Mexico

Dust Bowl 2.0: California's Historic Drought About To Get Even Worse As "Snowpack Melts Early Across The West"

It has been a bad year for California whose drought is rapidly approaching historic proportions: according to the LA Times, which cites climatologist Michael Anderson, "you’re looking on numbers that are right on par with what was the Dust Bowl." And it is about to get even worse. According to the USDA, the west-wide snowpack is melting earlier than usual, according to data from the fourth 2015 forecast by the United States Department of Agriculture's Natural Resources Conservation Service (NRCS). "Almost all of the West Coast continues to have record low snowpack," NRCS Hydrologist David Garen said. "March was warm and dry in most of the West; as a result, snow is melting earlier than usual."

When You Think The Financial World Can’t Get Any Crazier… This Happens

Who’s dumb enough to buy this stuff—10-year debt at negative yields and 100-year debt in a doomed currency?  Institutional investors, of course—large pension funds and the like. You might look at news like that and think, well, that’s crazy, I’d never do that. But the fact is, it’s being done with YOUR MONEY. Just like Winston Churchill commented that it’s false to characterize the fighting at places like the Somme, Verdun etc. in WWI as battles, when they were actually more like prolonged sieges, what’s happening in the financial world today is similar. The financial world today is the same. Billion dollar stimulus packages. Quantitative Easing 1, 2, 3… Negative interest rates. Negative long-term debt yields. Cash withdrawal and transaction controls. Higher taxes. Capital controls...

US Dollar Surge Returns, Pushes Equity Futures Lower

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

Why The Oil Price Collapse Is The Fed's Fault

The present oil price collapse is because of over-production of expensive tight oil. The collapse occurred because of the inability of the world market to support the cost of the new expensive oil supply from shale, oil sands and deep water. The problem is structural and systemic and firmly rooted in the irresponsible funding of under-performing U.S. tight oil companies since at least 2010. The first step to price recovery is the severing of capital supply to companies that could not fund their operations from cash flow when oil prices were more than $90 per barrel. If this does not happen, we could be in for a long period of low oil prices.

California: A Microcosm For Impending Global Water Crisis

The move by California to require mandatory cuts in water use for the first time in its history has highlighted the world’s looming water crisis and increased the focus on the links between sustainable water and sustainable energy. “We need a new paradigm,” says Steven Solomon, author of Water: The Epic Struggle for Wealth, Power and Civilization. “The days when we could just go further into the mountains and find new sources of water are past. We need to make better use of the water we have.”

Why From China's Biggest Bear, Hugh Hendry Became One Of Its Biggest Bulls

Considering that Chinese equities are the best performing market in USD terms (second only, oddly enough, to Russia) in 2015, one can see why after a disappointing 2012 and 2013, and modest 2014, Hendry has hit 2015 out of the park with a bang, generating a 10.6% return in the first two monthes of the year. So is Hendry still bullish on China's stock market prospects?  Why yes, and then some. But is he is contrarian just for the sake of being contrarian? Does he see something in China that nobody else does? Or is he simply right... or wrong, as the case may be? We will let readers decide.

Initial Claims Slide Again; Trade Deficit Lowest Since 2009 Despite Soaring Dollar On Imports Plunge

The volatility in initial claims continues: after last week's drop to 282K pulled the heavily-watched number back under 300K, this week we have seen even less layoffs, with the DOL reporting that only 268K claims for unemployment benefits were filed in the past week, well below the 286K expected. The 4-week moving average was 285,500, a decrease of 14,750 from the previous week's revised average. The previous week's average was revised up by 3,250 from 297,000 to 300,250. And while it is no secret that US labor data leave much to be desired it was today's trade data that will shock many, after the BEA reported that in February, the US trade deficit collapsed to just $35.4 billion, a 17% plunge compared to the $42.7 billion January revision, and far below the $41.2 billion expected. The $7.3 billion drop in the deficit was the largest since the $8.3 billion drop posted in June of 2013. And even more notable: the total February deficit was the lowest since October 2009!

The "Billionaire Hubs" - A Look At The Housing Habits Of The World's Ultra Richest People

When it comes to our current pre-war, pre-revolutionary world (in Paul Tudor Jones' words) there are two social classes which are jockeying for the post positioning when it all comes crashing down: the Ultra High Net Worth, i.e., the 0.01%, those 211,275 individuals (and their families) who have a net worth over $30 million and who collectively control $30 trillion in wealth, and everyone else, with the countdown to extinction for the global middle class now getting louder by the day, leaving a world of a handful of uber-wealthy oligarchs and billions of, well, others. And nowhere is this distinction more vivid than when looking at their residential real estate holdings. But while the real estate of the 99.99% is boring (and increasingly in the form of rentals), when it comes to the dwellings of the 0.01% things get exciting, and are the topic of the latest joint report between Wealth-X and Sotheby's whose findings we summarize below.

Frontrunning: March 26

  • Saudi Arabia, allies launch air strikes in Yemen against Houthi fighters (Reuters)
  • Pilot on Crashed Jet Was Locked Out of Cockpit, NY Times Says (BBG)
  • Why Bombing This Tiny Oil Producer Is Roiling the Energy Market (BBG)
  • U.S.-led coalition, Iraqis pound Islamic State in Tikrit (Reuters)
  • Munger Says Prepare for Harder World as Buying Power Slides (BBG),Mocks Greek ‘Idiotic Idea’ You Can Vote Yourself Rich (BBG)
  • The Central Banker Who Saved the Russian Economy From the Abyss (BBG)
  • Bank of Canada says foreign buyers complicate housing market (Reuters)
  • Investors Scoop Up Companies’ Bonds (WSJ)
  • Espirito Santo Probe Turns Mariana Mortagua Into Portuguese Star (BBG)

Frontrunning: March 24

  • Germanwings Airbus crashes in France, 148 feared dead (Reuters)
  • Greece promises list of reforms by Monday to unlock cash (Reuters)
  • Merkel Points Tsipras Toward Deal With Greece’s Creditors (BBG)
  • Banks Shift Bond Portfolios -Move to ‘held to maturity’ category aims to guard against rising rates, shield capital  (WSJ)
  • Beijing to Shut All Major Coal Power Plants to Cut Pollution (BBG)
  • As Silence Falls on Chicago Trading Pits, a Working-Class Portal Also Closes (NYT)
  • Oil below $56 as Saudi output near record, China activity slows (Reuters)

Regime Change: America's Failing Weapon Of International Deception

After almost two centuries of political and economic meddling in Latin America under the Monroe Doctrine (1823) banner, much of it involving regime change, the US is finally coming to terms with the reality that its influence has not just waned but disappeared. To Washington’s despair, similar results, if for other reasons, are happening throughout North Africa and the extended Middle East; certainly not the results the US had hoped for or anticipated from the revolutionary wave in the Arab Spring, now entering its fifth year. The era of using regime change as a weapon of mass deception may have already ended for the United States of America… and hopefully for the entire world.