• Pivotfarm
    07/07/2015 - 13:55
    Corruption has been the coveted jewel in everybody’s crown since antiquity. Aristotelian philosophy believed that everybody who had power could become corrupt.

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Service PMI Drops To Lowest Level Since January: Job Creation Slows, Input Cost Inflation Surges

Following last week's disappointing manufacturing PMI, today it was Markit's turn to report the June Service PMI, which just came out at 54.8, just under the 54.9 expected, down from 56.0 in May and the lowest reading since January. Additionally, job creation eased to a  three-month low while input cost inflation reaches its highest since October 2013. In other words, more bad news for future job prospects and margins.



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Presenting The ECB's "Tools" To Stem Contagion

On the heels of Sunday's landmark referendum in Greece, all eyes are now on global financial markets and how the European Central Bank intends to prevent contagion in the event Greece exits the currency bloc. 



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Copper Crashes, In Danger Of Breaching 15-Year Support Level

In this centrally-planned world, in which nobody even denies anymore that all markets have become central banker playthings, fundamentals are irrelevant and few have a clue what this latest crash in copper may signify (some do, and it isn't pretty) an even more disturbing clue for the fate of this erstwhile "market doctor" is revealed when looking at the long-term price chart. Here, as SocGen notes, copper is in danger of breaching a huge 15 year support line... after which it is free fall for a long, long time.



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With Yanis Gone, Now Troika Heads Must Roll

It’s time for the Troika to seek out some real men too. It cannot be that the winner leaves and all the losers get to stay. The attempts to suppress the IMF debt sustainability analysis were a shameful attempt to mislead the people of Greece, and of Europe as a whole. And don’t forget the US: Lagarde operates out of Washington. It cannot be that after this mockery of democracy, these same people can just remain where they are.



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SocGen Reiterates Cash Call, Says "Markets Will Stay Volatile"

We are in a risk-off period, so we reiterate the need to have cash in portfolios. The US dollar and US Treasuries are the safest assets in our view...



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Russia Gloats: "Merkel's Misery Over Broken Europe Dreams"

"After the Greeks voted against accepting the latest demands from its creditors, Merkel is facing her worst nightmare: a possible Greek exit from the euro, a possible exit from the EU completely and loss of confidence in the currency itself.  Half of her was Merkel — the pragmatic economist, the other was Merkel — the great European. She has now discovered, in her vacillation, she has not shown the leadership expected of the most powerful woman in the European Union."



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Frontrunning: July 6

  • Greece Bailout Referendum: They Voted ‘No’. Now What? (BBG)
  • Varoufakis Quits as Greece Enters New Showdown With Europe (BBG)
  • Merkel to Meet Hollande as Greece Told to Make Next Move (BBG)
  • German line hardens after Greek referendum 'No' (Reuters)
  • BOJ keeps rosy view of regional Japan, watching markets after Greek upset (Reuters)
  • Oil falls on Greece vote, China stock market turmoil (Reuters)
  • China Urges U.S.-Iran Compromise 36 Hours to Nuclear Deadline (BBG)
  • U.S. and Iran: the unbearable awkwardness of defending your enemy (Reuters)


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All The Latest Greek Headlines

With the only thing that matters in the hours ahead, at least until China reopens and the Pandamonium repeats, is the sheer chaos out of Greece which now literally changes the narrative by the minute, here is a convenient timeline of everything that has happened so far this morning starting with Varoufakis' unexpected resignation and going from there.



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Tumbling Futures Rebound After Varoufakis Resignation; Most China Stocks Drop Despite Massive Intervention

More than even the unfolding "chaos theory" pandemonium in Greece, market watchers were even more focused on whether or not China and the PBOC will succeed in rescuing its market from what is now a crash that threatens social stability in the world's most populous nation. And, at the open it did. The problem is that as the trading session progressed, the initial 8% surge in stocks faded as every bout of buying was roundly sold into until every other index but the benchmark Shanghai Composite turned sharply red.



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The Biggest Issue Now Is "The Math"

Once the reality of debt write-offs and who lent how much and what that means at home, the real fireworks could start. Can Italy, Spain or Austria afford to write-off 1/3 or 1/2 or more of what they lent to Greece? How about the EFSF or ECB? How will depositors feel if they get a quick 30% off the top? That is the biggest issue. The math as they say. And it is what we should be watching for.



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The First Post-Referendum Head Rolls: "Toxic" "Martyr" Yanis Varoufakis Resigns

The Greek referendum landslide "No" vote came and went and just hours after its passage claimed its first head, which was - perhaps somewhat surprisingly - that of the Greek finance minister himself, Yanis Varoufakis, who many say orchestrated the referendum seen as a loud endorsement of the government's actions. As of this morning he is no more. Here is why in his own words.



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Greece Contemplates Nuclear Options: May Print Euros, Launch Parallel Currency, Nationalize Banks

According to Telegraph's Ambrose Evans Pritchard who quotes what appears to be a direct quote to him from Yanis Varoufakis, Greece will, "If necessary... issue parallel liquidity and California-style IOU's, in an electronic form. We should have done it a week ago." Hardliners within the party - though not Mr Varoufakis - are demanding the head of governor Stournaras, a holdover appointee from the past conservative government.  They want a new team installed, one that is willing to draw on the central bank's secret reserves, and to take the provocative step in extremis of creating euros.



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Volatility, Confusion Reign As PBoC Intervenes: Chinese Stocks Surge Then Tumble

On the heels of a weekend which saw Beijing launch a series of ad hoc policy maneuvers designed to stop the bleeding in China's equity markets, the SHCOMP opened sharply higher Monday only to give back half of its opening gains minutes later in a preview of what will likely be a week of unprecedented volatility as panicked housewives and banana vendors looking to sell the rips battle the PBoC for control of China's stock market mania.



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Greferendum Caption Contest: Two For The Price Of One

Here are the two choices for today's caption contest: we leave it up to readers to decide which is more appropriate.



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