Very quietly, in the last few weeks, cross currency basis swaps (CCBS) related to the dollar have reversed their rise and started moving deeper into negative territory… again. This might not be of much interest to buyers of global equity markets at this point, but it is signalling ominous signs of growing funding stress in the financial “plumbing”.
The core thesis presented earlier by Fasanara Capital, is that what is taking place in the market right now is the blowing of arguably the biggest asset bubble in history, or rather twin bubbles - impacting both equities and bonds...
... created by trillions in central bank liquidity injections, and characterized by unprecedented equity valuations...
... concurrent bond bubbles, especially in Europe...
... defined by a "fake markets cycle"...
... which relies on narratives created daily to justify the "fake markets"...
Amsterdam | As the financial world happily fixates on who will be the next Fed Chairman, I am in Europe celebrating the 30th anniversary of Black Friday, October 19, 1987. Three decades ago, I was on a trading desk at Bear, Stearns & Co in London along with David, Joey, Gregory, Peter and Paul, among others. We had just finished a remarkable four year run, but the party was over.
World stocks stayed near peaks and currencies moved in tight ranges on Wednesday as China’s 19th Communist Party Congress opened while focus in Europe turned to speeches from top euro zone central bankers before next week’s key policy meeting, as well as Catalonia's ultimatum due on Thursday. S&P futures are solidly in the green as usual, with Dow futures jumping above 23,000, driven higher by IBM as investors looked for new reasons to extend gains after hitting new all-time highs Tuesday.
Authored by Mike Krieger via Liberty Blitzkrieg blog,
While I’ve touched on the Catalan independence movement in several recent posts, I want to make one thing clear from the start. I don’t have a strong opinion on whether or not independence is the right move for the region and its people. It would be completely inappropriate for me, a U.S. citizen living in Colorado, to lecture people 5,000 miles away on how they should organize their political lives.