- U.S. Regulator Subpoenas Banks Over Long Warehouse Queues (BBG)
- Apple Said to Prepare Holiday Refresh of IPhones to IPads (BBG)
- Fed's Yellen Says Stance on Banks Hardened (WSJ)
- Mexico opens up its energy sector (FT)
- Spin: Greek GDP marks gradual deceleration of recession (FT) ... spin aside, it dropped 4.6%, and in reality, probably over 10%
- Made-in-Canada Solution For BlackBerry Avoids Nortel Fate (BBG)
- America's Farm-Labor Pool Is Graying (WSJ)
- Video of 'lame' cattle stirs new concern over growth drugs (Reuters)
- Paulson Bid for Steinway Trumps Kohlberg Offer (WSJ)
- Egyptian government yet to decide on pro-Mursi vigils (Reuters)
Despite an overnight surge in the Chinese markets, with the Shanghai Composite closing up 2.4% following reports that China will not only continue with its "liquidity tightening" operation by, paradoxically, cutting RRR for smaller banks, but launch a stimulus for several Chinese provinces and city governments "on the quiet" in the form of jumbo-sized bank loans, and GDP news in Japan that were so bad they were almost good (although not bad enough to close the Nikkei in the green) US futures continue to take on water following the second worst week of 2013 as the market now appears resigned to a Taper announcement in just over 5 weeks (as we have claimed since May). News in Europe continues to be bipolar, with the big picture confirming that only dark skies lie ahead following yesterday's news that a new Greek bailout is just around the corner, or rather just after the Merkel reelection (even though Kotthaus perpetuated the lies and said a second cut in Greek debt is not on the agenda - although maybe he is not lying: maybe only Greek deposits will be cut this time), offset by on the margin improvements in the economic headlines, even as credit creation remains not only non-existent but as the FT reports (one year after Zero Hedge), some €3.2 trillion in financial deleveraging is still on deck meaning an unprecedented contraction in all credit-driven aggregates (one of which of course is GDP).
Should we broadcast a message to the rest of the world that anyone that can find a way to enter this country and somehow get to a “sanctuary city” can sign up for a plethora of welfare benefits and live a life of leisure at the expense of hard working American citizens? Yes, this question sounds absurd, but what we have just described will essentially be official U.S. government policy if the immigration bill going through Congress becomes law. Sadly, in politically correct America you can’t even talk about the problem of illegal immigration these days without being labeled as a “racist”. Our immigration system is completely broken, but these days we cannot even have a rational debate about these issues. In politically correct America, illegal immigrants have become a “favored class” of people that you are never supposed to say anything bad about. The following are 19 very disturbing facts about illegal immigration that every American should know...
If there was any doubt that the taper would take place shortly, it can be wiped out following the just released June international trade data, which showed a surge in exports to a record high $191.2 billion, an increase of $4.1 billion compared to May, even as imports declined by $5.8 billion to $225.4 billion, resulting in a trade deficit of just $34.2 billion, or 22.5% lower compared to the $44.1 billion in May, which is the lowest trade deficit since October 2009. It is also the biggest beat to expectations of -$43.5 billion since March 2005. Whether this plunge in the deficit was the result of the new GDP methodology is unknown, however the resulting surge in revised Q2 GDP following this bean-counting addition to the last month of Q2, means that the economy grew even more than expected and that the Fed's tapering course is now assured. It also means Q3 GDP based on July trade data will be dragged down as there is no way this surge in the collapsing deficit can be sustained.
Today, we have not one but two quotes of the day courtesy of Dick Fisher:
- FISHER SAYS MEXICAN GOVERNMENT BETTER RUN THAN U.S. GOVERNMENT
- FISHER SAYS MEXICO GOV'T ANTITHESIS OF U.S. GOV'T ON FISCAL, BUDGET
Brilliant, 100% accurate and absolutely hypocritical. Because the only reason the US government is the epitome of disorganized confusion, record partisan bickering and sheer chaos is because it has the Federal Reserve to pick up the pieces for its failure to come together on any one fiscal issue. And the Fed is perfectly happy to accommodate the same dysfunctional Congress by enabling it to do nothing not for one, two, or three but four years running now, and likely will continue into 2014 and further, in the process continuing an unprecedented wealth transfer from the poor to the uber rich. The same Fed that Dick just happens to be part of.
Discussion of recent and prospective price action in the foreign exchange market.
Good news appaears (for now) to not be bad news for stocks but it is bad news for bonds as they sell-off modestly on the best beat in initial claims in 3 months and the lowest absolute (pre-revision next week) level since January 2008. The highest insured unemployment rates in the week ending July 20 were in Puerto Rico (4.9), New Jersey (3.6), Connecticut (3.5), Alaska (3.4), California (3.4), Pennsylvania (3.4), New Mexico (3.2), Nevada (2.9), Virgin Islands (2.9), Illinois (2.8), New York (2.8), Oregon (2.8), and Rhode Island (2.8). So these are pre-recessionary levels of jobless claims and extended claims continue to slide (and Challenger this morning was positive) - but how does this exuberant job situation fit with the dismal economic data? Perhaps this?
As Obama parades around middle-America, promoting hope-and-change amid a "Better-Bargain for the middle-class," it seemed only appropriate to lay out a few 'facts' before his next pronouncement. Once upon a time, the United States has the largest and most vibrant middle class in the history of the world. Sadly, things have dramatically changed in America since that time. There just aren't as many "middle class jobs" as there used to be. In fact, just six years ago there were about six million more full-time jobs in our economy than there are right now. Those jobs are being replaced by part-time jobs and temp jobs. We live at a time when incomes are going down but the cost of living just keeps going up. As a result, the middle class in America is being absolutely shredded and the ranks of the poor are steadily growing. The following are 44 facts about the death of the middle class that every American - especially President Obama - should know...
Imagine there was a time when bottled water didn't exist in our catalog of popular commodities. Perhaps the trend started in 1976 when the chic French sparkling water, Perrier made its introduction. There it was seductively bottled in its emerald green glass amongst the era of disco and the spectacle of excesses... who could resist right?! What could be more decadent than to package, sell and consume what most consider (in the western world) a common human right easily supplied through a home faucet! It’s absurd that the cost of designer water is at a "280,000% markup" to your tap water and it's reaching record heights in consumption.
A brief discussion of the technical condition of the major currencies going to what is a week packed with fundamental developments.
Only a decade ago, drones were the purview of the military, but today we are realizing the commercial potential of this technology and the numerous cost-cutting applications for the oil and gas industry in the future. For everything from exploration and pipeline leak detection to oil spill clean-up assistance, drones are poised to become a necessity rather than luxury. First, let’s just clarify: Drone is just another name for robot, but what we’re talking about here is the Predator-style, unmanned aerial vehicle—maybe a bit smaller, and certainly not weaponized. It turns out that drones have a number of applications that don’t involve annoying Pakistan by launching bombing raids from across the border in Afghanistan, or sending them out to spy in Iranian airspace (and sometimes getting caught).
‘Vote For Gold’
"You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."
- The Citadel-SAC connection (BBG) - just wait until the Citadel-FRBNY connection emerges
- Letter backs Yellen for Federal Reserve role (FT) - or said otherwise, the Democrats would like the Fed to rule (and monetize deficits) for ever
- Obama, Republicans gear up for bruising U.S. budget fight (Reuters)
- Up for Debate at Fed: A Sharper Easy-Money Message (WSJ)
- UBS to Pay $885 Million to Settle U.S. Mortgage Suit (BBG), Banks shiver as UBS swallows $885 million U.S. fine (Reuters)
- Japan finmin Aso: CPI shows gradual shift to inflation from deflation (Reuters)
- Japan's PM calls for high-level talks with China (Reuters)
- Holder Targets Texas in New Voting-Rights Push (WSJ)
- Another Nightmareliner incident: Probe opened as Air India Boeing Dreamliner oven overheats midair (Reuters)
- Samsung Boosts Capital Spending as High-End Phone Demand Slows (BBG)
For the second consecutive day futures have drifted lower following a drubbing in the Nikkei which was down nearly 3% to just above 14K (time to start talking about the failure of Abenomics again despite National CPI posting the first positive print of 0.2% in forever and rising at the fastest pace in 5 years) and the Shanghai Composite which dropped to just above 2000 once again, after PBOC governor Zhou saying that China has big economic downward pressure and further reiterated prudent monetary policy will be pursued. This is despite Hilsenrath's latest puff piece which pushed the market into the green in yesterday's last hour of trading and despite initial optimism which saw stocks open higher following forecast-beating EU earnings gradually easing and heading into the North American open stocks are now little changed. It may be up to the WSJ mouhtpiece to provide today's 3pm catalyst to BTFATH, or else it will be up to the circular and HFT-early released UMichigan confidence index to surge/plunge in order to push stocks on any red flashing news is good news.
With regard to the disastrous Macondo oil well rupture that ended in 11 deaths and triggered the largest US offshore oil spill of all time (and uncountable ongoing ecological impacts), Halliburton has 'graciously' decided to plead guilty to destroying evidence. 'Guilty?' we hear you ask? When has any large US corporation not just settled in order to not be forced to admit guilt? Well, as Reuters reports, "their willingness to plead to this may also indicate that they'd like to settle up with the federal government on the civil penalties." The maximum statutory fine for this apparent midemeanour? $200,000! Or 0.0007% of expected revenues for 2013. Well, that'll teach 'em for sure - they won't be destroying evidence again, eh?