Moments After Market Close, UAE Oil Minister Kills Hope Of OPEC Production Freeze

Earlier today, when Reuters quoted “sources” that OPEC may consider a new oil output ceiling, a recurring headline meant simply to spark algo-driven buying (which it did), we said that the “most likely next step: a denial from other “sources.” That is precisely what happened moments ago when with hours until the OPEC meeting in Vienna, the UAE oil minister Suhail bin Mohammed al-Mazroui repeated what he has said only yesterday when he said he was happy with the oil market, and confirmed there will be no unanimous oil freeze.

  • UAE OIL MIN. SAYS HASN’T HEARD ABOUT AN OPEC OUTPUT TARGET PLAN
  • UAE MIN. SAYS OPEC, OTHERS WOULD HAVE TO AGREE TO ANY FREEZE
  • UAE MIN. SAYS OPEC `CANNOT JUST UNILATERALLY DO A FREEZE’
  • UAE MIN. SAYS OIL MKT IS RECOVERING, STILL ROOM TO CORRECT MORE

But… if he hasn’t hear it, that begs the question where did Reuters hear it?  And then we recall that Reuters also happens to be one of the biggest FX trading platforms, and if there is one thing that causes FX volatility it is rapid commodity moves.

For those wondering if oil is down on the news, spoiler alert: no.

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Dismal Global Data Sparks VIXtermination-Driven Ramp To S&P 2,100

As if by magic, a boring Beige Book was all the algos needed to slam VIX and lift stocks to the magical unicorn level of 2,100 for the S&P 500… Because why not dump protection ahead of OPEC, ECB, and Payrolls – makes perfect sense really…Sadly, the machines just couldn;t hold it there for the close

 

Simply put, today's ubiquitous V-shape recovery in stocks is yet another example of the only way to win…

 

Futures show the deja vu-ness of today's deep V…It appears PBOC and ECB are sellers (need turmoil to stop The Fed) and The Fed is the VIX-selling, stock-buyer of last resort (we must hike to have ammo for when shit hits the fan)…

 

Since Friday, Dow is the biggest loser as Small Caps squeeze higher. S&P and Trannies scrambled baxck to unchanged and Nasda qclung to gains…

 

Another day, another short squeeze…

 

As the yield curve continues to flatten…

 

Credit markets were not buying this bounce…

 

Treasury yields dropped on overnight economic weakness then rose on US dismal data…makes perfect sense…

 

The US Dollar index drifted lower on the day as JPY surged after its dismal data dump overnight (Note Cable weakened further as more Brexit polls hit)

 

Commodities were once again a mixed bag, despite the USD weakness: Silver, Gold, and Copper slid as oil rebounded on more OPEC headlines…

 

Algos went wild in WTI – running stops around all the big figures…

 

Charts: Bloomberg

Bonus Chart: Looks like July it is…

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Greece To Manufacture Kalashnikovs For Russia… On One Condition

Amid rising social unrest as yet another bailout is negotiated to pass-through Greek government hands to the banks, this week brought some potentially good news for the Greek economy. Following Tsipras and Putin's meetings this week, ekathimerini.com reports that Defense Minister Panos Kammenos unveiled a new partnership with Russia to manufacture Kalashnikov rifles "ending the prospect of Greece's defense industry shutting down." There's just one small condition for this growth-enhancing, job-creating program to begin – Europe must end its embargo with Russia (and break with its Washington vassal status).

As KeepTalkingGreece.com explains,

Defense Minister Panos Kammenos was proud to announce a joint Greek-Russian project: the co-production of Kalashnikov riffles in a factory in Aigio in northern Peloponnese. But the manufacture will not start tomorrow.

 

 

It will start as soon as the European Union ends the embargo on Russia. Only then Greece will seek to obtain a license to manufacture Kalashnikov assault rifles.

 

“We are ready to begin manufacturing Kalashnikovs in Patra as soon as the Russian embargo is over,” Kammenos told the defense parliamentary committee on Tuesday evening. The Greek Arms Industry (now Greek Defense Systems) would manufacture the assault rifles, he said. ?owever he did not elaborate whether 100% of the production will take place in Greece or just part of it or just fitting.

 

He added that “with approval and certification by the NATO, Greece would be able to sell the rifles to any member of the North Atlantic Alliance.”

 

 

The verbal proposal for the co-production was made by Russia reportedly already a year ago, during Kammeno’s visit to Moscow.

 

Panos Kammenos said further that the GDS has already activated agreements with India  and the GAI expands its partnerships with Dassault and Lockheed-Martin , while partnership with Egypt is under consideration.

While this is 'great' news, we won't be holding our breath for Europe (vassal states of Washington) and NATO (US) to agree to making Kalashnikovs for Russia on their own turf. Once again, the resignation of sovereignty to a central union reduces Greece's ability to freely find growth opportunities.

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Can David French (Or Anyone Else) Get on the Ballot for President this Year?

I wrote back in January about the difficulties that Michael Bloomberg, rumored at the time to be thinking about it, would face in launching an independent presidential bid.

The notion of a new independent presidential candidate is in the news again with the trial balloon floated of running conservative commentator David French for president.

Again relying on information gathered in a paper-only copy of the indispensable Ballot Access News, edited by Richard Winger (who I would say had forgotten more than you’ll ever know about third parties and ballot access except I have no evidence he’s forgotten much), a list of states whose ballot access paperwork deadlines are earlier than two months from now. (Aug. 1 or later).

Following each state name in parentheses is the number of signatures required to get on the ballot. Collecting them, in accordance to generally varying state requirements, can be complicated and expensive, but it is a problem that money and organization can solve.

Deadine already past: Texas

Deadlines in June: Illinois (25,000), Indiana (26,700), New Mexico (15,388), North Carolina (89,366)

Deadlines in July: Delaware (6,500), Florida (119,316), Georgia (49,336), Michigan (30,000), Missouri (10,000), Nevada (5,431), Oklahoma (40,047), South Carolina (10,000), Washington (1,000)

Of the August 1 or later deadline states, only seven of them (Arizona, California, Maryland, Massachusetts, New York, Oregon, Pennsylvania) require over 10,000 signatures.

I have not yet done all the math about electoral college votes involving the states least likely to make the cut by legal signature deadlines, and there could be and likely are local complications that make things not as clear-cut as the above might indicate, but those are the official facts as complied by Winger.

I have heard rumor-y rumblings that Kristol and his team, if indeed there is a team, blithely assume that they can also sue their way through any existing timing barriers with ballot access laws even if they run afoul of them.

This isn’t a crazy dream, I am told by Winger in an email interview today. Some of his historical observations:

• “Five states have had June petition deadlines held to be too early: Alaska, Arizona, Nevada, South Dakota, Kansas.  The lower courts were following Anderson v Celebrezze, which outlawed early petition deadlines for independent presidential candidates.”

•  “Robert La Follette didn’t decide until July 4, 1924, to run as a progressive independent, and he got on in 47 of the 48 states, and the one he missed, Louisiana, was not a deadline problem.”

 • “Strom Thurmond in 1948 didn’t decide to run until mid-July, and he got on in all the southern states, the only ones he cared about.”

• “In the early years of government-printed ballots in the US, the typical state deadline was October.”

• “The Libertarian Party wins about half its constitutional ballot access lawsuits….Minor parties and independent candidates have won 55 lawsuits against early deadlines, including in California a few years ago.  The old January deadline for a new party to get on the ballot is now July.”

What defines whether a ballot access challenge wins or loses? Winger writes that:

The biggest and most important variable is which judge we get.  Some judges are instinctively sympathetic to underdogs and believe in the ideals of the founders.  Other judges are not. It is sad but very, very true.  We can have a weak case and get a good judge and we win.  We can have an overwhelmingly strong case and get a bad judge and we lose.

Recently, a US District Court Judge in Arkansas refused to enjoin a new law that says a non-presidential independent must submit his or her petition in November of the year before the election, even though 3 times in the past, later independent non-presidential deadlines had been struck down, and one of them was summarily affirmed by the US Supreme Court.

So, the French for America campaign may be absurd on many levels, but it is not necessarily an impossibility.

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“The Economy Is Better Off Now Than When I Started” – Obama Delivers Remarks On The State Of The Economy

No fiction peddling will be allowed at Obama’s speech taking place in Elkhart right now, where the president is delivering his well-oiled sermon on how “the economy is better off now than at the start” of his presidency.

Watch live below.

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Meet Ability Inc – The Israeli Company That Wants to Hack Your Cellphone

Screen Shot 2016-06-01 at 1.06.47 PM

When you first go on duty at CIA headquarters, you raise your hand and swear an oath — not to government, not to the agency, not to secrecy. You swear an oath to the Constitution. So there’s this friction, this emerging contest between the obligations and values that the government asks you to uphold, and the actual activities that you’re asked to participate in.

By preying on the modern necessity to stay connected, governments can reduce our dignity to something like that of tagged animals, the primary difference being that we paid for the tags and they’re in our pockets. It sounds like fantasist paranoia, but on the technical level it’s so trivial to implement that I cannot imagine a future in which it won’t be attempted. It will be limited to the war zones at first, in accordance with our customs, but surveillance technology has a tendency to follow us home.

– From the post: A Whistleblower Manifesto by Edward Snowden

Yesterday, Forbes published an interesting and disturbing article profiling a company called Ability Inc in the post: For $20M, These Israeli Hackers Will Spy On Any Phone On The Planet.

First, the good news. As the article notes, the company has been struggling as of late with lawsuits and it seems obvious to me that the reason Ability agreed to talk to Forbes is for some free advertising. If the company was performing particularly well, there’d be no need to agree to this interview and executives would try to keep their business practices as clandestine as possible. That’s the good news.

The bad news is that a global “industry” like this exists in the first place. While virtually all countries in the world have harsh penalties for individuals who decide to do drugs on their own time and to their own bodies, governments appear to have no problem with corporations that exist solely to violate people’s privacy. Probably because these same governments as the main clients of such companies. The fact that we put up with this and pretend it’s a legitimate business practice is an embarrassment to us as a species.

Now, without further ado, here are some excerpts from the Forbes piece:

continue reading

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Appeals Court Won’t Reconsider Ruling That Applies Title IX Protections to Transgender Students

restroom signA transgender student who sued his school district in Virginia in order to use the men’s restroom at his school (rather than the unisex bathroom offered to him) will be able to do so for now. (CORRECTION: The case goes back to trial court, where it will reconsider its previous ruling based on the appeals court decision.)

The 4th District Federal Appeals Court in Virginia has declined to give a full court en banc hearing that the school district had requested in an attempt to overturn a panel decision requiring the school to accommodate the student, Gavin Grimm.

The ruling affirms the current positions by the Department of Justice and Department of Education (and the Obama administration generally) that federal civil rights laws that protect against discrimination on the basis of sex also apply to discrimination against people on the basis of being transgender.

Part of the justification for this interpretation is based on a past Supreme Court decision that determined that sex discrimination laws cover discrimination against a person based on whether he or she exhibited stereotypical gender-based traits. The foundation of the case revolved around a woman denied advancement opportunities after being told she wasn’t “feminine” enough. This precedent is being used successfully in the courts to apply to transgender discrimination.

In this case particular, though, the court ruled that because Title IX’s provisions about sex-separated facilities are ambiguous about dealing with transgender students, the court should defer to what the Department of Education has recommended. And that guidance is for the schools to allow transgender students to use the facilities of the sex they identify as, if that’s what they choose to do. (Read the ruling here.)

The court turning the review away means a possible attempt to turn to the Supreme Court. But as it stands, because we don’t have contradictory federal rulings here, it’s not entirely clear whether the Supreme Court would take up a case, or at least this particular case. Certainly the lawsuit by a group of scattered states trying to halt the Obama Administration’s school rules are an effort to try to force the debate up before the Supreme Court. The case from the states, Politico notes, could end up right in this same federal court first.

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The Great Hollowing Out Of The Middle Class: New Business Formation Collapses

For a country that prides itself (or used to at least) on the success of the entrepreneur and small business creation, a disturbing trend has developed. According to according to a new analysis by the Economic Innovation Group, fewer new businesses were created in the last five years than any other period since at least 1980.

 

"It's hard to put into scale the collapse of new business formation. We have no precedent for that rapid and steep of a decline. It will have a ripple effect in the economy. You're going to feel that impact five, 10, 15 years in the future" said John Lettieri, co-author of the report and co-founder of EIG.

 

Businesses that did form during the last five years are far more concentrated than ever before, with just 20 counties accounting for half of the country's total new businesses, all of them in large metro areas around large cities such as Los Angeles, Miami, Chicago, Dallas, New York, and San Francisco Quartz reports.

 

As large metro areas saw new business formation, sparsely populated areas were hardest hit. What's also important to note, is that the new businesses are more tech oriented and less of the traditional construction firms and restaurants that have helped the middle class in prior years. A shift that has been driven primarily by entrepreneur access to capital.

From Quartz

Particularly hard hit were sparsely populated, rural areas. In the last post-recession recovery, counties with 100,000 or fewer people generated one-third of the country’s new firms (net) between 1992-96. By comparison, those counties lost 1.2% of their businesses between 2010-2014.

 

The second story is that the majority of new companies look more like tech companies than the construction firms and restaurants that have typically anchored middle-class prosperity. New business formation over the past five years tracked very closely with access to capital, particularly venture and other forms of risk capital, says the report. Of the top 20 counties, 13 were in just three states (California, New York, and Texas) with ample access to such money. That shift has given highly educated urban dwellers another advantage at the expense of everyone else, a disparity polls suggest is fueling the rise of Republican presidential candidate Donald Trump among working-class, rural Americans.

The decline in opportunity for rural Americans was set in motion by the financial crisis, which saw the number of independent commercial banks drop by 14 percent between 2007 and 2013. The collapse in housing prices only accelerated the issue, as the opporunity for entrepreneurs to draw home equity loans was wiped out as prices fell.

This great hollowing out of opportunity for rural and non-urban Americans was set in motion and then accelerated by the financial crisis. First, the 2007-2008 crisis gutted the financial sector, even among banks untouched by subprime-mortgage fraud. The number of independent commercial banks dropped by 14% between 2007 through 2013, according to the Federal Reserve (pdf), and the number of people with access to community banks (which traditionally loan to small businesses) plunged by 40%, says EIG. (Some of that reduction may have been mitigated by expansion of larger banks.)

 

Making this worse, the collapse in housing prices also exhausted one of the only sources of cash for would-be entrepreneurs: equity in their homes. As whole communities saw their savings evaporate, there was little to stave off a downward spiral amid layoffs and stagnation. “Personal wealth is a key ingredient for startups, and there’s not much wealth in these areas,” wrote Narayana Kocherlakota, head of the Federal Reserve Bank of Minneapolis, on Twitter about the report.

As a result, polls suggest that this trend of highly educated urban residents having advantages over everyone else is fueling the rise of Donald Trump in his bid for the White House. Economically, employment options are becoming depressed for those Americans who live in more rural areas of the US due to "a missing generation of firms" as John Lettieri calls it, which could prove to have significant consequences down the road in the form of unemployment benefits and a drop in consumer spending.

"Trends are pushing us faster in this direction as capital and knowledge-based economic activity are attracted to large, connected cities. Half-measures and policy tweaks may not be enough to stem this. It's only recently that we're starting to fully understand the challenge that new companies are facing. You need proactive and coordinated effort to start reversing that trend. It won't reverse on its own." Lettieri said.

* * *

One could argue that it was the intent of the Federal Reserve to eliminate competition for its members from the beginning, something that the latest financial crisis (created by the central bank) seems to have helped out with tremendously. Sadly, middle class Americans are paying the price for that.

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What Happens When Thousands Of Chinese Cab Drivers Get Pissed At Uber

Ride-hailing services such as Uber and Didi are a deflationary, VC-funded blessing and convenience to consumers (and lately, to Goldman Sachs). But to cab drivers, the services provided by the Ubers and Didis of the world are a mortal threat: in the past we have seen troubling images from many corners around the world, most notably Europe, when the taxi industry, threatened by the new service, take arms – in some cases literally – against ride-hailing apps.

But in this latest example from the central Chinese city of Xi’an, courtesy of Tech In Asia, we see what happens when thousands of Chinese cab drivers take aim at consumer convenience. As you can see in the images below (which come via some Xi’an-based Sina Weibo users), taxi drivers congregated in a central area near the city’s ancient bell tower and made themselves into a massive traffic jam.

 

The protest apparently ended the way most protests in China do: with a large concentration of a different sort of car:

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