Archive - Jun 12, 2015 - Story

Today, following yet another diplomatic snafu when yesterday the IMF announced unexpectedly that it had cut off negotiations on with an intransigent Greek delegation, which hardly restored depositor confidence in their local banks (hit by the double whammy of yet another S&P downgrade) Greek media newsit.gr reports that the relentless bank run once again surged and that as of 3:30 pm, another €600 million or more were withdrawn from local banks by locals "who fear that something might happen over the weekend."

"As young technology companies jostle for investors who will pour money into the firms as they try to make it big and strike it rich, some companies are using unconventional financial terms," WSJ reports. This will end badly for someone, if not for the founders and VCs who will have long since cashed out with their fortunes in tow by the time reality comes calling and everyone suddenly realizes that valuing companies that have no hope of monetizing their product at infinty-times-daily-direct-eyeballs was probably not a great idea.

Fusion power has been something of a holy grail in the energy field for decades. The idea of harnessing the same energy that powers the sun naturally excites many. At the same time, despite decades of research, fusion energy has yet to come close to being a reality. Still, even today billions of dollars continues to be poured into fusion research at research labs around the world. And in the last decade, there has been a proliferation of interest in fusion power from commercial sources. The largest company doing work in fusion power is probably Lockheed Martin. Lockheed claims that it will have a prototype reactor in a just a few years’ time and that a commercial product could be coming within a decade.

Following years of continued fighting and disorder in the troubled region, President Barack Obama revealed today that he has not ruled out taking immediate and decisive military action in the United States Congress. As conditions worsen by the day, the president confirmed to reporters that he and his military advisors are currently evaluating the merits of a military option, suggesting that his administration has left open the possibility of toppling the hostile, unpredictable leadership currently reigning over the legislative assembly and restoring order to the Capitol building. "We cannot stand idly by and allow this senseless mayhem to continue,” the president continued.

Something unexpected emerges when looking at unadjusted retail sales.

During the last 27 years the financial system has ballooned dramatically while the US economy has slowed to a crawl - a divergent trend that has intensified with the passage of time. While the rationale for monetary central planning is bogus, the model on which state intervention is based is even more invalid.

Even though production has hit new record highs (and Saudis threatening to increase further), the machines remain transfixed by rig counts and inventories. The total rig count dropped 9 to 859 - declining at a faster rate than the prior week. Oil prices initially popped on the rig count drop but then everyone remembered this is just a sign of how bad the malivestment is given the surging production.

"Fiscal stimulus to households was successful during the financial crisis. Cash payments to households of around 1% of GDP (half of the size deployed during the GFC) could help lift economic growth close to trend, particularly if the accompanying political message was “confidence enhancing." - Citi

You know it's bad when on an illiquid Friday, a Greek Deal Rumor headline only manages a measly 5pt ramp in the S&P 500... Wolf cried just one too many times? Wednesday saw 25 point vertical ramp on the same headline...

Another day, another flash crash in the USD Index. As the Sept 2015 USD Index Futures contract suddenly crashed instantly, so EURUSD surged (and TSY yields tumbled)... something broke...

The temptation is great to hedge or seek large returns through the use of these volatility products.  ?Many will make a run for it anyway, but few still will really be able to be successful at it (again ~5% are profitable with skill).  Instead, the gravitational burden of a continuously decaying product assaults both your performance and intelligence (someone's going to earn a lot of money from you taking on these new-aged products but it's not you!) Simply out, It's been a baleful speculative vehicle, across any horizon.