"If the dollar rallies again from here then it is game over and the exit doors are small..."
As dozens now vie for residence in the big white one of Pennsylvania Avenue, MarketWatch, courtesy of LoanDepot.com and CoreLogic, unveil the homes (since most own more than one) and mortgages of the 2016 presidential candidates. With homeownership rates at multi-decade lows, and the American Dream disappearing for most, it appears it pays to be in government - from Trump Tower and Clinton's Compounds to Bernie Sanders' underwater mortgages and Carly Fiorina's five fireplaces...
Late last month, we suggested that the pressure on Chinese equities - which at that point had only begun to build - was at least partially attributable to an unwind in the country’s CNY1 trillion backdoor margin lending edifice. Precisely measuring the amount of shadow financing that helped drive Chinese stocks to nosebleed levels is virtually impossible, as is determining how much of that leverage has been unwound and how much remains or has been restored, but BofAML is out with a valiant attempt to not only identify each shadow lending channel, but to quantify just how much leverage may be built into the Chinese market. The figures will shock you.
There is a myth prevalent today that the gold price always falls when interest rates rise. The logic is that when interest rates rise it is more expensive to hold gold, which just sits there not earning anything. And since markets discount future expectations, gold will even fall when a rise in interest rates is expected. With the Fed's Open Market Committee debating the timing of an interest rate rise to take place possibly in September, it is therefore no surprise to market commentators that the gold price continues its bear market. Only the myth is just that: a myth denied by empirical evidence.
To understand what really happened earlier today, one should read the Bloomberg explanation, according to which it was the ECB which rejected proposals by Greek authorities to reopen country’s financial markets with no restrictions in place for both Greek and foreign traders, citing an Athens Exchange spokeswoman. And just like that, we wave goodbye to the Hellenic Republic, and greet the Mediterranean Vassal Province of Mario and Merkel. Because as of this moment, no Greek decision can be taken without the direct or indirect express prior approval of either the ECB and/or Berlin.
Now that Tsipras has succeeded in compelling Greek lawmakers to cede the country’s sovereignty to Brussels in exchange for the right to use the euro, tales of unrealized redenomination plots have come out of the woodwork. Just two days after FT reported that former Energy Minister Panayotis Lafazanis planned to seize the country's mint and currency reserves, Kathimerini reports that Yanis Varoufakis, on orders from Tsipras, developed a top-secret parallel banking system. Now, the opposition lawmakers who helped Tsipras pass the new bailout measures through parliament are demanding answers.
Before the crisis that started in 2007, both of us believed that the financial system was fragile and unsustainable, contrary to the near ubiquitous analyses at the time. Now, there is something vastly riskier facing us, with risks that entail the survival of the global ecosystem - not the financial system. The G.M.O. experiment, carried out in real time and with our entire food and ecological system as its laboratory, is perhaps the greatest case of human hubris ever. It creates yet another systemic, “too big too fail” enterprise - but one for which no bailouts will be possible when it fails.
In the U.S., the economy has failed to accelerate, with GDP growth stubbornly below 2.5%. It is worse in Europe and even China has slowed. Stagnant global economic growth, a strong USD, and lower oil prices have combined to cause revenue growth for the S&P 500 to fall. The first quarter of 2015 was the first quarter of negative sales growth for the S&P 500 since the financial crisis. 2Q15 is expected to be worse
Less than a decade after a housing/derivatives bubble nearly wiped out the global financial system, a new and much bigger commodities/derivatives bubble is threatening to finish the job. So... the central banks will panic. Again. Countries that retain some control over their monetary systems will see their interest rates fall to zero and beyond, while those that don’t will be thrown into some kind of new age hyperinflationary depression. Not 2008 all over again; this is something much stranger.
Deflation is back on the front burner and it's going to destroy all of the careful central planning and related market manipulation of the past 6 years. Clear signs from the periphery indicate that a destructive deflationary pulse has been unleashed. After years of suppression, the forces of reality are threatening to overwhelm our managed global ""markets"'. And it's about damn time.
The purpose of this article is to outline, with facts, large global structural issues that everyone, bulls and bears alike, should be fully aware of. This article will focus on much larger structural issues that have been building for years and decades. And no this article is not so much about central banks, debt issues, Greece, China, deficits, etc. While all these are important as part of the overall picture, they are mere current symptoms of a much larger issue that is at the core of all that is already in play and will only deepen in our societies in the decades to come.
Obama came to Kenya, hung out with his extended family such as Malik Abon’go Obama, and moments ago departed for his next African tour destination, Ethiopia, but not before he cracked some birther "jokes" and spoke in Swahili and danced.
With every passing day that Greece maintains its capital controls, the already dire funding situations is getting even worse, as Greek bank NPLs are rising with every day in which there is no normal flow of credit within the economy. This has led to a massive bank funding catch-22: the longer capital controls persist, the less confidence in local banks there is, the longer the bank run (capped by the ECB's weekly ELA allotment), the greater the ultimate bail out cost, and the greater the haircut of not only equity and debt stakeholders but also depositors.
"I don’t know if you’ll get the same slack in October as in April, absent a turnaround in the market price for oil. It’s going to be that ‘come-to-Jesus’ point in time where it’s about how much longer can they let it play. If the banks get too aggressive, they’re going to hurt the value for themselves and their ability to exit. So they’re playing a balancing act."
In a surprising development ahead of today's final stage of the Tour de France, earlier today Paris police opened fire on a car that tried to crash a barricade set up on Place de la Concorde ahead of the final arrival of the Tour de France cycling race, France 24 reports citing a police official. Luc Poignant, a spokesman with the SGP police union, said officers were finishing setting up the barricades for the race when the car tried to crash through the barriers. Officers opened fire on the car, which ultimately drove away.