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Hookers And Blow: How Changing The Definition Of GDP Officially Jumped The Shark

A year ago it was the US which first "boosted" America's GDP by $500 billion - literally out of thin air - when it arbitrarily decided to include "intangibles" to the components that 'make up' GDP (in the process cutting over 5% from the US Debt/GDP ratio). Then Spain joined the fray. Then Greece. Then the UK. Then Nigeria, which showed those deveoped Keynesian basket cases how it is really done, when it doubled the size of its GDP overnight when it decided to change the base year of its GDP calculations. Now it is Italy's turn, and like everything else Italy does, this latest "revision" of the definition of GDP easily wins in the style points category. As Bloomberg reports, "Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year." Yup: blow and hookers. And that, ladies and gents, how it's done.


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Citi Explains Kuroda's Dilemma: "Please Sell More Yen Cause I Can't"

"Words speak louder than actions until words stop working then we promise some actions... or more talk about actions." That appears to be the communication method-of-choice for the world's central bankers and The Bank Of Japan's Kuroda stepped into the breach today with his own demands. As Citi's Steven Englander translates, Kuroda is telling investors not to buy JPY just because the BoJ is being very reticent on policy ease (do as we say, not as we do). However, there is an important second message which is intended to be delivered to the Japanese bureaucracy - "Mr. Kuroda also acknowledged limits to what the BOJ can do to generate long-term growth."


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How Russian Investors Made $90 Billion After US Sanctions

We have discussed the "costs" associated with US sanctions on Russia previously and while economic growth expectations have slowed - just as they have slowed for the entire world - despite the common knowledge meme being propogandzied across the mainstream media, as Bloomberg notes, the Russian Ruble is now notably stronger than before the sanctions and for those who ignored US sanctions and bought Russian stocks - the MSCI Russia Index has gained $90 billion since Jay Carney said "sell" as the sanctions hit.


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Sorry, John Kerry Can't Testify About Benghazi; He Is Just Too Busy

Once again we get confirmation that this administration is the most transparent in history. The State Department's Marie Harf explained that John Kerry will not be attending the Select Committee hearing on Benghazi and must postpone his testimony to the House Oversight committee due "critical diplomatic work" he is undertaking. As the full letter below explains:

*HARF SAYS KERRY 'WILL APPEAR ONCE ON BENGHAZI'; SAYS NO NEED FOR KERRY TO GO BEFORE TWO COMMITTEES
*KERRY HAS 'CRITICAL DIPLOMATIC WORK' ON SUBPOENA DAY OF MAY 29

Furthermore, the State Department adds, "we believe there are witnesses better suited to answer questions regarding the Department’s response to Congressional investigations of the Benghazi attacks."


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Another Bad Week For Hedge Funds

With hedge funds the most aggregate short since the peaks in 2007/8 and any long/short fund struggling to eke out anything but losses, this week's epic surge in the prices of the "most shorted" stocks confirms once again that the "dash for trash" is alive and well. Buying the "most shorted" stocks has been a massively outperforming strategy for well over a year, and as we noted here, the trend of major outperformance of 'weak balance sheet' firms over 'strong balance sheet' firms continues. The results... "most shorted" stocks +5.1% from last week's lows - more than doubling the S&P's 2% gains...


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"The Poster Child Of Too Much Money Chasing Deals"

Three weeks after the formation of his company which "plans to" (as opposed to "is doing") "buy underdeveloped land and rill shale wells," 27-year-old Mark Hiduke raised $100 million from a local private equity firm. Makes perfect sense of course - especially after Dubai's 31x over-subscribed IPO for a firm with no operations - but perhaps the following sums it all up... "These guys are going to be the poster children of self-made oil and gas tycoons... or they could be the poster children of how too much money is chasing deals." Indeed...

 


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Watch The Russian Helicopter Drill In Action, Just In Time For The Ukraine Elections

Russia may or may not be pulling its forces back from the Ukraine border, but in their place it is launching a massive, and just as symbolic airforce drill, profiled previously, which is taking place at the same time as the Ukraine presidential elections. A part of it can be seen in action, courtesy of the EuroMaidan YouTube channel, which reports that The Russian military conducted airborne drills outside Rostov-on-Don near the country's border with Ukraine. No dramatic Wagner music, but watch the Russian choppers fly in the clip blow.


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A Productive Economy Is A Trading Circle

The destructive consequences of a parasitic Tyranny of the Wealthy and Majority have yet to play out, but they will, and sooner than most believe possible.


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No Inflation Friday: 42.4% Increase In The Price Of Being... Poor?

One of the most intellectually disingenuous statements made by western policymakers is that inflation is tame… nonexistent. However the actions of the World Bank this beggars belief as 'poverty' is re-defined (just like GDP) to ensure the planners can conjure hundreds of billions of dollars out of thin air without any consequences whatsoever. Zero risk.


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Russia Has Prepared A Confidential Retaliation Document As Ukraine Set To Hold NATO Accession Referendum

Until now Russian retaliation against Western sanctions has been largely symbolic, culminating with this week's Holy Grail gas deal with China, 10 years in the making, which would not have happened on such a truncated timeframe had it not been for western prodding. However, now Russia may be getting ready for actionable retaliation against the west. RIA reports that Russia has prepared a "confidential document" with measures in response to Western sanctions, citing Kremlin advisor Andrew Belousov. And while it is unclear if the US will dare to issue any more sanctions against Russia, considering the Russian stock market is now back to pre-sanctions levels, thus proving their complete futility (and if anything will simply serve to bring Russia and China even closer), one development that would certainly infuriate Putin is the news that Ukraine may hold a NATO accession referendum as soon as June 15.


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Retailers' Profits Miss By Most In 13 Years: "Consumer Is Not Back"

"The American consumer is not fully back and remains cautious," is the oddly real tone of Ken Perkins, president of Retail Metrics, reporting that U.S. retailers’ first-quarter earnings are trailing analysts’ estimates by the widest margin in 13 years amid weak spending by lower-income consumers intensified competition:

*U.S. RETAILERS MISSING ESTIMATES BY 3.2%, RETAIL METRICS SAYS, MISSING ESTIMATES BY MOST IN 13 YEARS

While extreme weather is tossed out as the reason for this miss, what is an ugly smoking gun is the expectations the chains are missing had already been significantly lowered. Hope remains strong as "pent-up demand" has analysts projecting a 8.6% surge in profits in Q2... as long as it's not too hot or cold or wet or dry.


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Gartman Humor: "We Erred Once Again... "

We erred once again in heading to neutrality for the trend of this market remains upward and there is and has been and likely shall remain enormous levels of suspicion about the validity of the bull market to keep the market climbing the proverbial “Wall of Worry.” ... now we have to look to use any periods of weakness to cover in hedges put into place in order to get ourselves net long once again.


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Treasury Yields Are Tumbling As Stocks Push For Record Highs

Treasury yields are tumbling... and so of course US equity prices are soaring as the S&P presses back up toward 1,900 and its all-time record highs. USDJPY is not supporting this spike so it's clear what is... VIX recovered its HP-spike from last night and that was all the momo ignition needed on a thin day to lift stocks ... This magical no volume ramp has lifted the Dow into positive territory for the month and year.

 


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New Home Sales Post Tepid April Bounce As Average, Median Home Price Drops From Year Ago

Last month's dramatic miss of expectations for a modest post-weather pop in new home sales (having dropped 14.5% month-over-month) so it was inevitable that there would be a bounce. Modestly beating expectations, 433k annualized new home sales in April was only a 6.4% gain MoM thanks to the upward revision of the big miss in March. This 'recovery' remains well below the peak see in January - right in the middle of the worst weather impacted time in US history if one is to believe what the media is spewing. Before the 'housing recovery is back on track' meme gets going though, there is the fact that homes sold in the Northeast fell to the lowest since June 2012... as the average home price fell to $320,100 - the lowest since August 2013.


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