The Heisenberg Report | TalkMarkets | Page 89
Contributor's Links: The Heisenberg Report
Perhaps more than any other time in the last six decades, the fate of markets is inextricably intertwined with the ebb and flow of geopolitics. From the ECB's attempts to use the central bank's balance sheet to influence political outcomes across the eurozone to Saudi Arabia's efforts ...more

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6 Bullet Points Explain Why You Should Be Wary On Wednesday
Commodities are in free fall, HY spreads are widening, IG is selling off now too, and the stock-bond return correlation is becoming less negative, triggering an unwind in risk parity.
Chart Of The Day: Rise Of The “Dumb” Money
As with all passive ETF posts, we have to put the word “dumb” in scare quotes. Why? Well, because it’s not entirely clear whether these flows are actually so “dumb” after all.
Goldman: “Lack Of Hard Evidence” Aside, Long Oil, Copper Reco Still A Good Idea
It may seem like a deflationary bombshell has been dropped on markets over the past two weeks or so, but as Goldman reminds us, “there’s reflation and then there’s reflation.”
Bernanke Was Right
They laughed at old Ben Barnanke when he said higher stock prices would boost consumer confidence and spur spending.“That’ll never work,” they said. “This won’t benefit Main Street,” they said. Who’s laughing now?
“There’s No Diversification”: When This Ship Sinks, We’re All Going Down With It
Macro hedge funds aren’t the only strategy that’s struggling to outperform a simple “buy SPY and forget it” approach YTD.
Percentage Of Junk Investors Raising Cash Explodes, Number Reporting Below Average Cash Position Halves
High yield is a bubble. The fundamentals are bad, the rally is overdone, and the spread compression off last year’s wides is nothing short of spectacular. Now, we’re seeing that bubble burst.
As Oil Plunges, Oil CEOs Say “Message Is Clear”: “Worst Is Behind Us, Time For Growth”
Capital markets haven’t slammed shut quite yet, although I’d imagine that this week’s price action might be making some folks think twice about all those energy shares they bought in January.
This Is The “Linchpin” For The Dollar
With the ECB and BOJ signaling that restrained pay rises in their economies mean they’re not going to take back monetary stimulus for some time, American wages are the linchpin for the dollar.
More Trouble?
Stocks haven’t plunged (yet). Treasuries fell, sending five-year yields to their highest levels since 2011.
Oil Erases Entire OPEC Cut Rally: “And Like That, It’s Gone”
The whole production cut agreement was a farce from the get-go because you can’t really call something a “cut” when you ramped up production going into it.
Chart Of The Day: “Bear” This In Mind If You’re Short
Have you put on your flatteners? That’s a question some folks are asking these days as the odds of a March hike and -dare I speculate – an actual rate hike cycle increase.
Treasurys Plunge, Yields Highest Since December After Blockbuster ADP Print
Remember a few Fridays ago when everyone was panicking about whether or not the reflation narrative had been undermined for good as 10Y yields hit YTD lows?
China Trade Data “Surprises” Bigly, Shows First Deficit In 3 Years
Wednesday begins in China, where we got highly anticipated trade data that probably shouldn’t have been so highly anticipated given that seasonality makes the compare largely meaningless.
Japan Dumps US Debt In Longest Streak Since June 2013
Japanese investors sold a net 1.69t yen ($14.8b) of U.S. sovereign debt in January, a third month they have cut their holdings, according to data from the Asian nation’s finance ministry and central bank.
“Only” 16% Of The World’s Total Debt Now Has A Negative Yield
I thought readers might find the chart of interest as it simply answers the logical question one might pose after looking at the charts shown above: “what percentage of debt globally has a negative yield?”
No Trouble In Little China And Nothing Doing In Oz
China’s FX reserves “unexpectedly” rose in February although I’m not entirely sure why everyone is using the term “unexpectedly” here. Have you heard much lately about the yuan? No? Exactly.
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