http://www.zerohedge.com/fullrss2.xml en Philly Fed's Plosser Explains Why He Dissented With The FOMC http://www.zerohedge.com/news/2014-08-01/philly-feds-plosser-explains-why-he-dissented-fomc <p>In an unscheduled release moments ago the Fed's Plosser just explained why he was the sole dissenter with the FOMC's announcement. Here is the punchline: "I cast a dissenting vote because I opposed retaining the statement language that reads "…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends." I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee's flexibility going forward."... "<strong>In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. </strong>Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, <strong>we are nearly 18 months ahead of where the Committee thought we would be just seven months ago.</strong>"</p> <p>He concludes: "the Committee's statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation."</p> <p>Poor Plosser still doesn't get that it was never about the economy but pushing the S&amp;P to the highest possible level before letting it all go.</p> <p><em>From <a href="http://www.philadelphiafed.org/newsroom/press-releases/2014/080114.cfm">the Philly Fed</a>:</em></p> <p><strong>Philadelphia Fed President Plosser Gives Statement on Dissenting Vote at the Federal Open Market Committee meeting of July 29–30, 2014</strong></p> <p>The economy has improved significantly this year, and inflation and unemployment have moved much closer to the FOMC's longer-term goals. However, neither the pace of the reduction in asset purchases nor its end date has been modified, nor has the time-dependent language associated with the projected liftoff of the federal funds rate been adjusted. Thus, I cast a dissenting vote because I opposed retaining the statement language that reads "…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends." I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee's flexibility going forward.</p> <p>In December 2013, the FOMC began to taper its asset purchase program, indicating that it was not on a preset course, but that the pace depended on the performance of the economy. The Committee also indicated it was likely that it would be appropriate to maintain the current range of the federal funds rate well past the time that the unemployment rate declines below 6.5 percent. At the time this decision was made, the unemployment rate was 7.0 percent, and year-over-year PCE inflation was 1.0 percent. With the recovery appearing somewhat unsteady and with the possibility of inflation falling further, caution and patience seemed prudent.</p> <p>My own assessment at that time was that the economy would gradually recover. I projected that by the fourth quarter of 2014 the unemployment rate would decline to 6.2 percent, and year-over-year PCE inflation would rise to 1.8 percent. Consistent with that view of gradual economic recovery, I believed that an appropriate monetary policy would require the funds rate to rise to 1.25 percent by year-end 2014. Moreover, I anticipated continued progress toward economic health in 2015, with the unemployment rate reaching 5.8 percent and inflation running at 2.0 percent. Consistent with these outcomes, my associated funds rate was in the neighborhood of 3.25 percent at the end of 2015.</p> <p>My views on the appropriate funds rate settings were — and continue to be — informed by Taylor-type monetary policy rules that depict the past behavior of monetary policy, which I find useful for benchmarking my policy prescriptions. With the economy having already reached my year-end 2014 forecast for inflation and unemployment, and appearing to be well on its way toward achieving my 2015 forecasts approximately a year ahead of schedule, the funds rate setting remains well behind what I consider to be appropriate given our goals.</p> <p><strong>In addition, the economy today is very close to achieving the central tendency outcomes for 2015 reported in the December 2013 Summary of Economic Projections. </strong>Specifically, the central tendency projection for unemployment at the end of 2015 was 5.8 to 6.1 percent, and that for inflation was between 1.5 and 2.0 percent. From this perspective, <strong>we are nearly 18 months ahead of where the Committee thought we would be just seven months ago</strong>. Consistent with these projections for 2015, 14 of 17 participants indicated that the federal funds rate should be above zero, with a median value of 75 basis points. <strong>Yet the Committee's statement does not appear to reflect what was once thought to be appropriate policy based on the behavior of unemployment and inflation.</strong></p> <p>Thus, given the clear progress we have made toward achieving our long-term goals over the past year, and the progress and momentum that appears to be building in the economy and in the broader labor market, I no longer believe that the forward guidance language in the statement is appropriate or warranted. </p> http://www.zerohedge.com/news/2014-08-01/philly-feds-plosser-explains-why-he-dissented-fomc#comments Monetary Policy Philly Fed recovery Unemployment Fri, 01 Aug 2014 12:05:53 +0000 Tyler Durden 492164 at http://www.zerohedge.com The Best And Worst Performing Assets In July And YTD http://www.zerohedge.com/news/2014-08-01/best-and-worst-performing-assets-july-and-ytd <p>Up until the last day of July, everything was going great: stocks were solidly up for the month, the DJIA was on the verge of 17,000, and the wealth effect was flourishing, if not the economy. Then yesterday happened, and everything changed: not only did the S&amp;P turn red for the month, but the DJIA slid to red for 2014. So what is the best performing asset class in July? With the PBOC now openly unleashing QE in its economy, no surprise that it was the Shanghai Composite, which returned over 8%, if virtually nothing since 2009. However, don't expect this to last: for China real estate is orders of magnitude more important than the stock market to boost the wealth effect. </p> <p>As for the best returning assets class in 2014 YTD: don't laugh - it's still Spain and Italy. Expect the day of reckoning for Europe's periphery to be fast, unexpected and very brutal.</p> <p>From Deutsche Bank:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The last 48 hours have made a big difference to returns in July with a sell-off in rates, credit, equities and commodities changing the month dramatically over this period and leaving a few more markets down for 2014 now.</p> <p>&nbsp;</p> <p>DM equities were tipped into negative territory for July while EM stocks had enough outperformance through the rest of the month to largely stay in positive territory despite the weakness in Russian equity markets. China was the key outperformer with the Shanghai Composite (+8.8%) posting its best monthly total return performance since December 2012. The rally in China also benefitted Hong Kong equities with the Hang Seng (+7.3%) recording its biggest monthly gain in two and a half years. Back to the DM world, the Stoxx 600 and S&amp;P 500 were -1.6% and -1.4% respectively – with the former probably negative impacted by the BES-driven weakness in Portugal (-10.5%). A poor month for the DAX (-4.3%) and CAC (-4.0%) has pushed them both into negative total return territory for the year at -1.5% and -1.2%, respectively. The FTSE was down -0.1% on the month keeping it in slightly negative territory for the year (-0.3%) although dividends have helped YTD total returns stay in the green. The DOW is also down YTD now.</p> <p>&nbsp;</p> <p>Moving on to Fixed Income, it was a mixed month for core rates with Europe outperforming Treasuries. This is perhaps not surprising with core European rates flirting around their all time lows whilst USTs suffered a dip following the strong GDP print just a day before month end thus giving up about half of all of the month's earlier strong gains. Turning to Credit, it was modest month for IG total returns but nevertheless IG still did better than HY with US HY (-1.7%) underperforming on the ETF outflow story. Staying in fixed income but moving to EM, the overall benchmark was down 0.6% with strength in Asia (+1.3%) neutralising the weakness in Latam (-0.7%) and EEMEA (-1.3%).</p> <p>&nbsp;</p> <p>The commodity complex had a very weak month with Corn, Wheat, and Brent all down -16%, -6%, and -5% respectively. Incidentally this also came during a fairly encouraging month for the Dollar bulls with the Greenback appreciating about 2% against a basket of major currencies.</p> <p>&nbsp;</p> <p>To sum up the year to date performance so far, the European peripheral complex is still the key winner with the IBEX (+12%), FTSEMIB (+11%), Spanish Bonds (+10%) and BTPs (+10%) topping our performance ranking chart and returning about twice as much as the S&amp;P 500 (+6%). EM equities have also done surprisingly well this year with a +8% gain to date. The latest July performance in China has also bumped both the Shanghai Composite (+7%) and the Hang Seng (+9%) into our top 10 list. Core DM rates are still in positive territory, though not surprisingly with Bunds (+6%) outpacing Treasuries (+3%). On the other end of the spectrum, the Nikkei (-3%) remains a key laggard while Russia (-5%) is feeling the heat from the ongoing geopolitical volatility. Generally commodities are amongst the worst performers this year largely led by softs.</p> </blockquote> <p>Visually, the month of July</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/July%20Return.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/July%20Return_0.jpg" width="600" height="323" /></a></p> <p>&nbsp;</p> <p>And YTD:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/July%20assets.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/July%20assets_0.jpg" width="600" height="645" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="937" height="1008" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/July%20assets.jpg?1406894281" /> </div> </div> </div> http://www.zerohedge.com/news/2014-08-01/best-and-worst-performing-assets-july-and-ytd#comments China Deutsche Bank Equity Markets fixed Hong Kong Italy LatAm Nikkei Portugal Real estate Volatility Fri, 01 Aug 2014 11:59:46 +0000 Tyler Durden 492163 at http://www.zerohedge.com Frontrunning: August 1 http://www.zerohedge.com/news/2014-08-01/frontrunning-august-1 <ul> <li>As we <a href="http://www.zerohedge.com/news/2014-07-31/scorched-earth-how-israel-converted-40-gaza-wasteland-rubble">predicted yesterday</a>, the "big" Gaza ceasefire lasted all of a few hours (<a href="http://www.reuters.com/article/2014/08/01/us-mideast-gaza-idUSKBN0G008720140801">Reuters</a>)</li> <li>To Lift Sales, G.M. Turns to Discounts (<a href="http://www.nytimes.com/2014/08/01/business/to-lift-sales-gm-turns-to-discounts.html?_r=0">NYT</a>)</li> <li>Espirito Santo Family’s Swift Fall From Grace Jolts Portugal (<a href="http://www.bloomberg.com/news/2014-07-31/espirito-santo-family-s-swift-fall-from-grace-shocks-portugal.html">BBG</a>)</li> <li>Argentine Debt Feud Finds Much Fault, Few Fixes (<a href="http://online.wsj.com/articles/argentina-mulls-legal-options-in-debt-dispute-1406814851?mod=WSJ_hp_LEFTWhatsNewsCollection">WSJ</a>)</li> <li>Fiat Says Ciao to Italy as Merger With Chrysler Ends Era (<a href="http://www.bloomberg.com/news/2014-07-31/fiat-says-ciao-to-italy-as-merger-with-chrysler-ends-era-cars.html">BBG</a>)</li> <li>Euro zone factory growth eases in July as inflation fades away (<a href="http://uk.reuters.com/article/2014/08/01/uk-pmi-manufacturing-eurozone-idUKKBN0G13HA20140801">Reuters</a>)</li> <li>CIA concedes it spied on U.S. Senate investigators, apologizes (<a href="http://www.reuters.com/article/2014/07/31/us-usa-cia-senate-idUSKBN0G027020140731">Reuters</a>)</li> <li>Ukraine Reports Losses After Pro-Russian Ambush Near Malaysia Airlines Flight 17 Crash Area (<a href="http://online.wsj.com/articles/ukraine-reports-losses-after-pro-russian-ambush-near-malaysia-airlines-flight-17-crash-area-1406890209?mod=WSJ_hp_LEFTTopStories">WSJ</a>)</li> <li>U.S. says India refusal on WTO deal a wrong signal (<a href="http://www.reuters.com/article/2014/08/01/us-india-trade-wto-idUSKBN0G009R20140801">Reuters</a>)</li> <li>Why Putin Has 2006 Flash Before His Eyes After Sanctions (<a href="http://www.bloomberg.com/news/2014-07-31/why-putin-has-2006-flash-before-his-eyes-after-sanctions.html">BBG</a>)</li> <li>Falling Wages in Southern EU Vex Draghi as Youth Punished (<a href="http://www.bloomberg.com/news/2014-07-31/falling-wages-in-southern-eu-vex-draghi-as-youth-punished.html">BBG</a>)</li> <li>Congressman Cantor to resign seat early: Richmond Times-Dispatch (<a href="http://www.reuters.com/article/2014/08/01/us-usa-congress-cantor-idUSKBN0G13FJ20140801">Reuters</a>)</li> <li>Eastern Europe Punished in Markets After Opposing Putin (<a href="http://www.bloomberg.com/news/2014-07-31/eastern-europe-punished-in-markets-after-opposing-putin.html">BBG</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>* Israel and Hamas agreed to a three-day cease fire in the Gaza conflict with the hope of forging a more lasting peace. (<a href="http://on.wsj.com/1puLbSA" title="http://on.wsj.com/1puLbSA">http://on.wsj.com/1puLbSA</a>)</p> <p>* Central Intelligence Agency officers snooped on computers used by a Senate committee investigating the CIA's interrogation program, an internal agency report has concluded; a critical finding in a bitter standoff between two government branches. (<a href="http://on.wsj.com/Xl5zMt" title="http://on.wsj.com/Xl5zMt">http://on.wsj.com/Xl5zMt</a>)</p> <p>* A tanker of oil from Texas has set sail for South Korea, the first unrestricted sale of unrefined American oil since the 1970s. How that $40-million shipment avoided the nearly four-decade ban on exporting U.S. crude is a tale involving two determined energy companies, loophole-seeking lawyers, and an unprecedented boom in American drilling that could create a glut of ultra-light oil. (<a href="http://on.wsj.com/1pJ3roq" title="http://on.wsj.com/1pJ3roq">http://on.wsj.com/1pJ3roq</a>)</p> <p>* The Sprint Corp and T-Mobile US Inc deal that has been in talks for more than six months was lurched on Thursday when France's Iliad SA entered with a buyout offer for T-Mobile, causing a clash between the telecommunications industry's titans. (<a href="http://on.wsj.com/1o8WRKT" title="http://on.wsj.com/1o8WRKT">http://on.wsj.com/1o8WRKT</a>)</p> <p>* The calm that pervaded financial markets for months evaporated as stocks tumbled in Europe and the United States, with the Dow industrials erasing its gains for the year after suffering its worst one-day loss since February. (<a href="http://on.wsj.com/1ob6AR0" title="http://on.wsj.com/1ob6AR0">http://on.wsj.com/1ob6AR0</a>)</p> <p>* Argentina's default on $29 billion in debt brought a stock market selloff and finger pointing by the Argentine government and creditors. But investors held out hope that a resolution to the crisis could be reached. (<a href="http://on.wsj.com/1lhyc2p" title="http://on.wsj.com/1lhyc2p">http://on.wsj.com/1lhyc2p</a>)</p> <p>* Investors retreated from risky corporate debt on Thursday, sending prices tumbling and deepening fears of an end to a long rally in U.S. junk bonds. This decline reflects fresh signs that the growth in the United States is picking up in earnest, a trend that many global bond managers expect to eventually prompt a Federal Reserve interest rate increase that would likely squeeze bond returns. (<a href="http://on.wsj.com/1s8ssgH" title="http://on.wsj.com/1s8ssgH">http://on.wsj.com/1s8ssgH</a>)</p> <p>* The energy boom in the United States is reflecting a noticed side effect: American oil and gas companies are paying less in federal income taxes. Energy companies are spending billions of dollars a year to drill in shale formations across the country, sending the nation's daily oil output up by almost 50 percent in just the past few years. All that spending has made drillers take advantage of incentives in the tax code for drilling and capital expenditures, deferring billions of dollars in income tax. (<a href="http://on.wsj.com/1lgFjZa" title="http://on.wsj.com/1lgFjZa">http://on.wsj.com/1lgFjZa</a>)</p> <p>* Alibaba Group Holding Ltd &lt;IPO-BABA.N&gt; is backing another California startup, announcing a $120-million investment in gaming company Kabam Inc and a partnership to publish and distribute its free-to-play mobile games. (<a href="http://on.wsj.com/1pKyUqp" title="http://on.wsj.com/1pKyUqp">http://on.wsj.com/1pKyUqp</a>)</p> <p>* Sony Corp sharply cut its forecast for smartphone sales, dealing a blow to the Japanese electronics maker's hopes for recovery. (<a href="http://on.wsj.com/1n98jl4" title="http://on.wsj.com/1n98jl4">http://on.wsj.com/1n98jl4</a>)</p> <p>* The Food and Drug Administration on Thursday laid out a proposed new regulatory plan to oversee potentially thousands of laboratory developed medical tests that the agency contends can be prone to errors. (<a href="http://on.wsj.com/1tAJ2IU" title="http://on.wsj.com/1tAJ2IU">http://on.wsj.com/1tAJ2IU</a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>French telecommunications company Iliad has made a surprise offer for control of T-Mobile U.S. that values the third-largest U.S. carrier at $29.5 billion.</p> <p>Companies across the eurozone bloc warned that the crisis in Russia and Ukraine is already impacting business, as the European Union's toughest sanctions against Russia since the end of the cold war sent ripples through the continent's boardrooms.</p> <p>Tesla Motors Chief Executive Elon Musk unveiled plans for a massive expansion in China, with as many as a third of the U.S. electric carmaker's global network of service centres located in the country by the end of 2015.</p> <p>Corporate networking site LinkedIn beat analyst expectations in its second quarter, sending its shares up as much as 12 percent in after-hours trading in New York.</p> <p>French telecoms-equipment maker Alcatel Lucent intends to float part of its submarine-cables division as it aims to complete 1 billion euros ($1.34 billion) of asset sales by the end of next year.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>* Kabam, a video game start-up, said on Thursday that it has received a $120 million investment from Alibaba Group Holding Ltd &lt;IPO-BABA.N&gt;. The new round gives Alibaba a board seat and what is likely a significant stake in Kabam, which said it is now worth more than $1 billion. (<a href="http://nyti.ms/1u5mfCj" title="http://nyti.ms/1u5mfCj">http://nyti.ms/1u5mfCj</a>)</p> <p>* Tesla Motors Inc announced on Thursday that it had an agreement with Panasonic Corp to build a large-scale battery plant in the United States. The planned factory will produce batteries for Tesla's all-electric vehicles, as well as modules for the stationary storage market. The company said it estimated that the plant and its associated supplier complex, which it is calling the Gigafactory, would employ 6,500 people by 2020. (<a href="http://nyti.ms/1puMaSP" title="http://nyti.ms/1puMaSP">http://nyti.ms/1puMaSP</a>)</p> <p>* Federal authorities are sounding alarms about a wide range of fraudulent schemes involving a popular prepaid money card product. Thousands of consumers have been lured into sending money through the card, called MoneyPak. For online fraudsters, the reusable green-and-white paper card that can be used to quickly reload, or transfer, hundreds of dollars in cash onto another prepaid card is often the money conduit of choice.(<a href="http://nyti.ms/1xHXNHm" title="http://nyti.ms/1xHXNHm">http://nyti.ms/1xHXNHm</a>)</p> <p>* In February, General Motors Co hit a milestone of sorts when its sales incentives, as tracked by the research firm Edmunds.com, dropped below those of its domestic rivals. But since its safety crisis began to mount in the spring, the automaker has piled on cash incentives and cheap lease deals to invigorate sales of its passenger cars, particularly the smaller models, joining what some of its competitors have been doing as well. (<a href="http://nyti.ms/1rULfy8" title="http://nyti.ms/1rULfy8">http://nyti.ms/1rULfy8</a>)</p> <p>* Target Corp named Brian Cornell as its new chief executive on Thursday, bringing in an outsider to lead the company for the first time as it looked to right itself. Cornell was most recently the chief executive of PepsiCo's Americas Foods unit. (<a href="http://nyti.ms/1tAELVM" title="http://nyti.ms/1tAELVM">http://nyti.ms/1tAELVM</a>)</p> <p>* Lenders to Puerto Rico's electric power authority are giving the beleaguered utility another two weeks before it has to make past-due payments on its lines of credit. PREPA owes money on two main credit lines - a roughly $250 million line from Citigroup Inc and a $550 million line from a syndicate of banks. (<a href="http://nyti.ms/1kaduGz" title="http://nyti.ms/1kaduGz">http://nyti.ms/1kaduGz</a>)</p> <p>* Iliad SA, France's fourth-biggest mobile company, said on Thursday that it had made a $15-billion bid for a majority stake in T-Mobile US Inc, a company that is roughly 60 percent bigger than it in market value. Under the terms of the deal, Iliad said it would offer $15 billion for a 56.6 percent stake in T-Mobile US. The French company said it valued the remaining stake in T-Mobile US at $40.50 a share, based on unspecific cost savings totaling $10 billion to be created from the deal. (<a href="http://nyti.ms/UECYjx" title="http://nyti.ms/UECYjx">http://nyti.ms/UECYjx</a>)</p> <p>* Shares in Synchrony Financial, the North American retail finance unit being spun off by General Electric Co , opened largely unchanged on Thursday after it raised about $2.9 billion in its initial public offering. Synchrony Financial, which handles private-label credit cards for major retailers like Gap Inc and Wal-Mart Stores Inc, ranks as the largest IPO this year in terms of money raised. (<a href="http://nyti.ms/1obvsrU" title="http://nyti.ms/1obvsrU">http://nyti.ms/1obvsrU</a>)</p> <p>* David Johnson, a former executive at the mortgage finance giant Fannie Mae, is joining FTI Consulting Inc as its chief financial officer. He will take over the role on Aug.25. (<a href="http://nyti.ms/1s9rNfJ" title="http://nyti.ms/1s9rNfJ">http://nyti.ms/1s9rNfJ</a>)</p> <p>* Four years after federal regulators passed new rules aimed at curbing overdraft fees, the Consumer Financial Protection Bureau is still finding problems with the high fees that banks charge customers when they overdraw their accounts. In a new report released, the agency said overdraft fees continue to pile up for many bank customers, particularly among young people. (<a href="http://nyti.ms/WQzA6R" title="http://nyti.ms/WQzA6R">http://nyti.ms/WQzA6R</a>)</p> <p>* The Food and Drug Administration announced on Thursday that it would start regulating medical laboratory testing, saying that tests used to make important treatment decisions must be vetted and validated before they go into use. (<a href="http://nyti.ms/1ADV4TH" title="http://nyti.ms/1ADV4TH">http://nyti.ms/1ADV4TH</a>)</p> <p>* Microsoft Corp has suffered a setback in its efforts to block United States federal prosecutors from seizing a Microsoft customer's data that is stored overseas. Judge Loretta Preska of the United States District Court for the Southern District of New York on Thursday upheld a magistrate judge's ruling that the company must turn over the customer's emails held in a Microsoft data center in Ireland. Microsoft plans to appeal the ruling. (<a href="http://nyti.ms/UEEJNO" title="http://nyti.ms/UEEJNO">http://nyti.ms/UEEJNO</a>)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>* China's ambassador to Canada, Luo Zhaohui, has said if Ottawa has evidence that Beijing is responsible for a cyberattack on a top Canadian research body, it should turn it over to the Chinese government.</p> <p>The Canadian government this week said computers at the National Research Council were breached, and pointed to "a highly sophisticated Chinese state-sponsored actor." (<a href="http://bit.ly/1og6pzo" title="http://bit.ly/1og6pzo">http://bit.ly/1og6pzo</a>)</p> <p>* The Canadian government has denied a request from freedom-of-expression charity, pen Canada, for auditors' guidelines on political activity, saying revealing how the Canada Revenue Agency conducts audits could hamper their work. (<a href="http://bit.ly/1s9bGOp" title="http://bit.ly/1s9bGOp">http://bit.ly/1s9bGOp</a>)</p> <p>In the business section:</p> <p>* Wind Mobile SA's foreign owner has put a C$300 million price tag on the startup wireless carrier, but with a number of players circling the asset, the ultimate outcome may depend on Canada's efforts to encourage the consolidation of new entrants in the cellular industry. Quebecor Inc said Thursday it is still in talks over financial and strategic arrangements that could culminate in it playing a role in a consolidated fourth national wireless carrier. (<a href="http://bit.ly/1qwym9e" title="http://bit.ly/1qwym9e">http://bit.ly/1qwym9e</a>)</p> <p>NATIONAL POST</p> <p>* Prime Minister Stephen Harper is reiterating his government's hard line against Hamas, saying it is solely responsible for the death and destruction in Gaza. Harper said while no one likes to see the suffering and loss that's occurring in the Middle East, Hamas is to blame. (<a href="http://bit.ly/1xJhpuM" title="http://bit.ly/1xJhpuM">http://bit.ly/1xJhpuM</a>)</p> <p>* Despite attempts by Justin Trudeau-led federal Liberals to win back ethnic voters, the Conservatives continue to raise more money from Chinese-Canadians than any other party, new fundraising data suggest. (<a href="http://bit.ly/1uO008c" title="http://bit.ly/1uO008c">http://bit.ly/1uO008c</a>)</p> <p>FINANCIAL POST</p> <p>* Wal-Mart Stores Inc's Canadian business's new Chief Executive Dirk Van den Berghe's hiring could be the surest sign yet that the biggest retailer in the world wants to get smaller in Canada. Finding space for its stores in the urban markets of Canada's major cities has been a stumbling block for the country's largest mass merchant, which has been rapidly expanding its grocery business to all of its big-box stores across Canada. (<a href="http://bit.ly/1pLopDj" title="http://bit.ly/1pLopDj">http://bit.ly/1pLopDj</a>)</p> <p>* Quebecor Inc CEO Pierre Dion reiterated his demand that Canada bring in new rules to force down roaming rates before his company consider becoming Canada's fourth wireless carrier, but he also cautioned that even if Quebecor gets what it wants, it might not take the challenge. (<a href="http://bit.ly/1m4qkS9" title="http://bit.ly/1m4qkS9">http://bit.ly/1m4qkS9</a>) </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>SHELL CITES 'ACT OF GOD' AND BREAKS OFF DRILLING IN STRIFE-TORN EAST UKRAINE</p> <p>Royal Dutch Shell has mothballed a multibillion-dollar shale gas joint venture in eastern Ukraine amid the escalating conflict with Russia. (<a href="http://thetim.es/1qukexc" title="http://thetim.es/1qukexc">http://thetim.es/1qukexc</a>)</p> <p>WATCHDOG'S PROFIT CLAIMS INFLATED, SAYS CENTRICA</p> <p>Centrica, the owner of British Gas, has attacked the energy industry regulator for making "false" accusations of profiteering in an escalating rift over the size of household bills for electricity and gas. (<a href="http://thetim.es/1kpiesp" title="http://thetim.es/1kpiesp">http://thetim.es/1kpiesp</a>)</p> <p>BALFOUR ACCUSES CARILLION AS MERGER COLLAPSES OVER U.S. SALE</p> <p>Balfour Beatty has ended discussions for a proposed 3 billion pound ($5.07 billion) merger with Carillion and angrily accused its construction industry rival of scuppering the proposed tie-up. (<a href="http://thetim.es/1oaqZWk" title="http://thetim.es/1oaqZWk">http://thetim.es/1oaqZWk</a>)</p> <p>The Guardian</p> <p>SCANDALS DENT PROFITS AT LLOYDS AS PPI BILL RISES 600 MLN STG</p> <p>Profits at Lloyds Banking Group more than halved in the first six months of the year as its bill for the payment protection insurance scandal increased by 600 million pounds and it paid out penalties for rigging interest rates. (<a href="http://bit.ly/1lfitRF" title="http://bit.ly/1lfitRF">http://bit.ly/1lfitRF</a>)</p> <p>PADDY POWER ADMITS PERSONAL DETAILS OF 649,000 CUSTOMERS WERE STOLEN IN 2010</p> <p>Irish bookmaker Paddy Power has revealed its website was hacked in 2010 and personal details of more than 649,000 customers stolen. (<a href="http://bit.ly/1xHiWkY" title="http://bit.ly/1xHiWkY">http://bit.ly/1xHiWkY</a>)</p> <p>The Telegraph</p> <p>SANTANDER: BANK CLAWBACK RULES THREATEN UK</p> <p>The head of Santander UK, Britain's fifth-largest high street bank, has said that regulations to introduce seven-year clawbacks on bankers' bonuses could threaten London's position as a leading financial centre. (<a href="http://bit.ly/1u5197e" title="http://bit.ly/1u5197e">http://bit.ly/1u5197e</a>)</p> <p>BT PROFITS BOOSTED BY FIBRE AND FOOTBALL</p> <p>Strong demand for faster internet access helped BT deliver a 7 percent increase in profits for the first quarter, as the company also continued to strip costs out of its struggling IT services division. (<a href="http://bit.ly/1qOkr2Y" title="http://bit.ly/1qOkr2Y">http://bit.ly/1qOkr2Y</a>)</p> <p>Sky News</p> <p>FORMER LIBOR BOSS QUITS TOP UK POST AT UBS</p> <p>Mark Yallop, who played a key role in the administration of the scandal-hit Libor benchmark, will leave his role as UBS's UK chief executive at the end of September. (<a href="http://bit.ly/1pIH5DH" title="http://bit.ly/1pIH5DH">http://bit.ly/1pIH5DH</a>)</p> <p>The Independent</p> <p>ROBERT TCHENGUIZ GETS 1.5 MLN STG IN DAMAGES AFTER BOTCHED SFO INVESTIGATION</p> <p>Britain's Serious Fraud Office has agreed to pay property tycoon Robert Tchenguiz 1.5 million pounds in damages in one of the most embarrassing episodes to hit the agency following a botched investigation. (<a href="http://ind.pn/1qOj8kQ" title="http://ind.pn/1qOj8kQ">http://ind.pn/1qOj8kQ</a>) </p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>Fly On The Wall Pre-market Buzz</strong></p> <p>ECONOMIC REPORTS</p> <p>Domestic economic reports scheduled for today include:<br />Nonfarm payrolls for July at 8:30--consensus 233K<br />Unemployment rate for July at 8:30--consensus 6.1%<br />Personal income for June at 8:30--consensus up 0.4%<br />Personal spending for June at 8:30--consensus up 0.4%<br />Markit final manufacturing PMI for July at 9:45--consensus 56.5<br />U. of Michigan consumer sentiment for July at 9:55--consensus 81.5</p> <p>ANALYST RESEARCH</p> <p>Upgrades</p> <p>ArcBest (ARCB) upgraded to Outperform from Market Perform at Cowen<br />Barclays (BCS) upgraded to Hold from Sell at Berenberg<br />DeVry (DV) upgraded to Buy from Hold at Stifel<br />Expedia (EXPE) upgraded to Outperform from Market Perform at Raymond James<br />Invesco (IVZ) upgraded to Buy from Hold at Deutsche Bank<br />Iridium (IRDM) upgraded to Buy from Fair Value at CRT Capital<br />Marathon Petroleum (MPC) upgraded at Credit Suisse<br />Marathon Petroleum (MPC) upgraded to Outperform from Neutral at Credit Suisse<br />OceanFirst upgraded to Outperform from Market Perform at Keefe Bruyette<br />PG&amp;E (PCG) upgraded to Outperform from Neutral at Credit Suisse<br />Pharmacyclics (PCYC) upgraded to Buy from Hold at WallachBeth<br />Progressive (PGR) upgraded to Market Perform from Underperform at Keefe Bruyette<br />Quanta Services (PWR) upgraded to Outperform from Neutral at RW Baird<br />Quintiles (Q) upgraded to Buy from Neutral at SunTrust<br />Red Hat (RHT) upgraded to Positive from Neutral at Susquehanna<br />Royal Dutch Shell (RDS.A) upgraded to Buy from Hold at Jefferies<br />Royal Dutch Shell (RDS.A) upgraded to Buy from Hold at Societe Generale<br />Selective Insurance (SIGI) upgraded to Outperform from Sector Perform at RBC Capital<br />Signature Bank (SBNY) upgraded to Strong Buy from Outperform at Raymond James<br />Strayer (STRA) upgraded to Neutral from Underweight at Piper Jaffray<br />Strayer (STRA) upgraded to Outperform from Market Perform at BMO Capital<br />Strayer (STRA) upgraded to Outperform from Market Perform at Wells Fargo<br />SunPower (SPWR) upgraded to Buy from Hold at Brean Capital<br />Synalloy (SYNL) upgraded to Buy from Neutral at Sterne Agee<br />Tableau (DATA) upgraded to Buy from Neutral at Mizuho</p> <p>Downgrades</p> <p>3D Systems (DDD) downgraded to Neutral from Buy at Citigroup<br />3D Systems (DDD) downgraded to Neutral from Overweight at Piper Jaffray<br />Ambev (ABEV) downgraded to Equal Weight from Overweight at Barclays<br />Bed Bath &amp; Beyond (BBBY) downgraded to Perform from Outperform at Oppenheimer<br />Boyd Gaming (BYD) downgraded to Neutral from Outperform at Credit Suisse<br />Campus Crest (CCG) downgraded to Hold from Buy at MLV &amp; Co.<br />Education Realty (EDR) downgraded to Neutral from Buy at UBS<br />EnPro (NPO) downgraded to Hold from Buy at KeyBanc<br />Generac (GNRC) downgraded to Hold from Buy at Canaccord<br />Hyatt Hotels (H) downgraded to Underperform from Neutral at Credit Suisse<br />Jive Software (JIVE) downgraded to Neutral from Outperform at Credit Suisse<br />Montpelier Re (MRH) downgraded to Hold from Buy at Deutsche Bank<br />Ocwen Financial (OCN) downgraded to Neutral from Buy at Citigroup<br />Randgold Resources (GOLD) downgraded to Neutral from Buy at UBS<br />Randgold Resources (GOLD) downgraded to Neutral from Buy at UBS<br />RenaissanceRe (RNR) downgraded to Equal Weight from Overweight at Morgan Stanley<br />ServiceSource (SREV) downgraded to Market Perform from Outperform at JMP Securities<br />Web.com (WWWW) downgraded to Neutral from Buy at SunTrust</p> <p>Initiations</p> <p>Arista Networks (ANET) initiated with a Neutral at Citigroup<br />Casella Waste (CWST) initiated with a Hold at Stifel<br />Finish Line (FINL) initiated with a Buy at Jefferies<br />PTC Therapeutics (PTCT) initiated with an Outperform at Oppenheimer<br />Progressive Waste (BIN) initiated with a Hold at Stifel<br />Prosensa (RNA) initiated with an Outperform at Oppenheimer<br />Sangamo (SGMO) initiated with an Overweight at JPMorgan<br />Sarepta (SRPT) initiated with an Outperform at Oppenheimer</p> <p><strong>COMPANY NEWS</strong></p> <p>Tesla (TSLA) announced that it broke ground on a possible Gigafactory location in Reno, Nevada. The company also forecast 100,000 unit run rate by end of 2015, split between Model S, X<br />Sanofi (SNY) raised its stake in Regeneron (REGN) to 22.5% from 21.6%<br />Web.com (WWWW) acquired U.K. online directory company Scoot<br />LinkedIn (LNKD) said cumulative members grew 32% in Q2 to 313M<br />Array BioPharma (ARRY) received orphan status for ovarian cancer treatment<br />Genesee &amp; Wyoming (GWR) said North American business outlook favorable in 2014</p> <p><strong>EARNINGS</strong></p> <p>Companies that beat consensus earnings expectations last night and today include:</p> <p>Tesla (TSLA), LinkedIn (LNKD), Expedia (EXPE), ImmunoGen (IMGN), Catamaran (CTRX), Calpine (CPN), Tesco (TESO), Genesee &amp; Wyoming (GWR), Gentherm (THRM), Hilton (HLT), Church &amp; Dwight (CHD), Arena Pharmaceuticals (ARNA), Oil States (OIS), Santander Chile (BSAC), Nevsun Resources (NSU), Empire District Electric (EDE), Territorial Bancorp (TBNK), Ashland (ASH), SurModics (SRDX), Nektar (NKTR), AXT, Inc. (AXTI), BioTelemetry (BEAT), Community Health (CYH), Autobytel (ABTL), Sierra Wireless (SWIR), Planar Systems (PLNR), MaxLinear (MXL), PMC-Sierra (PMCS), Fluidigm (FLDM), Microchip Technology (MCHP), DaVita (DVA), Arch Capital (ACGL), Jones Lang LaSalle (JLL), Jive Software (JIVE), Exelixis (EXEL), Imperva (IMPV), Electro Scientific (ESIO), Seattle Genetics (SGEN), Ellie Mae (ELLI), Standard Pacific (SPF), Brooks Automation (BRKS), ON Semiconductor (ONNN), Fluor (FLR), SunPower (SPWR), Rockwell Medical (RMTI), Omnicell (OMCL), Skullcandy (SKUL), GoPro (GPRO), Genpact (G), Quaker Chemical (KWR), DigitalGlobe (DGI), Tableau (DATA), Trecora Resources (TREC), Green Dot (GDOT), ARRIS (ARRS), Xencor (XNCR), GlycoMimetics (GLYC), Trulia (TRLA), Outerwall (OUTR), Edison International (EIX), Affymetrix (AFFX), DXP Enterprises (DXPE)</p> <p>Companies that missed consensus earnings expectations include:</p> <p>PBF Energy (PBF), Shenandoah (SHEN), Global Power Equipment (GLPW), A.V. Homes (AVHI), Cheniere Energy Partners LP (CQP), LRR Energy (LRE), Mercer (MERC), ARMOUR Residential (ARR), Cheniere Energy (LNG), GFI Group (GFIG), Idenix (IDIX), North Valley Banc (NOVB), Immersion (IMMR), Saul Centers (BFS), YRC Worldwide (YRCW), Alphatec (ATEC), ServiceSource (SREV), American Vanguard (AVD), Vocera (VCRA), Northeast Utilities (NU), Synaptics (SYNA), Bill Barrett (BBG), Computer Programs (CPSI), ResMed (RMD), STAAR Surgical (STAA), Live Nation (LYV), Westport (WPRT), HFF Inc. (HF), Boyd Gaming (BYD), Kodiak Oil &amp; Gas (KOG), Bravo Brio Restaurant (BBRG), Matson (MATX), Pharmacyclics (PCYC), FleetCor (FLT), Cerus (CERS), Maxwell (MXWL), Einstein Noah (BAGL)</p> <p>Companies that matched consensus earnings expectations include:</p> <p>Exelis (XLS), Eldorado Gold (EGO), Cavco Industries (CVCO), Erie Indemnity (ERIE), SS&amp;C Technologies (SSNC), Southwestern Energy (SWN), MRC Global (MRC), Natural Grocers (NGVC), Ikanos (IKAN), Callidus Software (CALD), Hansen Medical (HNSN), Web.com (WWWW), PerkinElmer (PKI), Addus HomeCare (ADUS), Epiq Systems (EPIQ), Western Union (WU)</p> <p>NEWSPAPERS/WEBSITES</p> <p>Analyst says Apple (AAPL) may ship just 3M iWatch units in 2014, Apple Insider reports<br />Sources say HSBC (HSBC), BNP Paribas (BNPQY) to finance Iliad's (ILIAF) T-Mobile (TMUS) bid, Reuters reports<br />General Motors (GM) has offered many discounts in recent months, NY Times says<br />Alibaba (BABA) makes strategic investment in mobile game developer Kabam, WSJ reports<br />SeaWorld (SEAS), Southwest Air (LUV) terminate 26-year marketing relationship, WSJ reports<br />Ford's (F) executive chairman says CEO transition "smooth," Detroit News reports</p> <p>SYNDICATE</p> <p>Athlon Energy (ATHL) 12.5M share Secondary priced at $46.25<br />Bacterin (BONE) files to sell common stock and warrants<br />Baxano Surgical (BAXS) files $26.28M mixed securities shelf<br />FCB Financial (FCB) 7.52M share IPO priced at $22.00<br />Hill International (HIL) 8.5M share Secondary priced at $4.25<br />Loxo Oncology (LOXO) 5.262M share IPO priced at $13.00<br />Mobileye (MBLY) 35.6M share IPO priced at $25.00<br />RGS Energy (RGSE) files to sell 4.2M shares for selling stockholders<br />VTTI Energy (VTTI) 17.5M share IPO priced at $21.00</p> http://www.zerohedge.com/news/2014-08-01/frontrunning-august-1#comments Apple Arch Capital Barclays Bond Capital Expenditures China Chrysler Citigroup Consumer Sentiment Credit Suisse Creditors Crude default Detroit Deutsche Bank DVA Eastern Europe Eurozone Fannie Mae Federal Reserve General Electric General Motors India Ireland Israel Italy Judge Loretta Preska Keefe LIBOR Lloyds Markit Michigan Middle East Morgan Stanley Personal Income Portugal Raymond James recovery Reuters Serious Fraud Office SWIFT Ukraine Unemployment Wells Fargo YRC Fri, 01 Aug 2014 11:41:41 +0000 Tyler Durden 492162 at http://www.zerohedge.com Futures Tumble Again On Global Equity Weakness http://www.zerohedge.com/news/2014-08-01/futures-tumble-again-global-equity-weakness <p>If yesterday's selloff catalysts were largely obvious, if long overdue, in the form of the record collapse of Espirito Santo coupled with the Argentina default, German companies warning vocally about Russian exposure, the ongoing geopolitical escalations, and topped off by a labor costs rising and concerns this can accelerate a hiking cycle, overnight's latest dump, which started in Europe and has carried over into US futures is less easily explained although yet another weak European PMI print across the board, with UK manufacturing growing at the slowest pace in a year in July as a cooling in new orders and output ended the first half’s "stellar growth spurt", probably didn't help. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/PMI%20July%20H.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/PMI%20July%20H_0.jpg" width="600" height="271" /></a></p> <p>This is how Goldman explained the latest manufacturing surveys out of Europe:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The Euro area final manufacturing PMI printed at 51.8 in July, 0.1pt below the Flash and the consensus estimate (Flash, Cons: 51.9). This implies a flat reading relative to the June print. The French component was revised up relative to the flash (+0.2pt), while the German component was revised down (-0.4pt). The July figure showed a loss of momentum in both Italy and Spain, with the manufacturing PMI easing 0.7pt in both countries (against a consensus expectation of around flat outcomes in July). </p> <p>&nbsp;</p> <p>The Euro area aggregate Final manufacturing PMI printed at 51.8, 0.1pt below the July Flash owing to a considerable 0.4pt downward revision in Germany, outweighing a 0.2pt upward revision in France.</p> <p>&nbsp;</p> <p>Relative to the June print, the Final July manufacturing PMI shows a 0.4pt increase in Germany (to 52.4) and a 0.4pt decline in France (to 47.8). The Italian manufacturing PMI fell by 0.7pt (to 51.9) against expectations of a stable reading (Cons: 52.5). The Italian PMI has eased 2pt since its recent peak in April, but otherwise remains close to or above the levels observed since the spring of 2011. Its Spanish counterpart also declined by 0.7pt (Cons: 54.5), but remains robust at a relatively high level of 53.9, close to its highest level since mid-2007. Developments outside the EMU4 were mixed: the Dutch PMI rose 1.2pt (to 53.5) while the Greek PMI declined 0.7pt (as in Spain/Italy) to 48.7. The Irish PMI ticked up 0.1pt and remains very solid at 55.4.</p> </blockquote> <p>However, one can hardly blame largely unreliable "soft data" for what is rapidly becoming the biggest selloff in months and in reality what the market may be worried about is today's payroll number, due out in 90 minutes, which could lead to big Treasury jitters if it comes above the 230K expected: in fact, today is one of those days when horrible news would surely be great news for the momentum algos. </p> <p>More importantly even than the noisy jobs number, the Fed will increasingly be looking at the quality composition of jobs (full time vs part time), and whether wages are growing: watch hourly earnings today as the FOMC have shifted towards wages as one of their main criteria for when to become more hawkish. The market is expecting this to stay at 0.2% M/M but the year-on-year number is tipped to increase to +2.2% Y/Y (vs 2.0% previous).</p> <p><strong>Still, with futures down 0.6% at last check, it is worth noting that Treasurys are barely changed, as the great unrotation from stocks into bonds picks up and hence the great irony of any rate initiated sell off: should rates spike on growth/inflation concern, the concurrent equity selloff will once again push rates lower, and so on <em>ad inf</em>. </strong>Ain't central planning grand?</p> <p>Heading into the North American open, stocks in Europe are seen lower across the board, with peripheral indices underperforming where Banco Espirito Santo (-6.47%) remained in focus and revived investor angst over the stability of the banking system. The broad based sell off saw DAX index fall to within a touching distance of the low printed in mid-April at 9166.53. Of note, front page of the WSJ reads 'hedge funds wager on a fall' saying that many Wall Street money managers who anticipated the US housing bubble see more trouble on the horizon. (WSJ)</p> <p>Turning to overnight markets, Asian equities are trading lower as a carryover of what we saw yesterday. However, all major bourses are off their respective opening lows and S&amp;P500 futures are up 0.22%. The Asia and Australian iTraxx indices are off the wides of around +4-5bp. Given the sharpness of the EM selloff yesterday, Indonesian USD sovereign bonds have sold off 10bp but there has been some reported buying at the lows. The official Chinese manufacturing PMI was better than consensus estimates (51.7 vs 51.4) and this is also helping risk sentiment recover a bit through the session.</p> <p>Today’s calendar starts with the final European PMIs this morning. But today’s tone will be largely set by how non-farm payrolls print. The data is due at 1:30pm London. At the same time as payrolls we’ll also get the June personal income/spending numbers which will be accompanied by the PCE data – the June PCE was included in Wednesday’s Q2 GDP data. Following on from all that, we have the non-manufacturing PMI. On the corporate reporting calendar, AXA, ArcelorMittal, SocGen and Chevron will be reporting earnings today.</p> <p><strong>Bulletin Headline Summary from Ransquawk and Bloomberg</strong></p> <ul> <li>Yesterday’s slide on Wall Street sent jitters through European stocks, with poor earnings and mixed European PMIs eroding sentiment further </li> <li>Core and peripheral fixed income markets also fell as support seen earlier in the week from coupon payments, redemptions and month-end extensions faded </li> <li>Volumes remain quiet ahead of today’s Nonfarm Payrolls, expected at 230K, with the unemployment rate expected unchanged at 6.1%</li> <li>Treasuries decline with global stocks before report forecast to show U.S. economy added 230k jobs in July, with unemployment rate holding at 6.1%.</li> <li>U.K. manufacturing grew at the slowest pace in a year in July as a cooling in new orders and output ended the first half’s “stellar growth spurt,” Markit Economics said</li> <li>Euro zone final manufacturing PMI unchanged at 51.8 in July from preliminary 51.9 reading; index is unchanged “only thanks to an improvement in Germany while manufacturing activity in Spain, Italy and France seems to be weakening,” according to Bloomberg Economics</li> <li>The euro-area units of OAO Sberbank and VTB Group, two Russian lenders targeted by a fresh round of EU sanctions, can maintain access to ECB funding as long as they don’t channel the funds back home</li> <li>Across much of the euro area, young adults are worst hit by wage deflation or stagnation, which increasingly is seen as a threat to the 18-member bloc’s nascent economic recovery</li> <li>China’s manufacturing expanded in July at the fastest pace in more than two years, signaling a pickup in economic &nbsp;&nbsp;&nbsp; growth is strengthening amid government support policies</li> <li>RBS, Britain’s largest state-owned lender, said it’s cutting lending to Russian companies, following European banks including Societe Generale SA and Natixis SA in complying with the latest round of sanctions over Ukraine</li> <li>Fighting erupted in Gaza just hours after a three-day cease- fire cobbled together by John Kerry began, with Israel and Hamas accusing each other of responsibility for the breach </li> <li>Sovereign yields higher. Euro Stoxx Banks falls 1.4%; down by 3.8% on the week. Asian and European&nbsp; equities, U.S. stock futures fall. WTI crude and copper lower, gold gains</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: Change in Nonfarm Payrolls, July, est. 230k (prior 288k) <ul> <li>Change in Private Payrolls, July, est. 227k (prior 262k)</li> <li>Change in Manufacturing Payrolls, July, est. 15k (prior 16k)</li> <li>Unemployment Rate, July, est. 6.1% (prior 6.1%)</li> <li>Average Hourly Earnings m/m, July, est. 0.2% (prior 0.2%)</li> <li>Average Hourly Earnings y/y, July, est. 2.2% (prior 2%)</li> <li>Average Weekly Hours All Employees, July, est. 34.5 (prior 34.5)</li> <li>Change in Household Employment, July (prior 407k)</li> <li>Underemployment Rate, July (prior 12.1%)</li> <li>Labor Force Participation Rate, July (prior 62.8%)</li> </ul> </li> <li>8:30am: Personal Income, June, est. 0.4% (prior 0.4%) <ul> <li>Personal Spending, June, est. 0.4% (prior 0.2%)</li> <li>PCE Deflator m/m, June, est. 0.2% (prior 0.2%)</li> <li>PCE Deflator y/y, June, est. 1.7% (prior 1.8%)</li> <li>PCE Core m/m, June, est. 0.1% (prior 0.2%)</li> <li>PCE Core y/y, June, est. 1.4% (prior 1.5%)</li> </ul> </li> <li>9:45am: Markit US Manufacturing PMI, July, est. 56.5 (prior 56.3)</li> <li>9:55am: University of Michigan Confidence, July final, est. 81.8 (prior 81.3)</li> <li>10:00am: ISM Manufacturing, July, est. 56 (prior 55.3); ISM Prices Paid, July, est. 58 (prior 58)</li> <li>10:00am: Construction Spending m/m, June, est. 0.5% (prior 0.1%)</li> <li>TBA: Domestic Vehicle Sales, July, est. 13.2m (prior 13.25m)</li> <li>TBA: Total Vehicle Sales, July, est. 16.79m (prior 16.92m)</li> </ul> <p><strong>FIXED INCOME </strong></p> <p>Bunds failed to benefit from lower stocks and traded lower, albeit marginally, as the support from month-end and also coupon/redemption related flow which was evident throughout the week waned. PO/GE 10y spread widened by almost 10bps as concerns over the beleaguered lender Banco Espirito Santo (-6.47%) raised fears that state aid may be needed to shore up capital base and in turn undermine country's financial position. </p> <p><strong>EQUITIES </strong></p> <p>Heading into the North American open, stocks in Europe are seen lower across the board, with peripheral indices underperforming where Banco Espirito Santo (-6.47%) remained in focus and revived investor angst over the stability of the banking system. The broad based sell off saw DAX index fall to within a touching distance of the low printed in mid-April at 9166.53. Of note, front page of the WSJ reads 'hedge funds wager on a fall' saying that many Wall Street money managers who anticipated the US housing bubble see more trouble on the horizon. (WSJ)</p> <p><strong>FX </strong></p> <p>GBP/USD plunged below the 100DMA after UK Manufacturing PMI (55.4 vs. Exp. 57.2) fell to the lowest level in a year, lifting EUR/GBP to two week highs. EUR/USD has been somewhat supported, with option barrier interest ahead of 1.3300 and 1.3350 keeping a floor under the pair. USD/JPY remains higher despite a poor showing from the Nikkei 225 overnight, as higher treasury yields prompted favourable rate differential flows.</p> <p><strong>COMMODITIES</strong></p> <p>WTI and Brent crude futures have echoed the trend seen in stocks, with refinery outages in Kansas also limiting crude demand from Cushing, Oklahoma. Spot gold has languished close to recent lows, with the USD still remaining close to 10-month highs and keeping pressure on base metals alongside market expectations of a sooner-than-expected rate hike from the Federal Reserve.</p> <p>* * * </p> <p><strong>Finally, DB's Jim Reid completes the overnight recap</strong></p> <p>So today's payroll number comes on the back of a turbulent couple of days for markets after a potent cocktail of a stronger US GDP print, higher yields, a slew of weaker earnings, the aftermath of the Argentinean default and more concerns over Banco Espirito Santo. DB's Joe LaVorgna has been at the bullish end of the street for some time now and expects payrolls of 250k and a 0.1ppt drop to 6.0% in the unemployment rate today. <strong>The market is at 230k and 6.1% respectively. It’s fair to say that given the nervousness, a very strong number could create chaos in the rates, credit and EM markets and cause collateral damage in equities</strong>. Equally a more tame release could help markets regain some poise in what is usually the most illiquid month in a structurally illiquid market for many asset classes. It’s also worth watching the trend in hourly earnings today as the FOMC have shifted towards wages as one of their main criteria for when to become more hawkish. The market is expecting this to stay at 0.2% M/M but the year-on-year number is tipped to increase to +2.2% Y/Y (vs 2.0% previous).</p> <p>The abovementioned cocktail of concerns resulted in the S&amp;P500 (-2.00%) notching up its largest fall in three-months yesterday. It was ironic that US treasuries closed flat on the day, given that the sell-off originated from higher yields yesterday as markets began to question the path of Fed policy. Though yields were virtually unchanged at the close this masked a fair bit of intraday volatility. Indeed 10yr yields traded up as high as 2.61% (or +6bp on the day) following a stronger than expected Employment Cost Index print (0.7% QoQ vs 0.5% expected). From that point, we saw a sharp rally back to unchanged-on-the-day helped by the shock 10pt plunge in the Chicago PMI (52.6 vs 63.0 consensus). No doubt the continued sell down of equities &amp; credit eventually prompted a flight to treasuries in the second half of the session. However, there was also market chatter of large duration extensions into month end, which may have driven the rally in rates back to unchanged. After a period of low volatility, 10yr UST yields have now traded in 16bp range over the last two and a half days. It was also interesting to see that despite the rally in treasuries and a 28% spike in VIX, this was not accompanied by a rise in gold prices which finished at the lows for the day (-1.06%).</p> <p>Compared to the rates market, the price action in equities and credit was certainly more linear. The Dow (-1.88%) and S&amp;P500 both closed at the lows, on volumes which were 30% higher than the 15-day moving average. Credit sold off across cash &amp; index, and finished at the wides. The sharpest moves were in Xover (264.25bp, +17.625bp) and Eur financial senior (73.25bp, +5.375bp) – the latter driven by renewed concerns around BES and also some disappointing earnings from the likes of BNP. The CDX HY index added 20bp in spread terms to 344bp.</p> <p>On the topic of HY, we’ve written for a while now that US HY fund flows are worth watching. The latest weekly flow data from EPFR has indicated that US HY funds suffered -$3.72bn of outflows in the week to July 30. This represents 1.2% of AUM and is the fourth consecutive weekly outflow bringing YTD cumulative flows to negative territory (-0.5% of AUM). During these four weeks, the weekly outflows have gotten progressively higher. There was -$421m in flows the week to July 9th, -$2.34bn in the week to July 16th, and -$3.67bn in the week to July 23rd. The latest weekly outflows of -$3.72bn obviously doesn't capture what happened in the last 24 hours but if we use the largest US HY ETF (iShares iBoxx HY) as an imperfect proxy, that ETF recorded -$363m of outflows yesterday according to Bloomberg. This is the largest one day outflow since February 3rd – on that day the S&amp;P500 fell 2.28%. The iShares iBoxx HY ETF is currently trading at a discount of 0.58% to its NAV which is the largest discount since August 2013. Across the Atlantic, it’s worth noting that Western European HY fund flows have held up well so far with the supportive backdrop of the ECB and still low inflation (we learnt yesterday that July core CPI was 0.8%, unchanged from June). However, Western Europe HY funds registered an outflow of -$297m (or -0.7% of AUM) in the week to July 30th, the largest weekly outflow since June 2013. We think the flows out of the HY should slow down soon unless rates continue to rise, but watch this space.</p> <p>On a more micro level, there were a number of company-specific stories which exacerbated Thursday’s selloff. On a day where nerves were already heightened, any bad news was quickly and severely punished by markets. An example of this was Adidas which fell 15.4% after the company issued a large profit warning. Amongst its commentary, the sportswear company noted that it was being hit by the downturn in Russia and it would respond by accelerating the closure of its Russian stores because of increasing risks to consumer spending. Volkswagen (-0.37%) reported earnings yesterday and said that Russian sales had declined 8% yoy in 1H14 (FT). In what is likely going to concern policymakers, Adidas and Volkswagen join Siemens, Metro and Royal Dutch Shell in warning about the actual or potential impact of the Russia/Ukraine conflict. The EU’s announcement that it will add Russia’s Sberbank, VTB Group and OAO Gazprombank to its sanction list is unlikely to help. Another micro-level story was Banco Espirito Santo, which fell 42% after resuming trading post its 1H14 results. This together with BNP’s result yesterday set a negative tone for European financials (-1.6%) who underperformed the broader Stoxx600 (-1.3%).</p> <p>Turning to overnight markets, Asian equities are trading lower as a carryover of what we saw yesterday. However, all major bourses are off their respective opening lows and S&amp;P500 futures are up 0.22%. The Asia and Australian iTraxx indices are off the wides of around +4-5bp. Given the sharpness of the EM selloff yesterday, Indonesian USD sovereign bonds have sold off 10bp but there has been some reported buying at the lows. The official Chinese manufacturing PMI was better than consensus estimates (51.7 vs 51.4) and this is also helping risk sentiment recover a bit through the session.</p> <p>Today’s calendar starts with the final European PMIs this morning. But today’s tone will be largely set by how non-farm payrolls print. The data is due at 1:30pm London. At the same time as payrolls we’ll also get the June personal income/spending numbers which will be accompanied by the PCE data – the June PCE was included in Wednesday’s Q2 GDP data. Following on from all that, we have the non-manufacturing PMI. On the corporate reporting calendar, AXA, ArcelorMittal, SocGen and Chevron will be reporting earnings today.</p> <p>A busy end to a challenging week</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="373" height="320" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/PMI%20July%20teaser.jpg?1406891141" /> </div> </div> </div> http://www.zerohedge.com/news/2014-08-01/futures-tumble-again-global-equity-weakness#comments Chicago PMI Copper Core CPI CPI Crude default Federal Reserve fixed France Fund Flows Germany Housing Bubble Israel Italy Jim Reid Markit Michigan Nikkei Oklahoma Personal Income Price Action RANSquawk Reality SocGen Ukraine Unemployment University Of Michigan Volatility Volkswagen Fri, 01 Aug 2014 11:05:33 +0000 Tyler Durden 492161 at http://www.zerohedge.com Silver Eagle Bullion Coins Reach 26 Million For 2014 http://www.zerohedge.com/news/2014-08-01/silver-eagle-bullion-coins-reach-26-million-2014 <p style="line-height: 1.1500000000000001; margin-top: 0pt; margin-bottom: 0pt;" dir="ltr"><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Gold and silver both fell over 1% yesterday. Gold fell $14.60 to $1,282.10 while silver fell 25 cents to $20.37/oz.</span></p> <p></p> <p style="line-height: 1.1500000000000001; margin-top: 0pt; margin-bottom: 0pt;" dir="ltr"><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: bold; font-style: italic; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><a href="http://info.goldcore.com/the-comprehensive-guide-to-the-american-silver-eagle" style="color: #000000; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 16px; font-style: normal; font-weight: normal; line-height: 23.993453979492188px; white-space: normal;"><span style="font-size: 15px; font-family: Calibri; color: #1155cc; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;"><img src="https://lh4.googleusercontent.com/Zn9aoK4obVumzXJJzgsL_rwnoHVv8PH0uAaH6SD-0HmYoigNiBz_J_mQDZaoEvW9NSdhNpLpToep-ZZGPhp_Gqeart5I7WxXN7LvDoQGA3h47OP0L-nCKo68fWBqiL3dAg" alt="American_Silver_Eagle,_obverse,_2004_Web_Page_Large.jpg" width="451px;" height="445px;" style="border-style: none;" /><br /></span></a><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #2d2b2c; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #2d2b2c; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #2d2b2c; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Asian trade was limited to a narrow band of $5.00 and volumes traded on Globex were again down.&nbsp;</span><span style="line-height: 1.3em; text-decoration: underline; font-size: 15px; font-family: Calibri; color: #1155cc; vertical-align: baseline; white-space: pre-wrap;">G<a href="http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore">old in Singapore</a></span><span style="line-height: 1.3em; font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"> remained in a tight range between $1,280/oz and $1,285/oz. and tr</span><span style="color: #2d2b2c; font-family: Calibri; font-size: 15px; white-space: pre-wrap; line-height: 1.1500000000000001;">aders appear to be waiting for the non farm payrolls data later today.</span></p> <p style="line-height: 1.1500000000000001; margin-top: 0pt; margin-bottom: 0pt;" dir="ltr"><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: bold; font-style: italic; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #2d2b2c; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">A better than expected jobs number is expected after the positive surprise that was the GDP number. Although, many participants questioned the GDP number as the </span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">growth in inventories contributed 1.66 percentage points and likely greatly exaggerated the strength of the U.S. economy in the 2nd quarter. </span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #2d2b2c; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Markets are jittery and global stock markets are seeing losses with all U.S. indices down yesterday and Asian indices down overnight. Tensions over the Ukraine and in the Middle East and the risk of contagion in Portugal and from Argentina’s default are weighing. </span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Premiums for </span><a href="http://info.goldcore.com/gold-bars-perth-mint-1-oz-at-record-low-premiums" style="text-decoration: none;"><span style="font-size: 15px; font-family: Calibri; color: #1155cc; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">gold bars</span></a><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> in India have dropped to new lows due to weak domestic demand. The premium on Wednesday fell to $5-$6 per troy ounce compared with $10 per troy ounce during the last week. </span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span></p> <p style="line-height: 1.4995908737182617; margin-top: 0pt; margin-bottom: 17pt;" dir="ltr"><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: bold; font-style: italic; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Silver looks better and better technically and fundamentally and was more robust than gold again yesterday.</span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><span style="vertical-align: baseline;"><img src="https://lh6.googleusercontent.com/DAhlcIdJ6GGGzYQGcww12w1CRSIOPzZ8NmEb9O9Q00uwsAgLJBnXwFBp1URbPezttfB7NMCy4nVUSl4ihB5D1gQira5E1YstIy1AGfpX6fj0rlvdSfuN3ZPPOm9VFk5Shw" width="624px;" height="368px;" style="border-style: none;" /></span><span style="vertical-align: baseline;"><br class="kix-line-break" /></span><span style="font-weight: bold; font-style: italic; vertical-align: baseline;">Silver in U.S. Dollars - 50, 100, 200 &nbsp;Simple Moving Averages (Thomson Reuters)</span></span></p> <p>Silver has tested support at the 200 day simple moving average at $20.21 and has rebounded higher again.Below that there is support at the 50 and 200 daily moving averages at $20.19/oz and $19.99/oz respectively. <span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">U.S. Mint data regarding bullion coin sales is always an interesting indicator regarding gold and silver store of value demand.</span><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">U.S. Mint figures show that American &nbsp;</span><a href="http://info.goldcore.com/the-comprehensive-guide-to-the-american-silver-eagle" style="text-decoration: none;"><span style="font-size: 15px; font-family: Calibri; color: #1155cc; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">silver eagles</span></a><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"> advanced by 260,000 on Tuesday. This increase meant that Silver Eagle sales are now over 26 million for the year. Sales of silver eagles remain at the &nbsp;second highest in the beautiful coin’s 29-year history. </span><a href="http://info.goldcore.com/the-comprehensive-guide-to-the-american-silver-eagle" style="text-decoration: none;"><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span></a><span style="font-size: 15px; font-family: Calibri; color: #111111; background-color: #ffffff; font-weight: normal; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Silver eagle sales had surpassed 29 million through the first seven months of 2013 and had an all time record year in 2013. Indeed, global silver demand rose 13% in 2013 and yet prices were lower for the year.</span></p> <p><span id="docs-internal-guid-2c8a7e76-9044-246a-210d-2a3b7f669254"><span style="font-size: 15px; font-family: Calibri; color: #111111; vertical-align: baseline; white-space: pre-wrap;"><img src="https://lh6.googleusercontent.com/M_C0WJ4y-4TcmeoDuPDRGlmZ3ICQBZ8uiVWew8ji0Hvu16cXZl3qxJP-SgaNtMml99HXyVryYzk1mFPbUbIOmy-Oy_YFGUl6QHnioTLpvJRh5y6S3qjsUdA8qyug-6Quqg" width="402px;" height="416px;" style="border-style: none; color: #2d2b2c; line-height: 17.25px;" /><br />Coinnews.net</span></span></p> <p>The table above shows the breakdown of U.S. Mint bullion products with columns listing the number of bullion coins sold last week, this week so far, last month, the month to date and the year to date.<span style="font-size: 15px; font-family: Calibri; color: #111111; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; font-weight: bold; font-style: italic; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;">The stealth phenomenon that is silver stackers or long term store of value buyers of silver coins and bars continues and is seen in the record levels of demand for silver eagles from the U.S. Mint.</span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"><span style="font-weight: bold; font-style: italic; vertical-align: baseline;"><img src="https://lh5.googleusercontent.com/kM-4Z41KaQ7Xx_nyKOI8ElN_I7K7DqDZzoIoH21g0WaF6nWZudPTPyxDvnLnPtTINGxFGhgrrodV_QthtNbz4Sx22_v3SE_fUccg38xTUTa36_sBEXSyREEGSdSGJXCXuA" width="296px;" height="476px;" style="border-style: none;" /></span><span style="font-weight: bold; font-style: italic; vertical-align: baseline;"><br class="kix-line-break" /></span><span style="font-weight: bold; font-style: italic; vertical-align: baseline;">Global Silver Demand 2004-2013 (GFMS)</span></span></p> <p>Silver stackers are those who are more informed about the fundamentals of the silver market and are concerned regarding systemic and monetary risks. They realise that silver is undervalued versus gold with the gold silver ratio at 62:1. This is particularly the case on a long term historical basis. <span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; vertical-align: baseline; white-space: pre-wrap;">The long term historical average gold to silver ratio is 15 to 1 and we expect it to revert to that level in the coming years and see silver over $100 per ounce as a real possibility. </span><span style="font-size: 15px; font-family: Calibri; color: #222222; font-weight: bold; font-style: italic; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; font-weight: bold; font-style: italic; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span><span style="font-size: 15px; font-family: Calibri; color: #222222; font-weight: bold; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">See interview about silver and how it remains the precious metal with the best fundamentals </span><a href="https://www.youtube.com/watch?v=6CJrYx-7XZI"><span style="font-size: 15px; font-family: Calibri; color: #1155cc; font-weight: bold; font-style: italic; text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">here</span><span style="font-size: 15px; font-family: Calibri; color: #222222; font-weight: bold; font-style: italic; vertical-align: baseline; white-space: pre-wrap;"><br class="kix-line-break" /></span></a></p> http://www.zerohedge.com/news/2014-08-01/silver-eagle-bullion-coins-reach-26-million-2014#comments default India Middle East Moving Averages Non Farm Payrolls Portugal Reuters Ukraine Fri, 01 Aug 2014 06:42:15 +0000 GoldCore 492160 at http://www.zerohedge.com Top Financial Experts Say World War 3 Is Coming … Unless We Stop It http://www.zerohedge.com/news/2014-08-01/top-financial-experts-say-world-war-3-coming-%E2%80%A6-unless-we-stop-it <h3 data-mce-style="color: #000099;" style="color: #000099;">Nouriel Roubini, Kyle Bass, Hugo Salinas Price, Charles Nenner, James Dines, Jim Rogers, David Stockman, Marc Faber, Jim Rickards, Paul Craig Roberts, Martin Armstrong, Larry Edelson, Gerald Celente and Others Warn of Wider War</h3> <p>Paul Craig Roberts - former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who&rsquo;s Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist - wrote an article yesterday about the build up of hostilities between the U.S. and Russia titled, simply: <a data-mce-="" href="http://www.paulcraigroberts.org/2014/07/28/war-coming-paul-craig-roberts/">&quot;War Is Coming&quot;</a>.&nbsp; In the article, Roberts notes:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>As reported by Tyler Durden of <em>Zero Hedge</em>, the Russian response to the extra-legal ruling of a corrupt court in the Netherlands, which had no jurisdiction over the case on which it ruled, awarding $50 billion dollars from the Russian government to shareholders of Yukos, a corrupt entity that was looting Russia and evading taxes, is telling. Asked what Russia would do about the ruling, an advisor to President Putin replied, &ldquo;<strong>There is a war coming in Europe</strong>.&rdquo; Do you really think this ruling matters?&rdquo;</p> </blockquote> <p>In January, well-known economist Nouriel Roubini <a data-mce-="" href="https://twitter.com/Nouriel/status/426258599804166144">tweeted</a> from the gathering of the rich and powerful at the World Economic Forum in Davos:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Many speakers compare 2014 to 1914 when WWI broke out &amp; no one expected it. A black swan in the form of a war between China &amp; Japan?</p> </blockquote> <p><a data-mce-="" href="https://twitter.com/Nouriel/status/426258248690593792">And</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Both Abe and an influential Chinese analyst don&#39;t rule out a military confrontation between China and Japan. Memories of 1914?</p> </blockquote> <p>Billionaire hedge fund manager Kyle Bass <a data-mce-="" href="http://www.zerohedge.com/news/2012-11-17/kyle-bass-falacies-such-mmt-are-leading-sheep-slaughter-and-we-believe-war-inevitabl" target="_blank" title="writes">writes</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Trillions of dollars of <a data-mce-="" href="http://www.washingtonsblog.com/2012/11/top-economic-advisers-forecast-widespread-war.html#" id="_GPLITA_0" title="Click to Continue &gt; by Text-Enhance">debts</a> will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, <strong>all too often war is the manifestation of simple economic entropy played to its logical conclusion</strong>. <strong>We believe that war is an inevitable consequence of the current global economic situation.</strong></p> </blockquote> <p>Reagan&#39;s head of the Office of Management and Budget - David Stockman - is posting pieces <a data-mce-="" href="http://www.davidstockmanscontracorner.com/mh17-the-exploitation-of-a-tragedy/">warning of the dispute between the U.S. and Russia leading to World War 3</a>.</p> <p>Investment adviser Larry Edelson wrote an email to subscribers entitled &ldquo;What the &ldquo;Cycles of War&rdquo; are saying for 2013&Prime;, which states:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Since the 1980s, I&rsquo;ve been studying the so-called &ldquo;cycles of war&rdquo; &mdash; the natural rhythms that predispose societies to descend into chaos, into hatred, into civil and even international war.</p> <p>&nbsp;</p> <p>I&rsquo;m certainly not the first person to examine these very distinctive patterns in history. There have been many before me, notably, Raymond Wheeler, who published the most authoritative chronicle of war ever, covering a period of 2,600 years of data.</p> <p>&nbsp;</p> <p>However, there are very few people who are willing to even discuss the issue right now. And based on what I&rsquo;m seeing, the implications could be absolutely huge ....</p> </blockquote> <p>Former Goldman Sachs technical analyst Charles Nenner &ndash; who has made some big accurate calls, and counts major <a data-mce-="" href="http://www.washingtonsblog.com/2012/11/top-economic-advisers-forecast-widespread-war.html#" id="_GPLITA_2" title="Click to Continue &gt; by Text-Enhance">hedge funds</a>, banks, brokerage houses, and high net worth individuals as clients &ndash; <a data-mce-="" href="http://www.businessinsider.com/former-goldman-sachs-analyst-charles-nenner-major-war-2012-dow-5000-2011-3" target="_blank" title="says">says</a> there will be &ldquo;a major war&rdquo;, which will drive the Dow to 5,000.</p> <p>Veteran investor adviser James Dines <a data-mce-="" href="http://www.marketwatch.com/story/dines-prophesies-war-2012-05-28?Link=obinsite" title="forecast">forecast</a> a war is epochal as World Wars I and II, starting in the Middle East.</p> <p>Economist and investment manager Marc Faber <a data-mce-="" href="http://www.washingtonsblog.com/2009/08/marc-faber-says-america-will-launch-more-wars-to-distract-from-bad-economy.html" title="says">says</a> that the American government will start new wars in response to the economic crisis:</p> <ul> <li><a data-mce-="" href="http://www.prisonplanet.com/the-alex-jones-show-l-i-v-e-june-23rd-with-marc-faber.html" target="_blank" title="“The next thing the government will do to distract the attention of the people on bad economic conditions is they’ll start a war somewhere.”">&ldquo;The next thing the government will do to distract the attention of the people on bad economic conditions is they&rsquo;ll start a war somewhere.&rdquo;</a></li> </ul> <ul> <li><a data-mce-="" href="http://www.bloomberg.com/apps/news?pid=20601080&amp;sid=aa4KTmib46Uw&amp;refer=asia" target="_blank" title="“If the global economy doesn’t recover, usually people go to war.”">&ldquo;If the global economy doesn&rsquo;t recover, usually people go to war.&rdquo;</a></li> </ul> <p>Martin Armstrong - who has managed multi-billion dollar sovereign investment funds - <a data-mce-="" href="http://armstrongeconomics.com/2013/08/21/as-the-war-cycle-turns-up-middle-east-is-going-nuts/" target="_blank" title="wrote">wrote</a> in August:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Our greatest problem is <strong>the bureaucracy wants a war</strong>. This will distract everyone from the NSA and justify what they have been doing. <strong>They need a distraction for the economic decline that is coming</strong>.</p> </blockquote> <p>Armstrong wrote a piece yesterday entitled, &quot;<a data-mce-="" href="http://armstrongeconomics.com/2014/07/31/russias-response/">Why We will Go to War with Russia</a>&quot;, and another one today saying, &quot;<a data-mce-="" href="armstrongeconomics.com/2014/07/31/russias-response/">Prepare for World War III</a>&quot;.</p> <h3 data-mce-style="color: #000099;" style="color: #000099;">Bad Economic Theories</h3> <p>What&#39;s causing the slide towards war? We discuss several causes below.</p> <p>Initially, believe it or not, one cause is that many influential <a data-mce-="" href="http://online.wsj.com/article/SB123008280526532053.html" target="_blank" title="economists">economists</a> and&nbsp; <a data-mce-="" href="http://www.washingtonpost.com/wp-dyn/content/article/2010/10/29/AR2010102907404.html" target="_blank" title="talking heads ">talking heads</a> hold the <a data-mce-="" href="http://www.washingtonsblog.com/2014/07/definitive-analysis-war-good-bad-economy.html">discredited belief</a> that war is good for the economy.</p> <p>Therefore, many are <a data-mce-="" href="http://online.wsj.com/article/SB123008280526532053.html" target="_blank" title="overtly">overtly</a> or <a data-mce-="" href="http://www.nytimes.com/2014/06/14/upshot/the-lack-of-major-wars-may-be-hurting-economic-growth.html?ref=business&amp;_r=0">more</a> <a data-mce-="" href="http://www.washingtonsblog.com/2011/08/no-mr-krugman-%E2%80%A6-war-is-not-good-for-the-economy.html">subtly</a> pushing for war.</p> <h3 data-mce-style="color: #000099;" style="color: #000099;">Challengers Give Declining Empires &quot;Itchy Fingers&quot;</h3> <p>Moreover, historians say that declining empires tend to attack their rising rivals ... so the risk of world war is rising <a data-mce-="" href="http://www.washingtonsblog.com/2014/01/risk-world-war-rising.html">because the U.S. feels threatened by the rising empire of China</a>.</p> <p>The U.S. government considers <a data-mce-="" href="http://www.washingtonsblog.com/2011/09/does-the-american-government-consider-economic-rivalry-to-be-a-justification-for-war.html" title="threatening war against any nation which becomes an economic rival"><em>economic rivalry</em> to be a basis for war</a>. Therefore, the U.S. is systematically <a data-mce-="" href="http://www.washingtonsblog.com/2013/01/the-war-on-terror-spreads-to-africa-u-s-sending-troops-to-35-african-nations.html" title="using the military to contain China’s growing economic influence">using the military to contain China&rsquo;s growing economic influence</a>.</p> <h3 data-mce-style="color: #000099;" style="color: #000099;">Competition for Resources Is Heating Up</h3> <p>In addition, it is well-established that competition for scarce resources often leads to war.&nbsp; For example, Oxford University&#39;s Quarterly Journal of Economics <a data-mce-="" href="http://economics.mit.edu/files/8041">notes</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In his classic, A Study of War, Wright (1942) devotes a chapter to the relationship between war and resources. Another classic reference, Statistics of Deadly Quarrels by Richardson (1960),extensively discusses economic causes of war, including the control of &ldquo;sources of essential commodities.&rdquo;A large literature pioneered by Homer-Dixon (1991, 1999) argues that scarcity of various environmental resources is a major cause of conflict and resource wars (see Toset, Gleditsch, and Hegre 2000, for empirical evidence).</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>In the War of the Pacific (1879&ndash;1884), Chile fought against a defensive alliance of Bolivia and Peru for the control of guano [i.e. bird poop; insert joke here] mineral deposits. The war was precipitated by the rise in the value of the deposits due to their extensive use in agriculture.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>Westing (1986) argues that many of the wars in the twentieth century had an important resource dimension.&nbsp; As examples he cites the Algerian War of Independence (1954&ndash;1962), the Six Day War (1967), and the Chaco War (1932&ndash;1935). More recently, Saddam Hussein&rsquo;s invasion of Kuwait in 1990 was a result of the dispute over the Rumaila oil field.&nbsp; In Resource Wars (2001), Klare argues that <strong>following the end of the Cold War, control of valuable natural resources has become increasingly important, and these resources will become a primary motivation for wars in the future</strong>.</p> </blockquote> <p>Former Federal Reserve chairman Alan Greenspan (and <a data-mce-="" href="http://www.washingtonsblog.com/2013/03/top-republican-leaders-say-iraq-war-was-really-for-oil.html">many world leaders</a>) <em>admitted</em> that <a data-mce-="" href="http://web.archive.org/web/20071116211434/http://www.timesonline.co.uk/tol/news/world/article2461214.ece" target="_blank" title="the Iraq war was really about oil">the Iraq war was really about oil</a>, and former Treasury Secretary Paul O&rsquo;Neill <a data-mce-="" href="http://www.cnn.com/2004/ALLPOLITICS/01/10/oneill.bush/" target="_blank" title="says">says</a> that Bush planned the Iraq war before 9/11. And see <a data-mce-="" href="http://www.independent.co.uk/news/uk/politics/secret-memos-expose-link-between-oil-firms-and-invasion-of-iraq-2269610.html" target="_blank" title="this">this</a> and <a data-mce-="" href="http://www.washingtonsblog.com/2012/10/the-wars-in-the-middle-east-and-north-africa-are-not-just-about-oil-theyre-also-about-gas.html" title="this">this</a>. Libya, Syria, Iran and Russia are all oil-producing countries as well ...</p> <p>Indeed, we&#39;ve extensively documented that the wars in the Middle East and North Africa are <a data-mce-="" href="http://www.washingtonsblog.com/2012/10/the-wars-in-the-middle-east-and-north-africa-are-not-just-about-oil-theyre-also-about-gas.html" title="largely about oil and gas">largely about oil and <em>gas</em></a>. The <a data-mce-="" href="http://www.washingtonsblog.com/2012/11/war-in-gaza-war-over-natural-gas-reserves.html">war in Gaza</a> may be no exception. And <a data-mce-="" href="http://www.theecologist.org/News/news_analysis/2482929/gaza_israels_4_billion_gas_grab.html">see this</a>. And Ukraine may largely be <a data-mce-="" href="http://www.zerohedge.com/news/2014-07-25/company-which-joe-bidens-son-director-prepares-drill-shale-gas-east-ukraine">about</a> <a data-mce-="" href="http://www.zerohedge.com/news/2014-06-30/russia-reveals-plan-b-gazprom-says-gas-transit-ukraine-may-be-stopped-completely">gas</a> as well.</p> <p>And <a data-mce-="" href="http://www.washingtonsblog.com/2014/07/totalitarian-future-part-two.html">James Quinn</a> and <a data-mce-="" href="http://www.washingtonsblog.com/2014/06/systemic-sources-geopolitical-turmoil-instability-fragmentation-resource-wars.html">Charles Hugh Smith</a> say we&#39;re running out of <em>all sorts</em> of resources&nbsp; ... which will lead to war.</p> <h3 data-mce-style="color: #000099;" style="color: #000099;">Central Banking and Currency Wars</h3> <p>We&rsquo;re in the middle of a <a data-mce-="" href="https://www.google.com/search?q=%22currency+war%22&amp;ie=utf-8&amp;oe=utf-8&amp;aq=t&amp;rls=org.mozilla:en-US:official&amp;client=firefox-a" target="_blank" title="global currency war">global currency war</a> &ndash; i.e. a situation where nations all compete to devalue their currencies the most in order to boost exports. Brazilian president Rousseff <a data-mce-="" href="http://www.ft.com/cms/s/0/326a6d62-e83d-11df-8995-00144feab49a.html" target="_blank" title="said">said</a> in 2010:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The last time there was a series of competitive devaluations &hellip; it <strong>ended in world war</strong> two.</p> </blockquote> <p>Jim Rickards <a data-mce-="" href="http://finance.yahoo.com/blogs/daily-ticker/next-global-crisis-currency-wars-already-begun-rickards-142124909.html" target="_blank" title="agrees">agrees</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon&rsquo;s first-ever &ldquo;financial&rdquo; war games. While expressing confidence in America&rsquo;s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into &ldquo;asymmetric warfare,&rdquo; if currency wars lead to rising inflation and global economic uncertainty.</p> </blockquote> <p>As does billionaire investor <a data-mce-="" href="http://rt.com/usa/news/china-trade-currency-bill-053/" target="_blank" title="says">Jim Rogers</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Trade wars always lead to wars.</p> </blockquote> <p>Given that China, Russia, India, Brazil and South Africa have just joined together to create a <a data-mce-="" href="http://www.nasdaq.com/article/brics-create-100-billion-emergency-reserve-fund-20140715-01338">$100 billion bank</a> based in China, and that more and more trades are being settled in Yuan or Rubles - instead of dollars - the currency war is hotting up.</p> <p>Multi-billionaire investor Hugo Salinas Price <a data-mce-="" href="http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/27_Multi-Billionaire_Salinas_-_Gaddafi_Killed_Over_Gold_Currency.html" target="_blank" title="told">says</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>What happened to [Libya&#39;s] Mr. Gaddafi, many speculate the real reason he was ousted was that he was planning an all-African currency for conducting trade. The same thing happened to him that happened to Saddam because the US doesn&rsquo;t want any solid competing currency out there vs the dollar. You know Gaddafi was talking about a <a data-mce-="" href="http://www.washingtonsblog.com/2012/01/are-the-middle-east-wars-really-about-forcing-the-world-into-dollars-and-private-central-banking.html#" id="_GPLITA_2" title="Click to Continue &gt; by Text-Enhance">gold</a> dinar.</p> </blockquote> <p>Indeed, senior CNBC editor John Carney <a data-mce-="" href="http://www.cnbc.com/id/42308613/Libyan_Rebels_Form_Their_Own_Central_Bank" target="_blank" title="noted">noted</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era.</p> <p>&nbsp;</p> <p>Robert Wenzel of <a data-mce-="" data-nodeid="4387582" href="http://www.economicpolicyjournal.com/2011/03/libyan-rebels-form-central-bank.html" target="_blank" title="Economic Policy Journal thinks">Economic Policy Journal thinks</a> the central <a data-mce-="" href="http://www.cnbc.com/id/42308613/Libyan_Rebels_Form_Their_Own_Central_Bank#" id="_GPLITA_1" target="_blank" title="Click to Continue &gt; by Text-Enhance">banking</a> initiative reveals that foreign powers may have a strong influence over the rebels.</p> <p>&nbsp;</p> <p>This suggests we have a bit more than a ragtag bunch of rebels running around and that there are some pretty sophisticated influences. &ldquo;I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising,&rdquo; Wenzel writes.</p> </blockquote> <p>Indeed, <a data-mce-="" href="http://www.rawstory.com/rs/2012/01/12/u-s-seeking-to-close-down-iran-central-bank/" target="_blank" title="some say">some say</a> that recent wars have really been about bringing all countries <a data-mce-="" href="http://www.webofdebt.wordpress.com/2011/04/16/libya-all-about-oil-or-all-about-banking/" target="_blank" title="into the fold of Western central banking">into the fold of Western central banking</a>.</p> <p>Finally, trend forecaster Gerald Celente - who has been making some accurate financial and geopolitical predictions for decades - says <a data-mce-="" href="http://www.youtube.com/watch?v=DWzVchARv0Y">WW3 will start soon</a>.</p> <h3 data-mce-style="color: #000099;" style="color: #000099;">Debt</h3> <p>Martin Armstrong argued that war plans against Syria are really about <a data-mce-="" href="http://armstrongeconomics.com/2013/09/03/14202/" target="_blank" title="debt and spending">debt and spending</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The Syrian mess seems to have people lining up on Capital Hill when sources there say the phone calls coming in are overwhelmingly against any action. The politicians are ignoring the people entirely. This suggests there is indeed a secret agenda to achieve a goal outside the discussion box. That is most like <strong>the debt problem and a war is necessary to relief the pressure to curtail spending</strong>.</p> </blockquote> <p>The same logic applies to Ukraine and other countries.</p> <p>Billionaire investor Jim Rogers <a data-mce-="" href="http://www.moneynews.com/StreetTalk/rogers-Europe-bailouts-war/2012/06/22/id/443184" target="_blank" title="explains">notes</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A continuation of bailouts in Europe could ultimately <a data-mce-="" href="http://www.washingtonsblog.com/2012/11/top-economic-advisers-forecast-widespread-war.html#" id="_GPLITA_1" title="Click to Continue &gt; by Text-Enhance">spark</a> another world war, says international investor Jim Rogers.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>&ldquo;Add debt, the situation gets worse, and eventually it just collapses. <strong>Then everybody is looking for scapegoats. Politicians blame foreigners, and we&rsquo;re in World War II or World War whatever</strong>.&rdquo;</p> </blockquote> <h3 data-mce-style="color: #000099;" style="color: #000099;">Americans <em>Don&#39;t</em> Want War</h3> <p><a data-mce-="" href="http://www.politico.com/story/2014/07/politico-poll-ukraine-middle-east-109155.html">Poll</a> <a data-mce-="" href="http://today.yougov.com/news/2014/07/24/staying-out-barack-obamas-foreign-policy-problems/">after</a> <a data-mce-="" href="http://www.washingtonsblog.com/2014/03/americans-overwhelmingly-oppose-us-intervention-ukraine-syria-iran-anywhere-else.html">poll</a> <a data-mce-="" href="http://www.washingtonsblog.com/2014/05/polls-americans-sick-war-terror-war-drugs-failed-u-s-wars.html">shows</a> that the American people <em>don&#39;t</em> want to get involved in any more wars.</p> <p>After all, we spent <em>trillions</em> in Iraq and Afghanistan, and Americans are exhausted.&nbsp; Not only does a <a data-mce-="" href="http://www.csmonitor.com/USA/Military/2014/0728/US-is-no-safer-after-13-years-of-war-a-top-Pentagon-official-says" target="_blank" title="top Pentagon officials says">top Pentagon official say</a> we&rsquo;re no safer &ndash; and perhaps <em>less safe</em> &ndash; after 13 years of war, but it has now been shown that war&nbsp; <em><a data-mce-="" href="http://www.washingtonsblog.com/wp-admin/www.washingtonsblog.com/2014/07/definitive-analysis-war-good-bad-economy.htmll">hurts our economy</a></em>.</p> <p>Never-ending wars are also destroying our democratic republic.&nbsp;&nbsp; The Founding Fathers <a data-mce-="" href="http://www.washingtonsblog.com/2011/11/the-founding-fathers-warned-against-standing-armies.html" title="warned against standing armies, saying that they destroy freedom">warned against standing armies, saying that they destroy freedom</a>.&nbsp;&nbsp; They were right ...</p> <p>And they warned against <a data-mce-="" href="http://www.washingtonsblog.com/2012/04/it-is-incumbent-on-every-generation-to-pay-its-own-debts-as-it-goes-a-principle-which-if-acted-on-would-save-one-half-the-wars-of-the-world.html" title="financing wars with debt">financing wars with debt</a>.&nbsp;&nbsp;&nbsp; But according to Nobel prize winning economist Joseph Stiglitz, the U.S. debt for the Iraq war could be as high as <a data-mce-="" href="http://www.bloomberg.com/apps/news?pid=newsarchive&amp;sid=acXcm.yk56Ko" target="_blank" title="$5 trillion dollars">$<strong><em>5</em></strong> trillion dollars</a> (or <a data-mce-="" href="http://www.latimes.com/business/money/la-fi-mo-iraq-war-cost-20130318,0,1591279.story" target="_blank" title="$6 trillion dollars"><em>$<strong>6</strong> </em>trillion dollars</a> according to a study by Brown University.)&nbsp; The U.S. has the largest standing army in history, and treats <a data-mce-="" href="http://www.washingtonsblog.com/2012/12/peaceful-protest-treated-as-terrorism-by-the-fbi.html" title="anti-war sentiment as terrorism">anti-war sentiment as terrorism</a>.</p> <p>But war is <a data-mce-="" href="http://www.washingtonsblog.com/2014/04/another-reason-bankers-love-war.html">great</a> for the <a data-mce-="" href="http://www.washingtonsblog.com/2014/04/wars-bankers-wars.html">bankers</a>&nbsp; and the <a data-mce-="" href="http://www.washingtonsblog.com/2011/11/war-is-great-for-the-1-but-makes-the-99-poorer.html" title="military-industrial complex">defense contractors</a>.&nbsp; And - as discussed above - governments are desperate for war.</p> <p>So it&#39;s up to us - the <em>people</em> - to stop wider war.</p> http://www.zerohedge.com/news/2014-08-01/top-financial-experts-say-world-war-3-coming-%E2%80%A6-unless-we-stop-it#comments Afghanistan Alan Greenspan Black Swan Brazil Charles Nenner China Davos Federal Reserve Global Economy Goldman Sachs goldman sachs India Iran Iraq Japan Jim Rickards Jim Rogers Joseph Stiglitz Kuwait Kyle Bass Kyle Bass Marc Faber Martin Armstrong Middle East Netherlands Nouriel Nouriel Roubini Purchasing Power Trade Wars Tyler Durden Ukraine Wall Street Journal Yuan Fri, 01 Aug 2014 04:33:59 +0000 George Washington 492159 at http://www.zerohedge.com Russia And Germany Allegedly Working On Secret "Gas For Land" Deal http://www.zerohedge.com/news/2014-07-31/molotov-ribbentrop-20-russia-and-germany-allegedly-working-secret-gas-land-deal <p>While many were amused by this photo of Putin and Merkel during the world cup final showing Europe's two most important leaders siding side by side, some were more curious by just what the two were scheming:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/world%20cup%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07-overflow/world%20cup%201_0.jpg" width="501" height="398" /></a></p> <p>&nbsp;</p> <p>Thanks to the <a href="http://www.independent.co.uk/news/world/europe/land-for-gas-secret-german-deal-could-end-ukraine-crisis-9638764.html">Independent</a>, we may know the answer, and it is a doozy, because according to some it is nothing shy of a sequel to the <a href="http://en.wikipedia.org/wiki/Molotov%E2%80%93Ribbentrop_Pact">Molotov-Ribbentrop</a> pact: allegedly <strong>Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine, one which would negotiate to trade Crimea's sovereignty for guarantees on energy security and trade. </strong>The Independent reveals that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, "hinges on two main ambitions: <strong>stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies</strong>."</p> <p>Amusingly, this comes on the day when the WSJ leads with "<a href="http://online.wsj.com/articles/ukraine-crisis-spurs-reversal-in-german-russian-ties-1406779203?mod=WSJ_hp_RightTopStories"><strong>On Hold: Merkel Gives Putin a Blunt Message. Germany's Backing of Russia Sanctions Marks Breach in Pivotal European Relationship</strong></a>" in which we read that " Angela Merkel spoke to Russian President Vladimir Putin for at least the 30th time since the Ukraine crisis erupted. She had a blunt message, according to people briefed on the phone conversation: <strong>Call me if you have progress to report in defusing the conflict. </strong>That was July 20. The two leaders haven't spoken since."</p> <p>They may or may not have spoken since, but it is not because Putin has "no progress to report" - it's because the two leaders have come to a secret agreement which will hardly make Ukraine, or most of Europe, not to mention the UN, happy as it requires that Crimea be permanently handed over to Russia in exchange for Russian gas, which has been cut off for a month now due to non-payment by Kiev. </p> <p>Here is how the deal came to happen:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Sources close to the secret negotiations claim that the first part of the stabilisation plan requires Russia to withdraw its financial and military support for the various pro-separatist groups operating in eastern Ukraine. As part of any such agreement, the region would be allowed some devolved powers.</p> <p>&nbsp;</p> <p><strong>At the same time, the Ukrainian President would agree not to apply to join Nato. </strong>In return, President Putin would not seek to block or interfere with the Ukraine’s new trade relations with the European Union under a pact signed a few weeks ago.</p> <p>&nbsp;</p> <p>Second, the Ukraine would be offered a new long-term agreement with Russia’s Gazprom, the giant gas supplier, for future gas supplies and pricing. At present, there is no gas deal in place; Ukraine’s gas supplies are running low and are likely to run out before this winter, which would spell economic and social ruin for the country.</p> <p>&nbsp;</p> <p><strong>As part of the deal, Russia would compensate Ukraine with a billion-dollar financial package for the loss of the rent it used to pay for stationing its fleets in the Crimea and at the port of Sevastopol on the Black Sea until Crimea voted for independence in March.</strong></p> </blockquote> <p>To be sure, in the aftermath of the MH-17 shooting, which in light of this revelation would clearly not benefit Russia, negotiations have stalled they are expected to restart once the investigation has taken place. <em>“It is in everyone’s interests to do a deal. Hopefully, talks will be revived if a satisfactory outcome can be reached to investigations now taking place as to the causes of the MH17 catastrophe.</em>"</p> <p>But while Germany can't wait to put the Ukraine conflict behind it and restore normal Russian relations (see Adidas' record plunge earlier today, blamed on the Ukraine conflict) others are far more eager to stir the pot some more: "A spokesman for the Foreign and Commonwealth Office said they had no knowledge of such negotiations taking place. However, the spokesman said he thought it highly unlikely that either the US or UK would agree to recognising Russian control over Crimea. There was no one available at the German embassy’s press office yesterday."</p> <p>Which, of course, goes back to the fundamental question behind the Eurozone experiment: just who calls the shots. And despite what the UK (and certainly France) believe, that one person was and continues to be Merkel.&nbsp; And at the end of the day, pragmatic Germany knows that for all the posturing and rhetoric, the biggest loser from a western embargo of Russia (which is now actively shifting its attention to China and now India) would be Germany itself.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>[S]trong trade ties between the two countries have also served to strengthen Ms Merkel’s hand and the Russian speaker has emerged as the leading advocate of closer relations between the EU and Russia. “<strong>This is Merkel’s deal. She has been dealing direct with President Putin on this. She needs to solve the dispute because it’s in no one’s interest to have tension in the Ukraine or to have Russia out in the cold. No one wants another Cold War,” said one insider close to the negotiations</strong>.</p> <p>&nbsp;</p> <p>Some of Germany’s biggest companies have big operations in Russia, which is now one of Europe’s biggest car markets, while many of its small to medium companies are also expanding into the country. Although Russia now provides EU countries with a third of their gas supplies through pipelines crossing the Ukraine, Germany has its own bilateral gas pipeline direct to Russia making it less vulnerable than other European countries.</p> <p>&nbsp;</p> <p>However, Russia is still the EU’s third-biggest trading partner with cross-border trade of $460bn (£272bn) last year, and the latest sanctions being introduced by the EU towards Russian individuals and banks will hurt European countries more than any other – particularly Germany, but also the City of London.</p> </blockquote> <p>Curiously, if there is one entity that could scuttle the deal it is, no surprise there, the US.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Central to the negotiations over any new gas deal with Gazprom is understood to be one of Ukraine’s wealthiest businessmen, the gas broker, Dmitry Firtash. Mr Firtash – who negotiated the first big gas deal between the Ukraine and Russia between 2006 and 2009 – <strong>is now living in Vienna fighting extradition charges from the Americans</strong>. But he has close relations with the Russian and Ukrainian leaders – he supported Mr Poroschenko – and has been acting as a go-between behind the scenes at the highest levels.</p> </blockquote> <p>Incidentally, the same Americans which over the past 2 years has been desperate to start a regional war in any one part of the globe in order to break some more windows and boost GDP courtesy of the tried and true "Military Industrial Complex" GDP boost. Which is why if indeed the Ukraine peace process is in the arms of the US, then <a href="http://www.zerohedge.com/news/2014-07-28/shocking-reason-putin-isnt-worried-about-50-billion-yukos-ruling">perhaps Putin's advisor was spot on </a>when he said that "<strong>There is a war coming in Europe</strong>." <em>Compliments of the United States?</em></p> <p>Finally, for those wondering how much of the Independent's story is a fabrication, here is Germany denying it all:</p> <ul> <li><strong>GERMANY: REPORT OF SECRET DEAL ON UKRAINE `TOTALLY UNFOUNDED'</strong></li> </ul> <p>Which, if Jean-Claude Juncker is any indication, seals it.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="750" height="595" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/world%20cup%201_1.jpg?1406828853" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-31/molotov-ribbentrop-20-russia-and-germany-allegedly-working-secret-gas-land-deal#comments China European Union Eurozone France Germany India Ukraine Vladimir Putin Fri, 01 Aug 2014 03:00:48 +0000 Tyler Durden 492123 at http://www.zerohedge.com Elliott's Paul Singer On Gold, Inflation, And The Global Monetary Delusion http://www.zerohedge.com/news/2014-07-31/elliotts-paul-singer-gold-inflation-and-global-monetary-delusion <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>"Although the levitation of financial assets has yet to levitate gold, we will <strong>grit our collective teeth on that score and await either 'asset price justice' or the 'end times,' whichever comes first</strong>."</em></p> </blockquote> <p><em>Authored by Paul Singer, excerpted from Elliott Management's latest letter to investors,</em></p> <p><span style="text-decoration: underline;"><strong>GLOBAL MONETARY DELUSION – MORE COWBELL</strong></span></p> <p>Central bankers think they are the masters of the universe because the world is looking to them (and only them) to deliver continuous stability and prosperity. <strong>There is no reason to suppose that they understand the modern financial system and economy to any greater extent than they did in 2007 (that is to say, not at all). </strong>Nevertheless, they plow ahead, expressing total confidence that what they are saying and doing is wise and not dangerous drivel. These master chefs have but one vat next to them on the policy table, and it is labeled “QE.”</p> <p><strong>They seem to think that all they need to do is dip into this vat, ladle on some QE, and asset prices will rise, the economy can be supported, jobs can be created and growth can be achieved. </strong>With no side effects, no indigestion, and no other factor would make them put the vat away and demand other ingredients. The new Chairwoman of the Fed, moreover, has made clear that as far as she is concerned, ZIRP is perfectly fine despite the stock market and high-end real estate booms, and that it will last, maybe not forever, but for a long period of time. The U.S. economy is growing, unemployment (at least the way they report it) is 6.1%, but the right interest rate for Chairwoman Yellen remains zero.</p> <p><strong>The central bankers of the developed world (with the possible exception of Germany’s) have failed to tell their political leaders that QE and ZIRP are creating great risks and uncertainties for the future.</strong> None of them has actually called a halt to monetary extremism in combination with demanding policies, or set out any policy recommendations that their governments should pursue in order to create real sustainable economic growth. Even the exquisitely named and effectuated “tapering” in the U.S. is months away from actually suspending the printing of money, and the Fed promises to preserve interest rates near zero for an extended period. In Europe, short-term interest rates are currently declining (to below zero in some cases) because of a new promise to keep interest rates lower for longer, and a new scheme for the central bank to purchase all kinds of securities.</p> <p><strong>All of the major central bankers profess a dread and imminent fear of deflation.</strong> In reality, the only places where such concerns are legitimate are in the lower-performing countries of the euro bloc that are prevented from devaluing their currency and are being forced to lower wages in order to correct imbalances.<strong> Everywhere else, the present and future prospects for deflation are virtually nonexistent, given the authorities’ misguided determination to boost inflation to levels higher than are currently purported to exist.</strong></p> <p><span style="text-decoration: underline;"><strong>We can state with a great deal of confidence (although it is a minority view) that neither we nor the central bankers who are orchestrating these policies on the world have any idea how this situation is going to end, despite their assurances to the contrary.</strong></span> We believe that global monetary policy is currently extremely dangerous, that the financial system continues to be opaque and overleveraged, that major financial institutions are still essentially dependent on government guarantees to protect them if there is a renewed financial crisis, and that an abrupt shake-up could occur at any time.</p> <p>Since confidence in paper money, central bankers and political leaders is unjustifiable and out of line with reality, the loss of such confidence could conceivably occur at any time, leading to the next “run” on the global financial system. We believe that those great sages who think that countries in the developed world have decades to get their financial systems and entitlement programs in order are delusional. In reality, only the markets can determine when time has expired – not the politicians or pundits and certainly not the central bankers.</p> <p>Signals between QE, consumer prices, asset prices, bond prices, stock prices and growth are completely awry because governments are pulling the strings to a degree never before seen in free enterprise systems.<strong> It is unlikely that these unprecedented and experimental government policies of such gargantuan scope will actually create the desired result and allow themselves to be able to be unwound without great shock and disruption to the global financial system. </strong></p> <p>We recently perused the annual report of the BIS (Bank for International Settlements). We were impressed by its cool-headed assessment of the risks of current governmental policy in the developed world. In the introduction to the report, the BIS said:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>To return to sustainable and balanced growth, policies need to go beyond their traditional focus on the business cycle and take a longer-term perspective – one in which the financial cycle takes centre stage…They need to address head-on the structural deficiencies and resource misallocations masked by strong financial booms and revealed only in the subsequent busts. The only source of lasting prosperity is a stronger supply side. It is essential to move away from debt as the main engine of growth.</p> </blockquote> <p>The report noted that an intense quest for yield is driving down volatility and interest rates regardless of credit quality. The BIS said that the report is a “call to action,” and that governments should do more to improve the safety and performance of their economies, labor practices, and banks, which should raise more capital as a cushion against losses. The report also said that rising debt levels in many countries increase the potential for trouble, but the report said that the risk of deflation is less than many think. The overall message is that the world is hooked on easy money and has forgotten the lessons of the financial crisis. The report said that “<strong>[T]he temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches. The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise</strong>.”</p> <p>We have been saying as much for some time now, but here is a prestigious international institution that is “telling it like it is” in a compelling and persuasive way. Naturally, we became curious about this institution and its members. Who are these insightful people? We were astounded to learn that the board of the BIS is comprised of none other than... the heads of the major central banks of the developed world! Yes – Yellen, Draghi, et al! <span style="text-decoration: underline;"><strong>So, these central bankers are simultaneously failing to tell their respective governments that (1) monetary policy has done enough; (2) monetary policy is causing massive risks and distortions; and (3) political leaders must grab the reins and make structural changes, these same central bankers are authorizing BIS reports that will enable them to say, after the coming multifactor crisis, that they told us about the risks</strong></span>. We wonder who from the Fed authorized the report, and why they haven’t shared these harsh views of Fed policy in the FOMC meeting minutes or the endless public speeches by Fed officials. It is duplicitous for the Fed to authorize the views in the BIS report yet keep quiet about them elsewhere. But then, the Fed has never accepted much responsibility for the 2008 crisis, despite its decisions to keep interest rates artificially low for an extended period of time, to do a poor job of regulating the banking system and to abet Fannie and Freddie in their utter irresponsibility. History rhymes. The Fed has created the fuel for another crisis, seems to know it judging by the BIS report, and yet is covering itself with an "I told you so" report from the BIS rather than changing course.</p> <p><em>“More cowbell” is a reference to a Saturday Night Live comedy skit in which a celebrity music producer (played by Chris Walken) keeps telling the cowbell player (Will Ferrell) in a secondrate band to play louder in the hopes of creating a better sound. It did not work, but it was funny. <strong>“More QE cowbell” as the cure-all to what troubles the global economy is also not going to work. And it is not really funny.</strong></em></p> <p><em><strong>*&nbsp; *&nbsp; *<br /></strong></em></p> <p><span style="text-decoration: underline;"><strong>We continue watching with amazement the Fed’s magic act </strong></span>as it attempts to use quantitative easing and zero interest rate policy (QE and ZIRP) to create seemingly robust economic growth in the face of very poorly designed political, economic and fiscal policies, while keeping inflation within a narrow band. Substantial inflation is occurring in many asset classes and service sectors of the global economy, but is not presently recognized or captured by the traditional metrics upon which the Fed relies. This inflation is spreading in both scope and intensity.<strong> If and when it breaks out in an inescapably broad way, there will be a crowd of seriously confused policymakers making excuses and claiming that inflation does not in fact exist; it is not their fault; it was completely unpredictable; and/or it will actually be good for people.</strong></p> <p>We believe that if and when inflation goes from being something that affects only a particular list of assets (a growing list, presently a combination of things owned by the well-off plus a number of things that are basic necessities) to a <strong>widespread “in-your-face” phenomenon affecting the cost of living of almost the entire population</strong>, then the normal yardsticks of risk, return and profit may be thrown into the garbage can. These measures may be replaced by a scramble by citizens and investors to preserve value on a foundation of shifting sand, together with <span style="text-decoration: underline;"><strong>societal unrest that may make the current politically-useful “inequality” riffs, blaming the “1%” and attacking those “millionaires and billionaires” who refuse to “pay their fair share,” look like mere warm-ups for real class warfare.</strong></span></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="544" height="452" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140731_cowbell.jpg?1406835378" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-31/elliotts-paul-singer-gold-inflation-and-global-monetary-delusion#comments Bond Central Banks Consumer Prices Global Economy Monetary Policy None Quantitative Easing Real estate Reality Unemployment Volatility Fri, 01 Aug 2014 02:57:06 +0000 Tyler Durden 492145 at http://www.zerohedge.com Saudi Man Receives 3 Year Prison Sentence And 450 Lashes For Being Gay http://www.zerohedge.com/news/2014-07-31/saudi-man-receives-3-year-prison-sentence-and-450-lashes-being-gay <p><em>Submitted by <a href="http://libertyblitzkrieg.com/2014/07/31/saudi-man-receives-3-year-prison-sentence-and-450-lashes-for-being-gay/">Mike Krieger of Liberty Blitzkrieg blog</a>,</em></p> <p>Saudi Arabia and its Medieval, inhumane monarchy&nbsp;has been a highlighted topic on <a href="http://libertyblitzkrieg.com">Liberty Blitzkrieg</a> for well over a year now. My government&rsquo;s&nbsp;close alliance with this autocratic, homophobic and primitive fiefdom&nbsp;exposes the sham that is U.S. foreign policy more clearly than anything else. In exposing this authoritarian regime for what it really is, I hope that the American public will never again fall for war under the guise of false &ldquo;humanitarian&rdquo; purposes. There is nothing whatsoever humanitarian about U.S. foreign policy.</p> <p>From the <em>UK Independent</em>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>A Saudi Arabian man has been sentenced to three years in jail and 450 lashes after he was caught using Twitter to arrange dates with other men.</em></strong></p> <p>&nbsp;</p> <p><em>The 24-year-old man who has not been named, was given his sentence after the court in Medina, Saudi Arabia,&nbsp;<strong>found him guilty of &ldquo;promoting the vice and practice of homosexuality.&rdquo;</strong></em></p> <p>&nbsp;</p> <p><em>According to a report in the daily Arabic newspaper&nbsp;<a href="http://www.alwatan.com.sa/Nation/News_Detail.aspx?ArticleID=194980&amp;CategoryID=3">Al-Watan</a>, the man was arrested following an entrapment ploy by the<strong> Commission for the Promotion of Virtue and Prevention of Vice (CPVPV).</strong></em></p> <p>&nbsp;</p> <p><em>In Saudi Arabia, like most of the Middle East, homosexuality is a taboo and can result in harsh punishments if someone is found guilty.</em></p> <p>&nbsp;</p> <p><em>By law, any married man found engaging in sodomy or any non-Muslim who commits sodomy with a Muslim can be stoned to death.</em></p> <p>&nbsp;</p> <p><em>Other punishments to be handed out to those found guilty of homosexuality include chemical castrations, imprisonment and execution.</em></p> </blockquote> <p>All these practices sure don&rsquo;t stop the U.S. from forming alliances left and right throughout the region. Look, I get it. In&nbsp;foreign policy, you sometimes have to be pragmatic and deal with nations with abhorrent &ldquo;cultural&rdquo; practices. That said, don&rsquo;t ever try to turn around and tell me you need to use my taxpayer dollars to go bomb some country for &ldquo;humanitarian purposes.&rdquo; My country&rsquo;s government has less than zero regard for human rights, internally or externally. So stop with the fucking bullshit already.</p> <p>For more examples of Saudi inhumanity and U.S. links to it, see:</p> <p><em><strong><a href="http://libertyblitzkrieg.com/2014/07/25/how-the-nsa-is-actively-helping-saudi-arabia-to-crackdown-on-dissent/" rel="bookmark" title="Permanent Link to How the NSA is Actively Helping Saudi Arabia to Crackdown on Dissent">How the NSA is Actively Helping Saudi Arabia to Crackdown on Dissent</a></strong></em></p> <p><em><strong><a href="http://libertyblitzkrieg.com/2014/07/15/must-watch-video-congressman-thomas-massie-calls-for-release-of-secret-911-documents-upon-reading-them/" rel="bookmark" title="Permanent Link to Must Watch Video – Congressman Thomas Massie Calls for Release of Secret 9/11 Documents Upon Reading Them">Must Watch Video &ndash; Congressman Thomas Massie Calls for Release of Secret 9/11 Documents Upon Reading Them</a></strong></em></p> <p><em><strong><a href="http://libertyblitzkrieg.com/2014/07/07/saudi-human-rights-lawyer-and-activist-jailed-for-15-years-for-free-speech-under-new-anti-terror-law/" rel="bookmark" title="Permanent Link to Saudi Human Rights Lawyer and Activist Jailed for 15 Years for Free Speech Under New “Anti-Terror” Law">Saudi Human Rights Lawyer and Activist Jailed for 15 Years for Free Speech Under New &ldquo;Anti-Terror&rdquo; Law</a></strong></em></p> <p><em><strong><a href="http://libertyblitzkrieg.com/2014/04/01/saudi-arabia-passes-new-law-that-declares-atheists-terrorists/" rel="bookmark" title="Permanent Link to Saudi Arabia Passes New Law that Declares Atheists “Terrorists”">Saudi Arabia Passes New Law that Declares Atheists &ldquo;Terrorists&rdquo;</a></strong></em></p> <p><em><strong><a href="http://libertyblitzkrieg.com/2014/02/04/meet-the-u-s-allies-saudi-arabia-passes-draconian-medieval-laws-to-crush-dissent/" rel="bookmark" title="Permanent Link to Meet the U.S. Allies – Saudi Arabia Passes Draconian, Medieval Laws to Crush Dissent">Meet the U.S. Allies &ndash; Saudi Arabia Passes Draconian, Medieval Laws to Crush Dissent</a></strong></em></p> <p>Full article <a href="http://www.independent.co.uk/news/world/middle-east/gay-saudi-arabian-man-sentenced-to-three-years-and-450-lashes-for-meeting-men-via-twitter-9628204.html">here</a>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="289" height="238" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140731_saudi.jpg?1406851448" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-31/saudi-man-receives-3-year-prison-sentence-and-450-lashes-being-gay#comments Middle East Newspaper Saudi Arabia Twitter Twitter Fri, 01 Aug 2014 02:56:05 +0000 Tyler Durden 492158 at http://www.zerohedge.com Chinese Yuan Surges & Stocks Jump To 2014 Highs After PBOC Unleashes QE http://www.zerohedge.com/news/2014-07-31/chinese-stocks-yuan-surge-2014-highs-after-pboc-unleashes-qe <p>Quietly, and without the drama associated with The Fed and ECB, <a href="http://www.zerohedge.com/news/2014-07-28/chinas-qe"><strong>China unveiled what looks like QE recently</strong> (as we discussed in detail here)</a>. Whether this is a stealth creation of a 'fannie-mae' structure to support housing or merely another channel for the PBOC to shovel out hole-filling liquidity is unclear. However, one thing is very clear, <strong>demand for CNY is surging (even as the PBOC weakens its fixing) and the Shanghai Composite is surging</strong> as hot money chases free money once again...</p> <p>&nbsp;</p> <p>The Yuan has rallied (lower on the chart) for 8 days straight as PBOC weakened its Fix.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140731_china.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140731_china_0.jpg" width="600" height="627" /></a></p> <p>&nbsp;</p> <p>The Chinese stock market has quietly surged to its highest since December - outperforming the Dow now year-to-date...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140731_china1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140731_china1_0.jpg" width="600" height="313" /></a></p> <p>&nbsp;</p> <p>BofA believes 3 factors are at play here:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>1. China:</strong> better data on exports &amp; PMI, GDP upgrades (BofAML upgraded 2014 GDP growth forecast to 7.4% from 7.2%), policy U-turn putting floor on growth, hopes for a Chinese QE, success in anti-corruption igniting hopes for reform. And China is of course relatively inexpensive and out of favor: in price-to-book terms, Chinese financials are trading at their cheapest level in more than 9 years relative to global financials</p> <p>&nbsp;</p> <p><strong>2. US growth:</strong> NE Asia has historically been a play on US growth; no coincidence that flows to NE Asian markets are coinciding with stronger US GDP (up 4% in&nbsp; Q2).</p> <p>&nbsp;</p> <p><strong>3. The end of the carry-trade:</strong> this is the more intriguing argument. Almost all investors we meet believe that a rise in stock markets and a decline in bond yields will not continue indefinitely. We believe concern that rates must inevitably “normalize” in coming months as growth picks-up, and concern that a flip in Treasury yields causes stocks to decline is causing investors to consider raising cash and finding uncorrelated investments. Japan, China and Korea rank in the top ten equity markets least positively correlated with SPX and most positively correlated with movements in 30y UST yield (correlation analysis based on weekly log change over the past 10 years). Carry-trades are at risk from rising rates. We think markets with low yields and higher exposure to US economic growth will be better protected if the backdrop flips from Low Rates-Low Growth to High Growth-Higher Rates.</p> </blockquote> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="961" height="501" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140731_china1.jpg?1406859218" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-31/chinese-stocks-yuan-surge-2014-highs-after-pboc-unleashes-qe#comments Bond China Equity Markets Free Money Japan Yuan Fri, 01 Aug 2014 02:27:01 +0000 Tyler Durden 492157 at http://www.zerohedge.com