With the snoozer of an FOMC meeting in the rearview mirror, as well as Scotland's predetermined independence referndum, last week's key events: the BABA IPO and the iPhone 6 release, are now history, which means the near-term catalysts are gone and the coming week will be far more relaxed, if hardly boring. Here is what to expect.
In a move that is certain to further escalate already stretched racial tensions in America's most cosmopolitan city, some 100 New York City buses will soon carry jarring anti-Islamic posters which feature photos of an ISIS beheading victim, his alleged executioner, Adolf Hitler, declare "Yesterday's moderate [Muslim] is today's headline" and proclaim "It's not Islamophobia, it's Islamorealism" as part of an "educational campaign." According to the NY Daily News, the ads, paid for by flame-throwing blogger Pamela Geller, at a cost of $100,000, are intended as an “education campaign” to warn of the “problem with jihad” and Islamic sharia law, Geller said.
US Industrial Production and the NY Fed Empire State Manufacturing survey are the two main releases for the US. In Europe, the euro area trade balance will be the notable print. Beyond today, US PPI, German ZEW and UK CPI are the main economic reports tomorrow. Wednesday will see the release of BOE’s meeting minutes, the US CPI, and the Euro area inflation report. On Thursday, President Obama will host Poroshenko and on the data front we have Philly Fed, initial claims, and building permits to watch out for, but the biggest market moving event will surely be the Scottish independence referendum. German PPI will be the key release on what will otherwise be a relatively quiet Friday.
Following ISIS blitzkrieg in which it took over nearly half of Iraq and a third of Syria in the blink of an eye, at which point it created its own Islamic State Caliphate resulting in Obama's own personal war against the jihadists, some have wondered what is ISIS' next step: surely its leadership will not merely stagnatte as one after another US predator drone bomb away the capital Reqqa until ISIS figurehead leader al-Baghdadi is killed or gravely wounded. To be sure, the one thing ISIS, which stunned the world with the speed of its ascent, can not afford is to stand still. So what is next on the strategic timeline for the Islamic State? According to one source, Al Arabiya, which cites Egyptian experts, the answer is none other than the Suez Canal, and the country it is located in: Egypt.
Just when we thought that the Fed is pulling an Obama and has "no strategy" to deal with what not some fringe blog but Deutsche Bank itself proclaimed was the bubble to end, or rather extend, all bubbles, when it said that "the bubble probably needs to continue in order to sustain the current global financial system" they surprise us once again when they report that, drumroll, the Fed has formed a committee led by the former head of the Bank of Israel - best known for using de novo created fiat money to buy AAPL stock as part of "prudent monetary policy" - Vice Chairman Stanley Fischer, to monitor financial stability, which according to Bloomberg is "reinforcing the Fed's efforts to avoid the emergence of asset-price bubbles."
The memory hole is working overtime in the USA zeitgeist these days. Shit happens and a week or so later, it unhappens. So it goes, as the late, great Vonnegut always said. All of these stories have something in common: tons of unanswered questions, which the news media shows no interest whatsoever in following up on. And no consequences. People die, nations rise and fall, money disappears, and everybody forgets. The memory hole is the truest signifier of the times we live in: the Age of Anything Goes and Nothing Matters... but that may be changing.
One of the more amusing comments overnight came from Bank of America, which now predicts that China's export growth will be boosted by iPhone 6 by 1% per month through year-end. Whether or not this is accurate is irrelevant, but we are happy that unlike before, BofA has finally figured out that iPhone sales are positive for Chinese GDP, not US, which was the case with the release of the iPhone 4 and 5, when clueless strategists all came out boosting their US (!) GDP forecasts on the iPhone release. We note this because the long-awaited release of Apple's new iPhone will certainly grab some attention tomorrow. According to a BofA poll last week and of the 124 respondents surveyed, 66% of those have noted that they are going to buy the new iPhone and of those planning to buy 75% of those will be replacing their iPhone 5/5s.
Summer is over and many Europeans may have to keep warm this coming winter by thinking about their summer holidays while wrapped in blankets, praying for a short winter or for the world to come to its senses. It both cases, they may well be disappointed. The never-ending conflicts in the Middle East, mayhem in Libya, uncertainty in the Gulf and a war in Ukraine are all going to take a toll on the energy supplies this winter. Result? Many cold Europeans, many angry Europeans and many very pissed off Europeans. And what does history tell us about cold, angry, pissed-off Europeans?
UPDATE: So far no good...*HEAVY ARTILLERY BLASTS HEARD IN UKRAINE'S MARIUPOL: RIA
While we had grown weary of trashed truces and snapped cease-fires in Israel, it appears, according to Interfax, that Ukraine and the pro-Russian separatists in eastern Ukraine (having gained notably over the army in recent days) have agreed a cease-fire:
*UKRAINE, SEPARATISTS AGREE ON CEASE-FIRE FROM 6PM TODAY, PRELIM. PROTOCOL TO CEASE-FIRE SIGNED IN MINSK: BBC
Great news, especially for Merkel (and Hollande) who has already come out and noted that the cease-fire means EU could suspend sanctions (saving face and avoiding some further escalation). The question is - how much of Putin's 7-point-peace-plan will Ukraine acquiesce to? If any?
The enemy of your enemy is your... frenemy; and so it is across the Middle East as the WSJ notes the spread of The Islamic State has united many parties once at odds with each other to become 'strange bedfellows'.
Words matter, the way they are said can matter even more, yet what is just as important is the posture, and yes – that can include even your choice of attire. Agree or not with the policies, but the decision for that suit in our opinion was anything but a faux pas, it was intentional... It was sending a visual cue to all that we are not fiercely red, white, and blue. We are taupe.
"Government engineered false-flag terrorism is a historically established fact. With all this hype circling ISIS, I have to suggest that maybe, just maybe, we are being given the ultimate scapegoat for the ultimate false flag attack. I believe the time is in fact ripe for a large scale false-flag on American soil."
The goal will be to terrify you and those around you into seeking out a more powerful, more centralized government authority to protect your security, to provide cover for the continued planned collapse of American society into third world status, and out of these ashes, the centralization of the political and financial foundations of our world into the hands of an elite few.
The “faster rotating sanctions spiral with Russia” causes worst plunge in the history of the German consumer index.
- Islamic State executes soldiers, takes hostages at Syria base (Reuters)
- Buffett Burger King Funds Flip Obama’s Inversion Calculus (BBG)
- Equities Reach Record $66 Trillion as S&P 500 Hits 2,000 (BBG)
- Central Banks Playing Own Version of Plaza-opoly With FX (BBG)
- Russia court closes McDonald's branch for 90 days (Reuters)
- Finland Says NATO an Option After Russia ‘Violates’ Border Laws (BBG)
- Netanyahu Hit With Domestic Criticism Over Gaza Truce (BBG)
- Biggest Danish Fund Readies for Rate Shock as Exit Narrows (BBG)
- Nonprofit Hospitals' Profits Fall (WSJ)
If the big hope propelling both ES and S&P cash over 2,000 was the Ukraine-Russian talks, leading to some de-escalation and a thawing of Russian-German conditions, then it was clearly a dud. As the WSJ reports, "face-to-face talks between the Russian and Ukrainian presidents failed to produce a breakthrough for ending the conflict over eastern Ukraine, as Kiev released videos of captured Russian soldiers and rebels pushed toward a government-held city. The one-on-one session, which Ukraine's President Petro Poroshenko described as "tough and complex," ended early Wednesday after a day of talks on the crisis in the Belarusian capital of Minsk. Mr. Poroshenko said afterward that he would prepare a "road map" toward a possible cease-fire with the pro-Russia separatists." In other words, absolutely no progress. There was however escalation, when overnight the September Bund future rose as much as 36 ticks to 151.18, after Poland PM Tusk said “regular” Russian troops are operating in eastern Ukraine. And so we are back to square one, with concerns over Russia pushing European bonds to new record highs, in turn leading to more US Treasury buying, while a brand new rumor of more easing from the ECB, this time by Deutsche Bank, has propped up European equities, which like US futures are trading water around the critical 2000 level.