India

What message is the coal sector sending to the market?

We previously questioned whether western sanctions imposed on Russia were being regularly breached by E.U. and Asian companies, noting that sanctions only work if all countries unite behind them. Now, only one year after being imposed, the sanctions are eroding as it seems that government and business policies are pulling in opposite directions. A U.S. State Dept. representative may have let the truth slip out recently when he noted, "if you tell us you’re going [to break a sanction], we’ll probably order you not to, but if you go and don’t tell us, we’ll probably do nothing."

After dozens of separate interventions, manipulations, and central-planning machinations over the past three weeks, China resorted to threats overnight when it called for the arrest of "hostile short sellers." The reason they went full Orwell, this is the great loss of 'wealth' in China's history... losing equivalent to 15 Greeces in just 17 days.

The long-awaited BRICS bank has officially launched, marking yet another milestone on the road to global de-dollarization and lending further credence to the notion that the sun is finally setting on the US-dominated multilateral institutions that have defined the post-war world and served to underwrite six decades of dollar dominance.  

Corruption has been the coveted jewel in everybody’s crown since antiquity. Aristotelian philosophy believed that everybody who had power could become corrupt.

"...If the S&P500 were to come down by 50% look at the bright side. The Millennial generation can finally buy into America’s future at a good price. Look at what they are facing right now: very little return on their savings and very lofty prices that they have to pay to invest in their future.  So we often forget that these wrenching dislocating financial events, particularly for older generations, can create opportunities for the young, and often create space for something more durable for the times to be built. So I’ll just summarize it with Schumpeter’s phrase: creative destruction. That’s how I prefer to see what happens in a Fourth Turning."

"...between ridiculously low interest rates and the increasing costs of compliance, we can’t make money anymore..."

The US government has really screwed the world on this. Paperwork is the priority. Not business. The transition isn’t going to be smooth. And it won’t happen overnight. But there will come a time, and likely soon, when the United States gets displaced.

The news from the recent St. Petersburg Economic Forum, which took place from June 18 to 20, inspired a torrent of speculation on the future direction of energy prices. But the real buzz at the conference was the unexpected but much publicized visit of the Saudi Deputy Crown Prince, as an emissary of the King. The unusually high level delegation from a long-time ally and protectorate of the U.S., like Saudi Arabia, visiting a Russian sponsored economic conference, in a country sanctioned by the U.S. was news enough but could be the first sign of an emerging partnership between the two greatest global oil producers.

America’s grand strategy, its long-term blueprint for advancing national interests and countering major adversaries, is in total disarray. Top officials lurch from crisis to crisis, improvising strategies as they go, but rarely pursuing a consistent set of policies. Some blame this indecisiveness on a lack of resolve at the White House, but the real reason lies deeper. It lurks in a disagreement among foreign policy elites over whether Russia or China constitutes America’s principal great-power adversary.

We warned previously that when (not if) the market crashes next, The Fed is going to need a scapegoat (other than British traders living at home with their parents) and judging by The Fed's Lael Brainard's comments today, high-frequency-traders (HFT) are in the crosshairs. Crucially, Brainard warns that HFT "may amplify market shocks," and The Fed is "studying possible changes in liquidity resilience." 

With massive strikes in France and now drivers shooting passengers, Uber is making headlines everywhere. While some might say any publicity is good publicity (and any disruption is good disruption), for the firm valued at $50 billion (with a stunning operating loss of $470 million and revenues of only $415 million) perhaps there is a limit to both press and disruption...

In the race to get to the top what does it matter that we destroy the planet along the way?

Four months after the UK opened the membership floodgates and dealt Washington a humiliating political blow, China has officially launched the Asian Infrastructure Investment Bank.

Spot the glaring "oversight" it in the BIS map below which is a snapshot of the original BIS release. Hint: Dollar zone in Green... Euro zone in blue...

Ideas Have Consequences... In Nazi Germany and Fascist Italy, in Great Britain, in Japan, and in the United States, there was a shift of opinion away from the free market in favor of government economic planning. The supreme mark of this transformation was the acceptance of John Maynard Keynes' unreadable book, The General Theory of Employment, Interest, and Money, which was published in 1936. A new generation of younger economists adopted this book and its outlook, which prevails today. The fascist economic idea of an alliance between government and business became almost universally accepted.