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Russian Ruble Tumbles To Record Low Against Dollar

The Russian Ruble has collapsed this morning to its weakest against the USDollar on record. The drop - similar in size to the drop when US and Europe unleashed Sanctions 3.0 - has sent USDRUB to 36.89. Russian stocks are down 2.2% this morning - biggest drop in 3 weeks - and Russian bonds are weaker (10Y +20bps back above 5%). We can't help but think somewhere Shinzo Abe is getting ideas about how to really devalue his nation's currency to competitiveness...



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Ukraine Again Says It Has Destroyed Russian Military Vehicles, Market No Longer Cares

The last time the Ukraine who cried Russian wolf invasion swore it had blown up Russian military vehicles, as part of the humanitarian convoy, it turned out rather quickly it had lied after it couldn't provide any evidence of this. So, in keeping with crying wolves, now is the time for try #2. From BBG:

  • UKRAINE SAYS TWO COLUMNS OF RUSSIAN MILITARY VEHICLES DESTROYED
  • UKRAINE SAYS RUSSIAN MILITARY VEHICLES DESTROYED NEAR ILOVAYSK

Judging by the market reaction, which actually rose on the headlines, it is becoming clear that Ukraine propaganda has lost all market moving abilities, as not even the algos buy the fabricated attempts at escalation.



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Pending Home Sales Drop YoY For 10th Month In A Row

Pending Home Sales fell 2.7% year-over-year making this the 10th month of falling YoY sales. This print beat expectations of a 3.5% decline but last month's data was revised lower to a 4.7% decline. MoM sales jumped 3.3% but the series has been extremely noisy in the last 6 months as the Northeast saw a seasonally-adjusted gain of 6.2% MoM (and Midwest fell 0.4%).



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Argentina Proclaims Peso Devaluation "Obviously Won't Happen" - Just Like It "Vowed" In 2013

May 2013, President Kirchner: ""As long as I'm president, those who want to make money through devaluations, which other people have to pay for, will have to keep waiting for another government,"

Jan 2014: Argentina Devaluation Sends Currency Tumbling Most in 12 Years

Aug 2014: Argentina’s Cabinet Chief Jorge Capitanich said today a devaluation of the peso, "obviously won't happen."

So what's next?



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The Housing Echo-Bubble Is Popping

How do we know when an asset class is in a bubble? When everyone who stands to benefit from the continuation of the expansion declares it can't be a bubble.



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GDP 'Good News' Sparks Bond Buying & Stock Selling, Treasury Curve Crumbles Further

US GDP beat expectations 'proving' that government data shows the recovery meme is on track (as long as it doesn't snow ever again). The market's reaction... intriguing - stocks shrugged even as a USDJPY pump tried to get things going; gold and silver moved modestly higher; and Treasury yields... fell notably at the long end. 30Y is now trading with a 3.06% handle and 5s30s is back below 145bps...!



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Q2 GDP Revision Unexpected Rises On Alleged Jump In Capex To Highest Since 2011

Following the unexpected surge in Q2 GDP, which beat most analyst estimates, there was widespread expectation that based on real-time data, the revised Q2 print would be worse. So perhaps it is appropriate that the Bureau of Economic Analysis punked everyone once again, when moments ago it released the first revision to the Q2 GDP print, which instead of dropping to the consensus expected 3.9%, it instead rose to 4.2%, up from the 4.0% initial report.



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Initial Jobless Claims Drop Back Under 300k, Continuing Claims Rise

"Slack" or "no slack" - initial claims tumbling along the bottom of the lowest levels in a decade suggest the US economy's job creation is as good as it gets. Initial claims was stable at 298k (vs expectations of 300k) down very small from the 299k adjusted data for last week. Continuing claims rose 25k on the week and missed expectations but also continues to tread water at the lowest levels since 2007.



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NATO Says Over 1000 Russian Troops In Ukraine, "Extremely Worrying... Dire Situation"

Hot on the heels of Ukraine's claims of 'invasion' and retraction of said claim, NATO is once again stepping in with strong claims about Russian 'incursions':

  • *NATO OFFICER: ESTIMATED 20,000 RUSSIAN TROOPS NEAR UKRAINE (not 17 or 45?)
  • *NATO OFFICER: OVER 1,000 RUSSIAN TROOPS OPERATING IN UKRAINE
  • *NATO OFFICER: 2ND FRONT RISKS CUTTING UKRAINE ARMY SUPPLY LINES
  • *NATO OFFICER: NEW 2ND FRONT 'EXTREMELY WORRYING' FOR UKRAINE

While NATO statements in the past have caused dramatic weakness in stocks (or been entirely shurgged off), it appears this time markets are taking their concerns more seriously as the officer states Ukraine's forces are in a "dire situation."



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Frontrunning: August 28

  • Clearly it's time to bomb Assad (on Qatar instructions): Islamic State executes dozens of Syrian army soldiers (Reuters)
  • Ukraine Declares Russian Invasion as Sanctions Threat Raised (BBG)
  • Ukraine Reports Russian Invasion on a New Front (NYT)
  • German Unemployment Rises as Risks to Economy Build (BBG)
  • Ebola spreads to Nigeria oil hub Port Harcourt (BBC)
  • FBI Probes Possible Hacking Incident at J.P. Morgan (WSJ)
  • FBI, Secret Service investigate reports of cyber attacks on U.S. banks (Reuters)
  • If you like your Venezuela, you can stay in Venezuela: Airlines Abandon Fliers Amid Currency Dispute (WSJ)
  • Boomer Wealth Dented by Mortgages Poses U.S. Risk (BBG)
  • People Aren't Buying Guns (BusinessWeek)


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Ukraine Accuses Russia Of Launching Invasion, Then Promptly Retracts

Ukraine accused Russia on Thursday of mounting an invasion in the southeast of the country in support of pro-Moscow separatist rebels. Ukraine's security and defense council said the border town of Novoazovsk and other parts of Ukraine's south-east had fallen under the control of Russian forces who together with rebels were staging a counter-offensive. "A counter-offensive by Russian troops and separatist units is continuing in south-east Ukraine," the council said in a post on Twitter. ... and then everything was promptly denied: CORRECTED-UKRAINIAN PRESIDENT POROSHENKO SAYS RUSSIAN TROOPS HAVE BEEN BROUGHT INTO UKRAINE (NOT 'RUSSIAN MILITARY INVASION HAS TAKEN PLACE')



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Futures Slide As Ukraine Fighting "Re-Escalates" Again

If you like your de-escalation, you can keep your de-escalation. To think that heading into, and following the Russia-Ukraine "summit" earlier this week there was so much hope that the tense Ukraine civil war "situation" would somehow fix itself. Oh how wrong that thinking was considering overnight, following rebel separatists gains in the southeast of Ukraine which included the strategic port of Novoazvosk and which is "threatening to open up a new front in the war" including setting up a land corridor to Russia controlled-Crimea, Ukraine's president Poroshenko for the first time came out and directly accused Russia of an "Invasion", or at least a first time in recent weeks, saying he has convened the security council on the recent Russian actions.



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Merkel Slams US Hegemony? "America Can't Solve All The World's Problems Anymore"

First Russia and China, then UAE, Egypt, and Turkey... and now it appears Germany (following a phone call with Putin) is pulling the rug out from under US hegemony - just as Obama's warmongery ramps up...

*MERKEL SAYS U.S. CAN'T SOLVE ALL THE WORLD'S PROBLEMS ANYMORE

Which is odd because just yesterday, President Obama (who never lies) stated "The United States is and will remain the one indispensable nation in the world..." adding that "no other nation can do what we do." Perhaps he is wrong?



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The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan

According to Russia's RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin'(sic) in action the move for a Petrodollar-free world.



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Chris Hedges: "Our Liberty Has Been Sacrificed On The Altar Of National Security"

"The relationship between those who are constantly watched and tracked, and those who watch and track them, is the relationship between masters and slaves." - Chris Hedges



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