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Equity Mania Reaches Fever Pitch As Even Famed “Value Investors” Throw In The Towel On Shorts

Once upon a time, the chart below would have resulted in value investors loading up on short positions, or at the very least moving money to the sidelines, while poking fun at the ‘momo’ crowd for once again convincing themselves that “this time is different” as they chased equities ever higher.  Alas, as Bloomberg points […]


In Dramatic Reversal, China Gives Up On Deleveraging Pledge

Last week, when looking at the latest Chinese credit data, we made two troubling observations: first, China’s economic growth was slowing across a number of key data points despite massive new credit injected into the economy over the past year. Second, that the formerly massive credit impulse – which was responsible for pushing the global […]


There’s Never Been A Worse Time For A European Investor To Buy US Treasuries

Since the common currency's inception in 1999, the EUR-hedged yield 'offered' to European investors from investing in US Treasuries has never been worse… As Bloomberg notes, for European investors using swaps to protect against currency swings, the benchmark 10-year U.S. yield fell Friday on a euro-hedged basis to around -60bps. In other words, it costs […]


TINA’s Dead – US Equities Are No Longer ‘Cheap’ To Bonds

For almost 7 years, asset-gatherers and commission-takers have exclaimed "There Is No Alternative" to stocks, given how low interest rates are. However, given the recent buying-panic in stocks, TINA is now dead BAB is back (Bonds Are Better)… In a sign the U.S. equity rally may be looking stretched, Bloomberg notes that the forward dividend yield […]


Strong 30-Year Auction Sets The Stage For Yellen’s Final Rate Hike

After yesterday’s stellar 3Y morning auction, and disappointing 10Y afternoon auction, today’s reopening of the 29-Year, 11-month RZ3 Cusip was right down the middle. The bond stopped at a high yield of 2.804%, stopping through the When Issued 2.808% by 0.4bps, the third consecutive stop through in a row. The high yield was above November’s […]


Deutsche: “We Are Almost At The Point Beyond Which There Will Be No More Bubbles”

Whereas many Wall Street strategists enjoy simplifying their stream of consciousness when conveying their thoughts to their increasingly ADHD-afflicted audience, the same can not be said for Deutsche Bank’s Aleksandar Kocic, who has a troubling habit of requiring a background and competency in grad level post-modernist literature as a prerequisite for his articles among the […]


Eric Peters: Today’s Opportunities Include Negative Convexity, Complexity, Illiquidity, Leverage, Or All The Above

From the latest Weekend Notes by Eric Peters, CIO of One River Asset Management Anecdote “What are the odds we come across an opportunity in the coming 4yrs to earn 20%?” the investor asked his team. “High,” they answered. “The odds are 100%,” he said, having seen this movie a few times. “So our cost […]


The Seven Questions Goldman’s Clients Have About “Rational Exuberance”

In mid-November, just days after Barclays released its 2018 equity outlook with the title “Rational Exuberance”… … Goldman’s David Kostin decided that imitation was the sincerest form of unveiling a non-contrarian year-end forecast, and in presenting his revised S&P price target for 2018 of 2,850 – which accounts for GOP tax reform – “borrowed” the […]


Six Ways US Stocks Are The Most Overvalued In History

Submitted by Mish Shedlock US large cap stocks are the most overvalued in history. Let's investigate six ways. Crescat Capital claims US large cap stocks are the most overvalued in history, higher than prior speculative mania market peaks in 1929 and 2000. Their 25-page presentation makes a compelling case, with numerous charts. It's worth your […]


Government Watchdog Warns Market Crash Risk Rising: “One-Sixth Of All Hedge Funds Are 15x Leveraged”

One wonders if the Fed ever reads the reports issued by the Office of Financial Stability, which does a surprisingly good job of laying out the risks facing the market at any one time, which incidentally are far greater than various Fed presidents would care to admit. If it did, it would learn from the […]


Weekend Reading: Keeping You Awake At Night

Authored by Lance Roberts via RealInvestmentAdvice.com, In her last testimony before Congress as head of the Federal Reserve, Janet Yellen made a curious statement: “I would simply say that I am very worried about the sustainability of the U.S. debt trajectory. Our current debt-to-GDP ratio of about 75 percent is not frightening but it’s also […]


“It’s All One Single, Giant $22 Trillion Position”: How Market Risk Became Systemic Risk

As excerpted from Fasanara Capital’s “Positive Feedback Loops and Financial Instability: the blind spot of policymakers.” The next time a Fed chair or macroprudential regulator argues that “there is no leverage in the market”, send them this. QE and NIRP have two predominant effects on markets: (i) relentless up-trend in stocks and bonds (the ‘Trend […]


Francesco Filia: The World’s Twin Asset Bubbles Could Collapse Under Their Own Weight

In this week's MacroVoices podcast, Erik Townsend interviews Francesco Filia, a fund manager at Fasanara Capital. After exchanging pleasantries, Townsend begins the interview by asking Filia, an analysts who's widely regarded for his research about how post-crisis monetary policy has impacted distorted markets, about the different metrics he uses to determine whether a certain asset […]


Get Out Now: SocGen Predicts Market Crash, Bear Market For The S&P

While the charade of sellside analysts releasing optimistic, and in the case of Barclays and Goldman “rationally exuberant”previews of the year ahead… … is a familiar, long-running tradition on Wall Street, rarely has the intellectual dishonesty and cognitive dissonance been quite so glaring: take Goldman, which while admitting that valuations have never been higher, and […]


Positive Feedback Loops, Financial Instability, & The Blind Spot Of Policymakers

Authored by Francesco Filia of Fasanara Capital, “Learn how to see. Realize that everything connects to everything else.” – Leonardo da Vinci A Dangerous Market Structure is More Worrying than Expensive Asset Valuations and Record Debt Levels Macro-prudential regulations follow financial crises, rarely do they precede one. Even when evidence is abundant of systemic risks […]