Archive - May 25, 2015 - Story

Ridding the world of Monsanto via a state buy-out would be a boon to humanity, and doing so for a mere $57 billion would be a bargain - especially when you consider the $3 trillion the state has squandered on endless wars of choice and the trillions of dollars the Federal Reserve and the government have squandered propping up the self-serving, parasitic cartel of too big to jail banks.

Everything is better (and fixed) once you can print...

Israel is refusing to comply with an order by a Swiss court that it pay $1.1 billion that it has owed to Tehran since before Iran’s 1979 Islamic revolution for its share of a jointly owned oil pipeline. “Without referring to the matter at hand, we’ll note that according to the Trading with the Enemy Act it is forbidden to transfer money to the enemy, including the Iranian national oil company,” the Israeli Finance Ministry said in a statement.

“The Iraqi forces just showed no will to fight. They were not outnumbered. In fact they vastly outnumbered the opposing force and yet they failed to fight and withdrew from the site...We can give them training, we can give them equipment. We obviously can’t give them the will to fight.”

"These are the only choices for the masses: whether to be a “doomer” or a “wisher.” Both positions are cartoon world-views that don’t provide much guidance for continuing the project of civilization, in case anyone is actually interested in that. It’s either rampaging id or the illusion of supernatural control, take your pick. I find both stances revolting."

"If, as the ECB's Coeuré said, you are concerned about the rapidity of the market moves, it seems odd, in our view, to give everyone an incentive to get longer today only to sell again tomorrow."

"Unrigged"...

There has to be a very clear line between central banks and governments. The latter should never be able to influence the former, because it would risk making economic policy serve only short term interests (until the next election). Likewise the former should stay out of the latter’s decisions, because that would tend to make political processes skewed disproportionally towards finance and the economy, at the potential cost of other interests in a society. This may sound idealistic and out of sync with the present day reality, but if it does, that does not bode well. It’s dangerous to play fast and loose with the founding principles of individual countries, and perhaps even more with those of unions of sovereign nations.

Between escalating Grexit concerns and Podemos 'victory' in Spain, European bond and stock markets shuddered somewhat today. EURUSD continues to close lower - back below 1.1000. All major bourses across Europe are in the red with Greece and Spain worst (ASE -3%) but the most notable shift is a collapse in Poruguese bonds. Illiquidity has always been an issue for PORTUG bonds but today's near 4 point collapse in 10Y bond prices (and 48bps spike in spreads) is dramatic to say the least. Bond yields and spreads are now higher than before Draghi announced Q€ in January and dramatically higher since bond-buying began. If EU leaders proclaim they can see no contagion from Greece, show them these charts. Finally, despite cash markets being closed, US equity futures also suffered (despite an exuberant BTFD rip higher in China overnight).

Some say that eliminating the welfare-warfare state and the fiat currency system that props it up will cause the people pain. The truth is the only people who will feel any long-term pain from returning to limited, constitutional government are the special interests that profit from the current system. A return to a true free-market economy will greatly improve the lives of the vast majority of Americans.

With just 10 days until a June 5 IMF payment that Athens almost certainly will not make unless it strikes a deal for the disbursement of more bailout funds, things just got quite a bit more interesting on the EU political front after Spain’s Popular Party was dealt a dramatic electoral blow on Sunday by the leftist Podemos and center-right Ciudadanos.

"Like pushing a rock up a hill," is how some trader’s view the current disconnect between the physical market for crude oil and the futures market with speculators pushing futures prices higher while the physical market remains moribund.

With US markets closed for the Memorial Day holiday, and some of the key European markets likewise shuttered for public holiday including the UK, Germany and Switzerland, it is difficult to find where one can observe or trade the weekend's newsflow, which is once again centered on developments in Europe, where on Sunday Spanish Prime Minister Mariano Rajoy’s People’s Party suffered its worst result in a municipal election in 24 years while Greece continues to threaten with default 5 some years after it should have officially pulled the plug.