On "The Late Show" on Thursday night, just last night, Bernie Sanders gave a clear "No" when asked if he was going to endorse Hillary Clinton, because Sanders wanted his supporters to be heard, and the Sanders camp wasn't sold on Clinton's ability to move in the direction that was necessary. The next morning, like magic, Bernie pulled a Dennis Gartman, and flipped when he told MSNBC that he was going to vote for Hillary after all.
Sterling drops, banking stocks tumble and peripheral EGB and credit spreads widen after the U.K.’s vote to leave the EU; verbal and direct intervention by central banks help currencies off earlier lows. U.K. PM David Cameron has resigned, announcing there needs to be a new prime minister in place by October.
'Hope & Change' and devolved into Nope & Deranged... Since the start of President Obama's second term, Goldman Sachs note that the Partisan Conflict Index has averaged 50% higher than its 30 year average. So who is to blame? President Obama's divisiveness? Or The Federal Reserve's extremely accommodative monetary polict removing any need for actual decision-making?
While hardly coming as a surprise to anyone, moments ago the Fed announced that all 33 banks have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage, Bloomberg reports. The biggest bank cleared the most severe scenario handily, with the exception of Morgan Stanley whose projected 4.9% leverage ratio tied for last place alongside a Canadian bank’s U.S. unit, falling within a percentage point of the 4 percent minimum. As a result of today's "test result" many banks will likely win regulators' approval next week to boost dividends.
The revelation that the EU is the result of a major US secret service operation – effectively just yet another secret creature of deception launched by the CIA (taking seat of honour in the hall of infamy that includes false flag operations, invasions, coup-detats, and the establishment of organisations such as Al Qaida and ISIS) solves the third mystery, namely how on earth the allegedly democratic European nations could design such an undemocratic, virtually dictatorial structure.
Several months ago confusion emerged if the Fed can pursue NIRP even if it wants to when the Fed itself admitted that "There are several potentially substantial legal and practical constraints to implementing a negative IOER rate regime, some of which would be binding at any IOER rate below zero, even a rate just slightly below zero." Moments ago Yellen put any confusion about this question to rest when she said that the "Fed does have legal basis for negative rates policy."
This contradiction speaks volumes about the sheer hypocrisy and double standards of the Western powers: that, when it comes to securing 265 billion barrels of Saudi oil reserves and 100 billion barrels, each, of UAE and Kuwait that together constitutes 465 billion barrels, i.e. one-third of the world’s proven crude oil reserves, they are willing to overlook the excesses that have been committed by such Medieval regimes but when it comes to negotiating with the Islamist insurgents to reach political settlements and to let up on all the violence and spilling of blood in the region, they stand firm against the so-called “terrorists” as a matter of principle. Why do the Western powers overlook the excesses committed by Saudi Arabia where Shari’a is the law of the land and Hudood-style executions are an everyday occurrence?
So, Wall Street banks control the boards of directors at the Fed banks. The Fed bank boards of directors appoint the committee members who set monetary policy. And the monetary policy they set ends up being a gigantic tax... a transfer of wealth from the middle class to a tiny group of beneficiaries, including the US government and the banks themselves. This is an unbelievable scam... and it truly is taxation without representation. Unelected bureaucrats impose their will over the entire financial system in a way that benefits a handful of people at the expense of everyone else.
While The Fed is a "motivated rate raiser," it appears that they are losing confidence in their growth forecasts, which means, as Goldman Sachs notes, another downgrade to the long run rate tomorrow, bringing the cumulative reduction in the Fed’s tightening cycle over the past year to 75 bps. There is a good chance the market will see this as a signal to sell the Dollar, on the grounds that the Fed will look increasingly uncertain over the medium-term trajectory of policy.
It may come as a surprise to some, but having tried - and failed - to predict the performance of virtually every asset class in 2016, Goldman is now forecasting the results of games from Euro 2016. It will not come as a surprise, however, that out of today's one game played so far, Goldman has been 0 for 1.