• Pivotfarm
    04/22/2014 - 20:14
    Age-old myths and fantasies about turning stuff that was worthless into gold. Alchemists leaning over their cauldrons of bubbling brew in the dark recesses of the dungeon of some mythical castle...

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Russia Warns It May Enter Recession As Soon As This Quarter

While hardly coming as a surprise to anyone, Russia is getting increasingly more vocal about the near certainty that the country is about to slam headfirst into a technical (at first), and then outright recession.

  • RUSSIA MAY ENTER `TECHNICAL RECESSION' IN 2Q, ORESHKIN SAYS
  • RUSSIAN 2014 CAPITAL OUTFLOWS MAY REACH $70B-$80B: ORESHKIN
  • RUSSIAN 2014 CURRENT-ACCOUNT SURPLUS MAY EXCEED $50B: ORESHKIN
  • RUSSIAN GDP MAY CONTRACT IN 2Q OR 3Q VS YR EARLIER: ORESHKIN


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Depositor In Failed Russian Bank Loses It, Takes Hostages, Demands $700,000 Ransom

Earlier today, the Central Bank of Russia announced that starting April 21, it would revoke the license of Moscow’s Bank Zapadny. According to reports, "the bank had cooked its books and failed to comply with regulations on the amount of assets a financial organization must maintain to ensure its stability, the central bank said." In other words, your typical FDIC Failure Friday only on Monday morning. Hardly notable. It is what happened next that was shocking. Shortly after the bank shutdown announcement, an armed man took three hostages at a Belgorod branch of precisely this failed Bank Zapadny. Tt appears this may simply be the latest case of a disgruntled bank client taking matters into his own hands.  As RT reports, "he may be a client of the bank wishing to withdraw his deposit despite the bank losing its license.....Life News tabloid says it has identified one of the attackers as 46-year-old Aleksandr Vdovin, a client who holds the bank’s promissory notes for a large sum, and who decided to reimburse them at gunpoint."



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Frontrunning: April 21

  • Putin playing the long game over Russian kin in Ukraine (Reuters)
  • U.S.-Russia Relations Come Full Circle After Ukraine (WSJ)
  • Japan PM makes offering to Yasukuni Shrine, angers China, South Korea (Reuters)
  • In Gold Miners' Talks, Scale Is Crucial: Combined Barrick-Newmont Would Be Able to Trim Costs (WSJ)
  • SEC Said to Weigh Shining Light on Brokers’ Stock Routing (BBG)... and protmply unweigh it
  • Exelon Beating Facebook in S&P 500 After Valuation Scare (BBG)
  • Court Case May Help Define 'Insider Trading' (WSJ)
  • Spanish banks face tough rivalry in small companies bet (Reuters)


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Sleepy Holiday Market Prepares For Scripted, Daily Low-Volume Levitation

It has been a largely event-free weekend except, of course, for the previously reported re-escalation in Ukraine following what was a lethal shooting in the east Ukraine city of Slavyansk blamed on Ukraine's Right Front, which has made a mockery, as expected, of the Geneva Ukraine de-escalation announcement from last Thursday. Overnight in Asia, Japan reported its largest ever trade deficit, providing yet more evidence that Abenomics has been an abysmal failure: all we are waiting for now is confirmation that basic Japanese wages have fallen yet again, which would make nearly 2 years in a row of declines. Still, the USDJPY, gamed as usual by HFT algos for which FX is now the last respite as the equity market crackdown gets louder, is doing its best to ramp from the overnight lows and ahead of the traditional US market open surge, as a result equity futures are modestly higher.



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This Means War: US To Target Putin's Personal $40 Billion Stash

While the White House has continually threatened further sanctions against Russia for non-de-escalation (even as it un-de-escalates itself), the specifics of the additional sanctions have been sparse. German CEO warnings over blowback from economic sanctions... the "nonsense" of replacing Russian gas with US gas... the Russian warnings of "interdependence" and "boomerangs"... all reduce the West's arsenal of financial sanctions. But, as The Times of London reports, perhaps the US has found a crucial pain point for Putin - a sanctions regime that would target Putin's personal wealth, which includes a reported $40 billion stashed in Swiss bank accounts.



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Martin Armstrong Asks "Do The Feds Really Own The Land In Nevada?"

"Is it true that nearly 80% of Nevada is still owned by the Federal Government who then pays no tax to the State of Nevada? This seems very strange if true as a backdrop to this entire Bundy affair." The truth behind Nevada is of course just a quagmire of politics. Sorry, but to all the commentators who call Bundy a tax-cheat and an outlaw, be careful of what you speak for the Supreme Court has made it clear in 1845 that the Constitution forbids the federal rangers to be out there to begin with for the Feds could not retain ownership of the territory and simultaneously grant state sovereignty. At the very minimum, it became state land – not federal.



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All You Need To Know About Russia, In Charts

A look below the propaganda surface in charts.



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JPY Drops, Nikkei Pops As Japanese Trade Balance Nears Record Deficit (36th In A Row)

UPDATE: Goldman folds on "J-Curve" - the pace of that improvement will be far more modest than in past periods of yen weakness.

Another month, another colossal miss for the "waiting-for-the-j-curve" Japanese trade balance. At 1.7tn, this month's adjusted trade balance is the 2nd largest on record, and is the 36th month in a row - the worst March deficit ever. Exports missed dramatically (+1.8% vs 6.5% expected) so, so much for devaluation driving competitiveness in a globally interdependent product development cycle - nearly the lowest YoY gain in exports since Abenomics began. Imports rose more than expected (+18.1% vs 16.2%) as the devalued JPY makes living standards more difficult to maintain. The result of this dismal data - JPY weakness which can mean only one thing - a 120 point rally in the Nikkei.



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Japan Expands Military Footprint For 1st Time In 40 Years Ahead Of Obama's Visit

Mere days before President Obama is due to visit on his Asia tour, Japan is making some rather uncomfortable 'diplomatic' moves. First, a senior Japanese cabinet official - Keiji Furuya - visited the highly controversial Yasukuni shrine (which is where "Class A" war criminals are enshrined alongside other war dead). And second, and perhaps even more concerning, is, as Reuters reports, Japan began its first military expansion at the western end of its island chain in more than 40 years on Saturday, breaking ground on a radar station on a tropical island off Taiwan. Both moves risk angering China at a time when non-Chinese Asia is looking for reassurance from Obama on his willingness to suport them.



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US Gas Will Never Replace Russian Gas For Europe

If Cheniere Energy's CEO calling the Obama plan to export LNG to Europe "nonsense" is not enough, the following will provide more than enough color to explain why, as Peak Prosperity's Chris Martenson pointedly remarks, recent entreaties by various US politicians to help wean Europe off of Russian gas are simply preposterous.  The numbers don't add up, and they never will.



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The "New" SATs (Summed Up In One Cartoon)

Presented with no snark or ironic comment whatsoever...



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Barclays Latest To Exit Commodity Trading, Layoff Several Thousand Staff

With JPMorgan and Deutsche Bank having exited the commodities business (and numerous other banks discussing it ahead of the Fed and regulators' decisions over banking rules of ownership), it appears a few short months of regulatory scrutiny is enough to warrant more broad-based cuts across bulge-bracket banks historically most manipulated and profitable business units. As The FT reports, Barclays, one of the world’s biggest commodities traders, is planning to exit large parts of its metals, agricultural and energy business in a move expected to be announced this week. This comes on the heels of Barclays shuttering its power-trading operations (after refusing to pay $470mm in fines) with CEO Jenkins expected to announce several thousand layoffs. This leaves Goldman (for now), Mercuria (ex-JPM), and Glencore to run the commodities world.



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Gas Prices Hit 13-Month Highs, Prompt Macro Concerns

At $3.67, US Regular gasoline prices are their highest since March 2013 having risen over 12% (40c) in the last 2 months. This must be great news, right? It must mean world demand is picking up and driving up prices of crude oil as global trade soars (amid a collapsing Baltic Dry and decelerating Chinese growth). This can't be related to "war premia" right? - as we noted here - because stocks (which always know best) have discounted all this tomfoolery. However, as the following chart shows, each time gas prices have surged up toards the Maginot Line of $3.80, US macro-economic fundamentals have collapsed... the only problem is, this time is different - because macro data is already weak going in (and expectations for the post-weather pop are high).

 



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An Obituary For High Frequency Trading: The Adaptive Genius Of Rigged Markets

Ultimately, I think the problem for HFT liquidity providers is not that they are skinning investors, but that they are outsiders. They're doing what the keepers of the market infrastructure keys have always done - skin investors, retail and institutional alike, to the outer limits of what technology and the law allows. But while their outward behavior and appearance may be familiar, they are clearly an alien species on the inside, without so much as a microgram of Wall Street DNA. They are Rakshasa's. HFT liquidity providers are technology companies disguised as financial intermediaries. They hijacked the market infrastructure in the aftermath of the Great Recession, stealing it away from under the noses of the big financial firms who had come to see control over market structure as their birthright, and they had a good run. But now the big boys want their market infrastructure back, and they're going to get it.



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Peak Smuggling: Indian Has 12 Gold Bars Removed From His Stomach

While US central bankers seem to believe that you can eat iPads, it seems one Indian fellow has taken the ongoing restrictions on gold imports, owning, or transacting in India to a whole new level. As we have noted previously - have led to an epidemic of smuggling as Indians continue to horde the precious metal (the only true source of financial security in their view) by any means possible. As The BBC reports, 12 bars of gold have been removed from the stomach of a 63-year-old businessman in the Indian capital Delhi. The surgeon said he had never seen a "case like this before," and customs officials were called and confiscated the gold - where whistleblowers for gold smuggling are rewarded more richly than for cocaine and heroine smuggling.



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