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The Middle East Meltdown and Global Risk
The Middle East Meltdown and Global Risk Among today’s geopolitical risks, none is greater than the long arc of instability stretching from the Maghreb to the Afghanistan-Pakistan border. With the Arab Spring an increasingly distant memory, the instability along this arc is deepening. Indeed, of the three initial Arab Spring countries, Libya has become a […]
The Dangerous Illusion That Risk Can Be Offloaded Onto Others
The Dangerous Illusion That Risk Can Be Offloaded Onto Others This confidence in central banks raises a pernicious systemic risk. Do you drive carelessly because your auto is equipped with airbags? Perhaps not. But would you drive more cautiously if you were perched on the front bumper? If even the slightest collision would crush the driver’s […]
Commodity Carnage Continues Amid Fears Of Glencore Liquidation
Commodity Carnage Continues Amid Fears Of Glencore Liquidation Despite a relatively unchanged US Dollar, commodities across the board are under significant (and seemingly coordinated) pressure this morning. It appears that the key selling began as Europe opened and the carnage in massive commodity group Glencore began to materialize. Glencore CDS is now above 700bps (up 154bps […]
The Next Financial Crisis Won’t be Like the Last One
The Next Financial Crisis Won’t be Like the Last One It seems increasingly likely the next Global Financial Meltdown will arise in the FX/currency markets. Central banks are like generals: they tend to fight the last war. The Great Financial meltdown of 2008 was centered in too big to fail, too big to jailtransnational banks and other […]
Market risk; model smash
Market risk; model smash Seeing the market crash from a few weeks ago, it is clear how quickly the markets can ferociously thrust past one’s risk models. Risk models that failed to safeguard against risk when it absolutely mattered the most. Models that left many large hedge funds hemorrhaging – top funds which by definition were supposed to protect their investors […]
Stock market confessions, chaos, complexity and the illusion of control
Stock market confessions, chaos, complexity and the illusion of control In the old days of the Chinese Cultural Revolution those who said or did something perceived by the Chinese authorities to be counter-revolutionary were forced into public confessions–and then humiliated, imprisoned or even put to death. It seems that old ways die hard. Last week the new […]
Watch Carefully as Dangerous Economic Times Approach: “Nothing but Black Swans Ahead”
Watch Carefully as Dangerous Economic Times Approach: “Nothing but Black Swans Ahead” USA Watchdog’s Greg Hunter interviewed investment expert Jeff Berwick on the ominous signs headed our way in the near future, and in particular, in the month of September. Berwick has, like so many other voices, been on the forefront of warning about the instability of […]
Inflation, the Fed, and the Big Picture
Inflation, the Fed, and the Big Picture CAMBRIDGE – Inflation – its causes and its connection to monetary policy and financial crises – was the theme of this year’s international conference of central bankers and academics in Jackson Hole, Wyoming. But, while policymakers’ desire to be prepared for potential future risks to price stability is understandable, they […]
The Default Next Move For Oil Is Down, And Here’s Why
The Default Next Move For Oil Is Down, And Here’s Why Panic seems like a strong word, but…. As traders, investors and pundits, we all like to think that what we do is akin to a science. We believe that by working harder and being smarter we can give ourselves an edge, that enough research […]
Internal Combustion: Anatomy Of A Market Top-Part 1
Internal Combustion: Anatomy Of A Market Top-Part 1 Over the past few months, we have detailed the systematic deterioration in the internals of the stock market. This trend recently reached depths historically seen only near major market tops. This is Part 1 of a 1 or 2-Part series on factors that are characteristic of a […]
The Margin Debt Time-Bomb
The Margin Debt Time-Bomb A terrible threat created by terrible decision-making What is perhaps the greatest risk to individual investors these days? Is it the potential for a decline in corporate earnings based on a slowing global economy? Is it that current valuation levels in both equities and fixed income instruments are much nearer historic […]
Third Greek Bailout Suddenly In Jeopardy: Creditors Warn Cash May Be Delayed If Elections Don’t Go As Desired
Third Greek Bailout Suddenly In Jeopardy: Creditors Warn Cash May Be Delayed If Elections Don’t Go As Desired Just when everyone was convinced that the main “risk off” event of the summer, namely the Greek bailout, was safely tucked away and that having abdicated its sovereignty to its creditors and Germany in particular, who now […]
The “Great Accumulation” Is Over: The Biggest Risk Facing The World’s Central Banks Has Arrived
The “Great Accumulation” Is Over: The Biggest Risk Facing The World’s Central Banks Has Arrived To be sure, there’s been no shortage of media coverage regarding the collapse in crude prices that’s unfolded over the course of the past year. Similarly, it’s no secret that commodity prices in general are sitting near their lowest levels […]
The Market’s “Other” Panic Indicator Just Went Off The Charts
The Market’s “Other” Panic Indicator Just Went Off The Charts With indicators from macro-fundamentals (e.g. retail sales, core capex, inventory-to-sales) to market-oriented measures (VIX levels and backwardation, HY credit spreads, commodity prices) all flashing various colors of dead canary in the coal-mine red, we thought today’s colossal spike in the Arms (TRIN) Index was a notable addition. An Arms Index […]
China: Doomed If You Do, Doomed If You Don’t
China: Doomed If You Do, Doomed If You Don’t Whichever option China chooses, it loses. Many commentators have ably explained the double-bind the central banks of the world find themselves in. Doing more of what’s failed is, well, failing to generate the desired results, but doing nothing also presents risks. China’s double-bind is especially instructive. While there an […]
