The game is over. The trend has changed. And the Fed knows it. The question is: What will it do about it? Roll-over or fight? But will it matter much if it fights? Janet Yellen clearly lost the crowd this week as “accommodative” was met with a resounding SELL as confidence has been shaken. Her job is now to win back confidence. Whether she can or not is now largely determined how the binary set-up we face here plays out. Bottom line: Bulls need a 1998 like repeat to save this year. How did the Fed manage the big correction in the Fall of 1998: It cut rates of course...Well, good luck with that this year.
While the rest of the levered-beta 2 and 20 chasers formerly known as "hedge funds" recently accused risk parity of blowing up their August returns (September is not shaping up much better) the biggest risk-parity fund in the world also found a scapegoat: the global economy, which according to Dalio, is the reason for All Weather's dramatic August slump. Bridgewater's message is simple: absent far more easing, what the charts above signal is that the US economy is about to slam head-on into an economic recession.
Jim and Jeff discuss the unfolding drama at the Fed, which can’t decide when—if ever—QE will come to an end. They also discuss possible endgame scenarios for liquidating unprecedented amounts of sovereign, commercial, and household debt; whether coming monetary shocks will present the IMF with an opportunity to demand a global currency reset, and who wins and loses when the game of musical chairs stops. This is a must-hear interview for anyone interested in currency wars, central banks, and the unhol
Submitted by Tyler Durden on 09/20/2015 - 19:15
Submitted by Tyler Durden on 09/20/2015 - 18:39 Presenting Exhibit A: Goldman's latest YTD performance breakdown by strategy basket. It reveals is that far from suffering even the most modest correction, the "Hedge Fund Hotel" strategy (aka the most concentrated holdings), is massively outperforming not only the broader market, but has returned double the second most profitable strategy - investing in companies with high revenue growth. In a world in which the Fed just saw its credibility crushed, expect this to change shortly.
Submitted by Tyler Durden on 09/20/2015 - 18:05 Because it's fair...
Submitted by Tyler Durden on 09/20/2015 - 16:20 As WSJ reports, "the FBI has opened an investigation into allegations of money-laundering related to a Malaysian state investment fund, a person familiar with the matter said. The scope of the investigation wasn’t known. It is the latest in a series of international investigations related to the fund that have been revealed in the past several weeks."
Submitted by Tyler Durden on 09/20/2015 - 15:45 Each of the 3 stages needed to move to a sustainable price have to be given time to play out. The rig count story has been told with a brutally fast 60 percent drop. Meaningful production declines are on. Next will be inventory draw downs; in that order. As to the latter, we’re just beginning to see the effects of the rig count. Large drawdowns will be here sooner than predicted.
Submitted by Tyler Durden on 09/20/2015 - 15:25 The Fed is really caught between a rock and a very dark place. This is the worst possible mess and the longer they have waited to normalize interest rates, the worst the total crisis is becoming for they will have zero control over the economy and once that is seen, holy Hell will break loose.
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Clinton insider, Larry Nichols, tears open the Clinton machine and exposes their colossal list of lies, deceptions and depravities. From Bill Clinton’s bizarre sexual history and involvement with trafficking cocaine into the U.S. too Hillary’s trail of death as secretary of state and her rise to the presidency: the blood is spilled as the gloves come off.
If we don’t understand both sides of China’s balance sheet, we understand neither – Michael Pettis
The most thought-provoking China analyst I know is Michael Pettis, author and economist, who is a professor at Peking University’s Guanghua School of Management as well as a rock music club owner and impresario. Conversations with Michael are always fascinating.
He has a fairly balanced take on China’s future, which is significantly different from most of what you read. That’s because he comes at understanding China’s problems in terms of balance sheets rather than macroeconomics. So five years ago he was telling us there was going to be a real debt problem in China because he understood the nature of balance sheets and China’s balance sheet portended further growth.
When Phoenix police arrested suspected freeway shooter Leslie Allen Merritt Jr. on Friday they victoriously tweeted, “we got him.”
But immediately after the arrest doubts began to surface, namely from Merritt’s father.
“He has been raised with too much respect for life and too much for firearms to have done this,” he said. “Whoever said my son is the freeway shooter is a moron.”
On Saturday a judge set Merrit’s bail at $1 million.
Aside from voting for whatever politician happens to be the flavor of the month, the Republican voters of Texas may have an additional question to answer for when Super Tuesday arrives next year. If the Texas Nationalist Movement has its way, then the Republican primary ballot may have to ask voters to decide whether or not they think “the state of Texas should reassert its status as an independent nation” and secede from the United States
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,139.27 up $31.49 per ounce (-2.84%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, gained 9.83%. The U.S. Trade-Weighted Dollar Index gained 0.05% for the week. Senior miners outperformed juniors for the week as the GDM Index gained 9.83 percent, more than the S&P/TSX Venture Index’s gain of 7.60 percent.
Gold Market Strengths
JPMorgan is calling a bottom on the mining sector, suggesting now is the time to pounce. The bank slapped an overweight on the sector this week, ending its bearish view. JPMorgan’s argument for miners was that in price-relative terms, mining is back to its levels from 10 years ago, when the Chinese commodity super-cycle was just starting. They see prices stabilizing in the coming year and note that miners have lowered capital spending in the past few years. They also believe that the bulk of EPS downgrades are behind us given the latest consensus projections of -44 percent year-on-year EPS growth for miners in 2015.