Frontrunning: July 7

  • Global stocks and sterling bounce after Brexit bashing (Reuters)
  • FBI director to face Republican fire over Clinton email probe (Reuters)
  • UK's Hammond says Article 50 a decision for government, not parliament (Reuters)
  • GOP Puts Pressure on Clinton, FBI After Lynch Closes Email Probe (WSJ)
  • Gold’s Most Accurate Forecaster Says Prices May Go to $1,425 (BBG)
  • Central Banks Put Squeeze on Sovereign-Debt Market (WSJ)

It's Not The Brexit Stupid!

Brexit is just a symptom of the disease eating away at the fabric of our global economy. Lehman’s collapse was not the cause of the 2008 worldwide financial crisis. It was just the excuse for something that was going to happen no matter what. Bad debt, bad bankers, bad regulators, bad politicians, media cheer leading, and a willfully ignorant populace were a toxic combination – and it’s worse today.

"We've Never Had A Shock To The System Like This" - Global Selloff Accelerates On Brexit, Italy, "Unknown" Fears

The flight to safety following last week's quarter-end window dressing is accelerating, with constant news and flashing red headlines of record low yields across DM government bonds once the norm, and as of moments ago Denmark's 10Y bonds joined the exclusive club of sub-zero yields; gold has soared to fresh multi-year highs above $1,370, the risk-off currency, the Yen, soaring and sending the USDJPY just above 100, while sterling crashed overnight once again below 1.27, levels not seen since 1985.

Frontrunning: July 5

  • Pound Tumbles to 31-Year Low as Its Post-Brexit Selloff Resumes (BBG)
  • Bad Debt Piled in Italian Banks Looms as Next Crisis (WSJ)
  • Stock Market to Bond Market: ‘La-La-La I Can’t Hear You' (WSJ)
  • A Prime Minister, a Referendum and Italy’s Turn to Get Worried (BBG)
  • Brexit Vote Paralyzes Companies Across Europe  (WSJ)

Three Former Barclays Traders Convicted Of LIBOR Manipulation

The first bank to admit that it engaged in massive manipulation of the LIBOR rate was Barclays back in 2012, and traders are still being scapegoated tried in court to this day. As Bloomberg reports, five traders learned their fate recently, nearly four years since the bank admitted to the charge. Three traders were convicted, while the jury was unable to reach a verdict on the final two.

America's "Soaring" Gasoline And Oil Demand Was Just An Illusion: How The EIA Fooled The Algos

"Could it be that the U.S. demand that's helped drive a near doubling of oil prices since mid-February was illusory?" That may be a reasonable conclusion to draw from the latest data published by the DOE.  When looking at weekly figures, it looks like U.S. gasoline demand is soaring. But the latest monthly data, showing the numbers for April, paint a very different picture. They show U.S. gasoline consumption falling between March and April. "The discrepancy between the two sets of data that gives cause for concern."

Frontrunning: July 1

  • Bond yields sink as central banks head for easier policy (Reuters)
  • PM hopeful Gove says UK leader must believe in Brexit (AP)
  • U.K. Can’t Bank on EU’s Rationality in Talks (WSJ)
  • Gove Makes Case for U.K. Premiership After Johnson Betrayal (BBG)
  • ECB not debating abandoning capital key in QE buys (Reuters)

Kuroda Is Trapped As The BOJ Can't Ease Any Further: Here's Why

While the BOJ is reportedly meeting with the government today, it’s going to be addressing a situation that just got more difficult with a poor menu of policy options. It can purchase more assets and lower interest rates, but it can’t change a world economy that’s running out of inflationary gas.

Previewing Today's Main Event: David Cameron Arrives In Brussels

For the first time since triggering a political earthquake that’s shaken Europe's foundations with his now massively backfired decision to hold a EU membership referendum in 2015, a decision which won him the parliamentary election battle but lost him, and Europe, the war, UK Prime Minister David Cameron is set to face his fellow - and very angry - European Union leaders at what may be Cameron's last summit in Brussels, even as back in London, the race to succeed him is heating up.

Global Stocks Rebound, US Futures Jump On Expectation Of "Coordinated Intervention By Central Banks"

After a historic two-day selloff, which as shown yesterday slammed European banks by the most on record the wildly oversold conditions, coupled with hopes for yet another global, coordinated central bank intervention, coupled with modest hope that David Cameron's trip to Brussels today may resolve some of the Article 50 gridlock, have been sufficient to prompt a modest buying scramble among European stocks in early trading, with the pound and commodities all gaining for the first time since the shock Brexit vote.

Chicago Is Pushing For A Massive Bailout Of Its Public School System

Perhaps riding high on the small victory of a slight reprieve in the amount of money the city would have to contribute to fund the liabilities over the next few years, Rahm Emanuel is now quietly asking the city to change investment rules that would allow Chicago to purchase debt from sister agencies such as the Chicago Public School system - said differently, Rahm Emanuel wants to bail out the Chicago Public School system.

Pound Plummets To New Lows; 10Y Gilts Slide Under 1%; British Banks Halted After Crashing

Things are going from bad to worse for the UK. "We’ve seen so many developments around Brexit over the weekend since the FTSE closed and things are now looking even more concerning," Angus Nicholson of IG Ltd., said. "It’s hard to have any idea about where fair value for the pound should be when you look at the fact that Scotland and Northern Ireland could no longer be part of the U.K. within the next year or two."