By Tyler Durden
Well that un-escalated quickly…
It appears Facebook Ads trumps trillions from Kuroda… for now…
With those stops run, we wil be interested to see what happens next.
Source: ‘Investors’ Panic-Buy S&P At Open – Erases All BoJ Cliff-Dive Losses
By Tyler Durden
As reported moments ago, Q1 GDP which came at just 0.5% growth, was a lousy number in which virtually every component besides personal spending (and government) subtracted from growth. In fact, in nominal terms, Q1 GDP grew only $22.2 billion annualized, of which personal consumption was more than double, or $52.5 billion.
But what did Americans spend money on in Q1? To our surprise, Healthcare, Obamacare was no longer what soaked up most Americans’ cash in the first quarter (nonetheless, it was a runner up with $10.8 billion in spending).
So what did they spend the most amount of money on? The answer, drumroll…. Recreational goods and vehicles. Not cars, which actually were a huge negative to Q1 GDP growth, reducing the headline consumption number by $13.4 billion nominal, but recreational vehicles, and other sundry related goods, which amounted to to $11.3 billion in Q1 spending.
It appears that after spending record amounts of money on their health insurance premiums, US consumers just can’t get enough of various “recreational” distractions such as RVs, ATVs and jet skis, and have made “recreation” the biggest source of growth in the US economy. Incidentally, net of other items, the entire Q1 GDP growth was covered solely by spending on Healthcare and Recreational goods and vehicles.
Summarizing the Obama economy: health insurance and jet skis, for waiters and bartenders.
Here is the full breakdown.
Source: What Americans Spent The Most Money On In Q1
Low gas prices produce strong sales and record earnings and profit margins for Ford. …read more
Source: Ford reports record earnings
By Tyler Durden
As China’s credit fueled craziness rages on, individual “investors” have been tripping over themselves trying to get in on a piece of the action, opening up enough brokerage accounts for every man, woman, and child in LA and pouring hard earned money into “investment” opportunities such as P2P funds.
This has of course lead people to game the system, recall Ezubao’s $7.6 billion P2P ponzi scheme that led to the arrest of 21 people earlier this year, and more recently the shuttering of Zhongjin Capital Management, which also led to 21 arrests on charges of suspicion of illegal fundraising.
It now appears that we’ve reached the point in the game where instead of waiting around to be arrested, those running shady ponzi schemes are now pulling the ripcord, clearing out as many bank accounts as possible, and just disappearing.
In the latest development in the crumbling shadow banking sector, police in the Chinese city of Hangzhou are searching for the chairman of the Wangzhou Group who allegedly disappeared with $154 million according to Reuters.
The Wangzhou Group is the parent of asset management firm Wangzhou Fortune, has more than 20,000 investors.
Investors had reported “problems with the company’s cash flow” since last Monday, Xinhua said.
To repay investors, Wangzhou Group plans to retrieve about 1 billion yuan in principal and interest payments on loans it has made and cover the additional 1.2 billion yuan shortfall by selling property, Xinhua quoted a company statement as saying.
We expect this won’t be the last time we hear of such a thing taking place, because after all as the credit bubble starts to burst, China authorities will try to root out more fraudulent firms in order to try and get ahead of the situation.
An effort that will inevitably be too little, too late.
Source: China "Wealth Manager" Disappears With $154 Million
By Sprott Money
Posted with permission and written by Sprott USA (CLICK FOR ORIGINAL)
Gold continues to consolidate. Two months of sideways price action is proving the yellow metal’s early-year gains were justified while setting the foundation for another move up.
That move will require some kind of impetus and there are many options to provide the push: more stimulus announcements in Europe or Japan, weak Q1 earnings, increasing inflation expectations, rising general economic uncertainty, US dollar weakness, and interest rate roulette, to name a few.
We don’t know if these things will transpire, let alone when. The US dollar is certainly declining, if in fits and starts:
That helps gold, from both the fundamental angle that gold is priced in greenbacks and the investment rationale that a declining greenback encourages savers to find another safe haven hideout for their savings.
But a declining dollar is only one cog in a machine driving investor interest towards gold. Another is the fact that super low interest rates have removed investors’ go-to tool for hedging their stock portfolios: bonds.
No matter what you think the odds are of a recession in the near to medium term, the fact is we are in uncharted waters. Very low or zero to even negative interest rates had their intended effect, which was to force savers and investors into riskier assets like bonds and equities. That created a seven-year bull market in equities and bonds – but one not representative of the actual economy, which remained stagnant.
That is what already happened. Of interest now is what will happen next.
Bonds have long been the go-to hedge against equities. Bonds are supposed to rise in price when recessionary periods push equities down, because recessions prompt central banks to lower interest rates and that lifts bond prices.
But how’s that supposed to work when interest rates are already rock bottom?
Bonds will not hedge stocks if we enter a recession because central banks can’t do anything to support bonds. That means investors will look elsewhere for a hedge. Gold will be a natural conclusion.
As John Hathaway of Tocqueville Asset Management calculated, if investors were to increase their gold allocation from 0.55% (the current level) to 1.55%, that would represent 56,075 tonnes of demand. That is far more gold than is currently available in London. In fact, a 0.1% increase swamps the supply of physical gold.
[2]
That is the kind of logic that backs the idea that gold has a good run ahead.
Gold moving sideways and consolidating supports the view that gold’s run has truly begun. The way equities are acting adds weight.
Gold stocks outperform gold at the start of a bull cycle. Take a look back to the last cycle: gold bottomed in April 2001 but then ascended slowly, not making a new …read more
Source: Gold and Silver Update – It’s Game On!
By Tyler Durden
Authored by Pepe Escobar, Op-Ed via RT.com,
The famous Hollywood adage – 'nobody knows anything' – seems to perfectly apply to the current turbulence in the oil market. So in an effort to clarify where the global oil economy is heading to, let’s engage in a Battle of the Oil Analysts.
Relying on these Oil Analysts (OA) does not necessarily mean you will be handed straightforward answers, but perhaps with some luck you will see a ray of light.
Saudi Arabia is saying that they are raising oil production to 12 million barrels a day. That’s highly debatable. Russia is saying that they can raise oil production to 13 million barrels a day. OA1 cuts to the chase: “Both are bluffing. Prices are still rising. That means no one believes them.”
OA2 kicks in, reminding that, “oil price is holding because of the 1.5 million barrels a day pulled off the market by a strike in Kuwait of about 10,000 workers. That cut their 3 million barrels a day production in half. Now they are going back to work. Yet the price of oil is still rising.”
I had explained before how the oil price was holding over $40.00 a barrel even with concerted Washington pressure over Saudi Arabia to keep it down. Then, OA3 had told me: “that’s because oil demand and supply is tightening.”
But then OA4 came up with a totally different outlook; the whole thing was about 'The Big Long', upon which I based my prediction of $45/$50 per barrel when I was in Tehran in November 2011 and the price was approaching $100 a barrel. The Saudis have been supporting the price and while they have plenty of capital to do so at high prices, storage is finite. Aligning with this, OA4 added that: “the market is about to crash, and is only being supported by the financial positions of the Saudi/GCC support operation, now unwinding.”
OA5, predictably, could not agree that the Saudis are supporting the market and about to let it collapse. He elaborated on how “hard it is to predict day-to-day prices. The only way you can know what is happening is to watch by satellite or surface observation the tankers coming out of each exporter, assume they are full, check their names to look up their capacity, and then add up what is leaving each exporter. What they say otherwise means nothing. There are services that do this that cost about $300,000 a year.”
OA6 kicked in with some perspective, explaining what happened in the middle of 2014: “The oil price started to crash with no visible increase in production. The deduction had to be that the surplus in the Gulf – which was the only place where there was a surplus – was being dumped in the market by the Gulf States, under orders from Washington. And this fit geopolitically with the uprising in Kiev as a replay of Afghanistan.”
If there is a consensus amongst most OAs, it is that Saudi Arabia is hurting. OA7 …read more
Source: "Nobody Knows Anything" – The Battle Of The Oil Analysts
Elon Musk’s SpaceX has been awarded an $82.7 million contract to send a U.S. Air Force satellite into space. …read more
Source: SpaceX just landed a coveted military contract
By Tyler Durden
Submitted by Mike “Mish” Shedlock
More Greece “Uncertainty”: Default Looms in July, EU Rejects Greek Emergency Summit
Those who thought the situation in Greece was solved after prime minister Alexis Tsipras suddenly caved in to creditors’ demands need think again.
Greek tax revenues are running well under expectations. A default looms in July unless the creditors give more money to Greece so that Greece can pay back the creditors. As convoluted as that sounds, that’s precisely the way this madness works.
The creditors demand still more austerity but Tsipras said “no”. Instead, Tsipras seeks an emergency meeting, but European Commission president Donald Tusk said “no” to that proposal.
Supposedly this standoff represents “renewed uncertainty”.
Emergency Meeting Request Denied
The BBC reports EU Rejects Greek Request for Emergency Summit.
The head of the European Union has rejected Greece’s request for an emergency meeting aimed at ending an impasse over the country’s bailout.
Greece agreed to a third rescue package worth €86bn (£60bn; $94bn) last year and faces a looming debt payment. However, it has been unable to unlock the next loan instalment after clashing with its creditors over more reforms.
The International Monetary Fund and other European partners are demanding that Greece implement further austerity measures. They are looking to generate nearly €4bn in additional savings or contingency money in case Greece misses future budget targets.
But the left-wing government led by Alexis Tsipras has said it will not agree to any “additional actions” to what it had already signed up to last summer.
A special ministerial meeting was supposed to be held on Thursday, but Dutch Finance Minister Jeroen Dijsselbloem, who is in charge of the Greece negotiations, called it off.
Summit Request Denied
The Financial Times reports Donald Tusk Rejects Alexis Tsipras Summit Request.
Donald Tusk, the European Council president, has turned down a Greek request for an emergency summit on Athens’ bailout and told eurozone finance ministers to do more to narrow their differences.
Without a deal on new austerity measures, Greece faces a default on €3.5bn in debt payments that come due in July.
Greece is fast running out of cash to pay salaries and pensions in May because of lagging tax receipts. To cover the gap Mr Tsipras’s government has been strong-arming state entities, from the cash-strapped health service to the profitable water utility, to empty their bank accounts and place the funds with the central bank in a short-term loan arrangement.
Bailout negotiations have stalled over a request by the EU and the International Monetary Fund, Greece’s main lenders, that Athens legislate €3bn in “contingency” budget cuts that could be triggered if the programme veers off-course and fails to produce projected surpluses.
Euclid Tsakalotos, the Greek finance minister, has told negotiators getting additional cuts through the Greek parliament is politically impossible, and has asked instead for lenders to …read more
Source: Greek Default Looms In July After EU Rejects Greek Emergency Summit
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Stocks in Tokyo plunged into negative territory after the bank said it was refraining from unleashing any fresh stimulus measures. …read more
Source: Bank of Japan shocks with vote against more stimulus
By Tim Knight from Slope of Hope
Today I received in the mail the State of California Primary Voter’s Guide, which the Secretary of State prints up by the millions and sends to every blessed citizen. I was expecting a few boring candidate statements of the U.S. Senate – AKA the World’s Most Exclusive Club – but, boy, was I wrong. Just take a look at some of these gems.
First off is a chap named Tim (I like him already………) who, understandably, doesn’t associate himself with any particular party. It seems what matters to him most is good old J.C., and he comes right to the point:
Next up is a woman whose first name, apparently, is President (which is shooting a bit high, since she only wants to be a United States Senator, a “prolific occupation”, as she puts it). For those considering whether or not to give her their vote, keep in mind that she is “mainstream Facebook in social media”, to say nothing of the fact that her core values are what drive America.
Mr. Peters, who decided not to bother sending in a photograph, is an “Andrew Jackson Democrat”, which I guess means he will soon be removed from our currency. The last 118 years, evidently, were misguided.
Karen Roseberry goes oblique on us with this coined phrase…….
If you take the time to go to her web site, however, you can start to drink in her qualifications for this high office.
My personal favorite, being from Silicon Valley myself, is Jason Hanania’s, who offers up a binary statement (which cost him $25, the per-word rate, for his entire statement).
Mike Peitiks is sporting a rocking beard and offers up his “single board” of a platform, which is climate change. I’d like to point out not one other candidate swore on the graves of future Californians. Not one.
Lastly, we end with Ling Ling Shi who, at long last, is willing to challenge the “10 giant chaos in economy” that we’re all so weary of fighting. Rock it, Ling Ling!
Source: World’s Most Exclusive Club
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