• EconMatters
    07/13/2014 - 22:47
    Market participants are far too levered up, all on the same side, and well behind the monetary normalization curve of when the first rate hike is actually going to occur. 

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CME, Reuters Picked To Replace Silver Fixing In Process Supervised By Former Gold Fixer

The person in charge of navigating the "transition" from the old fixing mechanism, of which he was part as recently as April, was a person who was, drumroll, supervising said transition. Surely, his "consulting" was fair and impartial. Naturally, Mr. Spall is no longer at gold-rigging Barclays, a bank which is for all intents and purposes, falling apart but at GCubed Consultants: enjoy perusing the company at the following link.Said another way, one of the Barclays guys who was accountable in the Gold Market Fixing Company for the price manipulation of his trader (the infamous Daniel Plunkett) is then rewarded by the LBMA to conduct an independent review of the applicants to run the Silver fix!



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The World's Two Most Expensive Cities For Expats Are Located On This Surprising Continent

America, Europe or Asia: those are the usual continental suspects which come to mind when asked where the world's most expensive cities for expats are located. They are also incorrect. According to the most recent study conducted by Mercer consultants not only the world's most expensive city, but also the second most expensive place for foreigners to live at this moment, are located in the one continent which we predicted two years ago, would become a Chinese colonial feeding ground. Africa.



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Germany Instructs Its Companies To Limit Cooperation, Procurement Orders With The US

Congratulations America: after severing ties with Russia, crushing cordial relations with China (leading to this stunning announcement by China's president), alienating France (which is now openly calling for an end to the petrodollar), the Obama administration - following not one, not two, but three spying scandals in just the past year - has managed to sour relations with Germany to a point where one wonders just who is a remaining US ally in Europe these days. According to Bloomberg, the German chancellor’s office has issued instructions to national intelligence services to limit cooperation with U.S. following alleged U.S. spying case, Bild reports without saying where it got information.



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RANsquawk - Weekly Wrap 11th July 2014



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A BusinessWeek Cover We Firmly Support

We promise to read BusinessWeek's cover story on the Viagra-fueled rise and subsequent droop of American Apparel's sleaze king, Dov Charney, just as soon as we are done admiring the cover.



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Banco Espirito Santo: All The Latest News

There has been an informational overload this morning, when as we reported previously, one after another bank scrambled to issue reports, some full of typos and clearly unvetted by compliance, calming the market and desperate to see all important confidence return to the peripheral market. Most of these notes have been nothing short of outright propaganda and disinformation, or a confirmation the analysts had zero idea what they were doing (case in point Goldman which had the stock at a Buy rating until this morning, even as the stock was virtually wiped out in recent weeks). Some, actually, have done the work. Below we provide some of the less then insightful reports, as conveniently summarized by Bloomberg, and we conclude with perhaps the best piece so far - one written by Bank of America's Richard Thomas who alone among the sell-side penguin circus, was as close as he could be, to predicting this week's outcome.



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How The Market Is Like CYNK (Which Was Just Halted)

"Whatever one feels about financials and the wider financial system, credit markets did arguably get a small glimpse of what things will be like when this cycle does actually end as the structurally impaired liquidity that exists in credit caused a small amount of panic yesterday morning before markets recovered in the European afternoon session. Liquidity is really poor in credit these days which doesn't matter when markets are in buy only mode as they have been for many quarters now, but it does matter on the days when you get a negative story."



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Frontrunning: July 11

  • Carl Icahn says 'time to be cautious' on U.S. stocks (Reuters)
  • Banco Espirito Santo Lifts Lid on Exposure to Group (BBG)
  • Slowing Customer Traffic Worries U.S. Retailers (WSJ)
  • Insurgents enter military base northeast of Baghdad (Reuters)
  • Obama tells Israel U.S. ready to help end hostilities (Reuters)
  • Japan economics minister warns of premature QE exit, sees room for more easing (Reuters)
  • Greek Banks See Quadrupling of Housing Loans by Next Year (BBG) ... to fund buybacks like in the US?
  • Piggy Banks Being Raided Signal Swedish Housing Dilemma (BBG)
  • London Seeks New Spenders as Russians Skip $719 Champagne (BBG)


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Epic Portugal Damage Control To Preserve Bank Confidence: BES Resumes Trading, Surges Then Tumbles

This clown parade of clueless opinions (did we mention Goldman had BES at a buy until this morning?), stretched all the way to the very top with Bank of Portugal itself issuing the following pearl:

  • BANK OF PORTUGAL SAYS BES DEPOSITORS CAN STAY CALM

Uhhh, what else would the Portugal central bank say? Panic and withdraw your deposits from a bank whose exposures to insolvent entities have been largely unknown until today (and even now).



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Did China Just Crush The US Housing Market?

A money-laundering butterfly flaps its wings in China... and the US housing market crashes?



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Barack Obama: "Don't Get Cynical, Get Hopey"

Cynicism is popular. Cynicism is popular these days. It's what passes off as wisdom. But cynics didn't put a man on the moon. Cynics never won a war. Cynics didn't cure a disease, or start a business, or feed a young mind. Cynicism didn't bring about the right for women to vote, or the right for African Americans to be full citizens. Cynicism is a choice. Hope is a better choice.

And so, as President, I'm going to keep a promise that I made when I first ran: Every day, I will keep asking the same question, and that is, how can I help you? And I'll keep treating your cares and your concerns as my own. And I will keep fighting to restore the American Dream for everybody who's willing to work for it. And I am going to need you to be right there with me. (Applause.) Do not get cynical. Hope is the better choice.



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Thursday Humor: The New US Tax Return

The recent IRS scandal is sure to go down as one of the most ridiculous of scandals in U.S. history. As Andrea Combs scoffs (rightly), the more that is uncovered, the more unbelievable the story becomes. So, in the interests of "fairness" - a topic this administration holds at its core - we present the new tax return, with addenda...



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Introducing Ghost Skyscrapers... In New York City

Manhattan has been transformed into nothing more than an oligarch playground, or as some call it, “Disneyland for Wall Street.” We have discussed at length the head-shakingly insane money-laundering inflows that are 'stashed' into NYC real estate but, as the following reports, one of the most shocking and disturbing revelations from that article was the fact that: "The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year." Forget China, ghost residences come to the US. Welcome to Planet Oligarchy, where empty skyscrapers loom over the hordes of freedom-hating, destitute slaves.



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11 Disturbing Charts About The Chinese Economy

Day in, day out, China 'bulls' (which implies 'everything' bulls as China is the ultimate fall-back save of growth in the world) will use the government-provided PMIs (at 2014 highs) as an indication that everything is tip-top and all those concerns about China's shadow-banking system, CCFD unwinds, guarantor bankruptcies, money-market rate surges on liquidity demand, and tumbling house prices are storms in a teacup to be ignored. Well in the interests of 'beating' a dead horse (and remembering just how bad soft-survey-based PMI data is at predicting future growth), we show below 11 examples that suggest China is anything but healthy.



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Baupost Revealed As 2.3% Banco Espirito Santo Stakeholder

As the world awaits the last day of the week and hopefully some clarity on the fate (or even state) of Portugal's Banco Espirito Santo ("BES"), which ultimately is controlled by the nebulous and unpublished accounts of the topmost HoldCo, Espirito Santo International, which in turn is merely a family investment vehicle of the Espirito Santo family as we showed this morning, moments ago BES issued two press releases whose purposes was to provide an updated org chart of the troubled financial entity, and more importantly, to boast that as of today, the deepest of value investors, Seth Klarman's Baupost was a 2.27% investor in the company.



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