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Cartoon of the Day: Boob Tube - Central bankers cartoon 10.04.2016

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4 Things To Watch On Deutsche Bank

Takeaway: “All it takes is for an external match to come in and ignite the situation.”

4 Things To Watch On Deutsche Bank - deutsche bank 1


Hedgeye Financials analyst Josh Steiner cut through the clutter on The Macro Show yesterday with Hedgeye CEO Keith McCullough. Steiner worries about…


  • Lack of Profitability: “The ECB’s negative rates have made it virtually impossible for Deutsche’s core business to make money.”
  • Counterparty Risk: Deutsche Bank’s $50 trillion (“yes, trillion with a T”) in gross derivatives which exposes Europe to a “reflexive downward spiral if fear sets in.”
  • Gravity of Situation: The bank’s derivate exposure is 14X the size of the German economy.
  • Uncertain Political Climate: “German Chancellor Angela Merkel has drawn a line in the sand” making it virtually impossible, in an election year, to rescue Deutsche without massive political backlash.

What happens next?


“All it takes is for an external match to come in and ignite the situation,” Steiner says. Watch him in the video below discuss.



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IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again)

Takeaway: IMF says, growth "has been too low for too long" ... #SlowerForLonger has been our Macro team's call for the better part of two years.

IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - growth cartoon 05.24.2016

Here we go again.


The IMF is downgrading its estimates for global growth yet again. Below is a quick rundown of the year-end 2016 growth estimate revisions:


  • Advanced Economies, 1.6% versus 1.8% estimate in July;
  • U.S., 1.6% versus 2.2% in July;
  • France, 1.3% versus 1.5% in July;

That's a tiny taste.

(Take a look at the chart below with IMF growth downgrades highlighted in yellow.)


IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - IMF growth table


Consider Maurice Obstfeld, the IMF's chief economist, comments:


Growth “has been too low for too long, and in many countries its benefits have reached too few — with political repercussions that are likely to depress global growth further.”


Sound familiar?

This story isn't new...


We've been warning about #LowerForLonger (rates) and #SlowerForLonger (growth) for the better part of two years. Hedgye Demography sector head Neil Howe makes an interesting point about the IMF in a recent post:


"In fact, over the past decade, these highly-compensated, D.C.-based bureaucrats have consistently chosen to revise their predictions downward. Back in 2010, when the IMF took its first stab at growth figures for 2015, the estimate (+4.6 percent) came in at nearly double the final figure." 


The World Bank's track record isn't so hot either, Howe writes.


IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - chart 4 large

Why do we even listen to these bureaucrats?




[UNLOCKED] Fund Flow Survey | Higher Lows for Stock Fund Flows

[UNLOCKED] Fund Flow Survey | Higher Lows for Stock Fund Flows - dollar pic

This is a complimentary research note originally published last week by our Financials team. For more info on our institutional research email

Buy Gold

Takeaway: Rates ↑, Dollar ↑, Gold ↓ ... buy more Gold

Buy Gold - Gold cartoon 08.11.2016 large

This morning's market message appears to be buy more Gold.


That’s been the playbook all year long. I see no reason to change that this morning with both the Pound and Yen signaling immediate-term TRADE oversold vs. a US Dollar that should fade on another rate of change slowing in non-farm payrolls on Friday.


fade central planners...



Editor's Note: The snippet above is from a note Hedgeye CEO Keith McCullough sent to subscribers this morning. Click here to learn more.


In case the message above isn't clear, take a look at this 37-second video below.

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