Archive - Jun 13, 2014 - Story

In case there was any concerns that the US Secretary of State is unable to handle the rapidly moving events in Iraq due to being stuck on his boat (again), here comes the Ketchup heir-in-law, speaking at the London Global Summit to end sexual violence in conflict (!) to diffuse all fears that "just once" the US may not be on top of its foreign policy game: KERRY SAYS OBAMA MOVING `RAPIDLY' TO DECIDING ON IRAQ RESPONSE; KERRY SAYS "WE ARE LASER-FOCUSED ON DEALING WITH THE CRISIS AT HAND." And just like that, the jihadists who are too extreme even for Al Qaeda, will surely promptly scatter, fearful what drastic sanctions the US will impose on the Al Qaeda central bank and, heaven-forbid, the travel ban that will likely also follow...

After the surge in prices in April, May's Producer Prices fall 0.2% MoM (compoared to a +0.1% expectation). Year-over-year inflation rose 2.0% (down from last month's 2.1% and missing expectations of 2.4% significantly). This is the first MoM drop since Febuary for the headline and core numbers as it appears vehicle rental appeared to see prices implode. PPI Ex Food and Energy (core), saw prices rise at 2.0% - the fastest since May 2012.

In December 2012, 70% of those polled viewed Hillary Clinton favorably; in March 2014 it was down to 56%; and now, as President Obama's approval rating hits record lows, only 52% view Hillary Clinton favorably. "She is down across the board," notes the poll, "even with groups that have been her most ardent supporters." As Bloomberg reports, among likely 2016 voters, Clinton remains ahead with 47% support compared to 38% for each of her potential opponents.

While the US scrambles to figure out what the least painful way is to admit yet another humiliating foreign policy defeat, things in Iraq continue to deteriorate as the relentless blitzkrieg unleashed by the ISIS/ISIL Al-Qaeda spin off, which has shocked everyone by its speed and scale, takes two more towns, as it rushes for its target: Baghdad itself.

• Tea Party struggles to repeat Cantor-style shock in Tennessee (Reuters)
• Iran Deploys Forces to Fight al Qaeda-Inspired Militants in Iraq (WSJ)
• Oil Rallies as Militant Advance in Iraq Threatens Crude (BBG)
• Gold Set for First Back-to-Back Weekly Gain Since April (BBG)
• Hedge Funds Get Stung by Slow Markets (WSJ)
• Sterling nears 5-year high after Carney speech (FT)
• Britain Warns Boom in Real-Estate Prices Threatens Economy (WSJ)
• East Europe Leaders Urge EU Unity to Counter Russia (BBG)
• Formula One Said to Be Valued at $8 Billion as Malone Seeks Stake (BBG)
• Dumb and dumber: Abe Plans Company Tax Cut in 2015 as Kuroda Warns on Budget (BBG)

Believe it or not, the main driver of risk overnight had nothing to do with Iraq, with the global economy or even with hopes for more liquidity, and everything to do with a largely meaningless component of Japan's future tax policy, namely whether or not Abe (who at this pace of soaring imported inflation and plunging wages won't have to worry much about 2015 as he won't be PM then) should cut the corporate tax rate in 2015. As Bloomberg reported, Abe, speaking to reporters in Tokyo today after a meeting with Finance Minister Taro Aso and Economy Minister Akira Amari, said the plan would bring the rate under 30 percent in a few years. He said alternative revenue will be secured for the move, which requires approval from the Diet.