marctomarket.com / by Marc Chandler / May 26, 2016
marctomarket.com / by Marc Chandler / May 26, 2016
The US dollar is trading with a softer bias today after the momentum stalled yesterday. The pullback is shallow but could be extended a bit more in the North American session. The US reports weekly jobless claims, durable goods orders and pending home sales. However, the market already appeared to take on board that the US economy is rebounding strongly in Q2 and that the prospects of a Fed hike have increased, but a June/July hike is still not a done deal. The next important step regardingmarket psychology is not today’s data but tomorrow’s speech by Yellen.
Recall in that in March several regional Fed presidents talked up the prospects of a rate hike as early as April. Yellen effectively closed the door on this line at her March speech in NY. Dudley’s comments last week, after the FOMC minutes, likely reflected the views of the Fed’s leadership, and should be reiterated by the Chair.
The interest rate adjustment has stalled alongside the greenback. The August Fed funds futures contract, which offers the clearest view of a June or July hike has stalled at an implied yield of 55 bp or about a 72% chance. As recently as May 16 the implied odds were closer to 20%. The US two-year premium over Germany widened from 125 bp after the US employment figures on May 6 to 143 bp yesterday.
zerohedge.com / by Tyler Durden / 05/26/2016 09:47
It’s official: years of warnings that Obamacare will lead to dramatic increases in healthcare premiums are about to be validated.
As the WSJ writes, big health plans stung by losses in the first few years of the U.S. health law’s implementation are seeking hefty premium increases for individual plans sold through insurance exchanges in more than a dozen states.
To be sure, we have extensively covered the imminent danger of rising healthcare prices as a result of Obamacare’s intrusive intervention in the insurance sector; however now that this is about to become mainstream information, we expect consumers to hunker down and save even more in anticipation of what is about to be a shock price increase for millions of middle-class American families.
As the WSJ reports, the insurers’ proposed rates for individual coverage in states that have made their 2017 requests public largely bear out health plans’ grim predictions about their challenges under the health-care overhaul. According to the insurers’ filings with regulators, large plans in states including New York, Pennsylvania and Georgia are seeking to raise rates by 20% or more.
zerohedge.com / by Tyler Durden / 05/26/2016 03:00
After last summer’s Jade Helm military drills, and just weeks after FEMA’s mass arrest drills in Texas, it is little wonder that the residents of Beech Grove, Indiana were terrified upon being awoken last night by the sound of bombs and helicopters, and flooded the emergency 911 call network with requests for information and reports of explosions. As Sputnik News reports, police officials quickly confirmed to alarmed residents that it was a scheduled military training exercise.
While some residents reported being forewarned of the late night drill, many others were taken by surprise. Members of the community reported hearing what sounded like bombs and seeing low-flying helicopters.
As FOX59 reported, Beech Grove residents say they saw helicopters flying low over the area and heard what sounded like several loud explosions.
acting-man.com / Pater Tenebrarum / May 26, 2016
A Science Goes Astray
Human beings have a strong tendency to look for patterns. The natural sciences have shown that the universe is governed by laws, the effects of which are observable and measurable in an objective manner. Mostly, anyway — there is, after all, the interesting fact that observers are influencing measurements at the quantum level by the act of observation. (For our lives in the “macro” world, however, this is not relevant. An engineer does not need to take relativity or quantum physics into account to construct a machine that works.)
In the late 19th and early 20th centuries, a never before seen string of very rapid advances in scientific knowledge and technological progress occurred. It is hard to overstate the impact of inventions such as the automobile, radio, airplanes, and so forth. This happened while per capita economic growth in what is today known as the “developed world” reached its fastest pace in all of history — a pace never to be seen again.
Although we cannot prove it, we believe there was a good reason why this combination of vast economic and scientific progress took place at the time: governments were but a footnote in the lives of most people. By 1910, spending by the US government was a mere 4% of GDP. There was no central planning and no central bank, although there was of course a certain amount of crony capitalist government intervention, and the forerunner of the Federal Reserve System (the system of “central reserve city, city and country banks”) was already established.
jsnip4, Published on May 26, 2016
zerohedge.com / by Tyler Durden / 05/25/2016 23:50
Two days after Donald Trump released a clip in which he hinted at Bill Clinton’s sexual transgressions by featuring two women – Kathleen Willey and Juanita Broaddrick – who have made rape accusations against the former president, and then promptly escalated his attacks on the Clintons in an interview with WaPo in which Trump called the circumstances of Vincent Foster’s death “very fishy”, Trump accidentally revealed what his next attack on Hillary will be.
This is how it was accidentally revealed: Trump campaign adviser Michael Caputo on Wednesday morning emailed a researcher at the Republican National Committee asking him to “work up information on HRC/Whitewater as soon as possible. This is for immediate use and for the afternoon talking points process.”
The email was obtained by Politico when Trump campaign spokeswoman Hope Hicks, who Caputo copied on his request to the RNC, accidentally responded instead to Marc Caputo, a Politico reporter who is not related to the Republican consultant.
charleshughsmith.blogspot.com / CHARLES HUGH SMITH / WEDNESDAY, MAY 25, 2016
Privilege serves the same purpose–benefiting the few at the expense of the many–regardless of the system’s ideological labels.
The righteous disgust with the status quo that spawned the broad-based campaigns of Bernie Sanders and Donald Trump is not unique to the U.S.Globally, those disenfranchised by the status quo–the unprivileged, or in Peggy Noonan’s phrase, the unprotected— are starting to express their discontent in the streets, in social media and in elections.
Why are people around the world angry? It’s obvious to everyone in the unprivileged classes and a mystery to the “we’re doing just fine here, what’s your problem?” privileged classes: The system is rigged to benefit the protected few and marginalize the unprotected many.
The problems are not just political; they are structural. As I outline in my new book, Why Our Status Quo Failed and Is Beyond Reform, there are two structural engines of disorder at the heart of the system:
1. Automation, software and the forces of globalization are disrupting jobs and wages everywhere.
jsmineset.com / by Bill Holter / May 25th, 2016
Have you ever wondered “who” would be blamed this time around? To this point, we speak about the “Lehman moment” when we look back at 2008. Of course it was not Lehman’s fault as they were forced, sacrificed or purposely destroyed, however you’d like to describe it. The way I saw it, the banking system needed an injection of capital, cheap capital and lots of it. The only way to get public funds was to “create” an emergency BEFORE the emergency became all engulfing, this is exactly what they did.
Now, some eight years and multiple $trillions later we are facing another “liquidity crunch”. It does not make sense that liquidity is scarce after all of the various QE’s but it is. The credit markets are very thin and trading even small pieces of credit has become hard work. The liquidity is just not there to support fully functional and liquid markets. The question now becomes, which financial donkey will have the tail of failure pinned on them?
I believe we have been getting the answer over just the last few weeks. My odds on guess is none other than Deutsche Bank, the largest or second largest derivatives monster on the planet. They have settled several cases recently including Libor, stock manipulation and for manipulating the London gold and silver fixes. I find it humorous as we were assured for so many years that gold and silver were THE ONLY things not being manipulated …how foolish of us to have thought such a thing?
As you know, DB is now offering 5% rates on 90 day money from it Brussels division. This makes no sense at all since they should be able to raise money in credit markets or from the ECB directly for nearly 0% or even negative …but for some reason they cannot. I have speculated Deutsche Bank has been “kicked out of the club” and their access to capital is being blocked. This may or may not be true but would make sense since they have agreed to turn state’s evidence and rat on other firms misdoings.
zerohedge.com / by Tyler Durden / 05/25/2016 22:30
Every day, there are a whopping 5,500 tonnes ($212 billion) of gold traded in London, making it the largest wholesale and over-the-counter (OTC) market for gold in the world.
To put that in perspective, Visual Capitalist’s Jeff Desjardins notes that more gold is traded in London each day than what is stored at Fort Knox (4,176 tonnes). On a higher volume day, amounts closer to total U.S. gold reserves (8,133.5 tonnes) can change hands.
kingworldnews.com / May 25, 2016
With continued uncertainty in global markets, take a look at this troubling chart.
Jason Goepfert from SentimenTrader: “The last time that stocks held up while economic reports failed to beat expectations, stocks sold off hard (see chart below).”
Those reports have not been consistently positive, at least in terms of exceeding economists’ forecasts. The Citigroup Economic Surprise Index has been below 0 almost every day in 2016, its longest period (by far) below zero, or nearly so. Earlier this month, the Bloomberg Economic Surprise Index dropped to its 2nd-lowest reading dating back to its inception in 2000, exceeded only by January/February 2009. That has raised concerns that the stock rally is running on fumes.”
jsnip4, Published on May 26, 2016
zerohedge.com / by Tyler Durden / 05/25/2016 21:40
Today’s long awaited blockbuster report released by the State Department Inspector General, which found that Hillary Clinton broke government rules by using a private email server without approval, and that among many other things Clinton would not have been allowed to use the server in her home had she asked the department officials in charge of information security, made the day of all of Hillary’s critics as it confirmed most of their accusations, while at the same time justified Hillary’s worst fears: apparently epic sloppiness “did make a difference after all” especially since it confirmed she had lied, again.
The report explicitly contradicted Clinton’s repeated assertion that her server was allowed and that no permission was needed.
“OIG found no evidence that the Secretary requested or obtained guidance or approval to conduct official business via a personal email account on her private server,” the report said, adding that Clinton should have discussed the arrangement with the department’s security and technology officials. Officials told investigators that they “did not – and would not – approve her exclusive reliance on a personal email account to conduct Department business.” The reason, those officials said, is because it breached department rules and presented “security risks.”
The palpable lack of coherent response to this sudden revelation confirmed just how jarred by today’s events the presumptive Democratic presidential candidate was.
As we first reported earlier today, the Clinton camp’s initial reaction was to use a kindergarten excuse: former secretaries of state were also doing it, or in the words of Hillary’s press secretary Brian Fallon, “the Inspector General documents just how consistent her email practices were with those of other Secretaries and senior officials at the State Department who also used personal email.”
thecommonsenseshow.com / By Dave Hodges / May 25th, 2016
Perhaps the best reason to vote for Hillary is the fact that her husband has admitted that Hillary talks to dead spirits, not kidding, here is it is. It is time for a mental health check.
Hillary a woman of integrity and honesty….
zerohedge.com / by Tyler Durden / 05/25/2016 20:00
Back in the middle of February – during the height of the financial-market turmoil, the market was pricing in a shockingly policy-error-ish 36.5% chance of a rate cut in 2016. Since then The Fed has done everything it can to try and regain credibility – attempting to be hawkish in the face of dismal data, baffling everone with bullshit, and droning on about data-dependence. Now, thanks to the FOMC Minutes released last week with officials suggesting investors may be underestimating the pace of tightening, the odds of a 2016 rate cut have collapsed to just 4.8% – its lowest since New Year’s Eve.
As Bloomberg details in the chart below, the probability of the Federal Reserve cutting U.S. interest rates in 2016 has fallen below 5 percent for the first time since New Year’s Eve, according to options on eurodollar futures contracts.
gata.org / By Ranjeetha Pakiam and Eddie Van Der Walt / Wednesday, May 25, 2016
Venezuela held the biggest gold sale by a central bank in eight years as the country’s economic crisis deepened and the government faced concern that it may struggle to honor bond payments.
The country cut its gold reserves by 16 percent in the first quarter, following a 24-percent reduction in 2015, according to data from the International Monetary Fund. The quarterly sale was the largest by any central bank since Switzerland sold 3.2 million ounces in the third quarter of 2007. …
zerohedge.com / by Tyler Durden / 05/25/2016 19:47
As Bloomberg’s Nathan Crooks demonstrates, this is the maximum amount of money one can take out from a Venezuela ATM each day.
For those wondering, the fistful of cash is worth about $25.
The good news: those locals lucky enough to still have money in a Venezuela bank don’t need a wheelbarrow to carry it.
armstrongeconomics.com / by Martin Armstrong / May 26, 2016
Our sources in France are unanimously warning that a major socialist union uprising is building in France and could erupt rapidly. The unions in France are notorious for being the most socialist, highly Marxist, in the entire world. To get their demands, they will go anything. They even kidnapped the head of Goodyear until he yielded to their demands. They act more like Stalinist rebels who ignore laws and it is always just about them. Employers are evil capitalists in their book.
Even the socialist MPs refused to vote for it. In France, if Parliament does not do what the President commands, he need not rely upon them. Prime minister Manuel Valls employed a constitutional tool that allows him to bypass the parliament altogether. This has now resulted in rising social unrest. A real confrontation is building. The question is can France become competitive globally at all?
marctomarket.com / by Marc Chandler / May 25, 2016
The US dollar is little changed against the major currencies as yesterday’s moves are consolidated and traders wait for fresh developments. Global equities were higher after Wall Street’s advance yesterday. Asia-Pacific bond yields were firm, following the US lead, but European 10-year benchmark yields are lower, led by the continued rally in Greek bonds after an agreement was struck that will free up a tranche of aid.
The relative stable capital markets are itself news. Last summer and again earlier this year, weakness of Chinese yuan and equities were a major disruptive force. Earlier today the PBOC “fixed” the yuan at its lowest level since March 2011. The dollar has been trending higher against the yuan steadily even if slowly all month. Today it is at three-month highs.
Chinese equities were the only Asian market to weaken today. The MSCI Asia-Pacific Index advanced 1.5% today off seven-week lows seen earlier in the week. The HK China Enterprise Index was up 2.7%. China’s markets were off 0.25%, and year-to-date are off 20%-22%
Yesterday the Wall Street Journal thought it was news that China is not letting market forces drive the yuan. We have long discussed the gap between China’s declaratory policy and its operational policy. Today Bloomberg report that the Chinese delegation to the upcoming Strategic and Economic Dialogue talks (June 6-7) is keenly interested in whether the Fed hikes in June or July.
The report claims China would prefer July. Can it really make that much of a difference? Is this a topic for a strategic discussion? Even though the Federal Reserve may practice a type of democratic centralism that is familiar in China, can Yellen (Fed chair often attends the talks) commit one way or the other, and even if she could, would she (or the US) want to?
zerohedge.com / by Paul Rosenberg / 05/25/2016
It’s really just a matter of time; the working man’s deal with his overseers is half dead already.But there’s still inertia in the system, and even the losers are keeping the faith. Hope dies slowly, after all.
Nonetheless, the deal is collapsing and a new wave of robots will kill it altogether. Unless the overseers can pull back on technology – very fast and very hard – the deal that held through all our lifetimes will unwind.
We All Know the Deal
We usually don’t discuss what the “working man’s deal” is, but we know it just the same. It goes like this:
acting-man.com / Bill Bonner / May 26, 2016
Gassy Hacks and Big Quacks
Today, we recall the “commencement” at the end of four years at the University of Vermont. The university itself is imposing and a little intimidating. The rest of the world works in warehouses or common office spaces. Academia labors in hallowed “halls” and prestigious “centers.”
People in the Main Street world work for profits… and are subject to market economics. The professoriate is above it all; no profit and loss statements… no profit motives or incentive bonuses… and (for those with “tenure”) no chance of getting fired, no matter how incompetent, irrelevant, or wrong they are. The private sector depends on output and results; academia harbors gassy hacks who may never produce much of anything at all.
The ceremony on Sunday opened with the procession of the university luminati, led by bagpipers of the St. Andrews Society. Ordinary people – even presidents of the United States of America – wear common coats and ties; the academic elite are gussied up with all manner of robes, funny hats, cowls, tassels, honors… and a line of capital letters following their names like baby ducks behind a waddling quack.
“All that brainpower… working on our Justin… it must have done him some good,” parents say to themselves. Then, they have their doubts. Justin seems to think that “diversity” is what really matters, that Bernie Sanders has the right idea, and that eating gluten is a sin.
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