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Frontrunning: July 2

  • Chinese stocks tumble again, ignoring Beijing's blandishments (Reuters)
  • Plight of Greek pensioners heaps pressure on Tsipras (Reuters)
  • Cash Crunch Hits Everyday Life in Greece (WSJ)
  • Souvlakis Tell a Story Well Beyond Today's Greek Crisis (BBG)
  • Greek Referendum on Bailout Too Close to Call, Poll Shows (BBG)
  • Move Over Greece: For Treasuries Traders, Today Is About the Fed (BBG)
  • ECB adds corporate names to QE-eligible bonds (FT)
  • Special Report: How Greece went bust (Reuters)
  • Puerto Rico’s Pain Is Tied to U.S. Wages (WSJ)


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China Crash Accelerates, Drags Composite Under 4000; US Futures Flat Ahead Of Nonfarm Payrolls

If it was Greece's intention to crush the Chinese stock market instead of Europe's, well - it succeeded.  Because despite the PBOC and politburo throwing everything but QE at the stock market, China stocks closed down sharply on Thursday after another wild trading day as investors shrugged off regulators' intensified efforts to put a floor under the sliding market, by cutting trading fees and easing margin rules, which has now crashed 25% in about two weeks wiping out $2.5 trillion of the peak $10 trillion in Chinese stock market cap as of June 14. This ultimately resulted with the Shanghai Composite closing under 4000 for the first time since April.



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The "Smartest Money" Is Liquidating Stocks At A Record Pace: "Selling Everything That’s Not Bolted Down"

Buyout firms conducted 97 stock offerings in the second quarter, more than in any other three-month period. "It’s clear that we are currently in an environment of frothy valuations,” said Lise Buyer, founder of IPO advisory firm Class V Group. Her disturbing punchline: "The insiders - those with the most knowledge - are finding this a very good time to take some money off the table." In an echo of Leon Black, Frank Maturo, vice chairman of equity capital markets at UBS AG, said, “Private equity is selling everything that’s not bolted down."



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Is This Why 'Europe' Is Now Trying To Crush Greece?

"...won’t a successful Greece show others that — much as many young people who cannot afford to pay their rent return home — they, too, can return to the way things used to be?..."

Simply put -  Europe can't 'afford' anything positive to come of Greece...



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US Police More Concerned About "Anti-Government" Domestic Extremists Than Al-Qaeda, Study Finds

U.S. law enforcement agencies rank the threat of violence from anti-government extremists higher than the threat from radicalized Muslims, according to a report released Thursday by the Triangle Center on Terrorism and Homeland Security (TCTHS). We have previously warned that any totalitarian apparatus implemented to fight an outside enemy, would ultimately be turned around and used upon the public domestically; and now it seems confirmed that the real enemy of the corrupt corporate state is none other than, “we the people.”



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Red China Goes Redder, Stocks Tumble Despite Government Ban On Bearish Talk

Despite more liquidity injections (CNY35 billion 7day RevRepo), archaic deals for brokerages to manipulate their balance sheets, and local reporters noting China's propaganda ministry ordering state media to publish only positive opinions about the stock market, not to criticize, Chinese stocks are in red once again. The record streak of margin debt declines continues and although futures were driven up early on, any strength has been sold into as unwinds wreak havoc on the ponzi wealth creation scheme. All major indices are in the red with Shenzhen (home of the 500%-club) the worst, down around 2% (though as CNBC would say "off the lows").



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Payrolls Preview: Goldman Expects Jobs Data To Disappoint

Despite much hopeful banter among the mainstream media, Goldman forecast nonfarm payroll job growth of 220k in June, notably below consensus expectations of 234k. This is roughly in line with Goldman's expectations for below average job growth over the remainder of 2015. Employment indicators were mixed in June: reported job availability, the employment components of most manufacturing surveys, and ADP employment growth improved, but jobless claims and job cuts both rose slightly and online job ads declined. Overall, the June data point to a gain below the very strong 280k increase in May.



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Athens On The Potomac - It Could Never Happen Here, Right?

Financial experts in New York, London, and Brussels have tut-tutted Greece’s economic travails as Athens considers its future with the European Union. Why did they borrow so much money? How can they ever pay it back? Do they think that much debt is sustainable? Instead of pointing fingers at the innumerates running Athens, they should consider our own situation.



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A Short History: The Neocon "Clean Break" Grand Design & The "Regime Change" Disasters It Has Fostered

To understand today’s crises in Iraq, Syria, Iran, and elsewhere, one must grasp their shared Lebanese connection. This assertion may seem odd. After all, what is the big deal about Lebanon? That little country hasn’t had top headlines since Israel deigned to bomb and invade it in 2006. Yet, to a large extent, the roots of the bloody tangle now enmeshing the Middle East lie in Lebanon: or to be more precise, in the Lebanon policy of Israel.



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"When People Jump In Even Though It's Overpriced, That's A Bubble" Shiller Warns

Bob Shiller moves beyond his normal fence-sitting perspective and goes full Marc Faber in this brief clip. Noting that his CAPE indicator of equity market valuation is flashing red (highest since 1929, 2000, and 2007), Shiller warns it is "when people jump into stocks even though they know valuations are high... that's a bubble," slamming CNBC's rosy perspective reflecting that this is the same as the dotcom rise. Notably he warns specifically "The US equity market is one of the highest in the world," and now is a good time to diversify away from it. Additionally Shiller warns of the slowing momentum in the housing market... warning that mean-reversion is likely with risk for further decline.



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Russia Or China - Washington's Conflict Over Who Is Public Enemy #1

America’s grand strategy, its long-term blueprint for advancing national interests and countering major adversaries, is in total disarray. Top officials lurch from crisis to crisis, improvising strategies as they go, but rarely pursuing a consistent set of policies. Some blame this indecisiveness on a lack of resolve at the White House, but the real reason lies deeper. It lurks in a disagreement among foreign policy elites over whether Russia or China constitutes America’s principal great-power adversary.



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"Heartbreaking" Scene Unfolds At Greek Banks As Pensioners Clamor For Cash

1,000 Greek bank branches chanced a stampede in order to open their doors to the country's retirees on Wednesday. The scene was somewhat chaotic as pensioners formed long lines and the country’s elderly attempted to squeeze through the doors in order to access pension payments.



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Who Will Be The Last To Crash?

This is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen... not, at least, until 2+2 stops equaling four. But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit. So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash?



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Black Churches Are Burning Across The South, Arson Eyed

Last month we made the following admittedly stark prediction: "Ultimately, it appears America has become a country wherein everyone feels marginalized and/or aggrieved in one way or another. In the absence of a dramatic societal reboot, we fear social instability is likely here to stay." That assessment appears to have been quite accurate because over the course of just two weeks, six predominantly African American churches in the US have burned, with authorities suspecting arson in several of the blazes.



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