6,773 Posts

nick_the_contrarian The Swiss National Bank Is Long $94 Billion In Stocks, Reports Record Loss Equal To 7% Of Swiss GDP

In other words, the SNB holds 15% of Switzerland's GDP in equities!

We'll give the SNB credit: while every other central bank is loaded to its gills in stocks, few dare admit it. At least the SNB files a quarterly 13-F.

So here hoping that other money printing hedge funds central banks follow suit: hedge funds such as the NY Fed, which having participated directly and indirectly (via Citadel) in the market for the past decade if not longer, are holding hundreds of billions, if not more, in equity exposure either on its balance sheet or in off-balance sheet vehicles (via Citadel). After all, both the Fed, the SNB and all their peers are desperate to "reflate" the world in the only way they can - through stock market levitation. So if anything, admitting to the world not only that they buy stocks outright, but show which stocks they buy, would result in massive future lagged frontrunning of such central bank 13-F purchases, and everyone jumping into the stock market. After all, piggybacking on a central bank is as close to a riskless trade as exists, at least until they all lose control.

We can hope, but it is that kind of "transparency" that the NY Fed will never agree to because, gasp, someone may just admit that while central banks like the SNB, the BOJ and, of course, the Chinese in the past month, have been openly buying stocks, the "value" of the S&P500 is nothing more than a function of how many times the NY Fed's trading desk at 33 Liberty Street pushes the "buy" button on any given day. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
17min

» LOG IN to write comment.

nick_the_contrarian "The Virtuous Emerging Market Cycle Is Turning Vicious" Albert Edwards Remembers The 1997 Asian Crisis

It also means that what may have been one of the biggest drivers of DM FX strength in recent years, if only against the pegged Renminbi, is suddenly no longer present.

While the implications of this on the global FX scene are profound, they tie in to what we said last November when explaining the death of the petrodollar. For the most part, the country most and first impacted from this capital outflow will be China, something its stock market has already noticed in recent weeks.

But what is likely the take home message for non-Chinese readers from all of this, is that while there has been latent speculation over the years that China will dump US treasuries voluntarily because it wants to (as punishment or some other reason), suddenly China is forcedto liquidate US Treasury paper even though it does not want to, merely to fund a capital outflow unlike anything it has seen in history. It still has a lot of 10 Year paper, aka FX reserves, left: about $1.3 trillion at last check, however this raises two critical questions: i) what happens to 10 Year rates when whoever has been absorbing China's Treasury dump no longer bids the paper and ii) how much more paper can China sell before the entire world starts paying attention, besides just JPM and Goldman... and this website of course.

Finally, if China's selling is only getting started, just what does this mean for future Fed strategy. Because one can easily forget a rate hike if in addition to rising short-term rates, China is about to dump a few hundred billion in paper on a vastly illiquid market.

Or let us paraphrase: how soon until QE 4? #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
1d
  •   gregman6 I'm ready to dump my 401k and dig myself a bunker 1d

» LOG IN to write comment.

nick_the_contrarian The War On Cash: Why Now?

Benefits To Banks and the Government of Eliminating Physical Cash

The benefits to banks and governments by eliminating cash are self-evident: Every financial transaction can be taxed.
Every financial transaction can be charged a fee.
Bank runs are eliminated.
In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash. Thus a bank might only have 1 percent of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.

So, when the dust has settled who ultimately benefits by this war on cash, government and the central banks, pure and simple.

This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens, and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
2d

» LOG IN to write comment.

nick_the_contrarian Wall Street Still Didn't Get The Memo - China's Done, Top's In!

In the first place, upwards of 90 million households are in the Chinese stock market, most of them buried under margin debt. Among them, they hold exactly 258 million trading accounts and a significant fraction of these were opened in just the past year by Chinese pig farmers, bus drivers and banana vendors, among millions of quasi-literate others.

The country went nuts speculating in stocks just like it has in empty apartments, coal mines, expensive watches, Macau slot machines, fine wines, copper stockpiles, and almost anything else that can be bought and sold. So when the Beijing overlords go into full panic mode about the stock market plunge, they actually have a reason: There are more trading accounts in their red casinos than there are people in Japan, Korea, Thailand and Malaysia, combined!. The truth is, the Chinese stock market is not even worth 30X because the entire Ponzi is unraveling. The Chinese economy is bloated with monumental malinvestments and stupendous excesses—–the likes of which have never previously been visited upon a modern industrial economy.

Accordingly, while it is impossible to gauge the magnitude and timing of the hard landing now imminent, one thing is certain. Namely, the virtual impossibility that an economy flushed with a helter-skelter debt expansion from $2 trillion to $28 trillion in just 14 years—-especially one that has no rule of contract law or even semblance of honest capital markets—- can avoid a thundering deflationary collapse.

Stated differently, profits have already nearly vanished in upstream sectors like coal, steel, aluminum and cement; are now eroding in shipbuilding, construction equipment, solar equipment, and other capital goods; and will soon be falling in overbuilt consumer industries, especially, automobiles, as well. Like Japan in the mid-1990s, China is heading for an era of profitless deflation as its credit binge comes to an end. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB
3d

» LOG IN to write comment.

» LOG IN to write comment.

» LOG IN to write comment.

nick_the_contrarian Why China Will End Up Like Japan

Just as in 1985, political pressure on China to revalue its exchange rate was growing, and the Chinese responded accordingly, though more reluctantly than the Japanese did in 1985. When the bubble burst Chinese authorities had the option of going all in, or accept failure and massive social unrest. The choice was simple; an unprecedented monetary and fiscal “stimulus” package was the favoured option. By substituting domestic demand for collapsing foreign demand the Chinese believed they could avoid the consequences of years of market/reality suppression.

It appeared to work just as it did in Japan, as the Chinese economy steamed ahead for several more years after 2008. Continued demand from China also helped desperate commodity producers which were set to years of pain after 2008. Instead, excess capacity continued to be piled on top of already malinvested resources for seven more years making the problems that much larger.

It is all a mirage though. Just as in Japan, the Chinese will not allow the market process to do its magic to get the economy back on a stable footing. Draconian measures to stop the recent stock market rout are a clear testimony of that. In other words, the Chinese economy will resemble that of Japan, and it will do so very soon, if it is not already there. Global commodity producers will be crushed and once again all the pundits proclaiming Chinese global dominance with the Yuan as the new world reserve currency will be put to shame. It will not happen; the “miracle” will turn into a nightmare. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
4d

» LOG IN to write comment.

nick_the_contrarian The Complete Guide To China's CNY 4 Trillion Margin Doomsday Machine

This means that most leveraged positions may suffer from losses ultimately, likely in Rmb trillions. On the other hand, the capital base of brokers and trusts, who are the first loss takers behind investors, is only Rmb1.6tr (Table 2). Banks’ capital may suffer greatly as well once the equity of the other FIs is depleted – banks provide or channel most of the leverage directly or indirectly. The risk is that the unwinding of the leverage will be disorderly – due to implicit guarantees behind most shadow banking financial products, investors could easily panic if they suffer from meaningful capital losses, by our assessment. The key risk to our view is that the government may be prepared to take on substantially all the leverage, in which case, we expect RMB or growth to come under pressure.

In other words, the risk to the margin unwind case is that the PBoC steps up its support via CSF and essentially restores margin lending to its pre-selloff levels. The obvious problem there is that after the bevy of steps Beijing has taken to support the market over the course of the previous month, the world is already highly skeptical of China's commitment to capital market liberalization. Any move by Beijing to go full-interventionist (or "full-Kuroda" as it were) may imperil not only China's bid for A-share inclusion in benchmark EM indices, but the country's yuan SDR bid as well.
Of course, as we're fond of pointing out, if the country's farmers, housewives, hairdressers, and grandmothers decide not to go silently into that good night, resigned to having lost everything in what is looking more and more like a modern day tulip mania every day, then a crashing economy and international ostracization of the renminbi may be the least of Beijing's worries. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
4d

» LOG IN to write comment.

motivationalrealizations Shout out to @fatfinger94 "The whole world is going to be vibing to that Franklin Estate sound, the sound of LOVE from the hearts at the of the BIGGEST COUNTY IN THIS COUNTRY! SAN BERNARDINO COUNTY!"
#FE #FamilySTRONG #DreamLiving #GoingUP #ForTheeEmpire #Victory #LivingDreams #DinoRocking #DinoGoingUP #FatFinger
#MotivationalRealizations
#HeyNow #StopTheHungerChallenge
MOTIVATIONAL REALIZATIONS
4d

» LOG IN to write comment.

nick_the_contrarian The End Of The Supercycle? Commodity "Capitulation" Arrives

The fund flow details indicate a "Great Rotation" out of commodities, Emerging Markets and, curiously, the US, and into bonds and continued flows into Europe, which has now seen 10 straight weeks of inflows with the latest one of $6.0 billion also the largest in the past 4 months.

Inflows into fixed income have been across the board: $1.9bn inflows to IG bond funds (first inflows in 3 weeks)
$0.5bn inflows to HY bond funds (2 straight weeks)
$0.3bn inflows to EM debt funds (modest inflows but largest in 11 weeks)
$2.1bn inflows to govt/tsy funds (3 straight weeks)
$0.2bn inflows to muni bond funds (first in 7 weeks)
While in equities it has been a tale of two flow directions: out of the US and into Europe (and to a lesser extent Japan): Japan: first outflows in 8 weeks ($0.5bn)
Europe: $6.0bn inflows (10 straight weeks & largest in 4 months)
EM: $3.3bn outflows (2 straight weeks)
US: $3.7bn outflows (outflows from both mutual funds & ETFs)
By sector, inflows to secular growth areas of healthcare ($1.3bn) & technology ($0.4bn)

To be sure, the best example of the paper flow capitulation is where else but gold, where in the past week algo, 1% of total gold/silver AUM has been wihdrawn! #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
5d
  •   thejalali Thank you. This is great. I buy when the market sells. Starting buying gold and silver last week. 5d

» LOG IN to write comment.

Lark HeyRubes

» LOG IN to write comment.

nick_the_contrarian The Casino-fication Of Markets Is Pervasive & Permanent

So what do the numbers tell us? Two things.

First, there’s more debt in the world today than before the Great Recession kicked off in 2008. All the deleveraging that was supposed to happen … didn’t. Sure, it’s distributed slightly differently, both by sector and by geography – and that’s critically important for the political utility thesis here – but whatever overwhelming debt levels you thought triggered a super-cyclical, structural recession then … well, you’ve got more of it now.

Second, it’s impossible to grow our way out of these debt levels. Japan, France and Italy would have to more than double their current GDP growth rates (and again, these are last year’s more optimistic projections) to even start to grow their way out of debt. Right. Good luck with that. Spain needs a triple. Even the US, the best house in a bad neighborhood, needs >3% growth from here to eternity to start making a dent in its debt. Moreover, every day you don’t achieve these growth levels is a day that the debt load gets even larger. These growth targets are a receding target, soon to be well out of reach for every country on Earth. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
1w

» LOG IN to write comment.

nick_the_contrarian Presenting The "Glamour" Bubble In All Its Glory

And in other news, now that "capitulation" is finally raging among the commodity sector, overnight that other "Anglo" gold miner, Anglo American, reported a $3 billion loss for the first half of 2015 and said it would cut 53,000 jobs over the next few years, as plunging commodity prices continue to wreak havoc on the bottom lines of miners world-wide.

Chief Executive Mark Cutifani said in a presentation to investors that the company would slash about 35% of its total workforce over the next several years, including jobs in operations the miner plans to sell. The job cuts include a reduction of 6,000 jobs at overhead operations, including 4,000 jobs in corporate-office operations. The overhead cuts should result in $500 million in cost savings, Mr. Cutifani said.

News of the cuts came as the miner reported a first-half loss, hit by a one-time charge of $3.5 billion, including $2.9 billion from a write-down on the value of Anglo American’s huge Minas-Rio iron-ore project in Brazil.

In retrospect, perhaps the good news is that while the overall market remains immune to reality, those companies and stocks reliant on the central bankers' most hated commodity, will finally undergo a long overdue period of "creative destruction", a result of which will be even less physical product in the market. It will also make the surviving companies stronger.

In the meantime, sit back and enjoy the reflation of the glamour bubble. If 2001 is any indication, companies with no earnings, no profits, but great "stories" can keep rising for a long time. Just make sure to sell before everyone else. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
1w

» LOG IN to write comment.

nick_the_contrarian China's Record Dumping Of US Treasuries Leaves Goldman Speechless

In other words, for once Goldman is speechless, however it is quick to point out that what traditionally has been a major source of reserve reflow, the Chinese current and capital accounts, is no longer there.

It also means that what may have been one of the biggest drivers of DM FX strength in recent years, if only against the pegged Renminbi, is suddenly no longer present.

While the implications of this on the global FX scene are profound, they tie in to what we said last November when explaining the death of the petrodollar. For the most part, the country most and first impacted from this capital outflow will be China, something its stock market has already noticed in recent weeks.

But what is likely the take home message for non-Chinese readers from all of this, is that while there has been latent speculation over the years that China will dump US treasuries voluntarily because it wants to (as punishment or some other reason), suddenly China is forced to liquidate US Treasury paper even though it does not want to, merely to fund a capital outflow unlike anything it has seen in history. It still has a lot of 10 Year paper, aka FX reserves, left: about $1.3 trillion at last check, however this raises two critical questions: i) what happens to 10 Year rates when whoever has been absorbing China's Treasury dump no longer bids the paper and ii) how much more paper can China sell before the entire world starts paying attention, besides just JPM and Goldman... and this website of course.

Finally, if China's selling is only getting started, just what does this mean for future Fed strategy. Because one can easily forget a rate hike if in addition to rising short-term rates, China is about to dump a few hundred billion in paper on a vastly illiquid market.

Or let us paraphrase: how soon until QE 4? #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
1w
  •   kingcuban1 China is gonna have to eat up those bonds and keep holding, just like toxic CDOs during the crash no one wants to buy it, unless China over the course of several years unloads all that, the illiquidity they will create will send everyone into another economic collapse, they wont dare do that. 1w

» LOG IN to write comment.

nick_the_contrarian Perhaps It Wasn't Such A Good Idea To Leave The Fate Of The Tech Bubble In The Hands Of Apple

Just before the last AAPL earnings call, we showed something extraordinary: all of the tech sector's growth in Q1 was in the hands of just one company, Apple.

In other words, take Apple away, and the entire thesis for why "the tech bubble is different this time", namely companies that have rising profits, falls apart.

And furthermore, the modest miss in iPhone sales happened in a quarter in which China had not yet seen the bursting of its stock bubble: the true collapse happened in just the last 4 days of June and onward in July, i.e., AAPL's last quarter. How "immodest" would it have been had the crash happened in June, or May, or April?

Which means that suddenly not only are Apple phone sales, but also all the hopes of a positive earnings growth in the Tech sector, as well as overall EPS growth for the S&P, pegged on one thing: whether the Chinese consumer will continue buying Apple products at a time when trillions in market cap, i.e., "wealth effect" was wiped out.

We don't know the answer, and neither does anyone else, but we have a very distinct feeling that the tech bubble, which is now reliant almost exclusively on AAPL to keep the "this time it's different" theme alive, is suddenly not all that excited that as its foundation it has an AAPL stock whose fate in turn is dependent on how well a centrally-planning communist party halfway around the globe can keep its own bubble growing in what everyone now admits is a quasi-nationalized "stock market." The answer, when revealed in about three months, should result in some impressive volatility. #Market #Rigged #Manipulation #QE #CentralBanks #Liquidity #Stocks #Trading #Volatility #HedgeFunds #Crash #Credit #Default #Cash #Citadel #FatFinger #FED #BOJ #Yellen #Kuroda #Draghi #Inflation #SNB #Greece
1w

» LOG IN to write comment.

_sarak23_ First serious bite wound working at the vet. Mr. Whiskers wasn't a fan of shots.. #VetAssistant #WVC #fatfinger #bitewound 1w
  •   bcms_softball Go get a shot of antibiotics. Trust me from experience 1w
  •   _sarak23_ I got a tetanus shot, antibiotics and have bee soaking it in Epsom salt. @bcms_softball 1w
  •   bcms_softball Had to have that for mine too. yowza it was nasty 1w

» LOG IN to write comment.

Rise Luspina Dwi Aryani Takarbessy
aryanitb swarovski-nya ilang #fatfinger #ringfinger 2w

» LOG IN to write comment.