Archive - Jun 17, 2015

They call it "voting," and we're told it's our civic duty. But it's just an illusion. Just like in Caesar’s time, the election will go to the people who spend the most money. But we're not talking about the candidates. They're just puppets. Entertainers. We're talking about the people who bankroll them.

The tension in the Eurosystem is getting unbearable...

On the eve of a critical Eurogroup meeting in Luxembourg where Greek FinMin Yanis Varoufakis says no new proposal will be tabled, Greeks are taking to the streets ahead of an anti-austerity protest planned for Wednesday evening.

Two critically important themes which have far-reaching geopolitical and economic consequences came together recently when it became apparent that Gazprom had begun settling all crude sales to China in yuan. This marked the intersection of yuan hegemony and the death of petrodollar mercantilism. Now, the trend continues as Russia and China will de-dollarize hundreds of millions in natural gas settlements.

Reflecting on the rate hikes undertaken in the 2004-2006 period (ensuring the world not think that The Fed would repeat that) Janet Yellen appears to have thrown Greenspan and Bernanke under the bubble-blowing bus with an off the cuff comment that "with hindsight, The Fed should have hiked rates faster," during that period... which is odd since we assumed it was The Fed's job to inflate financial assets to prove the real economy was doing great?

A simple method that can boost your chances of investment (or any other) success

Upgrades to labor market (despite downgrades to economic growth), upgrades to rate hike expectations (despite IMF warnings and downgrades to economic growth) and upgrades to being beyond the law (despite Congressional lambasting)... But do not be confused, Yellen will explain how it all makes sense (and if she can't will mumble and curse and move on)...

Update: Stocks give up gains

The kneejerk reactions so far are Dollar down hard and bullion, bonds, and stocks bid... let's see if Yellen can keep that going...

"The Federal Reserve signaled it was moving toward interest rate increases in the months ahead now that signs of a dip in economic activity early in the year are waning," Fed mouthpiece Jon Hilsenrath writes.

With data showing very little sign of the Q2 post-weather bounce that The Fed forecast, and markets quaking in their boots on every 'good' data print, The Fed remains cornered - desperate to hike (to regain some ammo) but needing to lie through their teeth in order to rationalize why...

• *FED FORECASTS IMPLY TWO QUARTER-POINT RATE INCREASES THIS YEAR
• *FED SAYS ECONOMY EXPANDING `MODERATELY,' JOB GROWTH PICKED UP
• *FED REPEATS INTL DEVELOPMENTS TO BE TAKEN INTO ACCOUNT

So the bottom line - The Fed has no idea still, is data-dependent (unless the data disagrees with them), and is now the world's plunge protection team. It seems the IMF's warnings have been ignored.

Pre-FOMC: S&P Futs 2091, 10Y 2.387%, EUR 1.1260, Gold $1178

Etsy, an online marketplace for handmade and vintage goods, announced yesterday a pilot program, called Fund on Etsy, to crowdfund new products. From June 16 to August 16, a select number of sellers can use the site to raise capital for the manufacture of their new products as part of a pilot program.

While Janet Yellen is hopelessly cornered (as explained yesterday, not hiking rates or worse doing even more QE, is the single "biggest risk to global equities" according to BofA as it would not only soak up even more liquidity and crush confidence in the economy, even worse than the Fed did hike rates and unleash the "Ghost of 1937") when it comes to monetary policy, one place where the Fed's desperate scramble to renormalize is distincly visible is in the FOMC statement itself.