Archive - Jul 17, 2015

While the Ukraine civil war, which just last summer was the biggest market-moving event and media discussion topic, has faded into the collective subconsciousness, for residents on both sides of the proxy conflict it continues to be an all too real and tragic event, and none more so perhaps than for Anatoliy Lyubimov, a resident of central Ukraine's Kozyatinskiy district, who recently received a draft notice mobilizing him to join the Ukraine army in its ongoing war with the Donetsk separatists. The reason: Anatoliy is disabled and has no arms.

Update: it appears that far from accidental, there may be an arson element behind these events. According to Greek ERT1 TV, "66 wildefires broke out simultanously", which is highly improbable without human intervention, begging the question: is someone employing "scorched earth" tactics with Germany's latest vassal state?

Greece is burning, literally, as Athens residents fled their homes on Friday amid wildfires fanned by strong winds and high temperatures burned through woodland around the Greek capital, sending clouds of smoke billowing over the city. Greek PM Tsipras urged calm as more than 80 firefighters with 18 fire engines and three aircraft battled the flames... brings a whole new meaning to the term 'firesale'...

The preposterous Gong Show in Brussels over the weekend was the financial “Ben Tre” moment for the Euro and ECB. That is, it was the moment when the Germans - imitating the American military on that ghastly morning in February 1968 - set fire to the Eurozone in order to save it. In short, Greece will become an outright debtors’ colony and its government will function as page-boy legislators for the Troika occupiers. Needless to say, political and social upheaval will erupt when the full extent of the Tsipras surrender becomes evident, and the resulting political contagion will spread throughout the length and breadth of Europe as Greece implodes. In due course, the euro will collapse and the baleful Keynesian money printers’ regime in Frankfurt will be repudiated and dismantled. But not before European democracy has a brush with death, and European prosperity is extinguished for a generation.

An "esoteric point" about China's GDP data has suddenly become a very big deal as the world looks to China for economic leadership amid a global deflationary supply glut, lackluster demand, and depressed trade.

It’s not even “Too Big to Jail” any longer. It’s now, “Too Big to Lose Profits.” After all #banklivesmatter

Just today, the value of Google has increased by more than the market cap of 415 S&P 500 companies!

China’s central bank is officially in the business of financing leveraged stock buying and as Bloomberg reports, the country's state-run margin lender now has the capacity to pump the equivalent of five Greek bailouts into leveraged stock trades. 

Since January's exuberant peak, UMich consumer sentiment has drifted lower. Expectations for July's preliminary data was 96.0 but the 93.3 print is the biggest miss since 2006. Both current and future "hope" conditions dropped markedlywith details showing American sless certain about retirement, less confident about income growth outpacing inflation, and businesses considerably less confident.

The timing could not be worse from a visual perspective but within minutes of the Eurogroup confirming that they approved the €7.16 billion bridge loan (which will merely be recycled back to The ECB to ensure the appearance of normalcy continues), local reports that the Greek finance ministry says banks will not re-open on Monday (as promised). Welcome to the new normal Europe... where the elites get their mony and the people... not so much.

In her euro-hegemonic role Germany failed to properly handle the Greek Crisis. What economics have been whispering among themselves after the scandalous Brussels Agreement of July 13th is now on the public discussion. One of IMF’s former European bailouts official, Ashoka Mody made it very clear in his article on Bloomberg on Friday morning: It’s Germany not Greece that has to leave the eurozone.

A conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buiy.

Following "good" Housing data, "bad" CPI data, and "ugly" wage growth data, someone decided to dump $1.4 billion notional in gold futures markets (sending the price to 2010 levels), sending silver plunging also...

Following a small dip in May CPI ex Food & Energy YoY, June saw a rise of 1.8% (as expected), hovering near the highest since October. Headline CPI continues to trot along the flatline (printing +0.1% YoY as expected) enabling monetary policy to run amock hyperinflating financial assets whicl standards of living continue to drop. However, all of this pales when compared to the continuing slide in real wage growth which has slowed almost every month since its peak in January and now stands at 7 month lows. Not what the 'narrative' wants to see...

The coming few months will prove challenging for the sector, and some small and medium U.S. producers may start missing their debt repayments or even file for bankruptcy. Quicksilver Resources and American Eagle Energy are two of the six U.S. based companies that have filed for bankruptcy in 2015 so far. Sabine Oil and Gas Corp. is the latest, and the biggest, U.S. producer to file for bankruptcy so far. Even mergers and acquisitions have slowed down considerably for the U.S. oil and gas industry in 2015. If the present trend persists, companies will have no choice but to cut their workforces even further to remain competitive and reduce their rising overheads. If oil prices remain in the range of $50 per barrel for longer than expected, even big operators such as Exxon Mobil, Chevron and ConocoPhillips (who have so far not made any major layoffs) could start downsizing their workforce.