Why Nav Sarao Had To Be Destroyed: He Found A Way To Beat The HFTs At Their Own Game

Today, we find precisely how and why Sarao was singled out: he not only ratted out the parasitic trading strategies of the real culprits behind the broken market, the massive HFT firms (such as Virtu which just went public just a day before the Sarao charges were filed) which gave the "regulators" no choice: one of them had to be put away for good, but found a way to capitalize on the algos' stupidity, and actually make money by beating them at their own game.  As such, regulators and exchanges such as the CFTC and CME had no choice but arrest him and prevent him from trading ever again!

"I’m Not Crazy, I’m Scared" - Why For One Trader, This Time It Is Different

"What is different this time? Central banks are driving all investment decisions, and what this implies is that they are in this trade so  deeply that there is no obvious or practical exit.... This is a dangerous situation. The focus must return to the REAL economy; we cannot trade our way out of past mistakes."

China Could Face "Sharp" Rise In Capital Outflows If Stocks, Economy Lose Momentum

"The downside risk would be to have broad-based outflows if the macro story deteriorates further or the stock exchange collapses, which would create a confidence crisis,” one analyst tells Bloomberg, as capital continues to flow out of China. The country faces accelerating capital outflows, a looming economic downturn, and an epic stock market bubble, and ironically, efforts to combat the latter two problems are very likely to exacerbate the former.

11 Signs That We Are Entering The Next Phase Of The Global Economic Crisis

Well, the Nasdaq finally did it. So if you invested in the Nasdaq at the peak of the dotcom bubble, you are just finally breaking even 15 years later.  Unfortunately, the truth is that stocks have not been soaring because the U.S. economy is fundamentally strong.  Just like the last two times, what we are witnessing is an irrational financial bubble.  Sometimes these irrational bubbles can last for a surprisingly long time, but in the end they always burst.  And even now there are signs of economic trouble bubbling to the surface all around us. 

America Ranks Below Israel In World Happiness Index

USA USA USA #15? Despite aerial bombardment, growing tensions with every neighbor, and the almost ubiquitous daily car-bombs, Israelis are "happier" than Americans according to Bloomberg's world happiness index. Happiness, it appears, is most abundant a long way from the equator with Switzerland, Iceland, Denmark, Norway, and Canada all topping the list; whereas the unhappiest nations are all in Saharan or sub-Saharan Africa (apart from war-torn Syria and Afghanistan).

5 Things To Ponder: Market Soup

Operating and reported earnings have turned sharply lower over recent quarters which has historically been associated with major market peaks. As shown below, it is also important to notice that revenue has tended to lag these downturns in earnings previously. This is because the measures used to substantially boost profitability from each dollar of revenue generated through accounting gimmickry, share repurchases, and cost cutting are finite in nature. When the effect of those manipulations fade, so does the inflated profitability generated from each dollar of revenue. This will be something worth watching closely over the next few quarters particular as the commentary of a "continued secular bull market" continues to hit the headlines.

"Let's Take Them On!": Libor E-mails Of Christian Bittar Revealed

Regular readers will be familiar with Christian Bittar, the former Deutsche Bank rates trader whose various exploits and adventures we began to chronicle more than two years ago. Now, thanks to the bank's settlement with the Justice Department, we know exactly what Bittar said on his way to manipulating the world's benchmark rates.

In An Unrigged World: Here's How A Record S&P Close Was Manufactured

Judging by the action today, all that mattered today was 2117.39 - that is the S&P 500's previous closing record high from March 2nd. One glimpse at the charts below and the VIX-slamming is evident (especially at the close) as each time it came close to losing the record high, a miraculous deep-pocketd volatility-seller stepped in...

An Austrian Province Just Requested A State Bailout

Finance Minister Hans Joerg Schelling has said repeatedly that the Austrian government isn’t liable to cover Carinthia’s guarantees." Herr Schelling's warning is about to be tested. Yesterday, Carinthia officially asked Vienna for financial support. The spokeswoman said Carinthia would run out of money in June without help, confirming local media reports. No Austrian province has ever gone bankrupt and there is no legislation on how to handle such an event.

When To Put On Bill Gross' Big Bund Short: Citi Explains

With only six weeks (or one Graccident) to go until Bund purchases are forced out to 7-year maturities, and with traders warning that nearly every piece of PSPP-eligible German government paper will eventually trade special in repo despite the ECB’s feeble attempt to remedy the situation via its Securities Lending Program, the world wants to know: “when do I sell Bunds?”