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Illiquid Markets Turmoil After Hotter-Than-Expected Inflation Print

On a turbo-charged illiquid day ahead of the Memorial Day weekend, stocks, bonds, USD, and commodities are turmoiling after this morning's hotter-than-expected CPI print. Stocks and Bonds were instantly sold (hawkish-er signal), the USD soared (hawkish-er signal) and crude, copper, and precious metals tumbled. Fundamentally speaking of course the US Open is soon and so the algos will, we are sure, rescue one of these (or will they)... and then there's Yellen at 1ET.



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Core Consumer Prices Jump Most Since March 2006 Thanks To Surging Healthcare Costs

The market appears to have chosen the hotter-than-expected Core CPI print (as opposed to weakest headline CPI YoY print since Oct 2009 of -0.2%) as key. Core CPI rose 0.3% MoM in April - the most since March 2006; and 1.8% YoY - the most since Jan 2013. The biggest driver of the surge in consumer prices is medical care costs - which rose 0.7% - the biggest increase since January 2007 (thanks Obamacare).



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Greece May Need To Issue IOUs Schaeuble Says After Latest Failure To Reach A Deal

"German Finance Minister Wolfgang Schaeuble conceded the possibility that Greece may need a parallel currency alongside the euro if the country’s talks with creditors fail," Bloomberg reports. Meanwhile, "sideline" negotiations between Greek PM Tsipras and Angela Merkel breakdown in Riga.



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SEC Commissioner Furious That SEC Has Made A Mockery Of "Recidivist Criminal Behavior" By Banks

"It is troubling enough to consistently grant waivers for criminal misconduct.  It is an order of magnitude more troubling to refuse to enforce our own explicit requirements for such waivers.   This type of recidivism and repeated criminal misconduct should lead to revocations of prior waivers, not the granting of a whole new set of waivers.  We have the tools, and with the tools the responsibility, to empower those at the top of these institutions to create meaningful cultural shifts, yet we refuse to use them.  I am concerned that the latest series of actions has effectively rendered criminal convictions of financial institutions largely symbolic."



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Frontrunning: May 22

  • U.S. vows to continue patrols after China warns spy plane (Reuters)
  • Bank of Japan Chief Cheers On Tokyo’s Surging Stocks (WSJ)
  • Merkel Stamps Out Optimism on Greece After Tsipras Talks (BBG)
  • Greece sees reforms deal with lenders in next 10 days (Reuters)
  • Why Greece’s Syriza party is not sticking to the script on an IMF deal (Channel4)
  • Why Does Putin Care Who Runs a Tiny Balkan Nation? Gas Pipelines (BBG)
  • U.S. Stock-Index Futures Are Little Changed Before Yellen Speech (BBG)
  • German Business Confidence Declines as Risks Cloud Outlook (BBG)


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Suicide Bomber Detonates In Saudi Mosque, ISIS Suspected

A suicide bomber blew himself up at a Shi'ite mosque in eastern Saudi Arabia during Friday prayers, residents said, killing and wounding several people.



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Chinese Stock Bubble Frenzy Returns; US Futures Flat Ahead Of Today's Pre-Holiday Zero Volume Melt Up

The highlight of the overnight newsflow may have been the BOJ's preannounced statement that it is keeping its QE unchanged (which comes as no surprise after a few weeks ago the BOJ adimitted it would be unable to keep inflation "stable" at the 2% in the required timeframe), but the highlight of overnight markets was certainly China, where the Banzai Buyers have reemerged, leading to another whopping +2.8% session for the Shanghai Composite which has now risen to a fresh 7 years high.



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David Cameron's New Thought Police

Once government becomes the arbiter of what speech is and isn’t legitimate, the door is inevitably thrown wide open to the suppression of all political dissent.



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ECB's Willful Ignorance: Leaking Central Bank Says Austerity "Compliments" QE

There’s something quite contradictory about telling governments to tighten their belts while promising to buy any and every piece of paper their treasury departments care to issue. In fact, it’s probably fair to say that a €1.1 trillion QE program simply cannot peacefully coexist with a strict, currency bloc-wide austerity policy. This glaring contraction was on full display at the ECB’s April 14-15 policy meeting, minutes show.



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Guest Post: This October The World Will Change - "China Is Preparing For Something Big"

"China... across the board... is preparing for something big in currency markets... The world has an unease about the dollar system... former President Hu of China said 'the dollar is a product of the past'."



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Welcome To The Oligarch Recovery: 82% Of US Construction Is Luxury Units

The reason everything is being built for the wealthy, is because all the gains from the oligarch recovery have gone to the wealthy. This is no accident. It’s how the bailouts were designed, and how the status quo operates. Our socio-economic system since 2008 can be best described as serfdom, and nothing is going to change until people admit this, rather than hanging on to false hopes that they one day too will become an oligarch. It’s not gonna happen.



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US Retaliates At China Escalation, Warns Sea "Sandcastles" May "Lead To Conflict"

"As China seeks to make sovereign land out of sandcastles and redraw maritime boundaries, it is eroding regional trust and undermining investor confidence" -- US Deputy Secretary of State 



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How The Media Deceive The Public About "Fast Track" And The "Trade Bills"

“Fast Track Trade Promotion Authority” (which was invented by the imperial President Richard Nixon in 1974, in order to advance his goal of a dictatorial Executive, that the Presidency would become a dictatorship) lowers the Constitutionally required approval from 67 Senators down to only 50 Senators. The difference between 50 Senators versus 67 Senators is, essentially, the difference between a treaty that is publicly discussed and widely acceptable to the American public (the people, after all, who voted for those members of Congress); versus a secret treaty that will be widely unacceptable to the American public when the America public will become informed of its contents, which won’t be until years after the treaty has already gone into effect.



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The Government's Message For Heavily Indebted Students: Don't Pay Us Back

"The U.S. Department of Education wants to remind you that you may qualify for a repayment plan that calculates your monthly payment based on your income. You will likely qualify for an income-driven repayment plan if your total federal student loan debt exceeds your annual income. Under an income-driven plan, your initial payment could be as low as $0 per month." -- US Department of Education



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Zappos CEO Pushes "100% Weird" Boss-less Model After Employee Exodus

210 of Zappos CEO Tony Hsieh's 1,500 employees took the money and ran last month after the company's pay-to-quit scheme backfired amid a transition to a boss-less corporate structure. Now, things are just getting "weird"...



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