Junk-Bond Rout Deepens.

Junk-Bond Rout Deepens, Sending Shockwaves Through Stocks and Other Markets - -> wsj.com/articles/junk-bond-s … 1449857705

Junk Bonds Are Tanking and Icahn Says Meltdown `Just Beginning’ - -> bloomberg.com/news/articles/ … nue-freeze

The junk bond market’s early warning signs are all flashing red for the global economy - -> telegraph.co.uk/finance/econ … g-red.html

Energy Sector’s Junk-Bond Pain Spreads - -> wsj.com/articles/energy-sect … 1449657000

The true barometer of how markets are going is the move of old and new market related threads to the top of the pins “latest posts”.

Imho, the malinvestment from FED QE is starting to unfold. Also, ECB’s QE is unwinding in the equity market after both Feb and Dec announcements.

China devaluing at the rate it is will counter the euro exports.

We only rallied after the sell offs in August and Paris attacks because they were holiday periods (China had a week off and Thanksgiving). Draghi’s October 22nd “do what we must” has already unwound.

Gonna need another bailout … !

Cribbers and moaners, the lot of you. :smiley:

Commodities, junk bonds, credit cycles, war - it’s all bullish!

Some of the major themes going into the rest of the decade.

The expansion of world war III.

Wars are expensive in terms of resources and lives. Ireland now finds itself dragged in to the war defending Frances colonial empire with a clause in the Lisbon treaty. Wars create chaos, destroy infrastructure and capital and expansion leads to yet more refugees fleeing to the relative stability of Europe. The French administration have seized the recent Paris attacks as an opportunity to escape the stability and growth pact, will other countries have a motive to do likewise?

The rise of the surveillance state is not about fighting terrorism (which the state own policies promote), it is about maintaining control by suspending civil rights and further gathering tax revenue since it’s traditional sources of revenue are declining or going to ground.

The defence of the Euro currency project and federalisation.

The Schengen agreement is already broken and nationalist sentiment is rising across Europe. The Euro nearly fell apart in 2012, Draghi and the Eurocrats are trying to save the European project under the guise of creating more inflation.

Rolling sovereign defaults

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This has happened many times previously, Europes last major wave was in the 1930s. The defaults will not be postponed forever, the idea that countries can keep borrowing and rolling over debt while using the taxpayer to underwrite that has it’s limits.

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Irish water is fundamentally a tax protest and a warning to the establishment about maintaining the corrupt status quo. The political parties who ride on this issue would do well to recognise that, whoever forms the next Irish government is going to be faced with raising taxes and default.

The reset of the European welfare state

This one will be at the hands of the progressive movement which has disappeared up it’s own arse and probably the national socialists will help as well. The campaign for the minimum wage failed and now it has morphed into the campaign for a living wage. (i.e. price controls on employment). The reason for the living wage movement is the growth of the service economy, which are not generally high paying jobs with low entry level requirements combined with the high cost of employing a person leading to increased automation or outsourcing where possible. Europes native population is getting older and living longer, however the generations following them are increasingly not finding productive work and not forming families. This is a recipe for what is termed social unrest and revolution. You can delve into the statistics for youth unemployment and the phenomenon of single people living at home longer to realise this is happening now, if these people are not entering the workforce and building savings, how can they provide security for family formation and their eventual retirement? Is the answer to create more laws and legislation while ignoring the outcomes of previous policies that maintain the security of one generation in power while undermining the others? I reckon reset is inevitable and tied into the sovereign defaults and loss of power.

Rising interest rates.

The current ZIRP/NIRP policy is destroying yield, especially for the pension funds forcing them into riskier assets such as junk bonds and they have holdings of sovereign debt. The free money flowing to the hedge funds combined with tax policies of states, is leading to some major debt laden acquisitions (Dell EMC being the most visible in this country), that deal rests on cheap money, tax optimisation and cash flow and the inevitable cost savings from the deal (i.e. voluntary separation)

With all the above in mind the collapse in commodity prices begins to make sense, very few people are willing to invest in chaos and even the devaluation of the Yuan to support flagging exports is not helping the Chinese as massive massive capital outflows have forced the IMF to add it to the SDR basket..

So the question is do your park your cash and go fishing until this all shakes out by the end of the decade before rejoining the population in whatever mania is in vogue then or do you look for opportunity in private enterprise? I’m bullish on that.