It’s happening. As expected, dynastic politics is prevailing in campaign 2016. After a tease about as long as Hillary’s, Jeb Bush (aka Jeb!) officially announced his presidential bid last week. Ultimately, the two of them will fight it out for the White House, while the nation’s wealthiest influencers will back their ludicrously expensive gambit. And here’s a hint: don’t bet on Jeb not to make it through the Republican gauntlet of 12 candidates (so far). After all, the really big money’s behind him.
Reasoned market analysis will have to allow for stop losses getting off-side -- or panic-struck or trying to be prudent -- traders back to neutral, the potential consequences of the markets desks of every major central bank being on high alert and prepared to act (“plunge protection teams,” to use the vernacular of the financial crisis), as well as the frustrating reality of it being Sunday evening, which means markets will open ad seriatim and only slowly.
Over the last few months the financial media has not only turned deaf ears to the drama, (out of boredom) they have also blindly discounted any contagion effects as “isolated” at best – relative periphery contagion at worst. In other words: Any and all problems can be contained, mitigated, or solved by none other than your friendly neighborhood Central Bank. After all, if you listen to the so-called “smart crowd” these bankers have powers even Zeus would envy. So why worry about a little turmoil at the foot of Olympus? In any hero-worship endeavor one thing must remain constant or it all falls apart. Those that worship can never witness any event regardless of how minor: that the gods are not all that they portend to be. In other words: Allow just one moment of truth to be witnessed showing frailty instead of omnipotence – and the whole ruse falls regardless of the size and strength of the monuments and temples built to honor. For they will be abandoned: sometimes slowly, at others - all at once.
Those Who Heeded My Advice on Setting Up A Veritaseum "Bail-In" Contingency Plan Look Very Smart Right NowSubmitted by Reggie Middleton on 06/28/2015 11:04 -0400
Probably the most prescient call of the year, made with two months lead time. Those EU area residents, particualrly the Greeks, who heeded the warning have now gained the freedom to sail past capital controls and bank holidays. What may have been overlooked is that I also prepared a list of what countries (and bank domiciles) may be next.
Blockchain-based Derivative Contracts Allows Leveraged Forex Trading Where Brokers Fear to Tread Due To GrexitSubmitted by Reggie Middleton on 06/28/2015 10:18 -0400
A Grexit debacle easily highlights the advantages of trading throgh blockchain technology. Long story short - no FTDs, counterparty or default risk when trading forex pairs!
Upcoming risk - Instruments moving to 'Close Only' mode
Due to the uncertainty surrounding the ongoing Greek debt negotiations, and ahead of a potential announcement over the weekend that could lead to high volatility on the market, please be informed that we have decided to decrease your risks by temporarily moving all Instruments to 'Close Only' mode, from 22:30 GMT+3 on Friday the 26th of June 2015, until 00:30 GMT+3 on Monday the 29th of June 2015, trading terminal time.
Following yesterday's furious market drop in Chinese stocks, just before the overnight open, Morgan Stanley came out with a much distributed report urging investors "Not to buy this dip", and so they didn't. As a result, the Shanghai Composite imploded, at one point trading down 8% while the Chinext and Shenzhen markets crashed even more. This was the single biggest Shanghai Composite one-day drop since 2007, and with a close at 4192.87 the SHCOMP is now on the verge of a bear market, down 19% from its June 12 highs. China's second largest market, Shenzhen, is now officially in a bear market.
"Racial and ethnic minorities now surpass non-Hispanic whites as the largest group of American children under 5 years old, the Census Bureau said Thursday. The demographic rise of minorities comes at a time when heightened racial tensions make headlines from St. Louis to Charleston, South Carolina, and as minorities lag in education, earnings and labor market outcomes."
In today's consequence-less world - where only the poor are punished - news that a top official at a controversial U.S. export finance agency deleted text messages sent within days of the 2014 midterm elections after a watchdog group filed an open records request for the messages, will come as no surprise whatsoever. The 'excuse' given by Ex-Im Bank's chief of staff Scott Schloegel - because as we saw yesterday, there is no accountability - he "deleted, by mistake, the messages on my phone for the period in question." Most transparent administration ever...
Following meetings with EU officials and then with IMF chief Christine Lagarde and ECB chief Mario Draghi on Wednesday evening, Greek PM Alexis Tsipras is back at it on Thursday, in a frantic attempt to salvage a deal with creditors. He'll need to win over EU finance chiefs (who are collectively losing their will to keep Greece in the currency bloc) and the IMF as the EU summit kicks off in Brussels.
The Bundesbank's Jens Weidmann unleashed a litany of cticisim on the Eurosystem (read the ECB) when he said that Greek banks should not continue to buy the short-term debt of their government, which is then repoed back to the ECB in exchange for precious cash. "The Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements," said Weidmann, who also sits on the European Central Bank's Governing Council, which approves such funding to Greece. "When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns," he said in a speech to be delivered at a conference in Frankfurt.
Chaos reigns, with contradictory headlines pushing and pulling futures in any one direction, only for the next headline to undo the previous one. And only headline scanning frontrunning algos have any chance of trading any of this...
For around 500 years, war (and the deaths from them) were pretty consistently awful. Then as we entered the 20th century the military and civilian death rate soared as the world fought through two world wars. Since then, despite the headlines, deaths and wars have tailed off dramatically... until the last decade that is - which has seen the trend change significantly. With Soros among the many worried about World War 3, we suspect the current dip will be nothing but a positive outlier in history.
And it started off all so well: the market, blissfully ignoring what we wrote just yesterday in Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers, was in full blown levitation mode overnight when it sent Japanese stocks to their highest close since 1996 (pre dot com) and with the Chinese central bank doing its best to keep levitating local stocks away from the abyss, pushing the SHCOMP up another 2.5%. Euro Stoxx 50 went from flat to down 1% and is bouncing. As BBG's Richard Breslow adds, predictably, the market is taking this as a ploy, not an end game. Of course, this is precisely the "Bear Stearns is fine" conventional wisdom that Cramer was spewing days before Bear failed because nobody could fathom how anyone can conceive of a worst case scenario. Only it isn't nobody: we reported before of a Goldman's "Conspiracy Theory" Stunner: A Greek Default Is Precisely What The ECB Wants.
FOMC Voting member Jerome Powell has spooked markets this morning (though a glance at stocks impotence would not tell you that) with his comments that a "September rate hike is now 50-50," and that "The Fed would like to test a rate rise as soon as September." FX markets are turmoiling with the USD surging and bond markets are seeing Bunds/TSYs sold aggressively. Stocks shrugged in their "huh?" way initially but tumbled as Powell confirms 'mechanical'-sounding 1% rise per year in rates if the economy continues to grow as expected.