- Second Ebola patient to arrive in U.S. on Tuesday (Reuters)
- Ebola Drug Made From Tobacco Plant Saves U.S. Aid Workers (BBG)
- Egypt plans to dig new Suez Canal costing $4 billion (Reuters)
- Apple Buybacks Pay Most Ever as CEOs Spend $211 Billion (BBG)
- DeMark Says Sell China Stocks Now After World’s Best Gain (BBG)
- Investors Stung by Losses After Exiting Struggling Property Fund in China (WSJ)
- B.A. in BTFD: MIT May Consider Granting Degrees in Less Than Four Years (BBG)
- Too late, money's already been spent: GPIF Needs Overhaul Before Asset Changes, Shiozaki Says (BBG)
- Oh look, another "truce": Israel withdraws troops, 72-hour Gaza truce begins (Reuters)
Unlike last week's economic report deluge, this week has virtually no A-grade updates of note, with the key events being Factory Orders (exp. 0.6%), ISM non-mfg (exp. 56.5), Trade balance (Exp. -$44.9 bn), Unit Labor Costs (1.2%) and Wholesale Inventories (0.7%).
In recent weeks France has defied US demands not to build Mistrals for Russia, has questioned dollar imperialism and the Petrodollar, and has blasted the US banking regulator's fines as "accelerating the decline of the dollar." So it is likely not a huge surprise that ahead of the G-20 meeting of world leaders later in the year, The FT reports, France has gathered support to challenge US regulators imposing heavy penalties on foreign banks. Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet hoping to bring "more proportionality" to bank fines. With allies like this...
Dispassionate, non-conspiratorial rant , fact-based high level discussion of the sigificant drivers of the week ahead.
The gold price manipulation scheme will go down as the biggest financial market scandal in US history for numerous reasons. They include the destruction of the free market system in the United States.
Outlook of the foreign exchange market in the week ahead, with some observations about equities and bonds.
In the last few days a new and curious question has emerged: would India embrace the US/Japan axis while foregoing its natural Developing Market, and BRICS, allies, Russia and China. We now have a clear answer and it is a resounding no, because in what was the latest slap on the face of now crashing on all sides US global hegemony, earlier today India refused to sign a critical global trade dea. Specifically, India's unresolved demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline. WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight that "we have not been able to find a solution that would allow us to bridge that gap."
"...the numbers that they crank out to make everybody feel good are almost as phony as the numbers that the Argentine government cranks out... I would say that inflation is realistically in the 8-10% range here in the US—and it’s going much higher. The growth is all a fantasy. It’s all a result of the assumption that there is no inflation, when there really is because what we have is inflation masquerading as economic growth. But the bottom line is the economy is really contracting, that’s why the labor force is shrinking, that’s why we’re using less energy, that’s why the people’s standard of living is going down, and real incomes are falling and job opportunities are disappearing. It’s because we’re in a recession and no one wants to admit it."
Overnight markets have been a continuation of the relative peace observed yesterday before the onslaught of key data later in the week, with the biggest mover standing out as the USDJPY, which briefly touched 102 before sliding lower then recouping losses. This sent the Nikkei 225 up 0.57% despite absolutely atrocious Japanese household spending data, coupled with a major deterioration in employment: at this rate if Abenomics doesn't fix the economy it just may destroy it. Aside from that the last 24 hours could be summed as having a lot of noise but not a lot of excitement. This was best illustrated by the S&P500’s (+0.03%) performance which was the second smallest gain YTD. And while the SHCOMP is starting to fade its recent euphoria and China was up only 0.24%, Europe continues to cower in the shade of Russian sanctions as both German Bund yields rose to record highs, and Portugal's BES tumbled by 10% once again to 1 week lows. Today Europe is expected to formally reveal its latest Russian sanctions, which should in turn push Europe's already teetering economy back over the edge.
An overview of the major events next week within the context of the capital markets, which could be at inflection points.
You’re More Likely to Be Killed By Brain-Eating Parasites, Texting While Driving, Toddlers, Lightning, Falling Out of Bed ...Submitted by George Washington on 07/24/2014 13:36 -0400
... Alcoholism, Food Poisoning, a Financial Crash, Obesity, Dog Bites, Doctor Mistakes or “Autoerotic Asphyxiation” than by Terrorists (Getting Hit By ASTEROID = Even Odds)
There are consequences to speaking publicly about the real state of the economy. After 8 years of service, Walmart CEO Bill Simon has been replaced by Greg Foran as President and CEO of the behemoth retailer. This comes just 2 week after Simon questioned the validity of the government's "rosy jobs numbers" on CNBC and several quarters of weak performance at the company (due to a weak economy). Walmart's press release explains that the new CEO has "a passion for fresh food" and is "one of the most talented retailers ever met." We are sure these are crucial factors to overcome the stagnating incomes of America for the largest retailer...
In yet another example of central planners not comprehending the unintended consequences of their actions, Glenn Stevens - head of the Reserve Bank of Australia - commented last night on the curious lack of animal spirits holding back the global economic recovery. As Bloomberg's Richard Breslow notes though, of course, his argument is disingenuous at best since it is the actions (and consequences) of central banks crowding out other market participants and creating a culture of investors who moo (herd-like along with their yield-chasing, buyback purchasing, capex cutting peers) rather than roar... Central banks have turned investors from bulls to cows...
?Economics is like a Monet painting. Stand too close and all you see is a bunch of seemingly random paint strokes. Back up a few steps and an image emerges. The painting of bubblenomics started with the Plaza Accord, September 1985, where five nations agreed to manipulate the dominant currencies at the time. Japan enjoyed a 50% devaluation of the US$ vs the yen, artificially enriching its citizens so they could travel the world in busloads with eighty pounds of cameras around their necks. The consequences of that bubble have yet to be corrected. Based on healthy guidelines, the price of real estate is far too expensive today, or, more precisely, the cost of housing is too high but we may need another crisis before the market will wake up to the needed changes. In the meantime, money printing and hype will continue.
In the absence of any major economic events, it will be another day tracking geopolitical headlines out of Ukraine (lots of accusations, propaganda and fingerpointing on both sides, zero actual evidence and facts - expect more European sanctions to be announced today to match last week's latest US-led round ) and Israel (where the death toll has now risen over 500, almost entirely on the Gaza side), and then promptly spinning any bad news as great news. For now, however, futures are modestly lower from the Friday close pushed down by the AUDJPY which has rebased around 95.00. We expect the momentum ignition correlation algos will promptly take of that as soon as the US market opens, a market which has now been described as bubbly by the BIS, the Fed and the IMF.