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Friday afternoon saw chaotic trading in GBPUSD (cable) as headlines flip-flopped before finally settling on a "deal" had been agreed between Cameron and The EU. Hope was high that this was a positive for "staying in" and cable rallied. But that has been dashed on the shores of Boris Johnson as London's mayor will campaign to leave the EU sending GBPUSD down 120 pips at the open.

Just as we warned: "If Johnson refuses to back Cameron, the Friday afternoon spike in the GBP may be very promptly undone."   

 

Other Brexit risk indiators remained at record highs into Friday's close…

FX Volatility butterfly…

 

And credit spreads…

 

We will see how they open late this evening.

via Zero Hedge http://ift.tt/1QTgfGo Tyler Durden

Via SaveScranton.com,

This video first premiered on NEPA Scene a couple of days ago.

The documentary begins with an explanation that Scranton has won the ignoble title of being the unhappiest place in America. This is quite the accomplishment considering that there are places in America that are literally swamps but they still find a way to be more optimistic than Scrantonains. The film delves into the reasons as to why the city and its citizens seem to have such a negative view about Scranton. According the film, the malaise in Scranton is due to economic depression, education, drinking and mental attitude. The film also features the Facebook page “Scranton Sucks” and asks one of the admins, “why does Scranton suck?” The administrators answer was insightful and brought home the point that Save Scranton has been championing since it first started- The government is the problem. The film ends with a question about whether the prospects of Scranton are half full or half empty. We at Save Scranton have decided to share our perspective on the ideas explored in this film and provide some commentary. Here we go:

Is Scranton the Unhappiest

It would be difficult to establish this as a matter of fact but it can be assured that Scrantonians are definitely unhappy about living in Scranton. It isn’t hard to understand why someone would be unhappy about living in Scranton. Scranton features a terrain of blighted homes, boarded businesses, crumbling roads and zero prospects toward progressing past its current state. The film appeared to make it seem like the reason for this was the lost of the coal mining, shipping and textile industries but Scranton has not been the only city to face the loss of its key industries. We have said quite clearly that the problem with the city of Scranton is dubious leadership, lack of vision and incompetence of the local government.

The Economy

The film explored the lack of economic prospects in Scranton and inquired about it like an open-ended question. What we found troubling is that film did not seem to be truly versed in the economic problems of Scranton. As we said in many articles such as “The Failure Of The Scranton Political Elite“,”The Real Story of How Scranton Became Broke“,”The Government Haves and The Working Class Have-Nots“, and “The Kingdom of Scranton” the Economic malaise in Scranton is due to the political machine that has its dirty little mitts tightly wrapped around the city of Scranton. It appears that the film avoided alluding to this fact. It also did not speak about the chamber of commerce purposely keeping good businesses out(here).

Education

With free MIT courses online, Khan Academy, Coursea, Open culture, Open Yale courses, Tufts Open CourseWare, How Stuff Works, TED, EDX.org, Codeacademy, Duke U, etc.. Education is free and available to anyone who wants it. It is often a perspective that is presented to people to have them believe that education is only found within a classroom or university. The response this is “if university makes people educated then who created university in the first place? A bunch of uneducated people?” Read the story of Benjamin Franklin, the guy was self-taught. I argue that the education issue in Scranton has more to do with self-esteem and confidence than anything else.

Drinking

Oh yes, Scranontians do love to have themselves a drink. In fact, it was one of the first things I witnessed when I first came to Scranton. Being from NYC, the presumption was that drinking was a social affair. Often times, people in Scranton drink as a way of coping with being in Scranton. I can hardly blame them. When you have a political entrench machine in place that functions like a criminal enterprise and manages to ruin the entire city without skipping a beat, it does make you want to take a drink.

Scranton Sucks

Now, the Facebook page Scranton Suck is pretty adamant about Scranton really sucking. The film happened to get one of the administrators on the phone to ask them why they thought Scranton sucked. Without any hesitation the folks at Scranton Suck spoke about the absurd high taxes that drive out businesses and the city council being incompetent. Doesn’t that sound familiar? The film seems to avoid really discussing this. It might be throwback to that tried and true tradition in Scranton of not discussing politics, but this reality concerning the incompetence of the local government and shadowy underworld behind it cannot be avoided. Scranton sucks because of the Scranton government and company period.

Finally

The film ends with the question is the glass half full and empty for Scranton. In the film, People began recounting how the glass was half full, or even all the way full, because there was “something” here. Let’s be honest, there is no glass in Scranton as it stands today. It is completely delusional to believe that Scranton has any prospects when you have a political machine, local government and chamber of commerce hell-bent on keeping the city dejected and ruined. The truth that we all must face is that Scranton will never get better until we run these shadowy figures out-of-town, take control of the city, and enact policies that encourage growth, progress and innovation. The glass has been stolen and we all know who the culprits are. Let’s be honest and call a spade a spade. The Scranton government and the political machine behind make Scranton Suck!

via Zero Hedge http://ift.tt/1oCrnBh Tyler Durden

The Jats are angry.

Violent protests by the rural caste have left 10 dead and 150 injured in Haryana, India where the government has sent 4,000 troops and 5,000 paramilitaries with shoot-on-sight orders.

The week-long riots reflect frustration with a lack of employment and university opportunities. “The Jats are demanding quotas for government jobs and university places for their caste, saying they are struggling to find opportunities despite India’s strong economic growth,” AFP writes. “India reserves places for lower castes in measures intended to bring victims of the country’s worst discrimination into the mainstream but the policy causes resentment among other communities, who say it freezes them out.”

The protests turned violent on Saturday when demonstrators set fire to residences and looted stores. “There were clashes during the night across the district,” an officer told AFP. “Over a dozen buildings were set on fire by protesters, with incidents of looting of shops and ATMs at two places.”

“Protesters have attacked the homes of regional ministers, torched railway stations and staged sit-ins on tracks, blocking hundreds of trains,” Reuters reported, earlier today. They also damaged pumping equipment at a water treatment plant causing New Delhi’s Chief Minister Arvind Kejriwal to call for water rations across the city and close schools on Monday. 

“No water available now. Still no hope to get it,” Deputy Chief Minister Manish Sisodia said on Twitter.

“We are not in control. The situation is very tense as thousands of protesters are on roads encircling the main administrative area in the town,” Jhajjar police chief Rajiv Kumar told AFP.

The ten people killed over the past week were shot by police who are attempting to bring the situation under control. “We will keep going until the government bows to our pressure,” Rajendra Ahlavat, a 59-year-old farmer and protest leader told Retuers. There is no way we will take back our demands.”

The Jats comprise some 25% of Haryana’s population.

Home Minister Rajnath Singh is scrambling to table a state assemly bill to meet the Jats’ demands.

Lets hope he pushes it through quickly because it appears the Jats aren’t prepared to back down. “We are here to die,” the abovementioned Rajendra Ahlavat said on Saturday.

If the last five days are any indication, government troops are happy to oblige. 

via Zero Hedge http://ift.tt/24ksB4h Tyler Durden

One week ago, when we commented on the latest weekly update from Credit Suisse’s very well hooked-in energy analyst James Wicklund, one particular phrase stuck out when looking at the upcoming contraction of Oil and Gas liquidity: “while your borrowing base might be upheld, there will be minimum liquidity requirements before capital can be accessed. It is hitting the OFS sector as well. As one banker put it, “we are looking to save ourselves now.“

In his latest note, Wicklund takes the gloom level up a notch and shows that for all the bank posturing and attempts to preserve calm among the market, what is really happening below the surface can be summarized with one word: panic, and not just for the banks who are stuck holding on to energy exposure, or the energy companies who are facing bankruptcy if oil doesn’t rebound, but also for their (now former) employees. Curious why average hourly earnings refuse to go up except for those getting minimum wage boosts? Because according to CS “It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months.”

From the latest Things we’ve learned this week

One Last Cigarette? Some comments that stood out to us during earnings include, “We are in a period of unprecedented uncertainty.” “We are managing our business week-by-week, crew-by-crew and unit-by-unit.” “We are in a generational downturn.” “We are very bearish for the first half of the year.” “In the second half [of 2016], every tank and swimming pool in the world is going to fill…”

 

On the Precipice. Oilfield Service companies have reduced headcount by as much as 35% in some cases and the reductions continue as oil prices not only continue their decline but the argument for a strong price comeback gets more and more difficult to rationalize. It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months. People who had been saying that this is the worst downturn since the 1980’s are now thinking that this is a return to the 1980’s. There are reports of banks selling loans at cents on the dollar to try and ensure their own survival and bankruptcy courts and workout specialists are seeing their best market in decades.

Wicklund concludes with some even more troubling observations about the recent OPEC headline-induced volatility and the future price of oil:

Rolling On. What was originally a “surplus-induced” downturn is now turning into a global credit downturn, with economic demand and GDP continuing to decline. US corporate debt levels are close to all-time highs as a share of GDP and global monetary policy has very few levers left to pull. “Duration” has become the new buzzword, “survivability” appears to be the key investment metric and any lights in the tunnel appear to be dimming.

 

The Fix. Demand was going to be the bailout and specifically consumerled demand, however, just about every economic report issued seems to deny that possibility. It is easy to say that with demand growing and capitalstarved supply waning, reaching balance and beginning growth is inevitable. But it may not be as simple as that and the timing remains one key question. And that key question is one that everyone has an opinion on. Now, it appears that Saudi, Russia, Iraq and Iran MIGHT come to some agreement to cap production growth at January levels, which was up more than 280kbopd from December. The cap offers some positive, but it makes any production CUTS less likely.

All this, as global demand across every industry continues to contract and as central banks are now powerless to do virtually anything, means that the true lows in the oil price are still ahead of us.

via Zero Hedge http://ift.tt/1Qu3E29 Tyler Durden

Submitted by Harry Dent via EconomyandMarkets.com,

So the S&P 500 is out of correction for now and the coast is clear. NOT! This is exactly what we’ve been predicting would happen – after reaching new lows, stocks would have to bounce before they inevitably resume their longer-term trend, which is down.

But stocks haven’t been the only victims of late. Just a couple weeks ago the January nonfarm payroll report came in at 151,000 jobs. So much for the expected 190,000! And of the ones reported, they were mostly low-wage jobs.

Pile that on top of the disappointing Christmas and retail sales in December. Not to mention falling stock earnings and sales growth, the worst December-to-January stock performance to date, and another banking crisis looming in Europe, especially Italy. There’s economic weakness everywhere you look!

All of this is leading me to believe that the next recession – which will lead into an even greater DEPRESSION – is not a few months away. I think it’s already begun.

Think back to the Great Recession in 2008. By the time we figured out it had started, it was months after the fact. It officially started in January 2008, three months after the stock market peaked in early October. And jobs didn’t peak and start to decline until four months later that May. Only then did the stock market see its sharp and deep crash between June and early November.

Well, of course it did! The jobs report is a lagging indicator! It doesn’t tell us anything about where we are now, which is probably why the Fed and markets-on-crack love it. Yet they think it’s the most important report that comes out. Go figure. (By the way, real estate is another lagging indicator, and Lance will have more on that for you tomorrow to tell you where we’ve been, and to give you an idea of where we’re going.)

David Stockman recently pointed out a better indicator for jobs that his colleague Lee Adler tracks.

Unlike the nonfarm payrolls report, where there’s a lot of room to fudge the numbers, this other indicator is in real time and goes right to the source: payroll! Specifically, payroll taxes that the IRS withholds from businesses.

It’s pretty obvious that if the IRS is withholding fewer payroll taxes, then there aren’t as many people on payroll. As it turns out, the trend in monthly data has been clearly downward since 2011. And the last two months are worse. Lee Adler’s daily data shows that jobs flattened in December and declined 5% in January.

Given that this is in real time, sounds like we’re already in a recession!

But let’s take a look at another indicator that shows we’re already there. This one most surprised me: the Restaurant Performance Index. What sector would you expect to benefit more from freed-up spending thanks to lower oil prices? But look where it is today:

By falling below the 100-level line, restaurants are officially in a period of contraction. The index fell to a negative reading of 99.7 in December from 101.3 in November. That’s a 1.6% drop in a month! We haven’t seen a drop this steep since late 2007!

It gets really ugly when you start digging into the index. Among the eight indicators that make it up, the December decline occurred in all of them.

For example, 73% of restaurants reported higher same-store sales in July. As of December, only 42% of them do. Ouch.

And whereas only 13% of restaurants were reporting lower same-store sales in April, now it’s 43% – more than the 42% on higher same-store sales I just mentioned. Sure, it’s higher by just a percent, but still, that’s a pivotal shift in momentum!

Digging deeper, 33% of restaurants reported higher customer traffic, but 51% reported a decline. And a quarter of them see worsening economic conditions in the next six months. Only 12% see better.

That likely points to a key tipping point in December. All of which suggests that a recession either started in that month or January.

Of course, most of the economists or analysts in bubble land aren’t seeing this. I can’t say none of them because a few are finally starting to wake up!

After stocks broke below the support level at 1,820 on the S&P 500, we were bound to get another bounce. But a much sharper and larger crash is growing very likely between sometime next month and July – and that won’t be the end of it.

We are not out of the woods yet. And we’re in for a lot of volatility ahead, so don’t expect things to settle down anytime soon.

via Zero Hedge http://ift.tt/1UgbjB0 Tyler Durden

More and more analysts and commentators have caught to the fact that the Powers That Be are actively preparing for the next financial crisis with even more extreme measures.

 

These measures include:

 

1)   Bank bail-ins

2)   Cash Bans

3)   NIRP

 

As we’ve been noting since 2013, the template for this process was first laid out in Europe, specifically in Cyprus. With that in mind, it’s worth remembering just how it played out there.

 

The quick timeline for what happened in Cyprus is as follows:

 

·      June 25, 2012: Cyprus formally requests a bailout from the EU.

 

·      November 24, 2012: Cyprus announces it has reached an agreement with the EU the bailout process once the troubled Cyprus banks are examined by EU officials (ballpark estimate of capital needed is €17.5 billion).

 

·      February 25, 2013: Democratic Rally candidate Nicos Anastasiades wins Cypriot election defeating his opponent, an anti-austerity Communist.

 

It is at this point that things went into hyper-drive.

 

·      March 16 2013: Cyprus announces the terms of its bail-in: a 6.75% confiscation of accounts under €100,000 and 9.9% for accounts larger than €100,000… a bank holiday is announced.

 

·      March 17 2013: emergency session of Parliament to vote on bailout/bail-in is postponed.

 

·      March 18 2013: Bank holiday extended until March 21 2013.

 

·      March 19 2013: Cyprus parliament rejects bail-in bill.

 

·      March 20 2013: Bank holiday extended until March 26 2013.

 

·      March 24 2013: Cash limits of €100 in withdrawals begin for largest banks in Cyprus.

 

·      March 25 2013: Bail-in deal agreed upon. Those depositors with over €100,000 either lose 40% of their money (Bank of Cyprus) or lose 60% (Laiki).

 

The most important thing I want you to focus on is the speed of these events.

 

Cypriot banks formally requested a bailout back in June 2012. The bailout talks took months to perform. And then the entire system came unhinged in one weekend.

 

One weekend. The process was not gradual. It was sudden and it was total: once it began in earnest, the banks were closed and you couldn’t get your money out (more on this in a moment).

 

There were no warnings that this was coming because everyone at the top of the financial food chain were highly incentivized to keep quiet about this. The Central Banks, the bank CEOs, the politicians… all of these people were focused primarily on maintaining CONFIDENCE in the Cyprus banking system, NOT on fixing the system’s problems.

 

Indeed, the financial elite cannot even openly discuss the system’s problems because it would quickly reveal that they are a primary cause of them.

 

For that reason, you will never and I repeat NEVER see a Central banker, bank CEO, or politician admit openly what is happening in the financial system. Even middle managers and lower level employees won’t talk about it because A) they don’t know the truth concerning their institutions or B) they could be fired for warning others.

 

Moreover, even award winning institutions are at risk. Consider that the Bank of Cyprus, the bank that imploded in 2013 and STOLE clients’ funds was voted Best Bank for Private Banking in Cyprus by EUROMONEY magazine in 2012.

 

No joke…

 

Bank of Cyprus has been named as the Best Bank for Private Banking in Cyprus, by the internationally acclaimed magazine EUROMONEY

 

Bank of Cyprus Private Banking ranked first among Cypriot, Greek and other international financial institutions operating in Cyprus in the Private Banking sector…

 

This recognition by EUROMONEY is ever more important in today’s macroeconomic environment as it reaffirms the Bank’s ability to safely and successfully respond to its clients’ financial needs and emphasizes its clients’ loyalty and trust.

 

Source: Euromoney.

So do not expect to EVER hear a Central Banker, politician, banker, regulator or anyone else in a position of power warn you of the real risks to your wealth. Indeed, as Cyprus has now SHOWN us, the only people who WILL be warned are the elite’s cronies:

 

One hundred and thirty-two companies reportedly had inside knowledge of Cyprus’ impending levy tax as they withdrew deposits worth US$916 million in the run-up to the bailout deal.

 

The companies withdrew their savings in the two-week period (between March 1 to March 15) leading up to the rescue deal that enforced heavy losses on wealthy depositors in Cypriot banks, according to Greek newspaper Proto Thema.

 

Shortly after this the EU ministers and the IMF hammered out a 10-billion-euro (US$13 billion) bailout agreement with Cyprus, which included a one-time tax on deposits held in Cypriot banks.

 

In the meantime all banks in Cyprus temporarily froze the amounts required to pay the tax on their clients’ deposits and stopped all transactions while the government negotiated the details of the agreement.

 

The companies on the list withdrew their deposits in euro, USD, GBP and Russian rubles and later transferred to banks outside of Cyprus. The total amount withdrawn comes to US$916 million.

 

Source: RT

 

How about that? The insiders were able to get nearly $1 billion out of the banks while ordinary savers’ deposits were frozen.

 

Please take a few minutes to digest what I’m telling you here. You will not be warned of the risks to your wealth by anyone in a position of power in the political financial hierarchy.

 

With that in mind, now is a good time to prepare for systemic risk. I cannot forecast precisely when things will get as ugly as they did in Cyprus for the financial system as a whole (no one can).

 

This is just the start of a much larger strategy of declaring War on Cash.  The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system at all costs.

 

Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.

 

We detail this paper and outline three investment strategies you can implement

right now to protect your capital from the Fed's sinister plan in our Special Report

Survive the Fed's War on Cash.

 

We are making 1,000 copies available for FREE the general public.

 

To pick up yours, swing by….

http://ift.tt/1eaWvC8

 

Best Regards

Phoenix Capital Research

 

 

 

via Zero Hedge http://ift.tt/1WB1FaN Phoenix Capital Research

Yesterday, when we summarized the statements by UK politicians regarding the June 23 EU referendum, we said the one most important opinion has yet to come: that of London mayor Boris Johnson’s whose “opinion may sway the vote one way or another in four months. As the Telegraph reproted that “David Cameron is mounting a last-ditch effort to woo Boris Johnson to back his campaign to stay in the European Union, by drawing up plans for a new constitutional settlement that puts the sovereignty of British institutions beyond doubt.”

As the Telegraph added, “sources close to Johnson said he remained “genuinely torn” and that he would “chew over” what the prime minister has to say when Cameron appears on the BBC’s Andrew Marr Show on Sunday, before issuing some form of statement this evening. He will then spell out the reasons for his decision in his column for the Daily Telegraph on Monday.”

It appears that Cameron’s effort to “woo” Johnson has failed because moments ago BBC reported that “Boris Johnson is to campaign to leave the EU in the UK’s referendum, BBC understands.”

The Guardian has more:

Boris Johnson is to transform the terms of the EU referendum by announcing that he is to throw his weight behind the campaign to take Britain out of the EU, according to the BBC.

 

In the biggest boost to the Leave campaign so far, the London mayor is to announce that after much soul-searching he now believes the time has come for Britain to sever its EU membership.

 

The news was broken by the BBC’s political editor Laura Kuenssberg who tweeted: “Boris WILL campaign to leave the EU -Huge boost for Out, big blow for number ten altho expected – more soon. Official announcement tonight.”

 

The report was being seen at Westminster as authoritative because Johnson recorded a broadcast interview in which he was due to explain his thinking.

Last night we said that “if Johnson refuses to back Cameron, the Friday afternoon spike in the GBP may be very promptly undone.” NOw that this appears to be the case, keep a close eye on cable once it opens in a few hours in Sunday’s illiquid trade – it could get volatile.

via Zero Hedge http://ift.tt/1Q9CnQs Tyler Durden

In December, Janet Yellen hiked right into what might as well be a recession in what Marc Faber suggests will go down as one the most ill-timed policy maneuvers in the history of central banking.

Things didn’t fall apart immediately, but the situation started to deteriorate markedly at the beginning of last month when collapsing crude prices and a bungled attempt to implement a circuit breaker in China triggered harrowing bouts of volatility across markets and set investors up for one of the most inauspicious starts to a year in history.

Now, with policy divergence between the Fed and its DM counterparts set to support the dollar at the expense of both EM stability and US corporate profits and with the continual weakness in crude set to trigger a default cycle, the FOMC faces a rather vexing question: “is it better to admit to a policy mistake and reverse course at the risk of destroying credibility or is it preferable to cling to the narrative so as not to completely destroy the notion that all is well and the US recovery is on track?”

“Fed officials continue to signal rate increases for later this year, but financial markets are increasingly focused on the risk of a policy reversal,” Goldman writes, in a new note. “At one point last week, markets saw a higher probability of a cut than a hike at the June FOMC meeting.”

With the market thus skeptical about the Fed’s willingness and/or ability to cling to the tightening cycle, Goldman has taken a look at the history of policy reversals, which the Vampire Squid reminds you are not “inherently” bad. 

*  *  * 

From Goldman

via Zero Hedge http://ift.tt/1WB1yM9 Tyler Durden