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With the economy imploding, currency collapsing, and credit risk soaring, it is perhaps no surprise that just under a year since she was re-elected, Brazil's President Dilma Rousseff is now Brazil's most unpopular democratically elected president since a military dictatorship ended in 1985, with an approval rating of just 8%. In a recent poll, 71% said they disapprove of the way Rousseff is doing her job... and two-thirds would like to see her impeached.

Things are getting downright scary in emerging markets as a "triple unwind" in credit, Chinese leverage, and loose US monetary policy wreaks havoc across the space. Between a prolonged slump in commodity prices and a structural shift towards weaker global trade, the situation could worsen materially going forward.

"The United States is on the brink of making another grave mistake under the name of protecting cyber security... If it stubbornly implements retaliatory measures against China in cyber space, it will be known for being a cyber bully and will have to shoulder responsibility for escalating confrontation and disrupting the peaceful order in the cyber space."

For years now China has been heralded as an economic miracle that will drive the global economy towards growth and eventually eclipse the US as THE superpower in the world.

• Deadline Draws Near for Puerto Rico (WSJ)
• U.S. to defend Syrian rebels with airpower, including from Assad (Reuters)
• Alpha Natural Resources to Seek Chapter 11 (WSJ)
• Iran’s Rouhani Says Nuclear Deal ‘More Than What Was Imagined’ (BBG)
• Cables Show Hillary Clinton's State Department Deeply Involved in Trans-Pacific Partnership (IBTimes)
• Win or Lose, U.S. Stocks Get Biggest Earnings Bang Since ’12 (BBG)
• Weaker China factories argue for more policy support as stocks swoon (Reuters)

We have argued that it is a perilous myth that central bankers these days control a general price level. They instead incentivize massive financial flows into securities markets and fashionable sectors. Over time, ramifications and consequences reach the profound. For one, excess liquidity promotes over/mal-investment. It’s only the scope and nature that remain in question. If major Bubble flows inundate new technology investment, the resulting surge in the supply of high-margin products engenders disinflationary pressures elsewhere. Policy responses to perceived heightened “deflation” risks then only work to exacerbate Bubbles, mounting imbalances and structural fragilities. This was a critical facet of “Roaring Twenties” analysis that was lost in time.

• U.S. stock futures slip amid lukewarm earnings, fall in commodities (Reuters)
• Stressful times for low-polling Republicans who may miss debate stage (Reuters)
• Trump shows staying power with surge ahead of first debate (Reuters)
• China Market Manipulation Probe Targets Spoofers After Crash (BBG)
• Beijing Chosen to Host 2022 Winter Olympics (WSJ)
• Obama Warns Support on Iran Deal ’Getting Squishy’ Amid Pressure (BBG)
• Pacific trade negotiators chase elusive final deal in tough talks (Reuters)

• Second-quarter GDP seen rebounding on consumer spending, housing (Reuters)
• China Stocks Fall as Traders Puzzle Over Sudden Late-Day Swings (BBG)
• European 'alliance of national liberation fronts' emerges to avenge Greek defeat (Telegraph)
• Thomas Cook warns on earnings over Greece (MW)
• Largest Greek toy seller Jumbo warns of hit from capital controls (Kathimerini)
• Chevron and Exxon Get the Plaudits, but Some Smaller Drillers Faring Well (WSJ)
• Schäuble outlines plan to limit European Commission powers (FT)
• UBS Deal Shows Clinton’s Complicated Ties (WSJ)

"How would US Treasury bulls in the private sector react if they knew in advance that the second largest owner of Treasuries, the PBOC, was a forced seller of Treasuries. Such compelled selling would be obvious before US markets opened each morning as downward pressure on the RMB exchange rate in Asia forced the PBOC to liquidate foreign currency assets to defend the fixed exchange rate. Would even Treasury bulls stand in the way of such a large and predictable liquidation? If they didn’t then the second phase of The Great Reset would come to pass and the decline of EM external deficits would force tighter monetary policy in both EM and DM."

As Greece prepares to weather still more austerity in exchange for a third EU bailout program, the economy has fallen into a veritable tailspin, as retail sales collapse, doctors flee, and credit is nowhere to be found. 

Only a government employee could point to a 99.5% failure rate and declare it a success.

Overnight, the Telegraph's Ambrose-Pritchard reported that "Mr Varoufakis told the Telegraph that the quotes were accurate but some reports in the Greek press had been twisted, making it look as if he had been plotting a return to the drachma from the start.  "The context of all this is that they want to present me as a rogue finance minister, and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history," he said. It remains to be seen if treason charges are forthcoming but Varoufakis isn't wasting time, and after giving unofficial on the record comments to the Telegraph, moments ago he issued the following public statement on his blog.

The US Syrian policy forces Ankara to walk a fine line between ISIS, Assad’s regime, Kurds, the US and its own interest. We will not rule out that Erdo?an could declare a state of emergency and postpone new elections. Whatever the result of the power struggle in Ankara may be, Turkey’s military will not accept the YPG and PKK armed to the teeth by the US.

• Gunman kills two, wounds seven in Louisiana theater before killing himself (Reuters)
• Health insurer Anthem to buy Cigna in $54.2 billion deal (Reuters)
• Murder, Poisoning, Raids: It’s Election Season in Russia (BBG)
• Lagarde Push for Greece Debt Relief Challenges Merkel (Bloomberg)
• Fund Boss’s Gamble on Health Law Pays Off Big (WSJ)
• Wall Street Cranks Up Its Outlook for Amazon After It Delivers Monster Earnings Report (BBG)
• China's Richest Man Marks Push Into Hollywood With Jake Gyllenhaal Movie (BBG)
• West Africa's alarming growth industry - meth (Reuters)

In the middle of the biggest criminal scandal involving the Fed, but also an FT-owned expert network (an FT which until today was owned by Pearson), the expert network known as Medley Global Advisors just changed its owners, from the FT/Pearson to Japan's Nikkei, in a transaction advised by Rothschild for the buyer and Goldman, Evercore and JPM for the seller.