On CNBC today, Charles Biderman, Chairman of TrimTabs Investment Research, said the market cap to wages and salaries ratio was flashing a warning sign for the stock market.
Via Citadel's website, "Citadel Connect, our innovative IOC Gateway, is one of the fastest growing sources of off-exchange liquidity in the U.S. equities market, executing over 74M shares ADV in Q2 2014." Interesting?
Watch these CNN Money videos from 2013 on Citadel Securities' high frequency trading desks and dark pools. Chicago-based Citadel is a global financial institution/$22 billion hedge fund/market maker run by Kenneth Griffin. Citadel's website says Citadel Execution Services (CES), a division of Citadel Securities, executes "approximately 26 percent of all U.S.-listed shares traded on behalf of retail investors."
Harry Dent was interviewed by Aaron Task on Yahoo Finance's Market Pulse on August 20, 2014. He's bearish on the stock market, bullish on the U.S. dollar, and thinks demographic trends fuel deflationary price pressures. He's been bearish on the market for a few years now. Watch the interview below. His views are similar to Robert Prechter's. Thoughts?
Some Fed Presidents Think The FOMC Will Raise Rates In Early 2015; Quotes From Janet Yellen's Jackson Hole Speech
With the Federal Reserve set to end quantitative easing (bond purchases) "after the October meeting", the focus will now be on rate hikes, which will depend on inflation and labor market conditions. Some Fed presidents think the FOMC will raise rates in early 2015 or earlier than expected (videos below). First, here is a quote from Janet Yellen's Jackson Hole speech today:
John Hussman, President of Hussman Investment Trust, wrote about how compressed risk premiums get repriced in his market comment this week titled "Dimes on Black and Dynamite on Red" (emphasis mine):
Read his entire note at HussmanFunds.com.
"Still, it's helpful to be aware of how compressed risk premiums unwind. They rarely do so in one fell swoop, but they also rarely do so gradually and diagonally. Compressed risk premiums normalize in spikes.”
Those spikes will make it quite difficult to exit in the nice, orderly manner that speculators seem to imagine will be possible. Nor are readily observable warnings (beyond those we already observe) likely to provide a clear exit signal. Galbraith reminds us that the 1929 market crash did not have observable catalysts. Rather, his description is very much in line with the view that the market crashed first, and the underlying economic strains emerged later:"
Read his entire note at HussmanFunds.com.
Germany's yield curve shows how bad it's getting in the euro area again, and some yields are back in negative territory. According to investing.com, the German 1-month bill yield closed at -0.028% and the German 2-year note yield closed at -0.010% on Friday. It's pretty crazy that the 2-year yield is negative. A flight to quality is occurring because a) euro area economies are either in a recession or stagnating; b) tensions are rising between Ukraine and Russia, and there is currently a trade war going on between Russia and the EU/US; c) there is deflation risk in the euro area, which could force the ECB to enact quantitative easing; and d) the U.S.'s Federal Reserve is set to end QE in October (stimulus), which could cause more market volatility.
Draghi: Euro's Fundamentals Are Weak, Monetary Policies In Euro Area And U.S. Are Diverging; $EURUSD Chart Looks Weak
Here were ECB President Mario Draghi's comments on the Euro at his press conference on August 7, 2014:
We basically decoupled our monetary conditions from those of the United States, and if you compare conditions with the beginning of May, when I first announced likely action on this front, you see that forward rate, the 1-year in 4 years OIS forward rate declined by 45basis points, the three months Euribor by 13 basis points. Excess liquidity is now at 140 billion, and it’s been stable over 100 billion. There has been a general compression in liquidity premia.
President Obama Authorizes Targeted Airstrikes Against ISIS; Hamas Violates Ceasefire; S&P Down Overnight
"THE PRESIDENT: Good evening. Today I authorized two operations in Iraq -- targeted airstrikes to protect our American personnel, and a humanitarian effort to help save thousands of Iraqi civilians who are trapped on a mountain without food and water and facing almost certain death. Let me explain the actions we’re taking and why." (full video and transcript after the jump along with some market commentary and a VICE vid)