Business

Written by David Haggith - The Great Recession Blog

Just about every major banker and finance minister in the world is meeting in Washington, D.C., this week, following two rushed, secretive meetings of the Federal Reserve and another instantaneous and rare meeting between the Fed Chair and the president of the United States. These and other emergency bank meetings around the world cause one to wonder what is going down. Let’s start with a bullet list of the week’s big-bank events:

Submitted by Michael Lebowitz via 720Global.com,

On numerous occasions over the past year we suggested that U.S. equity valuations were expensive. Certainly the recent sharp rebound in share prices in the midst of declining earnings, lower earnings forecasts and slowing domestic and global economic growth has only strengthened our conviction.

In this article we compare equity valuations and the market drivers of 2013 to those today and outline why we think equities may be the so-called “bug in search of a windshield”.

Following last week's 'biggest inventrory draw in 3 months', expctations were for a 1mm build this week, so when API reported a huge 6.2mm build. Perhaps slightly offsetting this surge is a 1.93mm draw at Cushing (after Genscape forecast a 1mm draw at Cushing this week and expectations were for a 800k draw). After a manic buying day in WTI, oil prices are plunging after hours...

API:

One week ago, we warned that "Valeant Lenders Demand Two Pounds Of Flesh For Covenant Waivers", a function of Valeant having virtually no leverage.

Well, while Valeant proudly announced it had obtained a covenant waiver from its lenders late last week, it appears not everyone was onboard with the plan, and as a result moments ago Valeant stock crashed (below $30) after hours as major bond investor Centerbridge has notified the company that it intends to call a default event, presumably on annual report delays breaking covenants.

As is the case every month, moments ago Jeff Gundlach started his periodic webcast to DoubleLine investors, this time focusing on asset allocation.

Among his notable remarks so far is that it increasingly looks like the Fed hike "increasingly likely looks like a one and done scenario" and that the Bond market keeps saying at best just one Fed hike this year.

Come to think of it, looking at the S&P, so do stocks.