Deja-Vu
Eh? Canadian Stocks Plunge To 2-Year Lows - (www.zerohedge.com) Canadian stocks are down 15% from their highs
in 2008 (and down 18% from the 2014 highs) as the blowback from a collapsing
energy market ripples across the entire "not unequivocally good"
economy. However, perhaps more worrying is the 2008-esque dynamic playing
out almost perfectly for America's northern neighbor...
Morgan
Stanley to cut 1,200 jobs, take $150M charge - (www.cnbc.com) Morgan
Stanley plans
to cut 1,200 jobs, or 2 percent of its global workforce, taking a severance
charge of about $150 million, a source told CNBC on Tuesday. The financial firm
will reduce 470 positions in its fixed income, commodities and currencies
businesses, with the remaining cuts coming from support positions across the
company. The firm did not disclose its cost savings with the move, but more
details may emerge in its January update. In a memo, Morgan Stanley said the
changes will result in businesses that are critically and credibly sized for
the markets. The restructuring comes amid a rough stretch for Morgan Stanley's
fixed income business. For the third quarter, the firm reported that net
revenue in fixed income and commodities sales and trading fell to $583 million
from $997 million in the previous year.
Investors Bet Commodities Slump Will Push Many
Into Default - (online.wsj.com) A
fresh wave of selling hit energy-company bonds, reflecting a growing consensus
that slumping commodity prices will push many heavily indebted firms into
default. Bonds from Chesapeake Energy Corp., which is looking to restructure
some of its debt through an exchange offer, traded at 32.8 cents, a decline of
17%, according to data from MarketAxess Holdings Inc. Oasis Petroleum Inc. bonds shed roughly 6% and
traded at 79 cents. A bond from EP Energy LLC traded at 80 cents, down about
5%. The selloff marks a sharp shift in Wall Street sentiment from earlier in
the year, when investors piled into energy-company debt and firms sold new
bonds as the price of oil appeared to stage a comeback.
When It Rains It Pours as China Unleashes
Commodity Torrent - (www.bloomberg.com) There’s
no let-up in the onslaught of commodities from China. While the country’s total
exports are slowing in dollar terms, shipments of steel, oil products and
aluminum are reaching for new highs, according to trade data from the General
Administration of Customs. That’s because mills, smelters and refiners are producing
more than they need amid slowing domestic demand, and shipping the excess
overseas. The flood is compounding a worldwide surplus of commodities that’s
driven returns from raw materials to the lowest since 1999, threatening
producers from India to Pennsylvania and aggravating trade disputes. While
companies such as India’s JSW Steel Ltd. decry cheap exports as unfair, China
says the overcapacity is a global problem.
The
real danger of the oil collapse - (www.cnbc.com) The
collapse of the housing bubble sent the world spiraling into recession. The
collapse of the energy and commodity bubble threatens to be just as damaging. That
few are willing to even use the term "bubble" with regard to the boom
and bust in the price of oil, copper, iron ore, and other materials tells how
early we still are in the painful unwind phase. As with housing, there
was a fundamental reason for these prices to soar. China has been on a historic
commodities binge as it doubled the size of its economy in recent years to
become one of the world's largest. Even so, those fundamentals begat—as they
have so often throughout human history—a feeding frenzy. That frenzy of
financing, mining, fracking and dealmaking exacerbated the boom and now, the
bust as China's growth and appetite for such raw materials has slowed
dramatically.
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