On Tuesday, Deutsche Bank agreed to a $55 million SEC settlement tied to allegations it hid billions in losses by mismarking its crisis-era derivatives book. The bank has always contended its valuation methodologies were sound. Here is the real story...
Who could have seen that coming?
UPDATE: Denial *GREEK CREDITORS NOT YET DRAFTING FINAL ACCORD, EU OFFICIAL SAYS
Another day, another rumor (not yet denied) of a report that Greece and its creditors are crafting a deal (well durr)... The result, vertical buying panic in US equities, USD dumped (on EUR strength), TSY yields spike 3bps, and Crude oil surges... what a "market"
What do you do when month after month you have nothing but bad data to report. Simple: you have two choice - you either seasonally adjust the data (or in the case of US GDP, double-seasonally adjust it), or if that is not possible since unlike US GDP, your numbers are at least somewhat indicative of underlying reality, you stop reporting them altogether.
A month ago 24-year-old Snapchat CEO Evan Spiegel gave global sheeple investors a glimpse at the reality in Silicon Valley's and how the second tech bubble will burst (via his leaked comments from 2013). Overnight he stepped up the rhetoric, as ReCode reports - itself in the midst of a stock-only buyout by Vox - Spiegel warns we are currently living through a tech bubble and that it’s a matter of when, not if, the tech bubble will burst. "People are making riskier investments and... there will be a correction," he warned, placing tha blame squarely on The Fed's shoulders, explaining that the bubble is being fueled by an "easy money policy" and low interest rates - that may not last much longer.
WTI Crude's late-day bounce yesterday is gone... and then some. Front-month (July) futures prices are back below $57.50 - their lowest since April 23rd (before the inventory "draw"s began). With OPEC's June meeting looming every closer, one wonders if this downward pressure on price is helping to solidify anti-Saudi rhetoric among the cartel members...
Bill Gross just revealed another aspect of trading in the new (or any) normal: one may get the direction and the timing with laser-like precision (as Gross did on his Bund trade), but if said trade is excecuted in a way where the inherent "coiled spring" volatility of the Gross-defined "new normal" blows up the trade structure, the losses will make one wish never to have had the correct idea in the first place.
Crude oil prices are tumbling as the USDollar pushes on to new highs driven by the continued stretch of renewed weakness in the Euro. As Bloomberg's Richard Breslow notes, however, "it’s not all about Greece. Not even close."
Greece is "nowhere close" to a deal with its creditors and will miss a May deadline to strike a compromise ahead of an IMF payment due on June 5. Meanwhile, the ECB tightens the screws on the country's banking sector by refusing to lift the ceiling on the emergency liquidity that until now has helped to offset deposit flight.
- FIFA Raided by Swiss Authorities in 2018, 2022 World Cup Probe (BBG)
- Companies Send More Cash Back to Shareholders (WSJ)
- Time Warner Cable Deal Stirs Debt Concerns (WSJ)
- Qatar $200 Billion World Cup Under More Scrutiny Amid FIFA Probe (BBG)
- Philippine, Vietnamese troops play soccer and sing on disputed island (Reuters)
- The G-7's Problem: Can the World Deal With a Greek Default? (BBG)
- SocGen Deal for Bache Illustrates Commodity-Trading Woe (WSJ)
- China’s Naval Abilities Test Asia’s Insecurities (WSJ)
"We begin then by saying without equivocation that we have changed our mind again regarding equities... Hence in our retirement funds here we reduced very slightly our long position in Apple directly and then wrote near-the-money calls against the remaining position. Further, we sold just out-of-the money calls against the “tanker” shares we owned, and we used the money taken in from those calls to buy more derivatives sufficient to take us back to market neutrality."
It had been a painfully quiet session in Asia (where Chinese levitation continues with the Shanghai Composite up another 0.6% oblivious of yesterday's rout in the US, because as we explained for China it is now critical to blow the world's biggest stock bubble) and Europe, where the only notable news as that for the first time in months the ECB had not increase the Greek ELA, keeping it at €80.2 billion on conflicting reports that Greek deposit withdrawals had halted even as Kathimerini said another €300MM had been pulled just yesterday, suggesting the ECB has reached the end of its road when it comes to funding nearly two-thirds of what Greek deposits are left in local banks. But the punchline came moments ago when Bloomberg reported that "Greece will likely miss a deadline for a deal with creditors by the end of the week as the two sides have made little progress during talks in recent days."
A video showing a car attempting to park but actually plowing into journalists resulted because the Volvo’s owner chose not to purchase the "optional extra" preventing the car from slamming into pedestrians.
"Graccident" Will Trigger The Demise Of The ECB And The World's Toxic Regime Of Keynesian Central BankingSubmitted by Tyler Durden on 05/27/2015 - 03:00
The euro-19 area is now close to having a 100% debt to GDP ratio, and that’s flattered by German surpluses from an export boom that is rapidly cooling, and the fact the for a few quarters Mario’s printing press has conferred huge interest rate subsidies on their depleted fiscal accounts. The pending Graccident will puncture that illusion, tipping most of Europe into acute fiscal crisis and political upheaval of the type that has already roiled Greece and was starkly evident in Spain’s elections last weekend. The odds that the European superstate and the ECB’s Keynesian monetary regime will survive the resulting upheaval are, thankfully, somewhere between slim and none.
While some have argued that President Obama and his folly-prone foreign policy debacle is the laughing stock of the world, it seems, as DefenseNews reports, that the Iraqi military is directly mocking America. Just a day after defense secretary Ash Carter accused them of cowardice, an umbrella group for mostly Shiite militia and volunteer fighters, Hashed al-Shaabi, said it had dubbed a military campaign to cut off the Islamic State group in Anbar province as "Operation Labaik ya Hussein," which roughly translates as "We are at your service, Hussein."