Submitted by Tyler Durden on 01/26/2016 - 17:12
"We are going to need a bigger dilution chart."
Submitted by Tyler Durden on 01/26/2016 - 16:25 Politicians are all corrupt; those few who do initially join to "help the people" either soon get corrupted, or are mulched out of the system. None are more corrupt than those who are at the very top of American politics; the so-called "survivors." Some politicians made the mistake of admitting their own wrong-doings, and others have "whistleblow"-ed on the corrupt nature of American politics.
Submitted by Tyler Durden on 01/26/2016 - 15:55 "The Fed’s monetary policy of extraordinarily low interest rates helped create the asset bubbles in stock and commodity prices that are now bursting. In retrospect, the Fed’s rate hike last month will likely be viewed as monetary malpractice. None of this is likely to forestall turmoil in credit markets. Investors are wise to be worried..."
Submitted by Tyler Durden on 01/26/2016 - 15:40 Based on 43 large sell-offs in the world's major equity markets, Morgan Stanley gauges how the current market slide compares to bear markets and bull corrections through history. While they have tended to last about 190 business days, with drawdowns around 30%, the current environment is considerably weaker than the typical bear market beginning...
Submitted by Tyler Durden on 01/26/2016 - 15:22
Submitted by Tyler Durden on 01/26/2016 - 16:33 “Soros’s war on the renminbi and the Hong Kong dollar cannot possibly succeed — about this there can be no doubt. Reckless speculations and vicious shorting will face higher trading costs and possibly severe legal consequences. And just as proved in the yuan exchange rate case, the Chinese government has sufficient resources and policy tools to keep the overall economic situation under control and cope with any external challenges.”
Submitted by Tyler Durden on 01/26/2016 - 19:20
Submitted by Tyler Durden on 01/26/2016 - 18:30 For the Sanders and Trump voters, the status quo seems not only unacceptable, but intolerable. And if their candidates and causes do not prevail, they are probably not going to accept defeat stoically, and go quietly into that good night, but continue to disrupt the system until it responds. Unlike previous elections in our time, save perhaps 1980, this appears to be something of a revolutionary moment. We could be on the verge of a real leap into the dark.
Submitted by Tyler Durden on 01/26/2016 - 18:28 For those who are inching closer to the "crash is imminent" camp, we suggest taking a look at the chart below showing the stress levels, or rather lack thereof, 2 months prior to every major crash in the past decade, and extrapolating how far said "stress" may soar to in the coming 8 weeks if, as Citi, JPMorgan and Deutsche Bank today suggest, central banks are on the verge of losing control...
Submitted by Tyler Durden on 01/26/2016 - 18:05 Sweden's Major General Anders Brännström thinks a global conflict could be right around the corner and in order to defend the homeland, the country's military needs to develop "the capability of armed battle against a qualified opponent." While it's not entirely clear who counts as a "qualified opponent," Defence Committee chairman Allan Widman sees a very real threat from the Russians going forward.
Submitted by Tyler Durden on 01/26/2016 - 17:40 The financial engineering that has been made possible by zero percent interest rates is no longer available to paper over weak corporate results in the U.S. Our economy is addicted to QE and zero rates, and without those supports, we will spiral back into recession. This is the reality that the mainstream tried mightily to ignore the past several years. But the chickens are coming home to roost, and they have a great many eggs to lay. In the end, stimulus does not create actual growth, but merely the illusion of it.
Submitted by Tyler Durden on 01/26/2016 - 17:37
Submitted by Tyler Durden on 01/26/2016 - 17:35
Submitted by Tyler Durden on 01/26/2016 - 16:49 Expectations were hardly sky high for AAPL heading into a quarter in which most of its suppliers had already announced iPhone sales would be disappointing, and moments ago AAPL validated many of these concerns when while beating on the bottom line, with an EPS of $3.28 compared to expectations of a $3.22 print, it missed not only on the top line, with revenue coming shy of the $76.5 billion expected at $75.9 billion, but across every single product line, most notably iPhones, of which AAPL sold 74.78 million in the quarter, below the 75 million expected.
Submitted by Tyler Durden on 01/26/2016 - 16:39 After a day of exuberant hope from rumors of production cuts, WTI crude is plunging back to reality as API reports a stunning 11.4 million barrel inventory build. This is the biggest weekly build since May 1996.
The current melt-down of the world’s debt bubble is likely to continue in the course of the next months. The secular trend to expansion of credit has morphed into contraction and liquidation. It is my opinion that the new trend is now established and no action by any of the Central Banks (CB) that issue reserve currencies will do anything at all to reverse that trend.
Sandeep Jaitly thinks that the desperate reserve-issuing CBs – the US Fed, the ECB, the Bank of England and the Japanese CB – may resort to programs of QEP, by which he means “Quantitative Easing for the People”. This quantitative easing will mean putting money into the hands of the populations by rebates on taxes, invented make-work schemes or any other excuse to furnish the people with the famous “helicopter money”, to get them to spend.
When I saw this comment from Ray Dalio I said to myself, “this isn’t someone trying to be a prognosticator or compassionate person, this is someone that has had an epiphany that his huge success probably had more to do with his rolodex and endless supply of free money more than anything else and is becoming depressed over that realization.” His All Asset fund was down 7% in 2015 and negative 2 of the past 3 years. – A colleague who manages money in an email to IRD today
Ray Dalio has achieved “rock star” status in the hedge fund world. Per a report sourced by Zerohedge, Dalio appears to be frightened by the prospects of the “normalization” of Central Bank monetary policy.
In a recent blog post, Martin Armstrong wrote: “This constant attack on central banks is really hiding what the problem truly is — government. When the Fed was created, it “stimulated” the economy by purchasing corporate paper. The Fed was NEVER intended to buy government bonds. The politicians did that for World War I and never returned it to its purpose.” That’s not entirely true. Also, it’s naive to believe that the Fed would benefit the overall economy if it were restricted to its originally-intended purpose.
Contrary to Mr. Armstrong’s assertion, the Federal Reserve Act of 1913 actually does enable the Fed to buy government paper. Specifically, Section 14 of the Act states:
There can be little contention the world is experiencing an economic slowdown. The problem is this; the slowdown is occurring at a time when credit levels have never been higher than they are today. The logic is simple, less activity, less turnover, less velocity of money with such high levels of debt make the debt unpayable. This is the classic case of deflation the Dent’s and Armstrong’s of the world speak about …but they all stop one step short of where this really ends up.
I have noticed recently via e-mails and comments, “they can do this forever, nothing will stop them from printing and doing QE so nothing will change” is almost becoming a national mantra. I would say, “well, yes, until it does not work any longer”. If we look at just one market alone, the oil market, it is clear the point of “unsustainability” has been reached.
Central banks have created a mess, unless you enjoy unemployment, crashing economies, a wave of bankruptcies, and half of the world’s assets owned by only a few people.
From Chris Martinson: The Deflation Monster Has Arrived
“Most of the bad decisions that will haunt our future were made by the Federal Reserve in its ridiculous attempts to sustain the unsustainable.”
“… looking at the next few years, we will experience this as a time of unprecedented financial market turmoil, political upheaval and social unrest. The losses will be staggering. Markets are going to crash, wealth will be transferred from the unwary to the well-connected, and life for most people will get harder…”
Well, I may not have had “much” to say yesterday, but I SURE DO TODAY! My god, have the “horrible headlines” multiplied in the past 24 hours (it’s early Tuesday morning), which the following twopictures summarize perfectly – in spades.
Yes, the Baltic Dry Index plunged 6% last week to a new all-time low, down a whopping 70% in the past five months. Meanwhile, the Shanghai Stock Exchange, despite yet another “record liquidity injection” by the PBOC, plunged 6.4% today alone – down 46% from June’s hyper-bubble top, as it sliced through August’s spike-bottom low of 2,850 like a hot knife through butter. The 10-year Treasury yield is back below 2.0% – “rate hike” and all; WTI crude plunged an astounding 8% yesterday alone, again, to below $30/bbl; whilst the PPT was routed in yesterday afternoon’s trading. And how about that? Yet again gold and silver prices rose. Not to mention, U.S. Mint gold and silver Eagle sales; which, based on early-year results, are on pace to set new annual records.
The admission that the economy is so weak that it needs more QE is going to destroy the narrative that the U.S. economy is in great shape and it’s no longer going to be the safe haven for capital around the world…it’s going to prick the bubble in the dollar…and people are going to realize that we’ve never recovered from anything, the economy is sicker than ever, the Fed’s going to make it even sicker with more of its toxic monetary policy, the dollar’s going to tank and the price of gold is going to skyrocket – and people need to prepare for that now. – Peter Schiff on the Shadow of Truth
When Mt. Vesuvius blew, no one knew when it would happen or how big the eruption would be.