You've Seen It Before, And Here It Is Again: "The Chart That Tears Apart The Stimulus Package"

Over a year ago we penned "QE 2 Was A Disaster: Here Is Why US Fiscal "Stimulus" Was  A Complete Failure As Well", because, well, QE2 was a disaster, which is important to remember as we are about to set off on the NEW QE as per Hilsenrath, because apparently creating 80,000 jobs per month (with the S&P a whopping 5% off multi-year highs) "Leaves Door For Fed Wide Open" even though the Fed has shown beyond a shadow of a doubt it is incapable of creating jobs and at best can ramp the Russell 2000 for a few months. But more importantly, a year later it is obvious that the ARRA just kept on being wronger and wronger with each passing month, until we get to today. We will spare readers our conclusion about ARRA architect Christina Romer's (long gone from the administration for obvious reasons) predictive powers, suffice it to say they are on par with those of the Fed itself. Simon Black, using AEI data, reminds us how the ARRA chart looks, one year later.

"Russia And China Will Pay A Price"

Hillary Clinton just made a very memorable statement.

I do not believe that Russia and China are paying any price at all – nothing at all – for standing up on behalf of the Assad regime.  The only way that will change is if every nation represented here directly and urgently makes it clear that Russia and China will pay a price

So — exactly what price must Russia and China pay? The real question though, is what Hillary Clinton thinks she can achieve through throwing unveiled threats around and destabilising the fragile global system?

Will The British Bankers' Association Ban Barclays As It Said It Would?

In the ongoing reincarnation of Lie-borgate (because as Jon Weil reminds everyone, this is nothing new under the sun, except for a few e-mails, and a bottle of Bollinger), there is just one missing link right about now. From Bloomberg, April 16, 2008:

"It's very important to us that we preserve the integrity of the figures," said Lesley McLeod, a BBA spokeswoman in London. "It's something we have been looking at. If we find that people have been putting in figures which don't reflect accurately their financial figures, the ultimate sanction is to throw them out of the pond.''

And just so there is no confusion, from the NYT, June 6, 2008

The British Bankers Association (BBA) -- which oversees the daily benchmark setting process -- in April announced that it was bringing forward its annual review of the process. It stated that any member found to be deliberately misquoting would be banned.

So: Will the British Bankers' Association now ban Barclays as it said it would? After all, there is all that "integrity" to be preserved.

No Country For Old Bulls

With global PMI rolling over again, dimming unemployment growth, and slowing EM Asia impacting global production, it is no wonder than BofAML's economics team sees a dearth of 'feelgood' factors in the market. In fact, as they note, further rate cuts in the euro area and China along with around $500bn of NEW QE in this quarter are priced into the market with any hope for risk assets to rally more consistently, investors will need to see not just willing-and-able central bankers but an abatement of the sovereign crisis in Europe and improvement in global data - neither of which they expect anytime soon. Easier monetary policy can only cushion the blow from higher uncertainty in the US and Europe. Effective policy breakthroughs would thus have to come from compromises in the European Council or in US cross-party politics. Investors have yet to zero in on the real impacts of rising economic uncertainty in the US. As Ethan Harris and Michael Hanson have argued, it is unlikely that the cliff is fully priced into the markets and US political dysfunction will share the spotlight with the European crisis over the next few months. And as last time, the joint act will likely undercut investor confidence.

Weekly Bull/Bear Recap

Your one stop summary of all the notable bullish and bearish events in the past week.

German TARGET2 Claims Soar To €729 Billion

We have some good news for our German readers: in the month of June, your implicit cost of preserving the Eurozone (read the PIIGS) via TARGET2 funding of current account and various other public sector deficits and imbalances amounted to only €1 billion/day, down from €2 billion in June. We also have some bad news, which is that Europe's negative convexity ticking inflationary timebomb (why inflationary: Why Germany's TARGET2-Based Eurozone Preservation Mechanism Is Merely A Ticking Inflationary Timebomb), which guarantees that with every month in which nothing is done to undo the Buba's onboarding of liquidity risk, the risk for an out of control implosion of German, and implicitrly all European monetary institutions, rises exponentially, and just hit an all time high of €729 billion. To everyone who naively believes that a deus ex can come out of stage left and somehow reverse this guaranteed loss to German taxpayers (sorry: no free lunch) in the form of even more guaranteed inflation down the road, we suggest you short the chart below, somehow (and when you figure out how, let us know, so we can do the opposite).

Equities Close Week Red Even As Hilsenrath Prevents Rout

A 10 point rally off the lows, thanks to a well-timed Hilsenrath-rumor, dragged stocks up to their day-session opening levels (and unsurprisingly perfectly to VWAP) and while bonds/FX/spreads all limped along with stocks in the last hour, broad risk assets were not as excited by the rumors as the NASDAQ and S&P seemed to be. US equity indices are all lower from Friday's close (with NASDAQ least worst) but they remain +1.3% (S&P) to +3% (NASDAQ) from pre-EU-Summit levels. With the USD ripping higher (on EUR weakness as much as QE-hope fading) up over 2% on the week (with EURUSD -3% on the week and JPY the only 'major' stronger as carry unwinds hit), commodities plunged (growth questions and QE-less) ending the week at their lows (except for WTI - which traded lower on Monday) as Gold outperformed (down only 0.85% on the week). Treasury yields dropped 5bps or so today - leaking back higher into the close but ending the week down 7-9bps (notably less sanguine than stocks). Staples were th eonly green sector on the day as Tech lagged along with Industrials. While the Financials sector fell 0.8% (with a nasty leg down into the close), the majors did worse as MS and BofA caught-up with JPM's post-summit weakness. Most interestingly, the late-day surge in stocks (which saw decent volume and average trade size as we crossed VWAP) was accompanied by a collapse in volatility. VIX ended the day down 0.4 vols at 17.1% despite a 9pts loss in ES leaving it notably cheap relative to credit/equity fair-value.

Drought Stalks the Global Food Supply

by Alan Bjerga, Bloomberg Business Week:

When rain doesn’t fall in Iowa, it’s not just Des Moines that starts fretting. Food buyers from Addis Ababa to Beijing all are touched by the fate of the corn crop in the U.S., the world’s breadbasket in an era when crop shortages mean riots.
This year they have reason to be concerned. Stockpiles of corn in the U.S. tumbled 48 percent between March and June, the biggest drop since 1996, the U.S. Department of Agriculture said last week. And that was before drought hit the Midwest. Chicago last month saw its first 100F June day since 1988, the year parched ground caused $78 billion in crop damage. The percentage of the corn crop with top-quality ratings was 48 percent as of July 1; it was 69 percent a year ago. And with little rain in the forecast, farmers can only hope to preserve what crops they can while watching corn futures rise 33 percent since June 15, to $6.75 a bushel.
Read More @ businessweek.com

All you need to know about today’s NFP Report: U-6 Not Seasonally Adjusted SURGES higher 0.8%

from John Galt FLA:

The chart below is all you need to know about today’s report. Non-seasonally adjusted U-6 surged from 14.3% in May to 15.1% in June. Add that in with the total lack of job creation and the second wave of the “Great” recession appears to be right over the horizon.
Read More @ John Galt FLA

Debt crisis: Spain back in the dangerzone as politicians wrangle

Spanish and Italian borrowing costs soared back into the danger zone as traders bet that the policy action by central banks was inadequate defence against the continued political and financial chaos in the eurozone.
by Louise Armitstead, The Telegraph:
The yield on Spain’s benchmark 10-year bond rose above the 7pc bail-out level amid fears that opposition in Germany and Finland could crush the rescue plans agreed in Brussels last week.

The Finnish finance minister, Jutta Urpilainen, said her country was not prepared to keep the euro “at any cost.” She said the euro was “use for Finland”, one of the eurozone’s last remaining AAA-rated countries, but added: “Collective responsibility for other countries’ debt, economics and risks; this is not what we should be prepared for. We are constructive and want to solve the crisis, but not on any terms.”
Read More @ Telegraph.co.uk

U.N. finalizing Arms Trade Treaty, U.S. claims Second Amendment will be protected

by Madison Ruppert, Activist Post
Currently, the Obama administration is joining countries from around the world at the headquarters of the United Nations (UN) for negotiations, being held from July 2-27, 2012, attempting to finalize the Arms Trade Treaty (ATT), part of which is the somewhat infamous “small arms treaty.”
As Brent Daggett rightly wrote in his fantastic summary of the ATT, the treaty was originally proposed all the way back in 2003. However, it was not actually addressed in the UN until December of 2006 when the UN General Assembly adopted a resolution entitled, “Towards an Arms Trade Treaty: establishing common international standards for the import, export and transfer of conventional arms.”
Since that time, support for the treaty – along with what I believe are misguidedly optimistic interpretations of its implications – has grown considerably.
Read More @ Activist Post

The Man versus the State

by Herbert Spencer, Mises.ca:
Most of those who now pass as Liberals are Tories of a new type. This is a paradox which I propose to justify. That I may justify it, I must first point out what the two political parties originally were; and I must then ask the reader to bear with me while I remind him of facts he is familiar with, that I may impress on him the intrinsic natures of Toryism and Liberalism properly so called.
Dating back to an earlier period than their names, the two political parties at first stood respectively for two opposed types of social organization, broadly distinguishable as the militant and the industrial — types, which are characterized, the one by the regime of status, almost universal in ancient days, and the other by the regime of contract, which has become general in modern days, chiefly among the Western nations, and especially among ourselves and the Americans.
If, instead of using the word “cooperation” in a limited sense, we use it in its widest sense, as signifying the combined activities of citizens under whatever system of regulation, then these two are definable as the system of compulsory cooperation and the system of voluntary cooperation. The typical structure of the one we see in an army formed of conscripts, in which the units in their several grades have to fulfill commands under pain of death, and receive food and clothing and pay arbitrarily apportioned; while the typical structure of the other we see in a body of producers or distributors, who severally agree to specified payments in return for specified services, and may at will, after due notice, leave the organization if they do not like it.
Read More @ Mises.ca

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Hathaway – The Lengthy 10 Month Correction In Gold Is Over

from KingWorldNews:
During the second quarter, the gold price declined 4.3% from $1,668 to $1,597. On a year to date basis, gold has appreciated 2.2%. Gold mining shares as measured by the XAU Index (PHLX Gold/Silver Sector Index) declined 9.7% in the second quarter and 11.9% on a year to date basis. That is the bad news. The good news is that the lengthy ten month correction in the metal and the shares appears to have reached a conclusion. On Friday June 29th, gold rose $45/oz. and the XAU jumped 3.4%. While it might be premature to declare an end to the correction based on the action of one day, we believe that the weight of all evidence as discussed in the following paragraphs provides a substantial basis to suggest the stage has been set for a resumption of gold’s multi year advance.
The immediate catalyst for Friday’s rally was the conclusion of the summit of European leaders which signaled that Germany had relaxed its rigid stance against direct lending by the European Central Bank to recapitalize the European banking system. As noted by David Zervos of Jeffries in his 6/29/12 commentary, “The ESM, with access to the ECB balance sheet for leverage, is now a fiscal backstop (with a printing press) for the resolution of bad European banks…This is a huge step in the right direction for the global reflation trade.” In short, when push comes to shove, political leadership in all Western democracies lean towards inflationary policies and back away from fiscal austerity.
Hathaway continues @ KingWorldNews.com

A List of Survival Skills You Need to Have

from TheSurvivalMom.com:
Have you decided to take the Survival Mom Family Camping Challenge?  If so, you might find this list interesting and helpful. How many of these skills do you already have? Which do other family members have and which will you need to learn?
Keep in mind that these skills aren’t just limited to camping. They are basic survival skills as well, which might come in handy someday if you or your children are lost or need to evacuate to a rural area.

• Cook over an open fire
• Know multiple ways to start a fire
• Know how to safely put out a fire
• Store food safely outdoors
• Cook on a camp stove
Read More @ TheSurvivalMom.com

Exclusive: Germany pushes Libor probe of Deutsche Bank

from Reuters:
Germany’s markets regulator has launched a special probe into Deutsche Bank over suspected manipulation of interbank lending rates, joining authorities around the globe investigating the world’s largest banks, two people familiar with the matter said on Friday.
Investigators in the United States, Europe and Japan are examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor). Britain’s Barclays has so far been the only bank to admit wrongdoing, agreeing last week to pay a fine of more than $450 million.
The Libor rates, compiled from estimates by large banks of how much they believe they have to pay to borrow from each other, are used to determine interest rates on trillions of dollars worth of contracts around the world.
The two sources said Germany’s BaFin regulator was now probing Deutsche Bank with a “special investigation”, a process initiated by the regulator which is more severe than a routine investigation initiated by a third party.
Read More @ Reuters.com

Gold & Silver Market Update with James Turk July 2012 “Fear Event Coming”

from visionvictory

X-ray vans to hit the streets of America?

from RTAmerica:

Here at RT we continuously bring you the latest on the militarization of the police in the US. From armed tank-like trucks to military grade pepper spray, civilians are being treated more and more like villains, and now X-ray vans may be hitting the streets sooner than you think.

Rogers: Correction May Take Gold below $1,200

from Dan Weil, MoneyNews:

Legendary investor Jim Rogers remains a long-term bull on gold, but thinks the precious metal’s correction may still have a long way to go.
At around $1,600 an ounce, gold is down about 17 percent from last year’s record peak of $1,924.
Gold has been in a bull market for the past 11 years, and Rogers, who has owned it for longer than that period, tells Oilprice.com, “I don’t know of any asset in history that’s gone up 11 years in a row without a correction.”
Read More @ MoneyNews.com

Latest Bank ‘Glitch’: Largest Russian Bank Halts All Credit/ Debit Transactions

from Silver Doctors:
RBS’ NatWest, whose banking ‘glitch’ (which began only days after RBS’ downgrade) is now nearing 3 weeks with officials now stating accounts will not be functioning until the end of July!
It appears that either NatWest’s IT problems have gone viral, or else Sberbank has also been impacted by margin calls/ liquidity concerns, as the largest Russian bank has halted credit and debit card transactions due to an ‘IT glitch’.
Interfax reports:

RUSSIA-SBERBANK-CARDS-MALFUNCTION MOSCOW. July 6. (Interfax) – Sberbank of Russia (RTS: SBER) has suspended credit and debit card operations due to a technical malfunction, the bank told Interfax. “All cards are not being serviced,” it said.

Something tells us that Irish and Russian physical gold and silver holders are not experiencing ‘IT glitches’ evaporating their holdings.
Read More @ SilverDoctors.com

Hey, Serfs!

by Lew Rockwell, Lew Rockwell.com:

The other day we (wife, children) were going through (false) security at the airport. We split up to go through the lines, such that our refusals and opt outs are not so concentrated.
My wife got through pretty quickly with our young daughters (no X-ray or strip search, we try to find the right lines) My son and I were stuck in a different line.
We heard a “freeze, freeze” or something like this coming from the output side of (false) security (where my wife was), followed by further barking of commands. From where I was, I couldn’t see much.
It turns out they were doing a new drill. They want all passengers to freeze on command. My wife told me later that she didn’t follow this order fast enough, so the subsequent barks I heard were directed at her.
Read More at lewrockwell.com 

Steve Keen on the Minsky Singularity and the Debt Black Hole’s Event Horizon!

from CapitalAccount:


Greece drops demands for softer bailout terms, fearing rejection from international lenders. Australian economist and Debunking Economics author Steve Keen will tell us if this is a case when debt deflation wins and the real economy loses. In the US, new jobs numbers disappoint again. However, the number of consumer and business bankruptcies are falling and could end the year at the lowest level since the 2008 financial crisis. Is this good news? Maybe not, as it may be due to rock bottom interest rates. Also, student loan delinquencies are rising. Economist and Professor Steve Keen will talk about the toll that too much d

Eurozone exit: $390,000 prize for winning escape plan

from RT:
A Wolfson Economics Prize worth $390,000 has been awarded to a top British economic consultancy for the best plan for dealing with member states leaving the eurozone.
­The plan proposed by the winning economist Roger Bootle and his team from Capital Economics calls for on an orderly break-up implemented if a struggling EU member was forced to leave the single currency.
The winning paper says the country should disclose its plans just three days before acting, preferably on a Friday.
Read More @ RT.com

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