• Marc To Market
    12/20/2014 - 12:21
    When the dollar falls, we are told it is logical.  The empire is crashing and burning.  When the dollar rises, the markets, we are told are manipulated.    Well, the dollar is...

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France's Fiasco In One Fine Chart

Scanning the world, France ranks at or near the top in government transfers to households, vacation times and labor market rigidity, and at or near the bottom in hours worked per week, labor force participation rates and retirement age as a % of life expectancy. As JPMorgan's Michael Cembalest notes, France is a workers's utopia - which is expensive to maintain - and sure enough four out of four of its main economic indicators are accelerating lower since Hollande's 'Deluge' began.



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It Begins: Ecuador Demands Repatriation Of One Third Of Its Gold Holdings

  • ECUADOR WANTS BANKS TO REPATRIATE ONE THIRD OF FOREIGN HOLDINGS
  • ECUADOR TAX CHIEF CARRASCO SPEAKS TO CONGRESS IN QUITO


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The Case Against Corzine

As the one year anniversary of the MF Global Bankruptcy is upon us, the WSJ has now joined the NY Times in writing a ‘woe is me’ piece on behalf of Jon Corzine. The WSJ continues bemoaning the pitiable situation of “restlessness and frustration” of the former CEO of Goldman Sachs, former Governor of New Jersey, and former Senator from New Jersey who apparently isn’t content with being “confident about the likelihood that he will avoid any criminal charges related to MF Global.” Corzine is still estimated to be worth several hundred million dollars despite presiding over the failure of the largest non-bank commodity broker where $1.6 billion in customer money was stolen. I cry for him, I really do... Trying to portray Corzine as being focused on mundane things like finding a job rather than worried about doing jail time for his obvious crimes appears to be another prong of Corzine’s attorneys’ use of the Chewbacca Defense, along with saying that the fraud charges “Make No Sense,” because the money “Vaporized” and he had no motive since he had a de minimis portion of his net worth invested in MF Global stock. However, proving Corzine committed fraud and perjury would be relatively simple for any motivated prosecutor. Since the Department of Justice clearly is not motivated to prosecute Corzine after he bundled $500,000+ in campaign contributions to their boss, I provide this quick and easy guide for any ambitious state prosecutor to bring charges themselves:



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Stocks Slump Back To Draghi's Elbow

While everyone is loudly patting themselves on the back for getting the electronic exchanges open and enabling a few proud men to wriggle out of positions (or into them) into month-end, we can't help but notice the overall weak tone of equities. The S&P 500 cash markets proclaim a very small green close but after-hours futures are getting hammered. The Dow is only -10pts (but with IBM and HD alone accounting for 25 points of gain!), The Nasdaq is leaking painfully as AAPL traded down exactly as we thought - inched back above VWAP and tumbled into the close -1.5%. Broad risk-assets, which had been indicating a lower move in US equities, kept on sliding and stocks stayed with them all day as correlations picked back up. Treasury yields are 4-6bps lower than Friday's close, the USD is down around -0.12%, but Gold and Silver are up 0.6% on the week now. Oil slipped (after a European close spike and dike) and Copper slid from the US open. The main story of today is the crash in S&P 500 futures after-hours to the lows of the day (down 8 points from its cash close).



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HFT Caught-Red Handed In FX Trading

After decimating equity and commodity markets, the HiFreqs have boldly gone and broken another market - FX. But that is not news: we reported over two years ago, that while HFT accounting for all of the churn - not liquidity - in stocks, bonds, and commodities, HFT had moved on to the final frontier, FX, where even the smallest moves now are catalysts for avalanche-like surges and plunges on the most meaningless of newslfow. What is news it that finally it has been caught in the act. From Reuters, which is also an involuntary accomplice in this latest HFT unmasking, courtesy of its institutional FX trading platform: "Thomson Reuters Corp is investigating whether one of its currency trading customers gained an unfair advantage when making high speed foreign exchange trades on its platform. Lucid Markets, a privately held electronic trading firm registered in Great Britain, may have benefited from trades using several connections on the Thomson Reuters Matching platform."



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Netflix Shorts Netflixed As Icahn Announces 10% Stake... Using Call Options!

UPDATE: Icahn did NOT purchase shares at all - he mostly bought ITM Calls (he only purchased 500K shares, the rest of the disclosed 5.541MM stake is from call-option equivalents). It would appear someone is trying to make their year in one super-leveraged pump!

Thanks to Mr. 'Blockbuster' Icahn, who just announced a 10% stake in the company (for reasons that seem to a pure punt on it being bought out), NFLX is trading up 15% on the day and has filled its Q2 miss gap. He has been building a stake since early September (according to filings) and we suspect was pissed when Q3 earnings stumbled the stock back to below his average fill (allegedly). Of course hundreds of knife-catching hedge funds are thanking the great investor for giving them their exit from Q2 earnings' miss - it seems that you do indeed get a second chance to sell... cue CNBC M&A renaissance chatter...



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Guest Post: Hurricanes Do Not Have A 'Silver Lining'

It didn't take long for mainstream economists to provide us with some inane commentary regarding the latest natural catastrophe. Allegedly, the massive destruction of wealth hurricane 'Sandy' will leave behind has a 'silver lining'. We believe the main reason behind this stance is the unquestioned acceptance of one of Keynes' great fallacies: namely the idea that all economic activity – even unproductive activity – is somehow 'good'. Naturally, if it were really true that we could create economic progress by breaking windows or digging ditches (we will admit that pyramids at least render what one might term 'monument services', even if the expense seems hardly justified by this), then the government should pay half the population for digging ditches and hire the other half to wreak wanton destruction. The loss of wealth the hurricane has inflicted is very real; the wealth destroyed by it is most definitely gone.



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One Year Later - Santelli Rips Apart 'Connected' Corzine

There remains more than $1.6 billion of customer funds unaccounted for and whether you believe PwC (as Forbes notes) were duped or not, one year on from MFGlobal, one thing is for sure - there is no more hated character in the pits of Chicago than Jon Corzine. CNBC's Rick Santelli says it all in this blockbuster rant against the incredible reality that this 'connected' individual has got away with monetary murder. Must watch - but beware your blood pressure... as he concludes "we haven't heard the end of this - Chicago will find the answers!"



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ADP "Cancels" 365,000 Private Jobs Created In 2012

Frequent readers know that in addition of any "data" and "numbers" out of Larry Yun's National Association of Realtors, which we openly boycott as these are consistently manipulated (recall the massive historical December 2011 revision), slanted and conflicted, the second dataset which we have mocked with a passion is anything coming out of the ADP, which every month releases its "Private Jobs" number a day before the official BLS Non-farm Payroll data. Today, our mockeries have been proven 100% spot on. The reason? A week ago, ADP announced that going forward it would coordinate with Moody's (yes, that Moody's), and especially its chief economist, SecTres hopeful (InTrade odds of actually attain that post: 0.00) Mark Zandi, to fudge adjust its data going forward. The data revision was supposed to be publicly disclosed tomorrow when the official October ADP number was released. Well, just like today's Chicago PMI, and so many other data points recently, this too was released early. What the early release allowed us to promptly calculate is that using the historically revised numbers, and comparing those based on the original methodology, in 2012 alone, the US would have lost a whopping... 365,000 private jobs! Putting thus number in context, according to the revised methodology, the US has generated only 1.172MM jobs in 2012 through September, or in other words, a statistical "fix" magically eliminated over 30% of what the market had previously expected were job gains, a number which the incumbent president has certain taken advantage of on more than one occasions while campaigning.



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Guest Post: The Financial Super-Storm of 2013

Four years of glorious central-planning "extend and pretend" have enriched the political and financial Aristocracies, and imbued them with a bubble-era hubris that they have indeed gotten away with murder: the $6 trillion the Federal government borrowed over the past four years, the Fed's $2 trillion in fresh cash, the Fed's $16 trillion bailout of the banking sector and various perception management manipulations have righted the storm-tossed ship. All those with power in 2008 remain in power and all those with outsized wealth in 2008 still hold their outsized wealth. Except the financial tides and winds have shifted, and the linearity of central planning is about to be disrupted by nonlinear, positive-feedback storms.



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Dark Knight Capital... Again

Dear Valued Client,

As per Knight’s request below, please route away from Knight.  If a client routes an order to Knight, the order will be rejected by our system.  Information on existing orders will still flow back from Knight.



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How Wall Street's Bankers Survived Sandy

For millions of common people in New York and New Jersey, Sandy has been a historic disaster, with leaving ruined, homeless or forced to live in the dark and cold indefinitely. Sandy was a historic event for the Wall Streeters (a term used loosely as many of them reside in midtown or in Connecticut) among us too. And now, courtesy of Bloomberg's Max Abelson, we see how some of them managed to (just barely) scrape through...



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2 Refineries, 3 Nuclear Sites, And 6.25 Million Residents Still Dark

The US Department of Energy has just released their latest storm damage report for Sandy and it does not make for good reading. Over 50% of New Jersey residents remain without electricity and almost 2 million people in New York state alone. Port Reading (Hess) and Linden (Phillips) refineries remain shutdown (about 308,000 barrels per day or 26% capacity offline), and 3 nuclear sites (Salem, Indian Point, and Nine Mile Point) remain offline and many of the others are at dramatically lowered output (only 52% of capacity online!). Not good...



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Citibank.com Down

Wet server? It's all Sandy's fault!



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A Grim Preview Of This Friday's Jobs Number

Following this morning's dismal employment sub-index from Chicago Fed PMI and the recent Philly Fed employment sub-index, the 'data' suggests that this week's (now confirmed by the BLS that NFP will be released on Friday as scheduled) payroll data could be the first negative print since September 2010. Of course, we are sure that pre-emptive Sandy 'action' and seasonal adjustments will explain away any miss from the current +125k estimate. Is this why the market is not levitating on moar broken windows?



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