Greece

Syriza hardliner Panayotis Lafazanis and "a diverse group of far left activists from supporters of the late Venezuelan president Hugo Chávez to old-fashioned communists," planned to take over the Greek mint, commandeer the country’s reserves, and arrest Yannis Stournaras, the governor of the Bank of Greece, FT says, describing a secret plot hatched at an Athens hotel last Wednesday.

China will be a net buyer, and a net importer of physical gold for years to come. In and of itself that won’t necessarily cause a sharp rally in gold prices anytime soon, but gold acquisition from the Chinese state and her citizens, as well as emerging market central banks the world over will continue to provide support for the physical gold market. Those that have sold gold in the past few days (and there have been plenty in the ETF and futures markets) as a result of the “disappointing” number out of China may have just caused the capitulation event that typically marks the bottom of any bear market.

Gold is jumping after the overnight double flash-crash...testing back towards $1100... And another alternate currency is ripping. Bitcoin is back up to pre-"Greece is Fixed" levels...

"The letter has been sent." Greece formally invites the troika back to Athens sparking anger, resentment among a conquered people.

Investors are dumping billions of dollars worth of gold, commodities and emerging market assets in a wave of "capitulation" selling, Bank of America Merrill Lynch said today as reported by Reuters.

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After yesterday's latest drop in stocks driven by "old economy" companies such as CAT, which sent the Dow Jones back to red for the year and the S&P fractionally unchanged, today has been a glaring example of the "new" vs "old" economy contrast, with futures propped up thanks to strong tech company earnings after the close, chief among which Amazon, which gained $40 billion in after hours trading and has now surpassed Walmart as the largest US retailer. As a result Brent crude is little changed near 2-wk low after disappointing Chinese manufacturing data fueled demand concerns, adding to bearish sentiment in an oversupplied mkt. WTI up ~26c, trimming losses after yday falling to lowest since March 31 to close in bear mkt. Both Brent and WTI are set for 4th consecutive week of declines; this is the longest losing streak for Brent since Jan., for WTI since March.

If itsy bitsy pie slice – Greece (.33%) – can create this much worldwide economic havoc because of their unpayble level of debt, imagine what will happen when the truth is revealed about France (3.81%), Italy (2.88%), and Spain (1.88%).

Innovation in technology reduces the need for labor. More individuals are sitting outside the labor force increase the demand for available jobs. Increased competition for available jobs suppresses wage growth. It is a virtual spiral that continues to apply downward pressure on an economy based nearly 70% on consumption. Importantly, what small increases there have been in unit labor costs have primarily come at the expense of higher benefit and healthcare costs rather than an increase in wages. As discussed previoulsy, for roughly 80% of the working labor force, wages have declined over the last five years. Janet Yellen is right that wages will have a hard time increasing without a pick up in productivity. The issue is that innovation IS the problem, not the solution. That is unless we begin to include the productivity of robots.

Schäuble seems to have foresaw the crisis back in 1994, distinguishing between core members and non-core members. Therefore, his thinking is quite different from that of France. Behind the curtain, the federalization of Europe is the ultimate goal, although politicians always denied that in front of the curtain. The curtain is starting to be drawn, but the equal federalization of Europe was never part of the German mindset.

It appears the "Greece is fixed" exuberant reach for risk is over. 30Y Treasury yields had soared 30bps in 3 days after a disastrous "Greek deal" was announced, has rallied all the way back and now trades back below the crucial 3.00% level... This is the best streak of gains for the long-bond in 4 months.

There has been a lot of chatter in recent days about the plunge in commodity prices - capped off by this week’s slide of the Bloomberg commodity index to levels not seen since 2002. That epochal development is captured in the chart below, but most of the media gumming about the rapidly accelerating “commodity crunch” misses the essential point. To wit, the central banks of the world have shot their wad.  The Bloomberg Commodity index is a slow motion screen shot depicting the massive intrusion of worldwide central bankers into the global economic and financial system. Their unprecedented spree of money printing took the aggregate global central bank balance sheet from $3 trillion to $22 trillion over the last 15 years. The consequence was a deep and systematic falsification of financial prices on a planet-wide scale.

US equity prices are back below yesterday's lows leaving The Dow down over 350 points off its "everything is awesome" highs on Monday (nearing its 200-DMA at 17,743). It's not just the Dow, as the rest of the major indices have given up all the post-Greferendum gains from a month ago...

It appears The IMF is willing to shake the boat of status quo, everything-is-awesome, once again. After proclaiming Greece is screwed and needs a haircut no matter what, the bank to save the world has unleashed a new report on Japan...

*IMF SAYS JAPAN NEEDS DEEPER CUTS TO CURB ‘UNSUSTAINABLE’ DEBT,  RISKS SURGE TO TRIPLE GDP WITHOUT CHANGE, IMF SAYS
*IMF: YEN MODERATELY WEAKER THAN IS CONSISTENT WITH FUNDAMENTALS

We assume Abe and Kuroda will disagree strongly, argue that they just need a little more devaluation and everything will be perfect. The slide in JPY suggests some more capital leaving their shores. It appears The IMF has read some of Kyle Bass' work.