HYG Meltdown: The Simplest Guide You'll Ever Read

Investors and traders alike often find it difficult to get of the way when freight trains are barreling down on them. Even when conductors like Carl Icahn have been blowing the horn as loud as they can for more than a year. Sometimes, you can't blame them (them being the homegamers). Retail, for instance, had…

Is Saudi Arabia Ripe For A Cultural Revolution?

"No explanation was offered as to how any of these targets could be realistically achieved within their timeframe." Or any explanation at all really. The quote excerpted above from Foreign Policy references Saudi Arabia and the kingdom's "Vision 2030" which, if you’ve closely followed Ryadh's descent into the red ink budget abyss, you know it…

Goldman Warns Big Drawn Down On The Way

Remember last year, when Jamie Dimon jumped on the bond market liquidity bandwagon and warned that harrowing bouts of flash crashing madness like what unfolded in October of 2014 with USTs were likely to happen with increased frequency? As a reminder, here's what he said: "Treasury markets were quite turbulent in the spring and summer…

An Eerie Calm Hangs Over The Dollar, One Bank Warns

Last month, in a brilliant presentation, Citi’s Matt King outlined “the polarization principle” and how it relates to politics, the economy, and markets. The idea is that as interconnectedness and correlations increase, heterogeneity naturally decreases. When that happens, the incidence of extreme outcomes in politics, society, and markets goes up. Here’s how the bank depicted…

Signs Of Global Growth Slump Linger, But Stocks Couldn’t Be Happier

Late last month in “Pondering A Slow Growth World: Have We Entered A New Era?” we questioned whether perhaps policymakers are effectively pushing on a string. That is, is it possible that something short-circuited post-crisis and, as WTO chief economist Robert Koopman put it last year, “that the timing belt on the global growth engine…

No One Knows What’s Going On Anymore

When you become so wedded to a market narrative that it becomes gospel, you are probably about to make a financial misstep. I’ve been a skeptic for years about the sustainability of what are increasingly artificial markets. Markets that rely for their viability, on a bid for equities that comes from somewhere no one really…

It May Be Time To Stop Blaming Central Bankers

“My message will be largely favorable, although recent developments have been mixed.” That’s it ladies and gentlemen. We’ve officially reached the nadir of Fed communication. Janet Yellen is now telegraphing what she is about to say in a speech which is itself ostensibly meant to telegraph something else. It’s a kind of bizarre evolution wherein…

Goldman: 100 Basis Points Equals One Trillion In Losses

On Friday, we got an abysmal NFP print. And that should have sent stocks soaring right out of the gate. As we explained here earlier today, bad economic news has traditionally been good news for equity investors and traders in the upside down environment that has largely characterized the post-crisis world. By the end of…

"So, Maybe July Then?”: Poor Jobs Report Puts Question Mark Over Fed

Bad news is good news. Or not. The market’s reaction to Friday’s NFP report betrays the extent to which investors and traders no longer have any idea how to read the Federal Reserve. There was a time when negative data was a guaranteed boon for risk. The worse the data, the better for stocks. Why?…

Positioning For A Rate Hike: Let’s Look At Valuation, Sentiment, And Flows

I like talking to traders. I no longer classify myself as one, but there was a time when I was a card-carrying member of the club. Nowadays, I like to look at the macro picture and try to discern whether there’s something big on the horizon that will ultimately encompass all asset classes and thus…