Greece

A look at next week's data in the somewhat larger context, and a look at interest rate differentials

... and the ECB printing presses!

China, Australia, Brazil, Canada, Sweden - it is beyond us how anyone can declare the crisis isn’t spreading. Be prepared – there are going to be lots of opportunities to both make and lose money. But first, you have to recognize what is happening.

The bond bubble is now well over $199 trillion in size. And if we were to include credit instruments that trade based on bonds, we’re well north of $600 trillion.

Anyone with any sense for global economic trends ought to be worried. The signs are everywhere of a serious deflationary crisis.

Consumer confidence deteriorated in most countries in July. While some of the deterioration was likely due to sentiment effects around the situation in Greece/Europe and the market volatility in China, rather than fundamental deterioration (which will be confirmed at the end of August if sentiment rebounds) it is worth paying attention to the trends in global consumer confidence, as it generally tends to reflect the prevailing global macro winds.

Near-term dollar outlook, with some views on oil, Treasuries and S&P 500 thrown in for extra measure.  

Hundreds of millions of people throughout the Western world are being forced to admit an obvious, yet uncomfortable reality. Democracy is dead. Your vote and your voice doesn’t matter. Not at all. No group of people understand this as intimately as the Greeks. They voted for one thing, got something else, and in the process were unceremoniously reminded of their political irrelevance. The Greeks are now in a position to show the rest of us how it’s done. Communities need to take matters into their own hands and tackle challenges at the grassroots level. Nowhere is this more impactful and necessary than in the monetary realm, and some Greeks are already leading the charge.

Most Americans have no idea that the U.S. corporate fraudulent government can legally lie to you every single day to get you to believe whatever they want you to believe and then turn around behind closed doors and laugh at you for believing their legal lies. Try telling that to most Americans and see how they look at you. This is another example of a hard-to-handle lie that is pushed on Americans every day; and the average working American has no time to truly wrap their heads around this stunning fact so they bury their heads in the sand instead, unwilling to look at the issue because they fear they won’t know what to do with the information.

After a week of relentless FX volatility, spilling over out of China and into all other countries, and asset products, it was as if the market decided to take a time-out overnight, assisted by the PBOC which after three days of record devaluations finally revalued the Yuan stronger fractionally by 0.05% to 6.3975. And then, as a parting gift perhaps, just as the market was about to close again, the Chinese central bank intervened sending the Onshore Yuan, spiking to a level of 6.3912 as of this writing, notably stronger than the official fixing for the second day in a row. In fact the biggest news out of China overnight is that contrary to expectations, the PBOC once again "added" to its gold holdings, boosting its official gold by 610,000 ounces, or 19 tons, to 1,677 tones.

Define irony: in a quarter in which Greece was supposed to have been near death (at least according to the worst PMI print in history and of course, judging by the bank lines in front of the capital controlled institutions), yesterday we learned that Greek GDP surged relative to expectations rising by 0.8%, which was what analysts had expected but with a minus sign in front of it. Then overnight, we got the rest of European GDP, including the big three: Germany, France and Italy. The results were nothing short of a big disappointment. At the Euroarea level, the result was also a big negative surprise with Q3 GDP rising 0.3%, down from 0.4%, and below expectations. This was the worst GDP print since Q3 2014.

Moments ago the Greek parliament, after a dramatic, most likely on purpose, overnight session - because when you are a puppet government of Belgium/Brussels you have to put in extra effort to prove you are "independent" - gave its approval for the third Greek bailout when Tsipras secured votes of more than 151 lawmakers in country’s 300-seat parliament. As on previous cases, the vote passed with substantial opposition support. In terms of numbers, the rebel faction within Syriza is now up to 42, with 43 being seen as the threshold beyond which Tsipras has no choice but to call elections. In other words the Tsipras government now hangs in the fate of just one person.

Greek lawmakers are now set to vote on the final draft of the country's third bailout program. If the proposal doesn't clear parliament, eurozone finance ministers will likely delay implementation of the ESM program, setting up the possibility that Athens will be forced to tap the remaining funds in the EFSM for a bridge loan in order to make a €3.2 billion payment to the ECB next week.

All of this raises an interesting question about the future of the US dollar. Because if an economy as large and powerful as China’s has had to concede defeat, does this mean that “King Dollar” will rule forever? No chance.