Bank of New York
- Republicans put squeeze on Obama in "fiscal cliff" talks (Reuters)
- Inquiry harshly criticizes State Department over Benghazi attack (Reuters)
- Banks See Biggest Returns Since ’03 as Employees Suffer (BBG)
- Italy president urges election be held on time (Reuters)
- Bank of England Says Sterling Hurting Economy (WSJ) - there's an app for that, it's called a Goldman BOE chairman
- China slowdown hits Indonesian farmers (FT)
- China dispute hits Japanese exports (FT)
- Market to get even more monopolized by the HFT king: Getco wins Knight with $2 bln sweetened offer (Reuters)
- MF Global Cases Focus on 'Letters' (WSJ)
- UBS fined $1.5 billion in growing Libor scandal (Reuters)
- Spotlight swings to interdealer brokers (FT)
- China Widens Access to Capital Markets (WSJ)
- With Instagram, Facebook Spars With Twitter (WSJ)
The Crisis of Conflicts at the New York Fed: Circling the Wagons to Set Up Ex-Goldmanite William Dudley As PresidentSubmitted by EB on 12/17/2012 12:01 -0400
New Fed minutes reveal powerful CEO voted to make William Dudley president of FRBNY and grant him conflicts waivers for investments in CEO's own company.
With gold and silver down this morning - following a mysterious vertical plunge last night (once again) - we thought ConvergEx's Nick Colas' timely discussion of gold was worthwhile. As he notes, Gold is the ultimate personality test for investors. Some hate it, excoriating its adherents for their lack of faith in human ingenuity – gold has been valuable since before humans could write. And some swear by the yellow metal, in the belief that it is the last vestige of rationality in a world of financial assets manipulated by central banks and opaque trading venues. What gets lost in the wash is that gold is a commodity and can be analyzed as such. On that basis, here is the 'Top 10' list of real-world fundamentals for gold.
In what is the first formal speech of Simon "Harry" Potter since taking over the magic ALL-LIFTvander wand from one Brian Sack, and who is best known for launching the Levitatus spell just when the market is about to plunge and end the insolvent S&P500-supported status quo as we know it, as well as hiring such sturdy understudies as Kevin Henry, the former UCLA economist in charge of the S&P discuss the "role of central bank interactions with financial markets." He describes the fed "Desk" of which he is in charge of as follows: "The Markets Group interacts with financial markets in several important capacities... As most of you probably know, in an OMO the central bank purchases or sells securities in the market in order to influence the level of central bank reserves available to the banking system... The Markets Group also provides important payment, custody and investment services for the dollar holdings of foreign central banks and international institutions." In other words: if the SPX plunging, send trade ticket to Citadel to buy tons of SPOOSs, levered ETFs and ES outright. That the Fed manipulates all markets: equities most certainly included, is well-known, and largely priced in by most, especially by the shorts, who have been all but annihilated by the Fed. But where it gets hilarious, is the section titled "Lessons Learned on Market Interactions through Prism of an Economist" and in which he explains why the Efficient Market Hypothesis is applicable to the market. If anyone wanted to know why the US equity, and overall capital markets, are doomed, now that they have a central planning economist in charge of trading, read only that and weep...
What does the Fed's QE 3, a Spanish default, the systemic crisis in the EU and Lehman all have in common?
Together, the market and democracy are what we like to call "the system." The system has driven and enticed bankers and politicians to get the world into trouble. One of the side effects of the crisis is that all ideological shells have been incinerated. Truths about the rationality of markets and the symbiosis of market and democracy have gone up in flames. Is it possible that we are not experiencing a crisis, but rather a transformation of our economic system that feels like an unending crisis, and that waiting for it to end is hopeless? Is it possible that we are waiting for the world to conform to our worldview once again, but that it would be smarter to adjust our worldview to conform to the world? At first glance the world is stuck in a debt crisis; but, in fact, it is in the midst of a massive transformation process, a deep-seated change to our critical and debt-ridden system, which is suited to making us poor and destroying our prosperity, social security and democracy, and in the midst of an upheaval taking place behind the backs of those in charge. A great bet is underway, a poker game with stakes in the trillions, between those who are buying time with central bank money and believe that they can continue as before, and the others, who are afraid of the biggest credit bubble in history and are searching for ways out of capitalism based on borrowed money.
You've probably noticed the cookie-cutter format of most financial media "news": a few key "buzz words" (fiscal cliff, Bush tax cuts, etc.) are inserted into conventional contexts, and this is passed off as either "reporting" or "commentary" depending on the number of pundits sourced. Correspondent Frank M. kindly passed along a template that is "officially deny its existence" secret within the mainstream media. With this template, you could launch your own financial media channel, ready to compete with the big boys. Heck, you could hire some cheap overseas labor to make a few Skype calls to "the usual suspects," for-hire academics, hedge fund gurus, etc. and actually attribute the fluff to a real person.
Exclusive: Bank Of England To The Fed: "No Indication Should, Of Course, Be Given To The Bundesbank..."Submitted by Tyler Durden on 11/09/2012 17:31 -0400
"Recently, Johnson Matthey have put 172 “bad delivery” U.S. Assay Office bars into good delivery form for account of the Deutsche Bundesbank. These bars formed part of recent shipments by the Federal Reserve Bank to provide gold in London in repayment of swaps with the Bundesbank. The out-turn of the re-melting showed a loss in fine ounces terms four times greater than the gross weight loss... No indication should, of course, be given to the Bundesbank, or any other central bank holder of U.S. bars, as to the refiner’s views on them."
- Greek Aid Payment Call Won’t Be Made Next Week, EU Official (Bloomberg)
- Eurozone faces brinkmanship on Greece (FT)
- Pressure Rises on Fiscal Crisis (WSJ)
- The JC Penney massacre continues (BBG) - In other news, any minute now Bill Ackman will get that 15x return...
- SEC left computers vulnerable to cyber attacks (Reuters) cue "back door Trojan" jokes
- Former Goldman trader accused of fraud (FT)
- Elizabeth Warren's Inadvertent Best Friends: Wall Street and Republicans (BusinessWeek)
- Zurbruegg Says Managing SNB Currency Reserves Is Major Challenge (BBG)
- Obama ally leads push on fiscal cliff (FT)
- Britain threatens to block banking union (FT)
- PBOC’s Zhou Says China’s Economy Improving as Data Due (Bloomberg)
- China slaps duties on steel tube imports (FT)
- Obama to Make Statement on Economic Growth, Cutting Deficit (Bloomberg)
Tim Geithner's public "servant" tenure has not been without its blemishes: from his deplorable run as the (figure)head of the New York Fed (from 2003 until 2009), when the entire financial system literally imploded under his watch, to his epic failing up as Hank Paulson's replacement as treasury Secretary of the United States, despite his legendary inability to navigate the Minotaurian labyrinth that is the TurboTax income tax flowchart, the Dartmouth alum has had his share of run ins with adversity (and adversity won). Of course, Geithner's tenure in charge of the Treasury in the past 4 years has been somewhat mollified by the fact that here too here was merely a figurehead, and the true entity that runs the US printing presses is none other than the JPM and Goldman Sachs co-chaired Treasury Borrowing Advisory Committee (for more on the TBAC read here and especially here as pertains to the former LTCM trader and current head of JPM's CIO group), meaning that the US Treasury, just like the Fed, are merely branches of the one true power in US governance: Wall Street. Geithnerian figureheadedness aside, the one undeniable fact is that Tim Geithner's days as head of the Treasury are now numbered: he has made it quite clear that he will not accompany Obama (should the incumbent be reelected) into his second term. So what is a career "public servant" to do once the public no longer has any interest in retaining his services? Bloomberg's Deborah Solomon has some suggestions...
The hurricane water surge has come and gone, devastating downtown New York, but one place, the one that represents the deepest hole burrowed south of Houston street and literally lies on the New York bedrock 80 feet below street level, is safe and sound. The place, of course, is where over 20% of the world's tungsten gold is stored. Especially that of Germany (wink wink). And Germany, whose central bank was recently caught in a series of official disclosure faux pas as described here in regards to its official gold holdings, can rest assured that nothing that hasn't already happened to its gold, happened last night.
"The sale of Treasury securities that was tentatively scheduled for today, Monday, October 29, will take place as scheduled, with a 10:15 AM open and 11:00 AM close. However, settlement will take place on Wednesday, October 31, not Tuesday, October 30. The purchase of Treasury securities previously scheduled for tomorrow, Tuesday, October 30, has been postponed, and the schedule of Treasury security operations will be updated in the coming days with details of the rescheduled operation. After today's sale, Treasury purchase and sale operations are anticipated to resume on Wednesday, October 31. Similarly, there will be no agency mortgage-backed securities (MBS) trading on Tuesday, October 30. MBS trading operations are anticipated to resume on Wednesday, October 31."
"We do not have the slightest doubt that our holdings in New York and Paris are also made up of the purest fine gold. We have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars’ existence but also of their quality.... We had nothing but the best of experiences with our partners in New York, London and Paris. There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible. Gold stored in your home safe is not immediately available as collateral in case you need foreign currency....for years, our gold has been stored by the highly esteemed central banks of the United States, Great Britain and France without provoking any complaints whatsoever – not by just any fly-by-night operators. Part of the debate in Germany has veered somewhat towards the absurd."
With the Associated Press report appended here, the German gold audit story has just exploded into the English-language press with some important revelations.