Tuesday, January 19, 2016

Why This Slump Has Legs

There may be shallow lulls in the asset markets, nothing ever only falls down in a straight line in the real world, but the debt will and must come down and be deleveraged. The process will in all likelihood lead to warfare, and to refugee movements the likes of which the world has never seen just because of the sheer humbers of people added in the past 50 years. When your children reach your age, they will not live in a world that you ever thought was possible. But they will still have to live in it, and deal with it. They will no longer have the facade you’ve been staring at for so long now, to lull them into a complacent sleep. And the Kardashians will no longer be looking so attractive either.

WTI Crude Plunges Back Below $30, Drags Stocks Lower

So crappy China growth and increased Iran supply prompted a stop-run surge in crude oil overnight as "bad news is good news" stimulus hopes lifted all boats. But that is over now...

Why The 10Y Yield Will Slide To 1.75%: Deutsche Bank Explains

"Before investors sell 10s, they need the Fed to pause...  The curve flattens into March 2s10s with risk off market dynamics and an increasing probability of relent, followed by bear steepening after a Fed pause. Rates could then stabilize or decline, depending on whether recession is avoided or at least postponed."

Proving Wall Street Strategists Are "Full Of Bull"

How overoptimistic are Wall Street forecasts year in and year out? On average, forecasts were wildly bullish, even with the gains in recent years with results no better than a coin toss as to whether the S&P came in above or below the average forecast. Nonetheless, every year had one thing in common: Not once did a consensus predict a down year.

IMF Slashes Global Growth Outlook Again, Warning "Of Great Challenges" In Year Ahead

A sharper than expected downturn in China, a soaring USD, sudden bouts of global risk aversion, and escalating geopolitical tensions will conspire to make 2016 a "bumpy ride," the IMF says, on the way to cutting its forecast for global growth for the fifth time in fifteen months.

The Only Chart You Need To Trade Today's "Bounce"

Will it be USDJPY or Crude that controls the "fundamentals" 'driving' stocks?

The World According To Stock Markets

USA, USA, USA!!! Exceptional once again...

BofA Reports $21.3 Billion In Energy Exposure; Beats On EPS Despite Revenue Miss, Sliding Sales And Trading

Here is what everyone wanted to know from BofA results:  commercial net charge-offs increased $75MM compared to 3Q15, driven by losses in Energy, while the Allowance increased $144MM from 3Q15, driven by energy-related exposures and higher loan growth across the portfolio. Most importantly, BofA revealed its "Utilized Energy exposure of $21.3B ($1B traded products)", down $2.6 billion from a year ago. BofA also notes that the "higher risk sub-sectors of Oil Field Services and Exploration & Production comprise 39% of utilized energy exposure." NPLs increased $110MM from 3Q15, to $1.2 billion driven mostly by increases in Energy. 

"The Oil Market Could Drown In Oversupply," IEA Warns

With Brent and WTI having dipped below $30 (today’s rebound notwithstanding), and with some grades going for less than zero in the US, the question on everyone’s mind is simply this: can oil continue to move lower? According to the IEA, the answer is “an emphatic yes.”

Equities Soar, Oil Back Over $30 On Hopes For More Stimulus Following Disturbing Chinese Data

Last night's Chinese data deluge can only be classified with one word: bad. So if bad news was again bad news as many claim, both commodities (read oil), and US equity futures should be tumbling right now... but just the opposite is happening and in fact both Brent and WTI have already jumped over $30 this morning. This happens even as the IEA said this morning that global oil markets could “drown in oversupply,”  And yet this morning both commodities, global stocks and futures soaring? Simple: the following Bloomberg headline summarizes it: "Brent Rallies More Than $1 as China GDP Spurs Stimulus Bets," and where Brent goes, so goes risk, and the S&P.

The Oil Crash Of 2016 Has The Big Banks Running Scared

by Michael Snyder, The Economic Collapse Blog:

Last time around it was subprime mortgages, but this time it is oil that is playing a starring role in a global financial crisis.  Since the start of 2015, 42 North American oil companies have filed for bankruptcy, 130,000 good paying energy jobs have been lost in the United States, and at this point 50 percent of all energy junk bonds are “distressed” according to Standard & Poor’s.  As you will see below, some of the big banks have a tremendous amount of loan exposure to the energy industry, and now they are bracing for big losses.  And the longer the price of oil stays this low, the worse the carnage is going to get.
Today, the price of oil has been hovering around 29 dollars a barrel, and over the past 18 months the price of oil has fallen by more than 70 percent.  This is something that has many U.S. consumers very excited.  The average price of a gallon of gasoline nationally is just $1.89 at the moment, and on Monday it was selling for as low as 46 cents a gallon at one station in Michigan.
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The Economy Is So Great That Walmart Is Closing 154 U.S. Stores In 2016: Here’s The Full List

See the complete list inside and why Walmart says it is closing 269 stores nationwide.
by Mac Torrence, Patch:
Walmart will close 269 stores worldwide, including 154 in the United States, as part of what the company is calling “portfolio management,” Walmart announced Friday.
The global retail giant, known for being a one-stop-shop for buying just about anything at a discounted rate, said financial performance and “strategic alignment with long-term plans” went into consideration when considering which locations to close.
The closings will affect 16,000 workers globally and 10,000 in the United States. They will have priority for open positions at nearby stores that remain open.
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Sheriff Clarke: ‘President Obama and Mrs. Bill Clinton, They Are Anti-Gun Bigots’

by Michael W. Chapman, CNSnews:

In the ongoing national debate about gun control, Milwaukee County Sheriff David A. Clarke Jr. said that President Barack Obama and former Secretary of State Hillary Clinton were “anti-gun bigots,” and that he personally wants to see “as many law-abiding citizens” as possible to be armed to help “beat back” the violence.
On Fox’s Hannity, Sheriff Clarke said the Democratic Party is a rival group to the National Rifle Association. He then said, “as far as President Obama and Mrs. Bill Clinton, they are anti-gun bigots. They are utterly intolerant to anybody else’s view when it comes to — other than their own when it comes to the 2nd Amendment, the shooting sports and self-defense.”
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Audit the Fed Legislation Sinks: Plan Accordingly

from The Daily Bell:
Senate rejects Rand Paul’s ‘Audit the Fed’ legislation … The Senate on Tuesday blocked legislation calling for tougher audits of the Federal Reserve, rebuffing an attempt by Republican presidential candidate Rand Paul to give lawmakers greater oversight of the central bank’s moves on interest rates. The 53-44 vote fell short of the threshold to overcome a Democratic filibuster. – AP
Dominant Social Theme: Dangerous legislation deserves to be blocked.
Free-Market Analysis: Audit the Fed, in which so many had invested so much hope, is no more, at least for now.
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World’s Richest 62 People Are As Wealthy As Half Of World’s Population

Charity says only higher wages, crackdown on tax dodging and higher investment in public services can stop divide widening
from The Guardian:

The vast and growing gap between rich and poor has been laid bare in a new Oxfam report showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population.
Timed to coincide with this week’s gathering of many of the super-rich at the annual World Economic Forum in Davos, the report calls for urgent action to deal with a trend showing that 1% of people own more wealth than the other 99% combined.
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Everything is Backwards

from Zen Gardner:
The level of deception to which the human race has been subject is today, so vast and all-encompassing in its scale that it can barely even be measured. We now live in a world where our air is hardly fit to breathe, our food is hardly fit to eat, our water has deteriorated to the point that we buy it in bottles, our health systems sell sickness, our education systems misinform, our money systems promote debt, our peace policies promote war, our media promotes lies, and our Governments remove our rights to preserve our freedom.
In considering this condition, perhaps the most sobering aspect of it is the latter, the fact that this situation has all come about due to the actions of Government. People we elected in good faith and placed in positions of trust to ensure a safe and viable future for ourselves and our children; Those whom we entrusted with our wellbeing and our security; people we trusted to keep us safe and informed.
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Democratic Debate: Alan Greenspan’s Spouse Should Not Have Co-Hosted

by Pam Martens and Russ Martens, Wall Street on Parade:
Leave it to NBC to remind us that corporate media is tone deaf when it comes to facing up to outrageous conflicts of interest. The final presidential debate before the Iowa caucuses and New Hampshire primary aired last night on NBC and was co-moderated by Lester Holt and Andrea Mitchell. Given the public focus on Hillary Clinton’s financial ties to Wall Street, it was clear that hard-hitting policy questions on reforming Wall Street would need to be asked during the debate.
So why put Andrea Mitchell on that stage instead of an objective media moderator? Mitchell is married to Alan Greenspan, the man whose 18-year stint as Fed Chairman included a two-term appointment by Bill Clinton’s White House. Greenspan was correctly dubbed by Time Magazine as “25 People to Blame for the Financial Crisis”; was the man who played a key role together with the Clinton administration’s Wall Street sycophants Robert Rubin and Larry Summers in repealing the Glass-Steagall Act that ushered in the devastating deregulation of Wall Street and subsequent collapse in 2008; and the man who attempted to lend credence to the nutty “selfishness is good/government regulation is the enemy” theories of Ayn Rand, Greenspan’s long-time economic mentor.
Read More…

State in India Goes 100% Organic, Protects 75,000 Hectares of Land from GMOs

by Christina Sarich, Natural Society:
As of the end of December, 2015, Sikkim has become India’s first fully organic state in the country. Implementing organic farming practices on 75,000 hectares of land, the citizens of Sikkim will enjoy GMO-free, sustainable agriculture which will be certified organic.
“We have achieved fully-organic status in the end of December. Prime Minister Narendra Modi will formally announce this at a sustainable agriculture conference in Gangtok on January 18,” said Sikkim Organic Mission’s executive director Dr. Anbalagan.
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filed under "white trash"

Hillary Clinton’s Subservience To Israel

Hillary Clinton: Israel First
by Robert Fantina, Counter Punch:
Although the United States is still ten months from its next exercise in electoral futility, most polls do not indicate what former Secretary of State Hillary Clinton is most anxious to see: a runaway victory for her candidacy. It is a good sign that, despite the fact that she has no real contrasting opponent on the Democratic side, the coronation she expected isn’t going to happen.
One might say that this writer focuses too much on Mrs. Clinton’s adoration of Israel. But by looking at her comments about that apartheid nation, one gets a clear view of some broader, very troubling perspectives that Mrs. Clinton seems to hold.
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