Fed mouthpiece and water boy Jon Hilsenrath has been directed to smooth talk a September rate hike back in. The “market,” or what’s left of it, doesn’t believe the signal as the odds for a hike has moved to only 19%. November is only 20%.
The ECB has been purchasing 8-9 billion euros of corporate bonds weekly. Italy has been the most active. Among the names purchased, 55% were BBBs and include VW, Glencore and Repsol. The ECB is a massively leveraged subprime hedge fund filled with lard.
The ECB has also bought €130bn in negative yield bonds. That is 35% of their total purchases.
More ultra-subprime: Contingent Convertible bond yields for Deutsche Bank are now at 11.55%. DB is the losing counter party to the subprime lard trades. They will never pay the claims. The lard trades are largely uninsured.
Since governments are insolvent, the creditors will need to foreclose on everything that is not tied down in order to bail out the derivative claimants. A gulag-style police state will need to be in place to carry this out on the debt slaves.
There is chatter around that Japan is issuing non-marketable perpetual bonds that feature no interest rate and no maturity date. The BoJ subprime hydra hedge fund will lard on them.
Ponzi Units Bursting: All the central bank larding and crooked dealings on behalf of the kleptocracy have failed to keep their inflated Ponzi property values intact. The rats are abandoning the ship.
In the 12 days after the Brexit vote, cuts to London asking prices soared by 163% compared to the 12 days before the vote, according to the Financial Times. Yet sales have plunged 18% from before the Brexit vote. Sales already took a big beating before then and are now down 43% from a year ago. These property holders took an additional hit on pound depreciation.
This has spread to the Hamptons on Long Island, where sales activity has dried up.
In addition, the contemporary-art bubble is bursting. Christie’s $788 million in auction sales is down 45% from a year earlier.