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FDIC Sounds Alarm On Insolvent, "Zero Hedged" Oil & Gas Producers

"U.S. regulators are sounding the alarm about banks’ exposure to oil-and-gas producers, a move that could limit their ability to lend to companies battered by a yearlong slump in prices," WSJ reports, reinforcing the notion that North America's "zero hedged" O&G sector is in for a rough ride.



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The Fourth Turning – An Interview With Neil Howe

"...If the S&P500 were to come down by 50% look at the bright side. The Millennial generation can finally buy into America’s future at a good price. Look at what they are facing right now: very little return on their savings and very lofty prices that they have to pay to invest in their future.  So we often forget that these wrenching dislocating financial events, particularly for older generations, can create opportunities for the young, and often create space for something more durable for the times to be built. So I’ll just summarize it with Schumpeter’s phrase: creative destruction. That’s how I prefer to see what happens in a Fourth Turning."



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This Is What It Looks Like When Central Banks Lose Control

In the utopian world of US equities - where every dip is a buying opportunity and "The Fed's got your back," - it is blasphemous for anyone to suggest this state of affairs cannot go on forever is extreme. However, as China encountered an accelerated version of the farce that the US has experienced in the past few years, the same "The PBOC's got your back" mentality dominated every fundamental fact and central bank omnipotence was doctrine. That is until 2 weeks ago... when modest efforts to rein in exponentially-growing leverage pricked the new normal's narrative. Now every "save" by the government and every plunge protected is sold into by a desperate population burned...



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Crude Carnage Continues - WTI Hits $55 Handle, Brent Tests $60

Trading at its lowest since early April, WTI Crude has re-tumbled again today to a $55 handle as Greferendum deleveraging and Iran chatter send futures down 2.5%... Brent crude neared a break below the crucial $60 level in early trading.



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3 Things: Valuations, Employment, Sectors

...while the media gets overly excited about monthly job growth, the reality is that job growth has been little more than just a function of overall population growth. This isn't something the fosters long-term economic expansions that generate higher levels of prosperity... and if you think low interest rates necessitate high stock prices, that wasn't the case in the 1940s when interest rates were low and stock prices were below their long-term average relative to past earnings.



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Good On You, Greece - But Don’t Waver Now (Part 2)

Earlier this week the embattled Greeks delivered still more body blows to the rotten regime of Keynesian central banking and the crony capitalist bailout state to which it is conjoined. By defaulting on its IMF loan, walking away from the troika bailout program and taking control of its insolvent domestic banking system, Alexis Tsipras and his band of political outlaws have shattered a giant illusion.



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Contagion Continues: Italy, Spain Stocks Tumble To Post-Greferendum Lows

Having bounced midweek on 'hope' of a deal and 'faith' in Draghi's containment, European stock markets are tumbling back to the post-Greferendum lows of Tuesday. Italy and Spain are now down 5.5 to 6% and as the European close nears - and the realization thanks to The IMF that the vote is a simple Yes/No to debt haircuts - stocks are being sold and volatility is picking up. Bond spreads are leaking higher but it is clear that what Draghi really 'contained' was EURUSD which remains only marginally lower on the week.



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Europe-US Risk Diverges Most In 13 Years - How Best To Trade The Referendum

European risk has never traded at such an extreme level relative to US risk... ever. But when looking for the best bang for your Greferendum-trading buck - are you better off buying higher vol in Europe or lower US vol? Or, as Goldman Sachs explains below, what are the highest payouts on bets for a rebound...



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The Troika Turns Europe Into A Warzone

There’s no there there. Europeans are completely clueless about what’s happening here in Athens. They can’t see to save their lives that their silence protects and legitimizes a flat out war against a country that is, just like their respective countries, a member of a union that now seeks to obliterate it. Europeans need to understand that the EU has no qualms about declaring war on one of its own member states. And that it could be theirs next time around. Where people die of hunger or preventable diseases. Or commit suicide. Or flee. All Europeans on their TV screens can see the line-ups at ATMs, and the fainting grandmas at the banks, the hunger, the despair. How on earth can they see this as somehow normal, and somehow not connected to their own lives?



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The Complete Greek Referendum Walk-Thru: When, How, What To Expect; And What Comes Next

  • WHEN ARE RESULTS DUE?
  • WHAT ARE GREEKS BEING ASKED TO VOTE ON?
  • WHAT DO THE POLLS SHOW?
  • WHAT IF IT’S YES?
  • WHAT IF IT’S NO?
  • HOW WILL MARKETS REACT?


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Chinese Stocks Plummet Despite Government Threats To Shorts, Europe Lower, US Closed

The Greece impasse set to culminate on Sunday continues to have a massive impact on at least one stock market, unfortunately it is the wrong one, located on a continent which is mostly irrelevant to the future of the Greek people (unless that whole AIIB bailout does take place of course). We are, of course, talking about China which as noted earlier, started off horribly, plunging over 7% with over 1000 stocks hitting 10% limit down, then in the afternoon session mysteriously recovering all losses and even trading slightly higher on the day, before the late selling returned once more, and the Shanghai Composite plunged to close down 5.8%: an unimaginable 20% total roundtrip move!



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Did The IMF Just Open Pandora's Box?

... at this very moment, politicians from Spain's Podemos to Italy Five Star movement are drafting memos demanding that the IMF evaluate their own debt sustainability. Or rather unsustainability.



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Martin Armstrong: Troika Is Maneuvering To Rig The Greek Referendum

As Stalin said, “Those who vote decide nothing. Those who count the vote decide everything.”



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The German Press Does It Again: "Give Me The Money Or I Shoot"

When a message needs to be sent by the powers that be, the German press can always be relied upon to send it, no matter how divisive (as they did here, here, and here). So it is no surprise that with the stakes appearing to have never been higher, Handelsblatt unleashes the following...



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NSA Leak Reveals Both Merkel And Schauble Saw Greek Debt As Unsustainable Even After Haircut

"Merkel's fear was that Athens would be unable to overcome its problems even with an additional haircut, since it would not be able to handle the remaining debt... Within the German cabinet, Finance Minister Wolfgang Schnaeuble alone continued to strongly back another haircut... with IMF Managing Director Christine Lagarde described as undecided on the issue."



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