The Ark is a Most Fashionable Destination; U.S. Bond Yields Drop to Record Lows

America the beautiful. We still have the most attractive sovereign bond yields, especially now that German bunds are -0.16%. Why not take a ride aboard the ark instead, currently yielding a tad over 1.3%? It’s a no brainier.

As you can see, stocks are being harassed by sellers this morning following an overtly naive audience of hecklers who bid stocks up last week after their cocaine supplies dwindled to new lows.

“It’s really just currency and yields. By watching currencies, watching yields, you get a pretty good sense of what’s on investors’ minds and right now it looks like slowing economic growth,” said Jack Ablin, chief investment officer at BMO Private Bank.

“As of Friday’s close in the U.S., that assumed Brexit was no big deal, that it was a non-event,” said Peter Boockvar, chief market analyst at The Lindsey Group. “That was naive.”

“At the end of the day it still leaves a lot of questions about global economic activity,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

“I think it’s a market in need of a catalyst,” he said.

Indeud.

TLT is trading north of $142 this morning.

I bet you thought we were out from the woods? Well, think again, for the market is very much mired in the same woods that loomed dreadful post BREXIT vote.

The pound is getting hammered into dust, down to 31 yr lows.

Crude oil is getting Gartman’d, off by more than 3%.

And lastly, but most chiefly, the world is encumbered with plunging German yields, now at new lows. It’s worth noting a divergence between European periphery nations v German exists today. I’ll keep track of these annoying pests for you, rest assured.

All of these items are weighing on stocks this morning, with the DAX off by 1.7% and our beloved NASDAQ down by 35.

Welcome to the car business, fucked faced TSLA shareholders. You thought Elon Musk’s stupid electric cars were immune to the plagues of production issues that have harassed the auto industry for the past hundred years?

Think again.

Tesla on Sunday said it delivered 14,370 vehicles in the second quarter, missing its forecast of 17,000 units because of what it called an “extreme production ramp” with half of the quarter’s output in the final four weeks. The maker of electric cars and energy-storage devices now expects to deliver about 50,000 cars in the second half, according to a statement. That means 79,180 Model S sedans and Model X sport utility vehicles shipped for the full year, slightly below its previous range of 80,000 to 90,000.

But don’t worry. I’m sure all of those SCTY door to door solar panel salesmen will bail you out of this mess.

I hope all of you are enjoying your hang overs. “The Fly” isn’t harangued by such issues, having foreseen his bodies hydration concerns, which he addressed accordingly. The same can be said about his stock market positioning, neatly tucked away inside of a gold mine aboard a floating ark.

Life could not be safer.

Good morning lads. There are a sundry of issues to worry about today, such as German 10yr yields plunging to -0.16% and the Swiss 50 yr now negative for the first time ever. European markets are getting hammered into glass and NASDAQ futs are down 20, which sounds very generous when considering WTI is down 2.9%.

Analyst downgrades are chock full this morning, as many cited BREXIT as a chief concern. NFLX was one of those downgrades this morning over at Needham.

I’m sure the market will square these awful things away by 3:30 and fucking ramp into the bell, or maybe not. Either way, I’m pleased with my positioning, which includes my one short position–recently featured inside Exodus.

The EU commissioner hailing from Berlin wants action taken against the spendthrift governments of both Spain and Portugal. For some odd reason, both nations believed they could enact a budget without the explicit directives of Brussels. As such, Germany is calling on the EU to apply sanctions to both nations, as a form of punishment to teach them a lesson in fiscal budgeting.

According to the Lords at the Bundesbank, all EU budgets must adhere to the strictest budgeting of keeping deficits below 3% of annual GDP. If done correctly, all nations under the EU standard will get to enjoy debilitating German-styled deflation. Under the rules set forth, nations who do not tow the line can and will be fined up to 0.2% of their GDP.

“If the Commission wants to preserve its credibility on upholding budget rules, we have to approve sanctions against Spain and Portugal,” Commissioner Guenther Oettinger was quoted as telling German daily Bild. “If we give ourselves common rules, they must be kept to.”

The rebellious Portuguese leader offers a rebuttal to his German overlord, asking for some understanding of the situation he’s in.

Portuguese Prime Minister Antonio Costa, whose center-left government is reversing previous austerity measures with the support of the Communist Party and radical Left Bloc, is fighting possible sanctions.

Costa said Monday that the 2015 budget deficit, when stripped of one-off measures such as rescuing a failed Portuguese bank, came to 3.2 percent – only slightly over the limit.

“It makes no sense to sanction Portugal,” he told reporters in Lisbon. Costa has warned that penalties could knock Portugal’s recovery off track as it aims to get the deficit below the limit this year.

Germany frowns upon excuses. All nations must bend to their caprices and follow the rules, or else!

He appears to be burned out, unable to continue the fight necessary to further vanquish his enemies. We all suffer from fatigue, every so often. Farage feel he’s going out on a high note and wants his life back.

“I now feel that I’ve done my bit, that I couldn’t possibly achieve more,” Farage told reporters in London on Monday. “It’s right that I should now stand aside as leader. What I said during the referendum campaign is I want my country back. What I’m saying today is I want my life back. And it begins right now.”

Someone should tell him “his life” was meant to be in public service, as Prime Minister of Great Britain. As these tools clown around, denigrating his country, Farage will enjoy a life of chain smoking cigarettes in the back of a pub.

Ridiculous.

Entrepreneurial men, such as myself, are going to bank extreme levels of coin come Tuesday, post July 4th festivities. We’re going to celebrate the birth of this great nation lavishing ourselves in the profits of our precious metal holdings. The rally in silver can no longer be ignored. The red headed, fat faced, woman at the end of the bar is now the most attractive.

SILVER HAS GONE THROUGH THE FUCKING ROOF.

No one knows what the fuck is going on. Some devil, somewhere, is bidding up silver. That’s fine by me. Let the blood flow, thick and red. A bet against gold/silver is a bet against freedom from central bank planning assholes, whose designs to rule the world through a one government system (EU) that will lay waste to two hundred years of American led progress.

On the eve of American glory, such a bet is folly.

I bet you think I’m being facetious with that title. The truth of the matter is, the Chinese banks are already in ruins. By transferring the bad loans onto the government’s balance sheet, killing the executives who mucked up the banking system, and then renewing a degenerate Chinese banking lifestyle, stocks will likely space rocket to new highs.

Once all of the bad news is eliminated, the ugly and inconvenient truths that plague us all, life can revert to happiness and gay fucking giraffes again. While bankers in America get to retire off Greek Islands in style, after ruining our economy; over in China, they get their dicks cut off and their heads kicked into stone statues of Mao. So, maybe a Chinese bank bailout would be a good thing, long term.

What sort of insane run is this (someone mention the Hunt brothers please)? Asian markets are flat and U.S. futures are pancaked ahead of Budweiser can festivities. But, the price of gold and silver are rifling higher again–with silver up 4.4% following a grape raping run of 6% on Friday.

All of you gold and silver shorts will soon meet your makers, ultimately. We are living in a Senator Gint world where fiat currencies are pissed upon, liberals are tossed into open fire pits, and RUSH FUCKING LIMBAUGH is put on blast, in every hood, extra bass. Fuck all of your rap music, we’ve got DR. MICHAEL SAVAGE reverberating throughout America on this 4th of Joohlie.

I’m taking special requests. Being that tomorrow will be a slow news day, toss some topics my way and I’ll try to bang them out one by one.

Any of you trading clowns catch one of these?

min cap: $5b
TCK +273%
ABX +202%
KGC +195%
AUY +194%
AU +168%
NEM +124%
AEM +112%
OKE +101%
CLR +97%
SBS +97%

Here is the median return breakdowns per sector.

Basic Resources: +13%
Consumer Goods +7%
Financials +1.55%
Healthcare -8%
Industrial Goods +10.5%
Services -0.35%
Technology +0.73%
Utilities +26%

TLT +19%
Bitcoin +86%

If you were in the reflation trade, long copper, oil and frac sand–you banked coin. Had you gandered at negative interest rates and said ‘fuck this’ and dropped money into dividend plays, like REITs, Utilities and Treasuries, you banked extreme coin. If you got pissed off at the New World Order, globalization, and the corruption of central banks and instead bought gold and bitcoin, you did the best.

Anyone delving into traditional bull market denizens, such as tech and biotech, did dreadfully.

The first half of 2016 was marked with cynicism and a lack of belief in the global growth story. Anyone who thinks the markets did great, sporting a 4% return on the SPY v a 26% return for electricity companies, are delusional.

Basic resources were helped by copper, oil and gold. Consumer goods were helped by the staples, basic necessities. Financials only posted a positive return because of the REITs and insurance. Industrial goods did well thanks to oil. Services, tech and healthcare did poorly, because we’re not really in a bull market.

For the second half of 2016, look for the narrative to change from “oh look at oil trade higher, gee that’s great” to “holy shit, how is XYZ going to refinance their debt in 2017?” There is a wall of debt coming due in 2017.

NOTEWORTHY: Coal was +51% for the first half, most likely due to Trump.

Regarding the utes, for the first time over the past decade, the average ute PE is trading at a premium to the market. The median PE is now at an absurd 23x. For a sector bereft of growth, this is patently absurd.

Data Provided by the Indefatigable Exodus.