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Tyler Durden's picture

Economic Reality Now Catching Up To Market Fantasy





In a murky world of market fantasy, our first guideposts are the fundamentals themselves. Supply and demand can be misrepresented for a time through manipulated statistics, but the tangible effects of decline cannot be. Our secondary guideposts are the paths that internationalists and central banks bulldoze through the fiscal forest. To anyone with any sense, the endgame is clear: Total centralization is the goal, and economic fear is the tool they hope to use to get there. We have written on numerous solutions to this threat in past articles; but the first and most important action is for each of us to acknowledge, wholeheartedly, that the system we know is ending. It is over. What replaces that system will either be up to us or up to them. Only by admitting that there is an end to the fantasy, a painful end, will we then be able to help determine our future reality.

 
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Why Obama's Favorite Student Debt "Relief" Program Will Cost Taxpayers $100 Billion





Did you take out a $245,000 loan to pay for your degree? Good news, the Department of Education wants you to know that "your payment could be as low as $0 a month!"

 
Tyler Durden's picture

With All Eyes On Payrolls US Futures Tread Water; China Rises As Copper Crashes To New 6 Year Low





Here comes today's main event, the July non-farm payrolls - once again the "most important ever" as the number will cement whether the Fed hikes this year or punts once again to the next year, and which consensus expects to print +225K although the whisper range is very wide: based on this week's ADP report, NFP may easily slide under 200K, while if using the non-mfg PMI as an indicator, a 300K+ print is in the cards. At the end of the day, it will be all in the hands of the BLS' Arima X 12 seasonal adjusters, and whatever goalseeked print the labor department has been strongly urged is the right one.

 
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Which Countries Have The Highest Default Risk: A Global CDS Heatmap





Aside from the socialist utopias of Greece and Venezuela, who else is on the default chopping block? The CDS heatmap below lays out all the countries which according to the market, are most likely to tell their creditors the money is gone... it's all gone.

 
Tyler Durden's picture

JPMorgan Helps Comex Avoid Gold Depletion, Boosts Registered Gold By 78% Overnight





We were less than surprised to see that just 2 days after our report, the Comex once again succeeded in sweeping default fears under the rug by boosting its eligible gold by a whopping 78% overnight, from 362K ounces to 643K, thereby pushing deliverable gold from its all time lows. However, this was not achieved with an infusion of actual new gold into the Comex, but thanks to JPM reclassifying 276K ounces of gold from the Eligible into the Registered category, even as actual eligible gold continues being withdrawn from the Comex.

 
Tyler Durden's picture

Is This Country Latin America's Next "Argentina"





Today, following another spike in negative news, it appears that the credit markets have finally woken up, and a quick look at Brazil's CDS shows that following today's spike to 314bps, the country's implied default risk is back to levels last seen in April of 2009! We expect more credit market participants to notice the depressionary developments in brazil, and as the country's CDS continue to blow out, many will start asking themselves: is Brazil the next Argentina?

 
Tyler Durden's picture

"I Pay $271 A Month To Schools And I Don't Have Kids": Illinois Bureaucracy Sucks Homeowners Dry





Reuters has taken an in depth look at Illinois' sprawling bureaucracy and discovered that the state "is home to nearly 8,500 local government units" which helps to explain why "the average homeowner pays taxes to six layers of government, and in Wauconda and many other places a lot more." The story also sheds quite a bit of light on why the state's fiscal crisis may ultimately prove to be intractable. 

 
Tyler Durden's picture

"Debt Is A Fickle Witch"





Debt is a fickle witch. When left to its own devices, which it has been for nearly seven years with interest rates at the zero bound, it tends to get into trouble. Unchecked credit initially seeps, and eventually finds itself fracked, into the dark, dank nooks and crannies of the fixed income markets whose infrastructures and borrowers are ill-suited to handle the capacity. Consider the two flashiest badges of wealth in America - cars and homes...

 
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Hedge Fund Horrors: First Einhorn Has Worst Month Since 2008, Now Paulson Getting Redeemed





"The wealth management arm of Bank of America Merrill Lynch is liquidating its clients’ money from one of Paulson & Company’s funds and has put another fund under "heightened review,'" NY Times reports. As it turns out, this was not the year to be long Greece and Puerto Rico. 

 
Tyler Durden's picture

Some Clear Thinking About The Price Of Gold





Despite its history of gains, and 5,000 years of tradition behind it, gold is rapidly becoming one of the most widely despised assets. But before we pronounce it dead and write the final gold eulogy, however, let’s consider the following...

 
Tyler Durden's picture

Peter Schiff: What If "They" Are Wrong (Again)?





What if the assumptions about a U.S. economic recovery and Fed rate hikes were wrong? Could observers be mistaken now about the trajectory of the Dollar vs. the Euro as they were back in 2000? Confidence is the only thing that really undergirds modern fiat currencies. But confidence can be very ephemeral...disappearing as quickly as it arrives. The U.S. Dollar benefits from confidence that the Euro currency may just be unworkable, that the U.S. economy will continue to improve, and that the Fed will raise rates throughout the remainder of 2015 and into 2016. If these expectations are unfulfilled, there could be a Euro reversal.

 
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"You're Gonna Need a Bigger Boat" - Does Size Matter When It Comes To The Debt Markets





The reality might just be that the collective "we," and quite possibly sooner than we think, really will need a bigger boat. That is, as it pertains to the global debt markets, which have swollen past the $200 trillion mark this year rendering the great white featured in Jaws which can be equated with past debt markets as defenseless and small as a small, striped Nemo by comparison. The question for the ages will be whether size really does matter when it comes to the debt markets...

 
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Fed/Treasury Worried High-Frequency-Trading "Hurts Market Function"





Just days after China bans Citadel (and its high frequency trading) from trading Chinese markets, US Treasury and Federal Reserve officials have been forced to admit they "need to consider whether the race for speed, at this already advanced stage, helps or hurts market functioning." As WSJ reports, Fed governor Jerome Powell and Antonio Weiss, a senior counselor to U.S. Treasury Secretary Jacob Lew, said Monday that the government should re-evaluate the structure of U.S. markets in light of recent events. They are growing more concerned about signs that financial markets have grown more volatile with the growth of fast trading. As Weiss concludes, "the constant pursuit to save one more millisecond not only consumes resources potentially better invested elsewhere, but increases the pressure on the plumbing of the system to handle ever-increasing speeds and messaging traffic." The pre-emptive blame-mongery is beginning...

 
Tyler Durden's picture

Frontrunning: August 4





  • Unhappy Voters Shake Up Presidential Race (WSJ)
  • China stock exchanges step up crackdown on short-selling (Reuters)
  • China Dethroned as World’s Most Liquid Stock Market After Curbs (BBG)
  • Xiaomi retakes the smartphone lead in China as Apple slips (Engadget)
  • Impact of EPA’s Emissions Rule on Industry to Vary (WSJ)
  • Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind (WSJ)
  • Greece says expects bailout deal by Aug 18 (Reuters)
 
Tyler Durden's picture

Greek Banks Crash Limit Down For Second Day; China And Commodities Rebound; US Futures Slide





After a lukewarm start by the Chinese "market", which had dropped for the past 6 out of 7 days despite ever escalating measures by Beijing to manipulate stocks higher, finally the Shanghai Composite reacted favorably to Chinese micromanagement of stock prices and closed 3.7% higher as Chinese regulators stepped up their latest measures by adjusting rules on short-selling in order to reduce trading frequency and price volatility, resulting in several large brokerages suspending short sell operations. At this pace only buy orders will soon be legal which just may send the farce of what was once a "market" limit up.

 
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