Is Iran In Our Gun Sights Now?

"Who else wants a U.S. war with Iran, besides ISIS? Unfortunately, their number is legion: Saudis, Israelis, neocons and their think tanks, websites and magazines, hawks in both parties on Capitol Hill, democracy crusaders, and many in the Pentagon who want to deliver payback for what the Iranian-backed Shiite militias did to us in Iraq. President Trump is key."

El-Erian Exposes The Upside And Downside Of Liquidity-Driven Markets

"The markets' overall sense of 'goldilocks' - not too hot, not too cold - explains much of the gap between buoyant stock indexes and lagging economic and policy fundamentals...What remains more elusive, however, is confidence that this will end up at an enjoyable destination."

Congress’ Radical Plan To End Illegal Money

"Perhaps they may unwittingly do us all a favor and fail to raise the debt ceiling. Could the dopes in Congress hatch a more radical plan to put an end to the government’s illegal money? Only by accident..."

No More "Cash On The Sidelines": Private Client Cash Levels Drop To Record Low

According to the latest BofA flow show report, private client cash - i.e., high net worth individuals who still allocate capital to single-stocks and ETFs on a discretionary basis - is now at a record low, taking out the cash levels observed in the period just prior to the last market peak in 2007.

Money Supply Growth Drops To Lowest Since Lehman

Growth in the supply of US dollars fell again in May, this time to a 105-month low of 5.4 percent. The last time the money supply grew at a smaller rate was during September 2008 — at a rate of 5.2 percent.

Junk Bonds Are Finally Starting To Care About Oil

"The recent price action in the oil market and the stronger response of the HY Energy sector has prompted many market participants to question the ability of the broader HY market to continue to resist lower oil prices. In our view, the bar remains high for oil prices to become the main directional driver of HY spreads but the risk has risen."

Lavrov Scoffs At Western Media: "Trump-Putin May Have Met Multiple Times... In The Bathroom"

Headlines ripped across social media - 'the Russians admit that Trump and Putin may have met more than 3 times' - sparking an instant 'I told you so' from the 'left' proving the conspiracy of collusion is correct. However, we note that the source of this new story, Russian Foreign Minister Sergie Lavrov, compared these conversations to "children mingling at a kindergarten," making fun of an NBC reporter, adding "maybe they met in the toilet?"

Trader Tells 'New' Volatility-Sellers: "Come On In, The Water's Warm"

"My message to all those new quant fund vol sellers, come on in! The water’s warm. Glad to have your new supply keeping implieds low. Don’t worry, I am sure the returns of the next 8 years of commodity volatility selling will be just as good as the last 8 years of equity index volatility selling… Yeah, when didn’t chasing the previous decade’s best return strategy not work?"

Frontrunning: July 21

  • Euro surge to two-year high prompts stocks pause (Reuters)
  • Short Sellers Give Up as Stocks Run to New Records (WSJ)
  • U.S. toughens stance on foreign deals in blow to China's buying spree (Reuters)
  • Trump team seeks to control, block Mueller’s Russia investigation (WaPo)
  • Trump Would Set Off a Chain Reaction by Trying to Fire Mueller (BBG)

Trump Legal Shake Up: Kasowitz Out As Personal Attorney, Corrallo Resigns

There's been a shakeup in President Trump's legal team. According to CBS News White House correspondent Major Garrett, Marc Kasowitz is out as Mr. Trump's personal attorney, while Kasowitz's spokesman, Mark Corallo - who has had a rocky relationship with Trump in the past - has resigned.

Euro Surges To 2-Year High In "Bipolar" Draghi Reaction; Futures Flat

"Draghi tried to talk the Euro down, even going so far as to suggest that ECB’s quantitative easing could be increased and prolonged," said Swissquote Bank's Yann Quelenn. "But the currency markets were not buying Draghi’s line, and neither are we. Available bonds are too scarce, and turn to a taper is too clear to disguise."