Creditors

The bail out is a cynical ruse, not to benefit Greece as a whole, but to benefit the banks and other creditors (the ECB and the IMF) who should take their medicine and move on. The one thing keeping the whole blighted euro project in place is an arrogant denial of the facts. A loss of political face now is a small price to pay for a much better outcome that will disadvantage far fewer people than the disorganised chaos into which Euroland will descend if the current bunch of lunatics are not put back in the asylum. Is this a Europe we want to be part of?

With the Greek bailout deal now nearly done, all that stands in the way of disbursal is the Greek parliamnent and a predictably incalcitrant Germany which, according to Bild (citing EU sources) has now determined that the new bailout plan is "insufficient."

The overnight market has been a repeat of yesterday's action, when following China's repeat 1.6% devaluation of the CNY (which was to be expected since the PBOC made it quite clear the fixing would be based off the market value, a value which continues plunging), the second biggest in history following Monday's 1.9% plunge, traders appeared stunned having believed the PBOC's lies that the devaluation was a one-off and as a result the E-Mini tumbled overnight, and is now 30 points lower from last night's PBOC fixing announcement, trading at around 2058, and far below the "magical" 200-DMA support line, which has now been solidly breached.

Late in June, BofAML noted that during the previous week "sales [of US stocks] were the largest since January 2008, led by institutional clients [whose] net sales were the largest in data history." Whether that particular bout of smart money dumping was simply an effort to get out ahead of what threatened to be a rather ugly conclusion to six months of bailout negotiations between Greece and creditors we can't say, but what we do know is that not only is the smart money (still) selling, but now even the dumb money has joined the party.

It’s very important to call out people like Trump for the man he is, so we don’t simply fawn and fall for a narcissist, strongman-type as a way to deal with our societal pain and frustration... "I was there at the first Tea Party in 2007 and I’ll be damned if I’m going to stand passively by and watch the movement destroyed by a fake conservative."

To help remind readers of what happens when the entire world engages in wholesale currency war, here is a complete list of all the recent FX interventions, courtesy of Stone McCarthy.

After what were described as "marathon" negotiations, Greece and its creditors have agreed to the terms of the country’s third bailout program. Although some remain optimistic, the general consensus seems to be that, as Finnish Foreign Minister Timo Soini said over the weekend, "we should just admit that this isn't going to work."

If yesterday it was the turn of the upside stop hunting algos to crush anyone who was even modestly bearishly positioned in what ended up being the biggest short squeeze of 2015, then today it is the downside trailing stops that are about to be taken out in what remains the most vicious rangebound market in years, in the aftermath of the Chinese currency devaluation which weakened the CNY reference rate against the USD by the most on record, in what some have said was an attempt by China to spark its flailing SDR inclusion chances, but what was really a long overdue reaction by an exporter country having pegged to the strongest currency in the world in the past year.

"These savings exceed the costs of the crisis - even if Greece were to default on its entire debt. [That is] even if Greece doesn't pay back a single cent, the public purse has benefited financially from the crisis."

• Grim China data keeps stimulus hopes alive (Reuters)
• Berkshire Hathaway to Buy Precision Castparts for About $37 Billion (BBG)
• Greece, lenders in final push to seal new bailout (Reuters)
• Quantitative Easing With Chinese Characteristics Takes Shape (BBG)
• Greece nears €86bn accord with creditors (FT)
• Oil Futures Signal Weak Prices Could Last Years (WSJ)
• Drop in long-term investment hinders eurozone recovery (FT)
• Two shot in Ferguson amid standoff between police, protesters (Reuters)

Following last week's bad news for the economy (terrible ADP private payrolls, confirmed by a miss in the NFP) which also resulted in bad news for the market which suffered its worst week in years, many were focused on how the market would react to the latest battery of terrible economic news out of China which as we observed over the weekend reported abysmal trade data, and the worst plunge in Chinese factory prices in 6 years. We now know: the Shanghai Composite soared by 5%, rising to 3,928 and approaching the key 4000 level because the ongoing economic collapse led Pavlov's dog to believe that much more easing is coming from the country which as we showed last night has literally thrown the kitchen sink at stabilizing the plunge in stocks.

"If Greece collapsed and Grexit would be tomorrow’s reality, we would lose 3-4 billion euros more or less at once. So I hope that the EU and euro zone, that in due course, we can face the facts and say enough is enough and that we must do something else."

In April, we brought you the "FAKE-O" score or, as we delicately described it, "banks' brilliant plan to lend to deadbeats." Essentially, the "new score" will determine how creditworthy someone is by asking the utility company if the lights are still on and asking the phone company if the phone is still connected. But because that wasn’t (nearly) absurd enough, Facebook has a better idea...

Aside from the socialist utopias of Greece and Venezuela, who else is on the default chopping block? The CDS heatmap below lays out all the countries which according to the market, are most likely to tell their creditors the money is gone... it's all gone.

Debt is a fickle witch. When left to its own devices, which it has been for nearly seven years with interest rates at the zero bound, it tends to get into trouble. Unchecked credit initially seeps, and eventually finds itself fracked, into the dark, dank nooks and crannies of the fixed income markets whose infrastructures and borrowers are ill-suited to handle the capacity. Consider the two flashiest badges of wealth in America - cars and homes...