Major
Firms Are Saying the Stage Is Set For Another Crisis In The Bond Market - (www.bloomberg.com) The
stage is set for another financial crisis to unravel years of relative calm in
debt markets. At least that’s how firms from UBS Group AG to Invesco Ltd. see
it. Here’s why: Prices in the world’s biggest bond market are swinging and the
plunge in oil is sinking the economies of nations from Venezuela to Nigeria. To
top all that off, the fundamental structure of the bond market has changed in a
way that makes it difficult for regulators to gauge exactly where risks are
building. As stresses grow, “we believe the probability of an ‘accident’
increases,” Invesco analysts including Rob Waldner wrote in the $786.5 billion
manager’s February fixed-income outlook. “The overall environment for risky
assets, and particularly for credit, is deteriorating.”
Stock-market crash of 2016: The countdown
begins – (www.marketwatch.com) It’s
time to start the countdown to the crash of 2016. No, this is not a prediction
of a minor correction. Plan on a 50% crash. Most investors don’t want to hear
the countdown, will tune out. Basic psychology. They’ll keep charging ahead
with a bullish battle cry, about how the Nasdaq will keep climbing relentlessly
to a new record above 5,048 ... smiling as they remember reading that a
whopping 73 companies are now in the Wall Street Journal’s Billion Dollar
Start-up Club, with Uber ($41 billion), SpaceX ($12 billion) and Snapchat ($10
billion). Hearts race even faster reading in Bloomberg BusinessWeek that
“China’s IPO Boom Mints Billionaires” and Jack Ma’s Alibaba fortune is now
valued at $35.1 billion. Yes, technology IPOs are in the lead, and with all
that good news, it’s easy to understand why investors tune out, don’t want to
hear the warnings, no countdown to the 2016 crash. But the crash of 2016 really
is coming. Dead ahead.
Goldman
Sees Bond Market ‘Danger’ as Low Yields Amplify Swings - (www.bloomberg.com) They
were once regarded as some of the safest assets. Now, in a world of record-low
yields, Goldman Sachs Group Inc. says fixed-income investments have become
dangerous. “The risk in bonds has gone up,” Francesco Garzarelli, London-based
co-head of macro and markets research, said in an interview on Bloomberg
Television’s “The Pulse” with Francine Lacqua and Guy Johnson. “The sensitivity
to small changes in yield expectations from here will command very sizable
price swings, and I just think that makes fixed-income a very dangerous asset
class.” Yields on government debt from Japan to Portugal have dropped to
all-time lows this year as the specter of slowing consumer-price growth
prompted central banks to buy fixed-income securities and cut deposit rates
even to below zero.
Greece
Warns It May Default On IMF Loan Next Week – (www.zerohedge.com) Now
that the Greek topic is back to overall debt sustainability, a few hours ago
Greece Kathimerini reported that the Euro Working Group "discussed
Greece’s imminent funding problems on Thursday amid mounting concern about how
the country will meet its obligations next months." This follows a
suggestion earlier in the day by the Greek Minister of State for Coordinating
Government Operations Alekos Flambouraris that"Greece might delay payment
to the International Monetary Fund if it cannot find the necessary money."
But wait, how does a country "delay" a debt payment? It doesn't:
"According to officials familiar with the subject. such a move would
constitute a “clear default,” with consequences for a large number of other
loans Greece has received."
The
New Class War: European Banks vs. Greek Labour - (www.therealnews.com) The
problem isn't simply that the troika wants Greece to balance the budget; it
wanted Greece to balance the budget by lowering wages and by imposing austerity
on the labor force. But instead, the terms in which Varoufakis has suggested
balancing the budget are to impose austerity on the financial class, on the
tycoons, on the tax dodgers. And he said, okay, instead of lowering pensions to
the workers, instead of shrinking the domestic market, instead of pursuing a
self-defeating austerity, we're going to raise two and a half billion from the
powerful Greek tycoons. We're going to collect the back taxes that they have.
We're going to crack down on illegal smuggling of oil and the other networks
and on the real estate owners that have been avoiding taxes, because the Greek
upper classes have become notorious for tax dodging. Well, this has infuriated
the banks, because it turns out the finance ministers of Europe are not all in
favor of balancing the budget if it has to be balanced by taxing the rich,
because the banks know that whatever taxes the rich are able to avoid ends up
being paid to the banks. So now the gloves are off and the class war is sort of
back. Originally, Varoufakis thought he was negotiating with the troika, that
is, with the IMF, the European Central Bank, and the Euro Council. But instead
they said, no, no, you're negotiating with the finance ministers. And the
finance ministers in Europe are very much like Tim Geithner in the United
States. They're lobbyists for the big banks. And the finance minister said, how
can we screw up this and make sure that we treat Greece as an object lesson,
pretty much like America treated Cuba in 1960?
Greek protesters clash with police in first backlash against Syriza - (www.reuters.com)
Hedge Fund Returns Falter, Yet Money Continues to Flow In - (www.nytimes.com)
For Yemen’s Arab Spring activists, hope plummets as chaos deepens - (www.washingtonpost.com)
That Awkward Moment When Stocks Rise While Profits Fall - (www.bloomberg.com)
World stocks near all-time highs after Fed signals - (www.reuters.com)
Germany's Schaeuble: credibility of new Greek plan still in doubt - (www.reuters.com)
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