Archive - Jun 25, 2015

In late June 1997, eighteen years ago, this part of the world felt pretty normal. People had jobs. Inflation was fairly low. The economy was growing. Confidence was high. Life was great. Property prices soared. Stock prices soared. It was a classic bubble... But it all unraveled, practically overnight.

Nope - no bubble here at all...

With levels of investors complacency at extremely high levels, it is a currently "fact" that little can go wrong. There is no recession in sight; the earnings decline was all primarily related to energy companies and most importantly, global Central Banks are continuing to support the financial markets. Of course, maybe it is the last point that should be questioned. If the economy is doing so well, then why are Central Banks still needing to intervene to support the growth? This is equivalent of saying the "the patient is cured, as long as we don't take him off of life support."

Another story from The dark side of Corporate America....

What hath Merkel wrought?

GERMANY'S MERKEL TOLD EU PARTY LEADERS THERE MUST BE DEAL ON GREECE BEFORE MARKETS OPEN ON MONDAY -PARTICIPANTS

The clever people said "Greece didn't matter"...

As we recently noted, Russia and Saudi Arabia appear oddly allied in recent weeks. What happens when two nations, that together account for more than fourth quarter of global oil production, begin collaborating on future energy projects?

But, but, but... dovish-er Fed; good news bad data; Greek Deal; Greece "doesn't matter"...

"CNBC is an electronic shaman for investors... The situation resembles George Orwell’s Nineteen Eighty-Four, where the protagonist Winston Smith tuned out the massive telescreen on his apartment wall that issued endless streams of positive news."

It appears it is "Saturday or bust" to avoid Merkel's worst nightmare. Jerome Dijsselbloem just told EU leaders that "insufficent progress" has been made on the Greek deal and has cancelled the EU Leaders' Summit for today and tomorrow:

• *EUROGROUP SATURDAY HAS TO GET THE DEAL DONE, EU OFFICIAL SAYS

Because, as Merkel said, this better be fixed Monday (or else).

Given the self-admitted lack of 'rules' around emergency funding from The ECB, today's (latest) threats to withhold Greek funding "due to politicial events" are perhaps the most ominous non-blackmail warning yet by the entirely independent Mario Draghi and his henchmen...

The treasury auction confusion continues. After yesterday's 5 Year auction priced well weaker than expected, despite a negative repo rate of -0.85% which has actually gotten even more negative this morning dropping to -0.9%, things looked somewhat ominous for today's final for the week issuance of $29 billion in 7 year paper. And yet, moments ago the auction came out far stronger than expected, with the Treasury pricing at 2.153%, a solid 1.2 bps through the 2.165% When Issued, suggesting a far stronger demand into the pricing deadline.