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Who Is Short Treasurys? (Spoiler: Pretty Much Everyone) / by Tyler Durden on 08/29/2014 14:14

Once upon a time, news and fundamentals mattered.

Then the Fed came and ever since then the main question has been where the highest concentration of shorts is, just to squeeze the margin call daylights out of them, and generate alpha (a [...]

ZIRP Morphes to NIRP / By Turd Ferguson / August 27, 2014 at 11:29 am

Never in my wildest dreams did I envision having a job where I wrote about acronyms like “ZIRP” and “NIRP”. But, I guess, never in my wildest dreams did I think that the world would get as utterly screwed up [...]

Daily Pfennig: Looking For A “Whatever It Takes” Speech / by Chuck Butler / August 26, 2014 6:50am

Good Day! … And a Tom Terrific Tuesday to you! A HUGE late game rally for the Cardinals propelled them to a win… YAHOO! Well, yesterday, I told you about my allergies and what they were doing to my eyes… When our little Christine came [...]

Philly Fed Surges To Highest Since March 2011 Despite Plunge In Jobs & New Orders / by Tyler Durden / 08/21/2014 10:12

Philly Fed has beaten expectations for 6 months in a row with its biggest surge since the 2009 lows.Against expectations of 19.3, Philly Fed printed 28.0 – highest since March 2011 all-time highs. All sounds awesome right? Umm, no, 7 of 9 internal [...]

The Italian Job: How Borrowing And Printing Lead To An Economic Dead End / by David Stockman / August 21, 2014

Earlier this week Bloomberg published a devastating chart showing real hourly wage growth for the first 60 months of every cycle going back to 1949. The 11 cycle average gain was 9% and the largest was 19% a half century back.

The Blight Of Debt-Fueled M&A: How Central Banks Destroy Corporate Value / by David Stockman / August 20, 2014

Monetary central planning gives rise to economic waste, distortion and deformation because it causes capital to be mis-priced. Nowhere is this more evident than in the massive and destructive level of mergers and acquisitions (M&A) that has become a standard component of bubble [...]

Hidden Financial Bombs: Margin Calls Hit Hedge Funds Speculating in Freddie/Fannie Bonds With High Repo Leverage / by David Stockman / August 11, 2014

Markets are more dangerous than ever before because six years of radical financial repression by the central banks have planted booby-traps everywhere. Ground zero consists of massive and reckless speculation in newly invented “structured finance” products which were designed to quench the market’s insatiable [...]

Fed’s Fisher: End of ZIRP moved ‘further forward’ / by Wolf Richter / August 6, 2014

The stock market swoon since late July has been ascribed in the media to the conflicts in Ukraine and elsewhere. But they’ve been going on for weeks and month. And they’ve just now suddenly started to impact stocks? Or was it something else, something [...]

Three Chart Alarm: The Fed Has Set-Up The Corporate Bond Market For A Big Fall / by David Stockman / August 4, 2014

The three charts below, which appeared in this morning’s Wall Street Journal, are still another reminder that the Fed’s heedless fueling of the third financial bubble this century has done enormous damage to the internals of financial markets. In this case, investors and [...]

Market Maven Warns Fed’s 3rd Bubble This Century Heading For 20% Tumble / David Stockman / August 4, 2014

Mark Hulbert is the dean of market chart-watchers. So his warning that three key signals of a market correction are now flashing in unison, and that this condition has invariably led to a 20% market drop over the last 45 years, should not be [...]

Investment Bank Discovers the “Redistributive Effects” of QE / by Wolf Richter / July 28, 2014

A new study found that the inflation-adjusted wealth of America’s median household – half of households are above and half are below – plunged 36% from 2003 to 2013. These years include the phenomenal stock and bond market rallies and price surges in other [...]

Don’t Fight The Fed: Yellen Spoke, Junk-Bond Market Listened / by Wolf Richter / July 23, 2014

The junk-bond market had been on a relentless tear since late summer last year, driving values to insane heights, with yields so low that they were reminiscent of Treasuries before the financial crisis.

But much of this junk debt is near [...]

The Implosion Is Near: Signs Of The Bubble’s Last Days / By David Stockman / July 14, 2014

The central banks of the world are massively and insouciantly pursuing financial instability. That’s the inherent result of the 68 straight months of zero money market rates that have been forced into the global financial system by the Fed and its confederates at [...]

Daily Pfennig: Going To Fantastico Friday Ville! / Chuck Butler / July 11, 2014 5:48am

In This Issue.

* Dollar drifts again with weak bias to sell… * Treasury Trap widens! * Euro seems to shrug off Portuguese Bank problem. * Where has all the CAPEX gone?

And Now. Today’s A Pfennig For Your Thoughts.

Going To Fantastico Friday Ville!

Good [...]

CEO Of Europe’s Largest Insurer Pops The Utopia Bubble: “Nothing Is Solved And Everybody Knows It” / by Tyler Durden / 07/11/2014 12:11

It’s one thing for a tinfoil fringe blog to repeat, month after month, that nothing in Europe has been fixed, that Draghi’s disastrous policies are merely concentraing and stockpiling even more unresolved problems – for now ignored courtesy of the gentle sprinkle of ZIRP, or [...]

Hidden Factors to Systemic Failure / By: Jim Willie CB, / 3 July 2014

The most amusing question asked of the Jackass by clients and other people is when the system is going to break down. My usual answer is 2008, which causes a strange reaction, since a past date. Then they are given a tactful tongue lashing [...]

UBS: The Secret Reason The Fed Is ‘Tolerating’ Bubbles / By Wolf Richter / JUNE 30, 2014 AT 12:05AM

Swiss megabank UBS, one of the great beneficiaries of the Fed’s policies, ponders in its latest FX Comments how to deal with asset bubbles, “most importantly in housing markets,” a topic that is a “hotly debated issue among central banks.”

The Fed Rules, Metrics And Ratios Are Just For Decoration / Wolf Richter / JUNE 19, 2014 AT 1:35AM

Fed Chair Janet Yellen did a superb job on Wednesday. Just about everything went up, and the S&P 500 hit another record high. Oh wait, the dollar didn’t. It ticked down to the rhythm of her words as they pealed through the universe. [...]

ZIRP Gains More Attention / By Gary Tanashian / 12 June 2014

We have been talking about how there had been no bubble in US stocks and how the economy is doing just fine. We have also been talking about how the bubble is in policy and that the economy and stock bull market have [...]

Giant Sucking Sound: Russian Money Yanked From US Banks / Wolf Richter / JUNE 5, 2014 AT 12:34AM

US Banks enjoyed more or less steadily climbing, or rather soaring, deposits by Russian institutions and individuals, having tripled in just two years to $21.6 billion by February, according to the US Treasury.

It may seem a bit counterintuitive that [...]

Part 1. The ZIRP Economy Unmasked: Zero Growth In Private Labor Hours Since 1998 / by David Stockman / June 4, 2014

Every now and again the apparatchiks who dutifully tend Washington’s statistical sausage factories accidently let loose a damning picture of what actually goes on inside. In that vein the BLS has just published the equivalent of a smoking gun. Namely, a study showing that in [...]

Repackaged Junk Has Never Smelled So Sweet: JPM Forecasts Record $100 Billion In 2014 CLO Issuance / by Tyler Durden / 06/04/2014 12:33

If the Fed is looking for definitive proof of bubble euphoria it should look no further than the CLO market: according to Bloomberg, so far in 2014, more than $46 billion of collateralized loan obligations have been raised, after $82 billion were sold in all [...]

Part 1. The ZIRP Economy Unmasked: Zero Growth In Private Labor Hours Since 1998 / by David Stockman / June 4, 2014

Every now and again the apparatchiks who dutifully tend Washington’s statistical sausage factories accidently let loose a damning picture of what actually goes on inside. In that vein the BLS has just published the equivalent of a smoking gun. Namely, a study showing [...]

Treacherous Market Conditions Ahead / From Scotiabank’s Guy Haselmann / 06/03/2014 17:45

Treacherous Market Conditions

Vanishing QE Matters

When the latest round of QE was announced in September of 2012, the economy was healing. Considerable progress had been made toward the Fed’s dual mandates and the FOMC was already providing extraordinary accommodation through two policy actions, ZIRP and [...]

“Buying Time” Doesn’t Fix Financial Crises, It Makes the Next One Worse / By CHARLES HUGH SMITH / JUNE 03, 2014

The strategy of “buying time so the financial system can heal itself” by protecting a systemically destabilizing financial sector has failed because it could only fail.

The core strategy of central states and banks to fix the Global Financial Meltdown of 2008 was [...]

The Big Hoax Of The Wall Street Hype Machine / by wolf richter / SATURDAY, MAY 31, 2014 AT 2:04AM

The S&P 500 index keeps bumbling from one all-time high to the next as corporations are issuing record amounts of debt to spend record amounts on buying back their own shares: $160 billion in the first quarter alone, according to CapitalIQ. [...]

Debt Rattle May 28 2014: Everything You Think You Own Has Been Borrowed / by Raúl Ilargi Meijer / May 28, 2014

Let’s take another look at debt. We’ve probably all gotten so used to huge debt numbers that we’re losing sight of what they actually mean. In the following article, Tyler Durden made me rethink both the debt issue and the perverse consequences of 7 years [...]

Ben & Janet’s Swell Housing Recovery: Sales Booming For The 1%; Heading Down For Everyone Else / by David Stockman / May 28, 2014

The absurd deformation evident in the latest data on housing bubble 2.0 sticks the fork in monetary central planning. In the attached post, Wolf Richter provides a succinct display of existing home sales on an April YTD basis versus prior year for 30 [...]

Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year / by Tyler Durden / 05/13/2014 13:09 -0400

When the Fed releases its quarterly household credit report, the one item most focused on is the amount of mortgages outstanding and originated in the prior quarter, since courtesy of its monthly consumer credit updates we know that US households have largely given up [...]

Daily Pfennig: Yellen Says ZIRP Is Warranted! / By Chuck Butler / May 8, 2014 8:35am

In This Issue.

* Currencies back to assaulting the dollar. * China prints very strong Trade Surplus! * ECB balance sheet shrinking. * ECB & Norges Bank meet.

And Now. Today’s A Pfennig For Your Thoughts.

Yellen Says ZIRP Is Warranted!

Good Day! . And [...]