Martes 29/09/15 Comercio internaciona, indice precios casas

[Fenix]

With Shell's Failure, U.S. Arctic Drilling Is Dead
Submitted by Tyler D.
09/29/2015 - 14:45

Arctic Drilling in the U.S. is dead. After more than eight years of planning and drilling, costing more than $7 billion, Royal Dutch Shell announced that it is shutting down its plans to drill for oil in the Arctic. The bombshell announcement dooms any chance of offshore oil development in the U.S. Arctic for years.


The Stunning "Explanation" An Insurance Company Just Used To Boost Health Premiums By 60%
Submitted by Tyler Durden on 09/29/2015 - 14:19

"With advances in medical technology, prescription drugs and ways to treat injuries and illnesses, Americans are living healthier lives. [i.e., living longer] Because of these changes, we must adjust your premium to stay in line with increased costs."

obamacare



Investment Grade Credit Risk Hits 2 Year High (And Why That's A Disaster For Stocks)
Submitted by Tyler D.
09/29/2015 - 14:12

Over the past few years three things have 'worked' - Buybacks, Biotechs, and Buying IPOs. Those days are now over...


Fiat Chrysler Admits Under-Reporting Deaths & Injuries To NHTSA
Submitted by Tyler D.
09/29/2015 - 14:04

Yet another auto-maker has lied. Fiat Chrysler Automobiles US says in a statement that it has identified deficiencies in its TREAD reporting and has promptly notified NHTSA. One cannot help but wonder what came first, a leak or some conscience, but as NHTSA notes this means FCA under-reported the number of deaths and injuries that the automaker may be responsible for.

[Fenix]

Did The Bank Of England Rig Emergency Liquidity Auctions During Crisis?
Submitted by Tyler D.
09/29/2015 - 12:25

In yet another indication that manipulation may well be unspoken (or perhaps even spoken) policy at the BOE, new details regarding the UK Serious Fraud Office's investigation into emergency liquidity auctions conducted during the crisis suggest the central bank may have played a direct role in rigging the bids.


This Bear Is Just Waking From Hibernation
Submitted by Tyler D.
09/29/2015 - 12:02

When you tell people in self denial the market could drop 40% in a few months, they think you are crazy. They declare this could never happen. They would get out of the market before it would fall vertically. Their memories are conveniently short as their normalcy bias and cognitive dissonance blind them to what happened over three months in 2008/2009. We wonder how many willfully ignorant investors can handle a 50% to 70% haircut in their 401k, especially if they are over 50 years old. We wonder how much angrier the populace will become when the current recession results in more job losses, bankruptcies and revelations of Wall Street malfeasance. Beware of the bear.


Big Bank Pink Slip Pandemonium Continues As Bank Of America To Cut "Hundreds" Of Jobs
Submitted by Tyler D.
09/29/2015 - 11:22

As WSJ reports, "Bank of America Corp. is expected to announce layoffs in its global banking and global markets unit as early as Tuesday, according to people familiar with the matter."

[Fenix]

Ron Paul Rages "They" Refuse To Learn From Their Mistakes
Submitted by Tyler D.
09/29/2015 - 10:53

If Congress understood the Austrian theory of the business cycle, it would have allowed the recession that followed the housing bubble’s inevitable collapse to run its course. Recessions are the economy’s way of eliminating the distortions caused by the Federal Reserve. Attempts by Congress and the Fed to end a recession via inflation and government spending will only lead to future, and more severe, economic downturns.


38 Dead After Saudi Arabia - Head Of UN Human Rights Panel - Bombs Wedding In Yemen
Submitted by Tyler D.
09/29/2015 - 10:20

Nothing screams out human rights like bombing women and children at a wedding party.


Consumer Confidence Spikes Near 8-Year High Amid Global Turmoil But "Hope" Fades
Submitted by Tyler D.
09/29/2015 - 10:09

For the second month in a row, US Consumer Confidence (according to The Conference Board) soared in September. Printing 103.00 (smashing expectations of 96. in September, this is just shy of January's high going back to August 2007. The biggest driver of this seemingly odd exuberance (amid global escalation in financial and physical wars) is the Present Situation (up from 115.8 to 121.1) while "hope" dropped from 91.6 to 91.0. As The Conference Board concludes, "while consumers view current economic conditions more favorably, they do not foresee growth accelerating in the months ahead.”


Cacophony Of The Clueless - FedSpeak Reaches Peak Confusion
Submitted by Tyler D.
09/29/2015 - 09:52

Superficially one gets the impression that they aren’t really trying to “explain” anything to the hoi-polloi, since it all sounds remarkably uncoordinated. To the extent that the messages are contradictory, they merely reveal the literal impossibility of central planning – neither Dudley nor Evans can possibly know at what level short term interest rates should be set.

[Fenix]

Why The Market Is Poised For A Rebound: Gartman Says "Bear Market" Will Take S&P To 1420-1550
Submitted by Tyler D.
09/29/2015 - 09:33

Forget China, Volkswagen, Glencore, Noble, and pretty much everything else. The only catalyst that matters for today's price action has just been revealed. Earlier today, Dennis Gartman, whose flop-flip-flop-flipping calls on stocks, commodities and everything else have become a blur, just went mega bearish, and is predicting that the S&P has some 400 points of imminent downside.


Glencore CDS Rout Continues, Curve Remains Inverted Even As Stock Rebounds On Sellside "Defense"
Submitted by Tyler D.
09/29/2015 - 09:02

convincing equity that company is viable is one thing (and the company and its sellside cheerleaders sure are trying). Convincing the far more skeptical bond market, which is desperately trying to figure out the counterparty risk, will be far more difficult...


Axel Merk Warns ZIRP Is Bad For Everyone, "May Lead To War"
Submitted by Tyler D.
09/29/2015 - 08:38

We call on central banks to abolish their zero interest rate policy (ZIRP) framework before more harm is done. In our assessment, ZIRP is bad for all stakeholders and may even lead to war.


Axel Springer Buys Business Insider For $443 Million, Paying 9x Projected Revenues
Submitted by Tyler D.
09/29/2015 - 08:21

In the latest sign easy-money market froth may be peaking, moments ago German media conglomerate Axel Springer announced it has agreed to buy 88% of web-only Business Insider, adding to the 9% it already owns, for $343 million, which according to the Springer press release values 100% of the content aggregator at $442 million "on the basis of a cash and debt free valuation of USD 390 million." The remaining 3% of the company will be retained by Bezos Expeditions, the personal investment company of Jeff Bezos, who purchased a $5 million stake in 2013.

[Fenix]

Goldman Capitulates, Cuts S&P 500 Earnings Forecast And Price Target; Sees Market At 2,000 By Year End
Submitted by Tyler D.
09/29/2015 - 07:18

With three months left in the year, we were wondering how long it would take before Goldman's equity strategist would throw in the towel on his increasingly improbable (unless of course the Fed launches QE4, NIRP and/or helicopter money in the coming months) year-end S&P500 price target of 2100. The answer: not very long, as this is precisely what Goldman did overnight, when it cut both its 2015 and 2016 EPS forecasts (to $109 and $120 from $114 and $126), with a corresponding cut in Goldman's 2015 year-end price target from 2100 to 2,000, rising to a nice round 2,100 the year following.


UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal
Submitted by Tyler D.
09/28/2015 - 23:22

Unlike previous gold probe cases, this one will have major consequences. How do we know? Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers. As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices." Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties. UBS, as usual, choice the former.

[Fenix]

Fourth Turning: Crisis Of Trust, Part 3
Submitted by Tyler D.
09/28/2015 - 19:45

The solution is not to let politicians redistribute the wealth from the rich to the poor. Crony capitalism must be replaced by true free market capitalism, practiced with integrity, fairness, principled conduct, intelligence, and high moral standards. Profits generated by corporations are not evil, but seeking profits at any cost to society is reckless, shortsighted and immoral. Capitalism without capital is destined for failure.


Fukushima Reactor No.2 May Have Suffered Total Meltdown
Submitted by Tyler D.
09/28/2015 - 19:15

To the extent the memory of Fukushima had faded over the last several years, the "fallout" (no pun intended) from the nuclear-like blast that tore through an industrial complex at the Chinese port of Tianjin last month served to remind the world of how far-reaching and unpredictable the consequences can be when disaster strikes at a site that houses potentially toxic materials. Well, don’t look now but experts now say the No. 2 reactor at Fukushima may have suffered a complete meltdown.


China Is Betting Its Energy Future On This Tiny, Foreign City
Submitted by Tyler D.
09/28/2015 - 18:15

No, it's not New York, or London; Moscow, Geneva, Vancouver or even D.C. According to Clarmond House, the most important foreign city - the one which China is making the center of its largest offshore infrastructure project - is the tiny port of Gwadar (population 85,000) which Pakistan purchased from Oman in 1958 for $1 million, and which has become the critical hub of China's future energy policy.

[Fenix]

Bubble Burst? IPOs Are Having Their Worst Year Since Lehman
Submitted by Tyler D.
09/28/2015 - 17:25

IPOs have underperformed the S&P 500 by a stunning 17% year-to-date, extending losses today to 26% year-to-date. With private valuations still sky high in the minds of their VC 'guru' investors, we suspect the fact that this year is now the worst year for IPOs since 2008 will begin to raise doubts about even the most unicorn-y opportunity.


Confusing Inevitable With Imminent
09/28/2015 20:45 -0400
Submitted by Jeff Thomas

In the early 2000s, I began to advise friends and associates that much of the world would likely be entering a depression before the decade was out. In my belief, it would happen in stages, first with an initial mini-crash and recovery, but that, at some point, several years later, the recovery would prove to be a false one. The economy would remain in the doldrums. Then, a far bigger crash would take place and the world would be in a full-blown depression. As a hedge, I recommended that they buy gold, as gold would survive and retain value, as stocks, bonds, and even currencies went south.

I turned out to be correct on the timing of the initial crashes, but entirely incorrect on the timing of the second, greater crash.

I considered it possible that the major events could begin as early as 2010, but would more likely occur from 2012 on. That date has passed, and, although governments have consistently damaged their economies ever further, the house of cards, however shaky, is still standing.

Thankfully, I’m not alone in my inexact timing. Those investors and economists who have had decades-long records for accuracy in their prognostication have all been early in their predictions with regard to the major events that surround the coming crashes.

And each has recommended gold as a hedge, stating that, if and when markets do crash and currencies collapse, there will be a dramatic rise in the price of gold.

Certainly, gold continued its rise following the mini-crash of 2008, and it seemed that it was on its way skyward. Many prognosticators stated that, if it topped $2,000, that would be it; there would be no stopping gold, as even the average person would finally understand that gold is not an investment as such, but a means of wealth preservation, especially during times of great flux.

But, after gold passed $1,900, it took a dive. Gold bugs regarded it as an overdue correction, but the “get rich quick” punters dropped gold like a hot potato and gold remained down. Each time gold has rallied, the bullion banks have sold naked gold shorts in the futures market, then purchased the shares, to be redeemed for bullion, which has then been sold in the physical market, hammering down the gold price. Now, four years after the fall from $1,900, gold sits a price that makes it just low enough to prohibit the profitability of taking it out of the ground.

Certainly, it benefits both the banks and the major governments of the world to hold down gold and we should not be surprised if they endeavour to do so.

Nowhere is the “gold is dead” message more prominent than in the U.S., where people tend to see the value of any commodity in terms of its relativity to the U.S. dollar. Understanding gold’s real value would be easier if Americans regarded the dollar as “rising against gold” instead of “gold declining against the dollar.” This may seem like hair-splitting, but, in fact, the dollar is concurrently rising against most of the world’s currencies. The currencies of most countries are, in fact, declining against gold.
These Are the Good Old days

The U.S. dollar is looking good worldwide and, in fact, so is gold - it’s just that, at present, the dollar is in the number one spot. In fact, I wouldn’t rule out a burst of faith in the dollar when, inevitably, the recent papering-over of the Greek problem once again fails and the EU as a whole is clearly in trouble. When that occurs, gold will again rise, but the dollar will also be likely to rise - possibly more dramatically than gold.

But, unlike gold, the dollar is at risk. U.S. debt has placed it in a precarious position from which it will most certainly fall. As billionaire investor Jim Rogers has repeatedly stated, “I’m long the dollar, but I hope I’m smart enough to get out in time.” Recently, he added, "If gold goes under $1,000, I hope I'm smart enough to step up and buy more gold - maybe even a lot of gold."

The dollar is not a truly strong currency; it is essentially, “the best looking horse in the glue factory.” It will be the last to go, but it will indeed go. We may have a bit of time before that happens. Whether it’s measured in months or years, we can’t be certain. But right now (and especially if the dollar rises further against gold), gold is a bargain. It has either reached its bottom, or will do so in the foreseeable future. Any significant drop would be a sign to back up the truck and load up, as its eventual rise is inevitable.

These are, in fact, the good old days; a time when gold is comparatively cheap.
Availability of Gold

But those who are just getting on board with the concept of wealth preservation through gold ownership are bumping into a problem that they hadn’t anticipated - it’s getting harder to find any for sale.

With the news of each major sell-off, investors assume that availability must be considerable, yet physical gold is becoming evermore difficult to locate. The Chinese, who have a vested interest in holding down the price, repeatedly downplay their purchase volume, yet even the amount that is known to pass into Chinese hands far exceeds that which they claim to hold.

Further, the issue of coins by those countries that produce gold and silver coins for sale is steadily diminishing. Large private suppliers are advising their retailers that their inventories cannot be maintained. And at the street level, coin shops are announcing that they’re no longer able to promise even thirty-day notice deliveries of coins.

So, what does this say to the potential gold buyer? Well, first, it says that, whilst there is still paper gold out there in the form of ETF’s, the punters whose approach has been to chase the market, hoping to sell high and buy low, have largely left the market and moved on to other speculations. Those who continue to hold gold tend to be those who do so for wealth preservation. For them, a year (or even several years) of low prices is not a reason to dump the yellow metal. They are the long-termers, who will hold, no matter how low gold may go in the short term. In fact, should the price drop below $1,000, they (like Jim Rogers) are likely to buy with both hands.

But, there’s still the dollar to be considered. As long as it continues to rise against other currencies, gold will appear to be falling in price. The dollar promises to remain high as long as the yen and the euro hold out. But should they fall, the dollar will be exposed.

Let’s say the Chinese start selling their U.S. debt back into the U.S. market in a bigger way, or the EU defaults on its debt, or the inflation caused by quantitative easing creates commodity price spikes. There are many, many possible triggers that will cause the dollar to tank and, surely, one of them will occur. We just don’t know which one, or, more importantly, when.

Of one thing we can be reasonably certain. If the dollar starts to head south, we will see a flood of people seeking to buy gold in an effort to preserve their wealth. However, as all the punters have already been driven out of the market and only the long-termers remain, potential buyers will find themselves making higher and higher offers, as sellers will be almost non-existent.

With any investment, when panic buying sets in, the sky is the limit. We shall therefore see a gold mania. Most contrarian economists predict a figure in the $5,000 to $8,000 range, but other estimates go far higher.

A gold mania is not imminent, but I believe it is inevitable.

* * *

Gold and silver have served as money for centuries and across many different civilizations. They have always been inherently international assets. There is nothing at all particularly American, Chinese, Russian, or European about gold and silver.

Buying precious metals is perhaps the easiest step you can take toward protecting yourself from an economic collapse.

The next step is to store that physical gold and silver in a safe foreign jurisdiction. That way it's out of the immediate reach of your home government and cannot be confiscated at the drop of a hat.

We have done due diligence and on-the-ground research on a number of private vaults and storage facilities around the world. You’ll find all the details on our preferred jurisdictions - like Singapore and Switzerland - and nonbank storage facilities in our Going Global publication.

Normally, this book retails for $99. But we believe this book is so important, especially right now, that we’ve arranged a way for U.S. residents to get a free copy.

[Fenix]

Dear Martin Shkreli: This Is How You Hike Drug Prices
Submitted by Tyler D.
09/28/2015 - 16:38

"In the Twitter-storm furor over Turing’s recent one-drug price gouge attempt, the media has overlooked the reality that Martin Shkreli was created by the system. Shkreli is merely a rogue trying to play the gambit that Valeant has perfected." And there you have it: boost the prices of dozens of drugs in the span of 1-3 years anywhere between 100% and 800% and nobody notices (thank you insurance companies). But hike the price of one drug by 5,500% and suddenly all of America thinks you are satan incarnate.

[Fenix]

Bernanke & Yellen Have Engineered A Financial Markets Neutron Star
09/28/2015 14:50 -0400
Submitted by Tim Price

As a child I was fascinated by the concept of a neutron star. A neutron star is the tiny but immensely dense thing that’s left after a massive star explodes. Imagine something eight times as massive as our sun packed into a 12 mile diameter sphere. Gravity compresses the surviving material so profoundly that its protons and electrons are squashed into neutrons. Just how dense ? A single teaspoon’s worth of a neutron star would weigh a billion tons. That presupposes you could actually get close enough to extract a teaspoon’s worth. In reality, the gravitational pressure would reduce your body to a very thin smear on the surface of the star. Very little escapes the gravitational force of a neutron star.

I never expected to encounter a neutron star but Messrs Bernanke and Yellen at the US Federal Reserve have been kind enough to engineer one for us. Like CERN it’s been something of an international collaboration – Messrs Carney and Draghi have also pitched in to do their bit. The hybrid of Quantative Easing (QE) and Zero Interest Rate Policy (ZIRP), our current monetary neutron star has succeeded in collapsing the yields of just about every financial asset. The tractor beam of ZIRP in particular is difficult to evade. Just ask Janet Yellen. After one of the most widely anticipated FOMC meetings in history, she has boldly decided to do precisely nothing.

Today’s investors are not exactly a lucky generation. Assuming they’ve survived two precipitous declines in stock markets in the course of a decade, they’re now faced with overpriced stocks, overpriced bonds, overpriced everything. The Economist cites a Deutsche Bank study pointing out that for 15 countries going back as far as 1800, the average prices of equities, bonds and residential property stand at an all-time high. In terms of investment yield, very little escapes the monetary policy neutron star.

Assuming prices matter, the implications for future returns are somewhat grave. “This is most obvious,” writes The Economist, “in the case of bonds: a yield of 2% means the nominal return if you hold the bond to maturity will be 2%. The real return may even be negative if inflation rises.” Gilt investors today dream of even 2% nominal returns: 5 year UK government paper struggles to reach a nominal yield of 1.3%. 5 year US Treasuries offer a munificent 1.4%.

“Worse still, there is always the chance that profits or valuations will return to their historical norms. If that happens, Deutsche reckons the average real return from equities over the next ten years will be negative. The same is true for Treasury bonds, European corporate bonds and American residential property.”

Deutsche are not alone – just more honest than most investment banks these days. The asset managers GMO recently published their own 7-year average annual real return asset class forecasts. For US large cap stocks, US small cap stocks, international small cap stocks, US bonds and international bonds, those annual return forecasts are all negative.

But not quite everything in the financial universe has seen its yield obliterated by the monetary policy tractor beam. Not quite all valuations are stratospheric. In a recent piece for the Financial Times (“The going gets tough for value managers”), columnist John Gapper suggests that QE “has lifted all boats in the equity markets”. With all due respect to Mr Gapper, that is simply not true. What is true is that to identify genuine value from today’s listed equity markets, you have to go further afield than most benchmarked and index-relative fund managers are either willing or able to. A case in point: the US accounts for fully 58% of the MSCI World Equity Index. Japan, by way of contrast, accounts for less than 9% of MSCI World. Yet over 40% of the Japanese stock market trades on a price / book ratio of less than one. It is objectively cheap – despite the fact that BoJ Governor Kuroda has himself been no slouch when it comes to stimulative monetary policy. And many Japanese companies remain disgustingly under-researched by a brokerage community still shell-shocked by a grinding, two-decade bear market. Question: would you rather look for bargains in a market recovering from 20 years of underperformance – or in a market that, on the basis of current overvaluation, now faces precisely that prospect ?

Absent some entirely magical economic developments, Janet Yellen looks set to be an unlucky Fed chairman. There is a growing risk that the fabric of the financial system may start to unravel during her tenure. Commenting on last week’s do-nothing FOMC meeting, Marcus Ashworth of Haitong Securities pointed out, fairly, that this is hardly progress in rebuilding market confidence in the Fed’s communications policy: now, after last Thursday,

“We are not just data-dependent but uncontrollable foreign economy-dependent.”

So there are some isolated pockets of value out there in stocks, but none whatsoever discernible to this observer from within the bond market – and doubtless plenty of skirmishes in the currency wars to follow. The Fed has managed to paint itself into an extraordinary corner. It has blown a pivotal opportunity to begin normalising interest rates and made its next attempt – if it ever even bothers – that much more problematic. The next flashpoint may not now be in stock markets themselves but in the international bond markets that dwarf them. Bonds, stocks, property – all in a bubble, and with the Fed having exhausted all its current and indeed feasible ammunition. Let’s not mention those $5 trillion of bonds the Fed happens to hold, the prices of which are only likely to appreciate further in an environment of entrenched deflation that will smash the economy in the process. Hardly a picture of progress on the part of our monetary central planners. Janet Yellen may yet go down in history as the very first person, and Fed governor, to have successfully squashed herself.

[Fenix]

Goldman Warns VIX Is Priced For Extreme Moves Ahead Of Payrolls
Submitted by Tyler D.
09/28/2015 14:35 -0400

VIX is "searching for a new home" according to Goldman Sachs as the current elevated level of implied risk lies at the high side (around 24) of the current business cycle (~18) and recession-esque volatility (~26) range. Current options prices imply a 7% chance of a 10% crash in the next month and uncertainty is running twice as high ahead of this week's jobs data than on a normal payrolls week...

The VIX is searching for home. An indecisive VIX curve is waiting for data.

Clarifying comments from Fed Chair Janet Yellen, an upward revision to second quarter U.S. GDP to 3.9% and a higher than expected increase in consumer spending were still not enough to hold the market up last week. The S&P 500 was down 1.4% last week and the VIX landed at 23.6. The VIX has averaged 22.4 over the last week and that is an interesting level.

An indecisive VIX is searching for a new home: Relative to the current levels of ISM, employment, and consumer spending we estimate baseline VIX levels of 18. 26 is the median daily VIX level over the last three recessions. An average VIX level around 22 over the last week is therefore midway between our business cycle estimate for the VIX and the median VIX level over the last three recessions. That is about as indecisive as the VIX has been in years. The VIX is searching for a home.

A flat VIX term structure also points to an indecisive vol market waiting for data. Oct-15 to Apr-16 VIX futures are also all within a vol point of 22. In the good times, the VIX term structure is upward sloping. When equities are at their worst the term structure becomes inverted, with the VIX much higher than the VIX futures. A flat term structure with no momentum in either direction signals extreme indecision, in our view.

While the economy may suggest VIX levels in the high teens, a primary take-away is still that baseline volatility levels have shifted at least 4 points higher than average VIX levels in 2014 (14.2). While we wish the VIX a speedy recovery, in our view an indecisive VIX is justifiable. The market is searching for improvement in U.S. and global data. We get ISM and payrolls this week.

What are the odds?

SPX options are pricing a 7% chance the market is down 10% over the next month.

After the drop in implied volatility and skew from a local peak one-month ago the S&P 500 options are now pricing in a 7% chance the S&P 500 declines 10% over the next month

And this week is extremely volatile...

While payrolls may be the headline release this week, if the market is focused on growth, then Thursday’s ISM release may also be highly watched. Consensus stands at 50.5 for the ISM print, our team expects a drop to 50, down from the current ISM level of 51.1. A print below 50 may not be helpful for the bulls.

The S&P 500 straddle expiring Friday October 2nd captures both the ISM and payrolls and is pricing in a +/- 2.4% S&P 500 move over the next week.

The S&P 500 has been down on seven of the first nine payroll release days in 2015. The straddle breakeven of +/- 2.4 corresponds to a fairly pessimistic S&P break-even range of 1885 and 1978. While the straddle price is down from a local high of 4.7% in August, the expected move of +/- 2.4% is 1.7x its median level 1w prior to payroll releases over the last year (Exhibit 3 above). The average daily absolute return on the S&P 500 has been 1.3% since mid-August and 46 bp over the last week, so the options market is pricing in an added cushion, even relative to recent S&P moves.

Source: Goldman Sachs

[Fenix]

And The Market Breaks...
Submitted by Tyler D.
09/28/2015 - 13:49

Stocks are down hard, JPY momo is not working, nor is VIX... time to break something...

* *NYSE ARCA SUSPENDS ROUTING TO CHICAGO STOCK EXCHANGE
* *NYSE ARCA HAS DECLARED SELF-HELP AGAINST CHICAGO STOCK EXCHANGE



Confusion-nado - 2015 Rate-Hike Odds Plunge To Record Lows After Fed's Evans Dovish Comments
Submitted by Tyler D.
09/28/2015 - 13:45

We have had "bad cop" Dudley and so now "good cop" Evans unleashes more uncertainty, confusion, and farce:

*EVANS: BEST APPROACH IS FOR LATER LIFTOFF, GRADUAL TIGHTENING
*EVANS SAYS `EXTRA-PATIENT APPROACH' TO TIGHTENING IS WARRANTED

The reaction was very clear, Fed Funds Futures dipped to record lows for October (16%) and December (41%). And worse still, "dovishness" did nothing for stocks at all...


The Next Looming "Commodity" Failure: Social Media
Submitted by Tyler D.
09/28/2015 - 13:26

The social media space is beginning to make one wonder if they’re looking at an iron ore chart, or bulk shipper, rather than “the hottest space it all tech.” i.e., everything social. And it’s just the beginning in my opinion. Sooner or later Wall Street is going to come knocking for either its promise of profits. Or, its money back. And when that starts (which I believe has already begun) the mad-rush to cash-in what ever value a share might have that day will be assailed with stunning speed... much like the commodity space where stalwarts of an entire sector can find themselves struggling for solvency in mere months.

[Fenix]

Ackman Loses $700 Million Instantly After Democrats Demand Subpoena
Submitted by Tyler D.
09/28/2015 - 13:04

Yet another nail in the Biotech Bubble's coffin as Bloomberg reports House Democrats demand a subpoena for Valeant over "massive price increases." The stock is down 12 % on the news extending the collapse of the last few days and weighing very heavily on the broad Biotech index. Very bad news for Bill Ackman and his 20 million shares...




Trump Promises To Cut Middle-Class Taxes, Gets Carl Icahn Endorsement - Live Feed
Submitted by Tyler D.
09/28/2015 - 11:05

Republican presidential nominee front-runner Donald Trump, amid massively variant poll numbers (Fox >40%, WSJ ~21%?), plans to unveil his tax plan today, that, as WSJ reports, would eliminate income taxes for millions of households, lower the tax rate on all businesses to 15% and change tax treatment of companies’ overseas earnings. Trumps's plan claims to bring "sanity, common sense and simplification to the nation's catastrophic tax code," and, despite plans to end "carried interest" tax breaks - most loved by hedge fund managers - Carl Icahn has come out and endorsed Trump as "the only candidate that speaks about the country's problems."

[Fenix]

The Echo Bubble In Housing Is About To Pop
09/28/2015 12:53 -0400
Submitted by Charles Hugh-Smith

And here's the knife in the heart of the Echo Housing bubble: declining household income.

The Federal Reserve-induced Echo Housing Bubble is finally starting to roll over, and the bubble's pop won't be pretty. Why is the bubble finally popping now?

All the factors that inflated the Echo Housing bubble are running dry. These include:

-- unprecedented low mortgage rates

-- FHA mortgage approvals for anyone who fogs a mirror

-- frantic cash buying by Chinese millionaires desperate to get their money out of China

-- the Federal Reserve buying up trillions of dollars in mortgages

-- lemming-like buying of housing for rentals by everyone from Mom and Pop to huge hedge funds.

The well's gone dry, folks. There isn't going to be another push higher or a third housing bubble after this one pops.

Let's start with the basics: demographic demand for housing and the price of housing. There are plenty of young people who'd like to buy a house and start a family (a.k.a. new household formation), but few have the job or income to buy a house at today's nosebleed level--a level just slightly less insane than the prices at the top of Bubble #1.


Charts courtesy of Market Daily Briefing)

It's considered bad form to describe today's prices as insane. It tends to hurt the feelings of everyone who's counting on the Echo Bubble to 1) make them even richer or 2) bail them out of the hole they fell into after Housing Bubble #1 popped.

Exhibit B is the insanely low mortgage rate, which has finally reversed course and is notching higher after 30 years of going lower. Why are today's rates insane? Risk. Mortgages are intrinsically risky. People who are terrific credit risks lose their jobs, experience horrendous medical crises, get divorced, etc., and the net result is a default that is unexpected.

Then there's all the credit-rating-of-501 crowd that was always one missed paycheck away from defaulting on their FHA/VA mortgage. Once the layoffs begin scything through Corporate America and struggling small businesses, those living paycheck to paycheck buyers of Echo Bubble housing will have no choice but jingle mail the keys to the bank.

Though they may still be drooling from the smack-like high of get-rich-quick fantasies, anyone buying rental housing at these prices is on the cusp of discovering a very painful reality: few can make money buying rental property at these prices, not once rents plummet as the global recession comes home to roost.

If we look at the ratio of mortgage dent to household income, the current level is still double the pre-financialization level. A slight decline from the insane levels of the bubble mania do not qualify as sane.

The Fed goosed the Echo Bubble by buying up an insane $1.75 trillion in mortgages, almost 20% of the entire mortgage market in the U.S. The Fed has kept buying mortgages to maintain this level, but the Fed is no longer expanding their mortgage holdings. That well has run dry.

And here's the knife in the heart of the Echo Housing bubble: household income-- stagnating for decades for 90% of households--has declined since the Bubble Top when adjusted for inflation. Please explain how declining real income can support nosebleed home prices now that mortgage rates have bottomed and started their inevitable rise from absurdly low levels.

If you want to believe the Echo Bubble can continue inflating, by all means take another hit of happy-housing-talk smack. But let me warn you--the high wears off.

[Fenix]

This Is When Junk Bonds Go Kaboom!
Submitted by Tyler D.
09/28/2015 - 09:12

We have been warning for months that high-yield bonds have decoupled from equity markets, just as they did in 2007/8, and the credit cycle's turning will inevitably flow through to crush the only thing left supporting stock valuations - the irrational non-economic corporate buyback-er. However, as we detail below, time's running out and it’s getting tougher out there for our QE and ZIRP-coddled corporate junk-bond heroes.



Bill Dudley Gives 2015 Rate Hike Odds, Even As He Says "Not Calendar Guidance"
Submitted by Tyler D.
09/28/2015 - 08:51
When is a 'date' not a 'date'? When a Fed member says so. The Fed speaker confusion-carpet-bombing contonues this morning with Bill Dudley who offered the following "insight":

*DUDLEY: HE EXPECTS FED PROBABLY WILL RAISE RATES LATER THIS YR (so a date?)
*DUDLEY: THAT'S NOT CALENDAR GUIDANCE, THAT'S DATA-DEPENDENT (not a date?)

His double-speak has sent stocks and bonds lower and USD higher for now...


Dying Petrodollar Ripples Through Markets As Asset Managers Bemoan Loss Of Saudi Bid
Submitted by Tyler D.
09/28/2015 - 08:11

"It was our Black Monday. The big question is when will they come back, because managers have been really quite reliant on Sama for business in recent years."



Commodities Slide As Chinese "Hard-Landing" Fears Take Center Stage
Submitted by Tyler D.
09/28/2015 - 06:47

It was all about China once again, where following a report of a historic layoff in which China's second biggest coal producer Longmay Group fired an unprecedented 100,000 or 40% of its workforce, overnight we got the latest industrial profits figure which plunging -8.8% Y/Y was the biggest drop since at least 2011, and which the National Bureau of Statistics attributed to "exchange rate losses, weak stock markets, falling industrial goods prices as well as a bigger rise in costs than increases in revenue." In not so many words: a "hard-landing."

[Fenix]

Western Propaganda Machine Kicks Into Overdrive As UK Brands Assad "A Butcher", France Bombs Syria In "Self Defense"
Submitted by Tyler D.
09/27/2015 - 21:05

"He’s butchered his own people, he’s helped create this conflict and this migration crisis, he’s one of the great recruiting sergeants for ISIL."


"Nothing's Safe" Passport's Burbank Warns "The Liquidity Of Everything Is Being Taken Down"
Submitted by Tyler D.
09/27/2015 - 19:30

Having warned that "we are on the precipice of a liquidation in emerging markets like the fourth quarter of 1997," Passport Capital's John Burbank sits down with RealVisionTV to discuss why "the Fed would eventually be forced into a fourth round of quantitative easing to shore up the economy." Being among 2015's best performing hedge funds, successfully navigating this turmoiling unwind of the Fed's efforts to "mean-revert" the world's assets back to normal, Burbank concludes, "nothing's safe," no matter what The Fed does, "the liquidity of everything is being taken down."