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Snowden Requests Russian Political Asylum

While hardly coming as news to anyone who could have read the tea leaves as soon as Snowden boarded the plane from Hong Kong to Moscow, the flashing red headline that the NSA whistleblower has just applied to be Depardieu's neighbor, has just escalated the great US foreign policy snafu that started a month ago with the NSA spying revelations, and has since developed into a huge scandal involving Europe, Russia, China, Hong Kong, and virtually every other country (not to mention US citizens) that the US government is spying on.


And with Putin saying there is no chance he will return Snowden to the US, in response to Obama's demands, suddenly the balance of power shifts to Russia's favor (which by now it is almost certain, knows everything that Snowden does). Ball is now in Putin's court. Just where he likes it.

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Guest Post: Our Legacy Systems - Dysfunctional, Unreformable

There are two problems with the vast, sprawling legacy systems we've inherited from the past: they're dysfunctional and cannot be fixed/reformed. America's legacy systems are like stars about to go super-nova. They have increased in size to the point where their stupendous mass guarantees that once their energy source (as measured in fossil fuels and money) falls below a certain threshold, the institution will collapse inward on itself.

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Muppet Alert: Stolper Says To Go Long EURUSD With 1.35 Target, 1.28 Stop Loss

Trading FX without a Tom Stolper reco to fade is complicated: there is always the risk of losing money. Luckily, that risk is now gone and for all those unsure which pair to short, the man with the 0.001 batting average has just come out with his latest piece of muppet-slaying "research", according to which it is now time to go long the EURUSD, with a 1.35 target and a 1.28 stop loss. You know what to do.

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Oppenheimer: "Time To Cover All Shorts In Gold And Gold Miners" Because "Gold Stocks Are So Bad, They're Good"

Whether lucky or good, Oppenheimer's Carter Worth was accurate in calling for a drop in gold back in January of 2013. From his note at the time: "For those without the time or inclination to read past the first page (we're told by the marketing experts that many people don't read past the first page of most research reports) here is the summary, in one word, of today's edition of "Money in Motion" focusing on Gold Bullion: SELL." Fast forward to today, when the technician pulls a U-Turn, and says that "at this time, we believe gold and gold miners represent good risk/reward. Indeed, the recent extreme weakness is judged to be the reciprocal or  correlative of the extreme strength witnessed in the summer of 2011. The "despair" relating to gold now is as palpable as "euphoria" then." Always one with a witty turn of the phrase, Worth summarizes his shift in sentiment as follows: "The bottom line, by our work, is this: at this time it is right to cover all shorts in gold and gold miners… and we would look for opportunities on the long side.... The charts of the individual equities are atrocious. And that is the circumstance that compels today's report. The stocks are judged to be "so bad, that they're good"."

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Snowden Appeals For Asylum To 15 Nations, Even As Putin Swears To Never Hand Him Over To US

While the situation for Edward Snowden remains uncertain, Russian officials report that he has handed them an appeal to 15 nations for political asylum. As the LA Times reports, an official noted, "Snowden reiterated once again that he is not a traitor and explained his actions only by a desire to open the world's eyes on the flagrant violations by US special services." This somewhat desperate act follows what Russian officials describe as "Ecuador disavowing [Snowden's] political protection credentials," though we have seen nothing confirmed by Ecuador (yet) especially in light of last week's strong anti-US rhetoric. Russia's President Putin just proclaimed that "Snowden isn't, has never been a Russian agent," and added that Russia doesn't plan to extradite anyone.

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Egyptian Military Coup In 48 Hours If No Solution Found

The Egyptian Military just made a publc statement on Egyptian TV and it appears the country is close to another military coup:


In other words, do as the people want, calm this down now, or we will step in within 48 hours.

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Manufacturing ISM Beats As Expected, Employment Index Drops To Lowest Since September 2009

No surprise in today's most important economic report: just as we predicted first thing this morning, "In keeping with the tradition of Baffle with BS, we expect the ISM to come in well above expectations to offset the major Chicago PMI disappointment." Just as expected, the headline June ISM just printed at 50.9, a beat of expectations of 50.5, and up from May's 49. And just to make sure everyone is completely baffled with unbelievable BS, while the New Orders number rose from 48.8 to 51.9, and Production (+4.8), Prices (+3), Inventories (+1.5), and Deliveries (+1.3), all rose, it was the time of Employment Index to drop from 50.1 to 48.7: the first sub-50 print since September 2009. In other words, just as every week/strong economic report is offset by a matchin strong/weak economic report a few days later, expect this Friday's NFP to come in blistering and to deny the ISM weak jobs number especially since Goldman is now warning of a "disappointment" to consensus (and with that put the Taper tantrum back front and center).

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Abenomics Update: Domestic Japanese Car Sales Plunge 15.8%

While last night's Tankan manufacturing reports met lowered expectations, it seems the reality of the domestic Japanese economy remains as bleak as ever. As Nikkei reports, Japan's domestic sales of new cars, trucks, and buses declined 15.8% for a year earlier in June for the second consecutive month. Even if one argues that Abenomics goal is not just boosting the domestic economy, total Japanese car sales were down almost 11% YoY as Honda saw its sales drop a stunning 40.7%. The latest figures continue this year's downward trend and while some blame the particularly sharp drop on fewer selling days in June, the auto dealer's association also said reflects the "ongoing severe" situation in the domestic market.

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The European Banking Union That Is Not

There is no European Banking Union. This is a good place to start. It does not exist which is why all of the ballyhoo and discussion in the Press is of such little importance. This grand scheme is nothing more than theory at this point and not a very good theory at that.

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Egypt's Morsi Still President As Ministers Resign, Muslim Brotherhood Offices Destroyed

With over a million people crowded into the streets of Cairo (and 16 reported dead and 781 injured according to The Jerusalem Post), the situation in Egypt is becoming more unstable. Amid cheers of "the people demand the fall of the regime," protesters set fire to and ransacked the Muslim Brotherhood's main offices all over Egypt. Many saw this as another victory towards their goal of Egypt not being ruled under Islamic law noting, that they "feel victorious, but we'll only have truly won once Morsi leaves." It seems the pressure is building as five Egyptian ministers have just resigned amid the growing chaos.

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The Goldman Takeover Is Complete: A Glimpse Inside The Bank Of England Where Mark Carney Is Now Presiding

Back in April 2012 we first suggested - to loud jeers by the "pundits" who were convinced there is no chance in hell of it happening - that Goldman's take over of the world's central bank triumvirate: the NY Fed (Bill Dudley), the ECB (Mario Draghi) and the Bank of England, would soon be completed with Mark Carney taking over the world's oldest central bank located on Threadneedle street. Today, this process has concluded and we have photographic evidence. Behold Goldman's Mark Carney attending his first Monetary Policy briefing (observe Michael Cross, Head of Foreign Exchange, and Executive Director for Markets, of Fleecebook fame sitting on the lower left).

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Single Digit Stock Price Makes RedBerry The New BlackBerry

First it was Research In Motion, then in an act of desperation (remember, it's not GMAC, it's Ally Bank although it can't IPO no matter what) it changed its name to Blackberry. And while we doubt it will happen, perhaps today's plunge of the stock price back to single digits should result in the final and correct name of the company that may have run out of kitchen sinks: RedBerry.

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June's Winners And Losers

Think gold and silver were the worst performing financial asset in June? Think again: that dubious distinction falls to the Bovespa, the Shanghai Composite and the Greek stock market index, all of which tumbled more than the precious metal complex did in the past month. Yet what an odd month for hard assets - on one hand WTI, Corn and Brent were the best performing assets, while gold, silver, copper and wheat tumbled.

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RANsquawk - Week Ahead - 1st July 2013

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Frontrunning: July 1

  • Pretty much as expected from George W. Bush: Edward Snowden ‘damaged’ security (Politico)
  • Gotta love the Keynesian-Monetarist religion: True 'Bullievers' Are Still Sweet on Japan (WSJ)
  • Canadian Takes Reins at Bank of England (WSJ)
  • Egypt streets quiet, political standoff goes on (Reuters)
  • Private Banks Leave Switzerland as End of Secrecy Hurts (BBG)
  • How Next Debt-Ceiling Fight Could Play Out (WSJ)
  • Easy Money Is Still Central (WSJ)
  • Lew Says China Needs Market Policies and Stop Spying (BBG) - China replies with the same
  • Ireland Preparing Plan to Tap Euro-Area Rescue Fund, Noonan Says (BBG)
  • Poll shows strong shift to Australian PM Rudd, new ministry named (Reuters)

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