With America's attention, diverted for the past week to events in the middle east and Ukraine, once again returning to domestic issues, Obama is coming under renewed pressure to address the immigration issues that has gripped the southern states as this will certainly be a hot topic issue during the midterm elections. Which is probably why the president has sent a team to Texas to assess whether a National Guard deployment would help to handle an immigration crisis at the Mexican border having so far resisted Republican calls for such a move, Reuters reports. Meanwhile, the underlying problem is getting from bad to worse, and as Bloomberg reported overnight, the flood of children at the border is now overwhelming the US, and as a result "President Obama and congressional Republicans have begun to offer the same simple-sounding solution for dealing with the flood of children crossing the U.S. border alone: Send the kids home."
- EU to weigh extensive sanctions on Russia (FT)
- U.S. lifts flight ban to Israel (Reuters)
- Russia says will cooperate with MH17 probe led by Netherlands (Reuters)
- Norway faces ‘concrete and credible’ terrorist threat (FT)
- Don’t Tell Anybody About This Story on HFT Power Jump Trading (BBG)
- But... but... PMI: Unilever Sales Growth Misses Estimates on Asian Slowdown (BBG)
- World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake (BBG)
- Qualcomm latest US tech company to reverse in China (FT)
- Hamptons Home Sales Rise as Buyers Find More Inventory (BBG)
US State Department "Confident" MH17 "Mistakenly" Downed By Separatists, Finds No Direct Link To RussiaSubmitted by Tyler Durden on 07/22/2014 22:38 -0400
UPDATE: US Intelligence officials identify Rostov as Russian military installation providing support to separatists... offers more evidence-less proof - Senior U.S. intelligence officials cited sensors that traced the path of the missile, shrapnel markings on the downed aircraft, voiceprint analysis of separatists claiming credit for the strike, and a flood of photos and other data from social media sites. With a somewhat shocking lack of evidence, AP reports that US officials (on condition of anonymity) have stated that intelligence suggests Malaysian Airlines Flight MH17 was mistakenly shot down by separatists and can find no link to Russia. However, the unnamed non-proof-providing officials believed Russia "created the conditions" for the downing of MH17. For now there is not even a YouTube clip to confirm this... as officials do not make the new technical evidence public...
In the Golden Age of the Central Banker it is impossible to distinguish fundamental economic reasons for asset class price movements from politically-driven strategic reasons. When words are used for strategic effect rather than a genuine transmission of information you create a virtual stalking horse. It’s a focus on how something is said as opposed to what is described. It’s a focus on form rather than content, on truthiness rather than truth. It’s why authenticity is as rare as a unicorn in the public world today.
After Delta Reroutes Flight Into Israel, 5 Other Airlines Suspend Flights To Tel Aviv On Missile WorriesSubmitted by Tyler Durden on 07/22/2014 12:26 -0400
Update: U.S. FLIGHTS TO ISRAEL HALTED BY FAA
About two hours ago, and in the aftermath of the public outcry regarding flights in conflict zones, first Delta then most other major international carriers announced they would suspend flights to Israel "until further notice" amid concerns that a rocket landed near Ben Gurion International Airport in Tel Aviv. The list of confirmed airlines that have halted such flights is shown below.
The 'information war' is hotting up. On the heels of yesterday's 30-minute detailed presentation of Russia's 10 awkward questions for Ukraine (and the US), CNN reports that the US government has released a satellite trajectory map of what it says was the flight's path and the site from which the missile was shot. Of course, the epicenter of the MH17 launch is Snizhne, in pro-Russian separatist-held territory. Rebel leader Alexander Borodai responded, "we don't have the technical ability to destroy this plane. Ukrainians are not interested in the truth."
As WSJ reports, last week's geopolitical chaos and distraction was ideal for a news dump, and the White House didn't disappoint: On no legal basis, all 4.5 million residents of the five U.S. territories were quietly released from ObamaCare. It seems the costs of healthcare soared in these five territories due to uneconomic mandates - which woul dhave been a disaster PR-wise for the administration and so, under cover of catastrophe, WSJ reports all of a sudden last week HHS discovered new powers after "a careful review of this situation and the relevant statutory language," that enabled them to 'selectively exempt' American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands from Obamacare. And all while vacationing...
For an administration in its sixth year, juggling presidential optics is nothing new. And with some rare exceptions, the public relations team around the president has remained consistently stubborn about refusing to let the never-ending stream of political, economic or international crises affect Mr. Obama’s daily schedule. The current myriad incidents are no exceptions: Moments after making a grim statement about Ukraine on Friday, the president popped into the East Room, where the first lady, Michelle Obama, was holding a mock state dinner for children to promote her Let’s Move nutrition initiative. “My big thing,” he confessed to the kids, “chips and guacamole!” There was plenty of laughter all around.
President Obama and Israeli Prime Minister Netanyahu spoke on the phone today; The White House just released the clarifying statement of next steps...
With a straight face, Barack Obama has been repeatedly telling us that the world is "more stable" and "less violent" than ever. In fact, he believes that this is the best time in history to be alive because of how peaceful and stable everything is. Just this week, his press secretary told the media that this administration has "substantially improved" the "tranquility of the global community". Apparently these guys don't think that we will notice all of the violence, war and terrorism constantly raging all around us.
- Ukraine Says Malaysian Airliner Shot Down Near Russian Border (BBG)
- Downing of airliner seen as pivotal moment in Ukraine crisis (Reuters)
- Malaysian Air Flight Took Route Avoided by Qantas, Asiana (BBG)
- Russian-Made Missile Hit Malaysia Jet, U.S. Officials Say (BBG)
- Netanyahu Orders Military to Ready Wider Gaza Incursion (BBG)
- Silvio Berlusconi Underage Sex Conviction Overturned (WSJ)
- But... but... "economic patriotism" - AbbVie to Buy Shire for $54.8 Billion as Drug Deals Surge (BBG)
- SEC targets 10 firms in high frequency trading probe - SEC document (Reuters)
- Art bubble pop: Sotheby's to Lay Off 'Modest' Number of Employees (WSJ)
- Moar Abenomics: Hermes Sales Trail Estimates as Japanese Revenue Declines (BBG)
For a centrally-planned market that has long since lost the ability to discount the future, and certainly respond appropriately to geopolitical events, yesterday was a rough wake up call with a two punch stunner of not only the MH 17 crash pushing the Ukraine escalation into overdrive, but Israel's just as shocking land invasion of Gaza officially marking the start of a ground war, finally dragging global stocks out of their hypnotized slumber and pushing risk broadly lower across the globe, even if the now traditional USDJPY and AUDJPY ramp algos have woken up in the past few minutes and will be eager to pretend as if nothing ever happened.
White House Statement Offers Condolences, Blames Russia, Demands "Full, Credible, Unimpeded" Investigation Into MH17 CrashSubmitted by Tyler Durden on 07/17/2014 23:43 -0400
The White House issued a full statement at 2238ET with regard the Malaysian Airlines Flight 17 crash following President Obama's earlier brief comments: "The United States is shocked by the downing of Malaysian Airlines Flight 17, and we offer our deep condolences to all those who lost loved ones on board... It is critical that there be a full, credible, and unimpeded international investigation as quickly as possible... While we do not yet have all the facts, we do know that this incident occurred in the context of a crisis in Ukraine that is fueled by Russian support for the separatists, including through arms, materiel, and training."
Despite an initial attempt to rally after the terrible news out of Ukraine hit, stocks were unable to mount any serious BTFD as uncertainty spread. Despite Bullard's best efforts, bond yields crashed lower (over 7bps today) with 10Y at 2.45% near the lowest close in 13 months. Gold prices jumped over $20 (even as the USD Index flatlined - though JPY strengthened notably as risk-off set in). VIX exploded 3.7 vols (its biggest swing - 45% - since Aug 2011). Equity markets cratered into the close as Israel ground invasion news (A White House Lockdown) added to the concerns leaving all US markets red post-payrolls and red post-Yellen. The S&P 500 dropped 1.18% - its biggest drop in 3 months. The Russell 2000 is now down 2.5% year-to-date.