Archive - Jul 2015 - Story

• Second-quarter GDP seen rebounding on consumer spending, housing (Reuters)
• China Stocks Fall as Traders Puzzle Over Sudden Late-Day Swings (BBG)
• European 'alliance of national liberation fronts' emerges to avenge Greek defeat (Telegraph)
• Thomas Cook warns on earnings over Greece (MW)
• Largest Greek toy seller Jumbo warns of hit from capital controls (Kathimerini)
• Chevron and Exxon Get the Plaudits, but Some Smaller Drillers Faring Well (WSJ)
• Schäuble outlines plan to limit European Commission powers (FT)
• UBS Deal Shows Clinton’s Complicated Ties (WSJ)

"We turned openly, but moderately, bearish of shares late last week and for a day or two we appeared to have been wise in our decision. Clearly that wisdom has waned rather materially in the course of the last two trading sessions and following the Fed’s non-decision yesterday we found ourselves covering in the calls we had written against our “tanker” shares as well as covering in some of the derivatives we had had in place, thus taking our net position in our retirement funds from one that was modestly net bearish to one that is nearly net market neutral."

We start off the overnight wrap up with the usual place, China, where in a mirror image of Wednesday's action, stocks once again started off uneventful, then gradually rose in the afternoon session and meandered near unchanged territory until the last half hour, when out of the blue they tumbled to close near the day's low, some 2.2% below yesterday's closing level.  What caused it?  One possible catalyst came from Reuters which reported that that Chinese banks were investigating their exposure to the stock market via wealth management products and loans backed by stock as collateral. 

Few of us understand patient gradualism. We live and have our being within a few years and mostly in an unconscious automated state of mind. But people in power are long-term planners. They absolutely understand human nature and how to channel it to the evolution and refinement of the authoritarian state. The goal is perfect docility and perfect harmony with authoritarianism (economic, social and spiritual). Until the people accept collectivism under some pretext, they are not docile and completely subdued. Once they do, rebellion and confrontation are impossible. This is the ultimate goal of the globalists, and the American system is nearing this state.

In a rather stunning note, CyberBerkut, a Ukrainian group of hackers, claims to have hacked John McCain’s laptop while he was in the Ukraine, and as Techworm reports, what they have released from his June visit appears to be a fully staged production of an ISIS execution video...

Following last night's afternoon session melt-up at the hands of a $100bn injection into China's sovereign rescue fund, Chinese stocks opened higher but faded fast, with no follow-through from yesterday's farce. With Warren Buffett's favorite indicator flashing red for China (and US) stocks, and so many rural Chinese citizens "just hoping to get out at breakeven," any assistance in levitating the nation's stocks are simply being sold into as margined traders unwind their positions. One such leveraged 'citizen' is none other than State-Owned-Enterprise GM Yang Shengjun, whose firm was ironically among the most vocal in blaming the crash on "malicious foreign sellers trying tio start an economic war" and is now under investigation for dumping his own shares... do as I say Chinese people, not as I do.

16 Months after Malaysia Airlines Flight MH370 disappeared off the coast of Malaysia, The Telegraph reports that fragments of a wing washed up in the French island of Reunion (near Madagascar) could be wreckage from the missing plane, according to an aviation expert.

US global superiority in military affairs is actually the superiority of a rich kid who thinks he’s really smart but in reality is merely just rich. When the seemingly endless flow of money slows (as it inevitably will), the mask of cleverness will fall. Everyone who resented the kid will be waiting at the edge of the playground for this day of reckoning, and because no one else will have been so dependent on spending-as-strategy, the erstwhile rich kid will find it tough going.

"He is going to pay me back in some sort of product when he is able to, maybe in cheese."

Since the market is once again on the verge of a terminal liquidity seizure with its associated side-effects (see China for details), the authorities needed to remind the "market" just who the scapegoat will be when the next crash finally does come. Which is why earlier today in an unexpected "preliminary second quarter guidance" release, ITG, owner of the Posit dark pool, was just busted with a $22.6 million potential SEC settlement for what appears to have been blatant frontrunning of company clients in its own prop trading pod. But what is particularly amusing in this case is that while everyone knows that when it comes to HFT's, it is never called "rigging" - the proper nomenclature is "glitch", so now we learn a new term to use instead of "criminal frontrunning" - drumroll... trading experiment,

As we recently warned, the hyperinflationary collapse in Venezuala is reaching its terminal phase. With inflation soaring at least 65%, murder rates the 2nd highest in the world, and chronic food (and toilet paper shortages), the following disturbing clip shows what is rapidly becoming major social unrest in the Maduro's socialist paradise... and perhaps more importantly, Venezuela shows us what the end game for every fiat money system looks like (and perhaps Janet and her colleagues should remember that).

Religious imagery... peak condescension... everyone proclaiming "gold is dead"... In a nutshell, sentiment has plunged to negative levels not seen in years, if not more than a decade. Here are four mainstream media articles that provide some evidence we may be approaching a sentiment low. Some of them we're sure you’ve seen, others perhaps not. What amazes us is how they’ve all come out within the last two weeks.

In GMO’s latest quarterly missive, Jeremy Grantham is back with another dose of inconvenient truthiness, this time in the form of "ten quick topics to ruin your summer"...

"All global financials markets are a shell game right now... There is no doubt that the price of assets right now is a question mark... and ultimately when Central Banks stop manipulating markets where that price goes is up for grabs... and probably points down"

We don’t know what we would do without Ms.Clinton. How would we know, for example, how long we should hold an investment without her to tell us? She seems to believe that today’s average holding period is too short. It causes an obsession with short-term results that she calls “quarterly capitalism.” How will “working to end short-termism” help working families? How many months of holding an investment is acceptable to the Democratic Party’s front-runner? Why would anyone even think that Ms. Clinton – who has never held an honest job in the private sector – could possibly have any idea about how to save capitalism… or how long an investment should be held?