Bank of New York
Whereas some central banks have become more forthcoming on where they claim their official gold reserves are stored, many of the world’s central banks remain secretive in this regard, with some central bank staff saying that they are not allowed to provide this information, and some central banks just ignoring the question when asked.
- After Rough Quarter, Investors Buckle Up (WSJ)
- From heroes to bystanders? Central banks' growth challenge (Reuters)
- Russian Airstrike in Syria Targeted CIA-Backed Rebels, U.S. Officials Say (WSJ)
- Kremlin says Syria air strikes target list of groups, not just Islamic State (Reuters)
- That’s information warfare? Russia accused of killing civilians in Syria (RT)
- Euro zone factory growth eases in August despite modest price rises (Reuters)
- How Glencore's Crazy Month Makes Greek Banks Look Tame (BBG)
Land of the Fleeced ... Home of the Slave
Thousands of investors with stop-loss orders on their ETFs saw those positions crushed in the first 30 minutes of trading last Monday, August 24th. Seeing a price blow right through your stop is perhaps the worst experience in all of investing because it seems like such a betrayal. “Hey, isn’t this what a smart investor is supposed to do? What do you mean there was no liquidity at my stop? What do you mean I got filled $5 below my stop? Wait… now the price is back above my stop! Is this for real?” Welcome to the Big Leagues of Investing Pain.
It is time for a comprehensive audit of Janet Yellen ’s Federal Reserve - and not just for the reasons presidential candidate Rand Paul and others have given. The Fed needs to be audited to see if its ruling body has broken the law by manipulating financial markets that are outside its jurisdiction.
One of the most curiously persistent surrealisms of Washington, DC is the reflexive deference given the Federal Reserve System. The Washington elite tends to accord more infallibility to the Fed than do Catholics the Pope.
Attempts to explain exactly what happened last Monday when prices for a whole host of ETFs and mutual funds diverged markedly from fair value abound and while there's no way to know for sure exactly what went wrong, FactSet has drawn some tentative conclusions after conducting a bit of "voodoo, tea-leaf reading."
A glitch in the Matrix (if you will) that affected pricing for 1,200 mutual funds and ETFs still wasn't wholly resolved as of Sunday evening after executives worked through the weekend in a frantic attempt to resolve the issue ahead of Monday's open. Remember, if anyone asks, none of this has anything to do with flash-crashing, broken markets.
- Hilsenrath: Fed Appears to Hold Line on Rate Plan (WSJ)
- Europe, Asia stocks set for worst monthly drop in three years on China, Fed (Reuters)
- Beijing abandons large-scale share purchases (FT), if only for a few hours
- China’s Next Problem: Paying for Its Stock-Market Bailout (WSJ)
- Crises Put First Dents in Xi Jinping’s Power (WSJ)
- Man Group’s China Chief Said to Assist Police in Probe (BBG)
During Monday's flash crashing mayhem, the fragility of the ETF pricing system was exposed for all to see. While common sense dictates that the extreme market moves, trading halts, and tripped circuit breakers may have had quite a lot to do with the epic divergences between NAV and unit pricing, the real culprit was a "computer glitch" caused by a botched "systems change" last Saturday. The fact that the trouble calculating NAVs across nearly 800 mutual funds happened on the very same day as the flash crash is strictly coincidence.
Perhaps the biggest market moving event of the day, more so than the Durables data, was Bill Dudley's speech. However, at least based on the prepared remarks there is no discussion of the economy. From Bloomerg. Now all eyes turn to the Q&A which is where any questions relevant to the recent move in markets will most likely emerge.
A half-century ago, America - and then the world - was rocked by a mighty stock-market crash that soon turned into the steepest and longest-lasting depression of all time. Those who ignore the lessons of history are doomed to repeat it - except that now, with gold abandoned and each nation able to print currency ad lib, we are likely to wind up, not with a repeat of 1929, but with something far worse...
Here is the paradox as succinctly summarized by Deutsche Bank, which notes that the current -29% year-over-year drop in the CRB index implies YoY headline CPI inflation falling from 0.1% to -0.9% over the next couple of months, or just in time for the September or December FOMC meetings both proposed as the "lift off" date. This would be the largest year-over-year drop since September 2009 (-1.3%) and one of the lowest prints in modern history.