Mad Natterings 02/15/16

It's Not the Mosquitos - It's Monsanto

In a recent report by the Physicians in the Crop-Sprayed Towns (PCST), the group revealed that the area in which most of the afflicted persons live had been sprayed with a larvicide known to cause birth defects.

The chemical, pyriproxyfen, was added to the state of Pernambuco’s drinking-water reservoirs in 2014, by the Brazilian Ministry of Health, in an effort to stop the proliferation of the Zika-carrying Aedes aegypti mosquito. - Blacklisted News

The best laid plan's of mice and men - ironic how the birth defects are being linked to Sumitomo Chemical's (Monsanto subsidiary) pesticide which was sprayed to combat the Zika carrying mosquitos.  Pyriproxyfen is a growth inhibitor of mosquito larvae, which alters the development process from larva to pupa to adult, thus generating malformations in developing mosquitoes and killing or disabling them. By definition, this pesticide is an endocrine disruptor and is teratogenic (causes birth defects). Oh and they not only sprayed it, they ADDED it to the WATER SUPPLY. DOH!!!


It's Not the Russian's, Its the Hackers who are coming

Hackers caused the Russian Ruble to swing 15 per cent in minutes by hacking a bank with a newly-discovered and highly capable malware. The "Metel" or "Corkow" malware which has been used to hack ATM networks, was used to break into the  Energobank and place on its behalf some $500 million in orders, sufficient to swing currency markets and trigger an investigation by the Russian Central Bank. The attack caused a 14 minute swing between 55 and 66 rubles per dollar that was markedly different from the normal rate, and caused the bank to reportedly lose $3.2 million. - The Register


It's Not the Tidal Wave, It's the Rogue Wave to worry

While a 12-meter wave in the usual "linear" model would have a breaking force of 6 metric tons per square metre (MT/m2), although modern ships are designed to tolerate a breaking wave of 15 MT/m2, a rogue wave can dwarf both of these figures with a breaking force of 100 MT/m2. Of course, for such "freak" phenomenon to occur, you need no doubt special conditions, such as the conjunction of fast rising CDS spreads (high winds), global tightening financial conditions and NIRP (falling pressure towards 940 MB), as well as rising nonperforming loans and defaults (swell). So if you think having a 99% interval of confidence in the calibration of you VaR model will protect you against multiple "Rogue Waves," think again... - Martin at Macronomics

Regarding non-linear phenomena such as rogue waves or solitons.  Short $300B in banking Coco's issued since 2013 and short sub prime or Alt-A US MBS (liar loans which they have made a boatload of in the last 4 years) are IMHO already in play, for shorting that is. Short Italian NPL bonds, short sub prime auto bonds, both would be nice if you could find someone stupid enough to sell that insurance. If you do please PM me.

Look at the June 2018 ED (eurodollar) contract, all last year +70bps, since Jan 1st +104bps, thats called a constriction in liquidity. On a chart it is concomitant and matches the Coco, HY and breakeven whole loan spread spikes. Speaking of spikes... 

DB's (Deutsche Bank) cost for capital, short end of the curve 6M tenor +120bps in one week??? With everything 10yr and less doing a full tilt boogey to pancake their lending cost curve at 240bps? With already uber thin NIM and deeper NIRP? Under the right circumstances, I don't know if a rogue wave may be necessary to capsize that listing ship. TBD. Well at least you can bet on that one. 

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