Why Yellen's Testimony Was Not Dovish Enough: Bank CEOs Told Her The 'Economy Is Stronger Than Markets Imply'Submitted by Tyler Durden on 02/12/2016 13:15 -0500
"The Council believes the economy is stronger than the recent negative market sentiment would imply."
There was much at stake in today's retail sales report, because had the Census reported another miss in the headline, ex auto and control group data, it would have made the Fed's job of maintaing the illusion of a recovery into a rate hike cycle virtually impossible. Luckily for Yellen, the numbers came out and they were were beats across the board.
Short-term, oil prices are a function of sentiment and manipulation. Here's how that works.
There has been an economic coup d’état in America and most of the world. We are now ruled by about 200 unelected central bankers, monetary apparatchiks and their minions and megaphones on Wall Street and other financial centers. Unlike Senator Joseph McCarthy, we actually do have a list of their names. They need to be exposed, denounced, ridiculed, rebuked and removed.
- Oil lifts stocks off lows, yen and low-risk debt in favor (Reuters)
- Yes, this agaim: Oil gains after Russia says open to talking with OPEC (Reuters)
- More forecasts: Oil Prices Could Jump 50% by the End of 2016 (BBG)
- New Risks for Trump After Iowa Loss (WSJ)
- Yuan Gap Widens Again as Depreciation Bets Swamp PBOC Fightback (BBG)
Not only is the specter of recession growing more visible, but it is also attached to a truth that cannot be gainsaid. Namely, having stranded itself at the zero bound for an entire business cycle, the Fed is bereft of dry powder.
As of June 2008 no Wall Street banking house was predicting a recession, yet by then the Great Recession - the worst economic downturn since the 1930s - was already six months old, as per the NBER’s subsequent official reckoning. Wall Street never predicts a recession. And that’s basically why the stock market goes up for 5-7 years on a slow escalator, and then plunges down an elevator shaft during several quarters of violent after-the-fact retraction when an economic and profits downturn has already arrived.
If the Wall Street Journal meant to reach for reassuring comfort, they fell far short. After spending late summer last year and into the fall proclaiming that manufacturing didn’t matter (12%), the newest round of talking points are “false positives.” In other words, manufacturing and industry does matter, after all, but just “not enough” to tip into full recession. Last year was supposed to be “the” year because of faith in only the BLS’ numbers. It was advertised as full deliverance of the promises of QE and ZIRP, but instead 2015 delivered only recessionary impressions.
It would be hard for a year to start any worse than 2016 has... "Prices are oversold and sentiment hasn’t been this despondent in a long time (even Aug/Sept wasn’t this palpably negative) but any bounce will not be particularly impressive and in a lot of ways that is the main problem as the upside just isn’t compelling enough to make a major stand...as Western central banks attempted to mollify sentiment with dovish rhetoric but to no avail."
Global Risk Off: China Reenters Bear Market, Oil Tumbles Under $30; Global Stocks, US Futures GuttedSubmitted by Tyler Durden on 01/15/2016 06:57 -0500
Yesterday, when looking at the market's "Bullard 2.0" moment, which in many ways was a carbon copy of the market's response to Bullard's "QE4" comments from October 17, 2014 until just a few minutes before the market close when suddenly selling pressure appeared, we said that either the S&P would soar - as it did in 2014 - hitting all time highs just a few months later, or the "Fed is now shooting VWAP blanks." Judging by what has happened since, in what may come as a very unpleasant surprise to the "the market is very oversold" bulls, it appears to have been the latter.
European shares tumbled, wiping out gains from a two-day rally, Asian stocks slid and the cost of insuring corporate debt rose as investor concern over global growth prospects resurfaced. U.S. equity-index futures pared gains of as much as 0.9 percent. Government bonds rose, with yields falling to records in Japan and China amid anxiety over the world economy. U.S. crude prices stabilized after dropping below $30 a barrel on Tuesday to touch the lowest since 2003 as Iran moved closer to boosting exports.
As the towering forces that are prevailing against failing global economic architecture and the pit of debt beneath that structure, as laid out below, it is clear that the 'Epocalypse' - encompassing the roots "economic, epoch, collapse" and "apocalypse" - is here, and it is everywhere. The Great Collapse has already begun. What follows are the megatrends that will increasingly gang up in the first part of 2016 to stomp the deeply flawed global economy down into its own hole of debt.
How can it be that automaker stock prices are tumbling given that auto sales (if one listens to CNBC) are surging, that (if one listens to the CEOs) everything is awesome for automakers, and (if one listens to Phil LeBeau) there is no bubble in auto credit? The answer is simple... (you just don't want to admit it)
After rising by $15.5 billion in the month before, and a near-record $22 billion in September, the November increase in nonrevolving credit was a paltry $8.3 billion - this was the smallest monthly increase in this most important for US car makers data, since February of 2012!
Don't show Phil LeBeau this chart!