Business

The canary in the coalmine of an increasingly desperate energy industry just croaked. With "unusual timing" and at "distressed prices," Reuters reports that Phillips 66 - the major US refiner owned by Warren Buffett - dumped crude oil for immediate delivery into Cushing storage tonight. This sparked heavy selling of the front-month WTI contract (to a $26 handle) and crashed the 1st-2nd month spread to 5 year lows.

As regular readers are no doubt aware, we like to check in on the hookers from time to time.

By that we of course mean SouthBay Research’s Vice Index, which tracks spending on fun activities in the cash economy.

Fun activities like boozing, gambling, and escort hiring. “Luxury good spending is sensitive to shifts in the economic winds, vice is even more so,” Andrew Zatlin reminds us. “A prostitute costs almost two days of after-tax wages [and] the consumer’s stack of money has to be a certain height before they can get on that ride.”

Earlier this month, Kyle Bass asked a funny question in a discussion with CNBC’s David Faber. To wit: “If some fund manager in Texas is saying that your currency is dramatically overvalued, you shouldn’t care on a $10 trillion economy with $34 trillion in your banks. I have, call it a billion -  it’s so small it should be irrelevant and yet somehow it’s really relevant.”

Submitted by Erico Matias Tavares via Sinclair & Co.,

William R. White is the chairman of the Economic and Development Review Committee at the OECD in Paris. Prior to that, Dr. White held a number of senior positions with the Bank for International Settlements (“BIS”), including Head of the Monetary and Economic Department, where he had overall responsibility for the department's output of research, data and information services, and was a member of the Executive Committee which manages the BIS. He retired from the BIS on 30 June 2008.

One thing that became abundantly clear in the wake of the financial crisis was that everything - and we do mean everything - was being manipulated by Wall Street’s biggest and most systemically important financial institutions.

First we learned that the most important benchmark rate on the planet was nothing more than a tool submitters used to inflate the value of their traders’ books, something we flagged way back in 2009.