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2 Year Paper Prices At Highest Yield Since May 2011; Directs Tumble, Dealers Surge

The most notable fact about today's $29 billion auction of 2 Year Notes was that the final yield of 0.544%, which stopped through the 0.546% When Issued, is that this was the highest auction yield since May of 2011 when the paper, since matured, priced at 0.56%. Considering some at the Fed anticipate the Fed Funds rate hitting over 4% by the time this bond is supposed to mature, either the Fed hawks or the market is wrong.



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Earnings Recovery? Europe Would Love Some Of That

As the following just released chart from Goldman shows that while non-GAAP EPS in the US have stabilized (and Japan is clearly the upside suprise even as its economy is once again teetering on the edge of recession), and Asia ex Japan is slowly rolling over once more, it is Europe that is the big shocker: as of July, European 2014 EPS forecasts are now the lowest they have been for the entire year, and are down 8% from where they were at the beginning of the year!



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The Case For A Bull Or Bear Market In Two Charts

Which appears more likely - a straight-line extension of the past two years' rise in stocks, or another "impossible" decline to complete the megaphone pattern?



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Russia Slams "Puzzling And Unprecedented" $50 Billion Yukos Award, Challenges "One-Sided" Court Ruling

The Hague is not Vladimir Putin's favorite place today. Following the "war crime" comments earlier, the arbitration court's decision to rule in favor of Yukos shareholders (and thuis against the allegedly "politically motivated" confiscation of the firm's assets by the Russian government) with a $50 billion settlement (half what was sought) has prompted a quick and angry response from the Russian government. Blasting the "one-sided use of evidence," and re-iterating the massive tax evasion that the leadership were involved in, Russia slams "the puzzling unprecedented amount of damages" awarded, claiming the process is "becoming increasingly politicized."



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Liberia Finance Ministry Scrambles To "Instil Confidence" After Employee Dies From Ebola

• Use of the elevator is restricted to only 4 persons per trip
• Absolutely, no clustering on the stairways
• No gathering of more than five persons except for meetings in conference spaces or spatial environment
• Absolutely no handshakes, hugging of other physical bodily contact
• Please report any suspicious illness or strange conditions amongst employees
• Only persons with genuine business dealings and transactions would be permitted on the premises
• All employees are further encouraged to wear long sleeve clothing to minimize any possible risk of exposure



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LOCO IPO Soars To Insane 20x EBITDA Multiple

The "fear of missing out" (on the next Chipotle) is strong with this one as El Pollo Loco (LOCO) IPO'd at $15 on Friday, opened at $19 and today explodes to almost $33 at a mind-numbing ~20x EBITDA (market cap over $1.2 billion on a $53 million EBITDA)... crazy chicken indeed...



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Libya Warns Oil-Fire Is "Out Of Control" - What 1.5 Million Gallons Of Burning Gasoline Looks Like

UPDATE: Caught on tape... A second fuel tank in the Libyan capital Tripoli has caught fire, which Libya's National Oil Company has described as "out of control".

A dark cloud hangs over Tripoli today... but this time it's physical not metaphorical. As NBC reports, a rocket hit a fuel storage tank containing 1.5 million gallons of gasoline, triggering a major blaze as rival brigades of former rebels fought for control of Tripoli's main airport. A huge cloud of black smoke billowed across the capital's skyline as the blaze burned "out of control," and firefighters had withdrawn from the area.



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100 Years Ago Today It Began: "Austria Has Chosen War"

The good news is that 100 years later the world is a far more stable and peaceful place.



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Macro Weakness Sends Stocks Reeling, All Indices Red Post-MH17

Well that escalated quickly. Friday's micro (earnings-based) weakness has extended to today's macro weakness and removed any "ignore the geopolitics, just buy the dips"-exuberance. All US equity indices are once again below the levels pre-MH17 headlines with the Dow and Russell 2000 worst performers. It appears investors need some reassurance that Yellen's "price-equity" ratio is still 'fair'.



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Pending Home Sales Tumble From Recovery Highs, Biggest Miss In 2014

Following last week's collapse in new home sales (and last month's massive beat and surge in pending home sales), it was likely not a total surprise that pending home sales would slow, but the -1.1% MoM print is the worst in 2014 (and the biggest miss in 2014). The median existing home price continues to rise (up 4.3% year-over-year) but this is the slowest rate of gain since March 2012. NAR is quick with the excuses and this time.. no weather is to blame.



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US Services PMI Beats After Last Week's Manufacturing PMI Record Miss, Employment Plunges

With US manufacturing PMI having missed by the most on record last week, it was only "fair" that the Services PMI from recent IPO Markit would beat expectations and hold at record highs. At 61.0 this is equal to the best print in history... but there is somethng wrong here. The surge in employment in June has been eviscerated as the index plunged back from record exuberance at 56.1 to 52.8 with some respondents noting "a degree of caution about the business outlook." This is not good news for long-awaited wage inflation that promises to lift all boats...



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China's Solution To “Property Companies Facing Huge Debt Burdens”: Much More Debt

“Property companies are facing huge debt burdens,” said Sun Binbin, a bond analyst at China Merchants Securities Co. in Shanghai. “If the regulator hadn’t eased, there probably would have been more defaults.” Or, translated: if the companies weren't allowed to "fix" their huge debt burdens with even more debt, it would have been a complete catastrophe.



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Argentina Bonds/Currency Tumble As Delegation Snubs Mediation

With 2 days until the 30-day grace period for 'negotiating' the already defaulted upon bonds is over and Argentina is once again dumped from the public markets, the demands for a "continuous mediation" by Judge Griesa appears to have fallen on dear ears. Bloomberg reports that the Argentina delegation will not meet with the mediator today.. and Argentina bonds are tumbling (and CDS soaring). Markets are implying around 45-50% chance of a default being triggered, which, as Jefferies noted last week, seems low. Argentina's black-market peso (blue dollar rate) weakened to 12.75 (just shy of its weakest ever at 13.00) implying a 50% devaluation over the peso.



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"Reprehensible" Lloyds Bank Agrees To $105 Million Wristslap For Manipulating Libor

That will teach them! Having received full credit for for co-operation and suspending some individuals, Lloyds Bank has been fined the staggeringly wrist-slap-like sum of $105 million for the "manipulation, attempted manipulation, and false reporting of Libor." As WSJ reports, the British bank becomes the seventh financial institution to strike a deal with U.S. and U.K. authorities who are conducting a long running probe into allegations of widespread attempts to manipulate Libor. With no less than the head of the Bank of England calling the bank's actions (mainpulating JPY Libor for at least 2 years) "reprehensible," and the CFTC adds individuals bevahior was a "gross breach of trust." Well we are sure after this they will never manipulate another market ever again...



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