• Phoenix Capital...
    07/03/2015 - 20:26
    Greece just took a hit… and once again it’s depositors that will take it on the chin. But this process is only just begun. Similar Crises will be spreading throughout the globe in ...

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The Fed Is The Problem, Not The Solution: The Complete Walk-Through

"Perhaps the success that central bankers had in preventing the collapse of the financial system after the crisis secured them the public's trust to go further into the deeper waters of quantitative easing. Could success at rescuing the banks have also mislead some central bankers into thinking they had the Midas touch? So a combination of public confidence, tinged with central-banker hubris could explain the foray into quantitative easing. Yet this too seems only a partial explanation. For few amongst the lay public were happy that the bankers were rescued, and many on Main Street did not understand why the financial system had to be saved when their own employers were laying off workers or closing down." - Raghuram Rajan



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If You're Greek, Move To Thailand

At 27.4%, Greece's unemployment problem is the worst in the world according to Bloomberg's data, followed closely by Spain and South Africa (though of course youth unemployment is massivley worse). The US is a middle-of-the-road 34th worst if we use the standard BLS-inspired unemployment rate, though jumps to 6th (worse than Cyprus) were we to use the more appropriate U-6 under-employment rate. The good news is, there is hope... At less than 1% unemployment, Thailand offers a warm climate, pretty scenery, and a market for jobs that seems to know no bounds (though we suspect the 'quality' of those jobs will be less - but as we know in the US, that doesn't matter).



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Guest Post: About That "Incomes Are Rising" Claim...

The mainstream media is claiming that "The aggregate amount of money in paychecks is increasing about twice as fast as GDP." Rising aggregate household income doesn't tell the real story, which is: 1. Most of the income gains flow to the top 10%; and 2. Thanks to rising taxes, healthcare and other costs, household net income for the bottom 90% is declining. The mainstream media's parroting of aggregate household income increases is used to suggest the economy is improving. But the truth is the economy is only improving for a thin slice of households.



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Gold: A Tale Of Two Markets

The last six months have been tough for gold investors or as Santiago Capital's Brent Johnson self-reflectively jokes, "if adversity builds character, then we gold investors should build a new Disneyland." But as he explains in this excellent summary presentation, the critical factors requiring ownership of gold (or hard money) are still in place and in fact - in some cases - are even more prescient now than ever as we suffer through a surreality of the tale of two economic realities and the tale of two gold markets.



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Eric Holder Slams "Stand Your Ground" Laws, Claims Self-Defense May "Sow Dangerous Conflict"

US AG Eric Holder, who it appears is not busy committing perjury before Congress, or failing to prosecute one single TBTF bank due to their systemic nature, or eavesdropping on the AP, or recording every American electronic communication, or selling weapons to Mexican drug cartels, or generally using the constitution as one-ply toilet paper, has found some time to peddle his thoughts on the Trayvon Martin shooting at an NAACP convention in Orlando. So what did the head of the US department of justice say? He proceeds to blast "Stand your ground" laws, because, you see, having the right to self-defense is dangerous and may lead to escalations. No really: "Separate and apart from the case that has drawn the nation's attention, it's time to question laws that senselessly expand the concept of self-defense and sow dangerous conflict in our neighborhoods." In other words, Holder is spreading a very christian message: when slapped, present the other cheek.



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When (And Why) Did QEternity Begin?

Following this morning's "if we hope it, they will buy" NAHB data, the venerable Goldman Sachs released their housing market Swirlogram (and it's something to behold). What we found most interesting was the massive inflection point that occurred just as the chart was collapsing back into the miasma of contraction... Cause or effect, QEternity?



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Jim Rogers: "Beware The Man On The White Horse..."

As far back as ancient times, whenever civilizations fell into great crisis, people in desperation have almost invariably turned to a single individual who promised them better times. Of course, history is full of examples of men who did not give up power willingly once the crisis passed.  As an example, the 1920s economic crisis in the Weimar Republic had a huge impact in the rise of Adolf Hitler’s National Socialism.  In the 1920s, there was one bankrupt country. And the consequences still define the world we live in. But Jim Rogers sees another "man on a white horse" that scares him even more today...



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Stocks Break 10-Day Winning Streak With 0.3% "Plunge" For Worst Day In Two Weeks

Better volume than yesterday, but still below average, saw the S&P suffer its devastatingly worst day (and first down day) in the last 10 days. The sell-off appeared to start on some Esther 'hawkess' George comments and were stick-saved by rumors of a Hilsenrath article (which appeared and was full of nothing). The S&P futures 'miraculously' reverted perfectly to VWAP but still ended its 10-day-winning-streak. Bonds were very modestly bid but liquidity was thin and activity muted. Gold and Silver had a positive day (up 0.55% on the week) as the USD kept falling (down a matching 0.55% on the week). WTI limped a little lower holding at $105.75 as gas prices continue to surge. Builders remain worst on the week (despite the 'awesome' NAHB print today) and Utilities best. Since 6/19's FOMC meeting, QE-sensitive sectors Energy, Materials, and Homebuilders remain the biggest losers with the winners (Financials and Discretionary) giving some back today. VIX was relatively well bid today as hedgers dug in ahead of Ben's speech.



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Yahoo Misses Revenue, Guides Lower, Stock Drops

Is the "hip" Marissa Mayer's honeymoon with Wall Street finally over? After getting the vast benefit of the doubt from Wall Street for some 50%+ upside in the stock price without generating any actual results, moments ago the search engine that everyone used over a decade ago before the arrival of such better alternatives as GOOG, once again failed to deliver. Specifically, while the company beat the EPS estimate of $0.30 with eash and a print of $0.35, it was the top line that the firm posted a miss, revenue coming at $1.07 billion on expectations of $1.08 billion. But it was the outlook that really impacted the stock, which initially was trading higher only to turn lower as the company's guidance cut was released. To wit:

  • YAHOO SEES 2013 ADJ OPER INCOME $900M-$1B, SAW $1.05B-$1.1B
  • YAHOO SEES 3Q REVENUE EX TAC $1.06B-$1.10B, EST. $1.12B
  • YAHOO SEES YR REV. EX-TAC $4.45B-$4.55B, EST. $4.54B

And while the traditional deus ex of a share buyback was used to confused the GETCO algos as usual, this time to the tune of $1.9 billion, it appears it was no longer sufficient to make the market forget that YHOO is the perpetual "promise" stock that just somehow never manages to deliver.



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Caption Contest: That Sinking Feeling

Does the NSA's surveillance reach under the water too? Russia's president is about to find out...



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Microsoft: "We Don't Provide Any Government With Direct Access...We Need The Attorney General To Uphold The Constitution"

A few days ago, Edward Snowden made even fewers friends in the corporate tech community with his Guardian disclosures that "Microsoft Helped The NSA Bypass Its Own Encryption Software, Spy On Its Clients." This promptly got the legal team the MSFT scrambling, and moments ago, the firm's General Counsel Brad Smith posted on MSFT's blog that, guess what, the world's biggest desktop OS maker doesn't give government data encryption keys or customer data. Well... what else were they going to say? Oh yes, repeat "direct acces" 6 times in a blog post, making it all too clear the whole issue is merely about semantics.



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How RINs Became Gasoline's Four-Letter Word

As the EPA’s RFS mandate has surpassed the industry standard of E10, the demand for RINs has likely increased as refiners/blenders need to show compliance with the RFS mandate to the EPA. This is reflected in ethanol RIN prices, which have surged to the highest levels since the peak in March earlier this year. Higher RIN prices could dissuade refiners from producing finished gasoline, and instead, would incentivize them to send more of the gasoline internationally to minimize their gasoline production with mandated RIN compliance. This gasoline would likely be sent as motor gasoline blending components, which includes RBOB. In theory, this could also help tighten the US gasoline market, however, there are limited markets for this gasoline, so unless it is pricing at a significant discount to world prices, it may be difficult to push this gasoline out of the US market without sufficient demand pull.



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Guest Post: Government Is Out Of Control And Out Of Integrity

Some of us are old enough to remember when honor and truth mattered. Integrity and ethics drove behavior rather than “what can we get away with.” Unfortunately for society, that is no longer the case.



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Israel Allows 2 Egyptian Battalions In Sinai Amid Daily Militant Attacks

As the death count rises - last night's actions in Alexandria and Cairo appear to be more escalations by the pro-Mursi supporters - AFP reports that Israel has given Egypt the go-ahead to deploy two battalions to the Sinai to tackle militants in the sensitive region where deployments are restricted by treaty. The Egyptian army is preparing to go on the offensive against Islamist militants in the Sinai who have escalated attacks since the 'coup' on July 3. Over the past two weeks, militants have launched almost daily attacks on troops and police in the peninsula, killing several members of the security forces and two Egyptian Christians. A senior Egyptian military official confirmed that the army "will carry out an operation" in the Sinai, without giving further details.



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Dianne Feinstein's Justification For The NSA's Domestic Espionage Programs

"As Chairman of the Senate Intelligence Committee, I can tell you that I believe the oversight we have conducted is strong and effective and I am doing my level best to get more information declassified. Please know that it is equally frustrating to me, as it is to you, that I cannot provide more detail on the value these programs provide and the strict limitations placed on how this information is used. I take serious my responsibility to make sure intelligence programs are effective, but I work equally hard to ensure that intelligence activities strictly comply with the Constitution and our laws and protect Americans’ privacy rights."



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