Goldman And SocGen Unleash The "C"-Word: ECB Alone Can't Contain Grexit Risks

Unnamed "officials" have proclaimed a new set of Greek proposals received by Brussels tonight as "a good base," according to AFP, and thusly the Euro is very modestly bid. However, both Socgen (without a 3rd bailout of €60-80 billion over the next 3 years, Greek uncertainty remains high and leaves Grexit risk merely semi-stable) and Goldman (a deal will come only after the introduction of capital controls, a technical default on the IMF and issuance of IOUs/and a further build-up of arreas... and the damage resulting from a breaking of the integrity of the Euro would not be fixed by monetary policy alone) leave us wondering just who is buying Euros and US stocks and selling Swiss Francs as D(efault) Day looms and the 'C' word (contagion) spreads.

Is This Complacency, Idiocy, Or Both?

How can it be implied that the markets are too fragile to deal with an unexpected raise of interest rates to (gasp) 1/4 of 1%, if all the “data” we were told (or sold) has been showing signs of all this “improvement?” The question still remains: How does any Ivory Tower prognosticator, or Wall Street talking head, square all these circles? Simple – they don’t. They just act as if it they didn’t or won’t happen. Or, just continue to act as if we’re too dumb to answer. This is complacency, idiocy, and more – all turned up to 11!

Bond Trading Revenues Are Plunging On Wall Street, And Why It Is Going To Get Worse

Among the renewed Greek drama, many missed a key development in the past week, namely Jefferies Q2 earnings, and particularly the company's fixed income revenue: traditionally a harbinger of profitability for Wall Street's biggest source of profit (or at least biggest source of profit in the Old Normal). And while not as abysmal as the 56% collapse in the first quarter, in the three months ended May 31 what has traditionally been the bread and butter of Dick Handler's operation generated just $153 million in revenue. CEO Handler blamed that decline on a lack of trading in the market and fewer companies selling junk bonds.

Future Shock And The Greening Of America

The 1960s visibly changed society in a few short years, and less visibly, the economy. Two books published in 1970, at the end of the tumultuous 1960s, attempted to weave a coherent narrative of what everyone was experiencing: Future Shock and The Greening of America. If Future Shock and Present Shock have any predictive value, then we must conclude the speeding up of change is eroding our ability to make sense of present-day trends, as the velocity of change is outrunning our ability to construct coherent narratives.

Greece Told To Have A Deal Ready Before Monday Meeting; Tsipras Submits Revised Plan With No Pension Cuts

With just under 24 hours until Monday's final summit after which even JPMorgan now agrees the ECB will be forced to use a nuclear option and limit or cut Greek ELA thus imposing capital controls as a "negotiating tactic", earlier today both France and Germany told Greece it must have a reform deal agreement with the Troika finalized and delivered before a crucial leaders’ summit between Athens and its creditors on Monday; in other words before trading opens on Monday.

Credit Market Warning

There are large signs of stress now present in the credit markets. You might not know it from today's multi-generationally low interest rates, but other key measures such as liquidity and volatility are flashing worrying signs. While some may hope that rising yields are signaling a return to more rapid economic growth, or at least that the fear of outright deflation has lessened, the more likely explanation is that something is wrong and it’s about to get... wronger.

Water Wars Crush California Wineries: "Whoever Has The Longest Straw Wins"

Eerily reminiscent of the determinedly evil oil baron from the movie 'There Will Be Blood', Reuters reports the growing tensions amid California's drought-stricken wineries are boiling over: "There is way too much demand. I blame a lot of vineyards like other people do... It's a matter of who has the longest straw at the bottom of the bucket." No one should worry though, because the government is here to help - with a new water management agency...

Geopolitics Will Trump Economics In Greece

Whatever the eventual financial costs to EU taxpayers of a Greek default, the political costs of a Greek exit are likely to be seen as unacceptable. Most likely the EU will allow a covert Greek default, disguised for the time being by extended repayment schedules, bogus refinancing formulae and possible delayed haircuts as bonds mature. They may insist that such moves are not a technical default. Despite that absurdity, our obedient press corps may even concur with such a characterization, and investors may be so thrilled that a relief rally occurs in stocks and bonds. Extend and pretend will once again be the only acceptable manner to confront our intractable problems.

Who Said It?

... the long-term deficit and debt that we have accumulated is unsustainable. We can't keep on just borrowing from China, or borrowing from other countries because part of it is, we have to pay interest on that debt. And that means that we're mortgaging our children's future with more and more debt, but what's also true is that at some point they're just going to get tired of buying our debt. And when that happens, we will really have to raise interest rates to be able to borrow...

UK Government Study Finds: If Nothing Is Done, Expect Civilizations' Collapse By 2040

We ran the model forward to the year 2040, along a business-as-usual trajectory based on ‘do-nothing’ trends - that is, without any feedback loops that would change the underlying trend. The results show that based on plausible climate trends, and a total failure to change course, the global food supply system would face catastrophic losses, and an unprecedented epidemic of food riots. In this scenario, global society essentially collapses as food production falls permanently short of consumption.

Greek GDP: The Shocking Reality Vs IMF Forecasts; And Who Is To Blame For The Greek Implosion

With a Greek default, shortly followed by a Grexit, a collapse of the "irreversible union" (but... but... "political capital"), and ultimately the end of the latest European monetary union experiment (the latest in a long and illustrious series of prior failures) now seemingly imminent, the blame game has begun. As the NYT noted overnight "the recriminations that would then fly would be so bitter that they would inflict a second round of damage." But who is really to blame? Simple: anyone and everyone who willingly and voluntarily was complicit with the great "can kicking" bailout fiction of the past 5 years...

Jim Rogers: Turmoil Is Coming

"I suspect in the next year or two we will see some kind of major, major problems in the world financial markets. I would suspect when we have this correction, it's going to cause central banks to panic... they will print and spend and borrow, but there comes a time when people are just going to say 'We don’t want to play this game anymore'. And at that point, the world has serious, serious problems because there's nothing to rescue us. I suspect the next economic/financial collapse will be the one they can't deal with."

The Euro Does Not Have A Problem... It Is The Problem

We have now reached the point where the euro does not have a problem – the euro is the problem. De-risking it should be a priority for European leaders, as it now poses a chronic risk to global financial stability. Either the outliers need to leave or the countries inside the eurozone needs to move down the pathway to full political, economic and monetary union.

America(*): Happy (Founding) Fathers Day

Today’s America* is an ugly fraud. Today’s America* has nothing in common with the nostalgic images and grand successes of the nation as it were in her glory days. In fact, we would argue not only does America* lack any authentic representation of times past but is the antithesis of America. We have come full circle, back to the very thing our ancestors fought, died and ultimately persevered to escape.

Meanwhile, Greece Is Quietly Printing Billions Of Euros

During the same period over which Greek banks lost nearly €30 billion in deposits, banknotes in circulation jumped by some €13 billion. In short, because Greeks are increasingly prone to stuffing their euros in mattresses, a large proportion of the deposit flight has come in the form of hard currency withdrawals, meaning the Bank of Greece is forced to (literally) print billions in physical banknotes.