As we warned previously, the devaluation, or breaking of the Saudi Riyal peg to the dollar, could be the black swan event for crude oil and the recent weakness in SAR forwards - while not as violent as Nigeria's Naira - certainly signals a renewed market fear that breaking the peg is imminent. It appears Saudi officials are none too pleased with the free markets speculating on this devaluation and as Bloomberg reports, banks in Saudi Arabia are coming under fresh pressure over products that allow speculators to bet against the kingdom’s currency peg, according to people with knowledge of the matter, which were supposedly banned in January.
Interestingly, privilege serves the same purpose--benefiting the few at the expense of the many--regardless of the system's ideological labels. Socialist, Communist and free-market elites loot their populaces and national wealth with equal gusto. Those who came to do good and stayed to do well first accumulate privileges, which they then leverage into wealth and power.
Core Durable Goods Orders tumbled 0.8% MoM and 6.7% YoY - down 15 of the last 18 months. However, following drastic revisions across the entire time series and thanks to a surge in military spending (+3.7%) and non-defense aircraft (+64.9% - bringing back memories of Boeing's aberration from a year or two back) the headline Durable Goods print rose 3.4% MoM. More worrying for GDP enthusiasts is the 0.2% decline in durable goods inventories in April for the 4th straight month.
"For our positions here at TGL… and we have had a terrible run this past week given that our largest position is and has been and shall continue to be gold and further given that we came into the week short of equities on balance and had to turn our trading ship around amidst this massive, violent rally that did indeed catch us off guard… we are up a scant 1.0% for the year-to-date"
WTI and Brent Crude oil prices have both broken above $50 for the first time since October 2015 this morning - almost doubling off its Feb 11th 26.05 lows. The immediate catalyst appears to be a combination of inventory drawdowns in US crude, continud US production cuts, and further supply disruptions (Nigeria specifically), none of which scream demand or growth is going to make a dent in the glut.
Is there anything that would make a gloomy Jeff Gundlach bullish? As it turns out the answer is yes, but it is a big bogey. “The market has been going sideways for 18 months, and when it breaks, either up or down, it should be a large move. So let the market prove itself. If it breaks to the upside, which I define as accelerating above 2,200, it is a good, low-risk, ‘go with’ buy." Aka, chase the momentum in either direction.
- Wall Street Crime: 7 Years, 156 Cases and Few Convictions (WSJ)
- Japan's Abe points to 2008 crisis as G7 leaders debate global risk (Reuters)
- Brent Crude Rises Above $50 a Barrel (WSJ)
- New York financial regulator gearing up to probe online lenders (Reuters)
- At Swinging Wall Street Parties, the Feds Are Now on the Prowl (BBG)
In a statement to the press, Obama said that world leaders are "rattled" by Republican nominee Donald Trump’s public statements. "They are paying very close attention to this election," the president told reporters. "I think it’s fair to say they are surprised by the Republican nominee. They are not sure how seriously to take some of his pronouncements, but they are rattled by it."
In what has been another quiet overnight session, which unlike the past two days has not seen steep, illiquid gaps higher in US equity futures (the E-mini was up 3 points and accelerating to the upside as of this writing so there is still ample time for the momentum algos to go berserk), the main event was the price of Brent rising above $50 for the first time since November with WTI rising as high as $49.97.
Former McDonalds CEO Crushes The Minimum Wage Lie: "It's Cheaper To Buy A Robot Than Hire At $15/Hour"Submitted by Tyler Durden on 05/26/2016 - 05:18
"I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry - it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries - it’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe."
After early promises to be the most transparent administration in history, this has been one of the most secretive. And in certain ways, one of the most elusive. On media rights generally, the Obama administration hasn’t walked its talk. It has set new records for stonewalling or rejecting Freedom of Information requests. And it has used an obscure federal act to prosecute leakers.
After last summer's Jade Helm military drills, and just weeks after FEMA's mass arrest drills in Texas, it is little wonder that the residents of Beech Grove, Indiana were terrified upon being awoken last night by the sound of bombs and helicopters, and flooded the emergency 911 call network with requests for information and reports of explosions. As Sputnik News reports, police officials quickly confirmed to alarmed residents that it was a scheduled military training exercise.
Weird things are happening in the Mediterranean Sea. Almost simultaneously three countries in the Mediterranean have closed their airspace and territories for aircraft departing from Libya. The exceptions are very few and involve the transport of military and evacuees. At the same time, three NATO exercises are taking place but the airspace closure and directly little to do with that.