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Tag Archives: Global Economy

Stocks Slide After Trump Threatens Government Shutdown Over Wall Funding, Killing NAFTA

Yesterday, when stocks surged at the market open following Politico's report that Trump is unexpectedly "making strides" on tax reform, we warned that "it can all be wiped away as soon as tonight, when Trump will deliver a speech to his "base", in which he may promptly burn any of the goodwill he created with capital markets following his far more conventional Afghanistan speech last night."Well, that's precisely what happened, because on Tuesday night, in another fiery campaign rally, Trump...

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Jackson Hole Preview: Market Reactions, And Why UBS Says “Don’t Skip Lunch”

Historically the annual Jackson Hole symposium has been a major market-moving event as it has traditionally been the venue where central banks make critical announcements such as Bernanke's preview and hints of QE2 and QE3 in 2012, as well as Draghi's suggestion of the ECB's QE in 2014. As shown in the chart below, market reactions following these events have been material. * * * Finally, for those who are not convinced that Draghi, who is scheduled to speak on Friday just before the market...

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Euro Turmoils After ECB Walks Back Draghi Jackson Hole Appearance

Just yesterday morning, we said that with the Euro rising as much as it has in recent months (or is that the dollar tumbling), the ECB's next move could - or should - be to talk down the common currency, instead of carrying the hawkish "bias" Draghi has pushed for the past half year, culminating with the Sintra mini tantrum in which the poor central banker was "misunderstood" by markets. Well, just 24 hours later that's precisely what happened when this morning the EUR turmoiled, first...

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Beware A Second Korean War

Authored by Donald Manzullo via The Strategic Culture Foundation, There is no way we could be sure that preventive actions would not set off a second Korean War These are difficult times on the Korean Peninsula. With North Korea’s second test of an intercontinental ballistic missile (ICBM) and newfound ability to produce a miniaturized nuclear warhead that can fit inside an ICBM, Kim Jong-un and the North Korean regime continue to demonstrate their persistent and determined effort to become...

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Fannie, Freddie Would Need $100BN Bailout In New Financial Crisis

While the latest Fed stress test found that all US commercial banks have enough capital to survive even an "adverse" stress scenario, a severe recession in which the VIX hypothetically soars to 70, the two US mortgage giants would not be quite so lucky: according to the results from the annual stress test of Fannie Mae and Freddie Mac released today by their regulator, the Federal Housing Finance Agency, the "GSEs" which were nationalized a decade ago in the early days of the crisis, would...

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Only Ten Years After The Last Financial Crisis the Banks Are At It Again

Via Jesse's Cafe Americain blog, Apparently the Banks have been lobbying heavily, and expending significant amounts of money again, leaning on their Congressmen and pressuring regulators, saying that their capital standards need to be relaxed so that they can make more loans to stimulate economic growth. But that, according to the FDIC Vice-Chairman, is utter nonsense. Hoenig, who was a high-ranking Federal Reserve official during the crisis, cautioned Senate Banking Committee Chairman Mike...

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In Epic Letter, Elliott’s Singer Rages Against Everything From Passive Investing To “Safe Spaces”

We've frequently warned about the myriad of potential risks arising from the massive capital flows from active to passively managed accounts which will eventually, and inevitably, wreak havoc upon the markets.  It is, in fact, this transition which is inextricably linked to the market's apparent disregard for traditional valuation metrics as it surges to all new highs with each passing day. As we've noted before, unlike actively managed funds (the good ones at least) that actually bother...

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Geopolitical Tensions Are Designed To Distract The Public From Economic Decline

Authored by Brandon Smith via Alt-Market.com, Tracking geopolitical and fiscal developments over the past several years is a bit like watching a slow motion train wreck; you know exactly what the consequences of the events will be, you try to warn people as much as possible, but, ultimately, you cannot reverse the disaster. The disaster has for all intents and purposes already happened. What we are witnessing is the aftermath as a forgone conclusion. This is why whenever someone asks me as...

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Albert Edwards: “The Last Time This Happened Was In January 2008”

Two days ago, we were the first to point out that in a striking case of data revisionism, the Bureau of Economic Analysis, in an attempt to retroactively boost GDP, revised historical personal incomes lower, while adjusting its estimates of personal spending much higher, resulting in a sharp decline in personal savings, which as a result, was slashed from 5.5% according to the pre-revised data, to just 3.8%, in one excel calculation wiping out 30% of America's "savings", and cutting them by a...

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AUDUSD Slides Back Under 0.80 After RBA Warns Over Strong Exchange Rate

The AUDUSD has faded overnight gains and was trading near session lows after the RBA kepts its interest rate at 1.5% as expected and previewed last night, however in an echo of last week's comments from Lowe, the central bank flagged that a stronger AUD was expected to contribute to subdued price pressures and was weighing on the outlook for output and employment and would result in a slower pick-up in economic activity and inflation than currently forecast. The kneejerk reaction after the...

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