Markets and Economy
Shares rally on China stimulus hopes, strong European data (Reuters)
Stock markets worldwide rallied on Tuesday on hopes of more stimulus measures in China and on strong German trade data, while Brent crude oil prices also rose.
China's imports shrank far more than expected in August, falling for the 10th straight month, though exports fell less than expected. Analysts said the imports data could lead to further policy easing from the Chinese government in coming months.
China Debt Crisis? The Other Side of the Ledger Suggests Not (Bloomberg)
So it's official — China's stocks bubble has popped.
What about the debt bubble? Is that next?
Well to answer that question, the best place to start is with the oft-overlooked other side of the ledger: assets. On that score, China's balance sheet looks a lot rosier, suggesting prospects for “financial Armageddon'' may be overblown, according to Bloomberg Intelligence economists Tom Orlik and Fielding Chen.
Leon Cooperman: Why this bull market isn't over (CNBC)
Hedge fund founder Leon Cooperman said Tuesday he's been a buyer throughout the recent selloff, and he sees stock markets heading higher.
"Even though I think the market is in a zone of fair valuation, I think the market is not in a position in my opinion to go down a lot, and I think that the path is still upward," the Omega Advisors chairman and CEO said on CNBC's "Squawk Box."
China Just Killed the World's Biggest Stock-Index Futures Market (Bloomberg)
Add the world’s biggest stock-index futures market to the list of casualties from China’s interventionist campaign to stop a $5 trillion equity rout.
Volumes in the country’s CSI 300 Index and CSI 500 Index futures sank to record lows on Tuesday after falling 99 percent from their June highs. Ranked by the World Federation of Exchanges as the most active market for index futures as recently as July, liquidity in China has dried up as authorities raised margin requirements, tightened position limits and started a police probe into bearish wagers.
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Citi: Capital Markets Now Control Oil Prices (Bloomberg)
From the concrete canyons of Lower Manhattan to the shale basins of West Texas, a new report from Citigroup underscores the degree to which Wall Street has financed the U.S. oil boom, with analysts warning that the slow grind of lower oil prices could spell tough times ahead for shale producers and their creditors.
Cash-hungry shale producers have relied on a mix of bond sales and loans to finance capital-intensive gas explorations, with the interplay between the two types of financings now under the spotlight as oil companies face an intensifying credit crunch.
How Market Volatility Affects Our Brains (Alpha Architect)
The current market volatility is justifiably causing people stress. Nobody wants to see their hard-earned wealth get vaporized.
But how does increased stress affect decision-making?
A recent paper published in the Proceedings of the National Academy of Sciences highlights an interesting finding:
- Humans don’t have stable risk preferences–stress makes us more risk-averse.
In, “Cortisol Shifts Financial Risk Preferences,” the authors question a core assumption in economic models that “agents” (i.e., human beings) have stable risk preferences. They find via experiments that this assumption may not be empirically valid. Humans are more afraid of risk when they get stressed–especially sustained stress.
8 things you need to know about bear markets (CNBC)
As Wall Street comes off one of its worst weeks in four years, and a wild Monday, investors are wondering how long the correction will last, and what the future holds as angst builds over global growth fears and coming U.S. interest rate hikes.
The Dow is now gyrating after it plunged to 16,450 Friday and experienced an intra-day swing of near 1,100 points on Monday, leaving it more than 10 percent below its record close in May. The Dow hit an 18-month low at 16,106 on Monday morning before it trimmed losses. The NASDAQ is down 11 percent from a record high reached earlier this year and is on pace for its worst month since November 2008.
Stephen Schwarzman of Blackstone Feels the Agony of Victory (DealBreaker)
Stephen A. Schwarzman ought to be a satisfied man.
The Blackstone Group, the investment firm he helped found 30 years ago, is hauling in cash at a dizzying pace. His name graces the New York Public Library building at 42nd Street and Fifth Avenue as well as a new complex to be built at Yale. And last year he made $690 million, one of the biggest paydays ever for a chief executive of a public company.
Life on the Home Planet
Spygate to Deflategate: Inside what split the NFL and Patriots apart (ESPN)
His bosses were furious. Roger Goodell knew it. So on April 1, 2008, the NFL commissioner convened an emergency session of the league's spring meeting at The Breakers hotel in Palm Beach, Florida. Attendance was limited to each team's owner and head coach. A palpable anger and frustration had rumbled inside club front offices since the opening Sunday of the 2007 season. During the first half of the New England Patriots' game against the New York Jets at Giants Stadium, a 26-year-old Patriots video assistant named Matt Estrella had been caught on the sideline, illegally videotaping Jets coaches' defensive signals, beginning the scandal known as Spygate.
The story of the refugee crisis that's crippling Europe, told in heartbreaking images (Business Insider)
Earlier this month, an image of a drowned Syrian toddler made the front pages of newspapers across Europe. The picture was emblematic of a crisis that has been plaguing the continent for years.
This year, it's estimated that Germany will grant asylum to over 800,000 refugees. Hungary, by contrast, will build a fences to keep them out. And Britain is slowly starting to accept them in small numbers. Europe has become a continent divided.
