Archive - Jun 2014

Inflation is once again soaring in the US. Oil is back above $100 per barrel. Stocks have more than tripled from their 2008 lows, and housing is now more expensive relative to incomes than it was in 2007 for some markets.

Here we go again:

• CHEMICAL WEAPONS WATCHDOG SAYS EVIDENCE SUGGESTS CHLORINE GAS-LIKE CHEMICALS HAVE BEEN USED IN SYRIA

Because apparently in the eyes of the administration, ordinary Americans are not only

The American Dream appears to be less and less appealing. Following the release of the names of individuals who renounced their US citizenship (or terminated their long-term US residency) in Q1 2014, the rate of expatriation from the USA is continuing its exponential rise...

As if the market needed any further proof it is not only manipulated and rigged (at least under a legal system that classifies trading on insider information as illegal), but is constantly abused by those with material, non-public information - i.e., insiders - here comes a study conducted by professors at McGill and New York Universities, which, as the NYT summarizes, finds that "A quarter of all public company deals may involve some kind of insider trading."

"While some may cheer an earlier Fed rate hike, its hard to see the recent growth-inflation mix as anything other than discouraging." - JPMorgan

Do you remember the serfs and servants and villeins and peasants in the good old times of feudalism and the Middle Ages? If you don’t, I have good news for you! The custom of working in return of goods instead of salary revives in Greece of modern European Union and of exquisite Euro area. The results of a survey conducted by the Labor Institute of the Confederation of Labor Union (GSEE) are shocking but not unexpected...

Just minutes after claiming the 'explosion' at "The Brotherhood" pipeline in Ukraine was not an explosion but a 'fire', Ukraine's interior minister Arsen Avakov has stated that:

*UKRAINE SAYS GAS PIPELINE EXPLOSION PROBABLY TERROR ATTACK

Of course, the question is which 'terrorists'? The Right Sector or the Russian separatists. According to reports from UKRTransGas, the fire has now been extinguished but it is the rhetoric of Ukraine's Yatsenyuk "Russia's gas halt aims to destroy Ukraine" that is most troubling as, like Russia's Pushkov warned, Ukraine-Russia tensions have reached a new stage.

A month ago, using the latest UK housing data from Rightmove, we asked a simple question: whose housing bubble is bigger: China's, or the place where increasingly more of China's $25 trillion in bank assets are being parked: the UK (specifically London). Using then available data, the answer was still a toss-up, even if the divergence in directions was quite clear. Earlier today, we finally got the official data from the UK's Office for National Statistics, and we politely retract our question, as rhetorical as it may have been. The reason: there is no contest - the UK's housing bubble has officially slammed China's, and the result is nothing short of a knock out.

Presented once again (6mths and 180 golf rounds forward)...

In 2006, I invited the late General Bill Odom to address my Thursday Congressional luncheon group. Gen. Odom, a former NSA director, called the Iraq war “the greatest strategic disaster in American history," and told the surprised audience that he could not understand why Congress had not impeached the president for pushing this disaster on the United States. History continues to prove the General’s assessment absolutely correct.

Disappasionate overview of what to expect from the 2-day FOMC meeting that begins today

As reported moments ago by the BLS, real average hourly earnings just posted their third sequential decline in a row, dropping from $10.33 in February, to $10.32 in March, to $10.30 in April, to $10.28 in May.  Furthermore, this was the first year over year decline since October 2012. And to put today's $10.28 real average hourly earnings number in context, this is the same real wage seen last in July 2013, July 2012, March 2011 and then, if one goes further back... the month after Lehman failed!

In what we are sure will be a reassuring hearing full of confirmation that markets are unrigged, safe for investors, and why retail has never had it better, the Permanent Subcommitte on Investigations will start by hearing from IEX's Brad Katusyama who will, as he did before, put them straight on the real actions of the high frequency trading community... Remember the last time HFTs tried to defend themselves... they lied.

Blame it on the... spring?

The Fed is losing its reasons for printing, leaving it desperate to revive the meme that the US economy is in self-sustaining recovery mode. At 2.0% Core CPI has caught up with the hot-flation of PPI removing the crutch of low-flation easement the Fed has been relying on. While Ex-Food-and-Energy is surging (well above expectations), the food index rose 0.5% in May after increasing 0.4% in each of the three previous months; and the index for food at home increased 0.7%, its largest increase since July 2011. This is all happening against a backdrop of real hourly wages dropping 0.1% YoY.