It is the 30th of March 2017

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Albert Edwards: This Is The Reason Why The Market Doesn't Believe The Fed Any More

While it was generally a quiet day in the market, an unexpected tension emerged today: first central banker incubator Goldman Sachs, and then RBC both made the case that Janet Yellen has not only failed to communicate what yesterday's rate hike means, but that the Fed has effectively lose control of the market, by unleashing just the opposite reaction of what the Fed had intended: in fact, as Goldman explained, the response to the market was the equivalent of "almost one full cut in the federal funds rate." In other words, instead of hiking, the market interpreted the Fed's action as a rate cut, which according to Goldman will force the Fed to explain that the market was wrong, prompting even more volatility when the market's inevitable cognitive dissonance hits.

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Albert Edwards: This Is The Reason Why The Market Doesn't Believe The Fed Any More

While it was generally a quiet day in the market, an unexpected tension emerged today: first central banker incubator Goldman Sachs, and then RBC both made the case that Janet Yellen has not only failed to communicate what yesterday's rate hike means, but that the Fed has effectively lose control of the market, by unleashing just the opposite reaction of what the Fed had intended: in fact, as Goldman explained, the response to the market was the equivalent of "almost one full cut in the federal funds rate." In other words, instead of hiking, the market interpreted the Fed's action as a rate cut, which according to Goldman will force the Fed to explain that the market was wrong, prompting even more volatility when the market's inevitable cognitive dissonance hits.

Read More

Albert Edwards: This Is The Reason Why The Market Doesn't Believe The Fed Any More

While it was generally a quiet day in the market, an unexpected tension emerged today: first central banker incubator Goldman Sachs, and then RBC both made the case that Janet Yellen has not only failed to communicate what yesterday's rate hike means, but that the Fed has effectively lose control of the market, by unleashing just the opposite reaction of what the Fed had intended: in fact, as Goldman explained, the response to the market was the equivalent of "almost one full cut in the federal funds rate." In other words, instead of hiking, the market interpreted the Fed's action as a rate cut, which according to Goldman will force the Fed to explain that the market was wrong, prompting even more volatility when the market's inevitable cognitive dissonance hits.

Read More

The US Motorist Is Unwell: Miles Driven Suffer Biggest Slowdown In Over 2 Years

While the media continues to blast the occasional OPEC production-related headline, the reality is that crude supply is increasingly becoming a shale story, as the US, now tens of billions in debt lighter - has rapidly emerged as the low-cost, marginal oil producer. As such absent a sharp rebound in prices in the coming 3 months, OPEC is almost guaranteed to revert to its prior production regime, as Saudi Arabia is already pained by the loss of market share to increasingly lower cost US producers, who as shown in the charts below, have seen their all-in production costs plunge thanks to rapid technological advancement.

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The US Motorist Is Unwell: Miles Driven Suffer Biggest Slowdown In Over 2 Years

While the media continues to blast the occasional OPEC production-related headline, the reality is that crude supply is increasingly becoming a shale story, as the US, now tens of billions in debt lighter - has rapidly emerged as the low-cost, marginal oil producer. As such absent a sharp rebound in prices in the coming 3 months, OPEC is almost guaranteed to revert to its prior production regime, as Saudi Arabia is already pained by the loss of market share to increasingly lower cost US producers, who as shown in the charts below, have seen their all-in production costs plunge thanks to rapid technological advancement.

Read More

Snap IPO To Price At $17, Above Range, Valuing Company At $24 Billion

Following yesterday's report that the Snap IPO, which is set to price any moment ahead of its break for trading tomorrow, is up to 10x oversubscribed and that - in a sign of demand for the company's shares - up to a quarter of the IPO buyers had agreed to lock themselves up against selling the company's shares for the next 12 months, we noted that the public offering, initially slated to sell shares in the 14-16 range would likely be upsized to a $17-18 range. Sure enough, moments ago the WSJ confirmed that Snap is set to boost the price of its initial public offering to $17 a share.

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