Archive - Oct 2015

As Bloomberg reports, "JPMorgan Chase & Co. is set to pay almost a third of a $1.86 billion settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit-default swaps market, according to people briefed on terms of the deal."

A quick summary of the latest HFT market-rigging scam: mysteriously, and "erroneously", a change in Latour Trading's code was made, which the firm lacked "direct and exclusive control" over, and which was non-compliant with Reg NMS requirements, yet which mysteriously ended up generating "gross trading profits and rebates by stock exchanges" amounting to $2.8 million. Where have we seen this? Oh yes...

The unforeseen consequences of the advent of electric cars will reverberate much farther than the demise of dealerships and significant shifts in market share in the auto industry.

Between the demographic time bomb about to go off - that is, the growth of the elderly population far exceeding the growth of the working age population by several orders of magnitude - and then the weak economy, the huge expansion of entitlements under the health care law, and the dramatic increases of the costs of those entitlements, including for labor, what could possibly go wrong?

The President speaks live about the mass shooting that wreaked havoc at an Oregon community college on Thursday

News That Matters

The signs of deflation are now flashing all over the globe and the possibility of an associated financial crisis is now dangerously high over the next few months. Our preferred model for how things are going to unfold follows the Ka-Poom! Theory, which states that this epic debt bubble will ultimately burst first by deflation (the "Ka!") before then exploding (the "Poom!") in hyperinflation due to additional massive money printing efforts by frightened global central bankers acting in unison. First an inwards collapse, then an outwards explosion.

If you think it’s bad now, just wait until November. If AKP doesn’t secure an absolute majority there’s no telling how Erdogan will react and if Ankara moves to nullify yet another democratic election by intentionally stirring up the PKK, you can expect outright chaos.

The system is a machine in which each gear serves the whole. So go ahead and try to "reform" the system by extracting whatever gear you don't approve of: the Deep State components, the Security State organs, the Federal Reserve, cartels/monopolies enforced by the State, the suppression of democracy, crony capitalism, whatever. The system is interdependent. Each subsystem needs the others to function.

"The system failed in 2008/09 and rather than allow a proper creative destruction cleansing, policy makers have been aggressively propping it up ever since.  We think the end game is that when the next global recession hits, then QE/zero rate world will be re-appraised."

"It's living in hell in Syria. They are living in hell," according to Donald Trump, blaming President Obama's failed policies. However, in a reversal of policy - earlier this month he told Fox News the US should take in more refugees - Trump told a New Hampshire rally: "If I win, they're going back."

Every year ending in a '5' has posted a positive return since 1875. In other words, the last 13 '5' years have left stock investors "high-fiveing" each other. However, the number of times the S&P 500 has finished the year positive - after being down 6% at end of Q3 - is ONE!

Always the silver lining... refugee housing crisis "solved"