Volatility is Back: Futures Swoon as WTI Gets Hit

I thought Brainard said they weren’t going to hike rates?

Futures are lower by 11, as WTI crude gets smashed to pieces, now off by 2.3%. It’s important to note that defensive assets, such as bonds and gold, are rallying.

It appears volatility has returned to the marketplace, as people try to make sense of all the fuckery.

Good morning.

Truth be told, until recently, I never took Alex Jones and Infowars that seriously. I do love a good theory that is chock full of conspiracy like the next man, maybe more. But, generally speaking, notwithstanding my penchant for theatricalities, I tend to concern myself with things that are within my boundaries of control.

But during this election cycle, almost every single thing being reported by Jones, or Paul Joesph Watson, has been spot in, with incredible accuracy.

I was gonna edit this clip and take out the highlights for you, but decided against it. Everything you need to know about the Clinton health situation has been, hitherto, covered with extensive detail at Infowars, so I figured it’d be best for you to watch the clip in its entirety.

Some key points.

• She had a brain tumor removed in 2012 and spent a year in the hospital.
• Joe Biden is waiting to replace her.
• She suffers from seizures often.
• The secret service has been feeding Jones info on the matter.

etc.

Major props to that crazy fucker, Tyler, at Zerohedge for creating a grass roots monster. As far as I can tell, this media empire that he’s building over there is entirely organic and infectious, unlike the publicly traded TheStreet.com, which has been an absolute catastrophe for both writers and shareholders alike. I know people who’ve written over there and they absolutely hated it. Although, I’m not one to talk, frankly, as I’m sure 90% of the people who’ve written for me would prefer that I was in a ditch somewhere, with a knife stuck firmly in my back.

Alas comes the August web publisher report from SimilarWeb, which shows ZH traffic coming in at a staggering 52m page views for August, number 73 in the country. Trust me, I’d kill someone, or several people, for that sort of reach.

Just ahead of him was Cramer’s website of misfits.

Here is the full report.

The coverage ratio is complete horseshit. You keep prancing around buying stocks of companies who have dick to door knobs to cover all of the debt coming due. Moody’s did an analysis on 15 energy companies gone bust in 2015 and found that the recovery rate for creditors was an abhorrent 21 cents on the dollar, the absolute worst since the telecom bust of 2001.

This is viewed by the credit rating agency as ‘catastrophic’ and is well below the 59% norm of past decades.

The high yield space was even worse, almost a complete bust at 6%–compared to the norm of 30%.

The prevailing view by most analysts, as well as Moody’s, is that the worst is behind us and that oil prices have stabilized and are going up. I cannot tell you how many times I’ve heard this manure coming out of the mouths of men.

The simple fact of the matter is, the balance sheets of the current energy sector is just about the worst ever, dating back to the dot com bust. If prices drop back down into the 20s, for whatever reason, you’re looking at a credit meltdown of monumental proportions.

Let us all pray to the Lord that the House of Saud prevail in gerrymandering the price of crude sharply higher, just in time for X-mas.

The interbank lending markets is the playground for fuckheads, manipulating FX markets in an effort to donkeypunch one another. I won’t speculate as to the reason why HIBOR is spiking now, but many people believe the PBOC is trying to defend the 6.70 level on the yuan and will sacrifice liquidity and equity prices to meet this end.

I promise you if CNH breaks 6.70 to the upside, all pandemonium will break loose.

Typically speaking, HIBOR up, stocks down.

Look how fucking animated D. Gartman was in this clip. He was practically jerking off on national television, him and that stupid fucking tie and hands formed in the shape of a pyramid, discussing how horrible a Trump Presidency would be for stocks, due to his ‘unknown quantity.’ Mind you, he isn’t a Clinton dick sucker or a Trump supporter. He merely goes onto the teevee to talk extreme shit about Trump, while saying Clinton would be good for stocks.

Words has it Gartman will be penciling in Robert E. Lee this election season.

I’d feel better about her as a person if she was afflicted with one of those two ailments, as opposed to an infectious virus that was weaponized for a photo opp with a small girl on Sunday.

I only play Doctor about the internets, so I won’t attempt to diagnose her. If any of you two bit physicians are capable of making an off the cuff diagnosis, I’d be interested to hear such opinions under the shroud of secrecy in these fine halls.

If forced to guess, I’d say she has an acute case of Evilis Bitchicitis.

On Friday, September the 9th, 2016, markets plummeted off renewed fears of a Federal Reserve hike. In the history of betting on Fed rate hikes, there has never been an instance when the Fed had moved without the odds being at 100% beforehand. On that fateful Friday, the chances of a Fed rate hike towered over the market–like the sword of Damocles–at a staggering 24%.

On September the 12th, 2016, the biggest dove on the Fed, Brainard, said something dovish. As a result, the chances of a Fed rate hike for September plummeted to 15%, all but eliminating the chance of a Federal Reserve rate hike.

Looking forward to December, the market is indicating a 58% chance of a Fed hike, the same amount that was feared on Friday.

It’s shit like this why I walked away from a 7 fig gig in Wall Street at the end of 2015. The fuckery is pervasive and nonsensical. This shit only makes sense to people who’ve been dumbed down to the point that they only react to stuff, sithout ever giving things a moment of analysis.

If I told you on Friday, there was a 24% chance of rain, would you carry an umbrella? How does one celebrate something that was never going to happen because it just decreased in probability?

Meanwhile, all of Friday’s losses are erased. Poof.

Fed’s Brainard has always been a dove. But with all of the hawkish statements out there, the market simply needed to hear what it already knew. There’s no fucking way the Fed is gonna hike rates in September, or ever for that matter. As a result, stocks are soaring.

In what has become common place today, America’s central bank is dictating policy on behalf of China, literally.

“Downside risks are also present in emerging market economies, where growth has slowed rapidly in recent years,” she added.

“Most importantly, China is undergoing a challenging transition from a growth model based on investment, exports, and debt-fueled state-owned enterprises to one driven by consumption, services, and dynamic private businesses. Because of the adjustment costs along this transition path and demographic trends, Chinese growth will likely continue to slow.”

Because of China, Brainard believes the Fed should hold off on rate hikes.

“I believe this approach has served us well in recent months, helping to support continued gains in employment and progress on inflation.”

She concluded, worrying a great deal about overseas:

“Foreign consumption and investment are weak, while foreign demand for savings is high, along with an elevated demand for safe assets.”

Well, you don’t hear stuff like this coming out of Clinton country, aka Wall Street, these days. Funny thing about Wall Street, it’s very similar to the unions, where all of the workers, or many of them are pro republican, but the leaders are mostly democrat shills. On Wall Street, they’re not so much democrat shills, as they are establishment whores.

David Woo, Head of Global Rates and Currencies, said in an interview today a potential Trumo presidency would equate to a massive boom in the dollar and the overall economy as a whole.

“The U.S. economy would take off in a big way” if Trump were elected and Republicans control both legislative houses next year, said Woo, thanks to the fiscal stimulus that Trump would enact. Trump has pledged to spend at least twice as much as the Democratic nominee on infrastructure and also enact a massive tax cut, two measures that would entail a renewed issuance of Treasuries.

Against this backdrop, the greenback would strengthen and U.S. Treasury yields would rise, a view shared by Woo and other fixed income veterans as well.

Without question, lower taxes and a stronger border will help both wages and investment. However, I am far less sanguine abount the immediate after shocks of a Trump win. There is this pervasive belief that Trump is simply talking shit and doesn’t mean to build walls or fuck with China and NAFTA. Well, what if he’s not just talking shit? What if he truly intends to start trade wars, in order to get better deals?

Long term, a Trump win would be fantastic for markets. However, in the short term, I am fairly certain markets will freak the fuck out over the specter of tighter Fed policy and the end to market rigging.