Month: September 2016

While the unscientific polls say otherwise, capital markets and the online bettors say that Hillary dominated last night’s debate. However, Trump was the undisputed winner when it comes to another metric: social media engagement. According to Twitter, “the debate was the most tweeted-about political event in the social media company’s history.” Reuters adds that Trump was the focus of 62% of the conversation on the social media platform, Twitter said. Likewise on Facebook, conversations about Trump made up 79% of debate chat, while Clinton’s share of the conversation was a modest 21%.

As Reuters confirms “Trump stole the social media spotlight during Monday night’s U.S. presidential debate”, although in a surprising twist he did so on what Twitter users branded his #Trumpsniffle.

Confirming America’s fascination with the trivial  – and perhaps issues “health-related” – Reuters adds that “the wealthy businessman sniffed repeatedly as he faced off against Democratic rival Hillary Clinton in their first debate, giving rise to the hashtag and a surge of interest on social media what might be causing his nose to run. Parody accounts, Donald’s Sinuses (@TrumpsSinuses) and Trump sniff (@TrumpSniff), gained a large following.”

Trump, 70, told Fox News on Tuesday morning he did not have a cold. “No, no sniffles, no,” he said. “No cold.” He complained he had a faulty microphone and joked that maybe it was picking up breathing.

 

Several tweeters seized on the sniffling to hit back at Trump over his repeated digs at the health and stamina of Clinton, 68, who had pneumonia earlier this month.

A compilation tweet showed every instance of Trump’s sniffles:

Is Donald Trump sick? Either way, #TrumpSniffles is now a thing https://t.co/AVGZlsApqr http://pic.twitter.com/VJuWb5rxt1

— USA TODAY (@USATODAY) September 27, 2016

In an unexpected twist, former Democratic presidential candidate Howard Dean on Monday mentioned cocaine in a tweet discussing Donald Trump’s sniffling during his first presidential debate.

Notice Trump sniffing all the time. Coke user?

— Howard Dean (@GovHowardDean) September 27, 2016

According to the Hill, “Dean’s tweet may prove controversial for mentioning — without evidence — illicit drug use and the Republican presidential nominee in the same breath.”

Going back to media engagement, Reuters adds that sentiment appeared to go Clinton’s way. Social media analytics firm Zoomph said tweets mentioning Clinton ended at a ratio of about 1.5 to 1, which meant that for every negative mention, there were 1.5 positive mentions, Zoomph said. Sentiment toward Trump fluctuated, but ended nearly flat at a ratio of one positive mention to every negative one.

As for what drew social media participants, the most tweeted-about topics were the economy, foreign affairs, energy and the environment, terrorism and guns.

While it is unclear if just being the most “buzzed” candidate has helped or hurt Trump – after all being a constant source of notoriety is nothing new to the billionaire –  one thing is sure, with little resolved and with no definitive winner emerging, the next debate in two weeks time is likely to be as engaging. And just to make sure of that, moments ago Trump already vowed “to hit Clinton harder in next U.S. presidential debate.” His supporters are probably asking why he did not do that last night.

via http://ift.tt/2ddqoDG Tyler Durden

Unlike yesterday’s 2Y auction, when paper was trading -1.0% special in repo which helped yesterday’s issuance to pass with the high yield printing through the WI, today’s 5Y auction did not have the added benefit of a short squeeze going into the 1pm deadline (5Y was trading just -0.1% in repo), and as such we were not surprised to see the high yield print at 1.129%, tailing the 1.128% When Issued by a marginal 0.1 bps. Putting this in context, it was the second lowest 5Y auction yield since June 2013, with the exception only of last month’s auction pricing at 1.25%

The bid to cover of 2.39 dipped from last month’s 2.54, but was in line with the recent range, just below the 6MMA of 2.41.

The internals also deteriorated from last month’s auction, with Directs taking down only 4.4% down from last month’s 6.2% and below the 6.7% average, Indirects were left with 61.4%, also in line with the 6 month average, if lower than last month’s 68.7%, while Dealers were left with 34.1% of the final takedown.

Overall, an uneventful auction which had no impact on pricing for teh 5Y bucket after the deadline, however the 30Y has continued to rally, which in turn has pushed the curve somewhat flatter, as the 5s30s spread now declines to 116.1 bps, not helping the global central banks’ attempts for a coordinated curve steepening.

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Deutsche Bank Sub CDS closed above 500bps for only the second day in its history (and the longer-term CDS curve inverted once again) as a bad day ended worse with Bundesbank member Andreas Dombret exclaimed "state support of banking sector must end," warning that it only "props up zombie banks." His pronouncements also pushed politicians to make the hard decisions and "tell banks they need structural reform."

As Bloomberg details, “Political support for the banking sector has to end at last,” Bundesbank board member Andreas Dombret says in text of speech in Vienna. “Unfortunately I’m only seeing this to a limited extent.”

• “Without courageous realignment, banks won’t be able to permanently survive, except perhaps as zombie banks with the support of public authorities,” he says.
• German and Austrian banks have to “adjust their business models so that they match the current environment,” he says.
• The whole sector has to shrink, because the “systematic clean-up, inevitable after the bursting of the financial bubble, isn’t finished yet,” he says.
• Discussion shouldn’t focus exclusively on “fewer banks, fewer branches,” he says, adding that the sector has to shrink to a sustainable size.
• Market participants have to decide how to address overcapacities, Dombret says.
• Basel III rules should be finalized by year-end and in the medium term the privileged treatment of sovereign bonds should be abolished.
• Capital markets union should be advanced to strengthen capital markets as supplement to the banking system

And the credit market reacted badly with Sub CDS topping 500bps for only the 2nd day ever…

 

And more troubling, Deutsxche Bank's longer-term CDS curve has returned to inversion…

 

The Q&A added to the worrries:

• EU “resolution regime, which started at the beginning of the year, hasn’t been tested,” ECB Supervisory Board member Andreas Dombret says in Q&A after speech in Vienna.
• “The banking sector must be an industry where unsustainable business models mean market exit without causing a systemic crisis”
• On negative rates: “If we reach the price-stability goal, we should get out of the low rate policy as soon as possible”

and Dombret's parting comments that

• “We need to stick to the bail-in rules. If we now propose a ‘bail-in holiday’ we don’t have the resolution system anymore”

Explains why the Sub CoCo bonds are trading with a 30% haircut already…

 

This won't end well.

via http://ift.tt/2dhpvLU Tyler Durden

Deutsche Bank Sub CDS closed above 500bps for only the second day in its history (and the longer-term CDS curve inverted once again) as a bad day ended worse with Bundesbank member Andreas Dombret exclaimed "state support of banking sector must end," warning that it only "props up zombie banks." His pronouncements also pushed politicians to make the hard decisions and "tell banks they need structural reform."

As Bloomberg details, “Political support for the banking sector has to end at last,” Bundesbank board member Andreas Dombret says in text of speech in Vienna. “Unfortunately I’m only seeing this to a limited extent.”

• “Without courageous realignment, banks won’t be able to permanently survive, except perhaps as zombie banks with the support of public authorities,” he says.
• German and Austrian banks have to “adjust their business models so that they match the current environment,” he says.
• The whole sector has to shrink, because the “systematic clean-up, inevitable after the bursting of the financial bubble, isn’t finished yet,” he says.
• Discussion shouldn’t focus exclusively on “fewer banks, fewer branches,” he says, adding that the sector has to shrink to a sustainable size.
• Market participants have to decide how to address overcapacities, Dombret says.
• Basel III rules should be finalized by year-end and in the medium term the privileged treatment of sovereign bonds should be abolished.
• Capital markets union should be advanced to strengthen capital markets as supplement to the banking system

And the credit market reacted badly with Sub CDS topping 500bps for only the 2nd day ever…

 

And more troubling, Deutsxche Bank's longer-term CDS curve has returned to inversion…

 

The Q&A added to the worrries:

• EU “resolution regime, which started at the beginning of the year, hasn’t been tested,” ECB Supervisory Board member Andreas Dombret says in Q&A after speech in Vienna.
• “The banking sector must be an industry where unsustainable business models mean market exit without causing a systemic crisis”
• On negative rates: “If we reach the price-stability goal, we should get out of the low rate policy as soon as possible”

and Dombret's parting comments that

• “We need to stick to the bail-in rules. If we now propose a ‘bail-in holiday’ we don’t have the resolution system anymore”

Explains why the Sub CoCo bonds are trading with a 30% haircut already…

 

This won't end well.

via http://ift.tt/2dhpvLU Tyler Durden

Submitted by Patrick Buchanan via Buchanan.org,

Celebrating the racial diversity of the Charlotte protesters last week, William Barber II, chairman of the North Carolina NAACP, proudly proclaimed, “This is what democracy looks like.”

Well, if Barber is right, so, too, was John Adams, who warned us that “democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”

Consider what the protesters, who, exults Barber, “show us a way forward to peace and justice,” accomplished.

In the first two nights of rioting, the mob injured a dozen cops, beat white people, smashed and looted stores, blocked traffic, shut down interstate highways, got one person shot and killed, and forced the call-up of state troopers and National Guard to rescue an embattled Charlotte police force.

This was mobocracy, a criminal takeover of Charlotte’s downtown by misfits hurling racist and obscene insults and epithets not only at the cops but also at bystanders and reporters sent to cover their antics.

We have seen Charlotte before. It was a rerun of Ferguson, Baltimore and Manhattan, after mobs in those cities concluded that innocent black men had been deliberately killed by “racist white cops.”

Yet, one week later, what do we know of the precipitating event in Charlotte?

Keith Scott, 43-year-old African-American father of seven, was shot and killed not by a white cop, but by a black cop who shouted to him, along with others, almost 10 times — “Drop the gun!”

 

An ex-con whose convictions included assault with a deadly weapon, Scott was wearing an ankle holster and carrying a handgun.

 

Charlotte Police Chief Kerr Putney, also black, after viewing video from a dash-cam and a body-cam of the officers involved, recommended against filing any charges.

 

The chief concedes that he cannot, from the video footage, see a gun in Scott’s hands at the time he was shot.

But how is the legitimate investigation of the death of Keith Scott advanced by a mob? And if mass civil disobedience is what “democracy looks like” in 2016, why are we surprised that other nations look less and less to American democracy as their model?

Moreover, if these repeated reversions of the enraged to street action become the new normal, what do they portend for the country?

Blanket cable news coverage of the Ferguson riots split us along racial lines. But what purpose did they serve? Even Eric Holder’s Justice Department concluded that officer Darren Wilson should not be charged in the shooting death of Michael Brown, who tried to grab his gun.

A year ago, Baltimore divided the nation.

Six Baltimore cops, three of them black, were charged in an alleged “rough ride” in a police van that killed 25-year-old Freddie Gray.

This year, a black judge acquitted three of the cops in three trials, and all charges against the rest were dropped.

No evidence was produced that the cops had intended to injure Gray.

In New York, the five cops who piled on Eric Garner to subdue him never intended to injure him, said a grand jury. Well over 300 pounds, Garner suffered from obesity, diabetes, asthma and hypertension, and died, not of a police chokehold, but a heart attack.

Yes, there have been incidents when cops made mistakes and cases where cops acted criminally. In Tulsa last week, after a white cop shot and killed an unarmed black man who appeared to offer no threat, she was charged with first-degree manslaughter. Is not this, rather than marching mobs, the way to handle such incidents?

Inevitably, given the violent crime in our cities — 540 murders this year in Chicago and 3,000 shootings — white and black cops are going to be confronting white and black suspects. Inevitably, some of these collisions are going to result in police shootings and black deaths.

While most of those police decisions to shoot are going to be seen in retrospect as justified, some will not be unjustified, and some will be malicious.

The latter will be rare, but they are going to happen.

But in a nation of 320 million, if every collision between white cops and black men resulting in the death of a suspect is to be seen as legitimate grounds for mob action like Charlotte, we will never know racial peace.

Like moths to a flame, TV cameras are attracted to conflict, especially racial conflict. Networks and TV stations reward with airtime the most incendiary of racial charges. Thus, the news going out to homes and bars will continue to polarize us along racial lines.

And when the rage of one side and the disgust of the other dissipate, some new incident, between white cops and black men, will occur, and will be recorded, and rushed onto the air.

The street action in Ferguson, Baltimore and Charlotte may be what “democracy looks like” to Barber’s NAACP. But to most Americans, it looks like a formula for endless racial conflict — and a touch of fascism in the night.

via http://ift.tt/2dhlUKi Tyler Durden

One year ago, when UBS last looked at the world’s most expensive housing markets, it found that London and Hong Kong were the only two areas exposed to bubble risk.

What a difference a year makes, because in the latest report by UBS wealth Management, which compiles the bank’s Global Real Estate Bubble Index, it found a new champion for the title of “world’s biggest housing bubble“, namely a familiar name, Vancouver, but also that as many as six cities had made the “bubble” category, up from last year’s two. Of last year’s two “winners”, London has been knocked into second place this year, and Hong Kong sixth, but both are still in bubble-risk territory.

Looking at soaring home prices across the globe, UBS has concluded that low interest rates have now created a new global housing bubble in major cities around the world, with Vancouver and London most at risk. Not surprisingly, the Swiss bank notes that ultralow interest rates at global central banks have contributed to overheating in the housing market in recent years.

Vancouver and London came first and second on the 2016 list of cities most at risk of real estate bubbles. Bubble risk was also evident in Stockholm, Sydney, Munich and Hong Kong.

According to UBS, house prices in these six cities have increased by nearly 50% on average since 2011. The average price rise in other financial centers has been less than 15%.

Who is to blame for this latest global bubble? Why your friendly, local central banker of course.

As the WSJ summarizes, loose monetary policy at global central banks is a key driver behind rising prices, the report claims. Low interest rates have pushed investors to hunt for returns in tangible assets, “so it is hardly any wonder that housing markets are again overheating,” according to report authors Claudio Saputelli and Matthias Holzhey.

For the European Central Bank, which controls monetary policy for all 19 member countries, the inability to adjust interest rates for particular economic development in separate countries has contributed to rising house prices in the region, UBS said.

While unemployment across much of Europe remains in the double digits, the locals are now faced with a double whammy of not only having no income, but even if they do, being unable to afford a home. 

“All European cities are overvalued, apart from Milan,” the report said. Central banks in the U.K., Canada and Australia are also keeping interest rates low. Combined with stable supply of homes and strong demand from foreign buyers, especially in China, “this has produced an ideal setting for excesses in house prices,” the authors said.

Meanwhile, Vancouver house prices have been significantly overvalued since 2007, according to UBS. The culprit there is not so much the BOC as the PBOC: until recently Vancouver served as the primary offshore target for Chinese money launderers, which neither the financial crisis nor weakening commodity prices managed to dent. However, this bubble now appears to have finally burst after the provincial government of British Columbia introduced a 15% transfer tax on foreign home buyers in August, leading to a crash in the most expensive local housing segments.

As for other housing markets, UBS said that in London, an acute housing shortage and readily-available mortgages “should be able to sustain the inflated prices for the time being,” the report said.

According to UBS it is impossible to predict what might pop the bubbles, and when, even in cities with the clearest signs of a problem, UBS said. “A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time,” Mr. Holzhey, a real estate economist, said in a written statement. UBS concludes that investors now buying cities considered overvalued “should not expect real price appreciation in the medium to long run,” UBS said.

That said, with every other asset class similarly overvalued, it is difficult to make a case in what other asset classes the nearly $2.5 trillion in record new liquidity created by central banks every year will see safer returns.

via http://ift.tt/2d0SpyJ Tyler Durden

One year ago, when UBS last looked at the world’s most expensive housing markets, it found that London and Hong Kong were the only two areas exposed to bubble risk.

What a difference a year makes, because in the latest report by UBS wealth Management, which compiles the bank’s Global Real Estate Bubble Index, it found a new champion for the title of “world’s biggest housing bubble“, namely a familiar name, Vancouver, but also that as many as six cities had made the “bubble” category, up from last year’s two. Of last year’s two “winners”, London has been knocked into second place this year, and Hong Kong sixth, but both are still in bubble-risk territory.

Looking at soaring home prices across the globe, UBS has concluded that low interest rates have now created a new global housing bubble in major cities around the world, with Vancouver and London most at risk. Not surprisingly, the Swiss bank notes that ultralow interest rates at global central banks have contributed to overheating in the housing market in recent years.

Vancouver and London came first and second on the 2016 list of cities most at risk of real estate bubbles. Bubble risk was also evident in Stockholm, Sydney, Munich and Hong Kong.

According to UBS, house prices in these six cities have increased by nearly 50% on average since 2011. The average price rise in other financial centers has been less than 15%.

Who is to blame for this latest global bubble? Why your friendly, local central banker of course.

As the WSJ summarizes, loose monetary policy at global central banks is a key driver behind rising prices, the report claims. Low interest rates have pushed investors to hunt for returns in tangible assets, “so it is hardly any wonder that housing markets are again overheating,” according to report authors Claudio Saputelli and Matthias Holzhey.

For the European Central Bank, which controls monetary policy for all 19 member countries, the inability to adjust interest rates for particular economic development in separate countries has contributed to rising house prices in the region, UBS said.

While unemployment across much of Europe remains in the double digits, the locals are now faced with a double whammy of not only having no income, but even if they do, being unable to afford a home. 

“All European cities are overvalued, apart from Milan,” the report said. Central banks in the U.K., Canada and Australia are also keeping interest rates low. Combined with stable supply of homes and strong demand from foreign buyers, especially in China, “this has produced an ideal setting for excesses in house prices,” the authors said.

Meanwhile, Vancouver house prices have been significantly overvalued since 2007, according to UBS. The culprit there is not so much the BOC as the PBOC: until recently Vancouver served as the primary offshore target for Chinese money launderers, which neither the financial crisis nor weakening commodity prices managed to dent. However, this bubble now appears to have finally burst after the provincial government of British Columbia introduced a 15% transfer tax on foreign home buyers in August, leading to a crash in the most expensive local housing segments.

As for other housing markets, UBS said that in London, an acute housing shortage and readily-available mortgages “should be able to sustain the inflated prices for the time being,” the report said.

According to UBS it is impossible to predict what might pop the bubbles, and when, even in cities with the clearest signs of a problem, UBS said. “A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time,” Mr. Holzhey, a real estate economist, said in a written statement. UBS concludes that investors now buying cities considered overvalued “should not expect real price appreciation in the medium to long run,” UBS said.

That said, with every other asset class similarly overvalued, it is difficult to make a case in what other asset classes the nearly $2.5 trillion in record new liquidity created by central banks every year will see safer returns.

via http://ift.tt/2d0SpyJ Tyler Durden