Submitted by Tyler Durden on 10/13/2015 - 10:01
With VIX collapsing 10 days straight (for the first time since October 2010), one might be forgiven for thinking "everything is awesome." However, as always, the real news is in the nuance that the mainstream often misses. As VIX has plunged (complacency about 'normal' risk), Skew (which measures extreme tail risk) has exploded to its highest ever...
Submitted by Tyler Durden on 10/13/2015 - 13:10 "Global trade is also declining at an alarming pace. According to the latest data available in June the year on year change is -8.4%. To find periods of equivalent declines we only really find recessionary periods. This is an interesting point. One metric we are already in a recession."
Submitted by Tyler Durden on 10/13/2015 - 12:56 Global central banks have made a Faustian bargain with our economic soul selling our future for a false stability today. At this stage, absent continuous intervention, a large deflationary crash in the global economy is inevitable. The next Lehman brothers will be a country. The real ‘shadow convexity’ will not come from markets but political unrest or war. Peace is not the absence of conflict. Global Central Banks have set up the greatest long volatility trade in history. Buy the fear and you will be protected from the horror.
Submitted by Tyler Durden on 10/13/2015 - 12:35 In the face of stubbornly low crude prices, it's starting to look like the end of the road in the O&G space. As WSJ reports, all of the proverbial fat that can be trimmed has already been trimmed in terms of layoffs and capex. This means further cost savings will have to come from salary cuts because going forward, cutting jobs altogether would imperil companies’ ability to operate.
Submitted by Tyler Durden on 10/13/2015 - 12:15 We think the market may have gotten ahead of itself, accepting the narrative that the Fed will raise rates as many other countries ease. We believe the market is gradually realizing that the Fed is far less flexible than it hoped it would be, thus causing a re-pricing of expectations. We don't think this will necessarily change the Fed's "desire" to pursue an exit. This re-pricing of expectations may have profound implications for the U.S. dollar, and with it, the price of gold.
Submitted by Tyler Durden on 10/13/2015 - 11:50 Credit Suisse is out with the latest edition of its Global Wealth report and although the results are not entirely surprising, they are worth highlighting. Three standouts: i) the rise in the value of financial assets is most certainly contributing to an increase in global inequality, ii) dollar strength led to the first decline in total global wealth (which fell by $12.4 trillion to $250.1 trillion) since 2007-2008, iii) 0.7% of the world's population own nearly half of the world's wealth while the bottom 71% of the population own just 3%.
Submitted by Tyler Durden on 10/13/2015 - 11:31 Some things you CAN see coming, in life and certainly in finance. Quite a few things, actually. Once you understand we’re on a long term downward path, also both in life and in finance, and you’re not exclusively looking at short term gains, it all sort of falls into place. Of course, the entire global economy has been hanging together with strands of duct tape for decades now, but hey, it looks good as long as you don’t take a peek behind the facade, right?
Submitted by Tyler Durden on 10/13/2015 - 11:17 “After careful consideration and analysis, we have decided to close the Fortress Macro Funds and return cash to our investors... But we have had an extremely challenging two years, and I do not believe the current environment is conducive to achieving our best results."
Submitted by Tyler Durden on 10/13/2015 - 11:10 With December rate-hike odds already plumbing record lows, today's data from The NY Fed's Consumer Expectatiopns Survey hamers the nail home that all is not well in America. Away from inflation expectations dropping and earnings expectations tumbling, household spending growth expectations have plunged to record lows.
Investors Are Terrified Of An EM Debt Crisis, But Are Bullish Because They Think Everyone Else Is TooSubmitted by Tyler Durden on 10/13/2015 - 11:09 Welcome to Reflexivity 101.
With continued uncertainty in global markets, today King World News is pleased to share an extraordinary piece warns that traders have now priced in the highest ever likelihood of a black swan event taking place over the next 30 days. This piece also includes a key illustration that all KWN readers around the world must see.
Jason Goepfert at SentimenTrader: “The SKEW Index has soared to a new all-time high. This means that S&P 500 options traders are pricing in the highest-ever likelihood of a “black swan” event over the next 30 days (see chart below).
Who can afford Gold...
Marc Faber has again encouraged individuals to own physical gold, be wary of possible government confiscation and said that the big question is where to store your gold.
“ … But I would say an individual should definitely own some physical gold…The bigger question is where should he store it?”
“Because I think if we think it through, the failure of monetary policies will not be admitted by the professors that are at central banks.
NSA can listen, take photos and locate the phone even when turned off.
The former U.S. spy, Edward Snowden, said in an interview published Monday by the BBC that British intelligence services are able to gain “total control” of mobile phones.
The former analyst with the U.S. National Security Agency (NSA) detailed from Moscow, where he moved to in 2013 to escape U.S. persecution, the characteristics of a software called “Smurf Suite”.
This is a group of programs that, according to Snowden, British spying agency, GCHQ, uses to manipulate smartphones.
13 October 2015 is the release-date of the report from the fake investigation — by the governments of Ukraine, Netherlands, Belgium, Australia, and later Malaysia — into who and what and why caused the shoot-down of the Malaysian MH17 Boeing airliner over the conflict-zone in Ukraine on 17 July 2014. That’s the plane which, at the last moment, was inexplicably instructed by the Ukrainian Government’s Air Traffic Control to go off the normal course avoiding the Ukrainian civil war zone over the east, and to go instead right into the war-zone. The airliner got shot down with all 298 aboard dead. Obama and his coup-installed Ukrainian Government blamed Russia immediately, and the European Union (which knew that he had actually taken Ukraine in a bloody February 2014 coup that was staged to look like a ‘revolution’) promptly caved to Obama’s demand to hike the anti-Russia sanctions that had been instituted in March 2014, when Crimea rejected Obama’s Ukrainian-coup-imposed government and held a referendum which resulted in Crimea’s switching to become again a part of Russia, of which Crimea had been a part for hundreds of years until the Soviet dictator in 1954 had it transferred to Ukraine — and so Russia is now being punished for enabling self-determination, real democracy, for the residents of Crimea.
- The CFTC’s Bank Participation Report is issued monthly from a survey taken at the Comex close on the first Tuesday of every month. The report summarizes the combined positions of the four largest U.S. banks (primarily JPM, MorganStanley, Citi, Goldman but occasionally others) and the twenty largest non-U.S. banks (Scotia, HSBC, DeutscheBank, UBS, Barclays and others). Read More
The great Richard Russell, now 91 years old, has been endlessly asked why he still writes Dow Theory Letters after all these years. And, for that matter, why he works so hard to maintain his health. His answer – both professionally and personally – is “I want to see how things turn out.”
I’m just 45; but damned if I don’t want to find out how things turn out, too – whether it takes one week, one year, or five decades. We are living through an historic period – of exponential population growth; parabolic money printing; and dramatic changes in the political, economic, and social landscape. And sadly, said money printing – dating back to the abandonment of the gold standard 44 years ago – has set the stage for cataclysmic financial happenings for years to come; which unquestionably, will have dramatic, perhaps terrifying ramifications on all aspects of our lives – as well as our children’s. So yeah, I too, want to “see how things turn out.”
President Obama’s visit to Oregon last Friday shows how low Obama will go to play politics, says former Ark. Gov. Mike Huckabee.
“When it comes to advancing his liberal agenda, President Obama will exploit anything, even death and suffering,” Huckabee said in a statement released Friday.
Huckabee wrote an opinion piece for Fox News addressing the problem: “If the president truly wanted to solve the issue, he wouldn’t call for new gun restrictions, he’d instead address the root cause of violence in America – sin and evil and the families broken and torn apart because of it.”
Flashback 2011: Have you heard the one about a homeowner foreclosing on a bank? Well, it has happened in Florida and involves a North Carolina based bank.
Instead of Bank of America foreclosing on some Florida homeowner, the homeowners had sheriff’s deputies foreclose on the bank.
It started five months ago when Bank of America filed foreclosure papers on the home of a couple, who didn’t owe a dime on their home. The couple said they paid cash for the house.
The case went to court and the homeowners were able to prove they didn’t owe Bank of America anything on the house. In fact, it was proven that the couple never even had a mortgage bill to pay.
Fitch Ratings is fretting about junk-bond defaults. “After five issuer defaults already this month accounting for nearly $2 billion in new volume,” Fitch now expects that the default rate will hit 3.5% by year-end, up from 2.5% to 3% a few days ago. Through September, the trailing 12-month default rate was already 2.9%.
Worse: a 4% default rate by year end is “more likely” than a 3% default rate. And it’s “set to rise further in 2016.”
In non-recessionary periods, the default rate averages 2%. During recessionary periods it averages 11%. That’s why recessions are terrifying for junk-bond holders. Junk bonds are called “junk” for a reason.
The Money GPS: