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“Sell The News”: Investors Greet Tax Reform With Near-Record Redemptions

Earlier this week, as Trump’s tax reform was finally being voted through Congress, we showed that in a surprising market reaction, total asset returns – those combination of S&P and 30Y Treasurys – saw their biggest two-day drop since last December, a shock which led to one of the biggest declines for risk-parity investors in […]


Global Liquidity Crisis Is Over… Dollar Shortage Suddenly Disappears

Remember last week when the world was desperately willing to pay excessive spreads to get their hands on dollar liquidity (the worst liquidity crisis since the European crisis)…   Well that's all over now! EUR-, JPY-, and GBP-cross currency basis swaps have suddenly snapped higher (less negative) as dollar liquidity is suddenly not a problem […]


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 […]


Housing Bubble 2.0: All-Cash Offers Increasingly Required To Compete In Overheating Markets

Back in 2005, anyone with a modest amount of startup capital and a dream could become a millionaire flipping houses.  The complete disregard for the underlying risk building up in what was later exposed as one of the biggest pricing bubbles in history resulted in investors dominating a market that had previously been reserved for […]


Second Cockroach: Canadian Mortgage Lender Crashes After Admitting Mortgage Fraud

Back in April/May, Canada's biggest mortgage lender, Home Capital Group, crashed its way into the headlines, coming clean over its balance sheet-full of liar loans, suffered a bank run, and was forced  to take emergency liquidty from taxpaying pensioners, and was eventually bailed out by good old Warren Buffett. "Probably nothing…" Well just when everyone […]


Moody’s Warns U.S. Office Real Estate At “Cyclical Tipping Point” That Will Devastate CMBS Market

We’ve frequently written about the growing supply problem in the major commercial real estate markets across the country (for example: NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers).  Now it seems that Moody’s is also growing somewhat concerned that growing supply, combined with waning demand and […]


Mauldin: The Bonfire Burns On

Authored by John Mauldin via MauldinEconomics.com, “Life invests itself with inevitable conditions, which the unwise seek to dodge, which one and another brags that he does not know, that they do not touch him; but the brag is on his lips, the conditions are in his soul. If he escapes them in one part they […]


Chinese Stock Rout Resumes As Top Fund Sees “High Probability” Of Bond Carnage

In early November, we discussed how commentators were become disturbed by the sell-off in Chinese government bonds after the Party Congress, which saw yields rise to 4.0%. The anomaly was that yields in less-liquid, unsecured Chinese corporate bonds had barely moved. Some sleuthing on the part of the Wall Street Journal discovered that the most […]


China Deleveraging Hits Corporate Bonds As Cascade Effect Begins

Following the market lockdown during October’s Party Congress, many commentators were disturbed by the continued rise in Chinese government bond yields as we returned to “business as usual”, with the 10-year rising to 4%. At the beginning of this month, we discussed the sell-off (see “China: Shadow Bank Inflows Are Critical To Sustain The Ponzi…But […]


The Mother Of All Irrational Exuberance

Authored by David Stockman via Contra Corner blog, You could almost understand the irrational exuberance of 1999-2000. That's because everything was seemingly coming up roses, meaning that cap rates arguably had rational room to rise. But eventually the mania lost all touch with reality; it succumbed to an upwelling of madness that at length made even Alan Greenspan look […]


Who’s Next? Venezuela’s Collapse Puts These Nations At Risk

"It's a wake-up call for a lot of people who will say ‘Look, the stuff I own is actually very risky'…" warns Ray Jian, who oversees about $6 billion at Pioneer Investment Management Ltd. in London. "People have been ignoring risks in places like Lebanon for a long time," and the official default of Venezuela […]


Hunting Angels: What The World’s Most Bearish Hedge Fund Will Short Next

It's not easy being "the world's most bearish hedge fund", a description we first conceived nearly three years ago, and one look at Horseman Capital's returns over the past three years confirms it: after generating market-beating returns for much of its existence, things went bad in 2015, and much worse in 2016… … when the […]


“Nightmare On Bond Street”: HY Turmoil Leads To Third Largest Junk Outflow In History

Following this month’s drop in junk bond prices and the 40 bps spread widening in high yield last week – the largest since November 2016 – Bank of America has come up with an apt title for its weekly fund flow report: “Nightmare on Bond Street”… … and with good reason: last week, US junk […]


Bill Blain: “Stock Markets Don’t Matter; The Great Crash Of 2018 Will Start In The Bond Market”

Blain’s Morning Porridge, Submitted by Bill Blain of Mint Partners The Great Crash of 2018? Look to the bond markets to trigger Mayhem! I had the impression the markets had pretty much battened down for rest of 2017 – keen to protect this year’s gains. Wrong again. It seems there is another up-step. After the […]


Venezuela, PDVSA CDS Triggered: ISDA Says Credit Event Has Occured

In a long overdue, and not exactly surprising decision, moments ago the ISDA Determination Committee decided, after punting for three days in a row, that a Failure to Pay Credit Event has occured with respect to both the Bolivarian Republic of Venezuela as well as Petroleos de Venezuela, S.A. Specifically, in today’s determination, in response […]