Saturday, July 2, 2016

Today's links

1--Here's Why Bond Yields Are Going Lower


The prospect of further cuts in interest rates and central banks buying bonds kept stock markets aloft in Europe and Asia on Friday, and drove U.S. and European government bond yields to their lowest in years...

The 10-year U.S. Treasury was recently yielding 1.42%, its lowest in four years; overnight, 10-year yields fell below the all-time low of 1.379% reached on July 25, 2012, according to Bloomberg. French and Dutch equivalents hit all-time lows and those for others among Europe’s struggling southern states were around their lowest in a year.

The fall in European government bond yields came largely thanks to a Bloomberg report that the European Central Bank was considering looser rules for bond-buying that might include moving away from a link between purchases and the size of a country’s economy. The report also helped European shares edge higher for a fourth day; U.S. stock markets were up slightly in recent trading

2--"I believe there is no way out", Kyle Bass interview (must read)

Looking at recent data, and specifically something we pointed out two weeks ago, Bass said the country’s $3 trillion corporate bond market is “freezing up” amid rising defaults and canceled debt sales. “We’re starting to see the beginning of the Chinese machine literally break down....


3--Media Exaggerations of Apocalyptic Venezuela Plays into Regime Change Narrative


4--Kyle Bass Says China’s Corporate Bond Market Is ‘Freezing Up’


China’s corporate bond market contracted by a record in May as tepid economic growth and a raft of missed payments spooked investors. Seventeen publicly-traded Chinese bonds have defaulted so far this year, up from six in 2015, and at least 188 firms have scrapped or delayed debt sales since the end of March, according to data compiled by Bloomberg....


Bass said in February that China’s lenders may suffer losses more than four times those at American banks during the 2008 credit crisis. He also predicted the yuan will fall in excess of 30 percent.
In the Real Vision interview, Bass reiterated that China’s lending binge in recent years has created “the largest macro imbalance in world history.” He expects bank losses of $3 trillion to trigger a bailout, with the central bank slashing reserve requirements, cutting the deposit rate to zero and expanding its balance sheet -- all of which will weigh on the yuan.

‘Not Armageddon’

“They’re going to do everything the U.S. did in our crisis,” said Bass, who has gone public with his China views since at least October. “Every single thing the Chinese central bank and central planners have to do is currency negative for them.”

5--The Fed's not-so-invisible hand--Stocks rise while bond yields tumble

the 10-year US Treasury note——the very benchmark of the entire global financial system—-had just kissed a record low yield of 1.38%. At the same moment, the futures market was signaling an open on the cash S&P 500 at 2110 or within 0.09% of its all-time high and at nosebleed PE ratio of 24X reported earnings.

Not in a million years would an honest, healthy, stable and sustainable free market have produced that combination. Starring at CNBC’s on set monitors, Fischer was looking at a screaming warning sign that financial markets have become radically unhinged. Starring into the cameras, he lied through his teeth in order to perpetuate the Fed’s sunny-side narrative.

6--Say what?  Neo-Nazi group crowns Scottish woman ‘Miss Hitler 2016’

She says she has lost friends over the years because of their “anti-fascist views” but now has a life partner and best friend “without whom I would be a very lonely Nazi.”...

“There are some people who I used to be friends with but because of their openly anti-fascist views, I no longer speak to. It makes me sad sometimes as I used to really enjoy their company.”
The woman says she is proud to be an NA member because of how “uncompromising” it is with its beliefs.
“This brutal honesty allows us to distinguish between the dedicated Nazis and absolute p*ssies.

7--US DoS Preparing 'Roadmap' for Clinton's Muscular Policy in Syria

8--Terrorists Used Turkey as a Base Before Syria War Broke Out

9--Russia, Turkey Reach Breakthrough Agreement on Fighting Terrorists in Syria

10--Economic inequality soars in US

Economic inequality leapt ahead in 2015 in the United States, with the average incomes of the top 1 percent rising twice as fast as the incomes of the remaining 99 percent of households, according to a study released Friday for the Washington Center for Equitable Growth. The top 1 percent had an average income of $1.4 million last year.

By far, the largest growth in incomes came in an even narrower section of the super-rich, the top 0.1 percent of households. These one-in-a-thousand households saw their incomes rise by nearly 9 percent to an average of $6.75 million.

The top 1 percent increased its share of total US household income from 21.4 percent to 22 percent. The top 10 percent collected more than half of all US household income, 50.5 percent, up from an even 50 percent in 2014. This was the highest figure for any year in US history, except for 2012.

These figures are based on an analysis of tax data by Emmanuel Saez, an economics professor at the University of California, Berkeley, who is well known for groundbreaking research into income and wealth inequality. The data from the Internal Revenue Service gives a more accurate picture of the growth of income inequality than US Census data, which exclude capital gains and other sources of non-wage income, which go almost entirely to the wealthy

11--The Istanbul airport bombing: Blowback from the war in Syria


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