- Greek Endgame Nears for Tsipras as Collateral Evaporates. (video) Greek banks are running short on the collateral they need to stay alive, a crisis that could help force Prime Minister Alexis Tsipras’s hand after weeks of brinkmanship with creditors. As deposits flee the financial system, lenders use collateral parked at the Greek central bank to tap more and more emergency liquidity every week. In a worst-case scenario, that lifeline will be maxed out within three weeks, pushing banks toward insolvency, some economists say.
- Greek Bonds Tumble on Speculation Cash May Only Last a Few Weeks. Greek bonds plunged, pushing 10-year yields up to the highest since April, as speculation grew that the nation’s financial system may be just weeks away from running out of cash. The time remaining for Greece to strike a deal with its creditors is “very limited,” European Union Economic Commissioner Pierre Moscovici told reporters in Berlin Monday. The Greek government meanwhile repeated its pre-conditions for any deal to be reached, saying it won’t yield ground on its “red lines.”
- German Tourists Cool on Greece as ATMs at Risk of Crunch. Greece’s standoff with creditors is threatening the surge in tourism that helped drag the country out of a six-year slump in 2014. A strong start to the year has tailed off in recent months with potential visitors deterred by the risk of being caught up in a cash crunch. Bookings from Germany were 0.7 percent higher than last year at the end of the first quarter after jumping 12 percent in January, prompting the Greek tourist lobby to consider ditching its forecast for a record number of visitors this year.
- Emerging Stocks End Three-Day Advance Amid Shifting Fed Outlook. The Shanghai Composite Index declined for a second day as 20 initial public offerings are due to come to market from Tuesday to Thursday, stoking concern that funds will be lured from existing stocks. Lender Banco Bradesco SA led Brazilian stocks lower. The real slumped for a second day as most developing-nation currencies weakened against the dollar. The Ibovespa fell 1.3 percent in Sao Paulo. Bradesco fell 3 percent, while Itau declined 2.1 percent.
- European Stocks Climb as Greek Shares Rebound, Carmakers Advance. A gain in automakers pushed European stocks higher, as Greek equities reversed a drop. The Stoxx Europe 600 Index rose 0.4 percent to 398.09 at the close of trading in London, after falling as much as 0.7 percent. It climbed 0.6 percent earlier.
- $100 Oil Seen Years Away by Petronas as Shale Output Resilient. The rally in crude prices may not last as U.S. shale output remains robust, according to Malaysia’s state oil company. “It will take many years until we see oil prices anywhere near the $100 mark,” Petroliam Nasional Bhd. President and Chief Executive Officer Wan Zulkiflee Wan Ariffin said at a conference in Kuala Lumpur on Monday. “We’ve underestimated the resilience of U.S. shale production. ‘We’re still grappling our way to climb out of this big drop.”
- China Steel Price Slumps to 12-Year Low as Seasonal Peak Passes. (graph) Chinese prices of steel used mostly to build homes and offices fell to a 12-year low as peak construction season begins to ebb in the world’s biggest consumer. The average spot price of steel reinforcement bar, or rebar, dropped for a 10th day to 2,458 yuan ($396) a metric ton, the lowest level since January 2003, according to data from Beijing Antaike Information Development Co.
- Bubble Blowing to Continue So Long as Yellen Isn’t Raising Rates. Janet Yellen will have to do more than talk about potential asset market bubbles if she is to pop any. Days after Federal Reserve Chair Yellen’s May 6 observation that stock valuations are “quite high,” Citigroup Inc. strategists led by Robert Buckland looked around the world at what central banks have done in the past to rein in financial market excesses. Their answer is that it usually takes at least three interest rate increases and as many as five to spark a slide in equities.
- Nobel Winner’s Math Is Showing S&P 500 Unhinged From Reality. If you sold every share of every company in the U.S. and used the money to buy up all the factories, machines and inventory, you’d have some cash left over. That, in a nutshell, is the math behind a bear case on equities that says prices have outrun reality. The concept is embodied in a measure known as the Q ratio developed by James Tobin, a Nobel Prize-winning economist at Yale University who died in 2002. According to Tobin’s Q, equities in the U.S. are valued about 10 percent above the cost of replacing their underlying assets -- higher than any time other than the Internet bubble and the 1929 peak.
- Endo(ENDP) Buys Par Pharma for $8.05 Billion Amid Hunt for Deals. Endo International Plc, the maker of pain drugs like Opana and Percocet, agreed to buy Par Pharmaceutical Holdings Inc. for $8.05 billion in cash and stock as part of a plan to ignite sales growth and pursue more acquisitions.
- CEOs love buying stock with your money, not own. As CEOs buy a record amount of stock with shareholder money, they are keeping their wallets in their pockets when it comes to purchasing shares with their own cash. In the last six weeks, U.S. companies made buyback announcements that came to $5.7 billion a day, according to TrimTabs Investment Research. Yet in the month of April executives at those same companies bought only $240 million worth of stock with their own money, the lowest level of insider buying in more than two years. "Insider buying virtually dried up in April, sending the insider sell/buy ratio to its highest level in more than two years," noted the TrimTabs report. It's a troubling contrast that may speak to the true feelings executives have about the staying power of this six-year bull market.
- El-Erian: Markets underestimating liquidity risk. (video) Markets underestimate the risk posed by a lack of liquidity, which looks more dangerous than Greece's precarious debt situation, Mohamed El-Erian said Monday.
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- Iran deputy oil min says OPEC unlikely to cut output. The Organisation of the Petroleum Exporting Countries (OPEC) is unlikely to implement a production cut at its next meeting in June, a senior Iranian official said on Monday. Asked if OPEC would cut output at the upcoming June 5 meeting, Iran's Deputy Oil Minister Rokneddin Javadi told Reuters: "I don't think so."
- Saudi Arabia's March oil exports highest in over 9 years - data. Saudi Arabia's crude exports rose in March to their highest in almost a decade, official data showed on Monday, a sign of unexpectedly strong global demand as the top oil exporter revved up its output to the loftiest rate on record. The OPEC heavyweight shipped 7.898 million barrels per day (bpd) of crude in March, up from 7.350 million bpd in February and 7.474 million bpd in January, figures supplied by Riyadh to the Joint Organisations Data Initiative (JODI) showed.
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