Private Equity

"Japanese day traders, colloquially and collectively known as 'Mrs Watanabe', are buying the yen as it nears eight-year lows," Nikkei reports. For their part, private equity firms are cashing out at what they figure may be the top for Japanese stocks.

Overnight saw yet another dip at the open that was ripped by the close in Chinese markets as Year-to-Date gains for China's Shenzhen Composite now top 105%. With IPOs rising 500% with no down days, Charles Hugh-Smith unleashes his satirical sword to 'explain' just how idiotic this situation has become, and (as we detailed here) it will get worse...

Smart money continues to maintain allocations or accumulate positions. U.S. mining financier Oskar Lewnowski is preparing to launch a base and precious metals fund. The 50 year old New Yorker has already invested almost $1 billion and hired a physical metals trader to handle supply.

• U.S. vows to continue patrols after China warns spy plane (Reuters)
• Bank of Japan Chief Cheers On Tokyo’s Surging Stocks (WSJ)
• Merkel Stamps Out Optimism on Greece After Tsipras Talks (BBG)
• Greece sees reforms deal with lenders in next 10 days (Reuters)
• Why Greece’s Syriza party is not sticking to the script on an IMF deal (Channel4)
• Why Does Putin Care Who Runs a Tiny Balkan Nation? Gas Pipelines (BBG)
• U.S. Stock-Index Futures Are Little Changed Before Yellen Speech (BBG)
• German Business Confidence Declines as Risks Cloud Outlook (BBG)

• Once-Unthinkable Criminal Pleas by U.S. Banks Get Investor ‘Meh’ (BBG)
• The E-Mail That Helped Catch Barclays: ‘ISDAfix Is Manipulated’ (BBG)
• CFTC Said Preparing ISDAfix Probe Talks in Weeks: Credit Markets (BBG)
• Islamic State takes control of Syria's Palmyra in westward advance (Reuters)
• Tensions High as Greece Gets Smallest Aid Rise Yet (BBG)
• The Rise of the $50,000 Rental (BBG)
• U.S. says South China Sea reclamations stoke instability (Reuters)
• First Hanergy Now Goldin: Hong Kong Stocks Drop Like Stones (BBG)

Since yesterday's fake AVP tender offer was nothing but a targeted attempt to force a short squeeze in one of the market's most shorted stocks, the best way to be positioned for future such criminal activity is to go long precisely the most shorted stocks, the names which in any other universe would be the first to crash, burn and file bankruptcy, but in this parallel centrally-planned universe may just be the biggest winners.

• The fake: Avon-Offer Hoax Shows It’s Easy to Put One Over on SEC’s Edgar (BBG)
• And the real: US buyout group TPG snaps up UK discounter Poundworld (FT)
• El Niño near-certain to last through summer: U.S. climate center (Reuters)
• Oil Sands Land Becomes Alberta’s Hot Real Estate as Oil Rebounds (BBG)
• SEC a stumbling block in banks' forex guilty pleas: sources (Reuters)
• Pimco’s Stocks Chief Maisonneuve to Leave as Funds Closed (BBG)
• Bank of America’s Woes Test ‘Fixer’ CEO (WSJ)
• Puerto Rico Governor, Lawmakers Agree on Revenue Proposal (BBG)

Real Estate is a highly “illiquid” asset class ‘most of the time’.  It always has been and always will be.  However, some times, such as now - and from 2003 to 2007 as a prime example - when liquidity is flowing like water, Real Estate’s illiquidity is masked.  Speculators can do no wrong.  Simply having access to short-term or mortgage capital to purchase Real Estate guaranties a double-digit return.  This continues until one day, suddenly, it doesn’t; and, the snap-back to the true, historical illiquid nature of the Real Estate sector happens suddenly and is amplified at first. This creates a snowball effect from which both house supply and illiquidity surge at the same time. Price then becomes the liquidity fulcrum and will drop, relentlessly ripping speculators faces off, until capital begins to view the asset class as a relative value once again.

The oil market rebalancing has started: weak prices in 1Q15 pushed producers to cut capex while supporting demand. But, as Goldman Sachs details below, while the rally in oil prices has closed the valuation gap to equities, these trade on historically high multiples and oil itself is now trading at a premium to its own still weak fundamentals in their view. Goldman therefore views this rally as derailing this rebalancing and setting the stage for sequentially weaker prices, especially with oil speculative length as long as when oil traded at $100/bbl.

• Bonds Extend Global Rout as Europe Stocks Slide, Dollar Weakens (BBG)
• Verizon Communications to Buy AOL for $4.4 Billion (BBG)
• Fresh Nepal earthquake kills dozens, triggers panic (Reuters)
• Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny (WSJ)
• Bill Gross: The Amount of Money I'll Give Away 'Is Staggering, Even to Me' (BBG)
• U.S. rejects notion that Gulf rulers snubbing Obama summit (Reuters)... what about AIIB?
• In Asia, Debt Market Gets Tougher (WSJ)
• Iran’s Mahan airline defies sanctions in shadowy aircraft deal (FT)

In the coming months, however many hours Clinton spends introducing herself to voters in small-town America, she will spend hundreds more raising money in four-star hotels and multimillion-dollar homes around the nation. The question is: "Can Clinton claim to stand for 'everyday Americans,' while hauling in huge sums of cash from the very wealthiest of us?" This much cannot be disputed: Clinton's connections to the financiers and bankers of this country - and this country's campaigns - run deep. As Nomi Prins questions, who counts more to such a candidate, the person you met over that chicken burrito bowl or the Citigroup partner you met over crudités and caviar?

On Saturday night, a man whose name still seems to be unknown, but who was wearing a “F##k the Police” t-shirt, came out in front of police past the official curfew. This is what happened next...

Baltimore, Maryland is in many ways the perfect microcosm for these United States of America.

If you still don’t get that, you’ll be in for a rude awakening in the years ahead.

Earlier today the US Census released its latest quarterly data, which confirmed that for what is left of America's middle class, owning a home has become virtually impossible, with the homeownership rate tumbling from 64.0% to 63.7%, which is tied for the lowest historic print since the first quarter of 1986, with the only difference that then the trendline was higher. Now, as can be seen on the chart below, it isn't. At this rate, by the end of the 2015 and certainly by the end of Obama's second term, the US homeownership rate will drop to the lowest in modern US history.

• Clinton charities will refile tax returns, audit for other errors (Reuters)
• China Warns North Korean Nuclear Threat Is Rising (WSJ), or another country realizes war is the only "exit"
• Shares, euro sag after euro zone PMIs disappoint (Reuters)
• China Manufacturing Gauge Drops to Lowest Level in 12 Months (BBG)
• Deutsche Bank Said to Pay $2.14 Billion in Libor Case (BBG), or roughly a €20,000 per banker "get out of jail" fee
• Brazil’s Petrobras Reports Nearly $17 Billion in Asset and Corruption Charges (WSJ)
• Can This Oil Baron’s Company Withstand Another Quake? (BBG)
• Bad for Q1 GDP: Raytheon sales fall amid weak U.S. defense spending (Reuters)