Merrill

In every era, there are certain people and institutions that are held in the highest public regard as they embody the prevailing values of society. Not that long ago, Albert Einstein was a major public figure and was widely revered. Can you name a scientist that commands a similar presence today? Today, some of the most celebrated individuals and institutions are ensconced within the financial industry; in banks, hedge funds, and private equity firms. Which is odd because none of these firms or individuals actually make anything, which society might point to as additive to our living standards. Instead, these financial magicians harvest value from the rest of society that has to work hard to produce real things of real value. Money is power. And history has shown that power is never ceded spontaneously or willingly. But the stability of this parasitical system begins to weaken quickly when the lifeblood it depends on begins to dry up. And that's when things can begin to go south in a hurry

• Humans Beating Robots Most Since ’08 as Trends Shift (BBG)
• Easing of Mortgage Curb Weighed (WSJ)
• European Banks Face Capital Gap With Focus on Leverage (BBG)
• Signs Suggest China Warming to Idea of Stimulus (WSJ)
• China Coal-Fired Economy Dying of Thirst as Mines Lack Water (BBG)
• Jeans and shoes show criminal underbelly of China-EU trade (Reuters)
• How U.S. drug sting targeted West African military chiefs (Reuters)
• Japan scrambles jets after China plane flies by southern islands (Reuters)
• Apple Plots Return to Growth After Coping With Aging Lineup (BBG)
• AT&T Falls Shy of Analyst Estimates as Discounts Hurt Margins (BBG)
• SAC insider trading case takes twist (FT)

• Biggest Banks Face Fed Restoring Barriers in Commodities (BBG)
• SAC to Employees: Cohen Didn't Read Dell Email at Heart of SEC's Case (WSJ)
• Second (and Third) liens are back, and so is 2005: As Banks Retreat, Hedge Funds Smell Profit (WSJ)
• Singapore funds benefit from Asian wealth (FT)
• 2 years later the lies haven't changed one bit - Tepco hit over slow admission of radioactive leak (FT)
• How big tech stays offline on tax (Reuters)
• Hilton Leads Rush to Africa in Fastest Boom (BBG)
• U.S. and UK fine high-speed trader for manipulation (Reuters)
• Key witness takes stand in SEC case against Goldman's Tourre (Reuters)
• Boomer Sex With Dementia Foreshadowed in Nursing Home (BBG)
• Bentley SUV gives £800m boost to UK car industry (FT)

Day after day 'positive' anecdotal data points are latched on to by a self-confirming media (and plethora of talking heads and asset-gatherers) unable to see anything but their 'it's all good in the long-term' thesis. The truth is, as Bloomberg's Rich Yamarone notes, there’s no way to assess last week’s economic data as anything other than poor. Chinese GDP continued to deteriorate, U.S. core retail sales and the index of leading economic indicators for June were flat, industrial production was at the same level as in March, and housing, the lone oasis of prosperity, slowed as new starts plunged nearly 10 percent from the previous month. Toss in the city of Detroit filing the largest municipal bankruptcy in U.S. history and the tone of America’s economic outlook took a decisive turn for the worse. Of course, this is all good for stocks is our new (ab)normal reality of single-factor Fed-liquidity-driven mass hypnosis.

• Earthquake Sends Kiwis Screaming From Wellington Buildings (BBG)
• China quake death toll more than doubles to 54, hundreds hurt (Reuters)
• In 2011, Michigan Gov. Snyder said bankruptcy wasn't an option for Detroit. Two years later, he changed his mind (WSJ)
• GlaxoSmithKline says Chinese laws might have been violated (FT)
• SEC Tries Last Ditch Move to Put SAC’s Cohen Out of Business (BBG)
• Detroit’s Bankruptcy Reveals Dysfunction Common in Cities (BBG)
• Obama to start new offensive on economy (FT)
• As WTI and Brent reunite, Gulf of Mexico faces squeeze, not glut (Reuters)
• Extended Stay Files for Public Offering (WSJ)
• Apple Developer Website Hacked: Developer Names, Addresses May Have Been Taken (MacRumors)
• Treasuries Not Safe Enough as Foreign Purchase Pace Slows (BBG)

CEOs have a primary job: manipulating up the stock of their company. But why they now wallowing worldwide in 2009-like gloom about the economy’s future?

Call it what you will, a handshake or a parachute; the result is all the same. The rest of us just get elbow out of the way as we get pushed through the back door. The top executives leave by the front door and to boot they hop into a chauffeur-driven car (paid by the company, of course) as they drive off into the sunset. To parachute someone: send them elsewhere, relocate them, bundle them off, pack them off or dispatch.

• An actual Bloomberg headline: Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong (BBG)
• Gay delivers further body blow to troubled sport (Reuters)
• China Wealth Eludes Foreigners as Stocks Earn 1% in 20 Years (BBG)
• Bernanke Boom Signaled by Yield Surge as Market Recalculates (BBG)
• Portugal's Parties Set Deadline for Pact (WSJ)
• Corporate Spending Set to Surge in U.S. (BBG)... or not at all based on the actual corporate data
• Legal Fears Slowed Aid to Syrian Rebels (WSJ)
• A mega-camp adds to the Boy Scouts’ troubles (Reuters)
• GSK accused of being ‘ringleader’ in China probe (FT)
• 19 Hospitalized in US-Ukraine Army Exercise - Ministry (RIA)
• Egypt Islamists march as senior U.S. official visits (Reuters)
• German spies made use of U.S. surveillance data (Reuters)

They can be handcuffed, they can be given coffins, they can be parachuted, they can be bungee’d, they can be life-jackets, they can be a hello and they can have their hands shaken. What are we talking about? Well, all of these things seem to have one thing in common, they are golden!

• Summers Said to Show Interest in Fed Chairmanship After Bernanke (BBG)
• Obama Tells Chinese He’s Disappointed Over Snowden Case (BBG)
• Texas Threat to Abortion Clinics Dodged at Flea Markets (BBG)
• A Peek at Trucking Data, and Then the Stock Surged (WSJ)
• China cuts growth target… or does it? (FT) - yes, it does, net of goal seeked Random () of course
• China Official Suggests Tolerance for Lower Growth (WSJ)
• Disney Says Wristband Boosts Sales in Disney World Test (BBG) - next up: implanted RFID chips
• Spain Prepares Cuts in Renewable-Energy Subsidies (WSJ)
• Bernanke Departure With Duke Heralds Cascade of Fed Appointments (BBG)

• Bernanke Supports Continuing Stimulus Amid Debate Over QE (BBG)
• Portugal president wants 'salvation' deal, including opposition (Reuters)
• Egypt has less than two months imported wheat left - ex-minister (Reuters)
• A rise in long-term interest rates is creating challenges and opportunities for the largest U.S. banks. (WSJ)
• BoJ says Japanese economy is ‘recovering’ (FT)
• More Chinese cities likely to curb auto sales (Reuters)
• PC Shipments Fall for 5th Quarter (BBG)
• Property Crushes Hedge Funds in Alternative Markets (BBG)
• New aid gives Greece summer respite before showdown (Reuters)
• Rajoy Punishes Exporters Sustaining Spain’s Economy (BBG)

Gold is little changed near a one-week high, and is marginally higher in dollars as the dollar has retreated from a three-year high, and higher in most currencies. The gold market continues to digest the ramifications of gold borrowing costs surging to the highest since the post-Lehman Brothers scramble for gold bullion. Gold Forward Offered Rates (GOFO) or the cost to borrow gold remains negative and overnight the 1 month GOFO has gone from -0.106% to -0.11167%. Other durations eased marginally. The lack of liquidity in the the interbank London Good Delivery gold market (400 ounce gold bars) has pushed gold forward rates, known as “gofo”, into negative territory, meaning that gold for future delivery is trading at a discount to physical market prices – a rare situation that has occurred only after the Lehman Brothers collapse and near the bottom of the gold market in 1999. The last time forwards were negative was in November 2008, when a scramble for physical gold led a sharp price rally of 46% from $682/oz to over $1,000/oz between October 2008 and February 2009.

• Greece's Economic Future 'Uncertain,' Creditors Say (WSJ)
• Secret Court's Redefinition of 'Relevant' Empowered Vast NSA Data-Gathering (WSJ)
• Thomson Reuters Halts Early Peeks At Consumer Data (WSJ)
• Larry Summers Circles as Fed Opening Looms (WSJ)
• S&P to Argue Puffery Defense in First Courtroom Test (BBG)
• Geithner joins top table of public speakers with lucrative appearances (FT)
• Losing $317 Billion Makes U.S. Debt Safer for Mizuho to HSBC (BBG)
• Pilot Error Eyed in San Francisco Plane Crash  (WSJ)
• Investment group sues U.S. over Fannie, Freddie bailout terms (Reuters)
• Egypt officials 'order closure of Islamist party HQ' (AFP)
• Heinz Kerry Transferred to Boston Hospital for Treatment (BBG) - a boating accident?

• Egypt Girds for Muslim Brotherhood Protests (WSJ)
• SAC Capital's Steven Cohen Expected to Avoid Criminal Charges (WSJ)
• SAC insider-trading probe could last years (Reuters)
• RBI seen selling dollars around 60.59 levels: dealers (Reuters)
• China signals will cut off credit to rebalance economy (Reuters)
• Egypt army arrests key Muslim Brotherhood figures (BBC)
• Rise in Steel Prices Alarms Buyers (WSJ)
• Draghi-Carney Seek Independence Day Break From Bernanke (BBG)
• Samsung Warns Results Will Miss Forecasts (WSJ)
• Russia Prosecutor Seeks 6 Years in Jail for Putin Critic Navalny (BBG)

• Portuguese bond yields soar amid political turmoil (FT)
• Portugal Resignation Rocks European Markets (WSJ)
• Portugal, Greece risk reawakening euro zone beast (Reuters)
• Egypt’s military chiefs hold crisis meeting as Mursi snubs ultimatum (Al Arabiya)
• Egypt Crisis Deepens as Mursi Refuses to Step Down (BBG)
• Hidden microphone found in London embassy: Ecuador (AFP)
• Health Law Penalties Delayed (WSJ)
• Rise in mortgage rates cut into homebuyer demand last week (Reuters)
• Bolivia angered by search of president's plane, no sign of Snowden (Reuters)
• Olympus ex-chairman gets suspended sentence (FT)