Citibank

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy.

Paul Volcker and Alan Greenspan were the Elvis and Beatles of this movement – the first to see widespread fame for their efforts. Then came Ben Bernanke, perhaps the Jimi Hendrix or Led Zeppelin of his day, taking existing tools and pushing them in new, previously unconsidered, directions.  Now, we have Janet Yellen and Mario Draghi, whose legacies are as yet undefined. They may end up like the next generation of rock stars from the 1970s – something like Bruce Springsteen, with a deep focus on common people in his music. Or, they could be the Bee Gees, who focused simply on commercial success. Only time will tell.

• European stocks up, oil slides as concerns ease over Russia-Turkey tension (Reuters)
• ECB discusses two-tiered bank charges, broader bond buys (Reuters)
• New agonies, alliances as Fed debates post-liftoff plan (Reuters)
• A New Military Power Rises in the Mideast, Courtesy of One Man (BBG)
• Russia's Gazprom says halts gas supplies to Ukraine over payment (Reuters)
• Other central banks set to act, but Swiss policy cupboard bare (Reuters)

In reading various recent regulatory reports, it is clear that almost none of the promises that were made to the public about what was going to happen under Dodd-Frank financial reform is actually happening. Welcome to another day at the casino where the model continues to be — heads they win, tails you lose.

The phrase “crossing the Rubicon” has stuck for more than 2,000 years, signifying a risky and dangerous point of no return. This week, the United States government crossed the Rubicon. In a fit of complete arrogance, a federal judge ruled that he has ‘jurisdiction’ over one of the biggest banks in mainland China, Bank of China (BOC), and demands that the bank turn over financial records to his court.

Unfortunately, we are used to politicians saying whatever they think they need to say to be elected president, and falling way short of their campaign promises on the job. Even scarier would be the notion of selling America to the craftiest bidder. The election may be more than a year away, but isn’t it time to dig beneath the carefully crafted persona that is Trump and unearth the person and the full spectrum of his business dealings? To see the real Donald Trump is to plunge into all the conflicts of interest he denies, the financial tricks he dispenses, the crucial details he obfuscates, and the flimflam he offers up day in, day out.

Each of the 3 stages needed to move to a sustainable price have to be given time to play out. The rig count story has been told with a brutally fast 60 percent drop. Meaningful production declines are on. Next will be inventory draw downs; in that order. As to the latter, we’re just beginning to see the effects of the rig count. Large drawdowns will be here sooner than predicted.

Did you know that the Federal Reserve pays an annual 6% dividend to its shareholders, i.e., the member banks of the cartel? Must be nice, considering savers who had nothing to do with cratering the world economy, and failed to receive a taxpayer funded bailout, can barely earn 0.5% on their money. It’s also quite bizarre. How many other “public institutions” have private shareholders to whom they pay 6% risk free dividends? None, which once again highlights the point that the Federal Reserve is NOT a public institution working on behalf of the citizenry, but is rather a banking cartel designed to enriched and protect its member banks (as we saw on clear display in 2008). It appears that some members of Congress are now targeting the estimated $17 billion per year paid out by the Fed to its member banks via the highway-funding bill.

As dozens now vie for residence in the big white one of Pennsylvania Avenue, MarketWatch, courtesy of LoanDepot.com and CoreLogic, unveil the homes (since most own more than one) and mortgages of the 2016 presidential candidates. With homeownership rates at multi-decade lows, and the American Dream disappearing for most, it appears it pays to be in government - from Trump Tower and Clinton's Compounds to Bernie Sanders' underwater mortgages and Carly Fiorina's five fireplaces...

It’s not even “Too Big to Jail” any longer. It’s now, “Too Big to Lose Profits.” After all #banklivesmatter

In a January 2013 report “Report of the Working Group to Study the Issues Related to Gold Imports and Gold Loans by NBFCs”, the Reserve Bank of India estimated that the ratio of paper gold trading to physical gold trading is 92:1. That is a lot of unbacked paper gold instruments. This has almost entirely separated the “gold price”, such as it is (the clearing price for vast volumes of paper gold “representations” with a fractional backing) from the fundamental supply and demand dynamics for actual physical gold bullion.

As Mr L. famously quipped. "Ever get the feeling you’ve been cheated?"

The Export-Import Bank died last night when its charter expired. After 81 years, what is commonly known as Boeing’s Bank is headed toward Washington’s trash bin. When Congress returns it could revive Ex-Im, which primarily subsidizes big business exports. But a proper burial for what Barack Obama once called “corporate welfare” would save Americans money, reduce economic injustice, and promote economic growth. Ex-Im’s closure is a very rare victory for the good guys in Washington. Crony capitalism is running rampant in America, undermining confidence in a market economy.

Stock markets in the US and Europe are in for a correction, while the euro is set to rise, according to Saxo Bank’s Chief Economist Steen Jakobsen, nomatter what happens between Greece and its creditors. Steen also looks at the impact a rate hike from the US Federal Reserve would have on USD and what currencies could gain once the Fed decides to move on rates, noting that "the consensus has it wrong on the timing of US rate hike," as the credit cycle topped in June 2014. He believes that commodities and metals in particular offer opportunities for investors.