• Category Archives Alternative Media
  • Deutsche Bank: “The Fed’s ‘Transparency’ Killed Long-Term Investing”

    Two weeks ago, one of our favorite derivatives strategists, BofA Barnaby Martin wrote something we have said for years: “QE has been the most effective way for CBs to ‘sell vol’”, arguing that accommodative monetary policies across the globe amid QE have “clearly supported a strong rebound in fixed income markets.” This should not be a surprise: as Martin calculated, there is now some $51 trillion at risk should rates vol spike, not to mention countless housing bubbles that have been created since the financial crisis where the bulk of middle class wealth has been parked, which in turn have trapped central banks, preventing them from undoing nearly a decade of unprecedented monetary largesse that has pumped over $15 trillion in central bank liquidity.

    The BofA strategist showed that every time the Fed embarked on the different phases of its QE program, credit implied vols declined significantly, while during periods of no monetary easing or when the market started pricing the possibility of easing policy removal (tapering tantrum and the subsequent tapering phase) implied vols advanced.

    This post was published at Zero Hedge on Sep 23, 2017.


  • Week in Review: September 23, 2017

    Almost a decade later, the Federal Reserve this week announced it will begin reversing quantitative easing. Slowly. Very slowly. The balance sheet currently stands at $4.5 trillion and they will begin allowing $10 billion in assets to roll off their sheets next month. Given the unprecedented nature of QE, even this modest reduction has many market observers on edge. Of course, the fallout from the Fed’s actions are still being felt, while the Trump Treasury is making threats that it would have disastrous consequences if acted on.

    This post was published at Ludwig von Mises Institute on September 23, 2017.


  • Trump Sports Feud Escalates: Demands NFL Chief “Tells Them To Stand”

    Update 4: In the latest escalation in his feud with the NFL, Trump just (re)blasted Commission Roger Goodell in a tweet, saying he was trying to “justify” the actions of players who don’t stand for the National Anthem. His tweet was sent in response to a statement Goodell released earlier today criticizing Trump for “disrespecting” NFL owners by suggesting they fire players for protesting.
    Roger Goodell of NFL just put out a statement trying to justify the total disrespect certain players show to our country. Tell them to stand!
    — Donald J. Trump (@realDonaldTrump) September 23, 2017

    Update 3: As the feud between the president Stephen Curry intensifies, on Saturday afternoon his team the Golden State Warriors, stood with him and announced they will not be attending the White House visit at all. In a statement, the Warriors said that “while we intended to meet as a team at the first opportunity we had this morning to collaboratively discuss a potential visit to the White House,” the statement read, “we accept President Trump has made it clear that we are not invited.”
    It added that “we believe there is nothing more American than our citizens having the right to express themselves freely on matters important to them,” the statement continued. “We’re disappointed that we did not have an opportunity during this process to share our views or have an open dialogue on issues impacting our communities that we felt would be important to raise.
    As a result, “in lieu of a visit to the White House” the Warriors will use their trip to D. C. to “celebrate equality, diversity and inclusion-the values that we embrace as an organization.”

    This post was published at Zero Hedge on Sep 23, 2017.


  • Trump Sports Feud Escalates: Warriors Respond “The President Has Made It Clear We Are Not Invited”

    Update 3: As the feud between the president and the Warriors escalates, moments ago the basketball team issued a statement release in which it said that ‘President Trump has made it clear that we are not invited’ and that “in lieu of a visit to the White House” the Warriors will use their trip to D. C. to “celebrate equality, diversity and inclusion-the values that we embrace as an organization.”

    This post was published at Zero Hedge on Sep 23, 2017.


  • “Thousands Could Die” – Puerto Rico Scrambles To Evacuate River Valley As Dam Fails

    Days after Hurricane Maria passed over the island and made its way west toward the Dominican Republican, Puerto Rico is still struggling with the initial response to the storm – rescuing people stranded in remote villages, and moving thousands into government shelters. Meanwhile the island’s first responders are making due without electricity, gas or cell phone service after the storm dealt a knockout blow to its infrastructure.
    In what was perhaps the most destructive blow to the island’s aging infrastructure, the NWS warned Friday that the Guajataca Dam in northwest Puerto Rico would soon fail, prompting the agency to issue a flash flood emergency warning for Isabela and Quebradillas municipalities. Now, authorities are scrambling to evacuate the residents of the river valley below the dam before their communities are entirely submurged. If the authorities don’t act quickly, “thousands could die” one official in charge of the rescue response said.
    According to federal reservoir data, the lake behind the dam, Lago de Guajataca, rose more than three feet between Tuesday and Wednesday, when the storm was still directly over the island. More recent data were unavailable. With floodwaters gushing into the Guajataca river valley, Reuters reports that emergency officials were scrambling Friday and Saturday to evacuate its nearly 70,000 residents before their villages have been completely submerged.
    Video published by CBS shows waters gushing over the top of the 90-year-old dam, sending a wall of water racing into the valley below.


    This post was published at Zero Hedge on Sep 23, 2017.


  • Japan’s Lonely Single Men Are Settling For Virtual Reality “Wives Of The Future”

    In a country where over 70% of unmarried men between 18 and 34, and 60% of women, have no relationship with a member of the opposite sex, and where birthrates are among the lowest in the world after Japanese women gave birth to fewer than one million babies in 2016 for the first time since the government began tracking birth rates, Bloomberg reports on an industry that’s profiting off the reluctance of young Japanese men and women to find a human partner.
    ***
    What Bloomberg calls the ‘virtual love industry’ in Japan has blossomed into a multi-million-dollar concern as unmarried men and women increasingly turn to simulated digital offerings for companionship. Inventors create applications that essentially allow users to build a ‘virtual wife’ or ‘virtual husband’. While we imagine virtual companions bring badly needed comfort to millions of lonely Japanese, as Bloomberg notes, the industry does have a dark side: Some virtual-reality offerings promote unrealistic and even damaging portrayals of women as submissive. And men as domineering and menacing.

    This post was published at Zero Hedge on Sep 22, 2017.


  • LeBron Calls Trump “Bum” For Withdrawing Steph Curry’s White House Invite

    Update: As one might have imagined, the responses to Trump’s comments have been far-ranging and explosive but perhaps the best known and most stunning was from LeBron James who called the president a “bum” for rescinding Curry’s invite (after Curry had he wouldn’t go)…
    U bum @StephenCurry30 already said he ain't going! So therefore ain't no invite. Going to White House was a great honor until you showed up!
    — LeBron James (@KingJames) September 23, 2017

    This post was published at Zero Hedge on Sep 23, 2017.


  • Blowback? – Mizzou Enrollment Tumbles To Lowest Since 2008

    Amid ongoing fallout from the negative media attention and student (and faculty) protests that rocked campus in 2015, the University of Missouri recently welcomed its smallest student body since 2008.
    As Campus Reform has repeatedly reported, the embattled university has taken hit after hit, starting with a $32 million budget shortfall and a five-percent budget cut, followed by a seven-percent drop in freshmen enrollment heading into last school year.
    As some may remember Mizzou hit the headlines after Melissa Click, a journalism professor, won infamy nationwide for her behavior during race-related protests at MU in November 2015.

    This post was published at Zero Hedge on Sep 22, 2017.


  • Earthquake Detected Near North Korea Nuclear Test Site; China “Suspects Explosion”

    In what may be the latest major escalation involving North Korea – and potentially the nation’s 7th nuclear test – China’s earthquake administration said it detected a magnitude 3.5 earthquake in North Korea, which it suspects “was caused by an explosion”, raising fears that the rogue state has tested another nuclear bomb. The Chinese administration said in a statement on its website that the quake was recorded at a depth of zero kilometers, while Xinhua said the epicenter was in roughly the same place as a similar shallow earthquake on 3 September, which turned out to be caused by North Korea’s sixth and largest nuclear test.
    ***
    However, in analyzing the same earthquake, South Korea came to a different conclusion, and said it was likely to be natural or man-made such as a nuclear test. South Korea’s weather agency assessed the seismic activity as a natural event.
    “The quake is presumed to have occurred naturally,” an agency official said, according to South Korea’s Yonhap news agency. “A sound wave, which is usually generated in the event of an artificial earthquake, was not detected.”

    This post was published at Zero Hedge on Sep 23, 2017.


  • Weekend Reading: Yellen Takes Away The Punchbowl

    September 20th, 2017 will likely be a day that goes down in market history.
    It will either be remembered as one of the greatest achievements in the history of monetary policy experiments, or the beginning of the next bear market or worse.
    Given the Fed’s inability to spark either inflation or economic growth, as witnessed by their dismal forecasting record shown below, I would lean towards the latter.
    The media is very interesting. Despite the fact there is clear evidence that unbridled Central Bank interventions supported the market on the way up, there is now a consensus that believes the ‘unwinding’ will have ‘no effect’ on the market.

    This post was published at Zero Hedge on Sep 22, 2017.


  • Pound Flash Crashes After Moody’s Downgrades UK To Aa2

    In an otherwise boring day, when Theresa May failed to cause any major ripples with her much anticipated Brexit speech, moments ago it was Moody’s turn to stop out countless cable longs, when shortly after the US close, it downgraded the UK from Aa1 to Aa2, outlook stable, causing yet another flash crash in the pound.
    As reason for the unexpected downgrade, Moodys cited “the outlook for the UK’s public finances has weakened significantly since the negative outlook on the Aa1 rating was assigned, with the government’s fiscal consolidation plans increasingly in question and the debt burden expected to continue to rise.”
    It also said that fiscal pressures will be exacerbated by the erosion of the UK’s medium-term economic strength that is likely to result from the manner of its departure from the European Union (EU), and by the increasingly apparent challenges to policy-making given the complexity of Brexit negotiations and associated domestic political dynamics.
    Moody’s now expects growth of just 1% in 2018 following 1.5% this year; doesn’t expect growth to recover to its historic trend rate over coming years. Expects public debt ratio to increase to close to 90% of GDP this year and to reach its peak at close to 93% of GDP only in 2019.
    And so, once again, it was poor sterling longs who having gotten through today largely unscathed, were unceremoniously stopped out following yet another flash crash in all GBP pairs.
    Full release below:

    This post was published at Zero Hedge on Sep 22, 2017.


  • New York Fed Calculates Inflation Is Running Hottest Since 2007

    As if inflation wasn’t “mysterious” enough to the Fed already, today the New York Fed joined the Atlanta Fed first in releasing its own measure to track underlying inflation called, simply, the Underlying Inflation Gauge. What is notable is that this latest inflation tracker shows prices behaving quite differently from traditional indexes this year.
    According to the UIG’s August measure, broad inflation came in at a red hot 2.74%, the highest since November 2007, according to historical data from the Fed. That compares with just 1.9% annual inflation according to the Labor Department’s CPI and an even more paltry 1.4% as measured by the preferred PCE gauge of Fed policy makers, which matched the lowest since September 2016.

    This is what the latest reading showed:
    The UIG estimated on the ‘full data set’ increased from a revised 2.64% in July to 2.74% in August. The ‘prices-only’ measure increased from a revised 2.09% in July to 2.17% in August. The August CPI showed a further pick up in inflation from June. In response to the firming of CPI inflation, both UIG measures displayed a rise in trend inflation. he UIG measures currently estimate trend CPI inflation to be in the 2.2% to 2.7% range, with both registering above the actual twelve-month change in the CPI.

    This post was published at Zero Hedge on Sep 22, 2017.


  • “Get Out James Comey, You’re Not Our Homie”: Comey Mercilessly Heckled At Howard University Speech

    Former FBI Director James Comey was mercilessly heckled this afternoon as he attempted to deliver a speech at the Howard University convocation ceremony. As the Washington Post confirms, a group of 20 Howard students led the heckling session that persisted throughout Comey’s speech and included the following clever chants:
    “Get out James Comey, you’re not our homie.”

    This post was published at Zero Hedge on Sep 22, 2017.


  • Fed’s Kaplan Makes A Stark Admission: Equilibrium Rate May Be As Low As 0.25%

    As we have hammered away at for years, “the math doesn’t work”, and it appears The Fed just admitted it.
    In a stunning admission that i) US economic potential is lower than consensus assumes and ii) that the Fed is finally considering the gargantuan US debt load in its interest rate calculations, moments ago the Fed’s Kaplan said something very surprising:
    KAPLAN SAYS NEUTRAL RATE MAY BE AS LOW AS 2.25 PCT, LEAVING FED “NOT AS ACCOMMODATIVE AS PEOPLE THINK” Another way of saying this is that r-star, or the equilibrium real interest rate of the US (calculated as the neutral rate less the Fed’s 2.0% inflation target), is a paltry 0.25%.
    What Kaplan effectively said, is that with slow secular economic growth and ‘fast’ debt growth, there’s only so much higher-rate pain America can take before something snaps and as that debt load soars and economic growth slumbers so the long-term real ‘equilibrium’ interest rate is tamped down. It also would explain why the curve has collapsed as rapidly as it did after the Wednesday FOMC meeting, a move which was a clear collective scream of “policy error” from the market.
    This should not come as a surprise. As we showed back in December 2015, in “The Blindingly Simple Reason Why The Fed Is About To Engage In Policy Error“, when calculating r-star, for a country with total debt to GDP of 350%…

    This post was published at Zero Hedge on Sep 22, 2017.


  • WTI Hovers Above $50 As US Oil Rig Count Slides To 3-Month Lows

    With crude production rebounding back to pre-Harvey levels, and refinery demand coming back on-line, WTI has trod water around $50 all week. The US oil rig count dropped for the 6th straight week (down 5 to 744), back at its lowest level since early June.
    *U. S. OIL RIG COUNT DOWN 5 TO 744 , BAKER HUGHES SAYS :BHGE US *U. S. GAS RIG COUNT UP 4 TO 190 , BAKER HUGHES SAYS :BHGE US As Bloomberg reports, it looks like shale billionaire Harold Hamm might be right in saying U. S. producers are being more cautious than government output forecasts seem to imply.
    At least that’s what the Baker Hughes weekly drilling report suggests, showing producers idled five oil rigs this week, adding to 19 parked over the previous five weeks.
    The numbers released every Friday increasingly make it look like the drilling boom might have peaked, and that should impact output down the road.

    This post was published at Zero Hedge on Sep 22, 2017.


  • Janet Yellen’s 78-Month Plan for the National Monetary Policy of the United States

    Past the Point of No Return
    Adventures in depravity are nearly always confronted with the unpleasant reality that stopping the degeneracy is much more difficult than starting it. This realization, and the unsettling feeling that comes with it, usually surfaces just after passing the point of no return. That’s when the cucumber has pickled over and the prospect of turning back is no longer an option.
    In late November 2008, Federal Reserve Chairman Ben Bernanke put in place a fait accompli. But he didn’t recognize it at the time. For he was blinded by his myopic prejudices.
    Bernanke, a self-fancied Great Depression history buff with the highest academic credentials, gazed back 80 years, observed several credit market parallels, and then made a preconceived diagnosis. After that, he picked up his copy of A Monetary History of the United States by Milton Friedman and Anna Schwartz, turned to the chapter on the Great Depression, and got to work expanding the Fed’s balance sheet.

    This post was published at Acting-Man on September 22, 2017.