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Frontrunning: May 18

  • Stocks sag as U.S. rate rise expectations revive (Reuters)
  • Clinton, Sanders hit final stretch of nominating contest (Reuters)
  • Bernie Sanders Wins in Oregon, But He Needed Kentucky, Too (NBC)
  • Clinton less than 100 delegates from nomination (The Hill)
  • Trump needs 66 delegates to officially clinch nomination (The Hill)
  • Japan GDP Rebound Not Enough to Stave Off Stimulus (WSJ)
  • Japan Dodges Recession Thanks to Consumers, Public Spending (BBG)
  • Austrian State Dodges Default With $12.4 Billion Debt Deal (BBG)

Copper Slides To Three Month Low Despite Flat Futures, Oil; Dollar Rise Continues

Copper Slides To Three Month Low Despite Flat Futures, Oil; Dollar Rise Continues

After two violently volatile days in which the market soared (Monday) then promptly retraced all gains (Tuesday), the overnight session has been relatively calm with futures and oil both unchanged even as the BBG dollar index rose to the highest level since April 4. This took place despite a substantial amount of macro data from both Japan, where the GDP came well above the expected 0.3%, instead printing 1.7% annualized, which pushed stocks lower as it meant the probability of more BOJ interventions or a delay of the sales tax hike both dropped.

British Spymaster Fears The EU Has "Run Its Historical Course"; Warns Of "Populist Uprising"

British Spymaster Fears The EU Has "Run Its Historical Course"; Warns Of "Populist Uprising"

None other than the former head of MI6 (the British Secret Intelligence Service) Richard Dearlove expressed his quite candid thoughts on the immigration crisis, as well as the possibility of a British exit from the EU during a speech recently at the BBC. The speech is well worth the listen.

Here are some notable quotes from the speech as it relates to the immigration crisis. The former head of intelligence is quick to point out that despite what the public perception may be, the reality is that there are terrorists already among us.

Goldman Downgrades Stocks Over Next 12 Months Due To Risk Of Sharp Market Drop

Goldman Downgrades Stocks Over Next 12 Months Due To Risk Of Sharp Market Drop

Having pointed out the gathering storm in VIX ETPs, raised concerns of a "reasonably high probability" of a large drop in stocks, and explained how complacently short-term risk is being priced, Goldman's portfolio strategy team have unleashed a dramatic warning. Shifting to an oveweight cash position for the next 3 months, Goldman warns "we downgrade equities to Neutral over 12 months on growth and valuation concerns. Until we see sustained earnings growth, equities do not look attractive, especially on a risk-adjusted basis."

The Humungous Depression

The Humungous Depression

Submitted by StraightLineLogic.com's Robert Gore via The Burning Platform blog,

Economic depressions unfold slowly, which obscures their analysis, although they are simple to understand. Governments and central banks turn recessions into depressions, which are preceded by unsustainable expansions of debt untethered from the real economy. The reduction and resolution of excess debt takes time, and governments and central banks usually act counterproductively, retarding necessary adjustments and lengthening the adjustment, and consequently, the depression.

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