Wednesday, July 30, 2014

Argentina fails to reach debt agreement, default imminent

BUENOS AIRES/NEW YORK (Reuters) - Argentina faces its second default in more than 12 years after talks with holdout creditors failed on Wednesday.
The country's economy minister, Axel Kicillof, speaking at a news conference at the Argentine consulate in New York, repeatedly referred to the holdout hedge funds as "vultures" after two days of talks failed to produce an agreement.
A last-ditch plan for Argentine commercial banks to buy out the non-performing debt held by hedge funds and avert a default collapsed on Wednesday, a senior banking executive and a second source from the financial market said.
"It all fell through," said the banking executive.
Kicillof had made reference to a potential private plan before news that those talks, too, had failed.
"Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in default," Daniel Pollack, the court-appointed mediator in the case, said in a statement on Wednesday evening.

Don’t be fooled, all is not well for stocks

For those who only watch the headlines, the stock market looks as if it’s doing a pretty decent job digesting 6 years of gains. The Dow (DJI) is hanging out near record highs in the 17,000 area, the S&P 500 (^GSPC)  is within 2% of the once unthinkable 2,000 mark and the Nasdaq (^ICIXis higher than anytime in the last decade.
Or maybe this is just the lull before the storm. As Josh Brown of the Reformed Broker CEO of Ritholtz Wealth Management notes in the attached clip, under the surface things are worse than they seem. Small caps are underperforming, the Nasdaq is being led by a tiny fraction of major stocks and it’s all but impossible to find ideas that are particularly fresh by any reasonable standard.
For want of a better term the market is choppy and choppy is bad. “Tops are a process. A choppy market can sometimes be indicative of a change in trend.”  When you’re six years into a bull market and long stocks there’s a good chance you’d prefer to have the upward drift in the market continue.
Brown, who was my co-author on Clash of the Financial Pundits, isn’t a fan of turning vague observations about stocks into financial transactions.  He’s got his clients’ money diversified across a well diversified collection of assets.  

Obama Sued: House Authorizes Lawsuit Against President With 225-201 Vote

Argentina defaults; Russia, Ukraine, Libya, Israel, Gaza, Iraq all in a state of (hot or otherwise) war, the worst Ebola epidemic in the history of Africa, and now Obama is getting sued.
And from Reuters:
The Republican-led U.S. House of Representatives on Wednesday cleared the way for the launch of a lawsuit accusing President Barack Obama of overstepping his authority in carrying out his landmark healthcare reform law.

The 225-201 vote, along party lines, to authorize the suit will allow House lawyers to draft legal documents over a five-week summer recess starting on Friday.

It cements the action as a lightning rod for months of bitter campaign rhetoric from both Republicans and Democrats ahead of November elections that will determine the political control of Congress next year.

The suit is expected to claim that Obama exceeded his executive authority in making unilateral changes to the Affordable Care Act, known as Obamacare.
And then this:

Thank You Obamacare - California Health Insurance Costs Spike Up To 88% In 2014

If you like your disposable income... forget it. Health-care insurance premiums for individuals in California rose between 22% and 88% in 2014 from last year, even after the federal health-care overhaul. This has led, as Bloomberg reports, to Proposition 45 - a bill that would grant regulatory say on proposed premium increases. "Unless Proposition 45 is passed we are going to continue to see dramatic year-over-year increases," warned Insurance Commissioner Dave Jones.