Trader Warns Jackson Hole’s “Hesitantly Optimistic” Chatter Will Be “Nothing But Buying Time”

Hawkish, dovish, hawkish, dovish? As many market participants suspect, this week’s Jackson Hole ‘retreat’ wil be a nothing-burger with perhaps a side-dish of temporary volatility as machines quibble over various words in headlines. Former fund manager Richard Breslow warns not to expect much

Via Bloomberg,

Expect to Hear Jackson Hole Is Great in August

At some level, I hope I’m wrong. This week would end up being far more interesting if we do indeed get some juicy policy announcement out of one, or, why not be greedy, two, of the big kahunas headlining Jackson Hole. But it’s unlikely and markets may well end up having to figure out what they want to do between now and autumn on their own.

As much as these folks love to talk, they probably have little intention of communicating.

What do we know?


The Fed doesn’t pre-commit. But has essentially done so on a taper announcement and commencement in the fall. Their best laid plans call for as benign a start to this process as possible. Whether Chair Yellen mentions it again is largely irrelevant. They want to do it and think they can. And they won’t if something untoward happens.


If her base case is transitory inflation and one more hike this year, this is neutral not hawkish. Or I should say uninformative. Their first priority is balance sheet and rates after. A hike requires waiting to see inflation numbers tick up. We’re going to know nothing new on this subject before the Aug. 31 release, at the earliest, of the PCE deflator.


President Draghi’s notion on timing of a taper has to be influenced by the German election. And that comes after the ECB’s September meeting. The Chancellor’s re-election is widely assumed. But peace and harmony within the Zone will be the order of the day until it is over. Periphery spreads are still tight but have begun to show signs of widening out. Another 10 basis points wider in the BTP to bund spread and things begin to look interesting.


The ECB has a much harder task than the Fed in pulling back stimulus due to the structure of the PSPP and use of the capital key. Confidently dismissing the process as harmless for markets is a luxury they can’t indulge in.

Of course, if the market “misinterprets” anything (translation – sells off), there are numerous officials willing and able to step into the breach and save the world with some clarifying “that’s not what he/she meant” remark. As Breslow concludes, we have all got rather used to it…

Unfortunately, there are the speeches and then the chit chats. With all of the winks, spins and low-downs we’ve come to expect. So, no matter what is said from the podium, expect to be treated to no end of assurances as to what they really meant.


In truth, they’re buying time, hesitantly optimistic and have a plan that sounds great in theory.

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Germany’s Gabriel hits back at Erdogan with call to back Turkish democracy

Tue, 2017-08-22 13:31

BERLIN: Germany’s Foreign Minister Sigmar Gabriel said Berlin and the rest of Europe should back the “democratically minded” majority of Turks who did not support President Recep Tayyip Erdogan, in a dramatic hardening of Germany’s position toward Ankara.
His remarks, at a campaign event for his Social Democratic Party (SPD), come amid sharply deteriorating relations between the NATO allies, after Erdogan urged German Turks to boycott Germany’s main parties in next month’s election.
“More than half the country is democratically minded. They didn’t support him,” Gabriel said at the meeting in the western Saarland region, according to the Foreign Ministry.
“I believe that many in Turkey are counting on Europe and Germany supporting Turkish democracy and not looking on helplessly.”
The remarks, coming after Erdogan told Gabriel to “know his place” and describing Germany’s main parties as “enemies of Turkey,” are likely to anger Turkey.
Erdogan accuses Germany of harboring plotters behind last year’s bloody coup attempt against Erdogan. Turkey has arrested 50,000 in a crackdown, including European-Turkish citizens. Western politicians say the dragnet is a pretext for Erdogan to rid himself of his opponents.
Lawmakers from Chancellor Angela Merkel’s Christian Democrat party and the Left party on the other end of the political spectrum urged the government to consider freezing the foreign assets of Erdogan and his inner circle.
“We need immediate and direct sanctions against Erdogan and his associates,” said Sevim Dagdelen, foreign affairs spokesman for the Left party.
Home to some 3 million people of Turkish descent, Germany has traditionally had good relations with Turkey, which is also a major trade partner and tourist destination for German sun-seekers.
But, with parliamentary elections due on Sept. 24, current tensions have badly dented Turkey’s image in Europe’s largest economy.
In his remarks on Monday evening, Gabriel was cautious on sanctions, saying that Germany did not want inadvertently to hit “the small restaurant owners and waiters on the west coast.”
The latest escalation in Ankara’s war of words with Berlin was triggered by Turkey’s use of an Interpol red notice to have Turkish-German writer Dogan Akhanli arrested in Spain. Accused of terrorism, Akhanli has been released but must remain in Spain while authorities assess Turkey’s extradition request.
“I always thought I was safe in European countries and that the long hand of arbitrary arrogance couldn’t reach me here,” said the activist, who spent long periods in jail for left-wing activism before fleeing Turkey in 1991.

Main category: 
‘You belong here,’ Germany tells Turks as row with Ankara rages
Erdogan urges ‘slap’ for German ruling parties in polls

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U.S. Sanctions Chinese, Russian Companies Aiding N. Korea

As tensions rise over North Korea, the U.S. Treasury this morning said it was slapping new sanctions on Chinese and Russian entities conducting oil, coal and banking business with Pyongyang, and propping up the country’s weapons program.   The sanctions target 16 Chinese and Russian individuals and companies, with the bulk targeting Chinese entities which have been buying and selling oil and coal with North Korea, or offering related banking services to facilitate these transactions.  “The Treasury will continue to increase…

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The Caribbean Is Poised To Become The Next Major Oil Region

In the future, we may be hearing about the Caribbean a whole lot more when talking about oil and gas. Previously, the area was virtually off the map for the fossil fuels industry, despite its proximity to the vast oil reserves of Venezuela. Now, the Caribbean has suddenly become a point of interest since ExxonMobil discovered major reservoirs in nearby Guyana in 2015. After their initial huge discovery of the Liza oil field 2 years ago, Exxonmobil also announced last month that they’ve discovered more oil in the Payara reservoir off the coast…

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Is This The First In A Slew Of Megadeals In Oil?

Oil prices have shown some weakness lately. With WTI slipping below $48 per barrel — after briefly topping $50 at the end of July.  But even at that level, crude has now been relatively stable for over a year — trading between the low 40s and low 50s.  And that predictability is bringing back petro-M&A.  That included a mega-deal this week by one of the world’s largest oil companies. With the firm making its biggest outlay in buying new production since 1999. In a place few observers expected.  The company…

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A 3% Drop Is All It Takes…

A 2.8% drop in stocks is all it takes…

…to convert sheer near full euphoria into outright panic

Source: CNNMoney

Quite a collapse in confidence for a ‘blip’ in stocks… (NOTE – this collapse in sentiment is bigger and faster than the plunge in Aug 2015 following China’s devaluation and the US flash crash)


At the same time, the ‘plunge’ in stocks has hammered BofAML’s Global Panic-Euphoria index out of ‘Euphoria’…

On a global basis, put-call ratios signal less euphoria than a month ago, and volatility has risen, taking Global Risk-love indicator from a protracted period in euphoria to barely inside the neutral zone.

With most of CNN’s Fear & Greed factors suddenly flashing “Extreme Fear”…


But there’s just one big caveat – almost 40% of the S&P 500 members are now trading below their 200-day moving-averages…


And that is what years of Central Bank conditioning does for investors’ risk appetites.

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