Ebola Deaths Go Exponential; Nigeria Demands Experimental Drug From US, Saudi Death First In Arab World

The official Ebola death toll is now at 932 with over 1,700 reported cases but as the WHO reports, in the last 48 hours, deaths and cases have exploded (48 and 108 respectively). As the charts below show, this epidemic is going exponential. What is perhaps most worrisome is, while playing down the threat in Nigeria (most especially Lagos - which the CDC Director is "deeply concerned" about), officials have formally asked the US for the experimental Ebola drug, which suggest things are far worse than the 3 deaths reported so far in Nigeria would suggest. Finally, as we warned yesterday, Saudi Arabia is suffering too as the main who was hospitalized yesterday with symptoms has died - the first reported casualty in the Arab world.

What Are the Options For Those Who Can't/Won't Get A Corporate/Government Job?

The average jobseeker is hoping to nail down a corporate or government position, for the usual reasons: security, pay and benefits. But there aren't enough secure, high-paying corporate/government jobs for everyone who wants one. Low-wage serfdom is not the only alternative to a shiny Corporate America/government bureaucracy job. To understand the alternatives, we have to understand the economy we have, not the one we wish we had or the one we might have in the future.

WTI Crude Tumbles Under $97 - Fresh 6-Month Lows

While bonds and stocks shrug off the volatility in FX markets, it appears the crude oil complex is suffering. Despite Putin's discussion of "countermeasures", crude oil prices have tumbled back under $97 to fresh 6-month lows. Brent Crude is notably not selling off (yet) as the spread pushed back above $8.

Costs? US Exports To Russia Collapse 34%

While Jack lew promised the economic impact on the US economy of Russian sanctions would be minimal, the facts suggest the opposite. Admittedly, Russia is not the US' largest trade partner but escalating sanctions have resulted in a 34% collapse in US exports to Russia - the largest absolute drop since 2010. Imports (from Russia) also fell (for the 3rd month in a row) but while the US is suffering 'costs' it is clear Russia is hurting more (for now - as Putin is set to unleash his countermeasures). Since sanctions began Russian stocks are up 9.5% and the S&P up 4.5% but the spread has collapsed in recent weeks.

ISIS Marches On (And The Saudis Are Getting Nervous)

The fundamentalist retro-gang that has conquered Northern Iraq has decided it needs to go Taliban on cultural monuments it disapproves of. In short, the group is not only killing people that don't conform to its harsh version of Islam, it is also trying to erase all traces of their history and culture - "The demolition of structures erected above graves is a matter of great religious clarity." It is quite ironic that Saudi Arabia, allegedly one of the main financial backers of ISIS, is finally getting worried a bit in light of all these events. Luckily, there is absolutely nothing to worry about. Not only do the Saudis believe that “ISIS will run out of steam” just before it gets to Mecca (see above), but more importantly, “the US State Department also issued a statement that it was “actively monitoring” the Iraqi situation” (apparently it neglected to “actively monitor” the Lebanese situation though). What could possibly go wrong?

Dollar Flash Crashes

No headlines on the tape for now but suddenly the world wants out of Dollars... (world's FX traders searching for Sikorski and Putin's "sell" button)... It appears led by major JPY buying as someone just puked a huge carry trade (25,000 JPY futures contracts or around $3 billion notional).

And The Next Country To Join The Renminbi Fan Club Is...

A few years ago, the definition of "strong banking" was Switzerland; now, not so much. But eager to restore some of its former banking luster, Switzerland has taken note of this and is rapidly positioning itself to become a major center of European RMB trade. Continuing to believe that the dollar is going to maintain its global reserve status is now not only foolish, but financially hazardous. To countries, businesses and individuals. Those who ignore the trend do so at their own peril.

The Loudest Warning Yet: "This Stage Should Lead To Increased Risk... System Less Able To Deal With Such Episodes"

"Suppression of yield and vol induces investors to take on more risk (QE III). The market clings to perception of certainty regarding outcomes, despite the Fed shifting commitment modes from time or level-based to data dependent. This stage of policy should eventually lead to increased uncertainty and risk."  Translation: the TBAC itself - i.e., America's largest banks - whose summary assessment this is, is now actively derisiking.

Russian Retaliation: Putin Orders Ban On All Food Imports From Sanctioning Countries For A Year

Last week we noted Russia was considering banning fruit from Europe (as well as various other sanctions retaliations) but this morning Vladimir Putin has come out swinging by signing 'a decree on countermeasures to Western sanctions':

*PUTIN BANS FOOD IMPORTS FROM COUNTRIES SANCTIONING RUSSIA: IFX
*PUTIN ORDERS GOVT TO PREVENT ACCELERATED GROWTH OF FOOD PRICES

So trade wars escalate externally and price controls internally. It appears the US (and Europe) will indeed feel "tangible losses" despite Jack Lew's promises.

Stocks Recover "Invasion" Losses On VIX Smash

Having lost contact with JPY crosses early on, it was left to VIX to be the momentum ignition to run equities back up to the scene of the crime yesterday. US equity indices are close to the levels pre-Sikorski yesterday as VIX is hammered back under 16.

Gold Jumps $20, Most In 2 Months On NATO Headlines

Talking-heads drew "this is not geopolitical risk fears" comfort yesterday that the stock sell-off was not accompanied by a big bid for gold. Today... not so much. Gold and silver have surged since around 8amET (when Ukraine incursion headlines began today from NATO) with the yellow metal up over $20 - its biggest jump since mid-Jun (with futures over $1310).

More Warmongering: US Secretary Of Defense, NATO Both Say Threat Of Russian Incursion A "Reality"

On the heels of yesterday's comments from Poland's Sikorski, NATO has confirmed there's a risk of Russia sending troops into Ukraine under the 'pretext' of a humanitarian or peacekeeping mission. "We're not going to guess what’s on Russia’s mind, but we can see what Russia is doing on the ground - and that is of great concern," a NATO spokesperson warned, adding, "this is a dangerous situation." Then US SecDef Hagel added, "the threat of Russian incursion in Ukraine is a reality." Russia's response to this warmongering (as Ukraine appears desperate to instigate something before the money runs out) is to blast the disinformation, "reports of troop buildups near the Ukraine border are groundless." It appears we are going to need more YouTube clips...

The Mystery Behind Strong Auto "Sales": Soaring Car Leases

When it comes to signs of a US "recovery" nothing has been hyped up more than US auto companies reporting improving, in fact soaring, monthly car sales. On the surface this would be great news: with an aging car fleet, US consumers are surely eager to get in the latest and greatest product offering by your favorite bailed out car maker (at least until the recall comes). The only missing link has been consumer disposable income. So with car sales through the roof, the US consumer must be alive and well, right? Wrong, because there is one problem: it is car "sales" not sales. As the chart below from Bank of America proves, virtually all the growth in the US automotive sector in recent years has been the result of a near record surge in car leasing (where as we know subprime rules, so one's credit rating is no longer an issue) not outright buying.

The Most Bullish Signal For Stocks Today...

"We have reduced our position in the market in the only account we manage directly our own retirement funds… to a long position in aluminium still hedged with out-of-the-money puts and some remaining derivative positions. The “news” out of Russia yesterday was sufficient to keep us on the sidelines on balance, wanting to be bullish but unwilling to commit funds when the news is this “un-or-im” balanced, for discretion is always being the far better part of trading valour."

President "I Will Not Rest" Obama's Approval Rating Hits Record Low

Nearly 80% of Americans have lost faith in the American political system, according to a new Wall Street Journal poll. Despite record highs in stocks (and consumer confidence?) - and a President proclaiming that as victory - 60% of Americans are dissatisfied with the economy and 70% believe the nation is heading in the wrong direction. Who is to blame for this? President Obama's overall approval rating has collapsed to a new low at 40%, with only 42% approving of his handling of the economy. "Americans are cranky, unhappy… It is with everything going on the world," and 57% are pissed off enough to carry a protest sign. But don't worry, as President Obama has reiterated during his tenure, he "will not rest..."

Three Years later, Japan Finally Tells The Truth: More Fuel Melted At Fukushima

After years of obfuscation and, simply put, lies; TEPCO has admitted in a new report that more nuclear fuel had melted at the Fukushima nuclear reactor than previously stated. While this is dreadful news, it gets worse, as the report further confirms that despite Abe's promises and TEPCO's state-funded efforts to build ice-walls, it may miss an important deadline binding it to clean radioactive water stored inside the Fukushima nuclear plant. Bloomberg reports officials commenting "we are doing everything we can do," but it appears, that is not enough as tens of thousands of tons of toxic water are expected to remain at the site by the imposed deadline.

June Trade Deficit Smaller Than Expected, Ex-Petroleum Deficit Near Record

Moments ago the BEA reported that the June trade deficit (which is the last month of Q2 GDP) came in $3 billion better than expected, declining from $44.7 billion to $41.5 billion, beating consensus $44.8 billion, as exports increased and imports decreased. The previously published May deficit was $44.4 billion. The goods deficit decreased $3.0 billion from May to $60.3 billion in June; the services surplus increased $0.1 billion from May to $18.7 billion in June. But perhaps most importantly, the trade deficit excluding the shale boom, i.e., America's reduced petroleum import needs which may last for a few more years before shale oil too is exhausted - just printed close to record highs. In other words, US trade ex oil is about as bad as it has ever been!

10Y Yield Tumbles To 13-Month Lows, Gold Jumps Over $1300: Surveying This Morning's Carnage

At 2.43%, 10Y Treasury yields are back at June 2013 levels with the entire complex pressing low-yields of the day (down 5-6bps on the week). The USD is strengthening (now up 0.45% on the week) to new 11-month highs. Equity markets are reeling in US and Europe. All major US indices are now down almost 1% from last week's payrolls data, and the Dow and Russell 2000 remain notably red year-to-date. In Europe, it's getting ugly fast, the broad European stock market is now down for 2014 with the periphery suffering the most. For 2014, Portugal is worst but Germany's DAX is -3.5% YTD. European bonds are also hurting with Italy, Portugal, and Spain spreads up 12-22bps, with German 2Y yields at 1bps - their lowest in 13 months. Gold is up on the week, jumping above $1300 this morning as copper slides.