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19Jun2015 Market Close: Sharp Market Down Turn At Closing, Oil Down, U.S. Dollar Slips, Grexit Remains A Possibility

Written by Gary

U.S. markets closed down . During the last 30 seconds of trading the DOW fell 28 points and the SP500 dove 11 points to close the session at its lowest point for the day.

Investors were keeping an eye on events overseas, as talks between Greece and its creditors remain unresolved with a big debt repayment looming. The European Central Bank today increased emergency lending for Greek banks as deposit flight mounted amid Greece's political deadlock with its lenders.

Todays S&P 500 Chart

Greece has in the past been the spark that has set off explosive financial fireworks. Yet European markets are showing few signs of panic, even after Thursday's Eurogroup meeting ended with no deal.

The Market in Perspective

Here are the headlines moving the markets.

Oil futures end lower to tally a loss for the week

Oil futures fell on Friday to tally a 0.6% loss for the week. Traders bet on a further rise in Saudi crude output and watched the Greek debt drama and negotiations over Iran's nuclear program. July crude CLN5, -1.64% lost 84 cents, or 1.4%, for the session to settle at $59.61 a barrel on the New York Mercantile Exchange.

Read the full story: Oil futures end lower to tally a loss for the week

Powerful Brazil CEO arrested in Petrobras graft probe

SAO PAULO (Reuters) - Brazilian police on Friday arrested Marcelo Odebrecht, the head of Latin America's largest engineering and construction company Odebrecht SA, and accused his family-run conglomerate of spearheading a $2.1 billion bribery scheme at state-run oil firm Petrobras.

ECB boosts emergency funding as Greek banks bleed, Tsipras calm

ATHENS/LUXEMBOURG (Reuters) - The European Central Bank expanded emergency funding to keep Greece's stricken banks on their feet as a steady flow of withdrawals continued on Friday ahead of a summit next week that could decide whether the country can stay in the euro.

IMF Humiliates Greece, Repeats It Will Keep Funding Ukraine Even If It Defaults

One week ago, we were stunned to learn just how low the political organization that is the mostly US-taxpayer funded IMF has stooped when, a day after its negotiators demonstratively stormed out of the Greek negotiations with "creditors", Hermes' ambassador-at-large Christone Lagarde said that the IMF "could lend to Ukraine even if Ukraine determines it cannot service its debt."

In other words, as Greece struggles to avoid a default to the IMF on debt which was incurred just so German banks can remain solvent and dump trillions in non-performing loans to US hedge funds and Greek exposure, and which would result in the collapse in the living standards of an entire nation (only for a few years before an Iceland-recovery takes place, one which Greece would already be enjoying had it defaulted in 2010 as we said it should), and as the "criminal" IMF does everything in its power to subjugate an entire nation, or else let it founder, the IMF told Soros' BFFs over in Kiev, that no matter if they default to its private creditors (in fact please do since Russia is among them), the IMF would keep the debt spigot flowing.

Courtesy of the US taxpayer of course.

Fast forward one week when, with Greece one step closer to a full-blown financial collapse, the IMF comes out and tell Ukraine - which already passed a law allowing it to impose a debt moratorium at any moment - not to worry, that even in a default it will keep providing unlimited funds. From Reuters:

Ukraine's efforts to strike a debt restructuring deal with its creditors will allow the International Moneta ...

The Truth About Greece and What It Means For Larger Problem Countries

The situation in Greece has very little to do with politics or economics. Instead it is entirely focused on just one thing.

That issue is collateral.

What is collateral?

Collateral is an underlying asset that is pledged when a party enters into a financial arrangement. It is essentially a promise that should things go awry, you have some "thing" that is of value, which the other party can get access to in order to compensate them for their losses.

For large European banks, EU nation soveregin debt (such as Greece) is the collateral backstopping hundreds of trillions of Euros worth of derivative trades.

This story has been completely ignored in the media. But if you read between the lines, you will begin to understand what really happened during the Greek bailouts.

Remember:

1) Before the second Greek bailout, the ECB swapped out all of its Greek sovereign bonds for new bonds that would not take a haircut.

China Shares Suffer Worst Week Since 2008

China shares suffered their worst week in over seven years amid rising fears of an equity bubble.

U.S. proposes tighter emission standards for big trucks

WASHINGTON (Reuters) - The Obama administration proposed new rules on Friday to slash greenhouse gas emissions from heavy, long-haul trucks, a move to attack climate change that prompted a wary response from industry groups worried about the costs.

MERS outbreak now No. 1 aviation sector risk: lessor

PARIS (Reuters) - Middle East Respiratory Syndrome (MERS) has risen to the top of the list of risks facing the aviation industry, the head of a leading aircraft lessor said, outstripping traditional concerns about fuel and currencies.

Fed's Williams says wants stronger inflation data before hiking rates

SAN FRANCISCO (Reuters) - A top Federal Reserve policymaker signaled Friday that despite a "nearly healed" U.S. labor market, he will not support raising U.S. interest rates until he sees stronger signs of inflation.

Supply chain wary as Airbus and Boeing push output envelope

PARIS (Reuters) - A rare note of dissent permeated the Paris Airshow this week as suppliers worried they might lose out if they invest to meet higher commercial jet production targets that ultimately prove unsustainable.

VW U.S. chief sees 'limited growth' until new SUVs arrive

DETROIT/BERLIN (Reuters) - Volkswagen AG expects "limited growth" in the United States over the next two years and will focus on defending the market share it has, the top executive for the region told Reuters, suggesting the German automaker will fall short of an ambitious 2018 sales target.

Alexis Tsipras' Open Letter To The Germans: "Duty Rests On All Our Shoulders"

Submitted by Pater Tenebrarum via Acting-Man.com,

Tsipras on the Topic of Greek Pensions

Greek prime minister Alexis Tsipras has published an interesting open letter in German newspaper "Der Tagesspiegel" on the question of Greek pensions, which we reproduce below. He evidently feels the need to specifically address the German public, because he believes the issue is misunderstood in Germany. In the letter, he explains why the Syriza-led government continues to refuse to make any concessions regarding the pension cuts demanded by creditors:

AREND-greece

Cartoon by Arend

"During a negotiation, an exchange of arguments is legitimate so long as there is sincerity and good faith between the parties. Otherwise, when the dialogue is ongoing with no end in sight then the methods used are akin to those described by the great German philosopher Schopenhauer in "The Art of Always Being Right"!

For example, it is unfair to selectively use statistical indexes — even if they are endowed with the prestige of distinguished economists, such as Olivier Blanchard- to produce unsupported generalizations that obscure reality. As such, I'd like address a popular myth that the av ...

For Caterpillar, The Second Great Depression Has Never Been Worse

When one strips away all the "double seasonal adjustments", all the non-GAAP masking tape, all the pro-forma addbacks, all the constant brainwashing propaganda where if one excludes all the bad things are great, and certainly the $22 trillion in central bank liquidity injections to keep crony capitalism as we know it alive in what is now a 7-year-old attempt to restore the post-crash confidence (which is failing thanks to the $57 trillion in debt added since then) what is one left with?

Well, the monthly retail sales of Caterpillar is a good place to start. Because far from confirming a "recovery" or ever stagnation, one look at the ongoing destruction in end demand for products of this industrial and heavy-machinery bellwether confirms nothing short of the second great depression.

And while in the past few months there had been some hope that the US was indeed decoupling from the rest of the world following a 5% Y/Y increase in retail sales in April, the tumble in May to just 1% for North America indicates that contrary to hopes that the US may pull the rest of the world up from its epic slump, it is the rest of the world (where China just posted a 17% drop in demand, while Latin America cratered by -50%) that is succeeding in dragging the US down into an upcoming global recession.

Actually did we say recession? That was the 19 month period following the Great Financial Crisis. The current interval, in which CAT retail sales have dropped for an unprecedented 30 months in a row (!) at an average monthly pa ...

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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