United States

Submitted by Simon Black via SovereignMan.com,

In a scathing editorial published in the Wall Street Journal today, the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, blasted US banks, saying that they still lacked sufficient capital to withstand a major crisis.

Kashkari makes a great analogy.

When you’re applying for a mortgage or business loan, sensible banks are supposed to demand a 20% down payment from their borrowers.

Trump's honeymoon with capital markets is on the rocks, kept alive only by the occasional soundbite about "massive" or "phenomenal" tax cuts; it now appears that the US president's - until recently - amicable relationship with Russia is also quickly souring.

One day after Defense Secretary Jim Mattis told US NATO allies they will have to pay up and meet their mandatory quota of 2% of GDP (which only 5 nations currently satisfy, among them the US and Greece), on Thursday the Pentagon's new chief also had some bad news for Russia when he rejected any kind of military collaboration with Russia, despite previous calls by Putin for the West to work with his country on Syria and other issues.

In an ironic twist of fate, it appears the catalyst for many of the biggest and most incomprehensible market ramps of the last few years is a fund called "Catalyst." With around $4 billion under management (before the latest collapse), the levered options fund is run by Edward Walczak who "uses options to create a better risk/return profile."

Secretary of State Rex Tillerson met his Russian counterparty, Foreign Minister Sergey Lavrov, at a G20 summit in Germany in the pair’s first meeting since Tillerson became secretary of state, and comes as a possible Russia-US rapprochement is in the spotlight. Moscow and Washington have much to discuss, Lavrov told Tillerson at their first meeting in Bonn, Germany, on Thursday.

"Mostly, it includes issues addressed by the two presidents during their phone conversation. I think that we could identify parameters of our future cooperation on each of those topics," he stated.