Archive - Nov 2015

Update: CME DIRECT ISSUES NOW RESOLVED, EXCHANGE SAYS

CME Group's online trading platform CME Direct will be unavailable until further notice due to a technical issue, the exchange said in a member notice this morning sent at 0857ET. While volumes look largely unaffected, Reuters reports that the outage came on the first day that CME migrated many users of its EOS Trader platform over to CME Direct, and also coincided with an upgrade to CME Direct's technology, sources familiar with the matter said.

Bitcoin is up 123% from its January lows and over 50% higher than its early-September (post-Bitcoin XT anxiety) lows when we first warned about the virtual currency's relationship with possible China outflows. Despite promises of easing capital controls (and the chaos in the Yuan market over the last few days), it appears the Chinese are not waiting for the other shoe to drop and as offshore Yuan tumbled, so Bitcoin surged above $340 this morning (rallying all the way back to unchanged YoY).

Much of the national debate about widening inequality focuses on whether and how much to tax the rich and redistribute their income downward. But this debate ignores the upward redistributions going on every day, from the rest of us to the rich. These redistributions are hidden inside the market. The only way to stop them is to prevent big corporations and Wall Street banks from rigging the market.

"... we have more single short names than long positions in our book today. We have reduced our net exposure by nearly a third through sales and new shorts over the past few months."

Janus Capital shares have tumbled back from earlier gains after WSJ reports that a firm run by George Soros has pulled a $500M investment with Bill Gross. The firm reportedly invested the money a year ago after Gross started at Janus Capital.

"I have lost so much money on people like him and I'm done dealing with it. They take the food right out of my mouth," exclaims Uber-driver Edward Caban after being assaulted by a passenger, "I don't feel safe driving for Uber any more... The quality of the passengers has gone down over the last couple of weeks and I know a lot of drivers will agree with me."

Now that Chipotle's e. coli outbreak had shuttered places all over the Pacific Northwest, I'm even more content to enjoy the fabulous, inexpensive fare at my local Los Gallos

Amid the ever-expanding easing program in Europe (longer? more-er? different-er?), one of the gravest concerns was (amid a growing scarcity of collateral), finding willing sellers (at any price) to meet the needs of central bank asset purchasers could be a problem. However, as The FT reports, it appears the Chinese stepped up to the plate to 'help' The ECB (rather The Bundesbank) out from its dilemma. Just as we saw with Chinese selling US Treasuries (whether to diversify away from the major reserve currencies, deal with outflows, or to manage a liquidity crisis at home), The PBoC's reserve management wing, the State Administration of Foreign Exchange, has been selling some of its German government bonds since the ECB began buying them in March, say two sources close to central banks in China and Europe. This news has prompted further weakness in Bunds today, despite expectations of Draghi unleashing more buying in December.

Yesterday in "$20 Trillion In Government Bonds Yield Under 1%: The Stunning Facts How We Got There", we did just that: showed several "facts" demonstrating how, as Bloomberg puts it this morning, "QE Helped Wall Street Steamroll Main Street." It appears many missed the findings of how central planning has now gone full retard, so here again, are the facts...

Thant's right, no BOOTS on the ground!

With Markit suggesting US Manufacturing is at a 7-month high (with new orders surging), The ISM appears to disagree as ISM Manufacturing PMI dropped to 50.1 - its lowest since Dec 2012. The silver lining in the ISM report is that it was a 'Chinese beat' - 50.1 vs 50.0 exp - but with the employment sub-index at its lowest since August 2009, the report is anything but positive. Finally, ISM inventory drops to 46.5 (its weakest since January) after Chicago PMI inventories soared over 60; and along with export orders in contraction for the fifth month (while Markit claims highest new orders in 7 months), today's US manufacturing outlook is just more baffle-em-with-bullshit.

"I’m not authorized to make any sort of conclusions, but a plane cannot simply disintegrate"...

Amid a slew of sometimes contradictory Manufacturing data, Canada appears to have suffered the most with its Markit PMI tumbling to 48.0 - a record low. Canada's weakness puts it below China (based on China's Caixin/Markit measure). US manufacturing rose marginally from its preliminary 48.0 print to end October at 48.1, highest since March. Output and New orders are seen rising at the fastest pace since March, but despite this 'strength' Markit is careful to warn a rate hike would be premature.

As the crackdown against Zexi was taking place, Shanghai police also arrested 3 suspects as they cracked a case of stock futures price manipulation involving over 11.3 billion yuan (US$1.8 billion), police said yesterday in a statement. According to Shanghai Daily, Yishidun, a commercial company registered in Jiangsu Province’s Zhangjiagang City in 2012, was found to use an illegal stock futures trading software to destabilize the market and profit from volatility.

Dennis Gartman, author of the institutionally well followed ‘The Gartman Letter,’ has asked questions about gold’s peculiar price action last week and raised the question as to whether there was official central bank manipulation of gold prices.