Nov 18 16 SIT EC
y POL
ZERO HEDGE
ECONOMICS
Two
weeks ago we warned of the "unintended
consequences" of Dodd-Frank which
are likely to crush bond market liquidity. On the day of Brexit we got a
glimpse of what can happen when the world's most liquid bond market suddenly
isn't and as one veteran bond trader exclaimed today,US
Treasury market liquidity is "worse than Brexit."
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"...in
the next recession I still expect 10y yields to ultimately fall to
minus 1% as helicopter money is adopted to finance Trump’s double-digit fiscal
deficits."
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Equity
breadth tends to directional lead changes in the PMI. So if
equity breadth is increasing, the PMI tends to accelerate. Unfortunately, the fact that equity breadth has been declining over the past
couple of months is pointing to a possible slowdown in the ISM
Manufacturing PMI.
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The dream “drain the swanp” about to evaporate
“Anybody who says they know how this going to work is kidding
themselves, and their clients. A lot of lobbyists are scrambling, because the biggest issue
is access.”
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Gold ETF Holdings have collapsed by
1.93 million troy ounces in the days since Donald Trump's election. This is the biggest decline since July 2013, a
period when gold prices plunged to $1200 before ripping almost 20%
higher in the next few weeks.
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Collapsing currencies, bond bloodbaths, soaring
cost of funds, and crumbling crude... Fuck that! Stock indices are at record
highs!!!!
….
Some context for the recent moves...
- Russell 2000 Biggest 2 week gain since July 2009
- Dow Biggest 2 week gain since Dec 2011
- S&P Biggest 2 week gain since Oct 2014
- EURUSD Longest win streak since Lehman (Oct 2008)
- Dollar Index Biggest 2 week gain since Lehman (Oct 2008)
- US Treasury Bond Biggest 2 week loss since Jan 2009
- Global Bonds Biggest 2 week loss EVER
- Gold Biggest 2 week loss since June 2013
- Copper Biggest 2 week gain since Feb 2010
Which leaves asset classes at extremes...
- USD Index Most Overbought since September 2014
- USDJPY Most Overbought since June 2015
- USDCNH Most Overbought since Aug 2015
- Dow Most Overbought since Nov 2014
- Russell 2000 Most Overbought since Jan 2013
- Major Financials SPDR Most Overbought since April 2010
- Regional Financials Most Overbought EVER
- Copper Most Overbought EVER
- Gold Most Oversold since Nov 2015
- Global Bonds Most Oversold since April 2000
- EM Bonds Most Oversold since Dec 2014
- Treasury Bond Most Oversold since June 2007
Spot the odd 'market' out... US Equities are the only
winners... http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/11/16/20161118_EOD2.jpg
So while everyone is excited about growth, the yield curve is
flattening dramatically...
The entire US Treasury market is now underwater for 2016...
….
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Entire Treasury Curve Now Underwater In 2016 As Bond Bloodbath Continues
10Y
Treasury yields are up a stunning 65bps from the Trump-win lows, spiking to
2.35% - the highest since Dec 2015. In fact the entire Treasury yield curve is
now higher in yield on the year...
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The
Dollar Index just broke to fresh 13.5 year highs, up an unprecedented 10 days
in a row. The USD buying panic began as US equities opened... and sparked
selling in every USD-priced asset as stocks, bonds, gold, and oil all
tumbled...
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Did OPEC just run out of short-squeeze ammo?
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RELATED: WTI
Slides After Biggest Rig Count Spike In 16 Months The US oil rig
count surged by 19 to 471 last week - the biggest weekly rise since July 2015
back to 9-month highs.
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Now this is geting funny (for all those not in
the stock that is)... +12%,
+133%, +14%, +215%, +70%, -85%.. and today +65% (so far)
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Amid a bounce back in the FANG stocks, the
Nasdaq has recovered from its post-Trump laggardness to surge past previous
record highs this morning... proving that 'everything' is awesome.
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POLITICS
It has
been interesting to watch market participants swing from “Trump The
Terrible”to “Trump The Great” in relation to the markets
and economy and he isn’t even in office yet. But while Trump certainly has an
extensive list of actions for his first 100-days,
there are many headwinds to actual policy implementation and ultimately their
success.
Submitted
by Lance Roberts via RealInvestmentAdvice.com, http://www.zerohedge.com/news/2016-11-18/weekend-reading-trump-effect
After more than a
week following the election, the markets, and a large chunk of the nation,
remain a mixed bagged of emotions ranging from exuberance and disbelief to
anger and depression. While
I don’t want to get into the “left versus right” debate in
this missive, it has been interesting to watch market participants swing
from “Trump The Terrible” to “Trump The Great” in
relation to the markets and economy and he isn’t even in office yet. It is the same as giving Obama
the Nobel Peace Prize when he entered office, an action the Nobel
committee has come to regret.
But which is it
really?
While Trump certainly has an
extensive list of actions for his first 100-days, there are many
headwinds to actual policy implementation and ultimately their success.
While the market participants
have already been chasing financial and infrastructure related assets, an
infrastructure program should be prepared but not implemented until the next
recessionary drag in the economy. The debt increase needed to fund
an infrastructure program, which would likely coincide with a new QE program to
buy the debt, would potentially have the greatest effect at limiting the
economic drag of the recession.
Importantly, with next week being
a light trading week, it would not be surprising to see markets drift higher. However,
expect a decline during the first couple of weeks of December as mutual funds
and hedge funds deal with distributions and redemptions. That draw down, as seen in early
last December, ran right into the Fed rate hike that set up the sharp January
decline.
Here is what I am reading this weekend.
Trumped! / Fed / Economy
- 2-Types Of Inflation: The Good & Bad by Danielle DiMartino-Booth via Money Strong
- What Adds Up & Doesn’t In Trump’s Plans by Lee Ohanian via San Francisco Chronicle
- Trumponomics Vs. Reality by Martin Feldstein via WSJ
- Paul Krugman Doubles Down On Fantasy by Steil & Smith via Council On Foreign Relations
- Coming To Terms With Trumponomics by John Cassidy via The New Yorker
- Yes, Trump Will Create Growth & Jobs by Stephen Moore via IBD
- Trump’s Next Default Lies Ahead by Brett Arends via MarketWatch
- Good Chance Trumped Handed A Recession by Chris Isidore via CNN Money
- The Trouble With Trump’s Infrastructure Plan by Tyler Cowen via Bloomberg
- Economic Doctors Misdiagnosed Economy by Ray Keating via Real Clear Markets
- Financial Crises & Policy Responses by Robert Litan via AEI
- I Can’t Believe What Just Happened by Paul Krugman via NYT
- Trump’s Impossible Economic Mission by Robert Samuelson via RCM
- Fed Ready For A Reckoning by Binyamin Appelbaum via NYT
- Who’s Going To Pay From Trump’s Plans by Marc Joffe via The Fiscal Times
….
Markets
- Is The Bull Market In Bonds Really Over? by Caroline Baum via MarketWatch
- 5 Reasons Investors Should Worry About Trump by Joachim Fels via MarketWatch
- Dividend Cuts Ramp Up by Ironman via Political Calculations
- Embrace Contrarian Thinking by Doug Kass via Real Clear Markets
- Don’t Believe The Great Great Bond Fake-Out by Jeff Reeves via MarketWatch
- Trumpageddon to Trumptopia! What’s Next? by Michael O’Rourke via HedgEye
- Market’s Two Bullish Arguments by Michael Kahn via Barron’s
- Trump-Rally Sits Atop A Lot Of “If’s” & “Maybe’s” by James Saft via Reuters
- Watch The Rise Of The Dollar by Jeffrey Snider via Alhambra Partners
- Trump Trade Is Getting Out Of Hand by James Mackintosh via WSJ
- Clear & Present Danger via Market Anthropology
- End Of The Year Rally? by Adam Shell via USA Today
Interesting Reads
- Populism Takes A Wrong Turn by Bill Gross via Janus Capital
- 2826 Day Old Bull Market A Headache by Joseph Ciolli via Bloomberg
- Trump Rally – Too Far Too Fast? by Paul La Monica via CNN Money
- Goldman Kills The Reflation Trade by Tyler Durden via ZeroHedge
- Rates Will Remain Low by David Trainer via Forbes
- Trump vs Rates by Mohamed El-Erian via Bloomberg
- If You Build It (Infrastructure), They Won’t Come by Stephen Entin via IBD
- A CasP Model Of The Stock Market by The Bichler & Nitzan Archives
- Oops! Single Family Permits Fall Flat by Aaron Layman via AaronLayman.com
- Judging Economic Policy by John Hussman via Hussman Funds
- Breadth Thrust To Launch Stocks Higher? by Dana Lyons via Tumblr
- Just One Question For Yellen by Jesse Felder via The Felder Report
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While Hillary's loss may be good
from some people's perspective, it may prove to be the worst thing that could
have happened...depending on what Trump does as president. If he governs as a Republican, it is time to pack bags.
Because the clock is ticking. We will have – at best – four years before
something far worse than Hillary returns, with a vengeance...Bernie Sanders,
for instance, or Michelle Obama, or – probably – something far
worse than either.
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Meet Mike Pompeo, The New Director Of The CIA
Moments after Donald Trump offered the Attorney
General spot to senator Jeff Sessions (which he promptly accepted), it was
announced that Trump had also picked rep. Mike Pompeo as CIA director, who
likewise accepted. Here is a brief profile of the new head of America's
spy agency.
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U.S.
SENATOR JEFF SESSIONS HAS ACCEPTED TRUMP'S OFFER TO SERVE AS U.S. ATTORNEY
GENERAL -TRANSITION OFFICIAL
One of Sessions' earliest decisions will be whether to follow through
on Trump’s campaign promises to appoint a special prosecutor to investigate the
e-mail practices of Hillary Clinton. Before the election, Sessions called for a
special prosecutor.
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So when the
protected class of well-paid institutional "progressives" speak
darkly of "reversing 40 years of social progress," what they're
really saying is we're terrified that
the bottom 95% might be waking up to our Great Con of identity politics and
political correctness.
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WORLD ISSUES and ME
China's curbs to cool its overheating property
market have a long way to go as October home prices grew at the fastest rate
since record-keeping began in 2011, despite a significant slump in property
sales volume as more discriminating buyers appear to have stepped back from the
recent buying frenzy.
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More of the same this morning as the dollar extended its advance on the
still undeteremined Trump reflationary policy measures after Yellen signaled an
interest-rate hike could be imminent, while bond yields around the globe rose
again, metals declined, European stocks advanced and futures were
modestly in the red just shy of all time highs.
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- Dollar heads for best fortnight vs. yen since 1988 (Reuters)
- Jeff Sessions Said to Be Trump’s Pick for Attorney General (BBG)
- Flynn set to be national security adviser (Reuters)
- NATO Secretary General Expects to Speak With Trump ‘Very Soon’ (BBG)
- Hensarling Could Be Wall Street’s Best Hope or Worst Nightmare (BBG)
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DEMOCRACY NOW
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GLOBAL RESEARCH
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INFORMATION CLEARING HOUSE
Trump and Putin Begin Work on US-Russia Reset By M K Bhadrakumar
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Trump Appoints Retired Lt. Gen. Michael Flynn
as National Security Adviser: Report By Chris Sommerfeldt The retired general has also
suggested killing relatives of suspected terrorists
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Lt. Gen. Michael T. Flynn: “Gun for Hire” By David L. Phillips Simply put, Flynn was bought.
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The day of reckoning revealed the emptiness of what Obama
team’ produced.
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COUNTER PUNCH
Kshama Sawant We
Cannot “Give Trump a Chance”
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Andrew Levine Trouble
Ahead: With Trump and For Him
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Omar Robert Hamilton Paradoxical
Truths of an Isolationist Empire
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Julian Vigo - Jasmine Curcio
Hillary
Clinton, The Vote, and Contemporary Feminism’s Class Blindness
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Ralph Nader Which
Trump? Early Signs Not Good
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Pepe Escobar Trumpolitics
101
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Norman Pollack Evolutionary
Fascism: The American Phenomenon
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Manuel E. Yepe What
Trump’s Win Means: a View From Cuba
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David Krieger Trump,
Nuclear Weapons and the Human Future
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Gilbert Mercier George
Soros: Dystopia’s Minister of Truth
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SPUTNIK and RT SHOWS
Snowden Fields Questions at Pen Int'l Session Dedicated to
Imprisoned Writers
https://sputniknews.com/world/201611181047594498-snowden-question-answer-session/
https://sputniknews.com/world/201611181047594498-snowden-question-answer-session/
VIDEO : https://youtu.be/AsVv-X8HKt4
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US in Syria: Obama's Failed 'Final Accord' https://sputniknews.com/world/201611181047592898-obama-administration-syria-failure/
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Moscow Says US Rhetoric on Syria Situation Based on 'Flagrant
Lies' https://sputniknews.com/russia/201611151047478353-Russia-US-Syria/
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White Helmets Behind "Reports" About Hospitals in
Rebel-Held Syrian Territory
https://sputniknews.com/middleeast/201611181047591222-white-helmets-syria-schools-hospitals/
https://sputniknews.com/middleeast/201611181047591222-white-helmets-syria-schools-hospitals/
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Trump: Flynn to Be 'Invaluable Asset' as National Security Adviser
https://sputniknews.com/us/201611181047597454-trump-flynn-security-adviser/
Trump: Flynn to Be 'Invaluable Asset' as National Security Adviser
https://sputniknews.com/us/201611181047597454-trump-flynn-security-adviser/
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Lawyer Hopes for Trump Administration to Change US Stance on
Assange, Manning https://sputniknews.com/us/201611181047596935-trump-assange-manning/
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All Pigs Are Equal But Some Are Moodier Than Others, New UK
Study Finds https://sputniknews.com/art_living/201611181047591237-pigs-study-sweets-moody/
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'Rivers of Blood' Return as Authoritarian Populism Makes a
Comeback
https://sputniknews.com/politics/201611181047586594-authoritarian-populism-europe-us/
https://sputniknews.com/politics/201611181047586594-authoritarian-populism-europe-us/
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China, Iran Bring in Their Military Into Geopolitical Game in
the Middle East
https://sputniknews.com/politics/201611181047595869-china-iran-middle-east/
https://sputniknews.com/politics/201611181047595869-china-iran-middle-east/
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Pompeo 'Good, Wise' Selection for Head of CIA - US Senator
https://sputniknews.com/us/201611181047598625-pompeo-cia-trump-roberts/
https://sputniknews.com/us/201611181047598625-pompeo-cia-trump-roberts/
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RT SHOWS
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SophieCo Time
for EU to stop freeriding on America’s defense policy – former Austrian
Chancellor
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WASHINGTON BLOG
Posted on November 17, 2016 by DavidSwanson
Michael Flynn, expected to advise Donald Trump on
counterproductive killing operations misleading labeled “national security,” is
generally depicted as a lawless torturer and assassin. But,
whether for partisan reasons or otherwise, he’s a lawless torturer and assassin
who has blurted out some truths he shouldn’t be allowed to forget.
For example:
“Lt. Gen. Flynn, who since leaving the DIA has become an outspoken
critic of the Obama administration, charges that the White House relies heavily
on drone strikes for reasons of expediency, rather than effectiveness. ‘We’ve
tended to say, drop another bomb via a drone and put out a headline that “we
killed Abu Bag of Doughnuts” and it makes us all feel good for 24 hours,’ Flynn
said. ‘And you know what? It doesn’t matter. It just made them a martyr, it
just created a new reason to fight us even harder.'”
Or even more clearly:
“When you drop a bomb from a drone… you are going to cause more damage
than you are going to cause good. The more weapons we give, the more bombs we
drop, that just… fuels the conflict.”
Will Flynn then
advise Trump to cease dropping bombs from drones? Or will he go ahead and
advise drone murders, knowing full well that this is counterproductive from the
point of view of anyone other than war profiteers?
⇒ Keep Reading
⇒ Keep Reading
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NOTICIAS IN SPANISH
El giro de Trump hacia lo
desconocido Claudio Katz
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La elección de Estados Unidos,
¿cambia algo no? Immanuel Wallerstein
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Trump y la quiebra de la
globalización neoliberal Ángel
Guerra
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PRESS TV
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