Guess Who The Dirtiest Dirty Shirt Is

We continue to hear that the US is the cleanest dirty shirt or that the US economy is doing 'relatively' well as a reason for buying stocks now. Not only is this plainly incorrect (as we have pointed out rather vociferously in the recent past) it flies the face of the disconnect between macro and markets. The fact of the matter is that year-to-date, the US economic data performance is the equal worst (with Japan) of all major economic nations and regions. That is a bucket-load of hope for the second-half of the year - or, as we noted recently, is it just plain silly.

White House Explains: Obama Didn't Know What He Knew When Everyone Else Knew What He Should Have Known

Here is The Hill with the White House's official explanation for what happened: "White House officials were notified of a Treasury Department inspector general report on the IRS but elected not to tell President Obama about it." In other words, neither the IRS was not aware of what is going on (recall the countless "I don't knows" and "I don't recalls") and apparently, neither was the president. And in fact, it was someone else's executive duty to make the decision what the chief executive of the nation is and isn't allowed to know.

What Could Possibly Go Wrong Here?

You know it's getting frothy when... "We're seeing many people cash out 401(k)s or IRAs because they want to take advantage of the [real estate] market." As CNNMoney reports, in order to get in on hot housing markets, amateur investors are buying up homes and taking risky measures - like tapping their retirement accounts - to fund the deals. As one adviser noted, "our average client has retirement accounts of about $150,000 and is looking to buy one or two properties," he said. "After 2008, they didn't trust Wall Street. They wanted hard assets." but as with every bubble there is always the greater fool to rely on - "They bought a lot of stuff cheap last year, but now they're paying market value," said Jack McCabe, a Florida-based real estate consultant. "Sometimes they're overpaying... There's no way they can get an 8% return buying at today's market prices." The problem, of course, is amateur investors sometimes spend all their free cash on their purchases, as "a whole lot of the people in the markets are not experts."  If the real estate market turns south again, that could leave a lot of investors in dire financial condition for their golden years.

Gold's Best Day In 11 Months As Stocks Close Red - Only 8 Hours To Wait 'Til Tuesday Though

All major US cash equity indices closed an odd shade of 'green' today which some have called 'red' - though only marginally and Treasuries ended the day practically unchanged (with 10Y +1bps). But the real action took place away from these two asset-classes. Precious metals were monkey-hammered at their open overnight but staged a miraculous recovery leaving gold with its best gain since June 2012 (didn't hear too much about that on TV?). Credit markets notably under-performed - never managing to get into the green on the day. VIX rose over 0.5 vols to close back above 13%. On the bright side, only a few more hours until Tuesday...

Name The Year Of The Famous Chuck Evans Quotes

Evans Quote #1: "Chicago Federal Reserve Bank President Charles Evans on Monday reiterated his belief that the US economy will begin to turn around in the second half of this year. "We think conditions will improve in the second half of this year,"

Evans Quote #2: "The sovereign debt crisis that has enveloped three European nations and threatens to spread to others will slow U.S. economic growth, but the impact will be “minimal to modest," the president of the Federal Reserve Bank of Chicago said Friday.

Evans Quote #3: Chicago Fed’s Evans comments in speech in Chicago: "economy improving quite a lot; companies seem to be in pretty good shape. Optimistic [XXXX] Will Be Year of Turnaround; US growth will be self-sustaining in [XXXX+1]"

Europe's 'Status Quo Pandering' Risks "Radicalization Of An Entire Generation"

It will come as no surprise to ZH readers that the topic of youth unemployment is critical in Europe but as Der Speigel reports, while the German government's efforts remain largely symbolic, Southern European leaders pander to older voters by defending the status quo and are failing in their fight against the potential for social unrest. One graduate noted, "None of my friends believes that we have a future or will be able to live a normal life," as a lost generation is taking shape in Europe. And European governments seem clueless; instead of launching effective education and training programs to prepare Southern European youth for a professional life after the crisis, the Continent's political elites preferred to wage old ideological battles. In this way, Europe wasted valuable time, at least until governments were shaken early this month by news of a very worrisome record: Unemployment among 15- to 24-year-olds has climbed above 60 percent in Greece. Suddenly Europe is scrambling to address the problem making it an 'obseesion'. There are strong words coming out of Europe's capitals today, but they have not been followed by any action to date.

Bernanke "Wealth Effect" Completely Wasted On Trillions In Pension Funds

The last few years have been dominated by one theme and every trade has been a derivative bet on that theme. The idea that by inflating another asset bubble, a wealth effect will ripple through the market to the real economy, encourage animal spirits and spark a renaissance (in something, we are not sure what). Well, so far no good. The real economy, as discussed at length, is not recovering; but the question of just who is benefiting from the wealth effect is unclear. As the following charts across the 100 largest G4 pension plans show, the asset managers have missed the trickle-down. Despite bad (and worsening) under-funding and a Fed repressing 'safe' assets to the point of ultimate risk, G4 pension funds have refused to partake of any mythical 'great rotation', remain avid bond buyers, are as drastically under-funded as ever, and finally, have maintained the same 'cash on the sidelines' for 14 years now...