Today's entire surge in stocks and EURUSD was predicated on nothing more than momentum ignited from rumors of a report that a deal was imminent. So now that Germany has come out and stated - unequivocally - that:
*GERMAN GOVT SURPRISED BY GREEK REPORTS OF PROGRESS: OFFICIAL
One might imagine some of the ramp would be removed.. and it is in EURUSD, but not in stocks. However, as JPMorgan warns "hope is not an investment case. The longer we go without a deal, the less likely we believe a deal becomes/the higher the chance of Grexit."
Something BIG is afoot: we are seeing multi-decade breakouts in numerous currency pairs.
Which country will be next to join the ‘bring our gold home’ movement?
Bill Gross just revealed another aspect of trading in the new (or any) normal: one may get the direction and the timing with laser-like precision (as Gross did on his Bund trade), but if said trade is excecuted in a way where the inherent "coiled spring" volatility of the Gross-defined "new normal" blows up the trade structure, the losses will make one wish never to have had the correct idea in the first place.
- FIFA Raided by Swiss Authorities in 2018, 2022 World Cup Probe (BBG)
- Companies Send More Cash Back to Shareholders (WSJ)
- Time Warner Cable Deal Stirs Debt Concerns (WSJ)
- Qatar $200 Billion World Cup Under More Scrutiny Amid FIFA Probe (BBG)
- Philippine, Vietnamese troops play soccer and sing on disputed island (Reuters)
- The G-7's Problem: Can the World Deal With a Greek Default? (BBG)
- SocGen Deal for Bache Illustrates Commodity-Trading Woe (WSJ)
- China’s Naval Abilities Test Asia’s Insecurities (WSJ)
It had been a painfully quiet session in Asia (where Chinese levitation continues with the Shanghai Composite up another 0.6% oblivious of yesterday's rout in the US, because as we explained for China it is now critical to blow the world's biggest stock bubble) and Europe, where the only notable news as that for the first time in months the ECB had not increase the Greek ELA, keeping it at €80.2 billion on conflicting reports that Greek deposit withdrawals had halted even as Kathimerini said another €300MM had been pulled just yesterday, suggesting the ECB has reached the end of its road when it comes to funding nearly two-thirds of what Greek deposits are left in local banks. But the punchline came moments ago when Bloomberg reported that "Greece will likely miss a deadline for a deal with creditors by the end of the week as the two sides have made little progress during talks in recent days."
Seems like now would be a good time to reinstate the NSA's bulk data collection (for our own security) to find out who is at the center of this...
*CAPITOL VISITORS CENTER HAS BEEN EVACUATED;CAPITOL NOT AFFECTED
*CAPITOL POLICE DON'T IMMEDIATELY HAVE STATEMENT ON EVACUATION
“Evacuate, evacuate, evacuate the U.S. Capitol building,” a loudspeaker blared.
American consumers may have pocketed most of their gas savings thus far, but there are two discretionary items where they aren’t holding back spending: bourbon and Tennessee whiskey.
- Developed-Country Growth Slows, OECD Says (WSJ)
- Charter Agrees to Buy Time Warner Cable for About $55 Billion (BBG)
- Dollar hits one-month high as periphery woes weigh on Europe (Reuters)
- IMF Says Yuan No Longer Undervalued Amid Reserve-Status Push (BBG)
- Hanergy secured $200m loan ahead of solar group stock tumble (FT)
- Congressional Inaction Threatens NSA Spy Program (WSJ)
- Germany sees progress on Greece, EU officials to confer on Thursday (Reuters)
- Hayes ‘motivated by greed’, prosecutor says in Libor case (FT)
- Whistleblowers Find SEC Rewards Slow and Scarce (WSJ)
What the honey-bee die-off means for humanity...
There has to be a very clear line between central banks and governments. The latter should never be able to influence the former, because it would risk making economic policy serve only short term interests (until the next election). Likewise the former should stay out of the latter’s decisions, because that would tend to make political processes skewed disproportionally towards finance and the economy, at the potential cost of other interests in a society. This may sound idealistic and out of sync with the present day reality, but if it does, that does not bode well. It’s dangerous to play fast and loose with the founding principles of individual countries, and perhaps even more with those of unions of sovereign nations.
China launches international gold fund with over 60 countries as members. The large fund, which expects to raise 100 billion yuan or $16 billion, will develop gold mining projects across the economic region known as the New Silk Road.
With just 10 days until a June 5 IMF payment that Athens almost certainly will not make unless it strikes a deal for the disbursement of more bailout funds, things just got quite a bit more interesting on the EU political front after Spain’s Popular Party was dealt a dramatic electoral blow on Sunday by the leftist Podemos and center-right Ciudadanos.
With US markets closed for the Memorial Day holiday, and some of the key European markets likewise shuttered for public holiday including the UK, Germany and Switzerland, it is difficult to find where one can observe or trade the weekend's newsflow, which is once again centered on developments in Europe, where on Sunday Spanish Prime Minister Mariano Rajoy’s People’s Party suffered its worst result in a municipal election in 24 years while Greece continues to threaten with default 5 some years after it should have officially pulled the plug.
Overnight Xinhua also reported that a gold sector fund involving countries along the ancient Silk Road has been set up in northwest China's Xi'an City during an ongoing forum on investment and trade this weekend. (read more about the "New Silk Road" which could change global economics forever here). The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan (16.1 billion U.S. Dollars) in three phases. The amount of capital allocated to nothing but physical gold purchases (without plans for financial paper intermediation a la western ETFs) will be the largest in the world.