Submitted by Leonard Brecken via OilPrice.com,
Recently, I dedicated some time studying in much further depth the explosion in volatility in the broader market as well as in underlying stocks. We have witnessed unprecedented volatility in E&P stocks in recent months. But the commodity crash is spreading to Biotechs and even the broader technology sector with the implosion of Linkedin stock last week.
Too much mal-invested, Fed-fueled, hope-driven "if we build it, they will buy it" inventory... and not enough actual demand. This has never, ever, ended well in the past - so why is this time different?
At 1.32x, the December inventories/sales ratio is drasticallyhigher than at year-end 2014 and is back at levels that have always coincided with recessions...
And just in case you needed more convincing that all is not well - the current spread between sales and inventories is now at a record absolute high...
Back in November, for the convenience of those "who can't wait to take the other side of Goldman's clients, and thus the same side of Goldman's prop desk" we previewed Goldman's "Top 6 Trades for 2016."
Naturally, we explicitly stated that the "the best trades for 2016 will be to... do the opposite of the Top 6 trade recos" for obvious reasons.
Via Dana Lyons' Tumblr,
The relatively few leaders (aka, “generals”) that had been propping up the indexes are being systematically taken out.
Just ten days ago, in the aftermath of the BOJ's -0.1% NIRP announcement, we reported that after more than one year after the ECB unleashed NIRP, the total number of government bonds with negative yields to a staggering $3 trillion, a number which nearly doubled overnight to $5.5 trillion.
Overnight in a historic event, the latest consequence of the BOJ losing control, the yield on Japan's 10Y JGB dropped below zero for the first time, in the process joining Switzerland as the only other country (for now) with a NIRPing benchmark 10Y treasury.