Australia

Paul Craig Roberts: "Americans Are A Conquered People"

The optimism that we see is that the public’s support of outsiders is an indication that the insouciant public is waking up. But Americans will have to do more than wake up, as they cannot rescue themselves via the voting booth. In our opinion, the American people will remain serfs until they wake up to Revolution. Today Americans exist as a conquered people.

Currency War Resumes - China Devalues Yuan To 5-Year Lows

After a brief haitus from the ongoing currency wars, China fired another salvo at The Fed tonight by devaluing the Yuan fix to 6.5693 - its weakest against the USD since March 2011. After eight days higher in a row for The USD Index, it seems PBOC has turned its currency liberalization plan off, stabilizing the broad Renminbi basket (which has been steadly devalued) and turning its attention to devaluing against the USD. Having unleashed turmoil in August (pre-Sept FOMC) and January (post Dec rate-hike), it appears the rising rate-hike probabilities jawboned by The Fed are decidedly disagreeable to "authoritative persons" in China.

Stronger Dollar Sends Futures Higher, Oil Lower, Asian Stocks To Two Month Lows

Yesterday's weak dollar headfake has ended and overnight the USD rallied, while Asian stocks dropped to the lowest level in 7 weeks and crude oil fell as speculation returned that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained thanks to a weaker EUR.

The World's Cheapest (& Most Expensive) Places To Sin

While Draghi and his co-conspirators hammer the deflation ogre in Sendai, there is some good news for those who partake of 'sin'. Broadly speaking the cost of beer-and-cigarettes (what Deutsche Bank defines as 'sin') has dropped notably over the past two years with prices in Moscow and Stockholm plunging the most (while Madrid and Mumbai have risen the most). However, those looking for the cheapest way to maintain their bad habits should head to Manila in the Philippines (and avoid Melbourne, Australia).

Global Stocks Slide, S&P Set To Open Red For The Year As Hawkish Fed Ignites "Risk Off"

After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.

Futures Fizzle After Oil Fades Bounce Above $48

It has been more of the same overnight, as global stocks piggybacked on the strong US close and rose despite the lack of good (or bad) macro news, propelled higher by the two usual suspects: a higher USDJPY and a even higher oil, if mostly early on in the trading session.

Who Rules The World? Part 1

The Western picture of world order is that “ever since the end of the Cold War, the overwhelming power of the U.S. military has been the central fact of international politics.” This is particularly crucial in three regions: East Asia, where “the U.S. Navy has become used to treating the Pacific as an ‘American lake’”; Europe, where NATO -- meaning the United States, which “accounts for a staggering three-quarters of NATO’s military spending” -- “guarantees the territorial integrity of its member states”; and the Middle East, where giant U.S. naval and air bases “exist to reassure friends and to intimidate rivals.” The problem of world order today is that “these security orders are now under challenge in all three regions” because of Russian intervention in Ukraine and Syria, and because of China turning its nearby seas from an American lake to “clearly contested water.” The fundamental question of international relations, then, is whether the United States should “accept that other major powers should have some kind of zone of influence in their neighborhoods.”

Chomsky: Europe Bows To Its "Washington Masters" On Everything From Snowden To Iran

“There are, I think, by now four Latin American countries that offer asylum to Snowden - not one European country. In fact, they won’t even let him cross their borders. Why? Because the master in Washington tells them, ‘we don’t want him to.’ And Snowden, it’s important to recall, performed an enormous service, a patriotic service in fact, to the people of the United States and the world.

China Hard Landing Spreads: Hong Kong GDP Tumbles At Fastest Pace Since Financial Crisis

In the latest indication of contracting global growth, overnight Hong Kong reported that its Q1 GDP fell off a cliff 0.4% qoq, widly missing estimates of 0.1% growth as retail sales plummeted and the property market continued its collapse. On a y/y basis, the economy grew only 0.8% when compared to the same period last year, less than half the 1.9% y/y growth reflected in Q4.

China Trade And The Inevitability Of Systemic Reset

The reset is the answer, not the problem. Delaying the answer only elongates the pain of the problem. Under the direction of orthodox economics (the fusion of Keynes and monetarism) the world’s “stimulus” apparatus is making a bad situation worse by (at best) dragging it out far longer than maybe it would have under more traditional business cycle conditions. Belief in the power of “stimulus” to make it happen prevents awareness of what is, again, really a paradigm shift that will not be altered. What we are analyzing, then, is not what awaits but how long it takes to get there and the huge, growing costs to delay what looks only inevitable.

Erdogan "Prince Of Europe" Rejects EU Demands To Reform Terrorist Law

The EU should thank its lucky stars that Erdogan will not uphold his end of the deal and gratefully cancel it. Coupled with the cancellation (for which the EU can blame Erdogan), the EU should announce an Australia-type plan forcing back all boats, while arresting and prosecuting smugglers. Call out the military to enforce the borders. That’s what Australia did.  Making a deal with the devil then letting the devil renege on a critical piece of his end is not a viable option. Accepting Erdogan’s new demands would do four things, all unsavory...

What Wall Street Expects From Today's Payrolls Report And How To Trade It

In what may be one of the least relevant payroll reports in a long time as the Fed already knows the labor market is doing better quantiatively (qualitatively it has been all about low-paying jobs gaining at the expense of higher paying manufacturing and info-tech positions) and as has further demonstrated it is no longer jobs data dependent, here is what Wall Street consensus expects: total payrolls +200,000, down from 215K in March; a 4.9% unemployment rate; average hourly earnings rising 0.3% (last 0.3%) M/M and 2.4% Y/Y (last 2.3%); on labor force participation of 63%.

Futures Rebound As Crude Regains $45 On Canada Fears; Turkey Hammered

While markets remain relatively subdued ahead of tomorrow's nonfarm payrolls report, after several days of losses in US stocks which pushed the S&P500 to three week lows, overnight markets ignored the latest weak data out of China where the Caixin Services PMI was the latest indicator to disappoint (dropping from 52.2 to 51.8), and instead focused on crude, which rebounded from yesterday's post inventory-build lows and briefly printed above $45/bbl over uncertainty related to the impact of Canada wildfires on production and how long will last. The bounce in WTI has meant Brent briefly traded at parity with West Texas for the first time in 6 weeks. 

The Central Bank War On Savers - The Big Lie Beneath

The central bank war on savers is rooted in a monumental case of the Big Lie. Here is what a retired worker who managed to save $5,000 per year over a 40 year’s lifetime of toil and sweat in a steel factory now earns in daily interest on a bank CD. To wit, a single cup of cappuccino. Yet the central bankers claim they have absolutely nothing to do with this flaming economic injustice.

Frontrunning: May 3

  • Global stocks slide as yen, euro gains question policy potency (Reuters)
  • U.S. Index Futures Signal Stock Losses as AIG Drops on Earnings (BBG)
  • EU Sees Weaker Growth in Eurozone and Wider EU as China Slowdown Weighs (WSJ)
  • Euro Set for Longest Run of Gains Since 2013 as Fed Focus Fades (BBG)
  • German Bonds Advance as EU Cuts Euro-Area Inflation Outlook (BBG)