Archive - Jul 28, 2015 - Story

After two years and a massive 167,000 signatures, FirstLook reports that The White House has officially denied a hugely popular whitehouse.gov petition calling for NSA whistleblower Edward Snowden to be “immediately issued a full, free, and absolute pardon,” saying thanks for signing, but no, stating that "Mr. Snowden’s dangerous decision to steal and disclose classified information had severe consequences for the security of our country and the people who work day in and day out to protect it." While acknowledging that "this is an issue that many Americans feel strongly about," Lisa Monaco, President Obama’s advisor on homeland security and terrorism, said in a statement, "we live in a dangerous world."

In case you were wondering WTF... it's oil, as the algos pin to WTI after JPY failed to follow through on overnight intervention...

Earlier today, the US Census released its latest homeownership data, which confirmed that for what is left of America's middle class, owning a home has become virtually impossible, with the homeownership rate plunging from the lowest level since 1986, or 63.7%, to just 63.4% the lowest reading since the first quarter of 1967.  And the punchline, which should come as no surprise to anyone: with housing no longer affordable to most, the median monthly asking rent just rose to a record $803 across the US.

"Look at the data, and you’ll realize that our present concerns are not hyperbole or exaggeration. We simply have not observed the market conditions we observe today except in a handful of instances in market history, and they have typically ended quite badly..."

"Now, let me be honest with you," Obama said. "I am in my second term. It has been an extraordinary privilege for me to serve as the President of the United States. I cannot imagine a greater honor or a more interesting job. I love my work. But under our Constitution, I cannot run again." He then added: "I actually think I’m a pretty good president. I think if I ran, I could win. But I can’t. So there’s a lot that I’d like to do to keep America moving, but the law is the law."

The Conference Board just reported that US Consumer Confidence, having bounced in June, has collapsed in July (and saw the bounce revised drastically lower). At 90.9, this is the lowest since September 2014 and is below the lowest economist estimate. More worrying is the crash in "hope" - as consumer expectations plunge from 92.8 to 79.9 (lowest since Feb 2014). This should not be a surprise since Gallup has been indicating fading confidence in its weekly survey for a while. 57% of Americans believe the US economy is "getting worse," which has left Gallup's Economic Confidence Index tumbling to its lowest in 10 months.

It all looked so awesome in the pre-open... thanks to the overnight PPT. But as soon as US equity markets opened, the selling began as Biotechs were hammered lower sending Small Caps plunging and Nasdaq into the red...

Just six weeks after one Chinese farmer invested his life savings in the Chinese market, proclaiming "it's a lot easier making money from stocks than farm work," another has lost it all... and more.  "I don't know what to do... I trusted the government too much..." he exclaims, adding "I won't touch stocks again, I have ruined everyone in my family."

The 0.18% month-over-month decline in Case Shiller home price index is the biggest since July 2014 which confirms the David Blitzer's view that "over the next two years or so, the rate of home price increases is more likely to slow than to accelerate." His biggest fear is that "first time homebuyers are the weak spot in the market," adding that prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust - housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes.

Anyone tempted to gamble on buying the proverbial dip in Chinese equities after Monday’s dramatic 8.5% sell-off probably shouldn’t, says Tom DeMark, who called a top and shortly thereafter, a bottom, in the SHCOMP back in 2013. "The die has been cast. You just cannot manipulate the market." 

"Greece is playing it correctly. Agree to everything. Give Germany no excuse to do what they want. Get the money. This is why France, among others, want this all agreed as quickly as possible, because they know this deal is not how it will end, but an end that keeps the EUR together must be found. The Germans know it too. They also know that they have been had and it is their own fault."

The U.S. E&P industry is really good at spending other people’s money to increase production. It doesn’t matter if there is a market for the oil and gas. As long as the capital keeps flowing, they will do what they do best. Don’t be distracted by the noisy chatter about savings through efficiency or re-fracking. Just look at the income statements and balance sheets from first quarter and it’s pretty clear that most companies are hemorrhaging cash at these prices. The U.S. rig count increased by 19 this week as oil prices dropped below $48 per barrel – the latest sign that the E&P industry is out of touch with reality.

The German Council of Economic Experts is out with a new report on euro area crisis management which backs state bankruptcies and euro exits for governments deemed "uncooperative." "A permanently uncooperative member state should not be able to threaten the existence of the euro. In view of this, the Council of Economic Experts recommends that the withdrawal of a member state from the currency union must be possible as an utterly last resort," the council says.

• Fed Officials May Offer More Clarity on Rates (WSJ)
• Stocks rebound, shrugging off volatile and weak China (Reuters)
• Three-Day Selloff Knocks 11% From China Shares (WSJ)
• China shares fall again as Beijing scrambles to calm markets (Reuters)
• VAT hikes to make Greek destination less popular (Kathimerini)
• Varoufakis - Something is rotten with the eurozone’s hideous restrictions on sovereignty (FT)
• EU denies Varoufakis 'tax control' claims (FT)