This belongs with the last post on the highly “disturbed dollar” but I felt it deserved its own separate piece to feature downstream of funding. Given the liquidity backdrop describing a broad range of extraordinarily disconcerting prices and liquidity rates, the selloff picking up pace in junk is anticipated. Even still, the nature of the crash and that it is [...]
The problem with exchange rates is that they don’t always tell us anything about what everyone seems to think. In fact, the more wholesale financial exhibitions in a particular currency, the less traditional interpretations conform. In many ways, this is very much like transitioning between classical physics in the Newtonian, deterministic paradigm into quantum physics’ often strange and seemingly incoherent [...]
China has exhibited the tendency of late toward political considerations of certain economic and financial factors rather than allow open interpretation. That point has been expressed about Chinese GDP but it also applies to Chinese markets, particularly those directly connect to the “dollar” – the CNY/USD exchange rate compressed to a straight, horizontal line from March until mid-August and now [...]
Joining Anglo American and Kinder Morgan, Freeport-McMoRan announced the full suspension of its dividend. The clustered nature of these announcements only create questions about what might have changed recently, a possibility which actually holds very little mystery. After all, the company’s stock price has been falling steadily since about December 2010 (trading at about $60) so that surely isn’t the [...]
Now that Kinder Morgan has come out with a massive dividend cut, I think it will get harder to ignore that this isn’t just about crude oil prices and the death of “transitory.” There is a financial element here that is perhaps even more important. Kinder Morgan Inc., the biggest North American oil pipeline operator, cut its 2016 dividend by [...]
The fact that there is almost universal recognition of a “manufacturing recession” not just here but spreading across the world is a significant change. After resisting and ignoring as much as possible for more than a year, economic weakness is now no longer unthinkable. This is, however, no mere academic exercise as there are very real consequences as the former [...]
China’s trade estimates continue the trend of the global economy pushing closer to recession, assuming that it is not already there. We know that the lower part of the global supply chain below Chinese manufacturing and assembly, the resources and materials flow, has already been pushed beyond simple recession in some places, like Brazil, into defining a new disastrous economic [...]
While some are shocked that China may have “used” a huge amount of “reserves” in November, that is only because so many myths and anachronisms continue to abound in the mainstream and beyond. Any conversation about forex in the context of central banks and national government agencies is one that still views money from a traditional standpoint – as if [...]
Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are neutral in the curve. Far [...]
If the junk bond bubble was this week’s most visible inducement toward illiquidity, there have been more than enough indications that might corroborate and explain. With a few more days trading, the huge jump in BofAML’s CCC junk index rate has been confirmed – with another albeit smaller surge again yesterday. At now 16.74%, that is significantly above the prior [...]
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