In Spite of All Polls Saying Otherwise, Citi Predicts Brits Will Vote to ‘Remain’ in the EU

This is some serious ostrich head in sand reporting from Citi. I’m reading the same narrative everywhere. Big banks wistfully declaring England will remain in the EU, while totally and completely ignoring all of the polling data that suggests they’ll leave.

Citi said a simple average of the past 10 opinion polls showed a 2.7 percentage point lead for “Leave”. This fell to 0.2 percentage points after Citi adjusted the figures to even out the number of telephone and online polls, and reduce the effect of different polling companies’ methodologies.

“Flirtation with political alternatives is often followed by ‘snapback’ to the status quo. We expect this bias for the status quo to help tilt the outcome in favor of ‘Remain,'” Citi said.

“Recent events in the UK have led to suspension of campaigning, and some increased uncertainty. Overall, we continue to put the risk of Brexit at the top of the 30-40 percent range.”

So 10 different polls say England will leave and Citi concludes there’s only a 30-40% chance it will happen? Jesus Christ, no wonder their analysts stink. They’re unable to connect two dots, add 1+1, urinate while standing up.

Both the Kingdom of Kuwait and the House of Saud have issued separate letters, expressing their dismay with Hillary, over recent comments that imply they have something to do with fomenting terrorism around the world.

Naturally, her statements were probably pre approved by her Saudi rulers, who have donated upwards of $25 million to the Clinton foundation. Nevertheless, the hall of mirrors and the pageantry of this faux anger is somewhat amusing to me.

Saudi Arabia and Kuwait have piled on outrage after Hillary Clinton condemned the weekend slaughter in Orlando and directly linked the oil-rich monarchies to the funding of terrorism.
In separate letters to Fairfax Media, the embassies for both countries in Canberra took exception to reporting of Mrs Clinton’s call to “stop supporting radical schools and mosques around the world”.

“Accusations levelled against the Kingdom of being lax or of supporting extremism fails to recognise the Kingdom’s leadership role in combating terrorism,” the Royal Embassy of Saudi Arabia wrote.

Kuwait’s embassy said it “wishes to convey its disapproval of the criticism and allegations stated by the presumptive candidate Ms. Hillary Clinton”.

Fun facts: In Saudi Arabia, homosexuality is punishable by death. How are the guilty executed? By stoning, naturally. Also, women aren’t allowed to drive, visit cemeteries or try on clothing in clothing stores. Moreover, a woman isn’t permitted to travel anywhere without a chaperone.

Alas, Hillary, the champion for gay and women’s rights, gladly and gleefully doing business with these barbarous savages of the first order.

What exactly has transpired recently, other than that singular bad jobs number, to deserve this treatise by Fed’s Bullard?Nevertheless, it appears the man from St. Louis has, finally, seen the light.

In the event of BREXIT, the blokes from HSBC are calling for a 10% storm trooping rally in gold. Like me, they believe gold should be placed on the ark, as a safe haven asset.

If, by chance, England votes to remain a slave to Brussels, they’re not really expecting more than a 5% drop. As a matter of fact, they don’t really think there is a scenario that might stop gold from ripping off heads to the upside.

Gold has historically traded as a safe haven asset and, as such, is likely to react to the results of the 23 June UK referendum on EU membership. We look at two possible scenarios, one in which the UK votes to leave and one in which the UK votes to remain in the EU, and their potential impact on gold. Scenario one, a vote to leave, could result in as much as a 10% rally in gold prices, to cUSD1,400/oz, we believe. The drive higher may be more pronounced if there were to be broader concerns about the future direction of the EU after the vote. Gold could also benefit from the reluctance of investors to move into the GBP or even the EUR. Under scenario two, a vote to remain in the EU, we believe gold is likely to fall by no more than 5%, or to USD1,220/oz, as other bullish factors are likely to support prices.

It’s a win-win situation. Can’t fucking lose.

Their bear case is far more detrimental. These maniacs are fear mongering like hell, calling for a 35% drop in equity prices. This is pure clown rapery on a very large scale.

They give BREXIT a 45% of occurring. Naturally, they’re telling folks to vote remain and then brace to lavish themselves in all of the gains to  be had. They’ve even bothered to tell us which sectors will rally most once clearer heads prevail and permit the autocrats in the EU to rule England, indefinitely.

For every carrot, there is a stick. These sectors will be RAMSHACKLED, in the event of a BREXIT. I am talking black flag, full blown mushroom cloud, over London.

In short, vote remain and receive money.

Vote BREXIT and get punched so hard your face will fall off.

I really enjoyed this note. MKM is talking rate equilibrium and making a farce out of our Federal Reserve, who no longer possesses the intellectual upper hand in these debates. Sad but true.

Executive Summary: It’s pretty clear at this point that the Fed will not be hoisting short rates up today and perhaps not even in July. It’s also equally obvious that the Fed desperately wants to raise rates in a sustainable way, despite market doubts that it will be able to do so. Is market incredulity justified, or simply a game of chicken that the Fed keeps losing? The market is skeptical — rightly, in our view — because it knows that the Wicksellian equilibrium rate remains depressed and, thus, the Fed has very little room to move rates up without putting its inflation target (and the business cycle) at risk. Indeed, both the indexed bonded market and survey-based measures show the Fed’s credibility in achieving its 2% PCE objective remains in serious doubt. And when you are near zero on short rates that is a serious problem indeed (and no, raising rates earlier would only have slowed the economy more, which would make the problem worse, not better). Our equilibrium short rate model (based on the prime age EPR and a risk premium) still suggests a near term rate hike would be a mistake. This is, essentially, the same message that our base/NGDP model is sending: the taper and end of QE were a de facto tightening that should be expected to keep NGDP growth, at best, near the low end of the six year range. This is the big picture, not the current myopic focus on a one quarter bounce in GDP that is not likely to be sustained. Indeed, business loan delinquencies are on the upswing, something that preceded a rising unemployment rate going into the early 1990s, early 2000s and 2007-2009 downturns. If this doesn’t make the hawkish hucksterism coming out of various financial organs seem silly, it should. Is the median FOMC member aware of this chart? We sure hope so, but if recent (verbal) performances are indicative of future results, we wouldn’t count on it. Happy Fed Day.

Well done.

I wonder why this is the case? According to Hedge Fund Research Inc., 291 funds were liquidated in the first quarter, with just 206 new funds started. Moreover, clients pulled a staggering $15 billion from these ‘vehicles’ in the first quarter, a trend all too familiar with many stalwart players in the investment business.

Over the past 12 months, 1,053 funds have shut the fuck down, while a mere 910 were started.

While funds like Pershing Square and their big, stupid, bets continue to mesmerize people, the average Clarence in these funds are getting smoked the fuck out–so they’re opting to send their money to their local discount house and subscribe to Exodus instead.

The allure of the hedge fund industry has been damaged, forever, I think. Having been in the business since the late 90’s and keenly aware of the needs of people with money, it’s apparent to me that more and more people want to take control of their finances and try to learn how to do it themselves, especially since their experiences with hedge fund investing have gone grimly these past few years.

Somewhere along the way, hedge funds forgot how to hedge. They’ve morphed into 3x Direxion asshole vehicles, with casino styled PMs at the helm.

It’d be very easy for me to lay waste to Cramer again for talking out of both sides of his ass. I’ll filter out his pathetic hedging, as he’s obviously scared to be labeled as ‘wrong.’ He likes oil, dividend payers and believes BREXIT will not happen. Moreover, this market is setting up for a rally. Names like PXD and BMY appeal to him. But the smaller capped shit, that you like to traverse in and out from, are a bane to him–because they’ve done nothing but crucify people over the past 2 years.

Enough of the religious talk. Here’s Cramer (extra Shining)

Infantile.

As all of Europe’s biggest banks plunge to new, historic, lows, the cost to swap currencies, measured by the FRA/OIS spread, hit the most extreme level since 2012. Many will blame the specter of BREXIT for this dislocation; but the European banks have been taking hits for a while now.

“There is a scarcity, similar to what happened during the Lehman event and European crisis, of dollars,” said Priya Misra, global head of interest-rate strategy at TD Securities (USA) LLC in New York, referring to the collapse of U.S. investment bank Lehman Brothers Holdings Inc. in 2008. “It might be on a smaller scale than Lehman but the essence is very similar, where you have a shortage of one currency.”

Share prices in some of Europe’s largest banks fell to record lows Thursday as the cost to insure against default on their debt rose.
Top officials from the Bank of Japan, European Central Bank and Swiss National Bank said Thursday they could provide liquidity backstops to markets to contain worsening funding stresses in the event that the U.K. votes to leave the European Union.

“These big central banks that matter now have these unlimited swap lines, and that is going to put a bound on how bad things can get,” said Zoltan Pozsar, director of U.S. economics at Credit Suisse Securities (USA) LLC in New York. “You are going to learn about the existence and the importance and the stabilizing impact of these facilities when they are tested.”

How wondrous. Oracle just beat the street. Who needs banks when we have gigantic tech companies and privately held unicorns to invest in?

This sounds like soured graped being flung at the reader class. I swear on a stack of holy Korans, I am in the least bit upset that markets closed higher today.

Having said that, 55% of stocks ended LOWER today. Odds are, if you’re reading this now, you lost money today and have been scratching your balls since noon, wondering where all the gains are being enjoyed.

Also, oil ended down 4%. The market hasn’t really digested the reversal in crude just yet. At $46 per barrel, the entire country of Venezuela is starving. Then again, why should we care?

Moving on.

In summary, the only sector that was noteworthy today were the utilities.

TLT was higher by 0.5% to new highs. The hounds are allocating, heavily, into dividend payers, ahead of a long summer of debauchery.

As you were.