There was no place on the river for additional barriers, and serious structural issues made it too risky to continue to add to the height of existing dams. Five-year T-note yields rose five bps to 4.14% (up 288 bps). Website Builder App for Windows and Mac - MOBIRISE I fell in love with macro analysis sitting at a trading desk staring at Telerate and Quotron screens in the summer of 1987 wild global market instability that culminated that October with the Black Monday crash. And the greater the scope of market risk, the more dangerous derivatives become. Complete one of our funding evaluations and demonstrate the profitability of your strategy & risk management capabilities to get funded with up to $200,000, with up to 80% profit split. U.K.'s FTSE equities index rallied 1.4% (down 5.3% YTD). Ive talked about this in the past. I spoke with Fed officials, economists, financial journalists and other market professionals, and basically everyone told me I was wrong. So, how have derivatives markets flourished for three decades, quickly recovering from multiple crises? I believe there is great value in contemporaneous analysis, and Ill point to Benjamin Andersons brilliant writings in the Chase Economic Bulletin during the Roaring Twenties and Great Depression era. Fear is contagious, said Ben Kumar, senior investment strategist at Seven Investment Management LLP. China also has serious credit issues with multi-trillion local government debt instruments and the multi-trillion AMCs, or asset management companies created to clean up after the nineties bust. De-risking/deleveraging will feed illiquidity and market dislocation. Of course, many wanted in on the action, with new insurance operators sprouting up on every corner. It was out with the traditional bank-dominated credit system restrained by bank reserve and capital requirements. Intermediate Capital Group plc press release (ICGUF): 1H GAAP EPS of 11.50.Revenue of 221.4M (-53.4% Y/Y). And, let me tell you, no one was interested in listening. If insurance is readily available and cheap, why not take on more risk and leverage? In comparison, the S&P SmallCap 600 Index fell 5.20% and the Morningstar Small Cap Index dropped 3.75%. Importantly, the Chinese currency is showing vulnerability, down over 10% YTD versus the dollar. Pershing Square Capital Management is an American hedge fund management company founded and run by Bill Ackman, headquartered in New York City. Is this happening to you frequently? Purchase apps were down 37% year over year and refis were 86% lower., October 3 Bloomberg (Prashant Gopal): Home prices in the US have taken a turn and are now posting the biggest monthly declines since 2009. The yen remained strong. Curiously, they actually had no intention of ever paying a claim. And let me tell you, there is nothing that could have gotten me more focused and determined than to watch my hopes and dreams get absolutely crushed. Myriad bubbles are faltering outside central bank control, and evidence is mounting that global policymakers have lost the capacity to ensure liquid and continuous markets. Country Garden, Chinas largest builder, only months ago viewed as a sound Credit, saw its bond yields today surge to a record 53%. And now, with Bubbles faltering and global financial conditions tightening, I believe global policymakers have lost control of bubble dynamics. I believe were witnessing a secular change in pricing dynamics and inflation psychology. The declines may continue as central banks continue to raise rates, Preqin said., October 3 Bloomberg (Alexandra Semenova): A risk-off mood across global financial markets amid persistent economic turmoil deterred prospective hedge funders from starting up new firms in the second quarter. Analytically, there are interrelated Bubbles globally that essentially create one monumental Bubble. Though 401(K) plans are set up to keep Americans nest eggs out of reach until retirement age, the Internal Revenue Service allows savers to pull money out for certain economic hardships, including buying a first home, preventing foreclosure and covering high medical bills. The percentage of protected homes is higher in coastal areas that sustained the most damage, but still, is over 50% in just one of the affected counties In all locations pummeled by Ian, the percentage of homes covered by flood policies is down from five years ago., October 4 Associated Press (Terry Chea): As Californias drought deepens, Elaine Moores family is running out of an increasingly precious resource: water. Interconnectedness: trading systems, derivatives platforms, swaps trading, hedge funds and family offices, international mutual fund complexes, inflationary policies Moreover, over the long boom, international finance became one fungible, commonly shared pool of liquidity too much of it trend-following, levered speculative finance. The outflows were the largest that the $4.1 trillion hedge fund industry had seen since the start of the coronavirus pandemic in the first quarter of 2020. With his seven-month invasion unravelling, Putin celebrated his 70th birthday on Friday with fawning praise from some officials but little public fuss. Yahoo Search - Web Search Five trillion of QE later, the bubble had grown only bigger and more unwieldy. On the downside, the Swedish krona declined 1.1%, the British pound 0.8%, the Swiss franc 0.7%, the euro 0.6%, the Australian dollar 0.4%, the Japanese yen 0.4%, and the South African rand 0.1%. One things for sure, the rainfall is unrelenting, and all the dams have reached maximum capacity. Gasoline spiked 10.6% (up 23%), while natural gas slipped 0.3% to $6.75 (up 81%). Moreover, I believe the previous cycle of relatively tame consumer price inflation in the face of massive monetary inflation was aberrational. Clearly, inflation is far too high, and persistently high inflation undermines the ability of our economy to perform at its full potential, Williams said Tighter monetary policy has begun to cool demand and reduce inflationary pressures, but our job is not yet done., October 5 Reuters (Howard Schneider): The U.S. Federal Reserve's fight against inflation is likely still in early days, Atlanta Fed president Raphael Bostic said, becoming the latest U.S. central banker to caution against the likelihood rates would be reduced in response to any weakening of the economy. Years of actuarial data create the ability to accurately forecast and price for future losses - for automobile accidents, house fires, healthcare expenses, death and so on. Brazil's Bovespa index surged 5.8% (up 11.0%), and Mexico's Bolsa index jumped 2.5% (down 14.2%). History offers nothing remotely comparable. Yet it was not until Pimcos Paul McCulley in 2007 referred to the new shadow banking system that people began to take notice. Asian emerging market economies are over-levered and acutely vulnerable to the confluence of tightening financial conditions and Chinese and Japanese crises. But theres a separate crisis brewing that could come to a head in the next decade. Despite glimmers of hope in recent data, Bostic said the overarching message Im drawingis that we are still decidedly in the inflationary woods, not out of them, with the Fed's target funds rate needing to rise to around 4.5% by the end of the year., October 4 Reuters (Howard Schneider): Inflation is the most serious problem facing the Federal Reserve and may take some time to address, Fed Governor Philip Jefferson said in his first public remarks since joining the U.S. central bank's governing body. Five-year hybrid ARM rates rose six bps to 5.36% (up 284 bps) - the high since January 2009. Over the years, Ive shared a flood insurance analogy. Interestingly, their responses were consistent. And I fear the holy crap moment markets hit with the harsh reality that the Fed and global central bankers dont have everything under control. However, for 2023, it sees trade growth of just 1.0%, compared with a previous forecast of 3.4%. Three-month Treasury bill rates ended the week at 3.26%. Stock Market Quotes, Business News, Financial News, Trading Ideas, and Stock Research by Professionals. For the week on the upside, the Brazilian real increased 4.1%, the Norwegian krone 1.7%, the South Korean won 1.3%, the Canadian dollar 0.7%, the Mexican peso 0.5%, the Singapore dollar 0.2%, and the New Zealand dollar 0.2%. The Commission is composed of the College of Commissioners from 27 EU countries. The country's FX reserves stood at $416.77 billion at the end of September, down $19.66 billion from $436.43 billion a month earlier, October 6 Reuters (Kylie Madry): Mexican Economy Minister Tatiana Clouthier stepped down, depriving Mexico of one of its key trade negotiators as her government scrambles to head off a major dispute over energy with the United States and Canada. Over the past 160 weeks, Fed credit expanded $5.002T, or 134%. ALTIMETER CAPITAL MANAGEMENT The French to German 10-year bond spread narrowed about one to 61 bps. French yields increased eight bps to 2.80% (up 260 bps). Spending increased 5.1% from a year ago, compared with a 6.7% increase forecast by analysts., October 3 Reuters (Noor Zainab Hussain): Insurers are bracing for a hit of up to $57 billion as they try to assess the damage from Hurricane Ian in Florida and South Carolina, risk modeling firm Verisk said The industry projection includes estimated wind, storm surge, and inland flood losses resulting from Ian's landfalls in the two states, Verisk said. Keep in mind how things operated over the past cycle: Loose money would fuel a bubble, the bubble would burst, and only looser money restored bubble dynamics to fuel the next even bigger Bubble. The GSEs and Wall Street finance, in particular, basically operated without any constraints whatsoever. A corporate treasurer or finance minister looking to issue new notes now would likely have to pay interest thats about 156 bps higher on average than the coupons on existing securities, after that gap surged to a record in recent days. Christianity is an Abrahamic monotheistic religion based on the life and teachings of Jesus of Nazareth.It is the world's largest religion with roughly 2.38 billion followers representing one-third of the global population. EM equities were mostly higher. I expected the Federal Reserve would come to better understand this highly unstable credit mechanism and move to rein it in. Fifteen-year rates declined six bps to 5.90% (up 367 bps). I am a CPA by training. Ive already seen ample evidence that derivatives will be at the epicenter of unfolding financial crises. Spain's IBEX 35 equities index increased 1.0% (down 14.7%). 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