Given this lack of warning, depositors need to plan in advance for the day when ATMs do not work and they cannot access cash in their bank accounts. Customers could only withdraw a maximum of €300 per day from branches and ATMs, and could only carry a maximum of €3,000 while travelling out of the country
Given this lack of warning, depositors need to plan in advance for the day when ATMs do not work and they cannot access cash in their bank accounts. Customers could only withdraw a maximum of €300 per day from branches and ATMs, and could only carry a maximum of €3,000 while travelling out of the country.
It has been another session of overnight weakness, in which, to quote Deutsche Bank, "something has changed" as ES algos no longer track every tick of the EURJPY (or other JPY pair variants). Usually in such transition periods where the robots are not sure how to trade risk based on highly leveraged inputs, things go bump in the night, and they did just that with the E-Mini trading just off its overnight lows, despite a notable rise in the EURJPY from yesterday's close. Keep a close eye on the now traditional pre-market ramp in the EURJPY - if unaccompanied by an increase in the E-mini, it may be time to quietly exit stage left.
Despite being found guilty of and fined for manipulations of every other market in the world (from FX to rates to energy), investors small and large continue to play the markets on the basis that they are fair and balanced. Aside from high-profile insider trades; day after day, the oddly high correlations, the obvious spikes, blips, and front-running are ignored... until now. In this brief documentary, CBC asks the critical question "are the world's stock markets rigged?" Amanda Lang concludes "there’s a sense among the general public that nobody seems to be maintaining the integrity of the system." as she highlights case after case "as though everything is rigged!" Conspiracy theory evolves once again into conspiracy fact as the system that's supposed to benefit many, but actually enriches a few.
Today's 10yr auction result was a surprise for many traders. Will tomororrow be a repeat?
For the last year or two, European banks have engaged in the ultimate of self-referential M.A.D. trades - buying the sovereign debt of their own nation in inordinate size to maintain the ECB's illusion of control (even as their economies collapse and stagnate) while referentially obtaining the funding for said purchase from the ECB by repoing the purchase back to the central bank, usually with no haircut to mention. Today though, as The FT reports, a top official at the European Central Bank has signalled it will try to force eurozone banks to hold capital against sovereign bonds, in an attempt to stop weak lenders using its cash to hoover up the debts of crisis-hit countries.
We’ve recently been treated to two mutually exclusive forecasts: that the Great Bull Market will run until 2016 or 2018, so no worries; and that markets are exhibiting bubble-like characteristics that presage another crash. So which forecast is more likely the correct one? Though it is unsatisfyingly imprecise, the “new normal” phase strongly implies that future declines will be as dramatic as the advances and that the five-year clock is ticking on the current Bull market. Forecasting an advance that lasts years beyond this five-year pattern is equivalent to forecasting that the “new normal” phase is now ending and a new phase of much longer Bull advances is beginning. That is a bold claim, and there is little historical data to give it much weight. Stripped of complexity, the charts suggest that the current run will top out within the next few months and retrace most of the advance from 2009; i.e., a crash of significant amplitude.
Big Tail Highlight Of 10 Year Reopening Auction, In Which Direct Bidders Get Least Since August 2012Submitted by Tyler Durden on 12/11/2013 13:13 -0500
Moments ago the Treasury sold $21 billion in 9 Year-11 Month paper in today's 10 Year reopening of CUSIP WE6, which pricing at 2.824% was a sizable 0.7 bps tail to the 2.817% When Issued trading at 1 pm, and easily one of the bigger tails in the past year for the benchmark bond auction. And while the closing yield indicated a sudden drop off in demand into the auction, the internals were hardly as ugly, with a Bid to Cover of 2.61, below last month's 2.70 (and below the TTM average of 2.73) but hardly a cliff drop in bidside demand. Breaking the allotment by final purchaser, Dealer got 40.5%, in line with the 39.2% average, while Indirects took down nearly half the auction, or 49.8% to be precise, far above the 38.3% LTM average, and the highest Indirect allotment since the 51.7% from June. Directs were therefore left holding 10.6% of the auction, the lowest such portion since August 2012. Overall, hardly an impressive auction, and one which probably reflects concerns what the taper could do for longer duration in the months ahead.
To help readers get a sense of perspective how the US and Japan compare when matched to China, below we present a chart showing the fixed monthly "money" creation by the Fed and the BOJ compared to the most comprehensive money supply aggregate available in China - the Total Social Financing - for the month of November. The chart speaks for itself.
The Bank of England's Tucker, who has worked with U.S regulators on the cross-border hurdles to taking down an international firm said that "U.S authorities could do it today--and I mean today". The FDIC official in charge of planning for resolutions, confirmed that the U.S system is ready to handle a big-bank collapse.
Investors all over the world are confronted by markets that have been dressed up for the amusement of the crew in charge of the ship, and nobody seems to recognize what they are looking at. Sure, they look like markets, but at the same time there is an unfamiliarity that is extremely unnerving to at least a few in the gathering crowd. The majority of the mob, however, have decided that they look enough like markets to charge in blindly in the expectation that all will be as it should. Things are not as they should be. Far from it.
Wall Streeter's Lament Volcker Rule: "Liquidity Is About To Be Sacrificed At The Altar Of Ignorance & Fear"Submitted by Tyler Durden on 12/10/2013 16:55 -0500
"... The entire socio-economic model is now built on this and, whether right or wrong, it demands a very different sort of banking that the "pay 3% on deposits and lend them at 5%" kind of industry of the 70s and 80s. Volcker risks over-egging the pudding and, to mix my metaphors, killing the goose that lays the golden "growth" egg. Liquidity, the holy grail of markets, is possibly about to be sacrificed on the altar of ignorance and fear."
For practitioners of Schadenfreude, seeing high-profile investors losing their shirts is always amusing. But for the true connoisseur, the finest expression of the art comes when a high-profile investor identifies a bubble, perhaps even makes money out of it, exits in time – and then gets sucked back in only to lose everything in the resultant bust. An early example is the case of Sir Isaac Newton and the South Sea Company... but there are much more recent examples that may prove just as disastrous...
The bombs are going to drop – increased forward guidance on rates and decreased direct bond purchases – but these policies in and of themselves are just tactical. What’s really at stake is the strategic meaning of these policies, the belief system that takes hold (or doesn’t) around the power of the Fed to create market outcomes. Over the next three or four months we’re going to see quite a battle for the hearts and minds of investors, with both “sides” employing the Narrative of Don’t Fight the Fed. On the one hand you will have the Fed, with their Jericho Trumpet of Hilsenrath et al shrieking at you a new interpretation of the Narrative: ZIRP is the source of the Fed’s power, not QE, so tapering is no big deal. On the other hand you also have the Fed, but the Fed of the past several years and the way it has trained the market to believe that the portfolio rebalancing effect … i.e., the behavioral impact of QE that Bernanke has directly credited with driving up the stock market … is what really matters. And if that’s your reality, then tapering is a big deal, indeed. I’ll be monitoring all this closely at Epsilon Theory in the weeks ahead.
They will try the head-fake taper. They must. It will be backstopped by and saturated in statistical lying, and everyone will have trouble parsing the probable effect because the chronic dishonesty loose in this land will have deformed and impaired all metrics of true value. At the heart of whatever remains of this economy is fire, and the officers of the Federal Reserve are playing with it. Pretty soon, we’ll get the un-taper, the final surrender to the crack-up boom that awaits before the western world has to go medieval.
Volcker Rule - Who cares? I know we are supposed to care more about this convoluted rule, but we just can’t. The concept that somehow “prop” trading brought down the banks seems silly. The idea that market making desks were a dangerous part of the equation is ludicrous. They could have fixed this with a few simple changes, but that would have meant some blame would have had to be shifted onto the regulators...