We have called this a tale of two graphs. But what it really describes is a clear and present danger to American capitalism fostered by an unelected monetary politburo in thrall to its own lust for power and mesmerized by its own doctrinaire group think. The tragedy is that nothing can stop them except the thundering crash of the gargantuan bubble they have single handedly enabled.
What is extremely clear is that there is something amiss with the statistical headline employment and economic data. While there are indeed pockets of improvement, which should be expected following a recessionary contraction, there is a lack of widespread recovery. That sentiment is clearly reflected in every major poll of American's over the last year. What is important is that there is a clear disconnect between the financial markets, statistical economic headlines, and the reality of the vast majority of American consumers. So, riddle me this - what happens when that disconnect is eventually resolved?
Greece tapped emergency reserves in its holding account at the IMF in order to make a 750 million euro payment to the Fund on Monday meaning that, as predicted, the IMF is now paying itself. Athens has one month to replenish the account. Meanwhile, the Fund has indicated it wants no part of another Greek bailout. And just to confirm how terminal the situation for Greece is, MarketNews just reported that Greece now has a paltry €90 million in cash reserves left. The end of the world's most drawn out tragicomedy is finally nigh.
Second Largest Coal Miner East Of The Mississippi Files For Bankruptcy: 4000 Patriot Coal Jobs In PerilSubmitted by Tyler Durden on 05/12/2015 09:23 -0400
At last check Patriot Coal had around 4000 employees. Those soon to be former employees will soon require yet another massive seasonal adjustment by the BLS to be "adjusted" out, because moments ago the second largest coal miner east of the Mississippi and the second largest producer of thermal coal in the eastern US filed Chapter 11 bankruptcy.
- 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)
As the years have passed without Washington hearing, Russia and China have finally realized that their choice is vassalage or war. Had there been any intelligent, qualified people in the National Security Council, the State Department, or the Pentagon, Washington would have been warned away from the neocon policy of sowing distrust. But with only neocon hubris present in the government, Washington made the mistake that could be fateful for humanity.
Did you know that 89 percent of all minimum wage workers in the United States are not teens? At this point, the average age of a minimum wage worker in this country is 36, and 56 percent of them are women. Millions upon millions of Americans are working as hard as they can (often that means two or three jobs), and yet despite all of their hard work they still find themselves mired in poverty. One of the big reasons for this is that we have created two classes of workers in the United States.
There is propaganda, and then there is the harsh reality, as shown by the case of Denny Rder, 47, of Decatur, Illinois: "look closer, and this city of 75,000 resembles many communities across the industrial Midwest, where the unemployment rate is falling fast in part because workers are disappearing: moving away, retiring or no longer looking for a job."
As investors, it is crucial to ignore headline statistical data and focus on the underlying data trends that affect the real economy. While it is currently "blue skies" for investors, there are clearly storm clouds forming on the horizon. It will be those who fail to take precautionary actions that suffer the worst of consequences when the storm hits.
For many reasons the answer to the question: “will the commodity price rally continue?” is particularly important at this juncture, and the answer from Barclays is 'no' - it will prove very tough to make further significant gains in commodity prices from here unless supply/demand conditions improve very fast indeed. There are a multitude of factors but what erks them the most is the huge disconnect between price action in physical markets where differentials are signalling oversupply and futures markets where all looks rosy. The risks for a reversal in recent commodity price trends are growing, and with fewer market makers to absorb the shocks, potentially, a period of high volatility could lie ahead.
As the SHCOMP soars, the sellside reacts to China's latest round of easing and the message is clear: more policy rate cuts are in the cards as real lending rates remain elevated and deflation risk remains high. Meanwhile, the PBoC's statement was making the rounds on WeChat hours before its official release suggesting Janet Yellen isn't the only central banker that enjoys leaking information.
Futures Jittery As Attention Returns To Greece; China Stocks Rebound On Latest Central Bank InterventionSubmitted by Tyler Durden on 05/11/2015 06:48 -0400
With the big macro data out of the way, attention today and for the rest of the week will focus on the aftermath of the latest Chinese rate cut - its third in the past 6 months - which managed to boost the Shanghai Composite up by 3% overnight but not nearly enough to make up for losses in the past week; any resumption of the 6+ sigma volatility in the German Bund, which already has been jittery with the yield sliding to 0.52% only to spike to 0.62% shortly thereafter before retracing some of the losses; and finally Greece, which in a normal world would have concluded its negotiations during today's Eurogroup meeting and unlocked up to €7 billion in funds for the coming months. Instead, Greece may not only not make its €770 million IMF payment tomorrow but according to ever louder rumors, is contemplating a parallel currency on its way out of the Eurozone.
Members of Angela Merkel's Christian Democratic bloc are pushing the Chancellor to let Greece leave the euro, with some lawmakers saying the EU would be better off without the Greeks. Meanwhile, German FinMin Schaeuble warns of "accidental" insolvency.
As we have pointed out for a number of years, according to the payroll jobs reports, the complexion of the US labor force is that of a Third World country. Most of the jobs created are lowly paid domestic services. No economist should ever have accepted the claim that the economy was in recovery while participation in the labor force was declining. Having looked at the actual details of the payroll jobs report, which are seldom if ever reported in the financial media, let’s look at what else goes unreported in the media.