Archive - May 2014

There is evil, and then there's organized evil. Large-scale evil requires surrender of autonomy, coercion by a central authority and a willingness to follow orders.

And War is a racket...

For those pressed for time, here is the one-chart post-mortem of what happened in yesterday's elections for European Parliament: the malcontents block, or the anti-EU and protest parties, soar and now control nearly a third of all seats, up nearly by 33% from a fifth currently, in the parliament they all predominantly loathe.

Ukraine didn't waste much time after its presidential election, which appears to have been won outright by the chocolate tycoon Poroshenko much to the humiliation of once frontrunner Tymoshenko, to resume its military operation in the east. Early this morning, the newswires blasted that Ukraine warplanes have carried out an airstrike against pro-Russian separatists at the Donetsk International Airport. This happened after forces belonging to the self-proclaimed Donetsk People's Republic, which proclaimed its independence from Kiev last weekend, came to the airport demanding that Ukrainian troops leave it. The self-defense troops said some 200 Kiev soldiers were guarding the inner perimeter of the hub. All flights have been suspended.

S&P (futures over 1900 for first time), Dow, and Nasdaq futures markets are all pressing new higher-highs this morning on the heels of Europe's dismal election news overnight. Helped early on by JPY weakness, stocks now have a mind of their own and have disconnected from an unchanged Treasury futures market (cash is closed) and a fading EURJPY/USDJPY carry trade. European peripheral bonds are the must-have asset of the day with Portuguese bonds particularly loved. Italian stocks are the high-beta idiot-maker trade today (+2.8%).

Anti-European-Union parties are showing strongly in this weekend's elections. Anxiety is spreading among the status quo as Greece's anti-austerity party SYRIZA wins and perhaps even more worryingly in supposed core of the union France's Nationalist party is leading in a "political earthquake" success:

EUROPEAN GOVERNMENTS MUST RESPOND TO CITIZENS' ANGER, SAYS 'SITUATION IS GRAVE FOR FRANCE, EUROPE'; DRAGHI SAYS PEOPLE VOTING ACROSS EUROPE ARE CLEARLY DISENGAGED

The US and UK markets may be closed for holiday today but that doesn't mean that US equity futures can't spin this weekend's resurrection of anti-EU sentiment in Europe, coupled with the just confirmed  resumption of the "anti-terrorist" operation in Ukraine (more on that shortly) following its anticlimatic presidential elections in a positive light. They can and they have, and even though the USDJPY low volume ramp is oddly missing overnight, and 10 Years appear bid, spoos are set for another record high, and are already trading up 0.2% at 1901.3, above 1900 for the first time ever. European shares remain higher with the autos and bank sectors outperforming and food & beverage, basic resources underperforming. The Italian and German markets are the best-performing larger bourses. The euro is little changed against the dollar. Greek 10yr bond yields fall; Italian yields decline.

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...