European Union

Precious Metals Surge Continues, As Does Italian Bank Pain, In Holiday-Shortened Session

In today's US holiday-impacted session, the biggest overnight story was the dramatic surge in precious metals, which saw silver briefly soar above $21 following a Chinese short squeeze sending the metal as much as 7% higher overnight, its biggest one day gain since December 1, 2014. As we reported overnight, silver touched a two-year high and gold rallied for a fourth day after the Brexit vote spurred demand for havens. The catalyst is familiar: speculation central banks in some of the world’s leading economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union.

Are We Living In "A Riskless World", Deutsche Asks

"Who of the big boys of central banking can realistically make a difference here is unclear to us. The Fed was caught wrong-footed in all of this, between domestic news (weak non-farms) to international. The ECB and BOJ are tapped-out; as in, their actions at this point are delivering more harm than benefit (underperforming equity and credit markets, lower credit issuance, substantial pressure on bank equities). In China, authorities are already dealing with the consequences of reopening the credit spigot earlier this year that reinforced concerns of a credit bubble popping there."

America Should Exit From NATO & The National Security State

In its reporting on Brexit, the New York Times asks an interesting question: “Is the post-1945 order imposed on the world by the United States and its allies unraveling, too?” Hopefully, it will mean the unraveling of two of the most powerful and destructive governmental apparatuses that came out of the postwar era: NATO and the U.S. national-security state.

Queen Urges "Keep Calm" As Scotland Seeks To Block Brexit

"If there is a way to stay in the EU, I am determined to pursue it," proclaimed Scottish First Minister Nicola Sturgeon in an interview with Greece's To Ethnos newspaper, noting that Scottish parliament is looking into legal grounds for a new referendum on secession from UK. This confirms JPMorgan's base case that Scotland will vote for independence and institute a new currency at that point. Shortly after Sturgeon's comments, The Queen made her first post-Brexit speech (ironically in Scottish parliament) urging Britons to "stay calm and focused," pointedly noting "real leadership requires deeper and more dispassionate thinking in turbulent times."

Brexit & The Crisis Of Capitalism

Thousands of commentaries have been issued about Brexit in the past week. Most discuss Brexit as the result of immigration issues, class war, political theater, a reaction against the European Union's bureaucratic power, sovereignty, etc. Other essays focus on the potential upsides or downsides of Brexit. What few if any commentators present is the idea that Brexit is a symptom of the Crisis of Capitalism...

Czech President Calls For EU, NATO Referendums

“I disagree with those who are for leaving the European Union,” Czech Radio quoted Zeman as saying on Thursday evening, according to Reuters. "But I will do everything for them to have a referendum and be able to express themselves. And the same goes for a NATO exit too."

US Manufacturing ISM Surges To 16-Month Highs (as Construction Spending Crashes)

US Manufacturing PMI fell back very modestly from its flash reading but rose MoM to 51.3 as Markit warns "producers are struggling in the face of the strong dollar, the energy sector decline and presidential election jitters." But, ISM Manufacturing surged full of hope to 53.2, above the highest analyst estimate (a 4 standard deviation beat of expectations). Every subcomponent rose aside from Prices Paid as it appears - as opposed to everything we have seen in earnings and chatter - that Brexit, election uncertainty has done nothing at all to dampen 'hope'. In the face of this seasionally-adjusted exuberance, construction spending has plunged almost 3% in the last 2 months - the biggest drop since Feb 2011.

Silver Breaches Key Resistance, Soars To 21-Month Highs Against Gold

Silver is up over 11% in the last 6 days (the most since Aug 2013) since Britons decided to leave the sinking ship, pushing the white metal above the key $19.50 level - back to its highest since September 2014. Gold has been in great demand also, heading for its 5th straight weekly gain after its best start to a year since 1980 as one analyst noted "gold will remain one of the major beneficiaries in the current backdrop, as heightened volatility and lingering uncertainty will keep investors' risk appetite in check." Silver's recent surge has seen it play catch up to gold, now back at its 'richest' to gold since September 2014.

Austrian Court Orders Rerun Of Presidential Election After Finding "Widespread" Voting Fraud

Austria’s Constitutional Court ordered a rerun of the runoff round of country’s presidential election, giving Freedom Party candidate Norbert Hofer a second chance of becoming the first right-wing populist head of state in postwar Western Europe. The court found law violations in “many districts” in how the May 22 second-round vote was carried out.