Budget Deficit

Gavekal On The Coming Clash Of Empires: Russia's Role As A Global Game-Changer

Just when China is starting to offer an alternative—an alternative that the US should be trying to bury—the US is moving to “weaponize” the dollar and pound other nations—even those as geo-strategically vital as Russia—for simple domestic political reasons. It all seems so short-sighted.

As D-Day Looms, The Maturity Of ECB's Bund Purchases Drops Again

In its latest monthly purchase, the ECB revealed that the estimated weighted average maturity of purchases of German bonds under the ECB’s PSPP in July declined once again to around 5.18 years vs 5.33 years in June, although it was modeslty higher compared to the record lows of 3.99 years in May and 4.7 years in April and March.

When Will The ECB Run Out Of German Bunds To Buy: Here Is The Math

If the ECB were to reduce the pace of QE to €40bn per month starting in January, it should not run out of German government bonds to purchase until early 2019. On the other hand, if it keeps the current pace of QE, it will run out of paper in late 2018, and even with a downward revised €40bn monthly total, the ECB will have almost no German bonds left to buy in 2019.

CBO: Repealing Obamacare Would Increase Uninsured By 32 Million, Double Premiums

One month after the CBO scored the now defunct Senate healthcare bill, forecasting it would increase the number of uninsured by 22 million while cutting the budget deficit by $321 billion over the next ten years, moments ago the CBO released its latest score of what a straight repeal of Obamacare would look like.

"Willful Blindness"

"...analysts are once again hoping for a “hockey stick” recovery in earnings in the months ahead... few, if any, Wall Street analysts expecting a recession at any point the future...because optimistic analysis supports our underlying psychological “greed”, all real scrutiny to the contrary tends to be dismissed. Unfortunately, it is this “willful blindness” that eventually leads to a dislocation in the markets."

What The Senate's Healthcare Fiasco Means For Trump Policies: Goldman Explains

Looking at last night's Senate fiasco, Goldman writes that while Congress may still pass a health bill, "it just won't be this one" and notes that the "enactment of much more narrowly-focused health legislation is still possible this year, in light of problems facing the individual insurance market for 2018." And in terms of near-term catalysts, all eyes now turn to the debt ceiling debate due in September...

White House Reveals Budget Deficit Will Be $250 Billion Greater Due To "Mistake"

The budget deficit for President Trump's first two years in office will be nearly $250 billion higher than initially estimated, hitting $702 billion in fiscal 2017, due to what appears to have been a calculation mistake: a shortfall in tax collections and a mistake in projecting military healthcare costs, according to budget chief Mick Mulvaney.

The Economist: "Get Ready For A World Currency By 2018"

"[In 2018], Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies..."

Bond Rout Fades With Futures Flat Ahead Of Payrolls; Pound, Yen, Oil Tumble

S&P futures are little changed following yesterday's rout even as Asian and European markets continued selling; the pound slid on poor factory data, the yen tumbled after the BOJ intervened to stabilize the JGB bond market, precious metals flash crashed early in the session, while the selloff in oil accelerated despite yesterday's massive inventory draw, although at least yesterday's sharp bond tantrum has stabilized.