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Weekly Commentary: More W than V
Weekly Commentary: More W than V The much vaunted “V” recovery is improbable. To simplify, a somewhat “w”-looking scenario is a higher probability. After such an abrupt and extraordinary collapse in economic activity, a decent bounce was virtually assured. Millions would be returning to work after temporary shutdowns to a substantial chunk of the U.S. […]
Credit Markets – The Waiting Game
Credit Markets – The Waiting Game Everything and the Kitchen Sink After the first inter-meeting rate cut in early March, we opined that further rate cuts were a near certainty and that “not-QE” would swiftly morph into “QE, next iteration” (see Rate Cutters Unanimous for the details). As it turned out, the monetary mandarins did not even […]
Realizing the Full Implications of the Forthcoming Catastrophe
Realizing the Full Implications of the Forthcoming Catastrophe Delivering Tomorrow’s Curses Roman poet Virgil penned these words in his epic, The Aeneid, roughly a generation before the birth of Jesus of Nazareth. They can be loosely translated to, “the descent to hell is easy.” Those who’ve traversed this passage can attest to the veracity of this […]
“Yellow Light” – Is The Credit Market Finally Reversing
“Yellow Light” – Is The Credit Market Finally Reversing Keep digging Yesterday, the European Central Bank held a stand-pat meeting, keeping the benchmark deposit rate at negative 40 basis points. However, ECB president Mario Draghi indicated that rate cuts and a resumption of asset purchases are on tap for September. In the accompanying presser, the outgoing […]
Weekly Commentary: Powell Federal Reserve Lowers “Fed Put” Strike Price
Weekly Commentary: Powell Federal Reserve Lowers “Fed Put” Strike Price I have little confidence history will get this right. Today’s overwhelming consensus view holds that Powell this week committed a major policy blunder. After his early-October “we’re a long way from neutral” “rookie mistake”, he has followed with a rate increase right in the throes […]
Weekly Commentary: Canary in the Credit Market’s Coal Mine
Weekly Commentary: Canary in the Credit Market’s Coal Mine What ever happened to “Six Sigma”? GE was one of the most beloved and hyped S&P500 stocks during the late-nineties Bubble Era. With “visionary” Jack Welch at the helm, GE was being transformed into a New Age industrial powerhouse – epitomizing the greater revolution of the […]
Weekly Commentary: “Not Clear What That Means”
Weekly Commentary: “Not Clear What That Means” November 15 – Bloomberg (Nishant Kumar and Suzy Waite): “Hedge-fund manager David Einhorn said the problems that caused the global financial crisis a decade ago still haven’t been resolved. ‘Have we learned our lesson? It depends what the lesson was…’ Einhorn said he identified several issues at the […]
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 […]
Corporate foie gras
Corporate foie gras One of the arguments put forth in the bull vs. bear debate is that the solidity of US non-financial corporations have never been stronger. The amount of cash held by non-financial corporations has risen 150 per cent since the depth of the crisis in 2009. With such a massive cushion to stave […]
Credit Market Warning: Long-awaited signs of danger are materalizing
Credit Market Warning: Long-awaited signs of danger are materalizing There are large signs of stress now present in the credit markets. You might not know it from today’s multi-generationally low interest rates, but other key measures such as liquidity and volatility are flashing worrying signs. Look, we all know that this centrally planned experiment forcing financial assets […]
As Goes The Credit Market, So Goes The World
As Goes The Credit Market, So Goes The World When confidence cracks, we’ll see it there first During the prior economic cycle of 2003-2007, one question I asked again and again was: Is the US running on a business cycle or a credit cycle? That question was prompted by a series of data I have tracked […]
What We Learned over Dinner from a Swiss Central Banker
What We Learned over Dinner from a Swiss Central Banker Dear Diary, Today… what we learned over dinner from a surprisingly smart central banker. But first, to the markets… The Dow shot up 121 Dow points yesterday, recovering most of Tuesday’s slide. In a series of business meetings Tuesday and Wednesday, we explained why nobody but us is rooting for […]
