This Is Not Going As Planned: Iraq Prime Minister Defies US, Accuses Saudi Arabia Of "Genocide"

Shortly after the US revealed that, in addition to aircraft carriers and amphibious assault ships it was also sending a few hundred "special forces" on the ground in Iraq, contrary to what Obama had stated previously, Washington made quite clear it wants Prime Minister Nuri al-Maliki to embrace Sunni politicians as a condition of U.S. support to fight a lightning advance by forces from the Islamic State of Iraq and the Levant. Then something unexpected happened: Iraq's Shi'ite rulers defied Western calls on Tuesday to reach out to Sunnis to defuse the uprising in the north of the country, declaring a boycott of Iraq's main Sunni political bloc and accusing Sunni power Saudi Arabia of promoting "genocide."

Facing Extinction, Hedge Funds Go All In: Take Net Assets To All Time High, Cash To Record Low

Now, for the first time, we have empirical proof that hedge funds are indeed on the verge of extinction. In its hedge fund quarterly note (which it clearly ripped off from Goldman), Bank of America has concluded what we said in the beginning of the decade: "Hedge Funds are less attractive post the financial crisis with lower alpha and less diversification benefits." Or, in other words, hedge funds (for the most part: this excludes those extortionists also known as activists who successfully bully management teams into levering up in order to buyback record amounts of stock, in the process burying their companies and employers when the next downturn arrives) no longer provide a service commensurate to their astronomical fees.

"Since 9/11, Everything About The Status Quo's Decision-Making Has Been Irrational And Dangerous"

The world is a very complicated place, and the Middle East is a particularly difficult region to try to get your head around. Between decades of colonialism, gigantic oil reserves, governments that are essentially feudal kingdoms, and the never-ending and always shifting Western government propaganda that often changes the targets of demonization on a whim, it’s no wonder people are so confused. The following provides a perspective based on what we have seen so far, and more importantly, ask readers to ask their own set of questions. What is happening is very bad, and it is the direct result of the idiotic children calling the foreign policy shots in Washington D.C. Ever since 9/11, everything about the status quo’s decision making has been irrational and dangerous.

The Only Chart You Need Ahead Of Tomorrow's FOMC Statement

Tomorrow will bring the word from on high with regard the great-and-powerful Fed's forecasts, dot-plots, and money-printing-replacing-forward-guidance. While one must 'never' question the PhDs, or fight the Fed (unless they say "sell" or "complacent"), we thought the following chart of their success at "forward guidance" should help investors with their allocation of 'faith' tomorrow...

The Most Destructive Presidencies In U.S. History: George W. Bush & Barack H. Obama

The Bush and Obama presidencies have effectively dismantled the rule of law and the Constitution by invoking essentially unlimited executive powers in the name of "national security." After 13.5 years, there is more than enough evidence for reasonable people to conclude that the presidencies of George W. Bush and Barack H. Obama are easily the most destructive in U.S. history. The Big Lie is that this destruction of the foundations of the rule of law and civil liberties is for our own good: if the President and the National Security State don't grab all these powers and deprive you of your constitutional rights, bad guys will destroy the nation. This is of course the same old tired justification used by dictators and despots everywhere, and it is always a lie.

Even The Feds Admit Minimum Wages Cause Unemployment

Advocates of minimum wage often base their support for the measure on ethical grounds, claiming that all workers deserve a degree of compensation regardless of their productivity. But a little know exemption (called 14(c)) allowing employers to pay certain staff below minimum wage, begs a question. If people with disabilities are exempt from minimum wage because their earning capacity is impaired and finding employment might otherwise be impossible, why don’t people without disabilities whose earning capacity is equally low also qualify for an exemption?

Accelerating Taper? No Better Time Than The Present

The market is highly confident that it has a good handle on tomorrow’s FOMC meeting, despite the fact that several factors will require modification.  There is high conviction that the Fed will not surprise the market, but rather take a “steady as she goes” approach that delivers a market consensus outcome.  The reasons for this view are obvious and logical; however, such complacency breeds risk as well as opportunity, because the arguments for accelerating tapering to $15 billion (per month) are quite compelling.

Ukraine-Russia Near "Serious Conflict" Following Explosion In Largest European Gas Transit Pipeline

With 2 Russian TV journalists killed in recent days and on the heels of Russia's cutting off Ukraine's gas supply for non-payment, Interfax is reporting that:

*EXPLOSION ON UKRAINE GAS TRANSIT PIPELINE REPORTED: IFX
*INTERFAX CITES UKRAINE INTERIOR MINISTRY ON GAS PIPELINE BLAST

Witnesses say flames are reaching 200 metres high. Gazprom shares are tumbling on the news (as should European stocks) and Russia's Foreign Affairs Committee Chief Aleksei Pushkov warned relations between Ukraine and Russia have entered a new stage and are "moving closer towards a serious conflict."

FUBAR I: Chinese Food Imports Now Demand More Land Mass Than The Entire State Of California

Here’s the good news: 2013 was a record year for Chinese grain production. Here’s the not so good news: “Although the number is huge,” said Nie, “it still could not satisfy domestic consumer demand. In recent years, China’s food imports have been increasing. Agricultural product imports are roughly equivalent to the productive capacity of 47 million hectares of planted area.” To put this number in context, if you could cram together all the farmland and pasture that it takes to grow the food just being imported by China, the total area of this land mass would be larger than the entire state of California.  As nations become wealthier, it takes much more land per-capita to feed them. The absolute best case scenario is substantially higher food prices.

Stocks And Bond Yields Jump As Turbo Tuesday Strikes Again

Another Tuesday, another sell-off in bonds and rally in stocks. The hawkish inflation data this morning sparked stock weakness and bond weakness but while the latter saw yields keep pushing higher, the former rallied back extravagantly ignoring the dismal housing data - well why not, its Tuesday today and FOMC tomorrow. The Russell 2000 was the winner once again as traders embrace high beta as alpha (and financials outperformed (2s30s steepened for once). 10Y Treasuries saw yields jump the 2nd most in 2 months (with 7Y the worst performer +6.5bps). Gold, silver, and copper all rose notably after the inflation data but oil prices decided to waterfall lower having briefly reached unch for the week (as soon as POMO ended). "Most shorted" stocks were smashed higher today (+2%) enabling the early ramp and while a late-day selling scramble nearly rescued failure from success, VIX pressure was enough to save stocks' green track record.

Adding Insult To Injury, Argentina Is Downgraded By S&P: What Happens Next

As reported yesterday, The SCOTUS dealt a major blow to Argentina hopes it would avoid making payments on its "holdout" bonds when it enforced a lower-court ruling that said Argentina can't make payments on its restructured debt unless it also pays holdout hedge funds headed by Elliott Management, best known for briefly seizing an Argentina ship in late 2012. The immediate result was a major rout in the country's sovereign bonds, which also sent Argentina CDS soaring. Sadly for Argentina, this would hardly be the end of it, and about an hour ago, Standard & Poor added insult to injury and lowered its long-term foreign currency rating on Argentina to CCC- from CCC+ citing a "higher risk of default on the country's foreign currency debt." As a result, yesterday's drop in bonds has continued, if at a more moderate pace, and the country's USD bond due 2024 hav continued to sink in intraday trading.  So what is next for the cash-strapped Latin American country for which the road ahead is suddenly quite "challenging" and default appears increasing like the only way out? For the answer we go to Citi's Jeffrey Williams who has laid out the five most likely developments.

Lest We Forget, It's Tuesday

With an hour left in the trading day and stocks surging impressively on absolutely no positive catalyst whatsoever (hawkish inflation, dismal housing data, Baghdad under attack, Ukraine terrorism) apart from higher bond yields, we thought a gentle reminder of what day of the week it is would help those looking for some sanity in the entirely rational "markets" that are not only unrigged by HFT but are also unrigged by massive insider trading...

Is Charlie Rangel Next?

In light of the stunning upset Dave Brat just pulled off against House Majority Leader Eric Cantor earlier this week, many are asking the question as to whether or not we are seeing a genuine political shift against the incredibly corrupt status quo. One thing that is abundantly clear is that any candidate with strong ties to Wall Street will be attacked like a piñata. While the mainstream media likes to talk nonsense about how Brat won because of his opposition to immigration reform, it appears the opposite is true. His winning issue was actually crony capitalism and Wall Street theft. Charlie Rangel has been a U.S. Representative. since 1971 and is currently the third longest serving Congressperson in America. He turned 84 years old this past Wednesday, and was at the center of a tax avoidance scandal several years ago. Of course, if a mere pleb like us were caught avoiding taxes we’d likely face harsh consequences. However, for a crony politician like Charlie Rangel all is forgiven and is allowed to continue to “represent” his constituents... his primary is June 24th.

US Captures The Banghazi Killings Mastermind (And Scapegoat): Meet Ahmed Abu Khatallah

With Hillary Clinton still plagued by relentless confrontations about her role in the Benghazi fiasco, which apparently are "making a difference", and certainly distracting from Obama's otherwise impeccable domestic (and foreign) reign, it was about time the US finally exposed a much more "appropriate" scapegoat for the public anger surrounding the events in Libya on September 11, 2011. Which is precisely what it did earlier today, when it was revealed not only who it believes the "mastermind" of the Benghazi attack is, but that the person in question, Ahmed Khatallah, had been captured.

President Obama To Explain 'Everything' - Live Feed

Quite frankly where do you start? We are sure there will be congratulations for the capture of the Benghazi ringleader (an interestingly timed distraction) but what the President will be asked (if we have a press corps) are: why Iraq wasn't his fault, how 275 boots on the ground are not really boots on the ground, will the US partner with Iran to 'fix' Iraq, and what about new reports of Syria using chlorine gas? Not to mention lost IRS emails, the VA debacle, government-sponsored civilian deaths in GM cars, and of course, how Seattle raising minimum wages will increase jobs?