Archive - Jun 2015 - Story

Just as consensus had expected, after printing at -0.7% in the first revision to Q1 GDP, the final revised GDP print for the March 31-ended quarter came in at -0.2%, confirming the third negative GDP quarter in one recovery cycle since 2011 (all of which have come in the first quarter of the year as global winter cooling fans will have you know)- the first time this has happened since the 1950s.

"Even if a deal between Greece and its creditors is struck, the problem isn't solved," warns Saxobank CIO Steen Jakobsen, which leaves the door open to a snap election being called shortly and a referendum on continued membership of the EU just weeks later. Debt refinancing will be the first issue, with the country needing a significant discount. But how can the country secure that, asks Jakobsen, when the government is unwilling to bring in significant reforms?

Collapse is not an event, it is a process.

• Greece Handed New Terms as Tsipras Approaches Decision Time (BBG)
• As U.S. Probes $12.7 Trillion Treasury Market, Trader Talk Is a Good Place to Start (BBG)
• Signs Swedish QE Backfiring as Liquidity Evaporates (BBG)
• ECB approves ELA funding requested by Greece- banking source (Reuters)
• Greek Millennials Can't Find Work But Actually Want to Keep the Euro (BBG)
• Greek deal or not, the euro is now a different beast (Reuters)
• Promoter’s Arrest Sheds Light on Cynk’s $6 Billion Surge (BBG)
• The World's Biggest Economies Are About to Feel the Impact of China's Slowdown (BBG)
• Senate Clears Trade Bill’s Way to Passage (WSJ)

And it started off all so well: the market, blissfully ignoring what we wrote just yesterday in Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers, was in full blown levitation mode overnight when it sent Japanese stocks to their highest close since 1996 (pre dot com) and with the Chinese central bank doing its best to keep levitating local stocks away from the abyss, pushing the SHCOMP up another 2.5%. Euro Stoxx 50 went from flat to down 1% and is bouncing. As BBG's Richard Breslow adds, predictably, the market is taking this as a ploy, not an end game. Of course, this is precisely the "Bear Stearns is fine" conventional wisdom that Cramer was spewing days before Bear failed because nobody could fathom how anyone can conceive of a worst case scenario. Only it isn't nobody: we reported before of a Goldman's "Conspiracy Theory" Stunner: A Greek Default Is Precisely What The ECB Wants. 

Who could have possibly foreseen that the IMF would throw up all over the Greek "proposal"... aside from this post here "Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers" yesterday afternoon of course. In any event, moments ago Bloomberg reported that just as we wrote here yesterday afternoon, there is no deal and that Greek PM Alexis Tsipras told his associates that creditors not accepting equivalent fiscal measures has never happened before, according to a Greek govt official, who asked not to be named in line with policy. Creditors “not accepting parametric measures has never happened before. Neither in Ireland, nor in Portugal, nor anywhere. This strange stance can hide two scenarios; they either don’t want an agreement or serve specific interests in Greece.”

As the Confederate Flag hysteria escalates, CNN's Ashleigh Banfield asks fellow CNN mouthpiece Don Lemon if it’s now appropriate for lawmakers to start a future conversation about whether or not the monument of Thomas Jefferson should be removed from the U.S. Capitol. As DailySurge notes rather eloquently, Banfield is foolish to conflate the Confederate flag with a Thomas Jefferson memorial; but we fear the stupid won’t be receding anytime soon.

In one swoop, on June 22, 2015, a divided U.S. Supreme Court handed down three consecutive rulings affirming the right of raisin farmers, hotel owners and prison inmates. However, this push back against government abuse, government snooping and government theft only came about because some determined citizens stood up and took a stand against tyranny. Whether these three rulings will amount to much in the long run remains to be seen. That said, if “we the people” don’t keep pushing back, standing up, and holding government officials accountable to the rule of law, these victories will do little to keep government bureaucrats off the backs of the American citizenry.

The Abe Cabinet's approval rating plunged to 39%, matching a record low, as more than half of voters oppose the new US-sanctioned military/security legislation being debated in the Diet. The last time Shinzo Abe's approval ratings were this low, he called for a snap election and told Kuroda to unleash QQE2.0 which has only squeezed real wages to even record-er lows (24th month in a row of declines), destroyed-er elderly Japanese savings, and crushed-er the middle-class. As his popularity has waned, Abe has become more and more desperate to keep support and has, for the first time in 70- years, lower the minimum voting age from 21 to 18 (adding 2.4 million new voters who have not been demoralized yet by declining pension benefits and quality of life).

Why will the IMF throw up all over the latest Greek proposal in just two numbers? Here is the answer, courtesy of Kathimerini: The proposals contain 7.9 billion euros of measures, of which 7.3 are from increases to tax and social security contributions.

Thus far the Russian response has been incredibly restrained, but that may not last forever. Continued economic pressure from the West may very well necessitate a Sino-Russian monetary arrangement that will eventually dethrone the dollar. The end result of this needless bullying by the United States will hasten the one thing Washington fears the most: a world monetary system in which the US has no say and the dollar is relegated to playing second fiddle.

If you work for GE, take close note of the despicable behavior from your CEO. You, your livelihood and your family’s well being mean nothing to Jeff Immelt. In fact, you’re nothing more than an easily expendable cog in his corporate game to accumulate even more wealth and more power for himself. He talks about you like you are chips on a poker table. You have been warned.

"If they want to lecture us on democracy building, let them lecture students at some American university," Russia’s Commissioner for Human Rights, Democracy and the Rule of Law Konstantin Dolgov said Tuesday, regarding the collapse of a bilateral arrangement struck in 2009 between Moscow and Washington. Fortunately for Dolgov, it doesn't appear as though he, or any other Russian diplomats for that matter, will be forced to endure a "lecture" on democracy from the US anytime soon because as the positioning of 250 Bradleys and self-propelled howitzers, and associated armored brigade combat team equipment" in Eastern Europe makes clear, the time for dialogue of any kind has long since passed.

For all the drivelly, politically correct platitudes about how a great job is about emotional gratification, self-fulfillment and, of course, benefits such as a matching 401(k) and 2 weeks of paid vacation, the best job is the one where the least amount of effort generates the greatest compensation at the smallest amount of risk. In that case no job will ever match that of Coty CEO Elio Leoni Sceti, or rather non-CEO. Because whereas Sceti was scheduled to become Coty's CEO in about a week, decided not to take the job. The punchline, however, is that despite never actually having set foot in the company's Empire State Building headquarters, or even working one day for his new employer, Coty is contractually bound to pay Leoni Sceti a severance (or is that non-signing bonus) of $1.8 million... for quitting before he even started!