Archive - Apr 2015 - Story

With almost 70% of Europeans already believing that Greece is a drag on the EU economy, this morning's statement by Greek Alternate Finance Minister Dimitris Mardas - coming just a week after the war-raparations committee was set-up, telling lawmakers in Parliament that he has calculated that Germany owes Greece EUR 278.7 billion in World War II reparations, will surely deepen the rift (at almost 40% of Germany's EUR 735 billion Q4 GDP) whether right or wrong.

In a world seemingly bereft of consequences for all but the lower classes, the removal of an "illegally rigged gas supply" before a ConEd visit, appears to have been the cause of the deadly explosion in New York's East Village last week. A plumber who worked at the building has allegedly, according to NY Post, admitted to illegally tapping into a gas line there - saying that the landlord’s son ordered him to do it (who, perhaps karmically, was hurt in the blast).

The USA set the tone for 21st century magical finance, in which “wealth” was “created” by digital accounting fraud. The effects at home are visible on our landscape of suburban hyperwaste and decrepitating older towns and cities.

As noted earlier, with equities now a barren wasteland of volume (and liquidity), the last remaining HFT master (of whale order frontrunning) has been forced to go to those asset classes where organic flow is still abundant such as FX, courtesy of central banks engaged in global currency wars. However, HFTs realize it is only a matter of time before FX order flow also dries up as central banks take their trade away from public venues (and dark pools) and as such are always looking for new, untapped markets. One place where they are about to land according to the WSJ, with hilarious consequences sure to follow, will be the one place that HFTs should have felt at home from the very beginning: bitcoin.

In so many ways, Warren Buffett and modern America are the same thing. An idea packaged and marketed so brilliantly, most of humanity unquestionably believes the myth.  However, when you look beneath the surface, it becomes increasingly clear that neither of them actually come close to what’s printed on the package.

With more than three quarters of US workers trapped in what we will call “wage growth hell,” and whose only chance at seeing a pay hike appears to rest on holding out for a promotion that’s probably not forthcoming, it doesn’t exactly come as a surprise that self-reported consumer spending hit a three-year low for March.

Because with the suddenly collapsing labor market, in which only Americans 55 and over can find jobs, expensive and superfluous Apple Watches should be a game-changer.

We can't make this up. Following Friday's dismal payrolls, today's Fed Labor Market Conditions Index (the aggregate index of all Yellen's indicators) collapsed to its lowest in almost 3 years. That was just the news that stocks needed to complete the biggest opening rally of the year so far.

Amid collapsing macro data and earnings expectations, Markit's US Services PMI smashed expectations and surged to 59.2 (its highest in 7 months) - just like Markit's Manufacturing PMI 'surprised'. Against the worst payrolls data in over 2 years, Markit's employment index rose by most since June. Furthermore, the business outlook tumbled to 8-month lows. And then following ISM Manufacturing's miss and tumble to near 2-year lows, ISM Services met expectations at its lowest since June... as Business Activity tumbled to one-year lows.

The question on everyone's lips: which asset class was responsible for Virtu's trading perfection for yet another year.  It wasn't stocks because adding across the firm's America, EMEA and APAX equity product lines, Virtu revenues actually declined, from $201 million in 2013 to $195 million in 2014. It also wasn't commodities, where revenue dropped by almost $2 million in 2014 to $93.1 million.The answer is...

Good news, bad news, no news... you decide...

Guarantees based on extracting higher taxes, borrowing trillions of dollars and creating trillions more out of thin air only guarantee eventual systemic implosion.

The rhetoric, threats, and promises continue to increase as Greece, its international creditors (i.e. Troika), and its potential pivot partners from Russia to China to Iran all vie for attention. With EU officials proclaiming "[the Greek] government cannot survive," suggesting Tsipras divorce himself from the extreme left of his party; and with 68% of Europeans polled believing Greece is a drag on the EU economy, Greece's last best hope perhaps remains with a pivot to another Troika (Russia, China, and Iran) as energy minister Panagiotis Lafazanis denounced Greece’s international creditors for treating the country with "unbelievable prejudice and as a colony." This all on the day when FinMin Varoufakis 'promises' Christine Lagarde that Greece will repay its IMF loan on April 9th (somehow?).