Watch As Ukraine Helicopter With 14 Troops On Board Is Shot Down

Events in Ukraine may have been moved to the backburner because not only are they not impacting US equities but have somehow managed to push Russian stocks to pre-sanction highs, but that does not mean that there is any de-escalation in the self-proclaimed eastern regions of Donetsk and Slavyansk where fighting between pro-Russian groups and Kiev army rages on. The latest incident took place a little over an hour ago when Pro-Russian rebels in eastern Ukraine shot down a military helicopter near Sloviansk, killing 14 people, the country's outgoing president says. This attack took place following a weekend of heavy fighting in Donetsk following a push against "terrorists" by the new president that left many rebel soldiers dead.  The helicopter was hit during heavy fighting between Sloviansk and Kramatorsk on Thursday after it had dropped off troops at a military base, reports said.

Frontrunning: May 29

  • Snowden: 'no relationship' with Russian government (Reuters)
  • Bond Surge Worldwide Drives Index Yield to One-Year Low (BBG)
  • Shares flirt with record highs on ECB easing bets (Reuters)
  • Goldman Shuns Bonds Pimco’s Gross Favors in ‘New Neutral’  (BBG)
  • Porn may be messing with your head (Reuters)
  • Dish to Become Largest Company to Accept Bitcoin (AP)
  • To Make a Killing on Wall Street, Start Meditating (BBG)
  • Apple to get Beats, music mogul Iovine for $3 billion (Reuters)
  • Fink Says Leveraged ETFs May ‘Blow Up’ Industry  (BBG)

Buying Of Bonds And Stocks Continues In Event-Free Overnight Session

The complete implosion in volume and vol, not to mention bond yields continues, and appears to have spilled over into events newsflow where overnight virtually nothing happened, or at least such is the algos' complete disregard for any real time headlines that as bond yields dropped to fresh record lows in many countries and the US 10Y sliding to a 2.3% handle, confused US equity futures have recouped almost all their losses from yesterday despite a USDJPY carry trade which has once again dropped to the 101.5 level, and are set for new record highs. Perhaps they are just waiting for today's downward revision in Q1 GDP to a negative print before blasting off on their way to Jeremy Grantham's 2,200 bubble peak after which Bernanke's Frankenstein market will finally, mercifully die.

The Middle Class Will Die Within 30 Years Leaving "A Wealthy Elite & Sprawling Proletariat"

If we continue down this path of ignorance, we will be left with a "tiny elite and a huge sprawling proletariat" who have no chance of "clawing their way out of a hand-to-mouth existence," is the loud and clear message from UK government advisor David Boyle. As The Telegraph reports, Boyle cautions, "we won't own our own homes, we won't be able to afford it," adding that "we cheerled the rise of property prices not realising that it would destroy, if not our own lives, but the lives of our children." His conclusion, "the middle classes have to wake up to prevent it happening and to create a political movement that will do it."

Snowden Says "Stranded In Russia By State Department"; Kerry Blasts "Man-Up And Come Back To US"

This evening's interview between Edward Snowden and NBC's Brian Williams is already stirring up controversy. In one excerpt, Snowden blames the State Department for "stranding him" in Russia, saying he "never intended" to wind up there. John Kerry has been quick to react to this "For a supposedly smart guy, that’s a pretty dumb answer, frankly," Kerry said. "If Mr. Snowden wants to come back to the United States today, we'll have him on a flight today." In an interview with Chuck Todd on MSNBC, Kerry called Snowden a "coward" and a "traitor," adding that "he should man up and come back to the United States," the secretary of state said. There is a live special at 11ET (below) after the televised interview.

Commuters Herded Like Cattle As China Escalates Its Own "War On Terror"

We have often said that while 9/11 was a horrible event, our collective response to it has been the real tragedy ( How I Remember September 11, 2001 post). A terrible event is no excuse to become such scared children that we would relinquish the basic freedoms our ancestors fought so hard to secure for us. The only people who really benefit from an expansion of the surveillance state and a loss of liberties are the rich and powerful. With China’s economy in free fall and increased violence occurring, it appears the leadership there is taking a page out of our post 9/11 playbook. This is what the commute looks like at train stations in Beijing...

 

Chart Of The Day: Global Youth Unemployment

We have some bad news... for Africa: according to the latest data released by the International Labor Organization, your youth unemployment problem is almost as bad as that of Europe.

Bacon Prices To Soar Even More: The Pig Diarrhea Virus Is Back For Round Two

The last time we looked at the rather unpalatable issue of soaring bacon prices back in March, it was the direct result of exploding, no pun intended, prices of lean hogs stricken by the aptly named porcine epidemic diarrhea (PED) virus, which killed up to 7 million pigs and pushed the price of pork and its derivatives to record highs. We have bad news: according to Reuters an Indiana farm has become the first to confirm publicly it suffered a second outbreak of a deadly pig virus, fueling concerns that a disease that has wiped out 10 percent of the U.S. hog population will be harder to contain than producers and veterinarians expected. That's right, the PEDv, aka pig diarrhea bug, is back, and this time it may have mutated.

Japanese Retail Sales Collapse By Most On Record

Given the pre-tax-hike surge, the oh-so-smart economists around the world were expecting some give-back from dragged-forward demand but the 13.7% MoM decline missed expectations by 2 percentage points. This was the largest MoM decline on record. Talking heads are already blaming the tax hike (but they knew all about it?) and year-over-year was just as dismal (and less immediately prone to events) as it fell by the most since the 2011 Tsunami. Bad news (the worst) is good news though right? Well no - USDJPY is down as is Nikkei as remember, Japanese inflation pressures are building and Kuroda has pushed off any actions from the BoJ for now.

Market Timing With Dennis Gartman: "The Market Will Stop When It Stops, Not A Moment Before"

Renowned for something, Dennis Gartman has outdone himself once again (again). After explaining that bonds are rallying on pension fund rebalancing but stocks should not be lower and shorting bonds never works; the bearded market-timing philosopher gives a glimpse of the kind of insight that can only be purchased for $29.95: "the market will stop when it stops; not a moment before."

Things That May You Go Hmmm... Like Spamazon and Flutter

During the first internet boom, the business model of South Park's Underpants Gnomes was commonplace, as scores of companies flooded the marketplace, sustained purely by the promise of future profits that would somehow magically appear. As Grant Williams scoffs in his most recent letter, it was the corporate embodiment of George Costanza’s “yada, yada, yada”: “First we build a company... yada, yada, yada... we make billions.” Of course, most of these companies went the way of the dodo; but remarkably, a mere 14 years after the bursting of the original internet bubble, there are signs of what Yogi Berra so beautifully referred to as “déjà vu all over again” - signs which some real heavyweight financial minds have recently highlighted...

"I've Been Investing Since January & I've Never Seen Anything Like It"

“I don’t know what to say. I’ve been investing since January and I’ve never seen anything like it.” – Unnamed Hong Kong housewife during the Asian financial crisis of 1997/8.

What follows is a continued personal perspective on some of the challenges facing today’s investor...

NYPD Prepares To Use Drones As CA License Plate Readers Stir Controversy

One of the many civil liberties related themes we have focused on over the past several years has to do with how emerging technologies can pose a threat, first to our basic 4th Amendment rights, and then ultimately to freedom itself. Two of the most high profile technologies in this regard, and which have extremely high potential for abuse, are license plate readers and drones.

America's Obesity Epidemic Hits The Military: 1 in 5 Recruits "Too Fat To Fight"

Students consume almost 400 billion junk food calories at school per year, equal to almost 2 billion candy bars and while the epidemic of childhood obesity is not 'news' per se - for one big employer in America, it is a major problem. As Bloomberg Businessweek reports, the number one reason people can’t join the military is that they’re overweight or obese, and "still too fat to fight." The problem is large for active service members also with over 51% overweight (though better than the civilian population) as the DoD alone spends an estimated $1 billion per year for medical care associated with "weight-related health problems."

Market Breaks Out - Is This The Mania Phase?

While the current bull market remains "bulletproof" at the moment to geopolitical events, technical deterioration, overbought conditions and extremely complacent conditions; it is worth remembering what was being said during the third phase of the previous two bull markets...

Chicago Considers Boosting Minimum Wage To $15/Hour

If there is one thing that the militarized warzone with the weapons ban (and which makes east Ukraine look like a kindergarten) namely Chicago, did not need in order to fall further into social chaos and disarray, it is a new tidal wave of unemployment: people freshly without jobs who for lack of better options would likely join the daily survival of the fittest routine on the streets of the windy city. And a tidal wave of unemployment is precisely what Chicago is likely to get if, as a group of Chicago aldermen have proposed, the minimum wage in the nation's third-largest city is nearly doubled to $15 an hour. Why $15? Because according to recently striking McDonalds line cooks, it's only fair, and is the minimum pay that fast-food workers have sought during national protests.

What Happened The Last Time Bonds & Stocks Were So Disconnected?

Presented with little comment aside to note that bond shorts have not covered (in fact they added last week) and the last time we got this disconnected (with negative breadth in stocks and super low volatility) - things went south very quickly...

Shale Boom Goes Bust As Costs Soar

"Traditionally we’ve been a financially conservative company," explains one fracking company, warning that "we’ve become more leveraged than we historically have been and we’ve become uncomfortable with that." This is the growing message from a shale boom that, as Bloomberg reports, is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground. As everyone chases the dream, well counts have soared and production per well has tumbled. "The list of companies that are financially stressed is considerable," warns one analyst as shale debt has almost doubled over the last four years while revenue has gained just 5.6% "not everyone is going to survive. We’ve seen it before."

Natural Disasters Don't Increase Economic Growth

Hurricane season is nearly upon us, and every time a hurricane strikes, television and radio commentators and would-be economists are quick to proclaim the growth-boosting consequences of the vicissitudes of nature. Of course, if this were true, why wait for the next calamity? Let’s create one by bulldozing New York City and marvel at the growth-boosting activity engendered. Destroying homes, buildings, and capital equipment will undoubtedly help parts of the construction industry and possibly regional economies, but it is a mistake to conclude it will boost overall growth.