Financial Markets and Economy
The Devastation in Global Commodity Currencies is Far From Over (Bloomberg)
A bounce in crude oil and other commodity prices Tuesday halted a plunge in currencies of countries linked to natural-resource exports. The respite will be short-lived, according to OppenheimerFunds Inc.
The Canadian, Australian and New Zealand dollars are off to the worst start to a year since the financial crisis. The nations are grappling with a 29 percent drop in raw-material prices amid swelling supplies and slowing demand in China.
Another disaster is coming unless we downsize ‘too-big-to-fail’ banks (Market Watch)
Nearly seven years after the global financial crisis erupted, and more than five years after the passage of the Dodd-Frank financial-reform legislation in the United States, the cause of the crisis — the existence of banks that are “too big to fail” — has yet to be uprooted. As long as that remains the case, another disaster is only a matter of time.
Greek banking stock plunge again as debt crisis dominates (Business Insider)
Greece's banking stocks plunged for the second day in a row on Tuesday, dragging the main Athens index down and reflecting the country's continuing financial and economic woes.
The banking index <.FTATBNK>, comprising the four major lenders, was down 29.2 percent, virtually at its 30 percent daily limit for losses. It hit the limit on Monday.
Africa's Diamond Walk Is Home to Prada, Zegna, a Few Buyers (Bloomberg)
On the sparkling tiles of Johannesburg’s newest luxury retail destination, one of two customers in the Burberry shop is trying on jackets.
U.S. Light Vehicle Sales increased to 17.5 million annual rate in July (Calculated Risk)
Based on a WardsAuto estimate, light vehicle sales were at a 17.5 million SAAR in June. That is up 6.4% from July 2014, and up 3.3% from the 17.0 million annual sales rate last month.
Rent Bubble = Housing Bubble = Rent Bubble (Of Two Minds)
Both bubbles (rents and housing) are vulnerable to popping.
As oil falls below $50, analysts eye 'mid-price' era (Business Insider)
A slump in oil below $50 a barrel — a level it has held above for most of the past decade — has raised the prospect of a new era of lower prices, although a return to super-cheap oil seems unlikely.
Prices below $50 for the two crude oil benchmarks, North Sea Brent and U.S. West Texas Intermediate (WTI) , were the norm prior to 2005. Brent averaged just $18.37 a barrel in the 1990s, WTI $19.70 a barrel, and both only broke above $50 for the first time in late 2004.
China steps in to curb short selling (Market Watch)
China took another step to curb volatility in its stock markets late Monday, moving to clamp down on short selling in the country.
Under new rules, short sellers must wait at least one day to cover their positions and pay back loans used to buy shares. Previously, investors could cover their positions within the same day, a practice China’s stock exchanges said tends to “add to abnormal volatility of stock prices and affect market stability.”
China Dethroned as Worlds Most Liquid Stock Market After Curbs (Bloomberg)
China has lost its title as the world’s most liquid stock market as trading halts and regulatory efforts to curb bearish transactions drive away investors.
China blames short sellers for its market crash (CNN)
Chinese brokerages have stopped executing short sales after officials tightened trading rules in a new attempt to shore up the country's stock market.
Short sellers borrow and then sell shares, betting they can buy them back later at a cheaper price — and pocket the difference. Only approved brokers are allowed to engage in short selling in China.
VIX ETF Surges Off Record Low Crushing Contango Cruisers (Zero Hedge)
Following our discussion of perhaps the most successful (and/or most risky) trades of the last decade – that of shorting the front-month VIX – we were less than surprised that VXX -the VIX ETF has collapsed to new record-lows this morning. A snap higher in VIX has been met by an avalanche of vol selling and, as we discuss below, the accelerating contango as expirations loom has encouraged yet more to take on unlimited risk positions to pick up pennies in front of the steamroller.
Investors are ‘stock market socialists’ (Market Watch)
History indicates bears could be led astray if they bet that a narrowing group of stock-market gainers portends a near-term selloff.
T.J. Thornton, head of U.S. product management at Jefferies, quipped in a weekend note that the connection between the advance/decline line—the ratio of rising stocks to falling stocks—and sentiment suggests that investors are “stock socialists.”
China stock exchanges step up crackdown on short-selling (Business Insider)
China stepped up its crackdown on short-selling of shares on Tuesday, unveiling rules that make it harder for speculators to profit from hourly price changes, as some of the nation's major brokerages suspended their short-selling businesses.
China's stock exchanges and market watchdogs are cracking down on short-selling as part of a broad government-orchestrated effort to prevent a collapse in the country's markets, which have lost about 30 percent of their value since peaking in June.
Why You Need an Exit Strategy for Your Business (Entrepreneur)
What are your long-term and short-term goals for your business?
Veteran entrepreneur Celeste Hilling, CEO and founder of 10-year-old lifestyle company Skin Authority, stumped me with this question a few weeks ago, but she definitely left me with something to think about. When I started Deborah Mitchell Media Associates a few years ago, I was primarily concerned about getting it up and running, but Hilling explained that an exit strategy should be a part of every business plan.
Why August gets no respect from investors (Market Watch)
August is the Rodney Dangerfield of the calendar: It gets no respect.
That’s surprising. Since the Dow Jones Industrial Average DJIA, -0.52% was created in the late 1800s, August has been one of the best-performing months. Its average gain is even better than January’s, and yet Wall Street celebrates January’s strength by naming a seasonal pattern for it: the January Effect.
South Africa Mining Shares Fall to Multiyear Lows as Metals Drop (Bloomberg)
South African commodity stocks, including Kumba Iron Ore Ltd. and Impala Platinum Holdings Ltd., sank to multiyear lows as metal prices tumbled.
Kumba, a unit of London-based Anglo American Plc, led declines on the FTSE JSE Africa All Share Index, dropped as much as 7.1 percent to an all time low. Royal Bafokeng Platinum Ltd. slid 5.1 percent. AngloGold Ashanti Ltd., the continent’s biggest producer of the metal, fell as much as 2.7 percent to a record. All 11 of the most active securities trading at 52 week lows on the Johannesburg Stock Exchange were resource-related.
'Smart money' investors are dumping huge parts of their portfolios (Business Insider)
Private Equity is a big force in the investment scene. There are nearly 4,000 of these firms in the US, and they’ve invested in about 13,000 companies. They’re considered the “smart money” because of their acumen, insider knowledge, and ability to time the markets, which they have to in order to profitably exit their their long-term illiquid investments.
OK, even the smartest among them got caught with their pants down last year when the oil price crashed. And those that invested in natural gas drillers have been regretting this move for years, after the natural gas price crashed in 2009 without ever really recovering since. Fracking, which boomed thanks to a near endless flood of money from Wall Street, including PE firms, has dished out costly lessons in return.
Puerto Rico's 'death spiral' has officially begun (Business Insider)
Puerto Rico's Public Finance Corp. has officially failed to make a payment due August 1.
The president of the island's development bank, Melba Acosta, has said it paid $628,000 of the $58 million due.
And according to CNBC, credit rating agency Moody's considers that a default.
Comex On The Edge? Paper Gold "Dilution" Hits A Record 124 For Every Ounce Of Physical (Zero Hedge)
Over the few days, we got what was merely the latest confirmation that when it comes to sliding gold prices, consumers of physical gold just can't get enough.
U.S. stocks set for choppy day as traders wait for nonfarm payrolls, earnings (Market Watch)
Wall Street was poised for a volatile session on Tuesday, with U.S. stock futures wobbling around the flatline as investors stayed on the sidelines ahead of key jobs reports due later in the week.
A raft of corporate updates are on tap, with earnings from Coach Inc. COH, -2.47%CVS Health Corp. CVS, +0.31% and Sprint Corp. S, -0.89% among those expected before the bell.
See no risks posed by Fed, BOE rate hikes: BOJ's Iwata (Business Insider)
Bank of Japan Deputy Governor Kikuo Iwata said on Tuesday he did not think that an interest rate increase by the U.S. Federal Reserve or the Bank of England will pose a risk to financial markets.
Iwata, speaking at the upper house financial affairs committee, said it is possible that foreign exchange markets have fully priced widely expected rate hikes in the United States and Britain.
Politics
Where Candidates Fear To Tread – Pervasive Racketeering Is Destroying America (Kunstler)
That the snarkier circles of political commentary thrill to the elephantine bellowings of Donald J. Trump only shows the pathetic limitations of the snarkists. They enjoy Trump’s filterless mouth, his harsh goadings of the other presidential wannabes, and his supposed telepathic empathy for the suffering public outside the magic kingdom of DC.
Trump Tops Pre-Debate Polls, Slams Koch Conference Attendees As "Puppets" (Zero Hedge)
Another weekend of glad-handing and Sunday talk-shows and still The Donald dominates the GOP Presidential nominee race. With all eyes firmly glued on this week's debate, Trump had a few choice words for those who attended the Koch brothers' biannual conference (which he was not invited to), tweeting "I wish good luck to all the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers… Puppets?" As WSJ reports, Mr. Trump poses a more delicate short-term challenge for the GOP, thanks to high name recognition, celebrity appeal and a populist message that taps a powerful anti-Washington vein. "I don’t think you should underestimate how frustrated people are," Florida Sen. Marco Rubio said Sunday during a lunch at the Koch gathering."Mr. Trump has tapped into some of that."
Technology
Nico Gerard’s new Swiss Made watches come with an Apple Watch built into the band (9 to 5 Mac)
First announced back in November of last year, accessory maker Nico Gerard is now accepting preorders for its Pinnacle Collection dual-watch bands for Apple Watch. The accessory, which is similar to a product from watchmakers Original Grain that we reviewed earlier this year, offers a traditional style watch on one side with the ability to attach an Apple Watch face to the strap on the opposite side of your wrist. The idea is to get the best of both worlds: The look and feel of a traditional watch, but without sacrificing all of the functionality of your Apple Watch in the process.
Health and Life Sciences
Skin cells offer clues to brain tumor disorder (Futurity)
A new study of one of the most common inherited causes of brain tumors may help doctors diagnose and treat the learning disabilities that often accompany the condition.
Research with patient skin samples and novel strains of mice shows that genetic mutations that cause neurofibromatosis 1 (NF1) can have varying effects on levels of dopamine, a signaling molecule in the brain associated with learning and attention.
Everyone 'must take vitamin D pills' (BBC)
Everyone should consider taking vitamin D supplements to counter the lack of sunshine in the UK, government experts are proposing.
The draft Scientific Advisory Committee on Nutrition guidelines suggest, from the age of one, 10 microgram pills be taken to ensure people get enough.
Life on the Home Planet
Methane in Atmosphere May Greatly Exceed Estimates, Report Says (NY Times)
A device commonly used to measure the methane that leaks from industrial sources may greatly underestimate those emissions, said an inventor of the technology that the device relies on.
The claim, published Tuesday in a peer-reviewed scientific journal, suggests that the amount of escaped methane, a potent greenhouse gas, could be far greater than accepted estimates from scientists, industry and regulators.
