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How Germany Defines, And Deals With, HFT Market Abuse

"The HFT Act will add the following clarification to the rules specifying the prohibition of market abuse: The placing of purchase or sale orders to a market by means of a computer algorithm which automatically determines the parameters of the order could be considered market abuse provided the placing of orders occurs without a trading intention, but (a) to disrupt or delay the functioning of the trading system, (b) to make it more difficult for a third party to identify genuine purchase or sale orders in the trading system, or (c) to create a false or misleading signal about the supply of or demand for a financial instrument."



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Guest Post: The US-EU-Russia Sanctions Puzzle

Whatever Russia does, doubt does not even enter the equation. The answer is sanctions. So here we go again. No one ever lost money betting on the stupidity of the usual, unknown “senior US officials” – who are now spinning the latest sanction package is to force Moscow to “respect international law and state sovereignty.” A cursory examination of the historical record allows this paragraph to be accompanied by roaring laughter. As for Russia’s "isolation", companies are barred from, in Washington-Wall Street newspeak, "important dollar-denominated funding sources." Or, euphemistically, "Western capital." This means the US dollar and the euro. Anyone following superimposed moves towards a multipolar world knows Russia does not need more US dollars and euro.



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Goldman's Former Head Of Housing Research Predicts Housing Crash, Recession Within Three Years

When a former Goldman executive and the prior head of its housing research team comes out with a shocking analysis so contrary to what the same individual would do in his "former life" when he would be extolling the "inevitable" rise of home prices from here to eternity and beyond, and also throw in an open letter to none other than president Obama, predicting at least a 15% crash in home prices in the next three years, a move which would without debt catalyze the next US recession, it is time to pay attention. Meet Joshua Pollard, who in February 2009 took over coverage of US Housing at Goldman Sachs.  His point, in short: "House prices are 12% overvalued today. They have already started to decline. Today’s misvaluation matches the excess of 2006-07, just before the Great Recession... 5 of the last 7 US recessions were led by a weakening housing market... I am lamentably confident that home prices will fall by 15% within three years." Or, as some may call it, crash.



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California Is Burning: Postcards From The Inferno

As if the drought was not disastrous enough for California, a consequence of the state's dryness is that nearly 6,000 firefighters are battling 12 separate wildfires raging across the Golden State. As the Cal Fire chief notes, "We've seen a lot more fires, and with those fires, more and more people are at threat. Every day we continue to see new fires ignite, forcing hundreds to evacuate," and the following images from the infernos suggest there is no end in sight as "we start to see winds pick up and conditions are at their driest."



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Goldman's Yellen Press Conference Post-Mortem: "Few Surprises"

Having confirmed yesterday that China's "Stealth QE" is absolutely uber-bullish (despite PBOC playing it down themselves), Goldman is out after the close (having seen stocks give all their post-FOMC gains back) to confirm the "Fed is still dovish" meme...



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House Votes To Fund Arms To Moderate (For Now) Syrian Rebels (And Ex-Im Bank) - Live Feed

*HOUSE HAS VOTES FOR U.S. AID TO SYRIAN REBELS; VOTE CONTINUING

Those sneaky politicians... The House has just begun voting on whether to amend the US Spending Bill to enable funding for Obama's grand strategy of training "moderate Syrian rebels.

  • *SYRIAN REBEL AID IS PROPOSED AS AMENDMENT TO U.S. SPENDING BILL
  • *HOUSE BEGINS VOTE ON U.S. AID TO SYRIAN REBELS SOUGHT BY OBAMA

However, what few have also noticed is that the bill also includes an extension for funding the Export-Import bank.



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Stocks Give Up Post-FOMC Gains; Dollar, Bond Yields Surge

Obviously, today's market was all about the Fed. some brief stop-running early on took out yesterday's highs only to fall back before Yellen... then the fireworks began. The initial kneejerk reaction was to sell stocks, sell bonds, and buy USDs. Then came the re-reaction - VIX was slammed below 12, the S&P 500 surged to near intraday record highs, bond yields accelerated higher, EUR and JPY weakness sparked USD bid, and PMs slipped lower as Yellen meandered uncomfortably through a two-faced press conference. By the close, the USD had hit fresh 4-year highs (USDJPY over 108), stocks had roundtripped to unchanged from FOMC, Treasury yields were notably higher, VIX back over 12.5, Trannies surged.



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How To Game A Rigged Market

"it may make sense to stay invested, but we have reached a point where protection against an untidy denouement to the present market phase should be built into the construction of a portfolio. It is not enough to rely on a protection that will be executed in response to price signals."



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Got (Record-High-Priced) Milk?

Hot on the heels of yesterday's low PPI and this morning's falling CPI, we thought it worth noting (given The Fed's pre-occupation that inflation is running too low) that the price of milk - that staple of the American diet - just hit an all-time high. Nope, no inflation here...



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The Fed's Laughable GDP "Forecast" Just Got Even Funnier

What in January 2012 was a 2014 GDP forecast range of 3.7%-4.0% collapsed to 2.1%-2.3% in June (because clearly the Fed couldn't possibly forecast snow in the winter), and three months later is now 2.0%-2.2%. In short, a 43% forecasting error. That is all.



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VIX Slammed Under 12, S&P To Record Highs As Yellen Starts To Speak

UPDATE: Stocks have roundtripped again since she started...

Having oscillated in a wide range immediately after the FOMC statement's release, stocks have decided that up is the way to go and the S&P 500 just hit new all-time record intraday highs (helped by a VIXnado collapse under 12 and surge in USDJPY). Treasury yields are higher, USDdollar is higher (but fading back from its initial spike), and gold and silver and unchanged.



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Janet Yellen's "Double-Dissent, Exit Strategy" FOMC Press Conference - Live Feed

Having used the most words ever in an FOMC statement to describe the total shenanigans that they have created, Janet Yellen prepares to 'meet the press' to explain how 'considerably' well things are going and yet how much 'considerably' more is needed to be done... For now the meme is that this statement is more dovish than the previous one; we suspect she will want to walk that back a little.



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The "Dots" Chart - Then And Now

Perhaps the one most important, if completely meaningless chart (because it will as usual revised countless times in the next year and the final outcome will be anything but what the Fed is predicting) that everyone was looking for in today's FOMC forecast materials, is the so-called "dots", so here it is.



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FOMC Keeps "Considerable" Wealth Effect Dream Alive, More See First Hike In 2015; Two Dissent - Full Statement Comparison

Perhaps not surprisingly - following Hilsenrath's 'leak' - the FOMC has decided to keep the "considerable time" language alive-and-well in its latest statement, supporting the uber-dovishness rate guidance as QE is tapered as expected:

  • *FED TO END QE PROGRAM AT NEXT MEETING IF OUTLOOK HOLDS, RELEASES EXIT STRATEGY GUIDELINES
  • *FIRST RATE RISE SEEN IN 2015 BY 14 FED OFFICIALS VS 12 IN JUNE (FISHER, PLOSSER DISSENT)
  • *FED KEEPS `CONSIDERABLE TIME' PLEDGE FOR LOW RATES POST-QE

Record high stocks, record low corp yields, surging GDP, PMIs soaring, housing and consumer sentiment exuberant, jobless claims at lows, JOLTS at highs, and the Apple iPhone 6 - if that doesn't draw Yellen to the middle, we don't know what will... but we are sure she'll explain in the press conference. Full redline below...

Pre-FOMC: S&P Futs 1992.00, 10Y 2.56%, Gold $1235, WTI $94.20, USDJPY 107.50



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Dramatic First-Person Video Of Attempted Gunpoint Robbery Courtesy Of GoPro

What happens when a camera on a stick captures an Argentinian gun-yielding thug on a bike? This.



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