0CT 15 20 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics
MORTGAGE RATES HIT RECORD LOW FOR 10TH TIME THIS YEAR
"It’s important to remember that not all people are able to take advantage of low rates, given the effects of the pandemic."
In a world where over $16 trillion in debt now trades with negative yields...
See Chart:
https://www.zerohedge.com/s3/files/inline-images/neg%20yielding%20debt.jpg?itok=h9C8YeL9
... the US remains one of the outliers where nominal yields are still positive (if not for too long). Still, with rates in the US remaining caught in a tight range, and as bank funding conditions increasingly normalize, it means that yields on mortgages continue to shrink, and sure enough according to the latest Freddie Mac data, the average yield for a 30-year, fixed loan dropped to 2.81%, down from 2.87% last week, which was not only the lowest in almost 50 years of data-keeping, but also the 10th record low this year. The previous all time low - 2.86% - held for about a month.
See Chart:
https://www.zerohedge.com/s3/files/inline-images/mortgage%20rates.jpg?itok=R6nzQWem
The availability of record cheap loans - which is unlikely to change with the Fed signaling it will hold its benchmark rate near zero through at least 2023 - has fueled a home buying spree which while bolstering the pandemic economy, has resulted in yet another bubble (for more details see Visualizing The U.S. Housing Frenzy In 34 Charts)
Meanwhile, the surging demand for the scarce supply of properties on the market is pushing up prices, putting homeownership out of reach for many Americans, and leading to even greater wealth inequality which, as a reminder, is how we got here in the first place. Adding insult to injury, lenders have tightened credit standards to near record levels, presenting another potential obstacle for would-be buyers.
See Chart:
% Reporting Tighter loan standards
https://www.zerohedge.com/s3/files/inline-images/tighter%20loan%20standards%203_2.jpg?itok=yr5CbmXx
“It’s important to remember that not all people are able to take advantage of low rates, given the effects of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in the statement.
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SOURCE: https://www.zerohedge.com/markets/mortgage-rates-hit-record-low-10th-time-year
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TRADERS RATTLED AFTER MORGAN STANLEY SEES 80% ODDS RESULT WON'T BE DETERMINED ON ELECTION NIGHT
And the VIX kinks again.
After we saw a brief surge in market expectations that the election would be resolved quickly on Nov 3 amid an avalanche of polls that predict a Biden avalanche, sentiment for a painless outcome has soured in the past few days, perhaps as doubt has crept into the "accuracy" of these same pollsters whose track record is absolutely atastrophic (as even JPMorgan reminded us).
As we noted two days ago, it is the view of the vast majority of Wall Street professionals that a contested election is inevitable, a direct rebuke of all the Biden-friendly polls, with 74% expecting a long and drawn out process.
See Chart:
Do you think the US elections outcome will be contested? [60% responded YES]
https://www.zerohedge.com/s3/files/inline-images/contested%20election_2.jpg?itok=dIpU062Y
However, there is some good: contrary to some expectations that the election outcome could take as much as a month to be decided - a la Gore vs Bush - new data cited by Morgan Stanley suggests "the worst-case outcome is the least likely." And while vote-by-mail (VBM) requests are breaking records, a concern given the slower process for counting those ballots, voters appear to be returning those ballots at a rapid pace in key battleground states according to Morgan Stanley's Michael Zezas.
See Charts:
https://www.zerohedge.com/s3/files/inline-images/vote%20by%20mail%20MS.jpg?itok=sVE_40_1
This reduces the risk of sufficient vote counts to reliably know the election result dragging out for weeks, according to the MS strategist who nonetheless predicts that a reliable result may take some time (i.e., a "Election Week") given key swing states like WI, where VBM totals are high and ballots can’t be processed or counted before Election Day. In short, Morgan Stanley says that "there is an 80% chance the result is not determined on election night."
See Table:
https://www.zerohedge.com/s3/files/inline-images/election%20week.jpg?itok=X2BHgG1G
On the other hand, there is an upside surprise is possible if VBM returns accelerate in FL and NC over the next two weeks. These are key tipping point states that can tabulate VBMs early.
Finally, judging by the VIX term structure where the November "kink" just spiked in the curve, the market is also far less sanguine, with both Oct and and Nov expiries which capture the period around the election, seeing a sizable move higher today (or "kinking") compared to yesterday, and are almost in line with a week ago.
See Chart:
VIX Term Structure
https://www.zerohedge.com/s3/files/inline-images/VIX%20shift.jpg?itok=6mkD9vzX
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DONATIONS needed to DEFEAT Trump & save the NATION & the WORLD from WW3. i need to buy a new computer & make basic reparations in my house. I’am broke and I have 10 grand Childs starting University and a wife in a critical health situation.
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Short Econ news:
1-
WTI POPS BACK ABOVE $40 AFTER BIGGEST DISTILLATES DRAW SINCE 2003
“The growing use of localized lockdowns are raising fears that energy demand could once again be set to tumble,”
Oil prices plunged overnight, with WTI back below $40, as last night's bullish API-reported bigger-than-expected draw was trumped by traders fears that weaker than expected US jobs data and new virus restrictions in Europe will further threaten any sustained demand rebound.
U.S. labor market data is providing “more fuel for the fire of a sour economic outlook,” said Gary Cunningham, a director at Tradition Energy. “If there are further restrictions or new restrictions put in place in Europe or here in the U.S., then that further decreases travel demand for petroleum.”
Official data showed a crude draw that was smaller than API reported, a big build at Cushing, and a huge draw in Distillates (biggest since 2003)...
See Chart:
https://www.zerohedge.com/s3/files/inline-images/bfm54DC.jpg?itok=FibCh2Zm
US Crude production remains noisy given the storm-related impacts, with shut-ins sending production levels down 500k barrels per day...
See Chart:
https://www.zerohedge.com/s3/files/inline-images/bfmBCDF.jpg?itok=s_1z1N_m
Latest EIA data indicate drilling activities remain anemic in September, even as WTI recovered to near $40 per barrel.
https://www.zerohedge.com/s3/files/inline-images/2020-10-15_7-59-00.jpg?itok=vEf-_wgA
“The growing use of localized lockdowns are raising fears that energy demand could once again be set to tumble,” TD Securities commodity strategists including Bart Melek said in a note. “With a second wave well underway, this is the primary risk for energy bulls at the moment.”
SOURCE: https://www.zerohedge.com/energy/wti-pops-back-above-40-after-massive-product-draw
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"THINGS COULD GET MESSY" - NOMURA WARNS BULLS "CANNOT OVERSTATE GAMMA IMPACT" FROM TOMORROW'S OP-EX
... things would get messy in index on a move down through 3400 (3389 to be exact) in SPX and / or through 284.63 in QQQs...
A double-whammy of 'soft' Mnuchin confirmation that a fiscal "deal" pre-election is unlikely and the reacceleration of COVID-19 restrictions and closures across Europe, sparked a significant 'risk-off' move overnight with Nasdaq almost erasing all its gains for the week..
See Chart:
https://www.zerohedge.com/s3/files/inline-images/2020-10-15_5-36-30.jpg?itok=DZaCKlcn
But, as Nomura's Charlie McElligott details, with stocks are the forefront of cross-asset risk sentiment, the talking-point on the desk is simple:
you cannot overstate the Gamma impact on the overall market of those single-name mega-cap Tech options expiring tomorrow
The reason, simple again - the options market tail wagging the broad US equity market dog as McElligott points out that the “negative Gamma” in these monster positions (from the calls which the Dealer is short this expiration in AMZN, ADBE and NFLX as largest standouts) has them chasing the market to remain Delta hedged, accelerating the swings in both directions this wk.
We saw the call-buying volume collapse - just like it did after Nasdaq-Whale impacts in August...
See Chart:
https://www.zerohedge.com/s3/files/inline-images/bfmA73C_0.jpg?itok=AXOn1lBe
As Nomura's MD notes, there is simply so much convexity now just a one day out from expiry in these Calls - similar to when the stocks blew through their strikes to the upside only a few days earlier and forced mass Delta buying to stay hedged - that we see the opposite accelerant flow on the way down, with the Delta on these now 1-day options having reversed those prior moves and utterly collapsing (looking much lower probability to strike), thus leaving the Dealer overhedged “long,” which means collectively / potentially ~$Billions of dollars for SALE intraday the lower we go across whatever the preferred hedging mix in these market leader Tech stocks (AMZN being the largest position - particularly the 8k Oct 3420 Calls, stock now 3289 last preopen after having traded up to $3496 just Monday!), QQQs or Nasdaq (even SPX) futures.
See Charts:
https://www.zerohedge.com/s3/files/inline-images/2020-10-15_6-02-30.jpg?itok=naDBgw55
As McElligott warned earlier in the week, the issue into- and out of- expiry on the index level will be the dangerous set-up with:
1) “extreme long” $Delta via options (remember just two days ago we had QQQs at 100th %ile and SPX / SPY at 97.5%ile)...
...then synchronizing with 2) a massive “Gamma drop-off” coming out of this expiration (QQQ still showing ~60% of $Gamma dropping after Friday, SPX / SPY down slightly but still ~29% dropping-off).
See Charts:
https://www.zerohedge.com/s3/files/inline-images/2020-10-15_5-49-45.jpg?itok=GhOP0dKJ
Which, Nomura's cross-asset-strategist fears, could set the potential for much larger trading range distribution coming-out next week with much smaller Dealer hedging "speed bumps".
Looking locally today, things would get messy in index on a move down through 3400 (3389 to be exact) in SPX and / or through 284.63 in QQQs, where we estimate that the current index “long Gamma” position for Dealers flips "short".
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3-
BEHIND THE NASDAQ WEAKNESS: GOLDMAN DOWNGRADES TECH TO NEUTRAL
"We downgrade Tech to Neutral" - Goldman Sachs
Amid the stock slide this morning, tech is getting hit especially hard, and one key driver for this is the overnight downgrade of the tech sector from Overweight to Neutral by Goldman Sachs, to wit:
We make four sector changes: we upgrade Banks and Autos to Overweight (bothfrom Neutral), and we downgrade Tech to Neutral and Food, Beverages & Tobaccoto UW (from Neutral). We also take off our long-held Long view on our Digital Economy basket(GSSBDIGI). We add a Long recommendation on our Recovery (GSSTRCOV)basket
vs. SXXP. This joins our Fiscal Infrastructure spending basket (GSSTFISC),which we continue to recommend.
See Table
Our Sector Recomensatios
https://www.zerohedge.com/s3/files/inline-images/gs%20sector.jpg?itok=n46bGTVg
The reasoning behind the downgrade is hardly a secret, and follows a similar move by Bank of America from two weeks ago when BofA chief equity strategist Savita Subramanian said that "it's time to buy value." While we will share some more details from the Goldman report, which oddly enough shares the BofA title "Time for Value", here are the highlights:
One of the most enduring features of the post-GFC period has been the secular outperformance of Growth vs. Value. There have been rotations, but these have generally been short-lived.
See Chart:
Growth has outperformed since the GFC. Relative Price Performance in local currency
https://www.zerohedge.com/s3/files/inline-images/value%20investors.jpg?itok=SH5t0JR2
The drivers of this long-term trend are well understood – low rates, low inflation and low economic growth.
See Chart:
https://www.zerohedge.com/markets/behind-nasdaq-weakness-goldman-downgrades-tech-neutral
We think these drivers for the most part remain in place; the secular trends still favour growth or growth-defensive stocks (such as the GRANOLAS).
See Charts:
https://www.zerohedge.com/s3/files/inline-images/gdp%20vs%20value.jpg?itok=69kXBdTs
CONTINUE READING AT:
SOURCE: https://www.zerohedge.com/markets/behind-nasdaq-weakness-goldman-downgrades-tech-neutral
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
MAJORITY LEADER MCCONNELL SAYS BARRETT HAS VOTES FOR SENATE CONFIRMATION
McConnell added that he expects the Barrett nomination on the Senate Floor on October 23rd (obviously before the election).
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THE LEAST IMPORTANT ELECTION OF OUR LIFETIMES?
This election is the least important of the past 30 years and very possibly the least important ever. Because, to put it bluntly, we’re kind of screwed either way...
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... some of which have subsequently proved to be wrong.
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GOODBYE MIDDLE CLASS: HALF OF ALL AMERICAN WORKERS MADE LESS THAN $34,248.45 LAST YEAR
Once upon a time in America, a single income could easily support a middle class household in most cases, but those days are long gone...
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THE BARRETT RULE: HOW DEMOCRATIC MEMBERS ARE CREATING A NEW AND DANGEROUS STANDARD FOR CONFIRMATIONS
We have now reached the Rubicon of confirmation politics. Thirty-three years after the Bork hearing, senators are now stripping away any pretense or nuance: they will oppose Barrett because of her expected votes on cases.
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
Pro-US Govt in Bol is going to lose elections.. bye bye cheap Lithium
EV INDUSTRY IS EXPLODING! FINDING A NEW LITHIUM SUPPLY IS CRITICAL FOR SECTOR
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US’ PEACE CRIME & possible start of WW3. RU is alert & will join CH response to US
XI JINPING TELLS ELITE TROOPS "PREPARE FOR WAR" AS US DESTROYER SAILS THROUGH TAIWAN STRAIT
State-backed Global Times said the USS Barry transit resulted in assets from China's Eastern Theater Command being mobilized.
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars & danger of WW3
THIS IS AMERICAN FASCISM:
-‘This is Not America’: WH Press Secretary Raps Twitter for Biased Approach to Banning Articles
- US Army Pushes for Missile to Reach Moscow From Germany, as Discarded INF Treaty Sought to Prevent [This is Imperial fascim with PENTA-NATO allies: Germany-UK ++)
- University of Oxford Develops Rapid, ‘High-Accuracy’ COVID-19 Antigen Test
- Pompeo Claims US-North Korean Diplomacy ‘Successful’ Despite Pyongyang’s Recent ICBM Display
- Hunter Biden Sought 'Lucrative' Deal for Himself, His 'Family' With Chinese Firm, New Emails Suggest Both Trump (taxes) and Biden (read this) are crooks. Don’t Vo: ABSTEIN
- China Tests Launching Suicide Drone Swarm From Truck, Helicopter
- Full Interview: Conflict in Nagorno-Karabakh is Liberation War for Azerbaijan, President Aliyev Says
- Full Interview: Turkey is the Main Sponsor of Nagorno-Karabakh War, Armenian PM Pashinyan Says
- Iraq Forms Committee to Develop Timeline for Withdrawal of US Troops
- 'Russophobia Was Exacerbated by Events of Ukrainian Conflict,'
- US Consolidates Hypersonic Research, Testing at Naval Surface Warfare Centre, Pentagon Says
- Russian Minister on Why He Chose COVID Vaccine Based on Human Adenovirus
- Russia Should Red Card Europe
- Trump Says Election Result Should Be Available on November 3
- PM Pashinyan Says Turkey Seeks to Continue Armenian Genocide in Nagorno-Karabakh Conflict - Video
- Azerbaijani Prest Aliyev Says Armenian PM Pashinyan is a Product of George Soros
- Biden's China Policy Will be More Systematic, But Predictable
- Why It Would be Self-Harming for Dems Not to Vote for Barrett Despite Abortion & Obamacare Concerns
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