Bank Of England Warns Greece "Threatens To Trigger Market Selloff That Could Ripple Through The Global Economy"Submitted by Tyler Durden on 07/01/2015 - 18:30
When it comes to Europe, Greece lost the blame game, and just like the Ukraine civil war last year, became an unwitting catalyst greenlighting Germany's concession to ECB QE, this time it may be Greece that launches the next step in the ECB's master plan: not just QE but more QE. This is precisely what Goldman's Franceso Garzarelli, co-head of macro and markets research, admitted earlier today in an interview on Bloomberg TV, when he said that the ECB "will have to go big" if the situation in Greece worsens and leads to wider peripheral bond yield spreads.
Financial experts in New York, London, and Brussels have tut-tutted Greece’s economic travails as Athens considers its future with the European Union. Why did they borrow so much money? How can they ever pay it back? Do they think that much debt is sustainable? Instead of pointing fingers at the innumerates running Athens, they should consider our own situation.
The oil price collapse of 2014-2015 began one year ago this month (Figure 1). The world crossed a boundary in which prices are not only lower now but will probably remain lower for some time. It represents a phase change like when water turns into ice: the composition is the same as before but the physical state and governing laws are different. The market must balance before things get better and prices improve. That can only happen if production falls and demand increases. That will take time. The most likely case is that oil prices will decrease in the second half of 2015 and that financial distress to all oil producers will increase. The hope and expectation that the worst is over will fade as the new reality of prolonged low oil prices is reluctantly accepted.
"The selling pressure so far has mainly come from stock-related borrowings via various unofficial channels where the leverage is much higher," BofAML says of the dramatic sell-off in Chinese equities. On Wednesday, the country's securities regulator moved to reassure markets as the unwind of hundreds of billions in leveraged trades threatens to collapse China's world-beating stock bubble.
1,000 Greek bank branches chanced a stampede in order to open their doors to the country's retirees on Wednesday. The scene was somewhat chaotic as pensioners formed long lines and the country’s elderly attempted to squeeze through the doors in order to access pension payments.
Despite the fact that even the U.S. government itself has admitted that it was funding terrorists– directly and indirectly through Saudi Arabia, the suggestion was met with disbelief, ridicule, or either entirely ignored. Now, however, the United States government has admitted that it funds terrorists on the ground in Syria yet again, this time placing an individual dollar amount on the assistance provided.
"Sometimes I'll find scrap metal that I can sell, although if I see something that looks reasonably safe to eat, I'll take it"...
Over the weekend, the lines in Greece stretched along the street. Around the corner. Down the block. Lines to get cash. Lines to buy gas. Lines of people eager to get their hands on something of value. Food. Fuel. Cash. Pity the poor guy who was last in line... As more and more people turn to gold as a way to avoid standing in lines, the feds could ban it again. But when we close our eyes and try to peer into a world where gold is illegal, what we see is a world where we want it more than ever.
NSA Leak: "Washington Is Negotiating With Every Nation That Borders China... So As To 'Confront' Beijing"Submitted by Tyler Durden on 07/01/2015 - 17:06
"Houben insisted that the Trans-Pacific Partnership (TPP), which is a U.S. initiative, appears to be designed to force future negotiations with China. Washington, he pointed out, is negotiating with every nation that borders China, asking for commitments that exceed those countries' administrative capacities, so as to "confront" Beijing."
Judging by the smiling Phil LeBeau who earlier opined of an 8.9% plunge in For F-Series sales that "I don't know if I'd Call that a slowdown," you would think the US Auto industry was killing it. Apart from the fact that all but the most luxurious brands missed expectations, we sum up the month of June's results by nothing the credit-spewed spike in May is now over and domestic car sales are continuing to trend lower. This is the biggest MoM drop since Sept 2014. As Ward's notes, they have now missed expectations for 6 of th elast 7 months...
The Home Sales Fallout Ratio gives us an idea of the trend of contracts (aka 'pending home sales') falling through and failing to close. It is telling us that, while sales are at a 9 year high, trouble is brewing in the current version of the bubbly housing market. This could be a harbinger of mass destruction should mortgage rates begin a persistent rise from here.