Developed Market Bond Yields Crash To Record Lows

In the last year, developed market bond yields have been cut in half with the last 2 days seeing a safe-haven flight that crashed yields to a new record low. With UK Gilts 10Y under 1% for the first time, Bunds crashing to record lows, Treasuries back below 1.50%, and JGBs smashed -22bps. With peripheral bond risk spiking and default risk surging, amid ratings downgrades, as Bloomberg's Mark Cudmore notes, "gilts may prove worthy of their name, offering a superficial coating of reward that masks significant threat."

Merkel Expects Article 50 Notification "After Certain Period" But Understands "A Period Of Analysis"

Over the weekend we reported that a key tension had emerged in Europe where on one hand the EU was pressing the UK for a quick and clinical divorce, while Merkel claimed there is no need to rush. It appears that Merkel has, as expectedly, won this modest disagreement with her Brussels subordinates. Moments ago, Merkel spoke, and in continuing her party line said that she understands Britain may need a "certain amount of time" to begin Brexit negotiations

Key Events In The Coming Week: All About Brexit

With global markets gyrating on every piece of news surrounding the Brexit drama, what’s the timetable for UK-related (and all other macro) events this week and beyond?

Soros Suffers Major Loss On Long Pound Trade Ahead Of Brexit

It is somewhat ironic that the man who made a $1.5 billion profit on Black Wednesday in 1992 when he bet against the pound sterling ahead of the UK exit from the ERM would be the same one to suffer major losses on the same currency 24 years later.  According to Bloomberg, Soros was long the pound before Britain’s vote to leave the European Union on Friday, and didn’t “speculate against sterling while he was arguing for Britain to remain,” a spokesman said in an e-mailed statement Monday. In other words, Soros did put his money where his Op-Ed was.

Frontrunning: June 27

  • After ‘Brexit’ Vote, Europe’s Leaders Debate Timing of U.K.’s Departure (WSJ)
  • Pound Slumps, Banks Tumble on Brexit Fallout; Bonds Extend Gains (BBG)
  • To Brexit or Regrexit? A dis-United Kingdom ponders turmoil of EU divorce (Reuters)
  • ‘Brexit’ Sparks Political Turmoil Across U.K. (WSJ)
  • 10 ways to leave EU lover; scenarios for Brexit (Reuters)
  • The $100 Trillion Bond Market’s Got Bigger Concerns Than Brexit (BBG)

UK Chancellor Osborne Breaks Silence, Fails To Calm Markets; Says In No Rush To Trigger Article 50

While the global market eagerly awaits outgoing UK PM David Cameron's address to Parliament on Monday after a weekend of political turmoil that left Britain looking rudderless following the shock vote to leave the European Union, this morning Chancellor George Osborne made his first statement since the EU referendum in a bid to calm the turmoil in financial markets that has followed the UK’s vote to leave the EU last Thursday.

European Stocks, US Futures Extend Slide On UK Chaos, Pound Carnage

With global asset correlations once again approaching 1, overnight stocks have been trading in broadly "risk off" mode, following every twist of pound sterling and the rapidly deteriorating British financial situation as "chaos infects" virtually all markets, from China, to European banks, to US equity futures.  As a result of ongoing aftershocks from the Brexit vote, coupled with the sudden political chaos in UK politics, where both parties now seem in disarray, with the pound has extended its selloff to a fresh 31-year low dropping below the Friday lows while European equities are dropping to levels last seen in February.

Pound Plummets To New Lows; 10Y Gilts Slide Under 1%; British Banks Halted After Crashing

Things are going from bad to worse for the UK. "We’ve seen so many developments around Brexit over the weekend since the FTSE closed and things are now looking even more concerning," Angus Nicholson of IG Ltd., said. "It’s hard to have any idea about where fair value for the pound should be when you look at the fact that Scotland and Northern Ireland could no longer be part of the U.K. within the next year or two."

Boris Johnson Emerges, Explains What "The Only Change" As A Result Of Brexit Will Be

" The only change – and it will not come in any great rush – is that the UK will extricate itself from the EU’s extraordinary and opaque system of legislation: the vast and growing corpus of law enacted by a European Court of Justice from which there can be no appeal. This will bring not threats, but golden opportunities for this country – to pass laws and set taxes according to the needs of the UK."

Why The Vast Majority Of Analysts Were Caught With Their Pants Down On Brexit

"If all an analyst does is track equities and sometimes commodities, they are never going to grasp what is happening in the economy.  Our financial system is not based entirely on numbers and graphs; it is a sociopolitical apparatus.  Political and social developments can indeed signal what might happen in stocks and on mainstreet.  The relations are there, but they are often indirect.  In 2016, EVERYTHING is snowballing with tension.  It was only a matter of time before something snapped."

"Frack Master" Busted For Blowing Investor Cash On "Whore Card"

Texas businessman Chris Faulkner charmed hundreds of investors and major media companies into believing he had extensive experience in energy markets, but, as Bloomberg reports, it turns out the self-proclaimed "frack master" had none and that at least $30 million he raised was spent on strippers, escorts, lavish vacations and other personal expenses.

Understanding Brexit: The Powerless Press Their Thumb In The Eye Of The Power Elite

Will Brexit hurt the classes that did not directly benefit from E.U. membership? Perhaps. Perhaps it was not in their self-interest to vote for Brexit. But the immeasurable pleasure in depriving the Power Elite of their "democracy" legitimacy was worth any potential sacrifice. The sense of having a real say, and possessing actual agency, is very empowering, and very rare, for members of the lower-middle class and the working class today.

How The Pentagon Is Preparing For A Tank War With Russia

“What’s necessary is political accommodation, is what needs to happen, if we don’t conduct operations and plan campaigns in a way that gets to the political accommodation,” he said. “The most important activity will be to broker political ceasefires and understandings.” Sometimes that happens at the end of a tank gun...