Sunday, February 21, 2016

The Next Shoe Just Dropped: Equity NAVs Of 348 CLOs Slide Below Zero; "Market Changed Dramatically In 6 Weeks"

First it was Junk Bonds, then Investment Grade bonds, then bank loans, and now, in just six weeks, the CLO shoe has finally dropped.

It Was True After All: The Government Is "Breathing Down The Neck Of Banks To Limit Their Energy Exposure"

As it turns out what we reported about the Dallas Fed was spot on after all: "The OCC is breathing down the neck of the large commercial banks to limit their energy exposure."

Bets On The Fed Going 'Negative' Are Soaring

As we detailed initially here, and followed here, there is a clear and present danger - no matter what the vareious Fed speakers say - that The Fed will be forced into negative rates sooner rather than later. The market appears to be losing complete faith in The Fed's current narrative as bets on NIRP have reached record levels - with 2017 now more likely than 2016 (QE first?).

Should Recessions Be Feared & Avoided?

There is no reason to fear recessions or to intervene in them. They represent a healing process. Only by liquidating the malinvestments of the boom and rearranging the economy’s structure of production as quickly as possible to the actual wishes of consumers can a sound recovery be achieved. "Thus, what the government should do, according to the Misesian analysis of the depression, is absolutely nothing. It should, from the point of view of economic health maintain a strict hands off, 'laissez-faire' policy. Anything it does will delay and obstruct the adjustment process of the market."

Trump: Finally, The Acceptance Comes... And The Gloating

Get ready America: your country is going to be "great again" in T-minus 9 months...

More "Ivory Tower" Lunacy

"Keep in mind for historical perspective the United States had negative rates in the 1930’s, OK. That was the best time to buy stocks, OK...."

Cable Tumbles As Brexit Fears Resurge After BoJo Backlash

Friday afternoon saw chaotic trading in GBPUSD (cable) as headlines flip-flopped before finally settling on a "deal" had been agreed between Cameron and The EU. Hope was high that this was a positive for "staying in" and cable rallied. But that has been dashed on the shores of Boris Johnson as London's mayor will campaign to leave the EU sending GBPUSD down 120 pips at the open.

Life In America's Unhappiest City

"The government is the problem..."

10 Dead, Troops Deployed, Water Rationed As Indians Riot: "We Are Here To Die"

The Jats are angry. Violent protests by the rural caste have left 10 dead and 150 injured in Haryana, India where the government has sent 4,000 troops and 5,000 paramilitaries with shoot-on-sight orders.

Panic Below The Surface: "Banks Are Selling Energy Loans At Cents On The Dollar To Ensure Their Own Survival"

"It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months. People who had been saying that this is the worst downturn since the 1980’s are now thinking that this is a return to the 1980’s. There are reports of banks selling loans at cents on the dollar to try and ensure their own survival and bankruptcy courts and workout specialists are seeing their best market in decades."

London Mayor Boris Johnson Says He Will Campaign For The UK To Leave The Eropean Union

It appears that Cameron's effort to "woo" Johnson has failed because moments ago BBC reported that "Boris Johnson is to campaign to leave the EU in the UK's referendum, BBC understands."

This Is What Happens To Gold When Citizens Lose Faith In Fiat Currency

It appears, first slowly and now quickly, the world is realizing that Alan Greenspan was right after all: "Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it."

The Recession Isn't A Few Months Away... It’s Already Started

There’s economic weakness everywhere you look!

"Reversal Risk": Goldman Documents The History Of Central Bank Backpedaling

Things got off to a rather inauspicious start this year in the wake of the Fed's move to hike rates in December. Now, with policy divergence between the Fed and its DM counterparts set to support the dollar at the expense of both EM stability and US corporate profits and with the continual weakness in crude set to trigger a default cycle, the FOMC faces a rather vexing question: “is it better to admit to a policy mistake and reverse course at the risk of destroying credibility or is it preferable to cling to the narrative so as not to completely destroy the notion that all is well and the US recovery is on track?”

Presstitutes At Work

from Paul Craig Roberts:

This morning I was stuck in front of a Fox “News” broadcast for a short period and then with a NPR news program. It was enough to convince me that Nazi propaganda during Hitler’s Third Reich was very mild compared to the constant stream of dangerous lies that are pumped out constantly by the American media.
The New York Times, Washington Post, and a couple of think-tank types were represented on NPR. They delivered the most crude propaganda imaginable and questioned no US government statement.
Did you know that all the trouble in Syria is due to the Russians and Assad? The US has no blame whatsoever. The US is trying to fight ISIS (which the US created, aids and abets), but the evil Russians and Assad are fighting the innocent “democratic rebels” who are trying to bring democracy to Syria as a replacement for a “brutal dictator” (elected by a large majority vote).
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Where The 2016 US Presidential Candidates Stand On Vaccines And GMOs

from The Sleuth Journal:

So where do the 2016 US presidential candidates stand on vaccines and GMOs? With every subsequent election cycle in the US, technology advances, making it easier for the citizenry to track what the various presidential candidates have said, voted and done in the past. We live in a surveillance state where military intelligence agencies like the NSA know virtually everything about us. However, one of the good points about the current state of technology is that also allows the people in general to watch and monitor their government more closely – which is absolutely essential if a representative republic is to function properly, and is also a prerequisite for freedom. Below is a brief list spelling out where each of the candidates stand on vaccines and GMOs, as best we know it.
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Saudi Arabia’s Dictator Demands Regime-Change in Syria — Otherwise WW III

from Washington’s Blog:

As has been recently reported, many experts on international relations are saying that the danger of a nuclear war between NATO and Russia is greater now than it was during the Cuban Missile Crisis in 1962 — in other words: greater than ever before in history. But it has just ratcheted a bit higher still:
The owner of Saudi Arabia, King Salman al-Saud, speaking through his spokesperson and chosen Foreign Minister, in an interview that was published on February 19th in Germany’s magazine Spiegel, says that he demands the resignation or else the overthrow of Syria’s President Bashar al-Assad, who is allied with both Iran and Russia.
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Donald Trump wins South Carolina Republican primary

from TheTandD:

Donald Trump claimed victory in South Carolina’s Republican primary Saturday, deepening his hold on the GOP field as the contest moves into the South. Ted Cruz and Marco Rubio were in a race for second place.
Hillary Clinton pulled out a win in Nevada’s Democratic caucuses, overcoming an unexpectedly strong surge by Bernie Sanders and easing the rising anxiety of her supporters.
Trump’s strong showing in South Carolina marked his second straight victory in the Republican primaries. Underscoring the electorate’s frustration with Washington, he was backed by nearly 4 in 10 of those who were angry at the federal government, and a third of those who felt betrayed by politicians in the Republican Party.
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Five-Year Retail Boom in Texas Implodes

from Wolf Street:

The Oil Bust Bites.
Retail sales in Texas were a boom machine after March 2010, their low point during the Great Recession. It lasted over five years. Sales tax collections, reported by the Texas Comptroller of Public Accounts, jumped 46% from the first half of 2010 to the first half of 2015. Blinding growth for a mature market!
Given the size of the Texas economy, it helped prop up overall retail sales in the US.
But by mid-2015, the retail sales boom came to a screeching halt. In the second half, sharp year-over-year declines set in. And in December, over the crucial holiday period, retail sales sagged.
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How The Court Jester Became King Of The United States

There is no material difference now in the old political parties, except which shall control the patronage [of the oligarchs]. –  From The Economic Pinch, 1923 (p. 60)
by Jeff Nielson, Bullion Bulls Canada:

It wasn’t supposed to be this way. You allow the Court Jester to run for “president”, in order to make all of the other bought-and-paid-for Stooges look better, in comparison. Then, after everyone has had a good laugh, the deck is stacked in favor of one of the lackeys of Big Business, i.e. the One Bank.
In the two-party dictatorship known as “U.S. democracy”, it was the House of Republicans’ turn to supply a seat-stuffer for the U.S throne. King William, of the House of Democrats had his eight-year reign. King George II, of the House of Republicans had his eight-year reign. King Barack, of the House of Democrats had his eight-year reign. The next king (for eight years) was supposed to be wearing Republican red, butnot wearing a jester’s cap.
What happened?
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