European Banks Are In Trouble

With Austrian bank contagion impacting European stocks on Friday, we thought it worth a look at the 'recovering-out-of-the-crisis-all-is-well-and-stress-tests-will-prove-it' European banks. It appears, having bid with both hands and feet for Europe's peripheral debt - thus solidifying the very sovereign-financial-system linkages that were the cause of the European crisis contagion - Europe's banks had the jam stolen from their donuts when Mario Draghi did not unveil a massive bond-buying scheme (by which they could offload their modestly haircut collateral at 100c on the euro, raise cash, take profits, and all live happily ever after). A TLTRO is no use to the banks who now know even the first sign of one dumping his domestic bonds will cause this illiquid monstrosity to collapse under its own weight. It is clear - as the following chart shows - that investors are quickly coming to that realization and exiting European bonds in a hurry.

Mike Maloney: The Dollar As We Know It Will Be Gone Within 6 Years

Based on historical patterns and the alarming state of our current monetary system, Mike Maloney, monetary historian believes the fiat US dollar is in its last years as a viable currency. He sees its replacement as inevitable in the near term - as in by or before the end of the decade - "All of this is converging with the crazy experiments the Federal Reserve has done. During the last three monetary shifts, it was only the world's central banks and big international banks that were affected and were worried. The common man didn't even know what was going on. With this one, everybody is going to feel it. Everybody is going to know it. You will either be a winner or a loser, but everybody is playing this game."

The Impact Of The World Cup On Stock Markets, In One Chart

What "harsh weather", aka completely unpredictable cold snaps and snow during the winter were to Q1 US GDP, which somehow cratered from an expected 2.5% increase to a -2.9% collapse (a $200 billion negative swing in the US economy due to weather, let that sink in for a second), the Brazil world cup may be to the stock market. At least that is the following chart from Bloomberg, highlighting the "World Cup Syndrome" shows.

Foodflation - Since QE3, Breakfast Is Up Over 24%

Having pointed out the 'surges' in the cost of your 4th of July burger at the behest of Greenspan and Bernanke, we thought a reflection on the soaring costs of 'the most important meal of the day' were in order. As the following chart illustrates in words and pictures even a PhD Fed economist or CNBC pretend-economist could understand - food-flation is here from breakfast through dinner (no matter how many iPads we try and eat).

What Next For Ukraine - Ethnic Cleansing?

Global chessboard enthusiast Zbigniew Brzezinski has a plan for Ukraine. In a recent speech to the Woodrow Wilson Center, excerpted by the Atlantic Council, he argues forcefully in favor of the United States providing the Ukrainian military far more weapons. Under the guise of preventing a Russian invasion of Ukraine, which has been the rallying cry of those who seek more US involvement in the region, Brzezinski believes that the US must provide Ukraine with enough weapons to deter Russian aggression toward Ukraine. The odds of defending against the invading Russian military being very low, Brzezinski has a different idea... Ethnic cleansing.

Nothing's Cheap Anymore

Day after day, we are bombasted with asset-gatherers, academics, and status-quo-huggers demanding we BTFATH as 'stocks are still cheap..." Some have even deferred modestly to the old standby "stocks are 'fairly valued'" in a last lame effort to save what credibility they have left when they look themselves in the mirror. The fact is - no, stocks are not cheap (as we pointed out here, they are more expensive than at the peak of what Jim Bullard called an obvious bubble). However, still the shrill call of 'stock-picker's market' rings out to encourage the placement of hard-earned savings into easily commissioned AUM. The fact is - as the 3 charts below show - nothing is cheap - Nothing!

Current 'Wealth' Is Transitory: "The Risks Of Failing To Act Should Not Be Underestimated"

Investors who feel that zero interest rate policy offers them “no choice” but to hold stocks are likely choosing to experience negative returns instead of zero. While millions of investors appear to have the same expectation that they will be able to sell before everyone else, the question “sell to whom?” will probably remain unanswered until it is too late. It’s an unfortunate situation, but much of what investors view as “wealth” here is little but transitory quotes on a screen and blotches of ink on pieces of paper that have today’s date on them. Investors seem to have forgotten how that works. Few are likely to realize that apparent wealth by selling. As The BIS warned recently...“The risks of failing to act should not be underestimated.”

France Assures Push Against Petrodollar Is Not A "Fight Against Dollar Imperialism"

To complete the French triple whammy offensive against the US Dollar this weekend (first, French central banker Noyer suggesting de-dollarisation; second, French oil major Total's CEO "seeing no reason for the Petrodollar"), French finance minister Michel Sapin says "now is the right time to bolster the use of the euro" adding, more ominously for the dollar, "we sell ourselves aircraft in dollars. Is that really necessary? I don’t think so." Careful to avoid upsetting his 'allies' across the pond, Sapin followed up with the slam-dunk diplomacy, "This is not a fight against dollar imperialism," except, of course - that's exactly what it is... just as it was over 40 years ago when the French challenged Nixon.

Why Obamacare Is Pushing Up Health Insurance Premiums

Now that Obamacare has been enacted, Americans across the nation are seeing their health insurance bills spiking, leading to what has been a documented slide in full-time hiring, a drop in consumer discretionary spending, not to mention stagnant and declining real wages. In short: a broad economic contraction (yes, yes, who could have possibly foreseen this). But how is it that insurers set their prices? As Bloomberg explains, insurers are calculating what to charge for health plans in 2015, which is no simple task. Actuaries can’t easily forecast how often the millions of new Obamacare enrollees will go to a doctor. New federal rules and expensive drugs will also increase costs. Wrong guesses could wipe out profits. Here is a quick and dirty way to understand why premiums are going up.

Sunday (Un)Humor: Create Your Own Caliphate

It's a good time to be in Iraq, if you're a crazed Muslim zealot bent on creating a caliphate, that is. As Mark Fiore explains in a format even the most iPad-addicted youf of today, Iraq is suddenly back on everyone's radar now that ISIS is taking over large chunks of that formerly-occupied nation. Here, in 120 seconds, is how they did it (and how you can too)... "now, sit back, relax, and enjoy a miserable theocratic existence..."

These Are The "Worst Possible States To Live In" As Ranked By Their Residents

It should come as no surprise that when Gallup recently conducted a poll asking residents to rank if their state is the "worst possible to live in" a whopping 25% of its residents, by far the most of any states, responded Illinois. Which were the other "worst possible" states? The table below ranks them all.

"There Is No Honest Pricing Left" - The Epochal Error Of Modern Central Banking

"The system we have now is one in which the Fed decides, through a Politburo of planners sitting in Washington, how much liquidity is necessary, what the interest rate should be, what the unemployment rate should be, and what economic growth should be. There is no honest pricing left at all anywhere in the world because central banks everywhere manipulate and rig the price of all financial assets. We can’t even analyze the economy in the traditional sense anymore because so much of it depends not on market forces, but on the whims of people at the Fed."

Spanish Tech Company Admits It Is A Fraud Following Short-Seller Report

The reputation of bearish-biased research boutiques is set to soar following the latest fiasco involving Spanish mid-cap tech company Let's Gowex (GOW) which a week ago was the subject of a research report by Gotham City Research and its Twitter frontliner, @LongShortTrader. In the report, Gotham predicted that "Gowex shares are worth €0.00 per share." Its conclusion: "the shares will be suspended, just as Pescanova’s shares were suspended." Needless to say at the time Gowex vehemently denied the report saying all its allegations were false. Gotham was right and hours ago the CEO admitted the company which as recently as a week ago had a $2 billion market cap was nothing but a complete fraud.

CEO Of One Of The World's Largest Energy Majors "Sees No Reason For Petrodollar"

The USA is fast running out of friends to support its 'exorbitant privelege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.

Taking Liberties...

...a not so far off future in which martial law, economic collapse, and the destruction of civil liberties stood imminent...

Yellen Is Flat-Out Wrong: Financial Bubbles Are Caused By The Fed, Not The Market

The selloff last year was a desperate warning about the lack of resilience in credit and funding. That repo markets persist in that is, again, the opposite of the picture Janet Yellen is trying to clumsily fashion. Central banks cannot create that because their intrusion axiomatically alters the state of financial affairs, and they know this. It has always been the idea (“extend and pretend” among others) to do so with the expectation that economic growth would allow enough margin for error to go back and clean up these central bank alterations. That has never happened, and the modifications persist. Resilience is the last word we would use to describe markets right now, with very recent history declaring as much.

McClellan Sounds "Alarm" Over Stock Market Drawdowns

"... for now, the message is that the average stock making up the Nasdaq 100 Index is not confirming the bullish message of the NDX’s higher price highs...the divergence does not absolutely have to persist; the market could just power through it, but that is not usually the way things usually work out."

Charting The Death Of The Saver

Euthanasia of the rentier appears to be increasingly the modus operandi of the central planning caste of the world. As we noted previously, Bernanke's (and now Yellen's) plan to exterminate savers is wholly unsustainable, The Fed's insistence that "our savers collectively have to hold all the assets of the economy and a strong economy produces much better returns in general" must be juxtaposed with comments from a money manager that "I don't think that's a fair-trade" for money intended to be invested safely." No matter how hard they herd the masses, the elderly (and still working) respond, "At our age, we can't be a risk taker anymore."