Greece

"Run For Cover If You’re Short" Gartman Pleads One Day After Saying "2,025 Is A Given"

"Anybody who's short - and there are a lot of smart people who are in fact heavily short - they have to run for cover, and I think it could get ugly.  In our account here, we quite literally were grasping for almost anything we could to reverse our position. Covering… or actually greatly reducing… our short position in the derivatives market was the first course of action.... We’ve learned over the years that when such things occur it is better to “shoot first and ask questions later."

Frontrunning: May 25

  • Oil nudges $50 a barrel as investors bet on shrinking overhang (Reuters)
  • From hinterland to wonderland: China's 'teapot' refinery boomtowns (Reuters)
  • Peter Thiel Has Been Secretly Funding Hulk Hogan's Lawsuits Against Gawker (Forbes)
  • China Wants to Set Prices for the World's Commodities (BBG)
  • Big Banks Ladle On the Risk (WSJ)
  • China Said to Plan Asking U.S. on Timing of Fed Rate Hike (BBG)

Global Stocks, Futures Rally, Ignore Sharp Yuan Devaluation On Hopes Fed Is Right This Time

The single biggest event overnight was the PBOC's devaluation of the Yuan to the lowest since March 2011, setting the fixing at 6.5693, the highest in over 5 years and in direct response to a stronger dollar, which however if one looks at the DXY remains well below the recent highs in the 100 range, suggesting for China this is only just beggining. However, the fact that there was not more volatility in onshore and offshore overnight FX also comforted the market that at the same time as its was devaluing the PBOC was also intervening in the FX market, thus providing some assurance it would not allow runaway "risk off" sentiment prevail, nor would it promote another blitz round of capital outflows, leading to another gradual levitation in overnight risk.

Eurogroup Agrees To Disburse €7.5BN To Greece Which Will Be Used To Repay Creditors

The short summary: Greece has promised to implement even more Draconian measures (which may or may not happen) in order to get money that was already promised to it, while the Eurogroup disburses just enough cash to cover the immediate funding needs of the creditors with a little left over to pay for government arrears while demanding even more austerity; future tranches may or may not be paid out if Greece complies with its promises (which will not happen) and meanwhile the Eurogroup says it may someday provide debt relief, once Greece ends its bailout program... which will never happen.

Frontrunning: May 24

  • Asian stocks near 11-week lows, dollar bounces on Fed rate view (Reuters)
  • Poll Finds Lack of Enthusiasm for Clinton and Trump (WSJ)
  • Oil falls for fifth day as focus returns to growing exports (Reuters)
  • The Hedge Fund That Couldn't Stay Open Long Enough for a Big Payday (BBG)
  • French police break up refinery blockade in anti-reform showdown (Reuters)

Stronger Dollar Sends Futures Higher, Oil Lower, Asian Stocks To Two Month Lows

Yesterday's weak dollar headfake has ended and overnight the USD rallied, while Asian stocks dropped to the lowest level in 7 weeks and crude oil fell as speculation returned that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained thanks to a weaker EUR.

Ten Riot Police Squads Deployed To Greek Refugee Camp As Evacuation Begins

Fearing a "forced" evacuation, dozens of migrants have left the refugee camp at Idomeni on the Greek-Macedonian border and are reportedly hiding in the surrounding region. It is perhaps no surprise they are fleeing as KeepTalkingGreece reports, ten riot police squads left Athens this morning and are expected to take position at the camp to aid in what officials call "a friendly evacuation." Other police forces from Northern Greece will be deployed in the area for "as long as it takes" to remove the 8,500 men, women, and children.

Futures Fade Early Bounce, Slide In Illiquid Tape As Yen Rises, Oil Drops

Government bonds rose and the yen strengthened as investors weighed the timing of the Federal Reserve’s next increase in interest rates and the outlook for inflation. Commodities slid, led by metals, while stocks in Europe declined. Treasury 30-year yields fell for a third day. The yen rose from near this month’s low. Futures on the S&P 500 also declined after initially jumping higher in thinly traded, illiquid tape.

Despite Depression, Greece Forced To Hike VAT, Add New Taxes

The IMF wants debt relief now, but Germany wants the IMF to hold off until Merkel wins reelection. Meanwhile, the Greek depression resumes. These tax hikes are insane. The key question remains: Is the IMF bluffing about debt relief or not?

Can Russia Survive Washington's Attack?

Neither Russia nor China seek conflict. It is a gratuitous and reckless act for Washington to send the message to Russia and China that they must choose vassalage or war.

Erdogan Nears Absolute Power With Appointment Of Puppet Premier, Stripping MPs Of Immunity

During today's congress of Turkey's AKP, Erdogan confirmed an impotent lapdog, Binali Yildirim - a close ally for two decades and a co-founder of the ruling AK Party - as his new prime minister on Sunday, which as Reuters explained was "a big step towards the stronger presidential powers [Erdogan] has long sought." In plain English, Turkey is unofficially a dictatorship, in which Erdogan is president only in title and in reality a supreme despot as there is no longer anyone who can politically challenge the president.

The Eurozone Is The Greatest Danger

Financial and economic prospects for the Eurozone have many similarities to the 1972-75 period in the UK, which this writer remembers vividly.  This time, the prospects facing the Eurozone potentially could be worse. The obvious difference is the far higher levels of debt, which will never allow the ECB to run interest rates up sufficiently to kill price inflation. More likely, positive rates of only one or two per cent would be enough to destabilise the Eurozone’s financial system. Let us hope that these dangers are exaggerated, and the final outcome will not be systemically destabilising, not just for Europe, but globally as well. A wise man, faced with the unknown, believes nothing, expects the worst, and takes precautions.

Egypt Officials Release First Footage Of EgyptAir Debris; Find Airplane Black Boxes

Following two days of searching, Egyptian crews have located the data recorders for EgyptAir Flight 804 close to an area where human remains and debris from the crashed flight have been found, CBS News reports citing government sources. Also on Saturday morning, the Egyptian military posted new photos of debris on its spokesman's Facebook page. They included what appeared to be parts of a seat, a lifejacket and what looks to be a pink and purple children's blanket.

The Biggest Bubbles: China vs. The U.S.

There is perhaps no other area where the tunnel-vision, hypocrisy, and corruption of the U.S. media is more visible than with respect to its nearly incessant China-bashing. Previous commentaries have exposed such vacuous drivel again and again and again. Admittedly, the numbers involved should give any sober individual cause for concern. They are an obvious symptom of the global phenomenon of worthless, paper currencies being used to pump-up, manipulate, and destabilize our markets – to a degree never before seen in the history of our species. However, singling out China’s markets as being “prone to bubbles” represents hypocritical blindness on the part of the U.S. media which is too absurd to be accidental.