It is the 15th of September 2019

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What Share Of Bond Markets Do Central Banks Own: Deutsche Bank Answers

With the latest ECB statement due out in just two days, traders are curious to see how Mario Draghi will escape from the trap in which the European central bank has found itself: on one hand, seeking to temper the recent dramatic rise in the Euro, on the other running out of QE eligible private-sector debt to monetize, especially in its largest captive market, Germany. While we don't know how Draghi will succeed (or fail) in this endeavor, overnight Deutsche Bank has released a useful analysis breaking down what share of bond markets the biggest central banks currently own.

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JPMorgan Lists Five "Red Flags" That Point To A 10% Downside Correction

The first time JPMorgan warned of market downside was in early March when the bank's US equity strategist Dubravko Lakos-Bujas wrote that while the fundamental backdrop remains supporting, the "short-term downside risk" in the S&P is increasing. Less than two months later, JPM presented six "red flags" why it is starting to sell stock. Just a few weeks later, JPM turned up the alarm again in late May, when the bank "sounded the alarm on the size of US debt, and warned of a financial crisis" while in the interim, JPM's quant Marko Kolanovic on several occasions warned that stocks are poised for a sharp drop due to purely technical and systemic factors. Of course, throughout this period stocks only kept going higher, closing at all time highs last Friday.

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World's Largest Actively Managed-Bond Fund Dumps "Excessively Risky" Eurozone Bank Debt

Back in September, Tad Rivelle, Chief Investment Officer for fixed income at LA-based TCW, said in a note that "the time has come to leave the dance floor", noting that "corporate leverage, which has exceeded levels reached before the 2008 financial crisis, is a sign that investors should start preparing for the end of the credit cycle." Ominously, he added that “we’ve lived this story before.” Five months later, the FT reports that TCW, which is also the US asset manager that runs the world’s largest actively managed bond fund, has put its money where its bearish mouth is, and has eliminated its exposure to eurozone bank debt over fears these lenders are "excessively risky."

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The Ultimate Market Forecaster: Martin Armstrong

Armstrong Painting
Martin Armstrong

Martin Armstrong is a controversial market analyst who correctly predicted the 1987 crash, the top of the Japanese market, and many other market events … more or less to the day.

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