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China Demonstrates "Sea Combat Ability" With Live Fire Drill Video

Unlike largely pacifist Japan, in China increasing militarism merely leads to a boost in "rally around the flag" morale, and greater patriotic support for the government. Which is probably also why China was eager to release at least one clip showcasing its latest naval "live fire" military capabilities, as shown on the recording below.



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Banks Squirm As Congress Moves To Cut The 6% Dividend Paid To Them By The Fed

Did you know that the Federal Reserve pays an annual 6% dividend to its shareholders, i.e., the member banks of the cartel? Must be nice, considering savers who had nothing to do with cratering the world economy, and failed to receive a taxpayer funded bailout, can barely earn 0.5% on their money. It’s also quite bizarre. How many other “public institutions” have private shareholders to whom they pay 6% risk free dividends? None, which once again highlights the point that the Federal Reserve is NOT a public institution working on behalf of the citizenry, but is rather a banking cartel designed to enriched and protect its member banks (as we saw on clear display in 2008). It appears that some members of Congress are now targeting the estimated $17 billion per year paid out by the Fed to its member banks via the highway-funding bill.



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This Is The Biggest Paradox Facing The Fed Ahead Of Its Rate Hike Decision

Here is the paradox as succinctly summarized by Deutsche Bank, which notes that the current -29% year-over-year drop in the CRB index implies YoY headline CPI inflation falling from 0.1% to -0.9% over the next couple of months, or just in time for the September or December FOMC meetings both proposed as the "lift off" date. This would be the largest year-over-year drop since September 2009 (-1.3%) and one of the lowest prints in modern history.



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VIX Vanquished To 12 Handle Ahead Of FOMC

Climbing the wall of complacency...



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Crude Surges After Surprise Inventory Draw, Biggest Production Decline Since 2013

Total US crude production slumped over 1.5% last week - the biggest decline since October 2013. Add to that a considerable inventory draw of over 4.2mm barrels (against expectations of a build)... and crude prices are surging.



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Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries

"How would US Treasury bulls in the private sector react if they knew in advance that the second largest owner of Treasuries, the PBOC, was a forced seller of Treasuries. Such compelled selling would be obvious before US markets opened each morning as downward pressure on the RMB exchange rate in Asia forced the PBOC to liquidate foreign currency assets to defend the fixed exchange rate. Would even Treasury bulls stand in the way of such a large and predictable liquidation? If they didn’t then the second phase of The Great Reset would come to pass and the decline of EM external deficits would force tighter monetary policy in both EM and DM."



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TWTR Twatted - Plunges 14%, Nears Record Lows

"That's what happens Larry when the smoke and mirrors clear..."



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Pending Home Sales Plunge Most Since 2013, Holdout Buyers Blamed

Following new home sales disappointment, pending home sales dropped 1.8% in June (missing expectations of a 0.9% rise) for the biggest drop sicne Dec 2013. After 5 months of gains, and with median prices at record highs, it appears affordability is crushing hopes of any sustained 'recovery' once again. Modest gains in the Northeast and West were offset by larger declines in the Midwest and South, but Larry Yun has an explanation, hold-out buyers are waiting for a better entry point (in other words - pent up demand is there). Did Chinese buyers just evaporate?



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Greek Bonds Tumble As Tsipras Threatens Snap Election

10 year Greek bond yields are spiking this morning (and prices therefore plunging) as trading actvity picks up in the dormant peripheral capital markets. The 2025s are downover 5pts from their last traded price back in late June with yields spiking back up toward 12.5%. This derisking comes after, as we detailed earlier, not only is the Greek economy collapsing but while Brussels is "satisfied with the smooth and constructive cooperation with the Greek authorities and that should allow us to progress as swiftly as possible," Greek PM Tsipras is threatening snap election as rebellion within 'his' party grows.



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ISIS "Ally" Turkey Seeks NATO Support As Two-Front "War" Escalates

As Turkey requests NATO support after launching strikes against both ISIS and PKK, question have arisen about Ankara's links to Islamic State and about the real aim of the country's "terror" crackdown.

"Erdogan is trying to achieve the result he failed to in the June 7 election in a political coup. That's the real aim of the steps taken now." "ISIS commanders told us to fear nothing at all because there was full cooperation with the Turks."



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A Veteran Trader Slams The Fed: "Savers Are The Patsies For Share Buybacks"

There will always be some "crisis" or excuse to do nothing. But the fact remains that the U.S. economy is not at zero interest rate health. Monetary policy is broken with the status quo. Unlimited and constant central bank participation in the markets is ultimately destructive, encourages dangerous risk taking (just buy every dip, nothing can go wrong,) and has become too much of an aphrodisiac for policy makers. Savers are being told you are the patsies for share buybacks.



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The Layoffs Return: Energy Giants Chevron, Saipem To Fire Over 10,000 Workers

Overnight, US energy major Chevron announced it will cut 1,500 jobs globally "as the company aims to reduce internal costs in multiple operating units and the corporate center." According to Rigzone, "the San Ramon, Calif.-based energy company will cut 950 positions in Houston, 500 positions in San Ramon and 50 positions internationally." But it's not just the US, because moments ago Italy's biggest oil and gas industry contractor Saipem announced that not only is it cutting its guidance, sending its stock plunging, but also reported that it plans to cut 8,800 workers by 2017.



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The Fate Of China's Monetary Policy Is In The Hoofs Of Pigs

It seems China's efforts to stabilize their economy stock market knows no bounds - nowhere better exemplified than the 5% spike in an hour last night after injecting $100bn into the sovereign (rescue) fund - and western observers applaud the efforts as if they are costlessly saving the world. However, there are costs to all this leveraged asset bubble creation (and maintenance) and, as China People's Daily reports, nowhere is that more evident than the surging price of pork (on if China's main CPI components). As Deutsche Bank warns, in the past 15 years, the PBoC has never cut interest rates when inflation was picking up (whether driven by food or more broad-based); so the fate of an 'easy money' inspired stock market bubble remains in the hands hoofs of pigs as the policy stance will be forced to turn from loosening to neutral in Q4 as inflation rises.



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It's Bounce Or Else For This Key Stock Market Gauge

This series reached an extremely skewed -462 yesterday (18 New Highs minus 480 New Lows). If this reading gets any worse, it will be one indication that the uptrend since 2009 is in jeopardy.



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Tsipras Threatens Snap Elections As Syriza Rebellion Threatens To Derail Bailout

With creditors now on the ground in Athens, and with a third prior actions vote in parliament due at the first of August, Greek PM Alexis Tsipras spoke out about the new bailout "deal", debt re-profiling, the referendum, party politics, and the possibility of early elections in an interview with Sto Kokkino radio station.  



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