Archive - Apr 2014

America is being run by an unelected gang of essentially self-perpetuating PhDs. The notion of an economics coup d’ etat is not so far-fetched.  So the last 35 years have brought the greatest exercise in mission creep ever undertaken by an agency of the state. That explains why the monetary politburo persists in its absurd quest to force more debt into an economy which is already saturated with $59 trillion of the same. To pretend, as does Yellen and most of the monetary politburo that they must plow ahead printing money at lunatic rates because Congress so mandated it, is the height of mendacity. The Fed has seized power and is not about to let go - common sense be damned, and the constitution, too.

The Fort Hood shooting appears to be over, with the shooter reportedly dead of a self-inflicted wound and according to the latest CNN update, three other people dead, and as many as 14 others injured, some in critical condition. Reports of a second shooter are so far unconfirmed. CNN also reports that the name of the shooter is 34 year old Ivan Lopez. The shooting is also said to not be terrorism-related, but instead a "solider on solider" attack.

BREAKING: Obama says he's following Fort Hood shooting closely, US will get to bottom of what happened.

— The Associated Press (@AP) April 2, 2014

As he visited clients around the nation, JPMorgan CIO Michael Cembalest noted a number of questions repeated... why can’t the US spend more on infrastructure? why can’t the US spend more on worker retraining? why is less money being spent on training, employment and related social services? why is energy spending falling? The answer, ne explains below, to all these questions is the same: these categories are declining since they are being squeezed out by the inexorable rise in entitlement payments.

Given our understanding that the number of large avalanches is positively correlated to the number of small avalanches, it seems pretty clear that (as Nanex and Zerohedge has been saying) the damaged market microstructure is mirrored in the increasing number of flash crashes since Reg NMS. Unfortunately, our murky understanding of how the microstructure causes the macrostructural changes can be used by the regulatory authorities to avoid investigation. They can't see a smoking gun. Accordingly, our modest proposal for dealing with HFT is this--nothing. Don't bust trades--let them stand. We'd be curious to see the response of the various Ivy-League endowment funds and pension funds when they suffer brutal, near-instantaneous, multi-billion-dollar losses. How would real companies, producing real products, react to a sudden monkey-hammering of their stock price, especially if it triggered debt covenants? Maybe they would all exit the market en masse. It might even force a real change.

Surprise, surprise!

Fort Hood, Texas, was was the place of an infamous mass murder that took place in November 2009, when 13 people were shot by a US Army major in what is the worst shooting to ever take place at an American military base.  Moments ago news hit that there is another reported shooting situation at Fort Hood with the shooting suspect said to still be at large.

FORT HOOD, TEXAS, ON LOCKDOWN AMID SHOOTING REPORTS: SHOOTING SUSPECT STILL AT LARGE; `MULTIPLE VICTIMS' AMID SHOOTING: KCEN TV

Live webcast from KCEN.TV below

Polish magazine "Fakt" has laid out the following scenario of just how a Russian invaston would look like, sweeping the Baltics, Belarus, and all of Ukraine, in one offensive wave.

It was so fitting that Obama sauntered into the Rose Garden on April Fools day to proclaim the wonderful success of Obamacare. We are the fools for allowing this fool and his fellow fools in Congress to further bankrupt our country with this disastrous government run clusterf*ck. Their is so much propaganda, spin, disinformation and outright lies circulating in the captured mainstream media that the dumbed down, distracted, disinterested American populace believe the sound bites from Obama and the talking heads on MSNBC and the rest of the Obama loving media. You may have noticed the non-stop 30 second ads trying to convince iGadget addicted morons to sign up for Obamacare over the last three months, building to a crescendo in the last few weeks. Let’s assess the tremendous success  the Savior was blustering about yesterday. He sold the plan to the American public back in 2009 with a number of promises.

The Nikkei shot up last night because the Yen was weak and, best of all, Japan's $1.25Tn pension fund will be handing money to the Banksters to put into the stock market. 

Round 2 of the HFT vs Reality death match just took place on Bloomberg TV. Once again the clear winner was Katsuyama and Lewis version of the real world as Manoj Narang finally lost all credibility with the mind-0bumbing comment that "speed matters less in today's market than it has ever mattered." But the Tradeworx CEO was a background singer compared to Michael Lewis who explained in his clearest analogy yet how the casino works and then devoured the anchor's constant efforts to play down the "rigged" market perspective... "it's very clear that people are being front run in the market... so, why are you even arguing about this?"

Biotechs ended positive but for the 10th day in a row saw the early pump, dumped (as did a number of the momo names). But the big news is the Dow getting back into green for 2014...and then failing to hold it! Trannies and the S&P both hit new record highs. Treasury yields continue to press higher with 5Y now at 7-month highs (testing 1.80%) as 30Y yields are up 11bps on the week. The USD rallied modestly all day (ahead of tomorrow's hope-strewn ECB meeting) but commodities were mixed with general flatness interrupted by significant spikes in gold and silver around 8amET. Copper faded during the US day session. VIX was slammed under 13 into the close but faded back higher into the close.

Spot what is missing in the just blasted headline from Bloomberg:

IRAN, RUSSIA SAID TO SEAL $20B OIL-FOR-GOODS DEAL: REUTERS

If you said the complete absence of US Dollars anywhere in the funds flow you are correct. Which is precisely what we have been warning would happen the more the West and/or JPMorgan pushed Russia into a USD-free corner.

Just over a month ago, we reported on the Supreme Court's ruling that police may search a home without obtaining a warrant thus denigrating the Fourth Amendment to the funeral pyre under the Obama Administration's totalitarian might. Today that decision (and the end of the 4th) were confirmed when the country's top intelligence official confirmed in a letter to Congress that the Obama administration has conducted warrantless searches of Americans' communications as part of the National Security Agency's surveillance operations. While efforts were made to suggest agencies do not deliberately track Americans' emails, phone calls, and online activity without a warrant, as Sen. Wyden notes, "the facts show that was misleading."

As if to prove all the HFT naysayers right, milliseconds before 3:30 pm - the traditional time when HFT algos come out and ramp stocks into the last half hour of the day, a massive E-mini order block slammed the tape, driven by a tremor in the USDJPY, sending the DJIA green for the year in the most unriggedly of manners.