Empire Fed Hits 4 Year High Despite Tumble In Employee Index

It was the best of times, it was the worst of times. Empire Fed jumped to 19.28, notably better than the 15.00 expectation and reached highs not seen since June 2010, and up from the 19.01 last month. It doesn't get much better than that - even in the V-shaped recovery off the recession lows: if only sentiment surveys were the same as hard data - the US recovery would never be stronger. Alas, despite all this exuberant cycle high-ness - if only in the eyes of beholders, and certainly not in Q1 US GDP of -2.0%, the number of employees index tumbles from 20.88 to 10.75 and worse still the forward-looking index dropped after 3 months of gains.  However, the worst news, comes for those who continue to, incorrectly, predict a CapEx renaissance: The capital expenditures index fell for a second consecutive month, dropping to 11.8, and the lowest since February.

 

Russia Halts Gas Supplies To Ukraine

"Today, from 10:00 a.m. Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies ... Starting today, the Ukrainian company will only get the Russian gas it has paid for."

"Cluster Of Central Banks" Have Secretly Invested $29 Trillion In The Market

Another conspiracy "theory" becomes conspiracy "fact" as The FT reports "a cluster of central banking investors has become major players on world equity markets." The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which "could potentially contribute to overheated asset prices." China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world's banks try to diversify themselves and "counters the monopoly power of the dollar." Which leaves us wondering where are the central bank 13Fs?

Frontrunning: June 16

  • Iraq Army Tries to Roll Back Sunni Militants’ Advance (BBG)
  • Starbucks to Subsidize Workers' Online Degrees (WSJ)
  • ‘Bitcoin Jesus’ Calls Rich to Tax-Free Tropical Paradise (BBG)
  • Medtronic Is Biggest Firm Yet to Renounce U.S. Tax Status (BBG), Medtronic to buy Covidien for $42.9 billion, rebase in Ireland (Reuters)
  • Oil Topping $116 Seen Possible as Iraq Conflict Widens (BBG)
  • Putin Seeks Paris Landmark as Hollande’s Russia Ties Defy Obama (BBG)
  • GM Says It Has a Shield From Some Liability (WSJ)
  • BOJ’s Bond Paralysis Seen Spreading Across Markets (BBG)

Stocks Fail To Soar Despite Global Geopolitical Risk Contagion

It's one of those days: despite the Iraq conflict spilling out of control and about to involve US drones and warplanes, despite China's naval conflict with Vietnam over an oil rig in disputed territory set to go "kinetic" at any moment, despite the Ukraine civil war having its deadliest day yet this weekend and adding insult to injury Russia halting gas supplies to Ukraine (letting Kiev and Berlin fight for the scraps), despite crude prices rising ever higher and about to unleash a "discretionary income" shockwave on America's summertime motorists, despite yet another massive tax inversion M&A deal in which the buyer has made abundantly clear its stock is overvalued and will be used as the purchasing currency, stocks are inexplicably not at all time highs this morning.

ISIS Jihadists Release Shocking Photos Documenting Slaying Of 1700 Iraqi Soldiers

ISIS militants boasted on Twitter that they had executed 1,700 Iraqi government soldiers, posting gruesome photos to support their claim. If the claim is true, it would be the worst mass atrocity in either Syria or Iraq in recent years, surpassing even the chemical weapons attacks in the Syrian suburbs of Damascus last year, which killed 1,400 people and were attributed to the Syrian government.

Convoys Of Russian Tanks Heading For Ukraine Border Ahead Of 2amET Deadline

As the 'negotiations' between Europe, Ukraine, and Russia were taking place this afternoon, technically unconfirmed reports of convoys of Russian military vehicles moving towards the Ukraine border were growing. As the 2amET gas-cut-off deadline looms, it appears Putin is mobilizing a significant force ahead of what will likely mean retaliatory actions by either Ukraine military forces or Ukraine militants. As InfoResist reports, up to 200 units are moving towards Ukraine from Kaluga and in the Rostov region, Russia.

Meet The "Minerva Research Initiative" - The Pentagon's Preparation For "Mass Civil Breakdown"

About a month ago we showed photos of the Chinese police engaged in a drill designed to crush a "working class insurrection", in which the police did precisely what would be required to end a middle class rebellion. It made us wonder: what does China know that the US doesn't. As it turns out, nothing. Because long before China was practicing counter-riot ops using rubber bullets, all the way back in 2008, the US Department of Defense was conducting studies on the dynamics of civil unrest, and how the US military might best respond. The name of the project: "Minerva Research Initiative" and its role is to " “improve DoD’s basic understanding of the social, cultural, behavioral and political forces that shape regions of the world of strategic importance to the U.S." The premise behind Minerva is simple: study how violent political overthrow, aka mass civil breakdown, happens in the day and age of social networks, and be prepared to counteract it - by "targeting peaceful activities and protest movements" - when it finally reaches US shores.

El Niño Is Coming: Here's What To Expect

Idiot central-planner and economist "justifications" for always being wrong aside, the reality is that El Nino is on its way even if the slowdown in the economy will be due to every other factor except the weather (start with the Fed) which just so happens is a "recurring" event. So upcoming GDP collapse (that nobody could have foreseen earlier, nobody, certainly not the Fed) notwithstanding, here is what one should really expect as a result of the unique weather formation which whose temperature and precipitation impacts across the United States occur during the cold half of the year, from October through March.

Guest Post: The Great Separation

What do Scottish independence, UKIP, self-employment, cryptocurrencies and the black economy have in common? The neo-liberal establishment wont fix itself, so for those fed up with banging their heads against policy brickwalls, there’s only one direction. Separate.

Russia Rejects Ukraine's Gas Deal; 2am Eastern Deadline Looms

As suspected given the huge distance between the bid and offer, the EU-brokered Ukraine-Russia gas deal has failed:

  • *GAZPROM CEO MILLER LEAVES SITE OF UKRAINE GAS TALKS, SAYS TALKS ENDED, DEADLINE WON'T CHANGE
  • *RUSSIA REJECTED EU'S GAS PROPOSAL: OETTINGER; UKRAINE WAS READY TO ACCEPT EU PROPOSAL ($300-$385)

Gazprom seeks $1.95bn from Ukraine for past shipments of gas by the 10am Moscow time deadline (2amET) and will continue to seek upfront payments for any further shipments.

Chart Of The Day: All The President's Golf Games

With the president stuck schmoozing with donors, house hunting, and always improving his short game (like right now), while the US is preparing to launch the third war of Iraqi liberation  (from the same Al Qaeda Jihadists the US is arming across the border in Syria), the question on everyone's mind is a simple one: whose golf game is better: Obama's or Dubya's. The answer, courtesy of Mark Knoller, is a no contest.

US Orders Partial Evacuation Of Baghdad Embassy As Aircraft Carrier Arrives In Gulf

Earlier today we reported that despite, or rather due to, all the confusing propaganda from either side, it was not exactly clear whether and how far away from Baghdad the ISIS offensive had been halted (if at all). It appears the confusion has also impacted none other than the US State Department, which moments ago announced it would evacuate an "substantial number" of the whopping 5,500 staff situated in the US embassy in Baghdad on the banks of the Tigris river, staff which incidentally is the largest of any US embassy. Additionally, the State Dept said that some additional U.S. govt security personnel will be added to Baghdad staff as result of instability and violence in certain areas of Iraq.

In Explosive Scandal, Head Of Polish Central Bank Recorded Promising Assistance To Government If Minister Fired

Yesterday, Polish magazine Wprost released a recording of a meeting between Interior Minister Bartlomiej Sienkiewicz and central bank Governor Marek Belka which took place in a Warsaw restaurant in July 2013. In the recording, Belka told the minister he would be willing to help the government out of its economic troubles if the finance minister was fired. And there goes the myth of impartial, apolitical central banks...

Macro Hedge Funds Throw In The Towel, Boost Their Equity Exposure To Highest In Three Years

With the 2014 calendar nearly half way done, and the macro hedge fund community not only underperforming the S&P 500 for the 6th year in a row, but generating a negative return YTD, what is a macro hedge fund universe to do? Why lose all pretense of being sophisticated fundamental trend pickers and do what Bernanke and Yellen have been forcing everyone to do from day one: go all in stocks of course! According to JPM as of this moment there is no difference in the positioning of both traditional long/short hedge funds and macro funds, both of which have increased their equity exposure to the highest since May 2011!

Hillary Clinton, NATO, Yanukovich, Uranium: What Wiki-Leaked Cables Reveal About Ukraine's New President

While barely covered in the western media as a result of the curious blackout of recent developments in the Ukraine civil war, for nearly a month Ukraine has had a new president, 48 year old billionaire businessman, Petro Poroshenko. In order to cut through the fog, we decided to go straight to the source on what the US has to say about the country's new leader, who for now at least, appears to be in the good graces of both Putin and the US, namely the leaked Wikileaks cables. Readers will hardly be surprised to learn that he features quite prominently.

Congressman Asks NSA To Restore Two Years Of "Lost" Lois Lerner IRS Emails

Yesterday, the republican campaign to get to the bottom of IRS' targeting of conservative groups was dealt an absolutely idiotic blow when the IRS, in all seriousness, announced that it had lost two years worth of emails to and from the chief subject of the investigation: former agency official Lois Lerner.  What, however, was simply a bizarre, if idiotic, lie has just been taken to a whole new level of ridiculousness, when moments ago, representative Steve Stockman (R-Texas) announced he would request that the National Security Agency help in the hunt for missing emails to and from the IRS’s Lois Lerner, and recover two years worth of "lost" emails.

Guest Post: The Only Fruit "Leading From Behind" Produces Are Road Apples

The meme “leading from behind” is a fancy way of saying “playing not to lose.” Intellectually it sounds intriguing. The idea can be made to sound esoteric, while at the same time leaving room for multiple ways of defensive posturing when one begins to be questioned whether or not the strategy is either working, or not. You can see the fallacy of this meme play out in mirror form over, and over again across the world of sports. Many of us that understand winning or leading know all to well exactly what happened. They switched from leading and playing for the win to – playing to win by not losing their lead. It never works. Some of the greatest upsets in sports history result from exactly this type of strategy or philosophy. The only difference here is that in sports – it’s just a game. This strategy along with its tactics when applied to nations is far different. The visible results along with the myriad of unseen potential consequences are now becoming quite apparent for anyone willing to look.

New York Times Says "Lack Of Major Wars May Be Hurting Economic Growth"

Now that Q2 is not shaping up to be much better than Q1, other, mostly climatic, excuses have arisen: such as El Nino, the California drought, and even suggestions that, gasp, as a result of the Fed's endless meddling in the economy, the terminal growth rate of the world has been permanently lowered to 2% or lower. What is sadder for economists, even formerly respectable ones, is that overnight it was none other than Tyler Cowen who, writing in the New York Times, came up with yet another theory to explain the "continuing slowness of economic growth in high-income economies." In his own words: "An additional explanation of slow growth is now receiving attention, however. It is the persistence and expectation of peace." That's right - blame it on the lack of war!