President Obama

As the mainstream media shows endless scenes of celebration in Tahrir Square following last night's military ouster of democratically-elected President Morsi, the tensions with his supporters grows more widespread. Perhaps, what is more worrisome for the future of Egypt, which we noted last night was definitely on a path on instability, is the reaction of world governments - from "deeply concerned" America to Turkey's "unacceptable" perspective to Saudi Arabia's "congratulations" and Russia's "democracy is not a panacea"- it seems not everyone is behind the second coup in 3 years (but everyone is calling for calm as the middle-eastern turmoil ripples into their markets) but is a "setback for democracy."

As I have said since the Egyptian revolution, the United States supports a set of core principles, including opposition to violence, protection of universal human rights, and reform that meets the legitimate aspirations of the people. The United States does not support particular individuals or political parties, but we are committed to the democratic process and respect for the rule of law. Since the current unrest in Egypt began, we have called on all parties to work together to address the legitimate grievances of the Egyptian people, in accordance with the democratic process, and without recourse to violence or the use of force....I now call on the Egyptian military to move quickly and responsibly to return full authority back to a democratically elected civilian government as soon as possible through an inclusive and transparent process, and to avoid any arbitrary arrests of President Morsy and his supporters. Given today’s developments, I have also directed the relevant departments and agencies to review the implications under U.S. law for our assistance to the government of Egypt.

North American crude oil has been in the news on several fronts this week, including some rapid price moves and an unexpected intervention by President Obama. Despite the publication of a new report projecting a much more rapid rate of tight oil supply growth than is generally expected and the entire Buffet-Railroad-Traffic-Pipeline meme relying on increasingly exponential dreams of the Bakken et al. saving us from our excess-energy-consuming selves, Barclays questions just how realistic these forecasts are, noting "it is perhaps wise to exercise a degree of caution over longer-term shale oil forecasts... partly because of the steepness of decline rates for shale oil wells, a lot of the very big productivity gains have already been made, and finally, skepticism around some of the more ambitious projections of US shale output due to the existence of numerous logistical barriers."

In this manner, all citizens anywhere could be under surveillance by any government, including their own, beyond any kind of effective control and oversight.

In the end the Obama administration is not afraid of whistleblowers like me, Bradley Manning or Thomas Drake. We are stateless, imprisoned, or powerless. No, the Obama administration is afraid of you. It is afraid of an informed, angry public demanding the constitutional government it was promised — and it should be.

I am unbowed in my convictions and impressed at the efforts taken by so many.

Having appeared to confirm no 'actual' American emails were intercepted in previous statements, it seems President Obama has some more questions to answer after the Guardian reveals that in fact, the Obama administration permitted the National Security Agency to continue collecting vast amounts of records detailing the email and Internet usage of Americans for more than two years. “The internet metadata of the sort NSA collected for at least a decade details the accounts to which Americans sent emails and from which they received emails,” the Guardian's Greenwald wrote. “It also details the Internet protocol addresses (IP) used by people inside the United States when sending emails – information which can reflect their physical location. It did not include the content of emails." Is it any wonder that Obama said he was "concerned" about firther leaks today.

• Scalpel in Hand, Chinese Premier Li Stirs Reform Hopes (Reuters)
• Obama Sets Conditions for Keystone Pipeline Go-Ahead (FT)
• World’s Most Indebted Households Face Rate Pain (BBG)
• SAC Probers Weighing 'Willful Blindness' Tack (WSJ)
• Draghi Says ECB Ready to Act, Calls for Investment Over Tax (BBG)
• U.S. Tops China for Foreign Investment (WSJ)
• Basel Presses Ahead With Plans to Limit Bank Borrowing (FT)
• Gillard Ousted as Australia PM by Rival Rudd (FT)
• Japan Economic Strength Will Show in Stocks, Nishimura Says (BBG)

After fluctuating wildly this morning between $1 and $35, the price of money spiked to an unprecedented $90 a dollar in afternoon trading, plunging international financial markets into chaos... "Everywhere you look, panicked investors are clamoring to exchange their dollars - which can only purchase about two cents apiece right now - for more stable dimes and quarters, which are trading at $18 and $32.25, respectively." President Obama is expected to address the nation later today about easing America’s dependence on domestic currency.

There is no greater crime in Washington today than speaking truth about the US economy in public.  This is why Ben Bernanke is not being reappointed for another term as Fed Chairman.

• Here come the rolling blackouts: Obama takes on power plant emissions as part of climate plan (Reuters)
• Walking Back Bernanke Wished on Too Much Information (BBG)
• As previewed last week: Bridgewater "All Weather" is Mostly Cloudy, down 8% YTD (Reuters)
• U.S. Said to Explore Possible China Role in Snowden Leaks (BBG)
• Coeure Says No Doubt ECB Loose Monetary Policy Exit Distant (Bloomberg)... so a "recovery", but not at all
• U.S. steps up pressure on Russia as Snowden stays free (Reuters)
• Texas' Next Big Oil Rush: New Pipelines Ferrying Landlocked Crude Expected to Boost Gulf Coast Refiners (WSJ)
• Singapore Offsets Bankers as Vacancies Fall (BBG)
• Asian Stocks Fall as China Sinks Deeper Into Bear Market (BBG), European Stocks Rally With Bonds as Metals Advance (BBG)
• Qatar emir hands power to son, no word on prime minister (Reuters)

Both the U.S. and China are now attempting to deflate asset bubbles. The former is likely to have second thoughts while the latter isn't.

NSA leaker Snowden shed new light on old relationships with a vibrant all-American industry

The Guardian has done it once again, this time presenting two July 2009 documents signed by none other than Eric Holder which lay out under what conditions the NSA is allowed to make use of information "inadvertently" collected from domestic US communications without a warrant. The documents detail the procedures the NSA is required to follow to target "non-US persons" under its foreign intelligence powers and what the agency does to minimize data collected on US citizens and residents in the course of that surveillance. "The documents show that even under authorities governing the collection of foreign intelligence from foreign targets, US communications can still be collected, retained and used."

There was non-Fed news in the overnight market. Such as Nikkei reporting that Germany's Angela Merkel was the first G-8 member to be openly critical of Japan's credit-easing policy "that has led to the yen's weakening against major currencies" in what was the first shot across the bow between the two export-heavy countries. Not helping risk in Asia was also news that China May new home prices rose in 69 cities over the past year, compared to 68 the prior month, thus keeping the PBOC's hands tied even as the liquidity shortage in traditional liquidity conduits continues to cripple the banking system and forcing the Agricultural Development Bank of China to scale back the size of two bond offerings today by 31% "as the worst cash crunch in at least seven years curbs demand for the securities." Rounding up Asia were the latest RBA meeting minutes which noted the possibility of further weakness in AUD over time, adding downside pressure on the currency and pressuring all AUD linked equity pairs lower. Still, the USDJPY caught a late bid pushing it above 95 on some comments by the economy minister Amari who said that the government would not be swayed by day-to-day market moves and the BOJ "should continue making efforts to convey its thinking to markets" adding the government was not making policy to pander to markets, confirming that Japan is making policy solely to pander to markets.

President Obama announced late last week that the US intelligence community had just determined that the Syrian government had used poison gas on a small scale, killing some 100 people in a civil conflict that has claimed an estimated 100,000 lives. Because of this use of gas, the president claimed, Syria had crossed his “red line” and the US must begin to arm the rebels fighting to overthrow the Syrian government. The process was identical to the massive deception campaign that led us into the Iraq war. That is exactly what the Obama Administration is doing with Syria: fixing the intelligence and facts around the already determined policy. And Congress just goes along, just as they did the last time. The president has opened a can of worms that will destroy his presidency and possibly destroy this country. Another multi-billion dollar war has begun.