Budget Deficit

Venezuela's Oil Crisis Is Opening Old Wounds With Colombia

Last week, Venezuelans lined up at their westerly border to visit Colombia for just a few hours and buy the essential everyday supplies once offered to them at low, subsidized prices by their prosperous socialist government. But, as oil prices slowly and steadily recover, will this model of brotherly cooperation prove to be sustainable in the long run?

Portuguese Bonds Slump As Last-Investment-Grade-Standing Falters

The only thing standing between Portugal's insanely decoupled low bond yields and the ugly fundamental reality is a BBB rating from DBRS which enables The ECB to keep buying the nation's bonds. The problem is, pressure is mounting on DBRS (the only 1 of 4 raters to maintain Portugal as investment grade) to drop the hammer... and Portuguese risk is rising.

Oman Refuses To Attend Algeria Oil Producer Meeting, Leaving OPEC Oil "Plan" In Limbo

Oman will not participate in a meeting of oil producers and consumers in Algeria next month as it is disappointed by the group's failure to address the issue of low oil prices, Minister of Oil and Gas Mohammad bin Hamad al-Rumhy said on Wednesday.  "We are moving into difficult times, and others still believe that everything will be fine. Those who expected the expensive oil producers will be run out of the business and shut down their operations, have been proved wrong."

Preview Of Key Events In The Coming Week

The coming week brings multiple macro data releases for July, including inflation, trade data, retail sales, IP, credit and money supply. A relatively light US data calendar next week with retail sales the main release on Friday but also import and producer prices and Michigan sentiment coming up. Retail sales will be closely watched to assess consumer spending growth for 3Q.

Saving The System: Exposing The 4 Fallacies Of Modern Monetary Policy

Monetary policy, we are told, is all about staving off recession and stimulating economic growth. However, not only is monetary debasement in any form counterproductive and destroys the personal wealth of the masses, but the economists who devised today’s monetarism have completely lost their way. The real reason for today’s global monetary policies is an ultimately futile attempt to prevent a systemic and economic crisis.

Saudi Banks Offered $4BN Bailout To Avoid Liquidity Crisis

The Saudi circular ref (low oil prices -> budget deficits -> more oil pumping -> even lower oil prices) continues to iterate toward it's ultimate conclusion which (spoiler alert) will not be pleasant... and the banking system bailouts have only just begun.

US Futures Rebound Despite Global Stock Weakness As USDJPY Ramps HIgher

After breaking a multi-year stretch of 9 daily record highs in the Dow Jones, overnight global markets saw some early weakness with Asian stocks retreating after BOJ chief Kuroda dashed hopes for so-called helicopter money, triggering yen’s steepest rally in a month and pulling the Nikkei lower by 1.1%. This however did not last long, and around the European open the traditional ramp in the USDJPY helped European equities shrug off early downside, while US equity futures have already recovered half of yesterday's losses.

This 'Market' Discounts Nothing Except Monetary Cocaine

In short, the market is not trading on a rebound in GDP, revenue growth or a breakout of already elevated profit margins. It’s just high on one more dose of monetary cocaine that in short order will prove to have been not even that.

Frontrunning: July 12

  • Stocks Advance on Stimulus Bets (BBG)
  • Japan to craft stimulus by end-July, may issue construction bonds (Reuters)
  • May ally says Britain to trigger EU divorce 'when we're ready' (Reuters)
  • Last Woman Standing, Theresa May Offers Calm on Brexit Road (BBG)
  • Merkel urges Britain to quickly clarify relationship with EU (Reuters)

US Futures Rebound After Volatile Session, All Eyes On June Payrolls

In a session where bleary-eyed traders followed the all-night tragic developments out of Dallas and initially sold off risk assets, it is good to see that some normalcy prevailed with the traditional post Europe-open futures ramp, which was further assisted by the successful resolution of the Dallas standoff, which has pushed futures modestly higher ahead of today's main event for markets, the June payrolls report due in under two hours.

Spain's Social Security Program Will Go Bust In 2018

Spain’s Social Security system is expected to go broke by 2018. In the US, concerns over such matters are virtually nonexistent. But Spain cannot print Euros, and is already deep in the hole on meeting budget deficit targets.