Archive - Jun 4, 2015

Legislation has been in introduced in the California state Senate that would increase the state’s approximately 47 cents-per-gallon gas tax by 10 cents.  The new California fuel levy, which would be the state's first increase since 1994, will be collected on top of an 18.4-cents-per-gallon federal gas tax that is charged to all drivers in the nation to fill the federal government’s transportation funding coffers. 

While hope has long been dismissed as a strategy among the investing public, for game-theory expert (and Greek FinMin) Yanis Varoufakis, "hope" appears to be all he has left. Reflecting on James Byrnes 1946 speech, Varoufakis explains a “Speech of Hope” for Greece would make all the difference now – not only for us, but also for our creditors, as our renaissance would terminate the default risk.

"I trust that many of you are familiar with the story of Peter Pan, in which it says, 'the moment you doubt whether you can fly, you cease forever to be able to do it.'"

A chart we first showed several months ago is once again making the rounds, this time courtesy of Newedge's Brad Wishak who looks at recent trends in asset volatilities, and asks a simple question: "how much longer can this divergence continue?"

U.S. companies announced $141 billion of new stock buyback programs last month and $243 billion of new M&A deals. Both figures are all-time records, and according to bubblevision are further evidence that CEOs are bullish on their companies and the economic outlook. You might say that. Then, again, it might put you in mind of swarming moths heading for a light bulb. The baleful truth is this. In its arrogant and misbegotten seizure of all financial power, the nation’s central bank has turned the C-suite of corporate America into a destructive agent of bubble finance. That’s ‘dumb money’ with a vengeance.

That Makes Sens ... Wait, WHAT??

This same process has likely begun for the markets again… but this time it will be global in nature as the bubble in question is not just in stocks but in bonds, commodities, real estate… indeed in the very Central Banks themselves.

Unconfirmed reports now suggest Greek PM Alexis Tsipras will ask for a vote of confidence as early as tomorrow.

Blockchain.com, which claims to be the maker of the most popular Bitcoin wallet, suffered at the weekend what the Guardian describes as a "total crypto breakdown", highlighting once again the vulnerability of electronic and digital currencies to human and technological errors and hacking.

Inconceivable? Consumer Comfort among the highest income earners in America has totally and utterly collapsed. Despite record-er highs in the US equity market and promises from every talking head that Q1 was a blip, those earning $100k or over have seen their 'comfort' crash to the lowest since September...

Anxiety over financial stability and shadow banking risks appear to have force Christine Lagarde and her fellow extrapolators to hit the panic button:

IMF CUTS U.S. 2015 GROWTH FORECAST TO 2.5% FROM 3.1%, URGES FED TO DELAY FIRST RATE INCREASE UNTIL 1H 2016

Adding that they viewed the Dollar as "moderately overvalued" and any more appreciation would be "harmful," it seems global disinflationary pressures have left the IMF no choice but to say publicly what everyone has uttered under their breath. Now Yellen is really cornered.. and just exactly how are the talking heads going to spin this as positive?

According to just released final data by the BLS, in Q1 labor productivity barely rose, growing 0.3% in Q1, following a -0.1% drop in the fourth quarter. Worse, on a sequential basis, productivity dipped by a -0.8% in Q1 (a 3.1% SAAR), after a -0.5% drop (-1.9% SAAR) in Q4. This is the first sequential drop in nonfarm productivity in 22 years, or since 1993!
That, in a nutshell, is also the real reason the US economy refuses to grow no matter how many billions in liquidity the Fed stuffs into it.

Why? Just because...and note this plunge began before the data hit this morning on heavy volume.