America’s grand strategy, its long-term blueprint for advancing national interests and countering major adversaries, is in total disarray. Top officials lurch from crisis to crisis, improvising strategies as they go, but rarely pursuing a consistent set of policies. Some blame this indecisiveness on a lack of resolve at the White House, but the real reason lies deeper. It lurks in a disagreement among foreign policy elites over whether Russia or China constitutes America’s principal great-power adversary.
The oil price collapse of 2014-2015 began one year ago this month (Figure 1). The world crossed a boundary in which prices are not only lower now but will probably remain lower for some time. It represents a phase change like when water turns into ice: the composition is the same as before but the physical state and governing laws are different. The market must balance before things get better and prices improve. That can only happen if production falls and demand increases. That will take time. The most likely case is that oil prices will decrease in the second half of 2015 and that financial distress to all oil producers will increase. The hope and expectation that the worst is over will fade as the new reality of prolonged low oil prices is reluctantly accepted.
Despite the fact that even the U.S. government itself has admitted that it was funding terrorists– directly and indirectly through Saudi Arabia, the suggestion was met with disbelief, ridicule, or either entirely ignored. Now, however, the United States government has admitted that it funds terrorists on the ground in Syria yet again, this time placing an individual dollar amount on the assistance provided.
Beginning July 1, drivers in Idaho, Georgia, Maryland, Rhode Island, Nebraska and Vermont will be charged more at the pump as a result of laws taking effect at the start states' new fiscal year.
We warned previously that when (not if) the market crashes next, The Fed is going to need a scapegoat (other than British traders living at home with their parents) and judging by The Fed's Lael Brainard's comments today, high-frequency-traders (HFT) are in the crosshairs. Crucially, Brainard warns that HFT "may amplify market shocks," and The Fed is "studying possible changes in liquidity resilience."
What if Berlin and Frankfurt do not budge? What if they tell Athens to ‘go jump of the tallest cliff’? I have good cause to hope that Berlin will prefer to accommodate the Greek government and to look with a great deal more ‘kindness’ the ‘request’ for a debt relief conference. And if it does not, and wishes to bring the Eurozone down with it, let it do its worst, I say.
The entire Western edifice rests on lies. There is no other foundation. Just lies. This makes truth an enemy. Enemies have to be suppressed, and thus truth has to be suppressed.
To summarize: the first revenue drop for the S&P in 5 years, a major downward revision in EPS now expecting just 1% increase in 2015 EPS, a 25% cut to GDP forecasts, a machete taken to corporate profits and 10 Yields, and not to mention double digit sales declines for some of the most prominent tech companies in the world. And that, in a nutshell, is the "strong fundamentals" that everyone's been talking about.
After seven long years of aggressively defending a monetary policy regime that's served to exacerbate the divide between the haves and the have-nots, the Fed looks at whether "the legend of Robin Hood" offers any helpful pointers about how to reignite America's economic growth engine. Spoiler alert: the Fed doesn't think "taking from the rich to give to the poor" would be very productive.
It appears Central Bank omnipotence is under threat once again....
As Gallup's Consumer Confidence plunges, The Conference Board's Consumer Confidence explodes higher from 94.6 to 101.4 (smashing expectations of 97.4). After missing by the most in 5 years in April, higher gas prices, market instability, and growing social unrest appear to be the perfect recipe for improved consumer confidence as The Conference Board data nears the highest since 2007. The biggest driver of the headline spike is the surge in "expectations" - in other words, hope - which jumped from 86.2 to 94.6, although expectations for higher incomes finally began to drop back to reality.
Cheap, easy credit has created moral hazard and nurtured magical thinking throughout the global economy.
Four months after the UK opened the membership floodgates and dealt Washington a humiliating political blow, China has officially launched the Asian Infrastructure Investment Bank.
It seems Goldman Sachs' conspiracy theory was right all along...
ECB'S COEURE SAYS ECB IS EVEN READY TO USE NEW INSTRUMENTS, WITHIN ITS MANDATE
GREECE COULD EXIT EURO, COEURE SAYS IN LES ECHOS INTERVIEW
This is exactly what The ECB wanted all along (and their leaders overlords) - all they needed was an 'excuse'. Or, in the parlance of Rahm Emanuel's times, "Let no Greek default crisis go to QE waste."
I wanted to do a post that had nothing to do with Greece or charts, just for a change of pace.