Archive - Apr 2015 - Story

When we first exposed in February how yet another bank - Bank of America - has been quietly preserving the post Glass-Steagall world in which cash depositing taxpayers are on the hook for a bank's stupidity, some shrugged it off and looked to stress test to solve all the problems. However, it appears - for once - the SEC is not willing to just ignore the bank's actions. Just as JPMorgan's CIO Office, aka the London Whale, took advantage of fungible, taxpayer-insured funding in the form of excess US deposits over loans, to corner the US credit market (in what was clearly a directional prop trade); so, as WSJ reports, The SEC is investigating whether BofA broke rules designed to safeguard client accounts, potentially putting retail-brokerage funds at risk in order to generate more profits using large complex trades.

It had been a relatively good quarter so far when it comes to leaked earnings... until moments ago when website scouring service Selerity managed to sniff out Twitter results, and they are not pretty.

The sudden closure of Corinthian Colleges' remaining campuses has displaced some 16,000 students. If all of their student debt is canceled — which is possible — it will cost taxpayers more than $200 million. With the government cracking down on the for-profit education space and with nearly 90% of students at for profit-colleges dependent on loans, the demise of the for-profit model could end up costing taxpayers quite a pretty penny.

Thus, the mistaken conceit of monetarism is on full display, especially in Japan, as they boil down their efforts to substitute financial wealth for true wealth as if they could simply conjure industrious creation from nothing. And Japan is proving useful as the full and complete refutation of every facet of such a notion, even if the mainstream resists so far confessing it.

It was all too easy to see the devastation unleashed on Baltimore last night as angry protesters showed their disgust at the police by burning, breaking, and looting their city; and give up hope for America's future. But there was a bright spot... a sign that people really do know right from wrong...

"An 'oil-debt nexus' could create a vicious circle whereby overindebted companies pump more oil to ensure they can pay interest on their loans, adding to the current global oil glut, and further depressing energy prices," WSJ notes, citing a BIS report. The interplay between the industry's growing debt pile and falling prices is a microcosm of the deflationary dynamic that’s taking hold in the macroeconomy and that serves, in Citi's words, to destroy creative destruction, creating "zombies" along the way.

It's difficult to estimate the quantity of our work devoted to data-shuffling compliance with and enforcement of perverse regulations and neofeudal menial-servitude to the top 10%, but shall we start with 40% and go from there?

It appears the banana-stand guy has more than a few friends...

The European Parliament continues to surprise as the parliamentarians got to vote on raising their own paycheck (always a good idea). The best thing about the story is that not everyone voted in favor; but most did... and the numbers are stunning. Given all their failures over the last decade, why would anyone, any country, want to have these people take their decisions for them?

Earlier today the US Census released its latest quarterly data, which confirmed that for what is left of America's middle class, owning a home has become virtually impossible, with the homeownership rate tumbling from 64.0% to 63.7%, which is tied for the lowest historic print since the first quarter of 1986, with the only difference that then the trendline was higher. Now, as can be seen on the chart below, it isn't. At this rate, by the end of the 2015 and certainly by the end of Obama's second term, the US homeownership rate will drop to the lowest in modern US history.

President Obama and Japanese PM Shinzo Abe are set to explain how great the TPP is and how the renewed military assertiveness is 'peaceful'...

"The Clinton Foundation’s finances are so messy that the nation’s most influential charity watchdog put it on its “watch list” of problematic nonprofits last month... It seems like the Clinton Foundation operates as a slush fund for the Clintons."

US equity markets have v-shape-recovered this morning after plunging on a combination of good housing data (that's bad news), weak manufacturing data and dismal consumer confidence which then was accelerated as Iran headlines smashed oil higher. All that was quickly forgiven and stocks have soared... Small Caps are now 1.5% as 'investors' panic-buy back to the highs of the day... VIX was monkey-hammered from 14.25 to back under 13.

Those curious can track the ship alleged confiscated ship, the Tigris, in real time courtesy of Marine Traffic.

It took 25 days to recover, and 2 days to lose all the exuberance that was 'well-deserved' and M&A-boom-driven, according to analysts. With a drop of over 10%, Biotechs are officialy in 'correction' and falling on heavy volume...