Right now it is all about the immediate fate of the UK, and as Bloomberg explains the "jolted markets" and overnight plunge in global risk assets, "growing anxiety over the prospect of the U.K. exiting the European Union dominated financial markets, sending global stocks down for a third day and the British pound to an eight-week low while boosting demand for havens such as the yen and gold."
Following Abe's decision to delay the April 2017 increase in the consumption tax, warnings about Japan's rating (recall that Japan's consolidated debt/GDP ratio is the highest in the world at 400%) were inevitable, and moments ago Fitch was the first to come out and while "affirming" Japan's AA rating, it was the first major agency to cut its outlook from Stable to Negative. Expect the other two big agencies to do the same, followed inevitably by downgrades.
In a surprising discovery, the Palm Beach Post first reported that according to state records, Orlando shooter Omar Mateen was employed by the US subsidiary of G4S plc, the world's largest security company by revenue. The problem is that according to Judicial Watch this is the same G4S who has been contracted by DHS to drive Other Than Mexican illegal immigrants across the Mexican border to Phoenix where they are then released without proper processing or issuing court appearance documents.
The German Chancellor was not interested in the reinforcement of Europe's external borders, the re-erection of its internal borders, the institution of a workable asylum vetting system and the repatriation of people who had lied to gain entry into Europe. Instead, Chancellor Merkel wanted to know how Facebook's founder could help her restrict the free speech of Europeans, on Facebook and on other social media. People must speak up -- must speak up now, and must speak up fast -- in support of freedom of speech before it is taken away from them. It is, sadly, not an overstatement to say that our entire future depends on it.
The headlines go from bad to worse for the UK and EU establishment as yet another new poll this weekend, by Opinium, shows "Brexit" leading by a remarkable 19 points (52% chose to leave the EU against 33% choosing to keep the status quo). With market anxiety rising, as One River's CIO notes, if Brexit happens, gold will soar.
FX, equity, and bond markets are in turmoil as Asian markets begin trading with Japan ugly, Sterling getting spanked, China devaluing FX (stocks down hard), and crude ($48 handle) and US equity futures (Dow -70) extending losses (as bond markets are all tumbling to record low yields). The hangover from further brexit concerns is not helped by the weakness in Japanese and Chinese data tonight.
Resurgent progressivism and loyal conservatism both appear to be undergoing painful castration in this 2016 presidential election; one by undemocratic and corrupt insider party politics, the other by the uglier face of bigoted-populism which might represent well over 25 percent of the nation’s population. Americans are not yet ready for a revolution; we may still need a few more darker days in both the economy and our unintended quest in world affairs.
Being a workaholic comes along with being grown up and having responsibilities (well, it comes along with it for some people). However, there is a rather disturbing study that the World Economic Forum reported earlier in the month that may convince some to schedule that vacation that's been put off for the last decade. As the WEF report finds, those 'suffering' with workaholism are significantly more likely to have psychiatric symptoms.
"All of my life I have confronted the vast bulk of humanity living in a false reality created by self-serving powerful interest groups and the government that they control. People believe the lies that define their reality, because they lack the education and the emotional and intellectual strength to confront the obvious lies."
The level of Chinese cross-border M&A chasing after US targets is literally off the charts. Notably, China has accounted for 26% of global cross-border activity YTD, which is nearly 3x higher than the next highest year. At $28 bn YTD, US-inbound deal flow from Chinese acquirers is already a record level and nearly 2x last year’s volumes
The suspected gunman in today's historic Orlando nightclub shooting, has been identified by relatives and law enforcement officials as Omar Mateen, a 29-year-old from Fort Pierce, Florida. According to social media, he is a US citizen, born in 1986, from Port Saint Lucie; whose parents are from Afghanistan. He was a registered democrat with a security officer and firearms license. According to California Rep. Adam Schiff, Mateen "made a pledge of allegiance to ISIS."
"The cure for the crisis — for the debt crisis, the financial crisis — has been deemed by the developed world governments to be more debt. There has not been a deleveraging. And after seven and a half years and counting of this mix of policies, at the moment we’re either in a stage of stagnation or rollover, possibly in the early stages of a global recession. So I think it’s a very dangerous time in the financial markets."
When it comes to Donald Trump and his bid for the presidency, what has become a recurring theme is that at every step along the way, people have underestimated him. The latest narrative as reported by The Hill is that Trump will struggle to find anyone to campaign for him, or anyone with a "name for themselves" at least. It is pointed out that Clinton plans to send all of the heavy hitters out to campaign, a literal establishment All-Star team. However, what 'they' fail to realise is that no matter what kind of establishment All-Star team Clinton assembles to go give speeches on her behalf, the country is fed up with the establishment, and so far, Trump has been the answer to that frustration.
As the man who perhaps best rode the coat-tails of an ever-increasing wave of American credit expansion exceptionalism (only to come undone in recent times as that game ends), it is no surprise that Warren Buffett explained in February that "for 240 years it’s been a terrible mistake to bet against America, and now is no time to start." We don't mean to rain on his parade too much, but the following charts suggest "nothing lasts forever" and time is ticking...
There is a deep irony embedded in the Fed’s savage assault on savers and its delusional doctrine of interest rate repression. While this actually results in monumental windfalls to speculators and the one percent, it’s all justified in the name of boosting the labor market and the wage bill. All this money printing has been for naught. Notwithstanding the 9X eruption of the Fed’s balance sheet from $500 billion at the turn of the century to $4.5 trillion today, growth in the most basic measure of labor input - total hours worked - has come to a grinding halt.