With the Greek IMF payment just 48 hours away, and Europe having submitted its best and final offer to Greece in a battle of "deal proposals", today Greek PM Tsipras will meet with European Commission President Juncker to discuss the recently submitted reform proposals by the Greek premier. However, a Greek government spokesman says that Greek PM Tsipras will not meet Eurogroup's Dijsselbloem despite several reports suggesting that they would do so later today. Last night it was reported that the EU, ECB, IMF agreed on terms for a cash-for-reform plan to be presented to Greece. However, a senior EU official has said that they are concerned that the stringent measures of the proposal could be met with rejection by Greece.
May was a banner month for car sales and it's easy to see why. Nearly every conceivable metric for financing hit a record in Q1 according to Experian, including average loan term and average amount financed, suggesting the trillion-dollar US auto loan market has officially hit bubble territory. Meanwhile, the "cash out auto loan" is the new home equity loan.
June is off with a bang, and a very busy week in the macro economic calendar, both globally and in the US, which culminates with the latest "most important ever" payrolls report, one which will surely be closely watched by a Fed which may hike as soon as a few weeks from now (but probably won't).
- FIFA Raided by Swiss Authorities in 2018, 2022 World Cup Probe (BBG)
- Companies Send More Cash Back to Shareholders (WSJ)
- Time Warner Cable Deal Stirs Debt Concerns (WSJ)
- Qatar $200 Billion World Cup Under More Scrutiny Amid FIFA Probe (BBG)
- Philippine, Vietnamese troops play soccer and sing on disputed island (Reuters)
- The G-7's Problem: Can the World Deal With a Greek Default? (BBG)
- SocGen Deal for Bache Illustrates Commodity-Trading Woe (WSJ)
- China’s Naval Abilities Test Asia’s Insecurities (WSJ)
"Coins and bills are obsolete and only reduce the influence of central banks," German economist and sole Keynesian member of the German Council Of Economic Experts Peter Bofinger tells Spiegel, becoming the latest central planning proponent to suggest that a cashless society would solve the world's economic problems by allowing the government to control who spends what and when in a futile effort to control the business cycle.
Fed-created bubbles are inevitably going to implode, because they have no relation to economic reality whatsoever. And when they implode, millions of Americans are going to be financially wiped out. Just like David and Jackie Siegel, “America’s time-share king”, America just keeps on making the same mistakes over and over again - we simply can’t help ourselves. And in the end, we will all pay a great, great price for our utter foolishness.
While the US is waking up in anticipation of what is once again said to be the "most important nonfarm payrolls number" at least since the last most important such number, because anything 250,000 and above puts the June rate hike right back on the Fed calendar, while a collapse in this lagging indicator will be explained away with harsh rain showers in April, and send stocks soaring due to yet another delay in tightening expectations despite Yellen's outright warning of overvalued stocks, the UK has been up all night following a dramatic election, whose outcome has been largely the opposite of what the experts predicted, with Conservatives set to win an outright majority, resulting in embarrassment for Labor, the Liberal Democrats and the UKIP, both of which have already seen dramatic changes in their leadership, and moments ago both Nick Clegg and Nigel Farage announced they would stand down as party leaders.
In a quarter in which US GDP is set to decline consumer credit, according to the latest update from the Federal Reserve, increased by just over $45 billion. But how is it possible that with such a massive expansion in household credit there was no actual benefit to the underlying economy? Simple: 98% of the credit lent out in the first quarter, or $44.3 billion, went to student and car loans!
BOND SELLOFF DEEPENS; GERMAN 10-YR YIELD JUMPS 17 BPS TO 0.76%
SPANISH 10-YEAR BOND YIELD CLIMBS TO 2%; HIGHEST SINCE NOV. 24
ITALIAN 10-YEAR BOND YIELD CLIMBS ABOVE 2%; 1ST TIME THIS YEAR
10Y TREASURY YIELD CLIMBS 6BPS TO 2.31%, HIGHEST SINCE DEC. 8
U.K. 10-YR BOND YIELD CLIMBS 8 BPS TO 2.06%; MOST SINCE NOV. 24
JAPAN 10Y YIELD UP 7.5 BPS, SET FOR BIGGEST RISE SINCE MAY 2013
Quickly looking at the potential market moving events this week, US payrolls on Friday will be the clear focus. In terms of expectations, our US colleagues are expecting a +225k print which matches the current Bloomberg consensus, while they expect the unemployment rate to drop one-tenth to 5.4%. Elsewhere, Thursday’s UK Election will be closely followed while Greece will once again be front and center.
- Win or lose, Cameron's political career hangs by a thread (Reuters)
- Greece aims for deal with lenders, IMF hard on reforms: minister (Reuters)
- Greek Jobless Legacy Adds Danger for Tsipras as Funds Dry Up (BBG)
- U.S. Will Change Stance on Secret Phone Tracking (WSJ)
- China April HSBC PMI shows biggest drop in factory activity in a year (Reuters)
- Goldman Sachs in Talks to Sell Its Coal Mines (WSJ)
- Takeover Fuel Begins to Flow as S&P 500 Bull Run Makes History (BBG)
Futures Levitate Following Worst Chinese Mfg PMI In One Year, Brent At 2015 Highs; Bund Slide ContinuesSubmitted by Tyler Durden on 05/04/2015 06:45 -0400
The best news for stocks is twofold: volumes continue to be lethargic with both the UK (May Day bank holiday) and Japan closed until Thursday (Golden Week), while the bulk of the S&P500 has now exited the stock buyback quiet period. As such, ignore record equity outflows - all the matters is that corporate CFOs, flush with brand news bond issuance cash, will tell their favorite Wall Street trading desk to buy stocks at just the right inflection point sending the market surging just as shorts once again test the downtrend and the 50 DMA.
Over the past couple of years, there has been a growing chorus of individuals claiming that the financial markets have finally shaken the shackles of the secular bear market that began at the turn of the century. Bank of America is the latest to jump onto the "new secular bull market" bandwagon; but what they miss is that secular bull markets are not born of price, but rather of a set of fundamental metrics that foster sustained economic growth over long periods of time.
We simply don’t see any time in the future that would see Americans start spending again at a rate anywhere near what would be required for an economic recovery. However, that is by no means a generally accepted point of view in the financial press; and so these issues must be addressed time and again until people begin to understand, and quit making the wrong decisions for the wrong reasons. People have a right to know what’s truly happening to their lives, and their societies. And they’re not nearly getting enough of it through the ‘official’ press.
Futures Flat On Minutes Day; Chinese Bubble Spills Into Hong Kong; Biggest Energy M&A Deal In Over A DecadeSubmitted by Tyler Durden on 04/08/2015 07:00 -0400
While US equity futures are largely unchanged, if only ahead of the now daily pre-open market-wide ramp, things in Asia have continued on their bubbly flurry, where China's Shanghai Composite briefly rose above 4000 for the first time since 2008, but it was the surge in the Hong Kong stock market that showed the Chinese bubble is finally spilling over, in the form of a blistering rally on the Hang Seng which rose nearly 4% on immense volume which at 250 billion Hong Kong dollars ($32 billion) was three times the average daily volume over the past year and nearly 20% more than the previous record volume day in October 2007, at the height of the pre-financial crisis bubble.