Business

It has been a bad year for most markets. It has also been a bad year for those entities who collect 2 and 20 to "hedge" against bad years for markets: hedge funds. Unfortunately, as we have said since 2009, most hedge funds tend do anything but actually "hedge" which is why as Goldman's latest HF tracker reports, hedge funds have only modestly outperformed a weak S&P 500 YTD following their reduction in net long exposure to 45% at the start of 2016, the lowest level since 2012. Most are down for the year.

Back in August, we warned that things were about to get much worse for Standard Chartered, whose EM focus makes the bank especially vulnerable to the ongoing downturn in commodities and the generally poor outlook for the emerging world in an environment characterized by slowing global growth and a persistently strong USD.

• Risk rally fades as stocks, oil slip back into the red (Reuters)
• Syrian govt. accepts halt to 'combat operations' in line with U.S.-Russian plan (Reuters)
• Earliest Chinese Data Signal Slowdown Hasn't Bottomed Out Yet (BBG)
• The Trickle of U.S. Oil Exports Is Already Shifting Global Power (BBG)
• Greek police remove migrants from Macedonian border as more land in Piraeus (Reuters)
• Clinton, Sanders race takes on angrier tone after Nevada (Reuters)
• London Whale’ Breaks Silence (WSJ)

Unlike Monday's global PMI deterioration (which sent markets around the globe soaring), there was little in terms of macroeconomic data overnight (German IFO earlier missed on expectations and business climate but beat on current assessment) so the "market made the news." These came most from the USDJPY which has continued to fall, sliding to 111.85 overnight, and dragging the Nikkei to a -0.4% drop.

In their latest report: “Eliminating cash will also eliminate the checks and balances on banking policy and practice”, Stefan Wieler and Josh Crumb from GoldMoney Insights™ show with comprehensive data that eliminating the largest bank notes in circulation is as good as eliminating cash altogether. It becomes evident fighting crime is not the main goal of a phase out of large bills. By eliminating cash, important checks and balances for commercial and central banks will disappear.