Moments ago, a hearing started in which the ongoing investigation of the George Washington bridge closure will focus on the role of Bridget Anne Kelly, Christe's former deputy chief of staff. The state legislative committee investigating the matter seeks to retrieve subpoenaed documents from Bridget Anne Kelly, and Bill Stepien, his former campaign manager. Just like in the case of IRS commissioner Lois Lerner, so Kelly is expected to plead the fifth. Watch the hearing below.
We are sure the great and good of the economic world will explain away this data with one word - "weather" but the 1.9% drop in Wholesale Sales is the largest in 5 years and aside from the financial crisis is the worst since 1993! This is also the biggest miss on record. Inventories rose more than expected (+0.6% vs +0.4% expectations) which could be a problem as the inventories/sales ratio surges to its highest in 11 months. Unsurprisingly, Autos saw the largest inventory build (+6.8% YoY).
... And it is Point72. Of course, those who are aware of the physical address of the firm that single handedly made and destroyed "expert networks" (and assured a daily bug sweep at every hedge fund office in New York), or better yet, have visited the firm's sprawling trading floor located at 72 Cummings Point, will know that the name is merely a derivative of the actual address. Then again, perhaps when it comes to address-based appelations, Cohen picked the only feasible option: after all going with the zip code of his trading desk adress may have been a little too reminiscent of a convict's inmate number: 06902. And that would hardly inspire confidence in the New and Improved Stevie A. Cohen.
Imagine that you are speeding down one of those long and lonesome stretches of highway that seems to fall off the edge of the horizon. As the painted white lines become a blur, you notice a sign that says "Warning." You look ahead for what seems to be miles of endless highway, but see nothing. You assume the sign must be old therefore you disregard it, slipping back into complacency. A few miles down the road you see another sign that reads "Warning: Danger Ahead." Yet, you see nothing in distance. Again, a few miles later you see another sign that reads "No, Really, There IS Danger Ahead." Still, it is clear for miles ahead as the road disappears over the next hill. You ponder whether you should slow down a bit just in case. However, you know that if you do it will make you late for your appointment. The road remains completely clear ahead, and there are no imminent sings of danger. So, you press ahead. As you crest the next hill there is a large pothole directly in your path. Given your current speed there is simply nothing that can be done to change the following course of events. With your car now totalled, you tell yourself that there was simply "no way to have seen that coming."
In order to determine if there is indeed truth behind the speculation that growth for the HFT space may have topped out, we decided to break down Virtu's 2013 net trading income by product line. We were not surprised to find that of the $45 million in total growth, the largest income category, US stocks growth was a tiny 5% of all, rising by $2.3 million in 2013, half the $4.5 million growth a year earlier. In fact, between EMEA, APAC and US Equities, there was very limited growth in 2013, while commodities posted an outright trading income decline. So indeed, it appears to be the case that growth in conventional products has indeed plateaued, as more and more HFT competitors rush in. And yet, one product stood out. It is highlighted on the chart below...
Silver is spiking this morning (up over 2.3%) by its most in almost a month as the losses suffered post-Putin's press-conference are now largely retraced. Gold has broken back above pre-Putin levels and is trading back above $1,350 (holding above its 1-year average). Bonds, stocks, and the USD are all relatively flat this morning leaving one wondering whether the catalyst for this move is related to the Ukraine-gold rumors although we noted Swiss 2Y rates dropping once again as safe-havens are bid.
Diplomacy Fails In Ukraine: Putin Slams Kerry Plan, Kiev Issues Ultimatum, Crimea Suspends All Non-Moscow FlightsSubmitted by Tyler Durden on 03/11/2014 - 08:01
While it may have been pushed back from the front pages to keep confidence high, things in the Crimea, and in Ukraine in general (which may or may not waved goodbye to its gold reserves) are going from bad to worse with every passing day, with the near term catalyst of course being this Sunday Crimean referendum vote, which seems like a done deal, and which will give Russia a carte blanche to annex the territory over the howls of protest from Ukraine's coup government, and the west of course.
- Malaysia Says Stolen Passport User Had No Links to Terror Groups (BBG)
- Malaysia military tracked missing plane to west coast (Reuters)
- Freescale loss in Malaysia tragedy leads to travel policy questions (Reuters)
- Top German body calls for QE blitz to avert deflation trap in Europe (Telegraph)
- Firms Suffer 23% Drop in Asia Fees Amid Search for Cash (BBG)
- Putin Dismisses U.S. Proposal on Ukraine (WSJ)
- Lenovo says China strike an IBM matter, but it won't cut wages (Reuters)
- Congress to Investigate GM Recall (WSJ)
- New hedge funds face life or death battle for funding (FT)
- Muni Bond Costs Hit Investors in Wallet (WSJ)
- BOJ keeps stimulus in place, cuts view on exports in warning sign (Reuters)
- ECB Homes In on Risky Assets as Inspectors Fan Out Across Europe (BBG)
- Snowden: "The Constitution was violated" (Reuters)
Stocks in Europe failed to hold onto early gains and gradually moved into negative territory, albeit minor, as concerns over money markets in China gathered attention yet again after benchmark rates fell to lowest since May 2012. Nevertheless, basic materials outperformed on the sector breakdown, as energy and metal prices rebounded following yesterday’s weaker than expected Chinese data inspired sell off. At the same time, Bunds remained supported by the cautious sentiment, while EUR/USD came under pressure following comments by ECB's Constancio who said that financial markets misinterpreted us a little, can still cut rates and implement QE or buy assets. Going forward, market participants will get to digest the release of the weekly API report after the closing bell on Wall Street and the US Treasury will kick off this week’s issuance with a sale of USD 30bln in 3y notes.
It would appear, judging by the tumble in JPY crosses (i.e. JPY strength) that the carry-traders of the world are disappointed in the BoJ's lack of exuberance.
- *BOJ RETAINS PLAN FOR 60T-70T YEN ANNUAL RISE IN MONETARY BASE (no change)
But it is the commentary that is truly baffling in its contempt for the truth:
- *BOJ: EXPORTS HAVE LEVELED OFF MORE OR LESS (umm, record trade deficit?)
- *BOJ: PICKUP IN CAPEX HAS BECOME INCREASINGLY EVIDENT (Tankan Capex growth fallen for 2 quarters)
- *BOJ SAYS JAPAN'S ECONOMY IS RECOVERING MODERATELY (GDP growth worst since Abenomics began)
Black is white; water is not wet; and Abenomics will work any day now...
A curious story, and one which should be taken with a mine of salt, has surfaced out of the pro-Russian newspaper Iskra, which reports - so far on an entirely unsubstantiated basis - that last Friday, in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.
The Holy Grail Of Trading Has Been Found: HFT Firm Reveals 1 Losing Trading Day In 1238 Days Of TradingSubmitted by Tyler Durden on 03/10/2014 - 21:50
Think JPM's 0 trading day losses in 2013 was impressive? Prepare to have your mind blown. The chart below shows the chart of daily net trading income by High Frequency Trading titan Virtu, taken from its just filed IPO prospectus. The punchline: in 4 years of trading Virtu has had one, one, day in which it lost money. Let that sink in: one trading loss day and 1237 days of profits. And that, ladies and gentlemen, is the Holy Grail of the New Normal broken, manipulated markets.
Seth Klarman's comments on "The Truman Show" market and "born bulls" appeared to upset the status quo today on CNBC leaving none other than Joe Kernan and then later, Jim Cramer questioning Klarman's credentials with a passive-aggressive "when did Klarman turn negative? We should look into that..." question. We found it intriguing and wondered how much the investing public weights the differing views of these veritable titans of stock market wisdom. The answer - a market-based answer - lie in the purest measure of all... the cost of acquiring their knowledge...
Rather than attempt to reduce a very complex system to a cartoonish "explanation" of events, we would be better served by seeking out the geopolitical linchpins that have proven key in every era and theater of operations. These include Energy, Transport routes, Military control of transport and geographical chokepoints, and The support or resistance of resident populaces