JPMorgan Settlement To Reach $11 Billion, AP Reports

Earlier in the week, we warned the mortgage settlement that JPMorgan might face could reach $20 billion. Well, 'officials' at the DoJ according to AP have stated that:

  • JPMORGAN NATIONAL SETTLEMENT MAY REACH $11B, AP SAYS
  • JPMORGAN PACT MAY INCLUDE $7B CASH, $4B CONSUMER RELIEF

What is most surprising is that JPM did not arrange the $11 billion "settlement" as $12 billion in consumer relief and a $1 billion cash payment from the government.

Wal-Mart Nails The "Consumer Recovery" Coffin Shut

UPDATE: CNBC Damage Control - Story was "misunderstood" and "misleading"...but not denied... CNBC is to Wal-mart as Hilsenrath to the Fed

 Welcome to the new normal recovery... if ever there was a headline that summed up the idiocy of the mal-invested distorted new normal, Wal-Mart just managed it:

*WAL-MART CUTTING ORDERS (In Q3 & Q4) AS UNSOLD MERCHANDISE PILES UP IN U.S.

So, it seems the "if we build it (or stock it), they will come (and buy)" mentaility has failed yet again... As we noted before, as goes Wal-Mart, so goes America...

At Least The Senate Can Agree On One Thing: We Need Moar Debate To Get Paid

While Cruz's speech was entertaining (and gained media attention), there is one thing they agree on

  • *SENATE VOTES 100-0 TO ADVANCE BILL TO KEEP GOVERNMENT OPEN

Which means the Senate invokes cloture on the motion to defund Obamacare - setting up 30 hours of debate before another vote on the motion (Cue Cruz again?)... but

*CARNEY REITERATES OBAMA WILL NOT NEGOTIATE ON DEBT CEILING

The 3 Big Lies Right Now

There appears to be 3 big lies (among many other smaller ones) currently driving the flow of speculative capital around the world. First, Bernanke said the Taper was off due to 'worsening' financial conditions (except financial conditions remain very near all-time highs). Many mean-reverting extrapolators are calling for a renaissance in emerging markets and Asian growth that will lead us out of this 'temporary' slowdown (except consensus growth expectations for Asian economies are tumbling in reality) and most people assume US economic 'escape velocity' growth is around the corner and the Fed will normalize policy 'just right' (but a glance at Eurodollar futures suggests the market is far more dovish than previous tightening cycles would suggest). With normaliation implying 600bps rates rises, we suspect the reality of these 'lies' will come back to bite sooner rather than later.

CFTC Concludes Long-Running Silver Manipulation Investigation, Finds Nothing Wrong

It is somehow fitting that on the day when even more undisputed evidence is revealed, surrounding the most brazen market manipulation scheme in history - one involving the "unmanipulable" Libor benchmark rate which serves as the foundation for hundreds of trillions in interest rate sensitive instruments - that the CFTC would also come out moments ago, and announce that in its long-running investigation of alleged manipulation in the silver market... there is absolutely nothing wrong.

Video Released Of Unmanned F-16 Drone Test Flight

One would think following the ever louder public complaints against the use of drones that the Obama administration would take the hint and perhaps taper their remote controlled less-than-surgical-strike use. One would be wrong because as we have learned, the president has instead opted to double down and expand drone use by branching out into such manned legacy fighter jet territory as remote-controlled F-16s.

Over 18 Hours In, Ted Cruz Obamacare Filibuster 4th Longest In Senate History... And Still Going

Having taken the floor at 2:41ET Tuesday afternoon,. Senator Ted Cruz's anti-Obamacare filibuster-lite has now become the 4th longest filibuster in Senate history, as The Washington Times repots, topping the 1908 speech by Sen Robert La Follette Sr.. Overnight, he read excerpts from both Ayn Rand's “Atlas Shrugged” and from Dr. Seuss’ “Green Eggs and Ham” on the floor, cited approvingly the words of wisdom from actor Ashton Kutcher and hit TV show “Duck Dynasty." Mr. Cruz will not be able to reach the third-longest filibuster in history, a 22-hour and 26-minute affair in 1953, because under the rules, the Senate will have to adjourn its session at noon.

The Big-Picture Economy, Part 3: Scarcity, Risk And Debt

When skimming and speculation are more profitable than actually increasing the production of goods and services, the discipline and incentives of a market economy are distorted to the point of no return. The only way to restore natural market discipline is to let the cost of credit rise to a market-discovered price, force all speculators to absorb the losses resulting from their bad bets, and let the risk of losses discipline lenders to adjust loan portfolios and interest rates to reflect the risks of rising rates and defaults. "Growth" that depends on manipulated interest rates and easy credit is a sand castle awaiting the rising tide; its destruction is assured.

Stunning Libor Fraud Admissions: "As For Kick Backs We Can Discuss That At Lunch" And Much More

  • Derivatives Broker 1: Make 6m go lower! They r going up. [Senior yen trader] will buy you a ferrari next yr if you move 3m up and no change 6m (February 29, 2008, via text message to personal mobile phone)
  • Yen Desk Head: Lord Baliff, I would suggest a lunch over golden week. Monday or Tuesday if you are around. *** As for kick backs etc we can discuss that at lunch and I will speak to [Senior Yen Trader] about it next time he comes up for a chat.

Median New Home Price Drops To Lowest Since January 2013

New home sales meet expectations at 421k after downward revisions in the last month - which was already the biggest miss of expectations in over 3 years. This looks like the last hurrah rush for purchases as we got a dip lower in rates in July before the most recent surge higher. Bear in mind that the actual unadjusted number of homes sold was a mere 35k (the 3rd lowest in 2013) and 11k have yet to be started. In the meantime, median home prices continue to slide - now at 2013's lows and supply is rising at 5.1 months (unadjusted) this is the highest in 2013. It seems that as rates rise, just as we warned, speculative capital will exit (on uneconomic yields) and home prices ae forced lower on a stagant income vs higher rates affordability basis. Sure enough, median home prices have slumped to their lowest level since January 2013.

Do You Believe In European Miracles?

Early in the Summer of 2012, Europe's crisis was re-escalating and spreading broadly to global risk assets. Something had to be done... and so Draghi stepped up with the not one but two 'phrases'... he said "whatever it takes" and delivered the miracle that has become OMT. Since then Draghi has been unwilling (or unable) to provide further color on exactly what OMT is (or how it will work) but as the chart below shows... it worked... and investing public bought the miracle. But, as Bloomberg's Niraj Shah notes, the German constitutional court will rule on the legality of the ECB’s Outright Monetary Transactions program later this year. While the court has no formal jurisdiction over the ECB, a ruling against bond purchases may damage investor confidence on the central bank’s willingness to use OMT.

Deutsche Bank Plunges On Latest Debt Trading Revenue Warning

First it was Jefferies. Then Citi. Now it's Deutsche Bank's turn:

JAIN EXPECTS 3Q DEBT TRADING REV. TO DECLINE `SIGNIFICANTLY'
JAIN SAYS CB&S AFFECTED BY MARKET ENVIRONMENT
JAIN SAYS 3Q TRADING RESULTS DIDN'T BENEFIT FROM CATALYST
JAIN EXPECTS TO TAKE ADDITIONAL LITIGATION RESERVES

Stock promptly plunges because nobody could have possible foreseen this...

Lew Warns D(ebt-Ceiling)-Day Is Oct 17 (Full Letter)

In a new letter to Congress, the political rhetoric is on the rise as Treasury Secretary Lew warns:

  • *LEW SAYS EXTRAORDINARY MEASURES EXHAUSTED NO LATER THAN OCT. 17

Adding that results could be catastrophic if the US government is unable to pay its bills, he warned that any attempt to priotize payments would "Default by another name."

AIG's Benmosche Is Sorry For Comparing Taxpayers To A Lynch Mob

Confirming, once again, that without fail Wall Street executives tend to have irreconcilable sociopathic tendencies in addition to delusions of grandure, AIG's Bob Benmosche found himself promptly under fire from all sides following his interview with the WSJ (reported here) in which he said that outrage over banker bonuses "was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that - sort of like what we did in the Deep South. And I think it was just as bad and just as wrong." There were two main differences: this time around, to pretty much everyone's disappointment, there were no actual lynchings or even anyone going to prison. But more importantly, racial hatred and lynchings in the "deep south" were generally irrational and without reason, which is certainly more than can be said about a banker uberclass that would not exist if it wasn't for taxpayers saving their ungrateful offshore bank accounts. In other words, the hatred at the likes of Benmosche is certainly warranted. Which, together with Elijah Cummings promptly demanding his resignation, is why in less than a day the CEO found himself apologizing for a "poor choice of words."

Troika Skeptical Of Greek Leaders' Economic Optimism

Various Greek leaders have proclaimed the worst over for the desperately troubled nation. The basis for that optimism - a primary surplus - however is being brought into doubt by none other than the Troika (the overseer of the bailouts). As ekatherimini reports, the troika has doubts about Greek projections for a primary surplus this year and next and has begun the process of discussing with Athens the contents of the 2014 budget. Skeptical of Greek projections of a 1.5% of GDP primary surplus this year, it is also ironic that the Greek leaders themselves are downplaying the size of the surplus for fear that handouts will sour. All-in-all, it seems, Greek data (in light of the extreme unemployment) is anything but trustworthy - especially in light of further doubts over the effectiveness of the unified property tax.