Reuters

Do you see what happens Larry when Wal-mart succumbs to "progressive" pressure and hikes minimum wage? This:  WMT CFO: 2017 RISE IN WAGES TO COST $1.5B; WMT PLANS REDUCTION IN CAPITAL EXPENDITURES THROUGH FY19; WAL-MART SEES FY2017 EPS DECREASING 6-12% VS FY2016.  In other words, the company just slashed its 2017 earnings forecast by up to a whopping 12%: the reason - the recent increase in wages.  So did the American worker win for once? Alas, no...

For anyone curious to know whether German FinMin Wolfgang Schaeuble had reconsidered his stance on the need for ultra accommodative policies now that the Volkswagen emissions scandal looks set to present a very serious threat to Germany's economy, the answer is "no."

As Rousseff fights to keep the Presidency, and has the speaker of the House battles to have her impeached, the country's economy continues to crumble. Retail sales came in below expectations for August and as Bloomberg reports, Brazil's top bankers now fear the combination of overindebted households and soaring unemployment could spell doom.

Earlier today the largest U.S. mortgage lender Wells Fargo reported results that beat expectations by the smallest possible increment. What caught our attention, however, was the fuel that keeps Wells Fargo's engine humming: mortgage applications. Unfortunately for the housing bulls, there was no good news here because after rushing higher in early 2015 on the latest false hope of an economic recovery or due to fears rates are rising, Wells' mortgage applications and the associated pipeline have declined ever since.

"The big battle preparations in that area are clear. There is a large mobilization of the Syrian army ... elite Hezbollah fighters, and thousands of Iranians who arrived in stages in recent days."

Capital Economics "expects gold could hit $1,200 before the end of this year, rising to $1,400 by the end of 2016”

• Democratic rivals back Clinton on emails, but little else in scrappy debate (Reuters)
• Hillary Clinton Shows Relentless Efficiency in First Democratic Debate (WSJ)
• U.S. Examines Goldman Sachs Role in 1MDB Transactions (WSJ)
• JPMorgan Says Trading Pain Isn't Over After Third-Quarter Slump (BBG)
• Islamic State battles insurgents near Aleppo as army prepares assault (Reuters)
• Oil Slide Means `Almost Everything' for Sale as Deals Accelerate (BBG)

Two weeks ago, using Macquarie data, we found something disturbing at China's micro level: a quarter of Chinese firms with debt are unable to cover their annual interest expense currently. Over the weekend, Hong-Kong based CLSA decided to take this micro-level data and look at it from the top-down. What it found was stunning. According to CLSA estimates, Chinese banks' bad debts ratio could be as high 8.1% a whopping 6 times higher than the official 1.5% NPL level reported by China's banking regulator!

• Playboy to Drop Nudity as Internet Fills Demand (NYT)
• Stock futures fall on weak China trade data (Reuters)
• Any Hall is down 20% YTD (WSJ)
• Global Stocks Slide With Metals After Chinese Imports Tumble (BBG)
• Clinton's tack to the left to be on display in Democratic debate (Reuters)
• Switzerland Said to Impose 5% Leverage Ratio on Big Banks (BBG)
• AB InBev, SABMiller brew up $100 billion deal (Reuters)

Marc Faber is an eloquent advocate of owning physical gold which he describes as being a way to become “your own central bank.”  He believes an allocation to physical gold will serve as vital financial insurance and that Singapore is the safest place to own gold in the world today.

For the past two weeks, the thinking probably went that if only the biggest short squeeze in history and the most "whiplashy" move since 2009 sends stocks high enough, the global economy will forget it is grinding toward recession with each passing day (and that the Fed are just looking for a 2-handle on the S&P and a 1-handle on the VIX before resuming with the rate hike rhetoric). Unfortunately, that's not how it worked out, and overnight we got abysmal economic data first from China, whose imports imploded, then the UK, which posted its first deflation CPI print since April, and finally from Germany, where the ZEW expectation surve tumbled from 12.1 to barely positive, printing at just 1.9 far below the 6.5 expected.

PBOC strengthens Yuan by most since Nov 2014

The message from China was heard loud and clear from the IMF meetings in Lima: The United States [Fed] "should assume its global responsibilities" given the dollar's status as reserve currency; "now is not the time to raise rates."

Wwith oil volatility surging in recent months, oil producers needed to take advantage of a rally, technical or otherwise, and an oil vol lull to reestablish hedges, even if it meant at far lower prices than recent benchmarks.  This is precisely what happened in the past week following one of the most torrid surges in the price of oil seen in recent years.

"There were too many wounded, tens of dead, body pieces scattered around, and people screaming. The state wasn’t able to prevent a massacre right in the middle of Ankara. Instead, it enabled it."