Archive - Jun 14, 2015

The lack of faith in central bank trustworthiness is spreading. First Germany, then Holland, and Austria, and now - as we noted was possible previously - Texas has enacted a Bill to repatriate $1 billion of gold from The NY Fed's vaults to a newly established state gold bullion depository..."People have this image of Texas as big and powerful … so for a lot of people, this is exactly where they would want to go with their gold," and the Bill includes a section to prevent forced seizure from the Federal Government.  Is this the first step down a road to secession?

The total market capitalization of China's stocks is now over 40% the size of the US stock market and topped $10 trillion for the first time in history. This represents at 8-fold increase in Chinese market cap since Lehman. But after that initial pop, Chinese stocks are weak too. Meanwhile in other markets the EUR is notably lower against the JPY and USD but appears to be protected from a plunge for now hovering at 138.40 and 1.1200 respectively after the Greek Deal failure news. US equity futures are tumbling, down 9 points but off the initial lows for now.

"Over the last couple of decades, we have been engaged in an enormous national experiment, taking impressionable and often ignorant teenagers and young adults and seeing just how much student loan debt they can handle.There is a practical question at hand for people who feel as if they are in over their heads: Is it ever a good idea to try to beat the system by openly defying it and refusing to repay the debt that you willingly took on?"

The Fed’s balance sheet grew eight times more rapidly than the economy during the last fourteen years. That’s just the inverse of the relationship that occurred back in the Golden Era. if you need any proof at all of this massive intrusion into the financial system isn’t working; the huge amount of money printing and balance sheet expansion; the unremitting financial repression and pegging of interest rates; look at that fundamental comparison. The only thing it’s really doing is simply inflating the serial bubble that ultimately reach unsustainable peaks and collapse. Hopefully on the third strike, the people who gave us these bubbles will be out.

Despite 'generously' offering his resignation just hours after being re-elected FIFA President following the massively wide-spread scandal; Swiss newspaper Schweiz am Sonntag is reporting, thanks to "generous messages of support from Asia and African colleagues," Sepp Blatter is considering remaining in charge of the fraudulent festering football fiefdom.

A classic tale of buying ridiculously low and creating massive value in the process

The writing was already on the wall after several EU officials expressed reservations about the feasibility of striking any sort of compromise with Greece’s negotiating team in Brussels on Sunday, and now it’s official. Talks have once again ended with no deal as the Greeks are standing their ground on pension cuts and VAT hikes.

Royal Dutch Shell has been considering ending its partnership with a Ukrainian energy company in a shale gas exploration venture in eastern Ukraine because of the fighting in the region and prospect of little profit from the project. In fact, at least two news reports say Shell already has notified Ukraine that it’s leaving in a formal “notice of withdrawal.”

As America 'celebrates' Flag Day - commemorating the adoption of the of the flag of the United States, which happened on June 14th, 1777 by resolution of the Second Continental Congress - we thought the following chart surveying the 48 flags (no confederate flags included) of America since 1767 would be of interest: from the Sons of Liberty's rebellious stripes in 1767 to the pattern we know today...

Irrespective of the political wrangling going on behind the scenes both in Athens and in Brussels, a terminal bank run could plunge Greece into a crisis faster than politicians can react, an eventuality which would have to be met with capital controls. As FT reports, Athens is "running out of options" to avoid a Cyprus repeat.