Pimco's Total Return Fund is watching investor withdrawals whittle away its flagship product. The trickles will turn to a deluge as investors realize the air is leaking out of the bond market bubble. Chair Yellen can keep the plates spinning a while longer if the Fed has to restart QE purchases. Everyone in the fixed income universe forgot about mean reversion while the fixed income party was going full steam.
The Administration's emission rules are going to put the coal sector in a world of hurt. Climate change advocates have a religious fervor for reengineering our society, with or without a scientific basis. The only thing dumber than blind faith in weak science is forcing others to pay for those beliefs. Renewable energy stocks may get a small push from new rules on power plant emissions. I doubt the Administration's push to convince other polluting countries in the developed world will bear fruit. US coal companies will just export to China and India if the coal can't be burned domestically, and those nations will have no incentive to cooperate with US climate goals if they would otherwise lose access to our coal. Way to go, Washington.
Ecuador is swapping gold for liquid assets, presumably some instruments denominated in US dollars. Goldman Sachs took them to the cleaners and all the Ecuadoreans can do is lie about the deal. It's obviously an asset swap but Ecuador's finance ministry and central bank both refer to it as an investment. They must think the global financial community is as stupid as their own citizenry. This swap only works for them if the US dollar retains its value for three years, a highly doubtful prospect if the US experiences hyperinflation. A dollar devaluation means they'll only get back a fraction of the gold they're swapping out. Goldman and other banks now have a case study they can use to liberate hard assets from other dollar-dependent countries before the party ends. I'll remember that the next time I'm stocking up on stuff.
Humans run around like chickens with their heads cut off. I exist to collect up the headless chickens and cook them for supper. The brainless losers who don't read my blog might as well be headless.