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Author: The Patriot

RBC Explains What The Hell Is Going On: “Prudent” Fed & Chinese Intervention

A “prudent” Fed (and China’s “National Team”) have spurred a risk-on rally, as RBC’s head of cross-asset strategy Charlie McElligott notes the market’s ‘Pavolovian’ response to Fed’s ‘dovish hints’ contained within the Minutes – despite simultaneously staying ‘on message’ with hiking / tapering commentary – prompts a “QE of old” response: stocks and Treasuries bid, while the USD faded. China further perpetuates the ‘risk rally’ via apparent market interventions: 1.       Intervention in FX markets to strengthen the Yuan overnight, with speculation of a number of Chinese banks selling Dollars in the onshore market overnight which drove the Yuan higher.   2.       Chinese “National Team” stock market inventions as well, with sharp-turns higher off of an initially weaker equities opening and again-weaker industrial metals.   Major reversals off lows saw nearly all domestic markets close at highs (Shanghai Prop +2.8%), while Hong Kong’s Hang Seng closed at highs since July 2015, with Chinese real estate developers leading. Initial (and expected) ‘sell the news’ on the snoozer OPEC outcome, as they extend the output cut 9 months per expectations—which disappointed the ‘bullish surprise’ camp which anticipated more OPEC-‘gaming’ of the market, thinking it was possible for a deeper-cut in conjunction with the consensus extension. This move lower in crude is notable if it were to escalate the current rollover in ‘inflation expectations’ (10Y BE’s below 200dma) which continue to show as the largest price drivers of risk-assets...

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Stocks Are Now At #2, Next Up #3 (the Big Breakdown?)

As we expected, the market is now turning in a big way. When markets peak and begin to break down, they never simply collapse. Instead they first break through support and then stage a bounce. The reason for this is due to investor psychology: the bulls don’t initially throw in the towel, but instead “buy the dip.” It is when the bounce fails to break to new highs that you have confirmation that the top is in. So the pattern is: 1)   A breakdown below support 2)   A bounce back to retest former support 3)   The REAL collapse. The markets are now on stage #2. And #3 is just around the corner. We expect stocks to fall HARD within the next week or so. This bounce will be the final gasp to maintain the rally. The next downside target is 2,300 at the red circle. And if things really getting messy we could go to 2,125 relatively quickly. We offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it). We made 1,000 copies to the general public. As I write this we are down to the last THREE. To pick up your FREE copy… CLICK HERE! Best...

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CBO: American Health Care Act Will Reduce Deficit By $119 Billion

Share Tweet Email House Speaker Paul Ryan / Getty Images BY: Ali Meyer Follow @DJAliMeyerMay 25, 2017 9:32 am The final version of the American Health Care Act, which House Republicans passed as their replacement for Obamacare, is now estimated to reduce the deficit by $119 billion from 2017 to 2026, according to the Congressional Budget Office. The budget office scoring of the original legislation released on March 13 projected that the bill would reduce the deficit by $337 billion from 2017 to 2026, increase the number of uninsured by 14 million people, and reduce premiums by 10 percent by 2026. The amended legislation would increase the number of individuals with health insurance and would lower premiums. “In comparison with the estimates for the previous version of the act, under the House-passed act, the number of people with health insurance would, by CBO and [Joint Committee on Taxation]’s estimates, be slightly higher and average premiums for insurance purchased individually—that is, nongroup insurance—would be lower, in part because the insurance, on average, would pay for a smaller proportion of health care costs,” the budget office said. The budget office projects that average premiums will rise in the short term, rising by 20 percent in 2018 and 5 percent in 2019. By 2026, however, average premiums will be 20 percent lower than they are now in states that make moderate changes to...

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Catalonia Threatens Spain With “Financial Bloodbath”

Authored by Don Quijones via WolfStreet.com,  Catalonia’s independence would set off Spain’s debt time-bomb. On Monday El Pais published leaked excerpts from what it claims to be the Catalonian regional government’s road map to independence. The secret document includes a plan for the region to unilaterally break away from Spain should its citizens be prevented from holding a referendum on independence in the fall. It provoked a fierce backlash from Madrid. “This proposal is an unacceptable attempt to blackmail the state,” Spain’s Prime Minister Mariano Rajoy said in a hastily convened press conference. Spain’s defense minister María Dolores de Cospedal likened the plot to a coup d’état. In the meantime, Madrid continues to refuse to even entertain the idea of allowing a referendum on Catalan independence, despite the fact that in just about every survey of the last few years 80% of Catalans, including many unionists, have requested one. It would mean the loss of 25-30% of Spain’s gross domestic product (GDP), says Spain’s Minister of the Economy, Luis de Guindos. And that’s something the government “will never let happen.” But Catalonia knows it has a card up its sleeves: its tick-tocking debt bomb. Catalonia can no longer issue its own debt and depends on the central government’s national liquidity fund (FLA, for its Spanish acronym) for about 60% of its funds. As ratings agency Fitch warned in April last year...

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