U.S. Yield Curve Flattens; Spreads Hit New Lows

The 2yr yield isn’t dropping as fast as the 10. Typically, this is an indicator of a weakening economy, which could be construed by this morning’s revised GDP data. Also, it could mean the Fed might hike rates within the next 6 months. If the Fed hikes, it will affect shorter duration bonds much more than longer. As such, the yield curve is flattening.

I’ve been tracking the curve in Exodus for a while now and haven’t seen it this low ever. With just 74bps between the 2 and 10 year, someone, somewhere, is betting on a deleterious turn in economic activity.

Bear in mind, TLT is moving sharply higher today, +0.9% to $140.36. My entire thesis for TLT is that I will only sell it when the yield curve inverts. So, the tighter that spread gets, the more likely I am to take profits on treasuries. Also, because the Yellen speech was pretty much as expected, lacking any substance or teeth, I added the second tranche of my gold positions. It is now a full position, a little more than 25% of assets.

It’s worth noting, he dollar was down 0.5% v the euro and is now up. Gold has coiled back a bit, off the highs. And markets are down 30-40 points from the early morning pop. Nevertheless, it’s a strong day and the following Yellen statement might have something to do with it.

For example, future policymakers may wish to explore the possibility of purchasing a broader range of assets. Beyond that, some observers have suggested raising the FOMC’s 2 percent inflation objective or implementing policy through alternative monetary policy frameworks, such as price-level or nominal GDP targeting. I should stress, however, that the FOMC is not actively considering these additional tools and policy frameworks, although they are important subjects for research.

Bear in mind, the Fed isn’t planning to do any of this stuff, in the foreseeable future.  As former Fed’s Mishkin noted, a change in the Fed inflation target is a very long discussion, which would not be made on a whim.

Janet Yellen thought she’d sound tough today at the Jackson Hole. She prepared a speech designed to scare Wall Street into believing she was interested in hiking rates.

The Federal Open Market Committee “continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives,” Yellen said in prepared remarks.

More pointedly, she added, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”

The result was not as she intended. Stocks took off like a fucking bottled rocket and commodities–thru the roof. A hedonistic party broke out, with lit candelabras in the commodity pits–sending gold and oil higher.

Also, the dollar got its stuffing punched out and gobbled up by hungry Devils.

Look at my charts.

Inside the cavernous offices of Dr. B. Bernanke, at Citadel, he was overheard saying ‘bitch is soft, that’s why this shit happens to her all the time’, just before taking a puff on his marijuana filled blunt.

Guess who isn’t getting an invite to the next Icahn event? You guessed it, Jefferies.

Apparently, Carl was trying to unload some of his HLF positions and one of the sages at Jefferies thought it’d be a good idea to call up Billy Ackman to see if he wanted to buy the stake. You know, to cover his ridiculously unprofitable short.

Ackman said no, and then immediately ran to the media to spread the news.

“If Carl sells, I think it can accelerate the demise of the company,” Ackman told CNBC. “With Carl there, they may have a better chance of keeping top distributors. With Carl exiting, I think it’s over and it’s over quickly.”

On the day Herbalife’s FTC settlement was announced, Icahn declared victory, saying in a written statement that “the shorts have been completely wrong on Herbalife.”

Jefferies has a long standing relationship with Icahn. For them to tell Ackman that he’s selling shares was either really stupid or done on purpose to hurt the benevolent dictator, Uncle Carl Icahn.

HLF was down more than 7% earlier this morning and has since crept back up a little.

She also wanted to make black gangs, who were ‘super predators’ ‘bring them to heel.’

Here are some olde clips of Hillary and Bill sounding like a lot different from the shit they’re saying now.

source: Infowars

Don’t worry, you’re all gonna make a fortune after tomorrow’s Jackson Hole speeches.

Meanwhile back on planet earth, Chinese NPLs are becoming such an issue it’s creating huge demand for credit mitigation warrants, which is another term for CDS.

The National Association of Financial Market Institutional Investors said in an Aug. 17 statement that it had allowed China Securities Co. to sell credit-risk mitigation warrants, a Chinese version of credit-default swaps. The contracts’ underlying assets will be the senior tranche of Agricultural Bank of China Ltd.’s non-performing-loan-backed securities, NAFMII said. The products, which must be written on specific underlying debt, were introduced in 2010 and none have been sold since 2011.

Chinese investors have called for tools to hedge credit risks after at least 18 firms missed local bond payments this year, compared with seven for the whole of 2015. NAFMII was considering starting trading of new versions of CDS products and held a meeting in Beijing in May at which some market participants voted to pass proposed rules, people familiar with the matter said around that time.

“Credit risks are much higher than before,” said Chen Kang, a bond analyst at SWS Research Co. in Shanghai. “Both regulators and market participants are actively pushing for the new CDS to be launched.”

In few years hence, China’s debt to GDP will top 300%.

This is an important topic that isn’t being talked about by the evil and corrupt main stream media. What the fuck are bloggers doing the night before JACKSON’S HOLE? We all want to know, don’t we? We’re all brimming with juvenile excitement to learn, so I’ll get straight to it.

Zerohedge: Hillary Clinton is Super Duper Corrupt, More on the Email Saga

Mish: Grim, Fucking, Disastrous August

Contra Corner: The Fed is Filled with Boardroom of Baboons

Financial Sense: Share Buybacks Just Plunged, Get Ready for a 1929 Style Crash

Wolf Street: Hedge Funds Sucking Wind Cause Greatest Redemptions Since Financial Crisis

Howard Lindzon: FRED WILSON IS MY HERO (he really said that)

Business Insider: Anderson Cooper Shills for Bigot Hillary Clinton in Trump Interview

Dealbreaker: Heather Bresch is a Super Asshole Lying Epipen Price Hiking Devil

Marketwatch: HERE ARE 4 JACKSON HOLES. YOU MAY NOT HAVE MORE OR LESS THAN JUST 4

Recode: Once Anti-Ad, What’s Ap is Now Sucking Ad Dicks

The Verge: Tim Cook is About to Ruin the 2017 iPhone

Uncle Fred: A Tweet Storm is Coming

Not enough fire and brimstone for me.

Instead of milquetoasting it on Maddening Money, Cramer should’ve called for the execution of the entire Mylan board, by way of bee attacks. This whole ordeal is very straight forward. These are caitiffs who prey on the weak and disadvantaged to make a fortune. This is not the behavior of ‘normal’ functioning human beings who have empathy.

I say, give them the guillotine, the dick guillotine.

I love underwriters. This piece of shit just came public on July the 29th, 2016. Today, on August the 25th, 2016, it has been destroyed.

The usual suspects are to blame, investment bankers who didn’t bother to do basic due diligence and identify potential immediate red flags.

Goldman Sachs, JP Morgan and Barclay’s led the charge on this bowser.

Here are the details.

• Reports Q2 (Jun) loss of $1.84 per share, $1.53 worse than the Capital IQ Consensus of ($0.31); revenues rose 38.0% year/year to $25.4 mln vs the $25.1 mln two analyst estimate.
• Free cash flow was ($2.1) mln, compared to free cash flow of ($4.3) mln for 2Q15, an improvement from (23%) to (8%) of revenue for the period. For the first half of 2016 TLND was approximately free cash flow breakeven.
• Co issues guidance for Q3, sees EPS of ($0.27)-($0.24) vs. ($0.25) Capital IQ Consensus Estimate; sees Q3 revs of $26-$27 mln vs. $25.64 mln Capital IQ Consensus Estimate.
• Co issues guidance for FY16, sees EPS of ($1.01)-($0.93) vs. ($0.97) Capital IQ Consensus Estimate; sees FY16 revs of $103-$105 mln vs. $101.81 mln Capital IQ Consensus Estimate.

Here is the CEO of Talend, Mike Tuchen, explain why he chose to go public and why his company was such an enticing bargain for investors. Fucker.

Shares are down 20% in the after hours.

Markets are on pause ahead of Janet Yellen’s Jackson Hole speech, where she’s expected to talk in strange tones, utter complete indiscernible gibberish.

I seriously doubt she will take a dovish tone with all of this elaborate and ornate decadence surrounding markets. Instead, she might poke a little at  hawkish concepts, alluding to a potential rate hike. This will provide succor to the financial sector, which has been maligned by underperformance. It might cause a sell off in REITs, utilities and maybe even bonds. But longer duration bonds, such as TLT, should do fine.

But it’s all gonna be a giant fiction, a well orchestrated lie for the world to enjoy.

Both gold and REITs should be bought on dips. In the event she strikes a neutral or dovish tone, I am well prepared with 13% of my assets long gold and miners.

But, rest assured, a storm is coming. The waters are very docile now and you’re all enjoying the perverse climes, aren’t you? This will end soon. The closer we get to Halloween, the scarier it will become. Animated skeletons will walk the streets of Wall, chopping off dicks with their little skeleton hands. Janet Yellen will eat one too many buttered scotched candies and perish, under a deluge of clubbed sandwiches.

H. Clinton will be elected and criminality will trickle down, causing crime waves of a military nature to run freely throughout the streets of America.

Everything is about to change. Brace yourselves.