General Electric

Now that the World Cup is over, and following last week's global macro reporting slumber (aside for the Portuguese risk flaring episode of course), things pick up quite a bit in the coming week. Here are the key events.

The overpowering and incessant statist economic management of the American economy, as reflected in the Ex-Im extension mobilization now underway, is causing the engines of capitalist prosperity to shutdown. The main culprit, of course, is our monetary central planners in the Eccles Building. But they are only the leading edge - the exemplar that tells Washington day in and day out that without constant ministrations by agencies of the state, our capitalist economy would continuously under-preform and tumble into the ditch. So what is at stake in the Ex-Im battle is the future of market capitalism itself. If Washington lacks the capacity to say no to the shareholders of a few big US corporations that can be counted on one hand, then the statist predicate will triumph finally and for ever more.

• Xi Says China Conflict With U.S. Would Be Disaster (BBG)
• Short selling drops to lowest level since Lehman (FT)
• Scoping the new subprime as watchdogs cry 'bubble' (Reuters)
• Carlos Slim to break up América Móvil empire (FT)
• Jury Acquits Rengan Rajaratnam in Insider-Trading Case (WSJ)
• Hamas rockets land deep in Israel as it bombards Gaza Strip (Reuters)
• Hong Kong Buyers Queue for New Homes After Prices Plunge (BBG)
• Rebel Stronghold in Ukraine Braces for Its Showdown (WSJ)
• Tiny Houses Big With U.S. Owners Seeking Economic Freedom (BBG)
• Chinese Cash-Bearing Buyers Drive U.S. Foreign Sales Jump (BBG)

• The Man Who Broke the Middle East (Politico)
• Kerry presses Maliki as Iraq loses control of Syrian, Jordanian borders (Reuters)
• Hank Paulson takes on global warming next: The Coming Climate Crash - Lessons for Climate Change in the 2008 Recession (NYT)
• In Yellen We Trust Is Bond Mantra as Inflation Threats Dismissed (BBG)
• After port fraud, China's vast warehouse sector under scrutiny (Reuters)
• Draghi Says Unlimited Cash Through 2016 Is Rate Signal (BBG)
• Tapes Said to Reveal Polish Minister Disparaging U.S. Ties (NYT)
• CDC reassigns director of lab behind anthrax blunder (Reuters)
• BNP set to receive ban to transact in USD as part of $9 billion settlement (WSJ)
• GE Clears Last French Hurdle to Clinch Alstom Deal (BBG)
• Al Jazeera journalists jailed in Egypt, supporters stunned (Reuters)
• ISDA Asked to Rule If Argentina Credit-Default Swaps Triggered (BBG)

Following last night's laughable (in light of the slow motion housing train wreck that is taking place, not to mention the concurrent capex spending halt and of course the unwinding rehypothecation scandal) Chinese PMI release by HSBC/Markit (one wonders how much of an allocation Beijing got in the Markit IPO) which obviously sent US equity futures surging to new record highs, it was almost inevitable that the subsequent manufacturing index, that of Europe, would be a disappointment around the board (since it would be less than "optical" to have a manufacturing slowdown everywhere in the world but the US). Sure enough, first France (Mfg PMI 47.8, Exp. 49.5, 49.6; and Services PMI 48.2, Exp. 49.4, Last 49.3) and then Germany (Mfg PMI 52.4, Exp. 52.5, Last 52.2; Services 54.8, Exp. 55.7, Last 56.0), missed soundly, leading to a broad decline in the Eurozone PMIs (Mfg 51.9, Exp. 52.2, Last 52.2; Services 52.8, 53.3, Last 53.2), which meant that the composite PMI tumbled from 53.2 to 52.8: the lowest in 6 months.

We suspect this is not exactly the great news that GE was expecting... but it looks like a win. French minister Montebourg believes none of the current offers fulfill their demands and will use a decree to block the deal:

• *MONTEBOURG SAYS FRENCH STATE TO TAKE 20% STAKE IN ALSTOM
• *MONTEBOURG SAYS FRANCE WILL BUY ALSTOM STAKE OR BLOCK GE OFFER
• *MONTEBOURG SAYS FRANCE WILL USE DECREE IN ALSTOM CASE
• *MONTEBOURG SAYS FRANCE WILL ENTER IN ALLIANCE WITH GE
• *MONTEBOURG SAYS FRANCE SEEKING ALSTOM STAKE AT MARKET PRICE

So GE forced to partner with French or no deal. Nothing like partnering with the (almost) most socialist government on the planet to make money.

• Must be an early winter: Housing Falters as Forecasters See U.S. Sales Dropping  (BBG)
• China Property Failures Seen as $33 Billion in Trusts Due (BBG)
• Polish Prime Minister Says Recording Scandal May Trigger Early Election (WSJ)
• Iraqi forces ready push after Obama offers advisers (Reuters)
• Priorities: U.S. cuts aid to Uganda, cancels military exercise over anti-gay law (Reuters)
• Kurds' Takeover of Iraqi City of Kirkuk Strengthens Their Hand (WSJ)
• U.S. says government lab workers possibly exposed to anthrax (Reuters)
• Netflix Up 21% With Tesla: The best U.S. stocks this month are ones that just a few months ago were the biggest losers (BBG)
• Architects of Iraq Invasion Return to Blame Obama (BBG)
• Nato claims Moscow funding anti-fracking groups (FT)
• Lawmakers Skeptical GM Bosses Were Unaware of Defect (WSJ)
• Corinthian Colleges Warns of Possible Shutdown (WSJ)
• Taiwan's Quanta to start mass production of Apple's smartwatch in July (Reuters)

• Currency Probe Widens as U.S. Said to Target Markups (BBG)
• Battle for Iraq refinery as U.S. hesitates to strike (Reuters)
• Ukraine forces battle separatists after truce 'refused' (Reuters)
• Fed Dots Ignored as Investors Focus on Yellen’s Message (BBG)
• Retirees Suffer as $300 Billion 401(k) Rollover Boom Enriches Brokers (BBG)
• American Apparel ousts CEO; source says Dov Charney 'will fight like hell' (LA Times)
• House Panel Is Subpoenaed as Trading Probe Heats Up (WSJ)
• GM Officials Ignored Alert on Car Stalling (WSJ)
• Russia’s $20 Billion Bond Void Filled by China to Mexico (BBG)

If you’re sitting in a job which can be outsourced your clock is ticking.

• Obama to tout manufacturing gains, highlight economic progress (Reuters)
• Iraq Gunmen Attack North of Baghdad as Obama Weighs Plan (BBG)
• Chinese Regulators Block Shipping Alliance Abandoned Deal (WSJ)
• Russian $8.2 Trillion Oil Trove Locked Without U.S. Tech (BBG)
• Ukrainian forces, rebels clash near Russian border (Reuters)
• M&A talk lifts stocks, Iraq tensions ease slightly (Reuters)
• Wealthy Clintons Use Trusts to Limit Estate Tax They Back (BBG)
• Argentina vows to service debt despite new legal blow (Reuters)
• Allergan's Bitter Pill for Morgan Stanley (WSJ)
• Islamists kill 50 in Kenya, some during World Cup screening (Reuters)
• American Express Revs Up Pursuit of the Masses (WSJ)

• Iraq Army Tries to Roll Back Sunni Militants’ Advance (BBG)
• Starbucks to Subsidize Workers' Online Degrees (WSJ)
• ‘Bitcoin Jesus’ Calls Rich to Tax-Free Tropical Paradise (BBG)
• Medtronic Is Biggest Firm Yet to Renounce U.S. Tax Status (BBG), Medtronic to buy Covidien for $42.9 billion, rebase in Ireland (Reuters)
• Oil Topping $116 Seen Possible as Iraq Conflict Widens (BBG)
• Putin Seeks Paris Landmark as Hollande’s Russia Ties Defy Obama (BBG)
• GM Says It Has a Shield From Some Liability (WSJ)
• BOJ’s Bond Paralysis Seen Spreading Across Markets (BBG)

It's possible to describe Rep.Eric Cantor as a serial sell-out. But that would be giving an unprincipled politician driven by an unalloyed ambition to climb the greasy pole of Washington power too much credit. In truth, Cantor never campaigned for any recognizable principle; he merely maneuvered his way to the top of the House GOP hierarchy by following in the tawdry footsteps of modern GOP bagmen like Tom DeLay and Roy Blunt. Eric Cantor made a career of milking the Warfare State and pandering to Wall Street. This brought him nearly to the top of the Washington heap. But in the end, it did not fool his constituents. And most certainly it set back the conservative cause immeasurably.

• Iraqi Drama Catches U.S. Off Guard (WSJ)
• Al-Qaeda Offshoot on NATO Border Threatens Turkish Rally (BBG)
• It's just the snow, people: U.S. Economic Recovery Looks Distant as Growth Lingers (NYT)
• Freed Taliban leaders may remain in Qatar beyond one-year travel ban (Reuters)
• BNP Paribas Executive Chodron de Courcel to Quit Post (WSJ)
• Greenmail is back (WSJ)
• Facebook Places Multiple Bets to Win Messenger Wars (BBG)
• ECB easing to benefit Ukraine, Russia corporate bonds (Reuters)
• Rome Shows the World How Not to Run Bike-Sharing Program (BBG)

Timothy Geithner is likely to go down in American history as one of the most dangerous, destructive cronies to have ever wielded government power. The man is so completely and totally full of shit it’s almost impossible not to notice. The last thing we’d ever want to do in our free time is read a lengthy book filled with Geithner lies and propaganda, so we owe a large debt of gratitude to former Congressional staffer Matt Stoller for doing it for us. Stoller simply tears Geither apart limb from limb, detailing obvious lies about the financial crisis, and even more interestingly, Geithner’s bizarre bio, replete with mysterious and inexplicable promotions into positions of power..."Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance..."

• Yellen Concerned by Housing Slowdown She Has Scant Power to Cure (BBG)
• Because snow in Q1? Citigroup’s CFO Says Trading Revenue Could Slide 25% (BBG)
• Banks Raise Caution Flag on Trading (WSJ)
• The answer is yes: Hilsenrath asks if BOJ’s Kuroda Awakening to His Limits? (WSJ)
• Google Develops Prototype Cars for Fully Autonomous Driving (WSJ)
• Amazon Expects Lengthy Hachette Dispute (WSJ)
• Tencent $1 Billion Game Shows Global Hunt for Mobile Hits (BBG)