Europe

With "significant" financial stress pervading the markets, it is hardly surprising that systemic risk concerns are rising rapidly. What we have been experiencing in markets this year, as BofA's FX team notes, is the impact of multiple shocks, at a time when central banks cannot come to the rescue, in a market that has been addicted to the central bank policy put. This leave cross-asset correlation soaring as shocks become larger leaving market fragility increasing.

With plenty of Tail risks lurking...

Via EvergreenGavekal.com, 

“Betting against gold is the same as betting on governments. He who bets on governments and government money bets against 6,000 years of recorded human history.”

 

– Charles De Gaulle, Leader of the French resistance during WWII and 18th President of France

SUMMARY

A little over a week ago, before we described the increasingly more perilous situation facing US refiners, we summarized the oversupply threat facing the biggest U.S. commercial hub located in Cushing, OK as follows:

The EU plan on merging all of Europe’s militaries into one giant Euro Army, and have said they will dismantle the British Army if Britain votes to stay in the EU in the upcoming referendum in June.  If Britons vote to stay a part of the European Union then the UK military will be forced to share sensitive weapons technology with the rest of Europe under a new agreement. Express.co.uk reports: Britain would also be expected to contribute around £375million to the scheme – enough to rehire all of the 20,000 soldiers the Government sacked in its last defence spending review.

Authored by Eric Zuesse,

Foreign policy is both economic and military. An interpretation of U.S. President Barack Obama’s foreign policy will be presented here that explains both his economic and his military decisions to-date, and that shows he’s been carrying out the policies of his predecessors in office.