sell! sell! sell!

[tiznow]

Fed like president is a figurehead more than anything.. The minions if the background pull the policy strings..

number 1 key is being strong in face of adversity.. Ben was a master.. Yellen looked shaky.. Honestly don't think anybody deep
down wanted to follow Ben and she just got stuck with it.. These guys gotta know what's really going on right?

maybe they are too brainwashed by their Ivy League educational inbreeding to see the light..

 

[tiznow]

Sean Duffy...lol dude thats the guy who was on the Real World: Boston.

Ben would've told him if he needed help getting on reality TV show then he would ask him, otherwise know your role.

Yup Ben was the man when it came to the grillings very stoic.. Glad he's gone now so status quo hopefully gets shaken.. But I give him his props at same time

 

[tiznow]

Financial media already blasting NIRP discussion nonstop..

ive seen this before.. Broken record.. Just keep blasting it into people's minds.. So they calmly accept it once it happens..

when gold confiscation starting?

 

[tiznow]

Watching the testimony my number 1 conclusion is that The cluelessness of our representatives in congress is dumbfounding.. Comedy hour

 

[PatsFan1283]

Watching the testimony my number 1 conclusion is that The cluelessness of our representatives in congress is dumbfounding.. Comedy hour

Did you see the testimony last week with the Pharma kid Shkreli?

Then afterwards he said they were clowns.

 

[tiznow]

Speaking of big short..

-------------

Some Hedge Funds Want to Make Subprime Auto Loans Next Big Short

A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade.
Subprime Loans
Money managers have looked at betting that subprime auto securities will tank for many of the same reasons that investors wagered against risky mortgage bonds in the run-up to the financial crisis: Loan volume has mushroomed in the last few years, lending terms have become looser and delinquencies are ticking higher. Mary Kane, an asset-backed securities analyst at Citigroup Inc., wrote in a note late last month that the bank has received "an explosion of calls" in recent weeks, after the movie "The Big Short" portrayed a group of traders that profited from the collapse of subprime home loans.
The demand now is coming from hedge funds that trade everything from stocks to bonds, analysts said. But many banks, including Bank of America Corp. and Morgan Stanley, are not interested in making the bet happen for clients, according to representatives of the firms. Some said they fear that helping clients wager against car loans would be bad for their reputation, and that new capital rules and other post-crisis regulations would make the transactions difficult or even impossible to put together.
"Most trading desks just don’t take that kind of risk now," said Mike Edman, a former Morgan Stanley executive who helped invent credit derivatives that helped Wall Street banks bet against subprime mortgage bonds.
At least one trading desk has done this sort of trade. Etai Friedman, who runs hedge fund Crestwood Advisors LLC in Beverly Hills, California, and manages $250 million, said he was able to work with a salesman he had known for years to buy an option that performed well if a custom-made index of subprime auto bonds fell. Friedman declined to identify the bank that did the trade, on which he earned a 36 percent return, but said finding a dealer was hard.
"A trade like this is just taboo now," Friedman said. He closed out of the trade in January.
Banks’ reluctance to help investors bet against subprime auto loans signals that trading desks may be paying more attention to how their activities will play with regulators and in the media, after having been criticized for crisis-era transactions. Goldman Sachs Group Inc. paid $550 million in fines and restitution to settle SEC charges that it misled investors when it helped hedge fund Paulson & Co. bet against mortgage bonds, and also faced a Senate subcommittee hearing and report about its role in the deals.
Regulators have also been pressing banks to think hard about the ethics of the trades they do for customers after a series of market manipulation scandals in markets ranging from benchmark interest rate Libor to foreign exchange. William Dudley, president of the Federal Reserve Bank of New York, has warned banks that if they do not do more to stop wrongdoing, regulators will consider breaking them up. The U.S. Financial Regulatory Authority, an industry regulator, identified fixing banks’ culture as a top priority this year.
Tempting Proposition

In addition to Bank of America and Morgan Stanley, Barclays Plc, Deutsche Bank AG and Goldman Sachs will not do these trades, said people with knowledge of their policies, asking not to be named because they were not authorized to speak publicly on the matter.
JPMorgan Chase & Co. hasn’t done the trades and doesn’t recommend that clients do them, two people with knowledge of the bank’s activities said. Citigroup’s Kane wrote that she advises clients not to do the trade, and an analyst for Wells Fargo said he recommends against such transactions. Representatives for the two banks declined to comment.
For investors who see more risks building in auto securities, shorting the bonds is a tempting proposition. Outstanding auto loans grew by nearly 50 percent between 2010 and December 2015, the last periodfor which the data are available, and now stand at more than $1 trillion. Rapid growth can signal that lenders have not been paying enough attention to risks, as was the case during the housing boom last decade. There were about $170 billion of bonds backed by auto debt outstanding as of the end of last year, up more than 45 percent from 2010, but below pre-crisis highs.
New risks are also emerging that weren’t seen in the last lending cycle. Those include longer loan repayment terms, ballooning loan amounts and more willingness to finance used cars.
More car debt is going bad, at least judging by loans that are bundled up into bonds and sold to investors. Net losses on securitized subprime loans rose to 7.5 percent in November, marking the highest level since 2010, Standard & Poor’s data show.
Many of those delinquencies are coming from newer subprime lenders that are less heavily regulated than banks.
Regulators and law enforcement officials have been looking closely at subprime auto lenders for signs of fraud. Ally Financial Inc., General Motors Co.’ s lending arm and Santander ConsumerUSA Holdings Inc. are among a slew of auto finance companies subpoenaed by federal prosecutors and state regulators over the past few years as part of an investigation into practices “related to subprime automotive finance and related securitization activities.” New York State was said to be examining as many seven companies, a person with knowledge of the matter said last year.
Banks are also looking at how they sold bonds backed by auto debt. Deutsche Bank, for example, has swept internal communications to determine whether its salesmen may have exaggerateddemand for its subprime auto loan bonds when selling them to investors, potentially reducing the yields that money manager received, people familiar with the matter have said.
"A Real Scandal"

Too many borrowers are likely driving away with cars they can’t afford, said Janet Tavakoli, president and founder of Tavakoli Structured Finance. Tavakoli sounded alarms about the mortgage bubble before its collapse. Now she’s predicting troubles brewing in auto securities.
“The auto loan market is very similar to what we saw before,” she said, calling loan fraud one of her biggest concerns. “Borrowers aren’t well-documented, and in many cases they don’t even need credit scores,” she said. "It’s a real scandal this is happening.”
One factor making it hard for investors to bet against bonds backed by auto loans is the lack of actively traded derivatives on the securities. In the subprime mortgage crisis, there were credit derivatives that investors could use to bet against an index of bonds backed by the home loans, but no such instruments exist now for bonds backed by auto loans, said John McElravey, an ABS analyst at Wells Fargo.
Inventing such a product is hard because few money managers want to use derivatives to bet that these securities will perform well -- they would rather just buy the bonds outright. In other words, the customers looking to bet against the bonds would want to use derivatives, while the investors wagering that the debt will do just fine would use the actual asset-backed securities, McElravey said. He is telling clients that betting against auto ABS is "a terrible idea."
Citigroup’s Kane also views bets against auto ABS as a bad idea. Bonds backed by car loans have historically performed well during economic downturns, in part because the deals have enough assets backing them to protect investors against a high level of defaults, she wrote in her recent note.
“Hit films are not the best source for trade ideas," Kane wrote. "The Big Short," based on Michael Lewis’s book with the same title, was released in December.
Still, investors are expressing plenty of interest, said Don McConnell, a senior portfolio manager at BMO Global Asset Management in Chicago, who helps manage $15 billion of taxable bonds.
"Some guys over beers have asked to do these trades," McConnell said. "It’s a very interesting concept."
Before it's here, it's on the Bloomberg Terminal.

 

[tiznow]

Still don't think this the oil bottom.. Unless I guess fed quickly moves to NIRP and dodges recession for now and keeps the bubble inflated..

oil bottomed out yesterday on opec chatter..

gas down to 1.28 in Oklahoma City the epicenter of oil overcapacity..

---------------------

As U.S. refinery cuts quicken, crude market faces next threat

[COLOR=rgba(0, 0, 0, 0.65098)]

Reuters/Nick Oxford/Files​

A pump jack is seen near sunflowers in Guthrie, Oklahoma in a September 15, 2015 file photo. From Alaska to Oklahoma, oil-producing states are scrambling to plug holes blown in their budgets by tumbling crude prices.Reuters/Nick Oxford/Files


[/COLOR]
By Jessica Resnick-Ault
NEW YORK (Reuters) - For the past six years, U.S. refiners from Texas to Philadelphia have bought every barrel of crude they can lay their hands on to cash in on a golden era of healthy margins.
Now, at least five refiners - including two of the country's largest - have voluntarily cut output of gasoline and distillate in the most widespread cuts since the global financial crisis, moves that may deepen crude’s prolonged rout as storage tanks at Cushing, Oklahoma, the main U.S. oil hub, near capacity.
Independent refiners including Valero Energy Corp, PBF Energy INC, Philadelphia Energy Solutions and Monroe Energy, a unit of Delta Air Lines Inc, are curbing output, capitulating to record stockpiles and sluggish winter demand that have hurt profits. Even large oil companies like Exxon Mobil Corp have slashed runs.
While seasonal run cuts for work are common, reductions for purely economic reasons are rare.
If the closures gather pace and refineries curb their purchases of crude further, it will heap further pressure on prices, removing one of the last remaining pillars of support for drillers and integrated producers.
"This is going to put back pressure on crude, but you had an ongoing imbalance between supply and demand," said Gary Ross, executive chairman of industry consultancy PIRA.
While gasoline profit margins may rebound by summer as the U.S. vacation driving season arrives, the run cuts will put pressure on crude stockpiles. Ross expects refineries to run at lower rates through March and April as refiners try to unload winter-grade gasoline.
The cuts also suggest the outlook for demand for gasoline and diesel may deteriorate before it gets better.
"No one really knows what demand will do this year," said Dennis Cassidy, managing director and co-head of the oil, gas and chemicals practice at AlixPartners, a global consulting firm. "That's what consensus sentiment is right now, that demand will surprise to the downside."
Over the past year, U.S. refining margins, the estimated profit from turning oil into gasoline and diesel, have halved and are near their lowest level in five years. Refineries in the Midwest are losing cash at current prices as prices at the pump slide below $1 and oversupply continues to punish prices.
LITTLE WIGGLE ROOM
Refineries coast to coast cut operations in 2008, reducing crude processing and reining in spending, after getting slammed by high crude prices during the year and as demand crashed with the global economic crisis.
But the latest round of cuts may be distinct in the pressure it places on the storage hub at Cushing, where tanks are close to full, leaving little wiggle room for surplus crude to find a home.
Based on recent weekly inventory data, Cushing could run out of space as early as next month. Data shows planned maintenance this spring by refineries will be slower than expected, but economic run-cuts will likely offset the effects.
It is a marked shift in fortunes for refiners, who process crude into products like gasoline, diesel and jet fuel and were the early beneficiaries of the oil price rout.
The companies raced to buy cheap crude and pump out large volumes gasoline as demand surged in response to falling consumer prices. Profit margins for refiners rose to near-record levels on the market's dynamics.
The companies are trying to defend profit against a downward pull from record gasoline stockpiles and sluggish winter demand.
The industry is optimistic about room for recovery in the spring, or sooner. The patterns are in line with historical norms, with low demand, low runs and low incentives to ramp up production, said Joanne Shore, the chief economist with the AFPM, a trade group representing refiners.
Because refiners need to sell off stockpiles of so-called winter-grade gasoline before they begin producing large volumes of gasoline with a chemical make-up that is more resistant to evaporation in the summer, the price of gasoline typically tumbles in March.
Tom Nimbley, chief executive of PBF, said the oversupply situation could be alleviated as refiners shift their production from gasoline to distillate fuels like diesel and jet fuel.
Still, traders say they are concerned about the outlook for refined products, and are hesitant to maintain their long positions for the summer months on the "crack spread," an approximation of refiner's profit.

 

[tiznow]

If they going down they going down kicking and screaming.. Futures starting to ramp up.. Back to the battle of 1850...

 

[tiznow]

Big oil bounce today 1850 reclaimed by the Bulls for now..

 

[tiznow]

[h=1]637 Rate Cuts And $12.3 Trillion In Global QE Later, World Shocked To Find "Quantitative Failure"[/h]2016 is shaping up to be the year that everyone finally comes to terms with the fact that the monetary emperors truly have no clothes.
To be sure, it’s been a long time coming. For nearly 8 years, market participants and economists convinced themselves that the answer was always “more Keynes.” Global trade still stagnant? Cut rates. Economic growth still stuck in neutral? Buy more assets.
It was almost as if everyone lost sight of the fact that if printing fiat scrip and tinkering with the cost of money were the answers, there would never be any problems. That is, policy makers can always hit ctrl+P and/or move rates around. But in order to resuscitate anemic aggregate demand and revive inflation, you need to tackle the core problems facing the global economy - not paper over them (and we mean “paper over them” in the most literal sense of the term).
Well late last month, central banks officially lost control of the narrative. Kuroda’s move into negative territory reeked of desperation and given the surging JPY and tumbling Japanese stocks, it’s pretty clear that the half-life on central bank easing has fallen dramatically.
And so, as the market wakes up from the punchbowl party with a massive hangover, everyone is suddenly left to contemplate “quantitative failure.”Below, courtesy of BofA's Michael Hartnett is a bullet point summary of 8 years spent chasing the dragon... and a list of the disappointing results.
* * *
From BofA
Whether the recent tipping point was the Fed hike, negative rates in Europe & Japan, or simply the growing market dislocations and macro misallocation of resources and wealth, the deflationary theme of “Quantitative Failure” is stalking the financial markets. A multi-year period of major policy intervention & “financial repression” is ending with weak economic growth & investors rebelling against QE.
In short, monetary policies of...

• 637 rate cuts since Bear Stearns
• $12.3tn of asset purchases by global central banks in the past 8 years
• $8.3tn of global government debt currently yielding 0% or less
• 489 million people currently living in countries with official negative rates policies (i.e. Japan, Eurozone, Switzerland, Sweden, Denmark)
• -0.92%, the most negative yield in the world (2-year Swiss government bond)

...have in 2016 led to a macro environment symbolized by...

• BofAML’s Chief US Economist Ethan Harris cutting potential trend real GDP growth in the US to 1.75%
• inflation expectations in both the US & Europe dropping below 2008 levels & a global profits recession
• one of the most deflationary recoveries of all-time: in the past 26 quarters the nominal GDP of advanced economies has grown 11%

and a significant impact on Wall Street...

• a bear market in equities (median stock in ACWI is down 28% from its highs; 45% of global stocks (1123) are down >30% from highs)
• bear market in commodities (10-year rolling return from commodities is currently -5.1%, the worst since 1938) & credit markets
• $686bn of market cap loss for global banks since Dec 15th – the day before the Fed hiked - and worsening global liquidity conditions, which in-turn will likely cause bank lending standards to tighten further

• and, most conspicuously, falling bank stocks and falling bond yields suggesting that 6 years of QE has failed to arrest deflation.

* * *
What comes next is anyone's guess but with China's credit bubble about to burst in spectacular fashion, we wonder how central banks plan to combat the ensuing hit to the global economy. After all, their counter-cyclical policy room is not only exhausted, they've now taken the easing bias so far into the monetary twilight zone that in Japan's case, things are starting to backfire and are becoming self referential (see the recently canceled JGB auction).
Throw in the fact that $12.3 trillion in asset purchases has impaired liquidity across markets and you have the conditions for what could turn into a truly harrowing year not only for Wall Street, but for Main Street as well. The same Main Street that was allegedly saved by a "courageous" Ben Bernanke who started us all down this road 8 long years ago.

 

[eek.]

Hellfire missile "just happens" to turn up in Havana in the year diplomatic relations are improving

Funny that, innit? Wot an amazing coincidence

Gawsh I'm so surprised!

After 50 years of never making a mistake too, wow.

====================================

Cuba returned to the United States an inert Hellfire missile that had been wrongly shipped to Havana in June 2014.

The missile, which did not contain explosives, had been shipped to Spain for a Nato training exercise, the Wall Street Journal said.

It was then taken to Germany and eventually to Charles de Gaulle Airport in Paris for onward delivery to Florida.

It was instead loaded on to an Air France flight to Havana.

The incident could have led to a serious loss of military technology, officials told the Wall Street Journal.

The whole affair has been embarrassing for the Americans, who have had to ask the Cubans if they could have their highly sensitive missile back, says the BBC's Will Grant in Havana.

The missile arrived on a flight from Paris "by mistake or mishandling in the country of origin," said a Cuban Foreign Ministry statement.

"Cuba acted with seriousness and transparency and co-operated to find a satisfactory solution to this issue," it added.

The AGM 114 Hellfire is a laser-guided missile that can be deployed from an attack helicopter or an unmanned drone.

US officials were worried that Cuba could share the advanced technology inside the missile with countries such as North Korea, China or Russia, sources close to the investigation told the Wall Street Journal.

The US and Cuba, old Cold War enemies, restored diplomatic relations in July last year after more than 50 years.

The two countries have been working to rebuild their economic and trade ties.

An announcement is expected on Tuesday about the reinstatement of scores of commercial flights between US cities and Havana.

http://www.bbc.co.uk/news/world-us-canada-35571837

 

[eek.]

For 50 years you couldn't get a box of Twinkies or a case of Coca-Cola into Havana...

...but a diplomatic relations busting Hellfire missile? No problemo amigo, just load that sucker on board

 

[tiznow]

China steps in and fixes yuan at one month high.. Global rally/squeeze for now.. Rigged game rules change all the time..

 

[eek.]

I reckon that if you have 10% of the population controlling 80 plus percent of global wealth movements then you will never see a "proper" market for anything except tangible heritable property (houses)

The rest of it is simply too manipulable, the elite simply control too much of the market volume

They own the racetrack and 8 out of 10 horses in the race

 

[tiznow]

Deutsche bank starts begging for sugar daddy to save them...

I don't think it will matter once ball starts rolling due to past fiscal irresponsibility easy money policies don't stop it (see 2000 and 2007 with markets falling as rates were cut)

------

[h=1]Only the Fed can save stocks now: Deutsche Bank[/h]The prolonged sell-off in risk assets across the globe will only abate if the U.S. Federal Reserve changes its path and begins to loosen its monetary policy once again, according to strategists at Deutsche Bank.

Chinese growth fears, stress in the U.S. energy sector and fragile balance sheets in European financial companies have all been credited in the last week for fueling the sell-off. However, there's only one real cure for this current bout of weakness, according to a team of European equity analysts at the German bank, led by Sebastian Raedler.
"Without policy intervention, there is more downside risk for equities," the bank said in a note entailed "The smell of default" on Monday.

Jonathan Ernst | Reuters
Janet Yellen

A major focus for the analysts has been rising bond yields on riskier corporate debt in the U.S.. This has been seen as a sign of an end of the current credit cycle, which in turn could that could pave way for a number of defaults in the country, the bank noted. Raedler said that U.S. high-yield spreads – the difference between investment grade and non-investment grade bonds - have risen above their 2011 peak and warned of the potential for a self-fulfilling "full default cycle." He highlighted the stress had started with energy firms - that have been hit by the oil price plunge – but added that it wasn't confined to this sector
"To avoid a further rise in U.S. defaults, we will likely need to see a Fed relent, leading to a sustainable drop in the dollar, higher oil prices and reduced energy balance sheet stress," the bank said in the report.
The problem for investors is that there is little sign of the Fed wanting to change course, Raedler added. Data last week from the Bureau of Labor Statistics showed that U.S. firms were continuing to hire with 5.6 million job openings in December 2015, up from 5.43 million job openings in November.


Rather than cutting, these data are likely to leave the U.S. central bank on course for more rate hikes after it decided to tighten policy at its December meeting last year. However, Fed Chair Janet Yellen sounded a more cautious tone in her testimony to Congress on Thursday.
Equities have been roiled this year with the pan-European Euro Stoxx 600 index down 12 percent and the S&P 500already losing nearly 9 percent, both on course for their worst year since the 2008 financial crisis. Deutsche Bankshares have been at the forefront of the selling in Europe with questions raised over the quality of its balance sheet.

A "full default cycle" in the U.S. would trigger a further 20 percent downside European equities, Raedler said, but would also increase the risk of a U.S. recession. He believes that this rising cost of debt for corporates would reduce their spend on investment and hiring. Falling equity prices would also urge people to save and thereby dent consumption growth, he added.


[h=4]Play Video
[/h]

Recession talk has been a hot topic this year alongside the possibility of central banks using negative deposit rates to stimulate their economies. However David Absolon, Investment Director at Heartwood Investment Management believes that the U.S. economy is not in the "doldrums" yet.

"The Fed is walking a tightrope between being seen to show confidence in the U.S. economy and at the same time acting to navigate against difficult global headwinds," he said in a note Monday.
"The U.S. economy, while anemic, continues to expand," he added.

 

[eek.]

Correction: They own the racetrack and 9 out of 10 horses in the race

Your predictions are logical Tiz, but we live in a heavily rigged casino

Upping interest rates would flush out a lot of our financial roaches, but it would tank Europe at the same time

 

[tiznow]

Digging deeper during debt deflation just compounds problems long term (see Japan)

west will continue down path of Japan until they decide to let the system really purge itself and really punish banksters and debtors... And not continue to punish savers and force them into high risk investments during boom/bust cycles to nowhere..

just logical common sense .. I'm sure insanity will prevail and we continue down Japan of doing the same thing of protecting status quo and digging deeper and deeper holes..

 

[snoop]

Shale oil party is over.

Devon to chop 1000 positions in Oklahoma headquarter.

 

[PatsFan1283]

Real estate market in Williston, ND beginning to crash.

Built a ton of construction as fast as possible because they needed to accommodate all those jobs. What a waste of materials. It's in the middle of nowhere and it is freezing.

 

[snoop]

Yeah ... Tizdoom will show up later with another Fed rant post.