Wednesday, January 13, 2016

Albert Edwards Hits Peak Pessimism: "S&P Will Fall 75%", Global Recession Looms

"To bottom on a Shiller PE of 7x would see the S&P falling to around 550. I will repeat that: If I am right, the S&P would fall to 550, a 75% decline from the recent 2100 peak."

FANG Bloodbath

Just when you thought it was safe to get back in the warm waters of the FANTAsy stocks, they slap you in the face with their triple-digit valuations...

"We Could Be Looking At A Really Ugly First Quarter" - Jeff Gundlach At His Most Bearish Yet

"Oil goes below $40, it’s frightening for geopolitical behavior. Guess what, folks? It’s below $40 and this frightening political behavior is upon us.... We could be looking at a really ugly situation during the first quarter of 2016... I think we're going to take out the September low of the S&P500."

Iran releases 10 US Navy sailors after boat drifted in Persian Gulf

from FoxNews:

Iran’s Revolutionary Guard released 10 U.S. Navy sailors who were detained after two small Riverine boats crossed into Iranian territorial waters, the Pentagon confirmed Wednesday.
A statement said that the sailors and the boats left the Iranian naval base where they had been held shortly before 9 a.m. GMT (4 a.m. EST). The nine men and one woman were later transferred ashore by Navy aircraft, while the boats continued toward Bahrain, their intended destination. There was no indication the sailors had been harmed.
Read More…

In Latest Embarrassment For Obama, Iran Releases Footage From Arrest Of 10 U.S. Sailors

Order Book For Biggest Bond Sale Ever Takes Shape: Over $100BN In Orders For $40BN AB InBev Offering

While the market for corporate bond issuance has been relatively quiet among the recent broader market turbulence, in a few hours a historic new bond is about to price and be sold to investors. Earlier today, Anheuser-Busch InBev NV, the acquiror in the second largest M&A deal of 2015 valued at $117 billion and just shy of Pfizer's massive $160 billion merger with Allergan, started offering bonds that will back its takeover of SABMiller Plc in a sale that according to Bloomberg will stretch into Europe and is set to become the biggest corporate-debt offering on record.

Inflation Expectations Collapse Post-Rate-Hike, Near Record Lows

Since The Fed hiked rates in December, the market's inflation expectations have collapsed in yet another clear indication of "policy error." 5Y5Y Forward inflation swaps have crashed below 2.00% for only the 3rd time in history (Lehman 2008 and September's Fed Fold were the other two) as despite central banker promises of transitory low-flation, the money is being bet against them as the regime-shift from full-faith to no-faith in Fed support continues.

After Poland Compares EU To Nazis, Brussels Launches "Unprecedented" Review Of Polish Media Laws

The latest diplomatic spat to divide the EU worsened materially on Wedensday when Brussels opened an official inquiry into new media laws enacted in Poland. Although the laws have drawn criticism domestically as well as abroad, the Polish government views the probe as a violation of sovereignty by an increasingly intrusive Berlin.

War Between Saudi Arabia And Iran Could Send Oil Prices To $250

The rift between Saudi Arabia and Iran has quickly ballooned into the worst conflict in decades between the two countries. The effect from the brewing conflict on oil is murky, but for now it is not having a bullish impact. But what if the current “Cold War” between Saudi Arabia and Iran turned hot?

Sweden's Foreign Minister Barred From Israel After Calling For "Extrajudicial Killings" Probe

Having upset The Sauds (by exposing the truth about The Kingdom's subjugation of women and medieval laws), and hurt relations with Saudi Arabia, Swedish foreign minister Margot Wallstrom has now made an enemy of another Middle-East nation. Israel has barred Wallstrom from entering their nation after she called for investigations into "extrajudicial killings" during recent violence. In response, the Israeli Foreign Ministry said in a statement: "The Swedish Foreign Minister has, in her reckless and ludicrous comments, buoyed terrorism and by so doing is encouraging violence."

Crude Crashes On Biggest 2-Week Gasoline Inventory Build On Record

Confirming API data overnight, DOE reports that while total inventories of crude rose less than expected (+234k vs +2.1mm exp.) Gasoline and Distillates saw a massive build once again. Gasoline invenrtories rose 8.44mm barrels (following last week's 10.6mm record build) is the biggest 2-week inventory build in history. Crude has crashed back from overenight "China is buying oil" demand hopes.

SunEdison Plunges 15%, Halted As Tepper Sues To Block Acquisition

The ongoing drama between SunEdison and Terraform Power and Appaloosa's David Tepper just escalated yet again. The stock plunged 15% after an initial halt but is now halted once again as Tepper says "immediate action is needed" as he sues the firm to block the firm's 'nepotistic' deal to acquire Vivint assets, having previously warned SUNE is "self-dealing."

Icahn's Freeport McMoran Is Not Buying The Bounce

With Freeport McMoran at the top of the list of entities due to be downgraded to junk (in fact trading in credit markets with a 79% chance of default), it is perhaps not entirely surprising that yesterday's dead-cat-bounce is fading fast this morning as Carl Icahn's big bet turns sour-er.

Former Federal Prosecutor Says Hillary Clinton Could Be Indicted Within 60 Days (Or FBI Will Revolt)

"I believe that the evidence that the FBI is compiling will be so compelling that, unless [Lynch] agrees to the charges, there will be a massive revolt inside the FBI, which she will not be able to survive as an attorney general..."

About That "Surging" Chinese Trade Data, There Is Just One Thing...

While Chinese New Year seasonals are undoubtedly one factor in last night's "surprisingly good" Chinese trade data, the following chart shows the level of "bullshit factor" was extreme by anyone's measure. Three years ago we first brought China's 'fake' trade data and abundant discrepancies to the public's attention and despite an apparent crackdown by regulators, the gaping difference between imports from Hong Kong and exports to Hong Kong is downright embarrassing for China's SAFE as it is clear that capital outflows are being disguised as exports with "over-invoicing" back in play.

Banksters Win Again - "Audit the Fed" Bill Fails In The Senate

Rand Paul’s signature “Audit the Fed” legislation failed to garner the 60 votes needed in the Senate to move the measure forward. Of course, this is merely the latest in a never-ending series of banker victories, and a truly devastating blow against liberty, free markets, transparency and any hope for government by the people and for the people. Ensuring that light is never shined on the Fed’s shady, corrupt and unaccountable bailout activities has always been a key goal of the American oligarchy, and they succeeded once again.

Gartman Now Says Crude Has Bottomed Hours After Warning Of "Egregiously Lower" Prices And "Panic Selling" To $15

"Crude oil prices, finally, have stabilised, and we shall go our far upon a limb here this morning suggesting very strongly that when nearby February WTI traded to $29.93 at its low yesterday amidst a great deal of very vocal consternation on the national business television channels that crude had “TRADED BELOW $30 PER BARRELL” that that was what we in the past had referred to as the “obscene number” and may well have been the low."

GE To Cut 6,500 European Jobs

Earlier today GE announced plans to cut 6,500 jobs in Europe over the next two years, including 765 in France, a spokesman for the company in France said on Wednesday. The spokesman added that GE was sticking to its pledge to create 1,000 net jobs in France in the next three years as part of its recent acquisition of Alstom's energy business. So definitely firing 6,500, but tentatively promising to add 1,000.

The Demise Of Dollar Hegemony: Russia Breaks Wall St's Oil-Price Monopoly

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy.

Jews Told Not To Wear The Kippa After Machete Attack At Marseille Synagogue

"Not wearing the kippa can save lives and nothing is more important. It really hurts to reach that point but I don't want anyone to die in Marseille because they have a kippa on their head."

Guest Post: 2016 - Year Of The 'Epocalypse'

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.

China Is The New Japan After All: Here's How To Trade It

China = Japan: China, like Japan in the early-1990s, has entered a secular period of significantly slower economic growth, compounded greatly by debt deflation; like Japan in the 1990s, Chinese asset prices, currency, banks (Chart 5) and capital flows will periodically cause severe disruptions to global financial markets, even if China does not itself cause a global recession.

Some Chinese Banks Run Out Of Physical Dollars As PBOC Holds Yuan Fix Flat For 4th Day

Having apparently taken the day off from selling US Treasuries and buying Offshore Yuan (following yesterday's "murderous" short-squeeze"), completing a 40 handle round trip in the "stable" currency year-to-date, PBOC decided to hold Yuan flat for the 4th day but make a statement that they would "give policy support to exports" - in other words devalue more. The unintended consequence of their decision to withdraw liquidity and crush shorts in offshore Yuan is more problematic as it has reportedly left Chinese banks short of dollars at their ATMs (and are delaying withdrawals). Meanwhile, another of China's favorite outlets for capital outflows - Bitcoin - just got stomped.

How Corrupt Is The US: An Extraordinary Example

For imprisonments, the US really does have no close second: it’s the unquestionable global market-leader, for prisons and prisoners. And this gets us to the market-leader for prisons within America itself, and to the stunning corruption that stands behind it. So, here’s that extraordinary example, and the story behind its corruption, which will provide a close-up view of America’s general corruption, from the top (including the government itself) on down.

The International War On Cash

When we first wrote on the subject, there was considerable criticism as to the possibility that such a program would ever be attempted, let alone succeed. And, granted, it was so Orwellian that it was understandably seen as a crackpot idea. But since that time, the program has been developing extremely rapidly. In the last six months alone, it has become so visible that it has even garnered a name - "the War on Cash." Once complete, state wealth control will exist.


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