Archive - May 11, 2015

There is propaganda, and then there is the harsh reality, as shown by the case of Denny Rder, 47, of Decatur, Illinois: "look closer, and this city of 75,000 resembles many communities across the industrial Midwest, where the unemployment rate is falling fast in part because workers are disappearing: moving away, retiring or no longer looking for a job."

The only reform of the PATRIOT Act is a total repeal. Accept nothing less.

The class of 2015 may be the most indebted class of college graduates in the history of US higher education and the economy may have flatlined in Q1, but that doesn't mean all hope is lost for anyone who didn't study to become a petroleum engineer because as the government will tell you, you can always be a farmer.

Put another way, the amount of high quality collateral backstopping this mess has shrunken dramatically. On top of this, traders have been piling into sovereign bonds in anticipation of various QE programs, forcing yields to multi-decade if not multi-century lows.

Whoever holds the most gold will hold the most real wealth and, by extension, gain the most prominent seat at the bargaining table for decades to come. Whether that table will be the IMF, the new AAIB (Asian Infrastructure Investment Bank), or any future central economic entity, the future will go to the player with the most metal, as he will be able to create the most currency, in whatever form it may take.

As investors, it is crucial to ignore headline statistical data and focus on the underlying data trends that affect the real economy. While it is currently "blue skies" for investors, there are clearly storm clouds forming on the horizon. It will be those who fail to take precautionary actions that suffer the worst of consequences when the storm hits.

Presented with no comment...

"We are not negotiating with domestic and foreign capitalists. We won't become a colony of Germany or any other Imperialist power", dozens of protesters said Monday, on the way to entering the Siemens building in Northern Athens and papering the exterior and interior with anti-austerity banners.

Whether it is more posturing ahead of OPEC's June meeting is unclear but the message from 'sources', according to The Wall Street Journal is "OPEC won’t agree to go lower," with regard global market share (which has fallen from more than 50-% to just 32% currently). The cartel's latest strategy report forecasts oil prices won't reach $100 - “$100 is not in any of the scenarios,” in the next decade (and could drop below $40) with its most optimistic scenario $76 in 2025 (which only Qatar and Kuwait can cover expenditures with). “If they want to sustain the organization, they have no choice,” but to reintroduce production quotas, adding any concession by stronger members would be temporary.

Having briefly tested above 3.00% on Thursday, for the first time since December 2nd, 2014, the post-payrolls reaction continues today with 30Y yields up 9bps and back above the 3.00% Maginot Line. We note, additionally, that as Deutsche reports, net short exposure to Treasuries is back at the extremes of its recent range.

Update: AP confirms Zimmerman not seriously injured.

George Zimmerman, who was acquitted in the 2013 shooting death of Trayvon Martin, has, according to WESH Orlando, been shot in Orlando, Florida.  The shooting involved two men and happened on Lake Mary Boulevard, police said. Officers at the scene said it appeared Zimmerman suffered a minor gunshot wound, Bracknell said. “He walked normally into the ambulance, so he wasn’t being helped or nothing,” said witness Ricardo Berrare.

With the class of 2015 graduating with a record amount of debt, one hopeful student appears to recognize her fate all too well...

As expected, today's Eurogroup meeting concluded without an agreement between Greece and its creditors as both sides cited "progress" and regurgitated familiar rhetoric around the need for a "comprehensive list of reforms", and a universal desire for a favorable outcome. Despite this, Athens claims it will make a €750 million payment to the IMF on Tuesday even as it isn't at all clear where the money will come from.

Here is what happens when you rebrand your real estate company as a cutting-edge P2P lender and your shares are listed on an exchange that's in the midst of a world-beating rally driven in part by millions of newly-minted, poorly-educated day traders...