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Deutsche Bank’s CoCo Bonds Speak of Fear of the Worst
Deutsche Bank’s CoCo Bonds Speak of Fear of the Worst The fine that broke the bank? Deutsche Bank investors just can’t catch a break. They keep thinking that shares have dropped so low that it’s time to grab them. Herd instinct sets in, and this buying perks up the shares. Then the bank’s sins once again […]
The Great Debt Unwind Beneath the Surface: US Commercial Bankruptcies Soar
The Great Debt Unwind Beneath the Surface: US Commercial Bankruptcies Soar They’d believed in six years of Wall Street hogwash. Not that you would have guessed from the stock market, hovering at all-time highs, or from soaring junk bonds, even the riskiest paper: CCC-and-below rated junk bonds skyrocketed since their February 12 low as their […]
Fear Spreads of a Housing Crash in Canada
Fear Spreads of a Housing Crash in Canada More Canadians sour on their Magnificent Housing Bubble. Canadians have been gung-ho about their magnificent housing bubble, feeding it with an endless willingness to pay every higher prices, even as regulators and international institutions issued warnings, as short sellers began circling, as subprime liar-loan scandals made their reappearance, and […]
This is What’s Cannibalizing the US Economy
This is What’s Cannibalizing the US Economy The sector is booming, but it’s a costly boom. In the sluggish US economy, the goods-producing sector has been in decline since late 2014, but sales in its biggest sub-sector are booming: medicines. Drugs are a physically small part of the goods-producing economy. But in terms of dollars, they’re the elephant […]
NY Fed Warns about Booming Subprime Mortgages, now Insured by the Government
NY Fed Warns about Booming Subprime Mortgages, now Insured by the Government “Astronomical” default rates and losses. The New York Fed just warned about the ticking mortgage subprime time bombs once again being amassed, and what happens to them when home prices decline. But unlike during the last housing bust, a large portion of these time […]
Turns out, OPEC Isn’t Dead Yet
Turns out, OPEC Isn’t Dead Yet In War for Market Share with US shale oil. Mayhem has crisscrossed the global oil markets since 2014: Huge losses for Big Oil, including teetering, over-indebted, state-owned giants like Mexico’s Pemex and Brazil’s Petrobras; bankruptcies among some of the smaller players; cuts in production in the US, Canada, and China where production […]
This is How Draghi Will Sock it to Investors that Weren’t Invited to the Secret Meetings
This is How Draghi Will Sock it to Investors that Weren’t Invited to the Secret Meetings They’re all getting ready for Wednesday. Here’s what Draghi has accomplished recently: the prices of euro-denominated corporate debt have soared. The average yield of investment-grade debt is on the verge of dropping below 1%. A good part of the […]
Another Real Estate Crash Is Coming: Legendary Market Timer Unloads His Positions: “They’ve Sold Deferred Reality For So Long…”
Another Real Estate Crash Is Coming: Legendary Market Timer Unloads His Positions: “They’ve Sold Deferred Reality For So Long…” If you haven’t heard yet, median home prices in the United States are on a tear having reached all-time highs in April. To boot, rental prices have gone insane, showing a year-over-year inflationary increase of 8%. On top of that, […]
Russia Frets about Risk of “Recession” in China
Russia Frets about Risk of “Recession” in China What do they see that we don’t? Russia’s economy has been shrinking five quarters in a row, though in the first quarter of 2016, it contracted at an annual rate of “only” 1.2%, after having contracted 3.7% in 2015, the longest recession in two decades. The budget […]
US Commercial Bankruptcies Skyrocket
US Commercial Bankruptcies Skyrocket The “credit cycle” begins to unravel. One of the big indicators of the end of the “credit cycle” is the number of bankruptcies. During good times, so earlier in the credit cycle, companies borrow money. Then, overconfident and lured by low interest rates and overoptimistic rosy-scenario rhetoric emanating from all sides, they […]
China’s Furious Stimulus-and-Debt Binge Backfires
China’s Furious Stimulus-and-Debt Binge Backfires Fabled transition to a service economy? Forget it. The export and manufacturing powerhouse of the world, the locomotive – along with the US – of the global economy, and an indicator of the global economy itself, disappointed economists once again. The operative word in the media today is “unexpectedly.” China has […]
Canary in the US Housing Market: Canadian Snowbirds Cash Out
Canary in the US Housing Market: Canadian Snowbirds Cash Out And sales crash. Naples, Florida, a wealthy beach town on the Gulf of Mexico, known for its golf courses and high-end shopping, and a favorite hangout for Canadian snowbirds trying to escape their cold winters, has a problem: Pending home sales in the first quarter […]
Canada’s Financial Sector just Crapped on its Bondholders, Hoping They Don’t Care
Canada’s Financial Sector just Crapped on its Bondholders, Hoping They Don’t Care To heck with the dreams of its bondholders. Great-West Lifeco, a Canadian financial services conglomerate which operates subsidiaries in Canada, the US, Europe, and Asia – including Putnam Investments in the US – and with over $1 trillion in consolidated assets under management, […]
Peak Negative-Interest-Rate Absurdity? Hilarity Ensues
Peak Negative-Interest-Rate Absurdity? Hilarity Ensues Among the goodies: “reverse Yankee” landmines. When a central bank like the ECB imposes negative interest rates along with QE on its bailiwick, funny things start to happen. Investors become so eager to get any kind of visible yield that they will do the craziest things. They’re now chasing €3 […]
