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Author Topic: Record High Margin Debt With Most Traders Betting Against This Market  (Read 6138 times)
galdur
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January 22, 2016, 02:44:38 AM
Last edit: January 22, 2016, 04:12:27 AM by galdur
 #81

Stocks all over the world will go down,it was long pump now it  is dump time
First 20% than we will see

Well yeah, but this plunge is pretty similar to that of last August. In the months before that the Chinese had been dumping U.S. paper so driving the herd from stocks into bonds and the dollar was pretty useful. So, I´m a little bit suspicious. And you have the bubble vision chorus all clamoring for declines and taking time off from their usual bullish hype. Seems managed.
But I guess that banking systems here and there are beginning to show some cracks. And commodities seem to be screaming depression. So there are probably some major defaults ahead. Debt levels are stupendous and of course decreasing turnover is poison for any ponzi scheme.

The world´s second most traded commodity:


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January 22, 2016, 10:50:50 AM
Last edit: January 22, 2016, 11:00:59 AM by galdur
 #82

Bond price and yield move in opposite directions, the higher the price the lower the yield and vice versa. If you´re extremely leveraged when the FED starts hiking your capital base can pretty quickly be wiped out unless the declining bond price is managed. The FED itself is leveraged 80-1 which makes this even more urgent.




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January 23, 2016, 09:43:02 AM
 #83

Saudi Arabia's Secret Holdings of U.S. Debt Are Suddenly a Big Deal

 Andrea Wong
 MsAndreaWong
 Liz McCormick

January 22, 2016 — 12:00 AM GMT Updated on January 22, 2016 — 2:30 PM GMT

Hiding data is “mind-boggling,” says former Treasury official
Saudi burns through $100 billion of reserves as strains emerge

It’s a secret of the vast U.S. Treasury market, a holdover from an age of oil shortages and mighty petrodollars: Just how much of America’s debt does Saudi Arabia own?
But now that question -- unanswered since the 1970s, under an unusual blackout by the U.S. Treasury Department -- has come to the fore as Saudi Arabia is pressured by plunging oil prices and costly wars in the Middle East.
In the past year alone, Saudi Arabia burned through about $100 billion of foreign-exchange reserves to plug its biggest budget shortfall in a quarter-century. For the first time, it’s also considering selling a piece of its crown jewel -- state oil company Saudi Aramco. The signs of strain are prompting concern over Saudi Arabia’s outsize position in the world’s largest and most important bond market.

A big risk is that the kingdom is selling some of its Treasury holdings, believed to be among the largest in the world, to raise needed dollars. Or could it be buying, looking for a port in the latest financial storm? As a matter of policy, the Treasury has never disclosed the holdings of Saudi Arabia, long a key ally in the volatile Middle East, and instead groups it with 14 other mostly OPEC nations including Kuwait, the United Arab Emirates and Nigeria. For more than a hundred other countries, from China to the Vatican, the Treasury provides a detailed breakdown of how much U.S. debt each holds.

“It’s mind-boggling they haven’t undone it,” said Edwin Truman, the former Treasury assistant secretary for international affairs during the late 1990s, and now a senior fellow at the Peterson Institute for International Economics in Washington. Because relations were rocky and the U.S. needed their oil, the Treasury “didn’t want to offend OPEC. It’s hard to justify this special treatment for OPEC at this point.”

For its part, the Treasury “aggregates data where more detailed reporting might disclose the positions of individual holders,” spokeswoman Whitney Smith said in an e-mail.
While that position is consistent with the International Investment and Trade in Services Survey Act, which governs disclosures of investments made by foreign persons and governments, and shields individuals in countries where Treasuries are narrowly held, it hasn’t kept the Treasury from disclosing figures for a whole host of other countries -- large and small.

They range from the $3 million stake held by the island nation of the Seychelles, to the $69.7 billion investment from the oil-producing economy of Norway, and those of China and Japan, which are both in excess of $1 trillion.
Representatives for the Saudi Arabian Monetary Agency, known as SAMA, and the nation’s finance ministry declined to comment.
Apart from the kingdom itself, only a handful of Treasury officials, and those at the Federal Reserve who compile the data on their behalf, have a clear picture of Saudi Arabia’s U.S. debt holdings and whether they’re rising or falling.
For everyone else, it’s a guessing game.

The special arrangement, born out of the 1973 oil shock following the Arab embargo, is just one small concession among many that successive U.S. administrations have made over the years to maintain America’s strategic relationship with the Saudi royal family -- and its access to the kingdom’s deep reserves of oil.
The exception extends to 12 other countries in the Treasury’s oil-exporter group, all from the Middle East or Africa. Based on aggregate data released this week, that group has trimmed its stakes by a few billion dollars since March and held $289 billion as of November.
Because its holdings are believed to be the largest, Saudi Arabia’s moves have drawn scrutiny, particularly as other central banks in emerging markets sell Treasuries to raise cash in defense of their currencies. (The Treasury doesn’t break out private and public holdings, but its disclosures say about two-thirds of foreign holdings are held by official institutions such as central banks.)

Those sales have had a small, but visible impact on America’s funding costs. According to Deutsche Bank AG, selling by foreign central banks since March has added 0.3 percentage point to yields on 10-year Treasuries, which ended Thursday at 2.03 percent.
SAMA’s own figures show reserve assets held in foreign securities have fallen by a record $108 billion in 2015. The Saudi central bank, which doesn’t disclose separate figures for Treasuries, owned $423 billion in overseas securities as of November.

“I come down on the side of thinking there should be more transparency,” said Jeff Caughron, chief operating officer at Baker Group, which advises community banks with more than $45 billion in investments. But at the same time, “the Treasury is constrained by political sensitivities and that comes into conflict with market participants that crave more transparency. It’s an understandable conflict.”
And events in recent months, from President Barack Obama’s landmark nuclear deal with Iran to Saudi Arabia’s execution of a prominent Shiite cleric who challenged the royal family, underscore just how sensitive U.S.-Saudi relations have become. The longstanding rationale for the alliance has also been undercut by America’s domestic oil boom, which has made it far less dependent on Saudi exports.

Whatever the political considerations, some analysts speculate Saudi Arabia may actually be trying to hold onto its Treasuries as part of a strategy to bulk up on dollar assets amid the deepening turmoil in global financial markets.

“You need dollars if you’re an oil producer, you want to make sure you have dollars on your balance sheet,” said Sebastien Galy, Deutsche Bank’s director of foreign-exchange strategy, who suggests SAMA could be raising cash by liquidating riskier investments such as stocks, real estate and private equity. Holding dollars also makes sense as a hedge against the plummeting price of oil, which is priced in the U.S. currency.
Figures from SAMA suggest the kingdom might be reallocating some of its reserves into short-term, liquid assets to help the finance ministry meet budget commitments and defend its 30-year-old currency peg of 3.75 riyals to the dollar.
The central bank has increased foreign currencies and deposits held abroad by 7 percent in the first 11 months of 2015, while at the same time reducing foreign securities, consisting of equities and longer-term debt, by 20 percent.
That cash has become key. Oil’s slump to less than $30 a barrel, from more than $100 two years ago, has eroded the petrodollar-fueled wealth that quadrupled per-capita income since the late 1980s and provided Saudi Arabia with the largess to offer free health care, gasoline subsidies and routine pay increases.

“When SAMA is required to raise liquidity for the Ministry of Finance, you’d see deposits and cash go up and they’d liquidate other assets,” said Khalid Alsweilem, SAMA’s former head of investment. “They know when the Ministry of Finance will spend all their riyals. So they prepare certain amount of cash available based on such expectations.”
Alsweilem, who spent 20 years at SAMA and now advocates for fiscal reforms as a fellow at Harvard University’s John F. Kennedy School of Government, says market watchers may overestimate how much money the central bank actually allocates to Treasuries.
SAMA isn’t a typical central bank because it acts as a quasi-sovereign wealth fund, he said. As such, it aims for higher returns as a buffer against falling oil revenue and invests in a wide array of risky assets, which explains why it has only recently started to become more transparent, Alsweilem said.
To hear Peterson Institute’s Truman tell it, more clarity by central banks is long overdue -- particularly when it comes to the U.S. Treasury.
“In the old days at the Treasury and central banks, transparency wasn’t the word of the day” and politics made special treatment a non-issue, he said. Now, “it’s simply a legacy issue. You want to deal with it sooner or later.”

http://www.bloomberg.com/news/articles/2016-01-22/u-s-is-hiding-treasury-bond-data-that-s-suddenly-become-crucial

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January 28, 2016, 08:38:48 PM
 #84

Want To Know What The S&P500 Does Next? Just Look At The Fed's Balance Sheet

Submitted by Tyler Durden on 01/28/2016 12:09 -0500

Central Banks Jim Reid Lehman


Over the past 7 years, we as well as others (if not those who believe in magic money trees, or managing other people's money while blogging) have repeatedly said that when it comes to "market" returns, look no further than the size of the Fed's balance sheet - the single best indictor of where the S&P500 is headed to next.

That is precisely what DB's Jim Reid did overnight. This is what he says:

Today we update a chart and table we used a fair amount in 2013/4 looking at the Fed balance sheet and equity and credit performance. .....more

http://www.zerohedge.com/news/2016-01-28/want-know-what-sp500-does-next-just-look-feds-balance-sheet
 



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February 01, 2016, 12:36:35 AM
 #85

Now; that is one intriguing head and shoulders formation. What´ll come of it, only time will tell. Seems to be a big stampede into the dollar currently, the E.U. and Japan (solid U.S. vassal regions) both being in negative interest rate territory. Strange times. As before; I think the big crash will start in the east and move west as markets open. When, well that´s the difficult part. It will probably loom for a while.


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February 01, 2016, 10:24:48 PM
 #86

Financial stocks account for 16 per cent of the S&P 500 in the US, and their 9 per cent slide last month is the biggest single reason the benchmark index is now 5 per cent lower than at the start of the year. zerohedge







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February 04, 2016, 01:27:32 PM
 #87

Uh oh, the biggest trade in the universe unwinding too fast for control? That has to hurt somewhere. All those derivatives.......




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February 10, 2016, 09:16:08 AM
 #88

Financial stocks account for 16 per cent of the S&P 500 in the US, and their 9 per cent slide last month is the biggest single reason the benchmark index is now 5 per cent lower than at the start of the year. zerohedge


They could drop further when their loans to the oil companies become bad. It might affect their viability.
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February 10, 2016, 09:24:13 AM
 #89

Financial stocks account for 16 per cent of the S&P 500 in the US, and their 9 per cent slide last month is the biggest single reason the benchmark index is now 5 per cent lower than at the start of the year. zerohedge


They could drop further when their loans to the oil companies become bad. It might affect their viability.

Yes, and major European banks seem to be on the verge of collapse. Maybe they´ll be printed back to life. Negative interest rates already in japan and Europe. I think the yield of the U.S. 5-yr note is presently at zero.
It´ll be a more or less controlled crash probably throughout the year.


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February 10, 2016, 09:00:44 PM
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March 12, 2016, 12:43:05 PM
 #91

03/11/2016 - Jeffrey Snider: US$ STRENGTH IS A MANIFESTATION OF A US$ SHORTAGE

FRA Co-Founder Gordon T.Long and Jeffrey Snider, Head of Global Investment Research at Alhambra Investment Partners discuss a broad array of Global Macro subjects in this 48 minute video discussion with supporting slides.

As Head of Global Investment Research for Alhambra Investment Partners, Jeff spearheads the investment research efforts while providing close contact to Alhambra’s client base. Jeff joined Atlantic Capital Management, Inc., in Buffalo, NY, as an intern while completing studies at Canisius College. After graduating in 1996 with a Bachelor’s degree in Finance, Jeff took over the operations of that firm while adding to the portfolio management and stock research process.

In 2000, Jeff moved to West Palm Beach to join Tom Nolan with Atlantic Capital Management of Florida, Inc. During the early part of the 2000′s he began to develop the research capability that ACM is known for. As part of the portfolio management team, Jeff was an integral part in growing ACM and building the comprehensive research/management services, and then turning that investment research into outstanding investment performance. As part of that research effort, Jeff authored and published numerous in-depth investment reports that ran contrary to established opinion. In the nearly year and a half run-up to the panic in 2008, Jeff analyzed and reported on the deteriorating state of the economy and markets. In early 2009, while conventional wisdom focused on near-perpetual gloom, his next series of reports provided insight into the formative ending process of the economic contraction and a comprehensive review of factors that were leading to the market’s resurrection. In 2012, after the merger between ACM and Alhambra Investment Partners, Jeff came on board Alhambra as Head of Global Investment Research.

Jeff holds a FINRA Series 65 Investment Advisor License.

US TIC REPORT, TREASURY SALES




TIC is a compilation done by the US Treasury based on their access to data on foreign accounts and holdings of Dollar accounts and securities, and estimates the foreign Dollar market. Over the last decade or so, it is clear that the Eurodollar market grew steadily at a rapid rate until about August 2007, at which point it pivots and comes back down. The TIC data shows the tendency of dollar markets to essentially be stable, usually addressed through selling Treasury. However, the private dollar markets offshore are in disarray to the extent that central banks around the world are forced to fill the dollar deficiency with their own holdings. Of especial note is China’s reduction of their US Treasuries and foreign currency reserves, and OPEC countries incurring serious Current Account deficits in an attempt to maintain their pegs with the US dollar.  In addition are the emerging markets who borrowed about $7-9T in USD, who now have difficulty paying back debts due to slowing trade and falling currencies.

This all leads to the US dollar strengthening, which is the manifestation of the dollar shortage. In recent days, Japan using NIRP will further disrupt the dollar system.

“US Dollar Strength is a manifestation of a US Dollar Shortage!”

https://www.youtube.com/watch?v=zapJDo5v7FM

more...

http://financialrepressionauthority.com/2016/03/11/jeffrey-snider-us-strength-is-a-manifestation-of-a-us-shortage/



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