Archive - May 25, 2014

Long before Virtu was forced to pull its IPO due to the backlash against HFT frontrunners in party due to being stupid enough to post its perfect trading record of 1 trading day loss in 5 years which could only be the result of a grossly rigged market, we pointed out that another entity, one having little in common with your garden variety HFT parasite, namely JPMorgan, had a 2013 trading record which could be summed up on one word only: perfection. Yet while one could simply attribute the same kind of market rigging to JPM as one can (and should) to the average hi-freak, it seems there may be more here than meets the eye so used to seeing manipulation everywhere it looks. According to Australia's Sydney Morning Herald, "a technical support person who worked for JP Morgan in Australia claims the bank regularly misled its New York parent and the US Federal Reserve by failing to report losing trades."

William Black's no-nonsense simplification of the fraud that we call a financial system is both addictive in its clarity and stunningly concerning in its scale. Having exposed Tim Geithner as perhaps the worst Treasury secretary ever, and that "banks have blood on their hands," the following brief discussion of 'how to rob a bank - from the inside' is crucial to comprehend that nothing has changed and to make matters worse, after 2009's 'reforms', "the weapon of choice remains accounting" as no one knows what it occurring behind the scenes of the banks...

Presenting the mainstream media malaise...

soaring food prices are not only already here but are set to surge even more, especially for those who rather eat real meat than mystery meat dispensed with largesse at your favorite $0.99 fast food. So what are food processors to do facing soaring meat input costs and unwilling to suffer bottom line hits? Why, return to that old staple of unknown origin of course.

Here comes Pink Slime... again.

European leaders will meet next week to discuss a three-tier plan to impose "costs" on Russia if today's Ukraine election is not deemed "free and fair." Reuters reports that the low-, medium-, and high-intensity scenarios that the always-so-smart EU leaders have created start with impose restrictions on imports of Russian luxury goods including diamonds, precious metals, furs, vodka and caviar. The sabre-rattlers then escalate up to the "stage three" measures against Putin with a complete ban on imports of oil and gas from Russia. In other words, in spite of German business damnation, EU leaders will commit economic suicide and stop importing gas just to teach Putin a lesson... well played... It seems Putin's words are more prophetic than ever... "Everything in the world is interdependent and once you try to punish someone, in the end you will cut off your nose to spite your face."

One hundred and ten of Greece’s best beaches (70,000 lots) are on sale by Greece’s privatization agency, the Hellenic Republic Asset Development Fund (TAIPED) in the name of supposed 'development' and 'utilization of public assets' as the prerequisite for receiving more handouts from the Troika. "This sale of the land must happen," explains one Greek civil servant, "we need this now, quickly. Tell the Russians and the Qataris to hurry up!" But as KeepTalkingGreece notes, not everyone is so exuberant about a supposedly recovered Greece dumping assets in order to pay back its European bailout banker overlords. With SYRIZA taking the lead in elections, the euro-skeptic sentiment is likely only to rise.

With England's euro-skeptic UKIP expected to win what will be the first insurgent party victory since 1910 and France's establishment concerned of "grave consequences" for the European Union following the National Front's win; given the strong turnout Europe-wide, the rise of the anti-European Union right is clear to see...

Memorial Day provides the political class countless opportunities to ruin an otherwise thoroughly enjoyable holiday weekend. Like clockwork, local congressmen, mayors, city council members, et al. materialize at parades, picnics, and churches to give speeches about “freedom.” But what does freedom really mean?

Below is a real-time tracker of the results from the elections as they come in. For anyone but the Euroskeptics, the results will hardly be pretty...

On Friday we showed what the most hated (by everyone) Russell 2000 stocks are as of the most recent period (and hence most susceptible to epic short squeezes), here is a listing of what the most beloved stocks, by hedge funds, are as of March 31. One thing to note: just like in the case of first Apple, then GM, any time virtually everyone piles into the most held stock, it means just one thing - there are no marginal buyers left.

On a weekend so full of memories, we thought it appropriate to remember what was promised so many years ago from our central-planning overlords. All that printed money, all those bailouts, all those promises and Bernanke's statement that "Fed actions did not favor Wall Street over Main Street..." and this is what we end up with... "not" all time highs in what really matters...

China and Russia signed an historic agreement in Shanghai this week - the ramifications of which have yet to be appreciated ... Reserve currency status does not last forever. Empires rise and fall. The world is constantly changing and evolving. Nothing lasts forever …

After the crisis, many expected that the blameworthy would be punished or at the least be required to return their ill-gotten gains—but they weren’t, and they didn’t. Many thought that those who were injured would be made whole, but most weren’t. And many hoped that there would be a restoration of the financial safety rules to ensure that industry leaders could no longer gamble the equity of their firms to the point of ruin. This didn’t happen, but it’s not too late. It is useful, then, to identify the persistent myths about the causes of the financial crisis and the resulting Dodd-Frank reform legislation and related implementation...."Plenty of people saw it coming, and said so. The problem wasn’t seeing, it was listening."

As was largely expected, Petro Poroshenko - the candy tycoon known as the "chocolate king" - has easily beaten Yulia Tymoshenko - nicknamed "gas princess" - to become Ukraine's next president according to exit polls:

UKRAINIANS ELECT POROSHENKO AS PRESIDENT: (POROSHENKO RECEIVES 55.9%, TYMOSHENKO RECEIVES 12.9% OF UKRAINE VOTE: EXIT POLL)
UKRAINE'S POROSHENKO SAYS HE'S READY FOR TALKS WITH RUSSIA
POROSHENKO: UKRAINE WON'T GIVE UP CRIMEA

Hope remains for stability in the nation as Poroshenko, as we noted here, is the most middle of the road - pro-Europe (but not too much) and most importantly believes Ukraine joining NATO "is probably not a good idea," which will likely disappoint the US. There has been violence in the East but it does not seem widespread enough to warrant any negative conclusions from Putin for now.