Friday, June 19, 2015


Calm Reigns" Everywhere As Greece Inches Closer To Default, China Crashes

The System Is Broken: Americans No Longer Believe In Its Institutions

It's difficult not to see that the foundation is crumbling...

Cyprus All Over Again

The European Central Bank said it was not sure if Greek banks would be able to open Monday, as residents have been withdrawing money from their accounts at an unprecedented rate.

Greece will hold an emergency meeting with creditors on Monday. After a meeting of finance ministers on Thursday, Eurogroup president Jeroen Dijsselbloem said "no agreement yet is in sight." The ECB is deciding whether to stop or pause providing liquidity to Greek banks, which may not open on Monday because residents are rapidly withdrawing their money. On June 30, Greece is due to pay $1.70 billion to the IMF.

China Is Turmoiling

Chinese stocks got crushed. The Shanghai Composite Index fell 6.4% to 4,481.22, marking the first time since January 2014 that the market entered a correction, according to Bloomberg, amid worries that Chinese stocks are in a bubble. It's also been the worst week for the index since the 2008 financial crisis.

For the 2nd time in a month, China's Shanghai Composite entered a correction, plunging 10% from recent highs as headlines of delayed IPOs andlarge-scale steel 'dumping' at a loss combined with global monetary policy fireworks and European event risks. The rest of the more highly sensitive and manic Chinese equity markets are also plunging with CHINEXT and CSI-300 down over 7% in the last month (and 17% from the highs in the case of the former). Chinese stocks have gone nowhere in a month...and are now in fact notably lower in June.

Don't Poke The Bear

The United States and Europe are preparing a new round of sanctions against Russia, which could start with banning more Russian government officials and businessmen from travelling and doing business in the West.

Russia's ambassador to Sweden has warned the country of the potential military "consequences" associated with joining NATO.  

Angry Russia Will "Respond In Kind" To Europe's Asset Seizures

On the heels of Thursday's move by Belgium, France, and Austria to freeze Russian state assets in connection with the disputed Yukos ECHR ruling, Moscow vows to retailiate in kind.

Market Reality

Since 1929, the Dow Jones Industrial Average has rarely ever been so close to a 52-week high while the Dow Transports AND Dow Utilities were so close to a 6-month low. Following this kind of divergence, the median return for the DJIA and DJT was negative on all time frames, from 1 month to 1 year. Things were particularly bad – and consistently so – at the 3-month marker.

Stock Buybacks Grind To A Halt Following Massive Credit Fund Outflows, "Bond Carnage"

There is hardly a better signal that inflection points in asset classes have been reached than major shifts in capital in/outflows. As a reminder, Bank of America has practically made a career of dragging out the old "great rotation" canard every time there has been a, well, great rotation, out of bonds and into stocks for the past 4 years... only to always top (and bottom) tick said capital flows. Overnight it did it again, when it reported that based on EPFR data, bond funds just suffered the biggest weekly outflow in 2 years of some $10.3 billion matched by a $10.8 billion inflow into stock funds: the largest since March.

Drying Up In LA LA Land  

California Has Never Experienced A Water Crisis Of This Magnitude – And The Worst Is Yet To Come

Things have never been this dry for this long in the recorded history of the state of California, and this has created an unprecedented water crisis.  At this point, 1,900 wells have already gone completely dry in California, and some communities are not receiving any more water at all.  As you read this, 100 percent of the state is in some stage of drought, and there has been so little precipitation this year that some young children have never actually seen rain.  Sadly, this is just the beginning.  There is a reason why experts refer to fresh water as "the new oil".

Mickey Ds Is Having Big Problems

McDonalds is shrinking its US operations. This year, for the first time, the fast-food chain will close more domestic stores than it will open.

Dumping Ahead Of The Herd

Sweden's Largest Fund Manager Is Quietly Dumping Stocks Before The "Herd" Is Caught In A Selling Vortex

An Important Thought

The American Revolution itself was predicated on the inequity of taxation without representation.

Are your interests represented when they buy bombs and body scanners? Mine certainly aren't. Yet people who define patriotism by the frequency and rapidity of their flag-waving think that we all have some collective duty to ignorantly believe whatever we're told by the government. I disagree!


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