This is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen... not, at least, until 2+2 stops equaling four. But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit. So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash?
Last month we made the following admittedly stark prediction: "Ultimately, it appears America has become a country wherein everyone feels marginalized and/or aggrieved in one way or another. In the absence of a dramatic societal reboot, we fear social instability is likely here to stay." That assessment appears to have been quite accurate because over the course of just two weeks, six predominantly African American churches in the US have burned, with authorities suspecting arson in several of the blazes.
The oil price collapse of 2014-2015 began one year ago this month (Figure 1). The world crossed a boundary in which prices are not only lower now but will probably remain lower for some time. It represents a phase change like when water turns into ice: the composition is the same as before but the physical state and governing laws are different. The market must balance before things get better and prices improve. That can only happen if production falls and demand increases. That will take time. The most likely case is that oil prices will decrease in the second half of 2015 and that financial distress to all oil producers will increase. The hope and expectation that the worst is over will fade as the new reality of prolonged low oil prices is reluctantly accepted.
"The selling pressure so far has mainly come from stock-related borrowings via various unofficial channels where the leverage is much higher," BofAML says of the dramatic sell-off in Chinese equities. On Wednesday, the country's securities regulator moved to reassure markets as the unwind of hundreds of billions in leveraged trades threatens to collapse China's world-beating stock bubble.
"Sometimes I'll find scrap metal that I can sell, although if I see something that looks reasonably safe to eat, I'll take it"...
Despite the fact that even the U.S. government itself has admitted that it was funding terrorists– directly and indirectly through Saudi Arabia, the suggestion was met with disbelief, ridicule, or either entirely ignored. Now, however, the United States government has admitted that it funds terrorists on the ground in Syria yet again, this time placing an individual dollar amount on the assistance provided.
Over the weekend, the lines in Greece stretched along the street. Around the corner. Down the block. Lines to get cash. Lines to buy gas. Lines of people eager to get their hands on something of value. Food. Fuel. Cash. Pity the poor guy who was last in line... As more and more people turn to gold as a way to avoid standing in lines, the feds could ban it again. But when we close our eyes and try to peer into a world where gold is illegal, what we see is a world where we want it more than ever.
NSA Leak: "Washington Is Negotiating With Every Nation That Borders China... So As To 'Confront' Beijing"Submitted by Tyler Durden on 07/01/2015 17:06 -0400
"Houben insisted that the Trans-Pacific Partnership (TPP), which is a U.S. initiative, appears to be designed to force future negotiations with China. Washington, he pointed out, is negotiating with every nation that borders China, asking for commitments that exceed those countries' administrative capacities, so as to "confront" Beijing."
DIJSSELBLOEM SAYS SEES NO GROUNDS FOR FURTHER GREECE TALKS
DIJSSELBLOEM SAYS WILL BE NO TALKS IN COMING DAYS
DIJSSELBLOEM SAYS WILL WAIT FOR OUTCOME OF GREEK REFERENDUM
DIJSSELBLOEM SAYS WILL TAKE INTO ACCOUNT OUTCOME OF SUNDAY VOTE
Judging by the smiling Phil LeBeau who earlier opined of an 8.9% plunge in For F-Series sales that "I don't know if I'd Call that a slowdown," you would think the US Auto industry was killing it. Apart from the fact that all but the most luxurious brands missed expectations, we sum up the month of June's results by nothing the credit-spewed spike in May is now over and domestic car sales are continuing to trend lower. This is the biggest MoM drop since Sept 2014. As Ward's notes, they have now missed expectations for 6 of th elast 7 months...
Following our post yesterday, in which we calculated the levels of ELA haircuts that would result in corresponding deposit haircuts, we - and the rest of the world - were patiently waiting to see if the ECB would commence using its nuclear option, first with a small increase in haircuts, then as we got closer to Sunday, with larger ones. Moments ago we got the answer, when the ECB not only kept the ELA frozen as expected, thus requiring the continuation of the Greek capital controls, but decided against a collateral haircut.
ECB SAID TO TAKE NO DECISION ON GREEK COLLATERAL HAIRCUT
In other words, so far Varoufakis' thesis remains intact, and the ECB has refused to push the "nuclear option" launch button.