Your Job

People are always looking for similarities from the past to predict the future. This blurb is from:
http://www.zerohedge.com/news/2016-07-11/good-luck-getting-your-money-out-when-next-crisis-hits. The comparison here is with Bear Sterns crashing and the market making new highs afterwards before the whole thing later unraveled.

After the new high in the market today articles like this are also common: marketwatch.com/story/its-only-a-matter-of-time-before-the-global-melt-up-2016-07-11. Your job, should you choose to accept it, is to figure out which one is correct. that's why it's called a stock market.

Another similarity between 2007 and 2008 has hit.
The first major warning sign of the 2008 meltdown was several Bear Stearns hedge funds that specialized in subprime mortgages imploding.
The UK is now experiencing something very similar.

Three more fund managers have stopped investors from leaving their UK property funds, trapping an additional £5.5bn and bringing to six the funds unable to meet withdrawal requests after the Brexit vote.

More than half of the £25bn of funds committed to commercial property by retail investors is now locked down by managers, who are under pressure to sell buildings to raise cash.

Overnight

This is more a story about Wall Street where the S&P 500 index crossed over into new ground Monday than it is about Asian markets.  Last week the index bumped up against the new high but didn't quite close there. The shift comes as the S&P 500 SPX, +0.34% hit an intraday record of 2,141.30 and closed at a record 2,137.16, surpassing its previous all-time high of 2,130.82 set May 21, 2015.

 Taking their lead apparently from the U.S., Asian markets across the board were up, continuing a bull move that started on Monday with the Nikkei 225 leading the pack, up 2.65%. The index is now up 6.7% in two days, this in anticipation of further stimulus from the Bank of Japan after Prime Minister Abe's election win on Sunday.

Reuters reported: Those gains are being replicated across the region, albeit on a smaller scale.
Like stocks, higher-yielding currencies are all up for the session, mirroring similar moves in commodity markets.
Government bonds yields, despite still remaining near all-time record lows, are also modestly higher.
The world is suddenly good again, just two week's after looking like it was all going to come to an end.
The only question now is what will happen when the expected stimulus splurge arrives, presuming that it will. A lot is being priced in, suggesting that there's scope for disappointment.
 
Anyway, that's for another day.

• ASX 200 5385.40 , 48.30 , 0.90%
• Nikkei 225 16124.36 , 415.54 , 2.65%
• Shanghai Composite 3010.55 , 15.63 , 0.52%
• Hang Seng 21025.34 , 144.84 , 0.69%
• KOSPI 1988.86 , 0.32 , 0.02%
• Straits Times 2890.66 , 14.52 , 0.50%
• S&P 500 Futures 2131.50 , 1.25 , 0.06%

Here's what action overnight looked like in other markets, again according to Reuters.
Currencies

• USD/JPY 102.98 , 0.19 , 0.18%
• USD/CNY 6.6997 , -0.0053 , -0.08%
• AUD/USD 0.7590 , 0.0061 , 0.81%
• NZD/USD 0.7266 , 0.0048 , 0.67%
• AUD/JPY 78.16 , 0.77 , 0.99%
• EUR/USD 1.1086 , 0.0030 , 0.27%
• GBP/USD 1.3085 , 0.0092 , 0.71%
• USD INDEX 96.336 , -0.2350 , -0.24%

Commodities

• Gold $1,355.20 , $0.35 , 0.03%
• Silver $20.38 , $0.12 , 0.57%
• WTI Futures $44.97 , $0.21 , 0.47%
• Copper Futures ¥37,080 , ¥260 0.71%
• Iron Ore Futures ¥443.50 , ¥16.00 , 3.74%

10-Year Bond Yields

• Australia 1.958%
• New Zealand 2.320%
• Japan -0.260%
• Germany -0.159%
• UK 0.761%
• US 1.437%

Britain Will Survive

Most have heard those words to the song about "Don't cry for me, Argentina." Well, the tears coming from the crybabies who can't get themselves to accept the Brexit results make those Argentina tears look like a mere cloudburst.

In today's WSJ Simon Nixon writes: " Britain's exit from the European Union promises to be one of the most complex divorce negotiations in history: Untangling this 43-year relationship will require painful decisions that touch upon almost every aspect of national life."

As for the record setting history and complexity of the divorce, it's obvious Mr. Nixon didn't go through ours. There are plenty of longer standing relationships than 43-year ones that bridge this gap. One needs to remind Mr. Nixon that Brits are quite adept at minding the gap.

He goes on to talk about the types of debates taking place in the UK and the continent over the process and timing since, a popular crybaby stall, nobody has a credible (There's hedge term, if you've ever heard one!) exit plan, the government should hold off invoking Article 50 for two years. Maybe by then, crybabies like Mr. Nixon hope, these rubes who voted to leave will have discovered the error of their ways.

Here's a guy who has the nerve to mention complexity and the EU in the same breath. The EU, my man, coined the original term complexity. You can wager your last beloved sterling it wouldn't take Margaret Thatcher long to make that decision. Even before the vote was announced many EU bureaucrats were quoted that if Brexit passed," leave means now." There's no two year holding period to that. Jean-Claude Juncker, the pathetic EU Commission President, seconded that motion in more ways than one.

Mr. Nixon than bewails the possibility that discussions might become acrimonious. Really. The idea that unless the UK strikes some trade deal with the EU, the island will pull an economic Houdini and disappear from the planet is pure scaremongering. There's probably more souls around the globe willing to purchase UK products now than ever for one simple reason: they had the courage to stand up and strike a blow for liberty for damn near everyone who actually cherishes it.

As for concerns about acrimony, wasn't that what stay people and their Brussels cohorts did nearly the entire pre-election time, bringing in all those scaremongering, name-calling heavyweights. The next UK PM, whoever she is, needs to find her mark on the floor, look the EU bureaucrats dead center in the eyes and: tell them: "We are the proud British people. We played your bureaucratic games for 43years. It's over." And then let the chips fall whichever direction they take. Britain will survive. It's extremely doubtful the EU will.

CB Caused Mania

As negative interest rates spread around the globe anyone with even a little common sense should realize this can't end well. Manias hardly ever do.

But if you're looking for people with a bit of that common sense trait, you need to look elsewhere than the confines of central bank edifices. Investor quest for yield is now at mania proportions and only going to get worse as global central bankers in the main continue to pursue what has been and clearly is failed policy.

Last week the yield on 10-year U.S. Treasury notes hit 1.366%, a record close. According to one report, there is currently $13 trillion negative yielding debt floating around the globe and spreading faster than the Zika virus. There was supposedly $11 trillion before UK voters voted to thumb their noses at the EU and as late as mid-2014 none.

Italy, a country hardly known for it economic forthrightness, reportedly has $1.6 trillion negative sovereign debt. A cynic might ask where is the sovereignty in  that? Here's some more sovereignty for you. Fifty year Switzerland bonds, the nation's longest maturity holding, now offer negative yields. We know what's going on in Japan and Germany isn't much different where nearly 80% of government bonds offer negative yields.

Is there anyone left who thought corporate debt was immune to such madness. If so we have a good tax-payer secure job with plush benefits. Just apply at your local branch of the Federal Reserve Bank. What central bankers have done and are doing is a crime against humanity. Let's start at the beginning nearly a decade now ago when the Fed essentially kicked off this economic charade.

To assume that these so-called economic experts didn't realize cutting rates would end up ultimately benefiting the few and hurting the many leaves only one of two possible conclusions: either they are not economic experts and haven't a clue or they knew precisely what they where doing: screwing older people dependent on fixed income and the like or purposely widening the economic gap between the haves and the withouts to bailout their rich banker and Wall Street friends.

It matters little now because these policies are an outrage and can easily be classed as a crime against humanity. And like anyone else they should be held accountable for their actions. We think it comes under the heading more of gross negligence than the latest MSM buzz "excessive carelessness."

Either way, for those enamored with the idea of a global court, let's see how much these closet globalists like the concept.

 cafe4now.blogspot.com

Close The Public Trough

France got away with it for a longtime, bending the EU rules as the organization's second largest economy. It's all part of the big dogs get fed first.

Now Italy, the EU's third largest economy, wants its place at the bailout or bail-in trough. Anyone surprised here. One of the huge phony recovery stories since 2008 was that anything got fixed, that anything changed. It didn't. That's just part of what Brexit is about. Another part is the pubic trough.

Change is afoot on a global scale and it could get pretty ugly, but it's a change, or changes, to be more precise, long overdue. Change never goes down easily. The false MSM meme that debt and money printing don't matter is now coming home to roost. Debt either gets defaulted on or inflated away by wars.

We're now talking trillions here and it will never be repaid. And in case you have not been paying attention, the elites are trying to gear up the rubes for another conflict. Central banks have made a complete mess of things, but what would one expect of  a group of distance academics and bureaucrats huddled around a committee table?

Italy's ongoing attempts to bend Europe's bail-in rules and revert to the "older" bailout protocol continue to run into problems. The latest confirmation came from Eurogroup head Jeroen Dijsselbloem who earlier today said he was not "particularly" worried about Italian banks. More interesting was his insistence that “there have always been and will always be bankers that say ’we need more public money to recapitalize our banks.... and I will resist that very strongly because it is, again and again, hitting on the taxpayer." He then added that "the problems with the banks need to be sorted out in the banks and by banks.”

He sided further with the Merkel camp when he said that he finds the ease in which bankers ask for public funds to sort out problems is “very problematic.”
Dijsselbloem added that “there has to come an end to” bankers asking politicians to solve their problems.
His statement comes just a day after David Folkerts-Landau, the chief economist of Deutsche Bank, called for a €150 billion bailout for European banks, confirming that it is no longer just an "Italian" issue.
Dijsselbloem's further comments showed that he won't be easily swayed absent a market-wide panic and/or a steep slump in the economy

The only problem, Dijsselbloem either by accident or purpose forgot to include politicians need to quite causing these problems and balance their own spending. Close the public trough.

zerohedge.com/news/2016-07-11/eurogroup-head-dashes-italy-bank-bailout-hopes-i-will-resist-taxpayer-bailouts-very-