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Mercenary Macro Links - Monday September 21st

Link-outs to full articles within content. Charts and visuals below excerpts.

Published daily -- for active discussion among seasoned traders -- in the MERCENARY FORUM (coming soon!)

Questions / comments email:[email protected]

for more commentary / insight / analysis visit: www.mercenarytrader.com

Treacherous Season, Weak Profit Growth, Darkened Mood

For Markets, Its the Treacherous Season - Barron's

"US Profit Growth Has Never Been This Weak Outside Of A Recession"

Who's Left to Sell U.S. Stocks? Mood Darkens Most Since Volcker - Bloomberg

Emerging Darkness

Hedge fund leader bets on emerging market rout - FT.com

Emerging markets and the Fed: good, bad and indifferent - FT.com

Empty Punchbowl, Waiting For Yellen, Dropping the Reins

Empty Punchbowl Leaves Central Banks Powerless to Bolster Stocks - Bloomberg Business

Waiting for Yellen - FT.com

Fed risks dropping the reins on US policy - FT.com

Still Hike Prone?

Fed Officials Still See 2015 Liftoff Despite September Delay- Bloomberg Business

Feds Williams Sees 2015 Interest Rate Rise as Appropriate - WSJ

St. Louis Feds Bullard Argued Against FOMC Decision at Fed Meeting - WSJ

Household Wealth, Fragile Bond Markets, Rent Crisis

U.S. Household Wealth Set Record in Second Quarter - WSJ

The New Bond Market: Bigger, Riskier and More Fragile Than Ever - WSJ

The RentCrisis Is About to Get a Lot Worse - Bloomberg Business

Euro Weakness, ECB Limits. Tsipras Victory

Goldman Sachs Says Euro May Weaken Up to 10 Cents on ECB Easing - Bloomberg BusinessEurozone Nears Limits of What Monetary Policy Can Do - WSJ

Victorious Alexis Tsipras to Be Sworn In as Greek Premier - WSJ

China, Reverse QE, BOJ stimulus

China Beige Book Says Pessimism `Thoroughly Divorced From Facts' - Bloomberg Business

China's "Reverse QE" Could Top $1.2 Trillion, Barclays Says | Zero Hedge

RPT-BOJ brainstorms stimulus overhaul as options dwindle -sources | Reuters

Oil Bullish (For Now), $1.5TR Question Mark

Oil Speculators Most Bullish on U.S. Crude Price in Two Months - Bloomberg Business

Plunging oil prices put question mark over $1.5tn of projects - FT.com

Volkswagen ScandalVolkswagen Drops 23% After Admitting Diesel Emissions Cheat - Bloomberg Business

Volkswagen reels from US investigation into alleged cheating - FT.com

Volkswagens Emissions Scandal The Short Answer - WSJ
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Charts and Graphics

World growth and Bridgewaters All Weather fund - Zero Hedge

Annual percentage change in forward EPS expectations - Zero Hedge

Bull / Bear ratio survey - Bloomberg

SPX options skew - Bloomberg

US household new worth and assets - WSJ

Size of US bond and stock markets - WSJ

Bond yields, corporate bond issuance, bond funds, liquidity scores and flows into funds - WSJ

Projections of relative household rent costs - Bloomberg

Projections of increase in relative household rent costs - Bloomberg

Investment fund positioning in Euro futures - Bloomberg

Eurozone lending and unemployment rate - WSJ

China manufacturing PMI - Bloomberg

Chinese consumer and producer prices - Bloomberg

Chinese capital flows - Zero Hedge

Quantitative easing, Fed policy and USD interest rates - Zero Hedge

Chinese reserves and capital flows - Zero Hedge

US crude oil production and forecast - Bloomberg

Share price of Volkswagen versus other carmakers - FT

Treacherous Season, Weak Profit Growth, Darkened Mood

For Markets, Its the Treacherous Season - Barron's

For whatever reason, a strange confluence of bad things seems to happen at this time of year there have

been an unusual number of market upheavals around this time.

US Profit Growth Has Never Been This Weak Outside Of A Recession"The chart... shows the annual change in 12-month forward S&P 500 EPS expectations. This series is based

forward consensus expectations and therefore excludes many of the write-downs and exceptional items tha

are currently pushing down actual reported profits. It is more akin to operational profits and has never been

negative outside of a recession!



Who's Left to Sell U.S. Stocks? Mood Darkens Most Since Volcker - Bloomberg

Amid a six-year bull market thats notable mainly for how little conviction there is in it, equity sentiment is

plunging at a historic rate, falling by some measures at the fastest pace since Federal Reserve Chairman P

Volcker had just finished pushing up interest rates in the 1980s. The cost to hedge against stock losses is

soaring, valuations are contracting, and bearishness among professional stock handicappers is rising the m

in three decades.


http://www.bloomberg.com/news/articles/2015-09-21/who-s-left-to-sell-u-s-stocks-mood-darkens-most-since-volckerhttp://www.zerohedge.com/news/2015-09-21/us-profit-growth-has-never-been-weak-outside-recessionhttp://www.barrons.com/articles/for-markets-its-the-treacherous-season-1442637816

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Emerging Darkness

Hedge fund leader bets on emerging market rout - FT.com

The world economy is locked on a course towards an emerging markets crisis and a renewed slowdown in

US, regardless of the Federal Reserve holding off on a rise in rates last week, according to one of 2015s m

successful hedge fund managers.

Emerging markets and the Fed: good, bad and indifferent - FT.com

...while market pricing as opposed to surveys of economists had largely anticipated the decision, the F

still surprised in the extent of its caution, citing China, global financial uncertainties and overly low domestic

inflation as reasons to stand still.

Empty Punchbowl, Waiting For Yellen, Dropping the Reins

Empty Punchbowl Leaves Central Banks Powerless to Bolster Stocks - Bloomberg Busine

The new worry is that in losing their ability to pep equity markets, central banks also may lose another chan

to drive their economies -- the wealth effect. Thats when loose monetary policy drives up stocks, encouragi

investors to spend the resulting windfalls on goods and services.

Waiting for Yellen - FT.com

Many believe the Fed should mean what it says and raise rates regardless of short-term noise. The US cent

banks credibility is on the line. But the damage to the Feds reputation would pale against its loss of face w

it to raise rates only to reverse itself thereafter. Other central banks, including Sweden and the European

Central Bank, have tightened too soon and been forced to rescind. The Fed has no wish to join their ranks.

Yellen was thus right to keep rates on hold. The danger of triggering an emerging market shock was too greBut she did not go far enough. Every emerging market tremor will boost speculation of another delay in

December. Ms Yellen needs to spell out what will guide her decision before then.

Fed risks dropping the reins on US policy - FT.com

This begs the question: how long should the Fed cite China or emerging markets as a reason for keeping ra

on hold, especially if the domestic case for not doing so becomes even more compelling? Seven years of ze

interest rates have already contributed to mounting financial distortions in emerging markets.

Still Hike Prone?

Fed Officials Still See 2015 Liftoff Despite September Delay - Bloomberg Business

Federal Reserve officials argued that an interest-rate increase is still warranted this year, laying out the case

for liftoff in remarks over the weekend that counter bets by traders that the central bank will stay on hold unt

2016.
http://www.bloomberg.com/news/articles/2015-09-20/fed-officials-still-see-2015-liftoff-despite-september-delayhttp://www.ft.com/intl/cms/s/0/881277e6-5e03-11e5-a28b-50226830d644.html#axzz3mNewgEKLhttp://www.ft.com/intl/cms/s/0/5ff984da-5dee-11e5-9846-de406ccb37f2.html#axzz3mNewgEKLhttp://www.bloomberg.com/news/articles/2015-09-21/empty-punchbowl-leaves-central-banks-powerless-to-bolster-stockshttp://www.bloomberg.com/news/articles/2015-09-21/empty-punchbowl-leaves-central-banks-powerless-to-bolster-stockshttp://www.ft.com/intl/cms/s/3/96908cd2-6041-11e5-9846-de406ccb37f2.html#axzz3mNewgEKLhttp://www.ft.com/intl/cms/s/0/c0e292aa-5d85-11e5-9846-de406ccb37f2.html#axzz3mNewgEKL

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Feds Williams Sees 2015 Interest Rate Rise as Appropriate - WSJ

John Williams, president of the Federal Reserve Bank of San Francisco, said in a speech Saturday he

believes it is still appropriate to raise short-term interest rates before year-end, reiterating a timeline that

remains the preference of a majority of Fed officials.

St. Louis Feds Bullard Argued Against FOMC Decision at Fed Meeting - WSJ

Federal Reserve Bank of St. Louis President James Bullard said Saturday he argued against holding ratessteady during the Feds policy meeting last week because he believes the economy has recovered enough

begin raising rates.

Household Wealth, Fragile Bond Markets, Rent Crisis

U.S. Household Wealth Set Record in Second Quarter - WSJ

The wealth of American households climbed to a new peak in the second quarter, bolstered by rising

real-estate values that more than compensated for a flat stock market.

US household net worth and assets - WSJ

The New Bond Market: Bigger, Riskier and More Fragile Than Ever - WSJ

Surveying the global bond market of 2015 can be an intimidating exercise. Long associated with safety and

predictability, bonds appear vulnerable as never before to price reversals and trading disruptions that could

spill over and threaten financing for businesses and individuals.



The Rent Crisis Is About to Get a Lot Worse - Bloomberg Business

The number of U.S. households that spend at least half their income on rentthe "severely cost-burdened,"

the lingo of housing expertscould increase 25 percent to 14.8 million over the next decade. More than 1

million households headed by Hispanics and more than 1 million headed by the elderly could pass into thos

ranks. Households shouldn't spend more than 30 percent of income on housing, by the general rule of thum



Euro Weakness, ECB Limits. Tsipras Victory

Goldman Sachs Says Euro May Weaken Up to 10 Cents on ECB Easing - Bloomberg Business

Goldman Sachs Group Inc. says the euro may fall up to 10 U.S. cents as the European Central Bank is set t

increase currency-weakening stimulus to meet its inflation target.

Investment fund positioning in Euro futures - Bloomberg
http://www.bloomberg.com/news/articles/2015-09-21/euro-extends-decline-as-ecb-officials-stress-divergence-from-fedhttp://www.bloomberg.com/news/articles/2015-09-21/the-rent-crisis-is-about-to-get-a-lot-worsehttp://www.wsj.com/articles/the-new-bond-market-bigger-riskier-and-more-fragile-than-ever-1442808001?mod=trending_now_2http://www.wsj.com/articles/u-s-household-wealth-hit-record-in-second-quarter-1442593339http://www.wsj.com/articles/st-louis-feds-bullard-argued-against-fomc-decision-at-fed-meeting-1442691410http://www.wsj.com/articles/feds-williams-sees-interest-rate-rise-as-next-appropriate-step-likely-in-2015-1442684288

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Eurozone Nears Limits of What Monetary Policy Can Do - WSJ

Thanks to the ECBs own version of quantitative easing, the value of the euro is down from a year ago and

bond yields are low, while bank lending is slowly recovering. All this provided a solid wall of defense agains

Greek contagion. But in many ways, the eurozone is running up against the limitations of what monetary po

can hope to accomplish, economists say.


Victorious Alexis Tsipras to Be Sworn In as Greek Premier - WSJ

Alexis Tsipras is expected to be sworn in as Greeces prime minister on Monday after his left-wing Syriza p

decisively beat its conservative rivals in Sundays national elections.

China, Reverse QE, BOJ stimulus

China Beige Book Says Pessimism `Thoroughly Divorced From Facts' - Bloomberg Busine

Perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our ne

five years of surveying the economy, CBB President Leland Miller wrote in the report. Global sentiment on

China has veered sharply bearish--too bearish. While we have long cautioned clients against relying on ros

official views of the Chinese economy, we believe sentiment has swung substantially too far in the opposite

direction.



China's "Reverse QE" Could Top $1.2 Trillion, Barclays Says | Zero Hedge

As we've noted previously, if China ends up liquidating $1.2 trillion in reserves, that would (in a vacuum) offs

more than 60% of QE3 and, based on the extant literature, put somewhere on the order of 200 bps of upwa

pressure on 10Y yields.




RPT-BOJ brainstorms stimulus overhaul as options dwindle -sources | Reuters

Sources say the Bank of Japan has been quietly brainstorming the idea of overhauling its massive monetar

stimulus programme over time, casting doubt on officials' confident assertions that it can keep buying up

government bonds for several more years.
http://uk.reuters.com/article/2015/09/20/japan-economy-boj-idUKL4N11O3FV20150920http://www.zerohedge.com/news/2015-09-21/chinas-reverse-qe-could-top-12-trillion-barclays-sayshttp://www.bloomberg.com/news/articles/2015-09-20/china-beige-book-says-pessimism-thoroughly-divorced-from-facts-http://www.wsj.com/articles/victorious-tsipras-to-be-sworn-in-as-greek-premier-1442837476http://www.wsj.com/articles/eurozone-nears-limits-of-what-monetary-policy-can-do-1442771605

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Oil Bullish (For Now), $1.5TR Question Mark

Oil Speculators Most Bullish on U.S. Crude Price in Two Months - Bloomberg Business

Hedge funds slashed their bets on falling oil prices, leaving them the most bullish on U.S. crude futures in tw

months.


Plunging oil prices put question mark over $1.5tn of projects - FT.com

A report published Monday says $1.5tn of potential investment globally including in North Americas

shale-producing heartlands is out of the money at current oil prices close to $50 a barrel and unlikely to

ahead.

Volkswagen Scandal

Volkswagen Drops 23% After Admitting Diesel Emissions Cheat - Bloomberg BusinessVolkswagen AG lost almost a quarter of its market value after it admitted to cheating on U.S. air pollution tes

for years, putting pressure on Chief Executive Officer Martin Winterkorn to fix the damaged reputation of the

worlds biggest carmaker.

Volkswagen reels from US investigation into alleged cheating - FT.com

The Environmental Protection Agency said on Friday that Europes largest carmaker installed defeat device

software on its diesel cars that meant they would activate emissions control systems for testing, but thereaft

the vehicles could release nitrogen dioxide at up to 40 times the permitted level.


Volkswagens Emissions Scandal The Short Answer - WSJ

Investors wiped more than 15 billion ($16.5 billion) off the market value of Volkswagen judged by the

more-than-20% plunge in the value of the auto makers nonvoting preferred stock. That is in line with estima

of the maximum $18 billion fine that Volkswagen might face. The scandal raises longer-term issues: the

reputation of the car makers top management its image in the U.S., where VW sales are weak: and the

credibility of the auto industry at large.
http://blogs.wsj.com/briefly/2015/09/21/volkswagens-emissions-scandal-the-short-answer/http://blogs.wsj.com/briefly/2015/09/21/volkswagens-emissions-scandal-the-short-answer/http://www.ft.com/intl/cms/s/0/5a82376e-604f-11e5-9846-de406ccb37f2.html#axzz3mNewgEKLhttp://www.bloomberg.com/news/articles/2015-09-21/volkswagen-drops-15-after-admitting-u-s-diesel-emissions-cheathttp://www.ft.com/intl/cms/s/0/3ba5d0a8-5e29-11e5-a28b-50226830d644.html#axzz3mNewgEKLhttp://www.bloomberg.com/news/articles/2015-09-20/oil-speculators-most-bullish-in-two-months-as-opec-calls-for-80

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US household net worth and assets - WSJ

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nvestment fund positioning in Euro futures - Bloomberg

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