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  • Finance 0

    Fed Warns Of Worsened Financial Climate

    The jury may well still be out on anthropogenic climate change, but anthropogenic economic climate change seems to be beyond doubt – however, it makes the atmosphere decidedly chillier. 2016 dawned with a pessimistic hangover that has heralded a Bear market on fears of a Chinese economic stall and the dreaded unicorn of falling oil prices which must be an omen of some long forgotten economic calamity. Taken together, these factors have caused a very significant retrenchment in asset prices with the banking sector, oil-related stocks and commodities hardest hit. Most analysts think that the response has been overdone, but stocks will weaken ...
    On February 11, 2016 / By
  • Finance 0

    Canadians Divided On TPP: How Will The Liberals Respond?

    Canadians Divided on TPP: How Will the Liberals Respond? In October of last year Canada joined 11 other Pacific Rim nations in agreeing to the Trans-Pacific Partnership (TPP), a proposed trade deal that would cover a wide spectrum of economic policies concerning intellectual property, labour, environmental law and state-investor dispute settlement. While Canada’s newly elected Liberal government has confirmed that it will sign the agreement, it still needs to be ratified by a majority vote in Parliament before being officially implemented. With Canadians divided on the proposed agreement,[1] the path to ratification may not be so simple. In...
    On February 11, 2016 / By
  • Finance 0

    Macro-Markets Risk Index Signals New US Recession

    Fed Chair Janet Yellen yesterday said that the recent weakness in financial markets may be a warning sign for the US economy. “Financial conditions in the United States have recently become less supportive of growth,” she advised in testimony before the House Financial Services Committee on Wednesday. “These developments, if they prove persistent, could weigh on the outlook for economic activity.” Yellen’s concern is well founded in the current climate. In fact, looking at the latest market numbers through yesterday (Feb. 11) paints a grim picture. Let’s start with the Macro-Markets Risk Index (MMRI), which is now predicting a U...
    On February 11, 2016 / By
  • Finance 0

    Stocks Crater, Yen Soars

    The continued sell-off in global equities is the main driver of the capital markets. It, along with the push lower in oil prices, are pushing core bond yields sharply lower.  The US 10-year yield is nearing 160 bp having begun the year above 225 bp. The 10-year gilt yield is at a new record low of 130 bp.It began the year near 195 bp.The yield on the 10-year bund is also at new record lows today near 17 bp.It had begun the year above 60 bp.The only thing that saves the 10-year JGB yields from going back into negative territory was the fact that Tokyo markets were closed today.  China and Taiwanese markets were still closed for ...
    On February 11, 2016 / By
  • Finance 0

    EUR/USD Tests The Upside – False Break So Far

    The euro is the second safe haven currency in line. When things get serious, the yen is in high demand at first, and the euro follows. This was enough to send EUR/USD above resistance at 1.1340 to a high of 1.1354, but from there we had it slide back to range: 1.1215 to 1.1340. Is this the first test before the big thrust to the upside? Or is it one of those infamous false breaks from the world’s most popular currency pair. The testimony of Janet Yellen yesterday was supposed to be balanced: acknowledging the rout in stock markets but showing optimism. However, it seems that markets have lost hope and respect regarding central banks...
    On February 11, 2016 / By
  • Finance 0

    USD/CHF Targets Support At The 0.9600 Zone

    USD/CHF: Having continued to maintain its downside pressure selling off on Thursday, USD/CHF targets support at the 0.9600 zone. This is coming on the back of its intra day price reversal on Wednesday. On the downside, support lies at the 0.9600 level. A turn below here will open the door for more weakness towards the 0.9550 level and then the 0.9500 level. Its daily RSI is bearish and pointing lower supporting this view. Further down, support resides at the 0.9450 level. On the upside, resistance resides at the 0.9700 level where a break will clear the way for more strength to occur towards the 0.9750 level. Further out, resistance comes in ...
    On February 11, 2016 / By
  • Finance 0

    Gold’s “Monkey Magic” – An Update On Gold And Gold Stocks

    Has a Bull Market Begun? Gold stocks have risen so much and so fast recently that a pullback, resp. consolidation either has begun already or is likely to begin soon. We have therefore decided to post a brief update on the situation in order to discuss what might happen next. Back in late November, we made a few remarks in order to clarify why we have focused so much on the gold sector again since last summer. Processing plant of the Driefontein mine in South Africa Photo via goldfields.co.za Here are a few excerpts: “When a market is down 83% like the HUI gold mining index is, we are generally more interested in trying to find out when i...
    On February 11, 2016 / By
  • Finance 0

    It Was Never About Oil Part 2; It Was Always Leverage And Volatility

    << Read Part 1: It Was Never About Oil The entire point of leveraged positions is the margin of safety. That is true on both sides of that equation, as for the provider and the borrower/user. In the most famous examples of collapse, from AIG to LTCM losses were never really the issue. None of them could withstand instead collateral calls to their liquidity reserves. As noted last week, AIG’s “toxic waste” positions ended up registering some $20 billion profits to the Federal Reserve and the government via its (illegal) Maiden Lane SIV’s. AIG just could not withstand the liquidity demands brought about by increasing calculated v...
    On February 11, 2016 / By
  • Finance 0

    Are Yellen And The Fed Tuned Into The U.S. Economy?

    Many people are not particularly happy with Federal Reserve Chairwoman Janet Yellen and her recent take on the U.S. economy. The miniscule rate hike implemented in December was a mere drop in the bucket according to some analysts and many lawmakers are concerned with the chair’s future moves. At a meeting before the House Financial Services Committee in Washington on Wednesday, Yellen practically admitted that she didn’t know which direction the Fed would be taking and despite her forecast several months ago that there would be 4 small rate increases in 2016, she seems to be backtracking now. In fact, while the Fed continues to predict fo...
    On February 11, 2016 / By
  • Finance 0

    Agency Bond Rigging Probe Expands As Europe Grills Banks On SSA Debt

    One thing that became abundantly clear in the wake of the financial crisis was that everything – and we do mean everything – was being manipulated by Wall Street’s biggest and most systemically important financial institutions. First we learned that the most important benchmark rate on the planet was nothing more than a tool submitters used to inflate the value of their traders’ books, something we flagged way back in 2009. Subsequently, all manner of rigging and fixing was discovered across markets from gold, to FX, to ISDA fix. Although chat logs clearly show that there are scores of people who should probably be in jail f...
    On February 11, 2016 / By