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Tag Archives: Central Banks

“It’s Time For Markets To Catch On” – Central Bankers Warn ‘Investors Are Too Complacent’

Authored by Lena Komileva, originally posted at The Financial Times, The US Federal Reserve raised rates for the third time in six months in June, even though inflation had stayed below its 2 per cent target for much of the past decade. Why? The justification lies with the return to “economic normalisation” (a more normal US growth and credit cycle), a reflationary global environment and easy financial conditions all combining to banish the extreme “tail risks” of a...

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“The World’s A Scary Place” But One Trader Notes “The AI Bots Don’t Care How You Feel”

Day after day... another sabre rattled somewhere in the world, another policy-reform hype-destroying debacle in Washington, or another slump in 'hard' economic reality data... and another record high for stocks. Former fund manager Richard Breslow says 'get used to it' - at last until the autumn, when the central bankers return... "AI bots don't care." As he discusses below, it's not the economy, stupid; it's the trading bots... Via Bloomberg, I guess...

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JPM: “Investors Are Starting To Hedge Against A Crash”

It's probably not a coincidence that in the same week in which one of the most level-headed investors of all, Oaktree's Howard Marks issued an alarm on the current state of the market, that JPM has come out with not one (as discussed previously, Marko Kolanovic's latest "tipping point" note last Thursday was blamed for the small and sharp selloff at the end of last week), but two reports in which JPMorgan makes it clear that not only is the market on the edge, but increasingly more traders,...

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“Why Does Extraordinarily Low Volatility Matter” Baupost Explains…

With elites increasingly sounding the alarm about the state of the stock market, and various market participants fearing the complacency is masking the fragility of the market's true character; it is no surprise that Baupost's recently named President and Head of Public Investments, Jim Mooney, has joined the chorus. While Mooney (and Klarman's) warning regarding market volatility is not new, perhaps the most interesting nuance is the 'difference this time'. Confirming...

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Chris Whalen: “Gundlach Isn’t Wrong, He’s Just Early”

Chris Whalen, Chairman of Whalen Global Advisers and a very well-known financial analyst (he was one of the original forecasters of Lehman's inevitable demise) appeared on MacroVoices podcast this week to discuss the equity valuations, the path of the US dollar and DoubleLine Capital founder Jeff Gundlach’s declaration that the 35-year bull market in bonds is dead. Some of the key highlights: "Erik: I want to start with the US dollar because, you know, we’ve had quite a...

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“This Time Will Be Different”: A Bullish Morgan Stanley Says “2017 Is Unlike 2012-2016”

Following a flood of warnings in the past week about both the precarious state of markets and the global economy, most recently from the otherwise stoic Howard Marks warning about bubble-like condition in the market (especially when it comes to passive investors), as well as Robert Shiller who explained what "keeps him up at night", we were due for some good news. It came over the weekend courtesy of Morgan Stanley's co-head of economics, Chetan Ahya, who writes in his Sunday Start weekly...

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Zombie Corporations Litter Europe, Kept Alive By ECB

Authored by Mike Shedlock via MishTalk.com, Bank of America says 9% of European firms have subpar interest coverage. Bloomberg covers the story in its report Zombie Companies Littering Europe May Tie the ECB’s Hands for Years. Watch out for the zombies.   The plethora of companies propped up by the European Central Bank will limit policy makers’ ability to withdraw monetary stimulus that’s been supporting the continent’s bond market since the financial...

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Goldman’s Clients Are Confused About Inflation: Here’s Why

In his latest weekly kickstart, Goldman's chief equity strategist David Kostin (who has maintained his year end S&P price target of 2,400 of -3% from current levels), says that the one topic most confusing (and important) to Goldman's clients in the past week, was what happens to inflation next: "the US inflation outlook and its equity investment implications were key topics of discussion during recent visits with clients in Boston, Chicago, and New York. Core Personal...

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Our Brave New ‘Markets’ – How HFT Algos Risk A Sudden Massive Sell-Off

Authored by Chris Martenson via PeakProsperity.com, One thing is clear: These aren’t your daddy’s markets anymore. Why?  Because about 10 years ago the Rise of the Machines (aka high frequency trading algorithms) completely altered the terrain of what we call the ‘capital markets.’  Let’s look at this as a before and after story. Before the machines, markets were a place that humans with roughly equal information and reflexes set the prices of...

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Dan Loeb: “None Of Our Early Predictions Have Come To Pass”

Below are some key highlights from Third Point's latest Q2 letter, in which we find that Dan Loeb, despite some early market turbulence and thesis drift, has again managed to do what 95% of his peers have been unable to do, outperforming the S&P YTD and returning 10.7% through June 30, up 4.6% in the second quarter. From the Second Quarter 2017 Investor Letter: Review and Outlook   During the second quarter of 2017, Third Point earned +4.6% in the Offshore Fund, bringing...

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