Mish's Global Economic Trend Analysis

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• Peek Inside Caterpillar's Fully Autonomous Mine Site - Drivers Not Needed
• Free Tuition at Stanford for Families Making Less than $125,000; Free Room and Board As Well for Under $65,000
• Endless Supply of Rabbits? Greece to Make April 9 IMF Repayment; Bond Market Unimpressed; Tsipras Heads to Russia

Peek Inside Caterpillar's Fully Autonomous Mine Site - Drivers Not Needed Posted: 04 Apr 2015 07:38 PM PDT Mining automation has long been a dream for those in the industry. In the following video, Caterpillar announces fully autonomous mining has arrived. Take a peek inside the people, technology and innovation that are making this dream a reality with a tour of an autonomous mine site in Australia. Link if video does not play: Caterpillar's Mining Automation Journey Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Free Tuition at Stanford for Families Making Less than $125,000; Free Room and Board As Well for Under $65,000 Posted: 04 Apr 2015 12:00 PM PDT Expect applications to Stanford university to soar with this announcement: Tuition free for Families Earning Less than $125,000 Per Year. Stanford University will provide free tuition to parents of students who earn less than $125,000 per year — and if they make less than $65,000, they won't have to contribute to room and board costs, either. Students are still expected to pay $5,000 toward college costs from summer earnings and working part-time while enrolled in college. If a student's parents make less than $125,000 per year, and if they have assets of less than $300,000, excluding retirement accounts, the parents won't be expected to pay anything toward their children's Stanford tuition. Families with incomes lower than $65,000 won't have to contribute to room and board, either. Students themselves will have to pay up to $5,000 each year from summer earnings, savings, and part-time work. There's no rule that parents can't cover their students' required contribution. Why other colleges can't do this — but what they can learn Stanford enrolls a high proportion of wealthy students, who pay higher tuition that helps subsidize lower-income peers. And Stanford is one of the world's richest universities, with an endowment of $21 billion. On the other hand, there's something that every college could emulate about Stanford's policy: it's incredibly simple and straightforward. Middle-class students know even before they apply to Stanford what they'll have to pay to attend, whether they'll be able to afford it, and how much they'll have to borrow. At most colleges, the amount a family is expected to pay doesn't show up until after students have applied, been accepted, and filled out financial aid paperwork. That's partly because many colleges are stretching their financial aid budgets and don't know what they're dealing with until students have been admitted. Most colleges can't match Stanford's generous financial aid commitment. But they could at least try to duplicate its simplicity. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Endless Supply of Rabbits? Greece to Make April 9 IMF Repayment; Bond Market Unimpressed; Tsipras Heads to Russia Posted: 04 Apr 2015 10:53 AM PDT Greece to Make April 9 IMF Repayment April 9th was one of the critical dates by which Greece was said to be out of cash. By now most expect these kinds of deadlines to come and go in belief the eurozone hat has an endless supply of rabbits. Sure enough, Reuters reports Greece Says Ready to Make IMF Payment on April 9 Greece will repay a loan tranche to the IMF on time on April 9, its deputy finance minister said on Friday, seeking to quell fears of default after a flurry of contradictory statements on the issue in recent days. Greece is fast running out of cash and its euro zone and International Monetary Fund lenders have frozen bailout aid until the new leftist-led government reaches agreement on a package of reforms. That prompted the interior minister to suggest this week that Athens would prioritize wages and pensions over the roughly 450 million euro ($490 million) payment to the IMF, though the government denied that was its stance. Euro zone officials then quoted Greece as saying it will run out of money on April 9, which the finance ministry denied. "We strive to be able to pay our obligations on time," Dimitris Mardas told Greece's Skai TV. "We are ready to pay on April 9." Adding to the confusion, German magazine Der Spiegel quoted a finance ministry general secretary, Nikos Theocharakis, as saying Greece would probably not pay next week's IMF tranche, prompting a further denial from the Greek finance ministry. Bond Market Unimpressed The bond market is unimpressed. Let's take a look at several durations. Greece 10-Year Bond Yield Greece 5-Year Bond Yield Greece 2-Year Bond Yield Notice the steep inversion in the yield curve. The 10-year yield is 11.91% while the 2-year yield is 23.57%. This is a sign of default risk and the larger haircuts that shorter term durations will take vs. longer durations. Come in far enough and the bond prices are steep, but no longer inverted. For example let's take a look at 3-month and six-month durations. Greece 3-Month Bond Yield Yield on the Greek 3-month bond is exceptionally high compared to the rest of the eurozone but at least it is not inverted compared to 10-year bonds. However, the 3-month bond is inverted compared to the 6-month bond. Greece 3-Month Bond Yield Tsipras Heads To Moscow As IMF Withdraws Athens Staff Zerohedge reports Tsipras Heads To Moscow As IMF Withdraws Athens Staff; Greek Default Risk Hits Post-Crisis High Amid growing pressure from their 'Troika colleagues' with Eurogroup Chair Dijsselbloem noting there is "still a long way to go" on Greek proposals and The IMF withdrawing its staff in Athens; new prime minister Alexis Tsipras heads to Russia to meet with Putin early next week. As Kremlin spokesman, Dmitry Peskov noted - somewhat intriguingly - "Greece has not asked [Russia] for financial aid... yet," as Tsipras is expected to seek agreement for a 'road map' of initiatives on the political and economic levels. Greek default risk has resurged in the last few days to its highest since the last 'restructuring'... Greek default risk hits post-crisis highs... Odds of Default Surge Back on January 28, Bloomberg stated Greece Credit Swaps Surge to Signal 70% Probability of Default. Odds have gone up since then. Endless Supply of Rabbits? Is there an endless supply of rabbits? I actually do not think so. Greece may not run out of money in April but it will run out of money by June in my estimation. That is less than three months away. As I noted on February 11, Greece Needs Third Bailout to the tune of €53.8 Billion Needed. I am convinced that Syriza will not agree to another bailout adding still more debt on top of the already unsustainable €323 billion pile. The extension granted to Greece runs out in June. In July a €3.5 billion payment is due the ECB, and in August another €3.2 billion payment is due the ECB. Can Greece come up with €6.7 billion? I don't think so. All this extension did was give both sides more time to come up with an exit strategy. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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