Six Reasons To Buy US Treasuries (In 1 Chart)

Ten-year bond yields in six euro-area nations ended at a record low on Friday as geopolitical tensions fueled demand for the safest fixed-income securities (before everything was ruled 'fixed' later in the US day). As the world's central banks policies begin to diverge, it appears US Treasuries are increasingly attractive on a relative basis for the 'reach for yield' herd (especially as high-yield technicals dominate) in this new normal world (even on an FX-risk-adjusted basis).

WHO Warns "No End In Sight" As 170 Ebola Healthcare Workers Now Infected

"The outbreak of Ebola virus disease in west Africa continues to evolve in alarming ways, with no immediate end in sight," is the ominous warning this morning from the World Health Organization. The WHO statement confirmed that a stunning 170 health-care workers (the ones covered from head to toe in protective garments) have been infected with Ebola and at least 81 have died. "Treatment facilities are oveflowing," they note as they prepare to hold an emergency meeting today on experimental therapies. But apart from that, as Western media says, it is contained and does not pose a risk to Americans...

Is Anyone In Control? The Iraq "Post Coup" Confusion Deepens

While the US is alternating between bombing the north of Iraq, and occasionally paradropping MREs and jugs of water to keep up the "noble" facade of intervention, it is very much unclear if Iraq currently has a government and in fact, who is in charge. As reported yesterday, current PM al-Maliki, seemingly unhappy with relinquishing power when a new Prime Minister, Haider al-Abadi was chosen, decided to conduct what many described as a military coup and encircled the residence of the president. Since then things have gotten quite confusing.

Confronting Brutal Facts: The US Market Is A Fly In Search Of A Windscreen

On September 9th, 1965, US Navy pilot James Stockdale was shot down over North Vietnam and seized by a mob. He would spend the next seven years in Hoa Lo Prison, the infamous “Hanoi Hilton”. When asked who didn't make it out? "Oh, that’s easy...The optimists." The lesson, he explains, is a valuable one for investors today: "you must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be."

Bonds Don't Believe It's All Over

As stocks soar higher amid dismal volumes, Treasury yields remain trapped in a very narrow range and just slipped lower on the day. It seems bonds don't believe the world's geopolitical carnage is over...

US Postal Service: Over $47 Billion In Losses In The Past Decade And Counting

Curious what pure, unadulterated government efficiency in practice, if not in theory, looks like? Then the following chart of USPS operating profits, pardon, losses over the past decade should be sufficient. The punchline: having generated revenues of nearly $700 billion in the past 40 quarters, the USPS has been bleeding red ink more or less consistently since 2006, and has now generated just over $47 billion in operating losses over the past ten years.

Suspected American ISIS Supporter Arrested At New York's JFK Airport

Having demanded "American blood," the news that a suspected American militant who pledged allegiance to the Islamic State terrorist group in chilling Twitter rants is being held without bail after his arrest at New York's Kennedy Airport is somewhat concerning. Donald Ray Morgan, 44, who has a previous conviction for firing a gun, had allegedly been brokering deals for military-grade weapons and ammo in his home state of North Carolina and was indicted for being a felon in possession of a firearm, according to The Daily News. The presiding judge noted, his actions "clearly implied to me that he is trying to go to Syria or Iraq as the next step and trying to be actively engaged."

Ukraine Says 45,000 Russian Troops On Border With Tanks, Missiles, Warplanes And Attack Helicopters

Just the usual warmongering soundbites, because someone clearly is on a mission to escalate the cross border hostilities into all out war. From Reuters:

  • UKRAINE MILITARY SPOKESMAN LYSENKO SAYS RUSSIA HAS 45,000 TROOPS ON ITS BORDER WITH UKRAINE WITH TANKS, MISSILE SYSTEMS, WARPLANES AND ATTACK HELICOPTERS

And meanwhile, from the other side: LAVROV: ONE MAY GET THE IMPRESSION THAT THE COUNTERTERRORISM OPERATION IN UKRAINE AIMS TO WIPE OFF SOUTHEASTERN UKRAINE FROM THE FACE OF THE EARTH AND TO MAKE ALL RUSSIANS GO

Forget iPhones - 100s Of Russians (& Mickey Rourke) Line-Up For Putin T-Shirts

While the West is used to long lines of people waiting patiently for the next big thing from Apple, it appears there is another 'must-own' item this summer. As Sky reports, hundreds of people have gathered in one of Moscow's most expensive stores to buy T-shirts with Vladimir Putin's picture on them. Somewhat amusingly, among the crowd was no lesser celebrity than Mickey Rourke who snapped one up.

The Complete History Of US Presidents Bombing Iraq Back Into The Stone Age

Operation Desert Shield; Operation Desert Storm; Operation Provide Comfort I and II; Operation Southern Watch; Operation Desert Strike; Operation Northern Watch; Operation Desert Fox; Operation Southern Focus; Operation Iraqi Freedom; Operation New Dawn,

and...

Operation [Provide Humanitarian Aid]

De-escalation Delayed: NATO Chief Warns Again "High Probability" Of Russian Intervention In Ukraine

Deja vu all over again. Just as he stole the jam from the market's donut last week, NATO Chief Rasmussen has done it again:

NATO'S RASMUSSEN SEES "HIGH PROBABILITY" THAT RUSSIA COULD INTERVENE MILITARILY IN EASTERN UKRAINE

He also adds he sees no sign of troop withdrawal. So, despite the market's confidence that it's fixed and Putin has folded, it seems NATO is not so sure. Un-De-Escalation begins.

US Equities Surge To Last Week's "Europe Is Fixed" Highs

Remember last Monday - the day after Banco Espirito Santo was bailed out and Europe was fixed... before the world's geopolitical chaos rotated to aa on the Spinal Tap amplifier of doom - well US equity futures have levitated on de minimus volume, with the help of AUDJPY, to last week's highs. And all that before Rasmussen threatened Russia, US unleashed airstrikes and Russia stopped its military drill. Treasuries are 0-1bps higher in yield. Silver and oil are rising notably.

Syria 2.0: US Starts Sending Arms To Kurdish Fighters

While Einstein defined insanity as repeating the same behavior and expecting different results, it appears President Obama's administration defines that action as US foreign policy. Just as they did in Syria (where the US 'trained' moderate Al Qaeda terrorists, instead of "sending troops" - ensuring no 'boots on the ground' blowback), AP reports that the US is sending arms to the Kurds as their new proxy mercenary force in Northern Iraq. We are sure the result will be different this time?

Frontrunning: August 11

  • Maliki digs in as U.S. pushes for new Iraq government (Reuters)
  • Ukraine's forces say close to taking rebel-held Donetsk (Reuters)
  • Anger Over Michael Brown Shooting Leads to Looting (WSJ)
  • German Economy Backbone Bending From Lost Russia Sales (BBG)
  • Kinder Morgan to Consolidate Empire (WSJ)
  • Early Failure to Detect Gaza Tunnel Network Triggers Recriminations in Israel (WSJ)
  • You’ll never guess how much BuzzFeed raised from Horowitz (FT)
  • The dumb money is now chasing Chinese oligarchs: Norway’s Wealth Fund Buys $576 Million of Mayfair Area (BBG)
  • Clinical trial to start soon on GSK Ebola vaccine (Reuters)
  • No drone skeet shooting any time soon (WSJ)