Bond yields are leaking higher, The USDollar is flat (but noisy), but with no macro data to spark a momo run, US equities have tumbled out of the gate... especially Dow Transports. Dow & S&P are back to unchanged on the week...
That the Fed and other central banks have unleashed the speculative furies is an unassailable and baleful reality. What is going on here plain and simple is a one-sided game of chicken. The robo-traders and hedge fund buccaneers on Wall Street press the market higher on virtually no volume or conviction whenever macro-economic weakness presents itself, virtually daring the Fed to maintain is ultra-accommodative stance still longer. The casino gamblers will keep chop, chop choppin’ higher until they finally lose confidence that the Eccles building is heaven’s door to further riches. Then the machines will sell, sell, sell. There will be no credible Fed speakers to stop them.
"A senior government official says that among the proposals discussed with the eurozone and the International Monetary Fund is the imposition of a levy on bank transactions, whose exact rate will depend on the exemptions that would apply. The aim is to collect 300-600 million euros on a yearly basis," Kathimerini reports. Meanwhile, parliamentary speaker Nikos Filis has a message for the IMF.
Goldman "Solves" The Lack Of Cheap Gas Consumption "Puzzle" - Spending Set To Rise... Just As Gas Prices SurgeSubmitted by Tyler Durden on 05/20/2015 - 08:11
According to Goldman, "low gas prices should have boosted Q1 consumption growth by 0.5-1pp, reinforcing the Q1 disappointment. However, the models also imply that only one-fourth to one-half of the eventual consumption impact should have been felt by Q1, suggesting plenty of remaining upside in coming quarters." Here is the one problem with that assumption...
UBS will pay $545 million, plead guilty to one count of wire fraud, and go on DoJ "probation" for three years for its role in forex manipulation. The market's assessment of how things turned out for the bank: "It couldn't have been better."
- Clinton aides sometimes blocked release of documents requested under public-records law (WSJ)
- House Benghazi panel subpoenas former Clinton White House aide (Reuters)
- Cash Crunch, for Many, Is a Monthly Woe (WSJ)
- Doubts over Greece add to euro's ECB-driven frailty (Reuters)
- For Many American States, It's Like the Recession Never Ended (BBG)
- Japan debt plan needs BOJ to keep rates low for years (Reuters)
- Euro Continues to Fall; European Bonds, Stocks Broadly Steady (WSJ)
- Los Angeles gives preliminary approval to $15 minimum wage (Reuters)
Futures Flat With Greece In Spotlight; UBS Reveals Rigging Settlement; Inventory Surge Grows Japan GDPSubmitted by Tyler Durden on 05/20/2015 - 07:00
The only remarkable macroeconomic news overnight was out of Japan where we got the Q1 GDP print of 2.4% coming in well above consensus of 1.6%, and higher than the 1.1% in Q4. Did it not snow in Japan this winter? Does Japan already used double, and maybe triple, "seasonally-adjusted" data? We don't know, but we do know that both Japan and Europe have grown far faster than the US in the first quarter.
"Even though this is just front-loading, it is effectively an increase in the size of quantitative easing, even if just for a short period of time", one strategist tells WSJ, regarding the ECB's leaked decision to increase PSPP purchases ahead of the summer "lull." Of course this means the opposite is true as well. That is, anytime supply is net negative, the ECB will taper QE.
“When you have anti-English, pro-European nationalists in Scotland and anti-European, pro-British nationalists in England, spiced up with a few anti-English, pro-European nationalists in Wales and of course, the anti-each-other, pro-whatever your having yourself, British and Irish nationalists in that blissfully incoherent chunk of Ulster – Northern Ireland, you know you’re not in the old UK." Welcome to new Britain, Europe’s 21st century version of the Balkans!
Do you remember what happened when Cyprus decided to defy the EU? In the end, the entire banking system of the nation collapsed and money was confiscated from private bank accounts. Well, the nation of Greece is now approaching a similar endgame. At this point, the Greek government has not received any money from the EU or the IMF since August 2014. As you can imagine, that means that Greek government accounts are just about bone dry.
"If The Public Knew About Obama's Lies And Cover Ups, Mitt Romney Might Be President" - Judicial WatchSubmitted by Tyler Durden on 05/19/2015 - 23:27
“These documents are jaw-dropping. No wonder we had to file more FOIA lawsuits and wait over two years for them. If the American people had known the truth – that Barack Obama, Hillary Clinton and other top administration officials knew that the Benghazi attack was an al-Qaeda terrorist attack from the get-go – and yet lied and covered this fact up – Mitt Romney might very well be president."
One of the fake stories kept alive by certain American politicians, with the help of western media, is that Vladimir Putin (who, they vacuously claim, is a dictator and a tyrant) wants to reconstitute the USSR, with the annexation of Crimea as the first step. Instead of listening to their gossip, let's lay out the facts... “He who doesn't regret the collapse of the USSR doesn't have a heart; he who wants to see it reborn doesn't have a brain.”
“A depression is coming? Let’s put interest rates at zero. The economy is still in trouble? Let’s have the central bank print trillions in new securities. The banks are not lending? Let’s change the accounting rules and offer government guarantees and funds. People are still not spending? Let’s have negative interest rates. The economy is still in the tank? LET’S BAN CASH TRANSACTIONS!”
A cashless society is promising to have very tangible costs to our liberties and future prosperity.
China Officially Launches Critical Local Government Debt Swap — But Is The PBoC Really Just Issuing Treasury Bonds?Submitted by Tyler Durden on 05/19/2015 - 22:30
China has pitched its local government debt swap program as a way for heavily-indebted provinces to deleverage. Now that the program is officially off the ground, what are the implications for banks and for the PBoC?
During the Iraq war more than 4,000 U.S. soldiers died, countless others were severely injured, and the total cost to U.S. taxpayers was more than 2 trillion dollars. But now whatever the U.S. military accomplished during that war is being completely undone by ISIS. On Monday, we learned that ISIS had fully taken control of the strategically important city of Ramadi. Despite nine months of airstrikes by the U.S. military, ISIS continues to move forward and take new territory. So what will the U.S. do if ISIS actually takes control of the entire country?