Archive For: February 2016

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Here Comes The Red Swan And Other Reasons To Be Very Afraid

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Why You Can Expect Another Global Stock Market Meltdown

The mispricing of assets across world markets has reached epidemic proportions. Stock prices have made strong advances over the past several years, yet market analysts see further gains, arguing that the selloffs of August 2015 and early 2016 represent a healthy correction. But this rise in stock values has been underpinned by financial engineering and liquidity — setting the stage for a global financial crisis rivaling 2008 and early 2009.

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Freddie Mac Back At It----3.5% Down Mortgages Without Private Mortgage Insurance

Bank of America Corp. is rolling out a new-mortgage product that would allow borrowers to make down payments of as little as 3%, in a move that would represent an end run around a government agency that punished the bank for making errors on similar loans.

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Subprime Auto Delinquencies Surge To Highest Level Since 2010

As we've gone out of our way to document, underwriting standards for car loans are getting looser as lenders scramble to feed Wall Street's securitization machine and keep America's auto sales "miracle" alive. Of course the pool of creditworthy borrowers is finite and so it must be continually expanded by lending to those whose FICO scores and income might not otherwise warrant the extension of a loan.

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Mind 1826 On The S&P 500----Next Stop Is 1736 According To Chartist Tom DeMark

The S&P 500 is three trading days from reaching "trend exhaustion," according to infamous technical analyst Tom DeMark. "The foundation of the ongoing rally is suspect," warns DeMark, noting that if the market closes below these key levels in the next three days, DeMark warns "the decline is going to be sharp."

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Pioneer Of 'Smart Beta' ETFs Warns----Trade Too Crowded, Crash Is Coming

And there’s a further, dangerous twist. As an investment fashion becomes more popular, people drive up the price. But as they drive up the price, they then start factoring that extra bump in valuations into their forecasts for the future. So people get even more bullish while they should be getting bearish. It’s like jumping on a seesaw at the top and thinking it’s going to keep going up.

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The Economics Of Not Awesome------How Wall Street's EPS Hockey Sticks Have Been Crushed

Back in September 2015, FactSet estimated that EPS for the S&P 500 would grow by almost 5% in Q1 2016. Their latest update is now -6.9%. Energy, of course, gets most of the blame but according to their latest breakdown it is widespread if of a smaller magnitude. For Q4, earnings are on track to...

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Thanks For The Tip, Janet: Foreign Banks Paid Interest By Fed On $247 Billion Of Excess Cash

China, Japan and other overseas central banks are leaving more of their dollars with the U.S. Federal Reserve as they have liquidated their U.S. Treasuries holdings to raise cash in an effort to stabilize their currencies, government data show.

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It's The Corruption, Stupid----Hillary Doesn't Get What The Donald Understands

In 1992, James Carville, Bill Clinton’s senior campaign strategist, scribbled a terse memo containing three instructions. Two are long forgotten. The third may live forever. “It’s the economy, stupid” became a meme because it nailed the issue that drove that election. One overarching issue drives this election, but neither Hillary Clinton’s campaign nor the Democratic Party got the memo. Any swing voter could tell them what it says: It’s the corruption, stupid.

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Singapore Warning----Default Pain Rapidly Rising To 1998/2008 Levels

Rajah & Tann Singapore LLP, Southeast Asia’s largest law firm, reckons the region’s rising bond defaults will inflict as much pain on creditors as the financial crises of 2008 and 1998.

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