Archive - Jun 2015

The S&P 500 dropped briefly below 2,100 testing its 50-day moving-average and the Russell 2000 and S&P MidCap 400 both broke below their 50-day moving-averages. But remember, Greece is irrelevant and any correction is a healthy buying opportunity...

DIJSSELBLOEM SAYS CREDITORS STILL FAR FROM A DEAL WITH GREECE
DIJSSELBLOEM SAYS PROGRESS ON GREECE STILL SLOW, INSUFFICIENT
DIJSSELBLOEM SAYS: GREECE DEAL NOT THEORETICALLY POSSIBLE THIS WEEK

Update: *UNITED AIRLINES GROUND STOP LIFTED BY FAA

Just minutes are bomb threats have been evaluated as a hoax, we get news of a much more widespread issue:

*ALL UAL FLIGHTS ARE GROUNDED DUE TO "AUTOMATION ISSUES": FAA

All United Airlines flights have been grounded as of Tuesday morning at 9:35 a.m ET, according to the Federal Aviation Administration.

It’s not the case that every one of these middle- and upper-class households turned to pawnshops and payday lenders because they got whomped by an unexpected bill from a mechanic or a dentist. “People who are in these [non-bank] situations are not using these forms of credit to simply overcome an emergency, but are using them for basic living experiences,”

Who could have seen this coming? Just 24 hours after the NSA goes "dark" from "securing" the nation against terrorist threat (by recording and storing all domestic phone calls) we get this:

BOMB THREATS PHONED INTO AIRPORTS, CNBC SAYS

According to NBC, these threats are against planes already in the sky.

The reason why "investing" in the economy in the form of government spending always, without fail, leads to adverse results and negative returns, is because unlike the private sector, there are neither checks and balances, nor punishment if one fails at their job. Case in point, the much maligned Transportation Security Administration, aka the TSA, best known for groping women and infants at airport checkpoints is about to be even more maligned because according to an exclusive report from ABC, TSA screeners failed ailed to detect mock explosives and weapons in 95% of tests carried out by undercover agents.

Both Greece and the troika are said to have devised their own version of a 'final' offer in bailout negotiations, with WSJ saying creditors have prepared a draft agreement for PM Alexis Tsipras to either accept or not. The question now seems to be: how much will the Greek PM have to cede and what does that mean for the Greek government?

• Greece, creditors exchanging documents to reach deal - Commission (Reuters)
• Greece’s Creditors Reach Consensus on Proposal to Athensa (WSJ)
• Greece calls on lenders to accept 'realistic' plan sent on Monday (Reuters)
• Hundreds missing, many elderly tourists, after ship capsizes on China's Yangtze (Reuters)
• Oil up ahead of OPEC meeting as dollar slips (Reuters)
• U.S. Met Secretly With Yemen Rebels (WSJ)
• Euro zone back to inflation as May prices beat forecast (Reuters)
• Patients Get Extreme to Obtain Hepatitis Drug That's 1% the Cost Outside U.S. (BBG)

Once again it's all about Greece, with the latest iteration of a "Greek deal is imminent" rumor making the rounds and, just like yesterday, sending futures in the green, just a little over an hour after the increasingly more illiquid E-mini future has slid 0.7%. The EUR, where the bulk of Virtu headline kneejerk reacting algos are to be found, has surged over 100 pips overnight on more hope and optimism.

Most investors have heard Kyle Bass' rather eloquent phrase, "buying gold is just buying a put against the idiocy of the political cycle. It's that simple." However, what few may remember was his warnings in 2011, suggesting the University of Texas Investment Management Co. take delivery of its gold - as opposed to trusting it in the 'safe' hands of COMEX massively levered paper warehouse. Now, as The Star Telegram reports, Texas is going one step further with State Rep. Giovanni Capriglione asking the Legislature to create a Texas Bullion Depository, where Texas could store its gold. The goal is to create a secure facility that would allow the state to bring home more than $1 billion in gold bars that are owned by UTIMCO and are now housed at HSBC in New York.

The first step in any 12-step imperial-overstretch recovery program would involve accepting the fact that American power is limited and global rule an impossible fantasy. Accepted as well would have to be this obvious reality: like it or not, the U.S. shares the planet with a coterie of other major powers -- none as strong as we are, but none so weak as to be intimidated by the threat of U.S. military intervention. Having absorbed a more realistic assessment of American power, Washington would then have to focus on how exactly to cohabit with such powers -- Russia, China, and Iran among them -- and manage its differences with them without igniting yet more disastrous regional firestorms.  But for any of this to happen, American policymakers would first have to abandon the pretense that the United States remains the sole global superpower -- and that may be too bitter a pill for the present American psyche (and for the political aspirations of certain Republican candidates) to swallow. From such denialism, it’s already clear, will only come further ill-conceived military adventures abroad and, sooner or later, under far grimmer circumstances, an American reckoning with reality.

China may raise the quota on a critical debt swap plan by as much as CNY1 trillion, underscoring how important its success is both in terms of kicking the can for the country's heavily-indebted local governments and in terms of jumpstarting the credit creation machine. Meanwhile, an effort to encourage ABS issuance is sputtering amid rising NPLs.

Ex-Im Bank distorts the market and reduces the average American's standard of living in order to increase the power of government and enrich politically powerful corporations. Congress should resist pressure from the crony capitalist lobby and allow Ex-Im Bank's charter to expire at the end of the month. Shutting down Ex-Im Bank would improve our economy and benefit most Americans. It is time to kick Boeing and all other corporate welfare queens off the dole.