Archive - May 2015 - Story

What follows is a remarkable data base of Corporate Fines and Settlements. From blatant cartel price-fixing or not disclosing the dangers of the company's heavily promoted medications to destroying documents to thwart an investigation of wrong-doing, the list is stunning and reads like a who's who of Corporate America and Top 100 Global Corporations. In other words, these were not wrist-slaps for minor oversights of complex regulations - these are blatant violations of core laws of the land and while the PR spins how corporate profits benefit widows and orphans, this vast wealth is concentrated in the top 1% and the top 5%.

Back in July 2007 Citi's then CEO Chuck Prince, a little over a year before his bank received a gargantuan government bailout said "as long as the music is playing, you've got to get up and dance." Moments ago Janet Yellen just killed the music: YELLEN SAYS EQUITY MARKET VALUATIONS QUITE HIGH

Or, paraphrased, the $4.5 trillion balance sheet the US created, and the $22 trillion in assets purchased by global central banks to keep the dream alive, has lead to "quite high" stock prices.

With the crucial May 12th €774mm Greek IMF payment looming (and thus even more critical May 11th deadline for the Eurogroup's decision to release around €7bn in additional funds to Greece), the much-discussed 'splintering' of the Troika (The Institutions as the Greeks would prefer we describe them) appears to be gradually un-splintering. Today's statement from the EU talks that the members of the Troika "share the same objective" may reassure some after the 'limbo' of serious disagreements between the European Commission and The IMF. However, with various 'red lines' remaining unaddressed, EU sources say a deal on Monday is not possible.

For the chartists out there (and these days that would mean pretty much all momentum-igniting algos who are the only ones left trading these here "markets") the following note from SocGen explaining why if/when the 10Y selloff rises above 2.32% it may be a time to panic (and vice versa) is quite relevant now that the 10Y is just a few basis points away.

Exactly two months after the latest Warren Buffett-owned BNSF train derailed near the spot where the Galena river meets the Mississippi, resulting in a huge fire and the evacuation of all homes in a one mile radius, moments ago another of Buffett's BNSF oil trains derailed, this time near the town of Heimdal, North Dakota, resulting in the same outcome.

Confirming last night's API inventory data, DOE just reported a 3.882 million barrel drawdown in total crude inventories (considerably more than the 1.5mm bbbl draw expected). This is the biggest draw since early September. The initial spike took WTI Crude prices above $62.50 but that is fading now...

Paging Mario Draghi... This was not supposed to happen!!

It's deja vu all over again...who are 'they' going to blame for this one?

Greece is set to introduce a surcharge on withdrawals and financial transactions in an effort to raise cash amid fractious negotiations with creditors. Meanwhile, the ECB is considering measures that will tighten the screws on the country's cash-strapped banking sector.

While the rest of the world, or at least 1% of it, is enjoying the ongoing "wealth effect" propping up the increasingly more rickety "markets" built on the backs of $22 trillion in central bank assets, or more than the GDP of the US and Japan combined, earlier today Nav was fighting if not for his life then certainly his freedom when he told a London court he had done nothing wrong, the Flash Crash was not his fault, and was just good at his job. "I've not done anything wrong apart from being good at my job. How is this allowed to go on, man?" Sarao said at Westminster Magistrates' Court.

California water regulators are getting worried. The state has now approved a set of sweeping conservation measures designed to cut water consuption by up to 36% in some areas to combat a severe drought that has now killed some 12 million trees and threatens to turn California into a modern day Dust Bowl.

Well this cannot be good. US output per hour (for the non-farm businesses) - or non-Farm productivity - plunged 1.9% in Q1. This follows a 2.1% slump in Q4 2014 and is the first consecutive quarterly plunge since 1993. This was driven by a 0.2% decline in output as hours worked increased 1.7% with manufacturing productivity suffering a 1.1% drop in Q1 (driven by a 1.2% decline in output).

Following March's dismal drop in the ADP Employment report (the biggest miss in 4 years) and missing for 3 straight months, April printed a very weak 169k (against notably lowere expectations of a 200k rise). Even worse, February and March was revised even lower. This is lower than the lowest economist estimate. Large companies were particularly weak with smaller businesses adding the bulk of the meager jobs print. The esteemed Mark Zandi blames this on "the fallout from the collapse of oil prices and the surging value of the dollar."

A new report from France's air accident investigation agency shows that Andreas Lubitz repeatedly put the outbound flight from Düsseldorf to Barcelona into an unexplained controlled descent on the same day he deliberately flew the inbound flight into the French Alps killing all 150 passangers.

Today, Virtu released its first public financials since going public, and our speculation has been proven correct: FX is now the largest revenue generator for VIRT, amounting to 28.4% of revenues in the quarter ended March 31, at $42.2 million, well above the $29.1 million generated from trading  America Equities and the $34.7 million from global commodities. In fact, as the chart below shows, on an LTM basis, FX is now not only the biggest revenue item for the world's dominant HFT firm at $131.1 million, but is also the fastest growing source of profit, rising 103% on a year over year basis!