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The Biggest Energy Trading Disaster In History

The simple fact is that trading involves risk. Bad risk management happens every day to individual traders who blow up their accounts with one overly aggressive or poorly managed position, and it occasionally happens to those paid to risk other people’s money as well. When it happens to the pros, though, the enormous access they have to leverage exaggerates the effects. n the energy markets, that leverage is ever present as most trading is done via futures contracts and other derivatives. As a result, some of the most spectacular blowups in trading history have involved energy.



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AK-47 Sales Soar After US Sanctions Kalashnikov Imports

Who could have seen this coming? Following the US imposition of further sanctions on Russia last week, specifically the import of Kalashnikov firearms, CNN reports gun stores across the US are experiencing a run on AK-47s. Yet another unintended consequence of US foreign policy...



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Putin Makes First Official Statement; Russia To Cut IBM, Microsoft Dependence: Complete Ukraine Situation Summary

Your one stop to catch up on all the latest development surrounding the crash of flight MH17 and the recovery effort.



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Lights Out At Barclays' Dark Pool: Volume Plummets By 79% From Highs

A week ago, when we commented on the latest publicly available data for Barclays' fraud-embroiled LX dark pool, whose volume as we reported had tumbled 37% in the week of the lawsuit announcement, we said that the downward volume trend "is about to get a whole lot worse for Barclays as the trickle becomes an avalanche." Sure enough, following today's reported by Finra's ATS database for the week of June 30, we find just that, and one can largely say lights out to Barclays LX operation, whose total shares traded plummeted from 197 million (and 312 million the week before) to a paltry 66.4 million, a two-week drop of 79% from its recent highs, putting it, in 12th total dark pool volume place, below ITG and above BIDS trading. So much for any ambitions of becoming America's top dark pool. Last on the other hand...



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Frontrunning: July 19

  • Fighting erupts in Ukraine as crash investigators arrive (Reuters)
  • Russian Billionaires in ‘Horror’ as Putin Risks Isolation (BBG)
  • Israel kills militants entering from Gaza, death toll tops 500 (Reuters)
  • The other Gaza: In violent weekend, at least 40 people shot in Chicago (Reuters)
  • Barclays Dark Pool Drew Early Alarms (WSJ)
  • Finance Industry Bonus Hit in Poll as Revenue Disappoints (BBG)
  • Severstal to Sell North American Units (WSJ)
  • Yum, McDonald's apologize as new China food scandal brews (Reuters)
  • Yellen Wage Gauges Blurred by Boomer-Millennial Workforce Shift (BBG)
  • Ukraine Offers to Hand Over Malaysia Airlines Probe to Dutch (WSJ)


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Quiet Economic Calendar Means All Attention Focused On Ukraine And Gaza

In the absence of any major economic events, it will be another day tracking geopolitical headlines out of Ukraine (lots of accusations, propaganda and fingerpointing on both sides, zero actual evidence and facts - expect more European sanctions to be announced today to match last week's latest US-led round ) and Israel (where the death toll has now risen over 500, almost entirely on the Gaza side), and then promptly spinning any bad news as great news. For now, however, futures are modestly lower from the Friday close pushed down by the AUDJPY which has rebased around 95.00. We expect the momentum ignition correlation algos will promptly take of that as soon as the US market opens, a market which has now been described as bubbly by the BIS, the Fed and the IMF.



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"I Was Absolutely Shocked At What I Read," Congressman Calls For Release Of Secret 9/11 Documents

“I was absolutely shocked by what I read... What was so surprising was that those whom we thought we could trust really disappointed me. I cannot go into it any more than that. I had to sign an oath that what I read had to remain confidential. But the information I read disappointed me greatly.”



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RANsquawk - Week Ahead - 21st July 2014



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White House 'Quietly' Exempts 4.5 Million People In 5 "Territories" From Obamacare

As WSJ reports, last week's geopolitical chaos and distraction was ideal for a news dump, and the White House didn't disappoint: On no legal basis, all 4.5 million residents of the five U.S. territories were quietly released from ObamaCare. It seems the costs of healthcare soared in these five territories due to uneconomic mandates - which woul dhave been a disaster PR-wise for the administration and so, under cover of catastrophe, WSJ reports all of a sudden last week HHS discovered new powers after "a careful review of this situation and the relevant statutory language," that enabled them to 'selectively exempt' American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands from Obamacare. And all while vacationing...



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Three Charts Of The Week: Money Printing Is Not Bringing Prosperity To Main Street

Furious money printing by the world’s major central banks is not generating real growth and prosperity - but professional economists never seem to get the word.



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Market Madness: Geopolitical Chaos Sparks Biggest "Dash-For-Trash" In 17 Months

Since The Fed's extension of Operation Twist (and subsequent unveiling of QE3) in 2012, the stocks of "weak balance sheet" companies are up over 100%. In that same period, the stock prices of "strong balance sheet" companies are up a mere 43%. The "dash-for-trash" that the Fed's financial repression forced upon an investing public has enabled the worst companies to not only survive (creating yet another mal-investment boom) but squeezed their share prices to thrive. The reason we bring this up  is simple... this last week of exuberant equity market performance in the face of unimaginable geopolitical possibilities saw "weak balance sheet" stocks outperform "strong balance sheet" stocks by their most in 17 months. In other words, amidst all the chaos and uncertainty 'investors' drove the biggest dash for trash since March 2013.



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A "Tone-Deaf" Obama Mocked By The NYT For Vacationing While The World Burns

For an administration in its sixth year, juggling presidential optics is nothing new. And with some rare exceptions, the public relations team around the president has remained consistently stubborn about refusing to let the never-ending stream of political, economic or international crises affect Mr. Obama’s daily schedule. The current myriad incidents are no exceptions: Moments after making a grim statement about Ukraine on Friday, the president popped into the East Room, where the first lady, Michelle Obama, was holding a mock state dinner for children to promote her Let’s Move nutrition initiative. “My big thing,” he confessed to the kids, “chips and guacamole!” There was plenty of laughter all around.



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"Buying The Car Was The Worst Decision I Ever Made" - The Subprime Auto Loan Bubble Bursts

It has been over six months since we first highlighted the growing deterioration in the quality of auto loans and mentioned the 's' word (subprime) as indicative that we learned nothing from the financial crisis. Since then, auto loans (and especially subprime in the last few months) have surged to record highs; and most concerning, recently has seen delinquencies and late payments spike. The reason we provide this background is that, thanks to The NY Times, this story is now hitting the mainstream media as subprime-quality car buyers (new and used) realize the burden they have placed on themselves thanks to exorbitantly high interest rates (and a rapidly depreciating 'asset'). As one car 'owner' exclaimed, "buying the car was the worst decision I have ever made."



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The Insiders' Case For A Stock Market Mini-Crash

Ssshh... The trade only works if everyone is lulled into staying on the long side until it's too late.



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