Key Events In The Coming Week: FOMC, Housing Starts, CPI, TIC Data

It was a quiet start to the week today with just the June Euro area trade balance (which rose €21.9bn vs €23.1 bn expected, up from €21.3 bn) in the European timezone and Empire manufacturing and NAHB housing market index for August this afternoon in the US. Under the radar, but perhaps the most news today, is the June TIC data which will likely confirm the ongoing liquidation of "FX Reserves" aka TSYs by "Belgium" aka China. Expect another $15-20 billion drop in Belgian Treasury holdings in the month of June.

Frontrunning: August 17

  • Oil moves nearer six-year low on Japan data, oversupply (Reuters)
  • Commodity Slide Spurs Treasuries as Emerging Markets Extend Drop (BBG)
  • Because 7 years is "just right" - BOE Official Says Don’t Wait Too Long on Rates (WSJ)
  • How Medicare Rewards Copious Nursing-Home Therapy (WSJ)
  • Millennials Are Developing Parents’ Taste for Jaguars, Cadillacs (BBG) ... and even more debt
  • Mexican Billionaire’s Firms Swept Up in U.S. Probe of Citigroup (BBG)

MS Boosts TSLA Price Target To $465, Days After Underwriting Stock Offering; Sees Tesla Bigger Than Ford And GM

Moments ago, Morgan Stanley did it again just as expected, only this time it at least followed protocol when it announced it is raising its price target on TSLA from $280 to a whopping $465, or just shy of $61 billion in implied market cap. Incidentally at this price TSLA would be the biggest US automaker, surpassing not only GM's $50bn in market capo, but also Ford's $60 billion.

Futures Flat As Oil Drops To Fresh 6 Year Low; EM Currencies Crumble Under Continuing FX War

It was a relatively quiet weekend out of China, where FX warfare has taken a back seat to evaluating the full damage from the Tianjin explosion which as we reported on Saturday has prompted the evacuation of a 3 km radius around the blast zone, and instead it was Japan that featured prominently in Sunday's headlines after its Q2 GDP tumbled by 1.6% (a number which would have been far worse had Japan used a correct deflator), and is now halfway to its fifth recession in the past 6 year, underscoring Abenomics complete success in desrtoying Japan's economy just to get a few rich people richer. Of course, economic disintegration is great news for stocks, and courtesy of the latest Yen collapse driven by the bad GDP data which has raised the likelihood of even more Japanese QE, the Nikkei closed 100 points, or 0.5% higher. 

American Malls In Meltdown - The Economic Recovery Is Complete & Utter Fraud

What happens when we roll back into the next official recession, unemployment soars, and consumers really stop spending? What is revealed when you look under the hood of this economic recovery is that it is a complete and utter fraud. The recovery is nothing but smoke and mirrors, buoyed by subprime auto debt, really subprime student loan debt, corporate stock buybacks, and Fed financed bubbles in stocks, real estate, and bonds. The four retailers listed below are nothing but zombies, kept alive by the Fed’s ZIRP and QE, as they stumble towards their ultimate deaths. The coming recession will be the knife through their skulls, putting them out of their misery.

Asian Currency Crisis Continues As China Holds, Malaysia Folds, & Japan Heads For Quintuple Dip Recession

Asia got off to an inauspicious start this evening with Japan printing a disappointing 1.6% drop in GDP - heading for its fifth recession in 6 years... so much for Abenomics, but, of course, Amari spewed forth some standard propaganda that he expects Japan to recover moderately (and Japanese stocks popped modestly assuming moar QQE). Then Malaysia continued its collapse with the Ringgit down another 1% hitting fresh 17-year lows and stocks dropping further, as the Asian Currency crisis continues. Heading into the China open, offshore Yuan signaled further devaluation but the CNY Fix printed very modestly stronger at 6.3969; and following last week's best gains in 2 months, Chinese stocks are plunging at the open after Chinese farmers extend their streak of margin debt increases. Finally, WTI Crude drifted back to a $41 handle in early futures trading.

Goldman Weighs In On America's Pension Ponzi: Contributions Must Rise $100 Billion Per Year

"Unfunded pension liabilities have grown substantially. There are several factors behind this, led by lower than expected investment returns and insufficient contributions from state and local governments to the plans. In aggregate this would raise government pension contributions by something like $100bn per year, lowering spending in other areas (or raising taxes) by a similar amount."

How Humans Cause Mass Extinctions

There is no doubt that Earth is undergoing the sixth mass extinction in its history – the first since the cataclysm that wiped out the dinosaurs some 65 million years ago. According to one recent study, species are going extinct between ten and several thousand times faster than they did during stable periods in the planet’s history, and populations within species are vanishing hundreds or thousands of times faster than that. By one estimate, Earth has lost half of its wildlife during the past 40 years. There is also no doubt about the cause: We are it.

Goldman's 4 Reasons Why The S&P Will Remain Unchanged For The Rest Of 2015

These are Goldman's four reasons why the bank expects the S&P 500 will end 2015 unchanged from the current level: High starting valuation, negligible earnings growth, outflow from domestic equity mutual funds and ETFs, and modest economic growth. Offsetting these headwinds to a higher market, buybacks remain robust and serve as a pillar of support in the current environment.

"Deal Or War": Is Doomed Dollar Really Behind Obama's Iran Warning?

"The US is digging itself in deeper and deeper,” warns Doug Casey, adding the telling question: “Then what’s going to happen?” President Obama’s grim warning of “deal or war” seems to provide an answer. Faced with economic implosion on an epic scale, the US may be counting on war as its other option.

 

The FDA Just Approved OxyContin To Be Prescribed To Children

The infamously untrustworthy Food and Drug Administration (FDA) has furthered its reputation as one of America’s most beloved hypocrites with its latest motion. It was reported on Thursday that the FDA has just approved OxyContin prescriptions for children between the ages of 11 and 16 years-old.

North Korea Threatens To "Invade USA," Use Weapons "Unknown To The World"

If Washington does not cancel its planned military exercises with South Korea, North Korea has issued new nuclear threats and says it is ready to us its latest weapons, which "are unknown to the world." The drills, called Ulchi Freedom Guardian, are due to start Monday are designed to "protect the region and maintain stability on the Korean peninsula." However, as expected Pyongyang is not happy, "If [the] United States wants their mainland to be safe," said state TV, "then the Ulchi Freedom Guardian should stop immediately."

The Donald vs. China (Or The Fallacy Of Protectionism)

For reasons that will forever remain a mystery to us, mercantilism and protectionism actually hold enormous popular appeal. The best explanation we can come up with for this phenomenon is that the support for such policies is based on a mixture of economic ignorance and relentless propaganda by vested interests over the past, say, four centuries. Still, it is almost comical that people are so vociferously clamoring for policies that can actually cost them a fortune and will definitely lower their standard of living.

New Snowden Leak Exposes AT&T's "Extreme Willingness To Help" NSA Spy On Americans

Newly disclosed NSA files expose the spy agency's relationship through the years with American telecoms companies. As NYTimes reports, The National Security Agency’s ability to spy on vast quantities of Internet traffic passing through the United States has relied on its extraordinary, decades-long partnership with a single company: the telecom giant AT&T. The documents, provided by the former agency contractor Edward Snowden, described the NSA-AT&T relationship as "highly collaborative," while another lauded the company’s "extreme willingness to help."