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The Consequences Of $50 Oil

If U.S. shale stays competitive, it could trigger another round of production increases from Saudi Arabia, which is determined to do its utmost to hold on to market share even as it boasts of long-term plans to build an “oil-less” economy by 2030. The Saudi bottom line has been ravaged by years of low prices, generating huge budget deficits and debts to contractors (which the Saudi government will attempt to cover through IOUs). Nevertheless, Saudi Arabia remains uniquely positioned to weather such storms; should the price fall again, it is better-placed to retain market share than the high-cost producers in the U.S. and elsewhere.


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First Quarter GDP Revised Higher To 0.8%, Misses Expectations

Following the terrible initial Q1 GDP print of 0.5% released one month ago, there was some hope that following some subsequent favorable inventory and trade data, the number would be revised substantially higher, with the whisper estimate rising as high as 1% or more, above the consensus estimate of 0.9%. Moments ago the BEA reported that in its first revision of Q1 growth, the US economy grew at only 0.8% annualized, a modest rebound from the original GDP report, however still missing consensus estimates.


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"We Come To Mourn The Dead" - Obama Is First Sitting President To Visit Hiroshima, Offers No Apology

Ealier today, Barack Obama became the first sitting US president to visit the memorial of the American atomic bombings of Japan in Hiroshima, however without offering no apology for the attacks. The trip comes amid Japanese protests over alleged crimes committed by US troops stationed in Japan. "We have a shared responsibility to look directly in the eye of history. We must ask what we must do differently to curb such suffering again," Obama said in a speech at the memorial.


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Bitcoin Surges To 2016 Highs On Rising Chinese Demand; Decouples From Gold

Ever since last September, when we explained that as a result of China's crackdown on capital controls, the one clear winner (in addition to Vancouver real estate) would be bitcoin, the digital currency has more than doubled in dollar terms, rising from $230 and surging as high as $500 a few months later. Overnight bitcoin, which had traded in a stable range with little of its characteristic volatility in recent months, made its latest breakout, surging nearly 5% from a $440-level, to a fresh 2016 high of $480, and has since retracted the move modestly, trading at $475 at last check.


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Frontrunning: May 27

  • Oil prices ease from seven-month high to below $49 (Reuters)
  • Wall Street Waits for Yellen Before Taking Off for a Long Weekend (BBG)
  • Donald Trump Celebrates Clinching GOP Delegate Race (WSJ)
  • Trump vows to undo Obama's climate agenda in appeal to oil sector (Reuters)
  • Japan Fails in Bid to Have G-7 Warn of Global Crisis Risk (BBG)
  • Valeant Rejected Joint Takeover Approach From Takeda, TPG (WSJ)

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Gundlach Predicts Yellen Will Be Dovish Today; Is "Quite Sure" Oil Prices Are Going Down Again

With verious Fed presidents having whipping up the market into a hawkish frenzy in the past two weeks, leading to a dramatic repricing in summer rate hike odds with expectations for a July rate hike now over 50%, many can be "disappointed" by Yellen's speech today, at least according to Jeff Gundlach who said Yellen appears to be more cautious on raising interest rates and he expects her comments to be dovish again on Friday, when she is scheduled to speak at an event in Harvard-Radcliffe.


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All Eyes On Yellen: Global Markets Flat On Dreadful Volumes, Oil Slides

In a world where fundamentals don't matter, everyone's attention will be on Janet Yellen who speaks at 1:15pm today in Harvard, hoping to glean some more hints about the Fed's intentionas and next steps, including a possible rate hike in June or July. And with a long holiday in both the US and UK (US bond market closes at 2pm today), it is no surprise overnight trading volumes have been dreadful, helping keep global equities poised for the highest close in three weeks; this won't change unless Yellen says something that would disrupt the calm that’s settled over financial markets.


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First Photos Of US Soldiers In Syria Released

Following the propagandist double-speak gushing forth from the Obama administration over when a "boot on the ground" in Syria is a "boot on the ground," the following photographs via Agence France-Presse confirm US special operation forces in a rural village 40 miles from Raqqa. As The Guardian reports, the Pentagon press secretary, resisted commenting on the photographs and would only describe the US special operations forces’ mission in generic terms, despite the fact that these troops are at the frontline of fighting when President Obama assured America that forces are consistently behind the forward lines.


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It's Over: Even MSNBC Turns On Hillary - "Stop Lying, Stop Digging"

"It’s pretty remarkable," "Morning Joe" host Joe Scarborough said of Clinton’s response to the OIG watchdog report "I don’t understand why you put out a statement like that,” Scarborough added. "Stop lying, stop digging." The slam continued: “'I screwed up. I’m terribly sorry,'" he offered as alternate responses. "'I hope the American people will forgive me and I hope they will let us move on to the issues that matter.'”


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And Another Week Of Selling: "In 2016, Equity Funds Have Lost The Largest Ever Outflow For The Asset Class"

As BofA also put it: "Equities continued to experience outflows and lost $3.32bn (-0.1%) last week, their 4th consecutive decline. Year-to-date, equity funds have lost $58.6bn (-0.6%), the largest ever dollar outflow in any 22 week period for the asset class"


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Guest Post: Has The Pope Abandoned Europe To Islam?

In 2006, Pope Benedict XVI said what no Pope had ever dared to say -- that there is a link between violence and Islam. Ten years later, Pope Francis never calls those responsible for anti-Christian violence by name and never mentions the word "Islam." To scroll the list of Pope Francis's apostolic trips -- Brazil, South Korea, Albania, Turkey, Sri Lanka, Ecuador, Cuba, United States, Mexico, Kenya, Uganda, Philippines -- one could say that Europe is not exactly at the top of his agenda. The two previous pontiffs both fought for the cradle of Christendom. Pope Francis, on the contrary, simply ignores Europe, as if he already considers it lost.


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How Bad Are The US Computer Systems? An 8'' Floppy Disc Houses Nuclear Coordinate Data

If you thought that $80 billion a year would be a sufficient enough budget for the US government to systematically upgrade its computer systems, think again.


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The Looting Stage Of Capitalism Begins: Germany's Assault On The IMF

Greece is being destroyed by the EU that it so foolishly joined and trusted. The newspaper headlines are nothing but fluff that provide cover for the IMF to succumb to presssure and violate its own rules. The cover lets the IMF say that a (future unspecified) debt writedown will enable Greece to service the remainder of its debt and, therefore, the IMF can lend Greece the money to pay the private banks. To call the looting of a country and its people a “bailout” is Orwellian.  The brainwashing is so successful that even the media and politicians of looted Greece call the financial imperialism that Greece is suffering a “bailout.”


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This Is How Much Your Health Insurance Payment Is About To Jump By

For all those currently enrolled in healthcare plans administered in the following states, this is how much, on average, your plans will go up by.


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Beware What Washington Wishes For - Russia Is Ready For War

A case can be made that the Beltway – neocons and neoliberalcons alike - do not want a hot war with Russia. What they want, apart from racking in more cash for the Pentagon, is to raise the ante to such a high level that Moscow will back down - based on a rational cost analysis. Yet oil prices will inevitably rise later in 2016 – and under this scenario Washington is a loser. So we may see a raise of interest rates by the Fed (with all the money continuing to go to Wall Street) trying to reverse the scenario. Russia does not want – and does not need – war.. but The Aegis changes the game in the sense that it qualifies as a launch area for US missile defense.


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