In the latest stunning development out of UK politics, moments ago during a press conference in which Boris Johnson -the man who led the Leave campaign - was widely expected to announce he would run for UK premier and Conservative party leader, the former London mayor, who was considered a frontrunner for the post, announced he would not stand for premier or Tory leader.
Britain’s decision to leave the European Union has “unleashed” a crisis in financial markets similar to the global financial crisis of 2007 and 2008, George Soros told the European Parliament in Brussels. "This has been unfolding in slow motion, but Brexit will accelerate it. It is likely to reinforce the deflationary trends that were already prevalent" Soros said.
The trend of jobless claims continues lower (despite a modest 10k rise this week to 268k from a revised lower 258k last week). The problem is... as we have shown numerous times, this 'measure' of the labor market appears to have seasinally adjusted itself into being totally-useless as an indicator of anything factual. With Consumer Confidence for over-55s at its lowest in 2 years, it seems the job exuberance is just not rubbing off...
Despite all the exuberance over the Brexit bounce in US (and UK) equities, never minds bonds, FX, and credit being far less enthusiastic, Deutsche Bank is plunging once again this morning. Having failed The Fed's stress test for the second year running and been diagnosed by The IMF as the world's most systemically dangerous financial entity, the giant Germanbank is getting slammed down almost 4% today, back near record lows as its 'Lehman-esque' path to devastation continues.
The biggest macro event overnight was a report out of Reuters that China's central bank is willing to let the yuan fall to 6.8 per dollar in 2016 to support the economy, which would mean the currency matching last year's record decline of 4.5 percent. The report promptly sent the offshore yuan tumbling, sliding much as 0.72% to 6.7021 per dollar, the lowest since January 11, however it promptly recovered losses following significant PBOC intervention in the open market.
Day three of the post-Brexit rally continues, and after some initial weakness due to concerns about Chinese currency devaluation, both European stock and US equity futures were trading at session highs, facilitated by yesterday's stress test results which saw dozens of US banks unleash a tsunami of stock buyback announcement which in turn pushed S&P futures to new post-Brexit highs.
"Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse. The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime."
They came from the dark, corrupt and hopelessly deranged policies of the status quo. The same status quo that remains in power to this very day. The sooner we rid ourselves of this societally cancerous tumor the better, because the longer it takes to move on to something else, the more negative that something else is likely to be.
"The peak season has disappeared. Carriers have already taken out capacity, and if there was a strong peak season coming, they wouldn't do that. It's partly overall trade declining, but it's also that importers simply bought too much."
If no one knows or respects truth, the world is lost. But it only takes a few to change the world. The cultural anthopologist Margaret Mead said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” Change can be for better or worse...Americans need to decide that they, like the British, do not appreciate being led backward to worse times.