Archive - Jun 2014 - Story

• HSBC 175K
• Goldman Sachs 175K
• Citigroup 185K
• JP Morgan 200K
• Deutsche Bank 200K
• Bank of America 225K
• Barclays 225K
• UBS 230K

• Canada Aims to Sell Its Oil Beyond U.S (WSJ)
• ECB Unanimity May Prove Fleeting (WSJ)
• Chinese military spending exceeds $145 billion, drones advanced: U.S. (Reuters)
• France to sell 10 warships to Russia next? BNP Executive Firings Sought by Top New York Bank Regulator Amid Probe (BBG)
• Vodafone says governments have direct access to eavesdrop in some countries (Reuters)
• Home Price Gains of 20% Vanish as Hottest Markets Cool (BBG)
• G-7 Heads Warn Moscow Before Facing Putin (WSJ)
• Barclays Fine Spurs U.K. Scrutiny of Derivatives Conflict (BBG)
• "Or Costs" - Obama Says Putin Running Out of Time Over Ukraine (BBG)
• Banca Monte Paschi Falls After Offering New Stock at 35.5% Discount (BBG)

If predicting yesterday's EURUSD (and market) reaction to the ECB announcement was easy enough, today's reaction to the latest "most important ever" nonfarm payrolls number (because remember: with the Fed getting out of market manipulation, if only for now, it is imperative that the economy show it can self-sustain growth on its own even without $85 billion in flow per month, which is why just like the ISM data earlier this week, the degree of "seasonal adjustments" are about to blow everyone away) should be just as obvious: since both bad news and good news remain "risk-on catalysts", and since courtesy of Draghi's latest green light to abuse any and every carry trade all risk assets will the bought the second there is a dip, the "BTFATH mentality" will be alive in well. It certainly was overnight, when the S&P500 rose to new all time highs despite another 0.5% drop in the Shcomp (now barely holding on above 2000), and a slight decline in the Nikkei (holding on just over 15,000).

Timothy Geithner is likely to go down in American history as one of the most dangerous, destructive cronies to have ever wielded government power. The man is so completely and totally full of shit it’s almost impossible not to notice. The last thing we’d ever want to do in our free time is read a lengthy book filled with Geithner lies and propaganda, so we owe a large debt of gratitude to former Congressional staffer Matt Stoller for doing it for us. Stoller simply tears Geither apart limb from limb, detailing obvious lies about the financial crisis, and even more interestingly, Geithner’s bizarre bio, replete with mysterious and inexplicable promotions into positions of power..."Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance..."

Meet Mieko Tatsunami, a 70 year old retired kimono dresser from Tokyo. Unlike the scores of paid actors ordered to pitch Abenomics and to spread the gospel of rising asset prices, Mieko shares a most rare commodity in this day of pervasive propaganda: the truth. “The price of everything we eat on a daily basis is going up,” Tatsunami, 70, a retired kimono dresser, said while shopping in Tokyo’s Sugamo area. “I’m making do by halving the amount of meat I serve and adding more vegetables.” Ironically, that's what Americans are doing too. Only here the "halving" of the food is done by the food producers, while the consumers rarely if ever notices that they are paying the same amount for ever lesser amounts of food. At least in Japan they are honest about the food inflation. As Bloomberg shows, Tatsunami’s concerns stem from the price of food soaring at the fastest pace in 23 years after April’s sales-tax increase. Rising prices helped push the nation’s misery index to the highest level since 1981, while wages adjusted for inflation fell the most in more than four years.

If you make more than $27,520 a year at your job, you are doing better than half the country is. But of course $27,520 a year will not allow you to live "the American Dream" in this day and age. After taxes, that breaks down to a good bit less than $2,000 a month. You can't realistically pay a mortgage, make a car payment, afford health insurance and provide food, clothing and everything else your family needs for that much money. That is one of the reasons why both parents are working in most families today. The American Dream is becoming a mirage for most people. No matter how hard they try, they just can't seem to achieve it. And here are some hard numbers to back that assertion up. The following are 15 more signs that the middle class is dying...

Goodbye ZIRP, hello NIRP. Today's decision by the ECB to officially lower the deposit facility rate to negative (as in you pay the bank to hold your deposits) is shocking, but not surprising: we previewed just this outcome precisely two years ago in "Europe's "Monetary Twilight Zone" Neutron Bomb: NIRP." Here is what we wrote in June 2012 about Europe's unprecedented NIRP monetary experiment.

As increasingly more conspiracy 'theories' become conspiracy 'facts', The History Channel discusses "The Gold Conspiracy" in this brief documentary. Gold is one of the most precious metals in the world. A glittering commodity so rare that people will go to great lengths to obtain it. But who sets the price? And what are the secret methods to control its value? History uncovers the clandestine world surrounding the highly prized precious metal. How much gold does the United States really have – and where is it locked away? Is the American government overstating the amount of gold in its reserves to create the mystique of financial superiority?

With a 9 standard deviation range between the highest and lowest excuse for a forecast from the 81 "qualified" economists on Bloomberg's survey, there is plenty of room for noise to dominate signal with tomorrow's payrolls data. Goldman forecasts a softer-than-consensus 210k increase in non-farm-payrolls as May employment data flow looks more mixed, and they expect that the unemployment rate rose two-tenths to 6.5% in May (vs. consensus 6.4%). Average hourly earnings (AHE) are likely to be in focus again following several months of heightened attention to wage growth and labor market slack; Goldman expects an increase of 0.2% in May (vs. consensus 0.2%).

The massive consolidation of wealth, combined with the removal of any limits on money in campaigns, has allowed for the purchase of our government. Americans know that something is wrong, deeply wrong. They see signs of the problem everywhere: income inequality, growing concentration and power of mega corporations, political donations/corruption, the absence of jobs with decent salaries, the explosion of the US prison population, healthcare costs, student loan debt, homelessness, etc. etc. However, the true causes and benefactors behind these problems are purposely hidden from view. What Americans see is Kabuki Theater of a functioning form of capitalism and democracy, but beyond this veneer our country has devolved into the exact opposite.

Since Mario Draghi is merely a frontman for (and former employee of) Goldman Sachs in yet another central bank, and since his policy mandate is implemented only after extensive drafting and pre-clearance with 200 West, the best "most-mortem" of what happened today comes from the firm that was responsible for today's announcement in the first place: Goldman Sachs itself.

It would appear the Fed, after being angry at itself for creating the "complacency" evident in the markets globally has reached the pinnacle of critically circular logic in its defense of policies that are aimed at financial stability (i.e. prices flat or rising but absolutely not falling). Fed's Williams, a la Greenspan's "a-ha" moment, appears to have realized that investors are not always 'rational' and "bull markets may cause investors to get ‘carried away’ over time and confuse what is a one-time, perhaps transitory, shift in fundamentals for a new paradigm of rising asset prices."

Five year after the Great Recession ended and the percentage of the pouplation employed continues to languish near its crash lows - despite seasonally-adjusted jobs data signaling the re-creation of 9 million jobs. However, as The NY Times illustrates in this massively impressive chart series, not all industries have 'recovered' equally.

Over the last few years central banks have had a policy of quantitative easing to try to keep interest rates low – the economy cannot pay high energy prices AND high interest rates so, in effect, the policy has been to try to bring down interest rates as low as possible to counter the stagnation. The severity of the recessions may be variable in different countries because competitive strength in this model goes to those countries where energy is used most efficiently and which can afford to pay somewhat higher prices for energy. Whatever the variability this is still a dead end model and at some point people will see that entirely different ways of thinking about economy and ecology are needed – unless they get drawn into conflicts and wars over energy by psychopathic policy idiots. There is no way out of the Catch 22 within the growth economy model. That’s why de-growth is needed.

Most market participants know that "you don't fight the Fed" or ECB or BoJ etc... (unless they tell you markets are complacent or frothy or "to sell"). But what really scares market participants... based on today's horrifying short squeeze... is the word of the follicularly-challenged master of the universe...