"They Don't Want To Get Burned Again" - Oil ETF Sees Biggest Outflows In 6 Years

"The oil rebound has run out of gas and now you are seeing nervous investors with itchy trigger fingers bailing out of USO," notes Bloomberg, as the biggest US ETF that tracks oil is heading for the largest two-month outflow in six years, raising concern that crude’s 30% rally may stall. As BNP points out, "we do not think that the bulls have enough supporting fundamental factors to make a case for a higher oil price," and judging by the mass exodus from USO, as Bloomberg concludes, knife-catching 'investors' "don’t want to get burned by another drop in oil."

Margin Debt Breaks Out: Hits New Record 50% Higher Than Last Bubble Peak

For those who still cling on to margin debt as indicative of anything, the latest NYSE report should provide some comfort: finally the long-awaited breakout in participation has arrived, and after stagnating for over a year, investors - mostly retail - are once again scrambling to buy stocks on margin, i.e., using debt, and as of April 30, the amount of margin debt just hit a new all time high of $507 billion, $30 billion more than the month before, and nearly 50% higher than the last bubble peak reached in October 2007.

Inaccurate Statistics And The Threat To Bonds

Statistics have become very misleading: in particular we are being badly misled into believing that the US is teetering on the edge of price deflation, because the US official rate of inflation is barely positive, a level that US bonds and therefore all other financial markets have priced in without accepting it is actually significantly higher.

IRS Admits Refunding Billions On Fake Tax Returns

Just hours after being force to admit that they were hacked (by Russians apparently), an inspector general's report shows that The IRS has rather remarkably continued to pay refunds on hundreds of thousands of fraudulent tax returns in recent years, and sent dozens of checks to the same addresses, including in Eastern Europe and elsewhere. While some progress has been made, $2.3 billion of real US taxpayer's money was wrongfully refunded to fake US taxpayers... but with this new cyber-attack, we suspect that number will soar.

WTI Crude Continues To Soar As Oil Rig Count Decline Re-Accelerates

With production soaring by the most in almost 2 years, the rig count declines (or additions) appear to have become noise but following last week's single oil rig decline but this week's re-acceleration of declines is rather notable. Total rigs declined 10 to 875 and oil rigs declined 13 to 646 (the biggest weekly drop in a month). Crude prices had soared into the rig count data (despite the record production in Russia, OPEC's promise to keep production at highs, US production surging, and economic growth slumping) and kept going after.

3 Things: Oil Trouble

While it is likely oil prices could get a bit of a bump from a decline in the U.S. dollar, ultimately it will come down to the fundamentals longer term. It is quite clear that the speculative rise in oil prices due to the "fracking miracle" has come to its inglorious, but expected conclusion. What is interesting is that most have not figured out that the same thing will occur with the artificially driven surge in financial markets as well. It is quite apparent the some lessons are simply never learned.

De-Dollarization Du Jour: Russia Backs BRICS Alternative To SWIFT

Russia is moving to undercut a critical financial communications link by creating an alternative system backed by the world's rising EM powerhouses who are set to officially launch their own development bank when they convene in July. At the same time, Moscow will consider cementing its economic ties with regional allies via the establishment of a currency bloc.

GDP Report Confirms Global Trade Is Crashing, And Why That Is Good News For Some

We did not actually need confirmation that global trade is slowing to a crawl (and has in fact reversed): after all, we have been showing just that for the past year, most recently earlier this week but it is important to note that in today's negative GDP print, it was net trade (exports less imports) that subtracted -1.9% from the final GDP print, driven by a -1.03% annualized drop in exports. This was the biggest hit to US trade since thegreat financial crisis.

UMich Consumer Sentiment Slumps To 6-Month Lows, Current Conditions Tumble

Following the collapse in Gallup's consumer confidence and Bloomberg's Consumer Comfort, UMich Consumer Senitment printed 90.7 (against expectations of a rise to 89.5 from 95.9). With May's preliminary print the biggest miss in 17 months, this final drop leaves Consumer Sentiment at its lowest since November 2014. Hope dropped from 88.8 to 84.2 but it was the collapse in Current conditions - which fell from 107 to 100.8 - that crushed the headline. This is the biggest plunge in current conditions since Summer 2011 (the US debt downgrade). Business expectations plunged to 8-month lows, employment expectations tumbled... but the number who think it's a good time to buy a house rose.

 

Chicago PMI Bounce Is Dead, Crashes Back Near 6 Year Lows

Following Milwaukee ISM's plunge to 15-month lows this morning with a plunge in new orders (missing for 4 of last 5 months), Chicago PMI printed a disappointing 46.2 (against expectations of a slight rise to 53.0 from 52.3 last month) - lower than the lowest economist estimate. After last month's modest (dead-cat) bounce back from winter's collapse to 6 year lows, this re-collapse is hardly the kind of Q2-recovery-reinforcing data the mainstream wants. With the level now back at the same when Lehman hit, New Orders, Production, and Employment all contracted in May.

Is The Oil Glut Real?

The age of propaganda is now upon us; where perception trumps the truth, until that is, the house of cards burns and falls, which it always does. With such blatant data manipulation going on, why shouldn’t we question the extent of stated “glut” in oil? The longer perception is distorted to create a false reality, the worse things will get in the end. We saw this before in 1999/2000 with the internet bubble and in 2008/2009 with the housing bubble, and it will not end well. If producers are dumb enough to get roped in to turning the spigot on when oil does rise (just as they appear to have done this morning) then, once again, prices won’t hold.

How Japan's Unemployment Rate Dropped Even As 280,000 People Lost Their Jobs

Yesterday Japan amazed everyone when it reported that its unemployment rate had dropped yet again, this time to 3.3%, the lowest since April 1997. The paradox is that while the number of Japan's unemployed dropped by 20,000, the number of those employed plunged by 280,000! Or as Goldman calls, it "growth in jobholders looks to have peaked amid a lack of recovery momentum in the economy"