Several days after Paul Singer released his much anticipated letter to investors (key excerpts here), the founder of Elliott Management was profiled on Bloomberg as the "most feared activist investor in the world—by hedge fund rivals, companies and even countries", and for good reason.
The 9th record close in a row for The Dow (and 10th straight day higher - longest streak since Feb).
As one veteran trader exclaimed "holy smokes... never saw volume this low" -
This is the lowest aggregate S&P 500 e-mini Futs volume for this day in history since 2001...
This is easy...
On Monday Russia warned that it would begin aggressively reducing its dependence on the US Dollar and US-based payment systems, and shortly after it confirmed just that when Indonesia announced that it will barter coffee, palm oil, tea and various other commodities in exchange for 11 Russian-made Su-35 fighter jets, calling U.S. and European sanctions against Russia "an opportunity to boost the Southeast Asian nation's trade."
While Draghi shook things up in late June, it appears to be Janet Yellen's flip-flop that has sparked the latest regime shift in global capital markets.
Since then, traders' expectations for foreign exchange uncertainty has surged, while the outlook for equity, rate, and oil uncertainty has tumbled.
This has left the market now seeing equities as safer than currencies...
When are equities safer than currencies? As Bloomberg notes - almost never, at least until now.
Authored by Charles Hugh Smith via OfTwoMinds blog,
Financialization incentivizes hot money capital flooding into speculative credit-asset bubbles.
When we speak of capital investments and capital flows, it's presumed all the capital being referenced is equal: a dollar is a dollar, wherever and whenever it's put to use.