Capital Markets

Tyler Durden's picture

Greece Floats Surcharge On Withdrawals As ECB Considers Cuts To Liquidity Lifeline





Greece is set to introduce a surcharge on withdrawals and financial transactions in an effort to raise cash amid fractious negotiations with creditors. Meanwhile, the ECB is considering measures that will tighten the screws on the country's cash-strapped banking sector.

 
Tyler Durden's picture

For HFTs It's All About FX: Trading Currencies Is Now Virtu's Biggest Source Of Revenue





Today, Virtu released its first public financials since going public, and our speculation has been proven correct: FX is now the largest revenue generator for VIRT, amounting to 28.4% of revenues in the quarter ended March 31, at $42.2 million, well above the $29.1 million generated from trading  America Equities and the $34.7 million from global commodities. In fact, as the chart below shows, on an LTM basis, FX is now not only the biggest revenue item for the world's dominant HFT firm at $131.1 million, but is also the fastest growing source of profit, rising 103% on a year over year basis!

 
Tyler Durden's picture

Violent Moves Continue In European Bond Market; Equity Futures Rebound With Oil At Fresh 2015 Highs





This is how DB summarizes what has been the primary feature of capital markets this week - the huge move in European bond yields: "On April 17th, 10-year Bunds traded below 0.05% intra-day. Two and a half weeks later and yesterday saw bunds close around 1000% higher than those yield lows at 0.516% after rising +6.2bps on the day." Right out of the European open today, the government bond selloff accelerated with the 10Y Bund reaching as wide as 0.595% with the periphery following closely behind when at 9:30am CET sharp, just as the selloff seemed to be getting out of control, it reversed and out of nowhere and a furious buying wave pushed the Bund and most peripheral bonds unchanged or tighter on the day! Strange, to say the least. Also, illiquid.

 
Marc To Market's picture

Dollar Better than Gold? Ask Venezuela





Venezuela swapped its gold at a 40% discount for dollars and has to pay intrerest on those dollars.  Not anti-gold rant.  Google story if you  doubt the facts I cite. 

 
GoldCore's picture

U.S. Fears a European “Lehman Brothers”





Gillian Tett, markets and finance commentator and an Assistant Editor and former U.S. Managing Editor of the Financial Times, wrote an important and little noticed article last week questioning complacency on the part of European policy makers regarding a Greek default and potential exit or ‘Grexit’. Tett argues that a Greek failure would lead, as Lehman’s did to “wider policy uncertainty: when Lehman failed, the entire paradigm for finance suddenly seemed unpredictable”.

 
Tyler Durden's picture

Suddenly "You Can't Ignore The Data" Has Turned Into "Trust Me"





The week that passed has been nothing short of a roller coaster ride for many nervous investors. And for some: a realization that the once hyped, hawked, and levered Billion dollar babies can indeed “come off the rails.” Turning the once joyride into something more in common with a free fall into the abyss. However, you’re told not too worry: For if you loved the ride when the prices were higher, then surely you should be ecstatic to “ride again” since the new ticket prices are clearly “on sale!”

 
Tyler Durden's picture

A Hill Street Blues Financial World - Be Careful, Its Dangerous Out There





We heard from several central banks in the last few days, and what they had to say was just one more reminder that we are in a Hill Street Blues financial world. So, hey, let’s be careful out there - and then some!

 
Tyler Durden's picture

"$12 By '20": Democrats Seek 70% Increase In Minimum Wage





Democrats are moving on a “$12 by ‘20” pitch, whereby they hope to have the minimum wage hiked to $12 within the next five years. The rationale is simple: restore the purchasing power Americans once had and you will restore robust economic growth. Ok, maybe it's not that simple, because as Republicans note, raising the pay floor by nearly 70% may well cost America jobs, thus making things worse for the very people the wage hike was meant to help.

 
Tyler Durden's picture

Saudis, Russians No Longer Buying Gold In Dubai As Oil Slump Curbs Precious Metals Shopping





“The market is dead,” one industry insider tells Bloomberg, referring to demand for tax-free physical gold in Dubai. As it turns out, the ill-effects of sliding crude prices aren't confined to Alberta's housing market, cash-strapped oil boom towns and the market for blue collar jobs in Texas. The pain is also being felt by gold vendors who are quickly discovering that when oil revenue begins to run short, fewer Saudis and Russians go on precious metals shopping sprees.

 
Tyler Durden's picture

Punk Q1 GDP Wasn't Surprising: It Extends A 60-Year Trend Of Exploding Money And Imploding Growth





During the heyday of post-war prosperity between 1953 and 1971, real final sales - a better measure of economic growth than GDP because it filters out inventory fluctuations - grew at a 3.6%  annual rate. That is exactly double the 1.8% CAGR recorded for 2000-2014. The long and short of it, therefore, is that there has been a dramatic downshift in the trend rate of economic growth during an era in which central bank intervention and stimulus has been immeasurably enlarged. How exactly is the Fed helping when the trend rate of real growth has withered dramatically?

 
Tyler Durden's picture

The Swiss National Bank Is Long $100 Billion In Stocks, Reports Record Loss





According to the latest SNB financial release, 18%, or CHF 95 ($102 billion) of the assets held on the SNB's balance sheet are, drumroll, foreign stocks!  In other words, the SNB holds 15% of Switzerland's GDP in equities!

 
Tyler Durden's picture

One Heckuva Bull Market





The current equities bull run seems unstoppable. No amount of geopolitical concerns, Greek default fears, rate hikes, US dollar strength, crude oil price volatility, Russian sanctions or whatever else you can think of can put a dent on it. Perhaps we should take a step back and try to understand what is driving this strength. OK, we know that central banks continue to spike the punchbowl, but what is the actual transmission mechanism that directs all this liquidity into equities – as opposed to commodities for instance, which continue to struggle?

 
Tyler Durden's picture

What Wall Street Thinks Caused The Bund Rout





As Bloomberg summarizes the various opinions suggested by Wall Street analysts, the rout in German debt and other European sovereign bonds was caused by market-technical factors such as investor positioning and supply glut rather than shift in views on economic outlook, analysts say, with profit-taking on successful QE trades, thin market liquidity and position-squaring before month-end are cited among main bearish catalysts.

 
Tyler Durden's picture

Why Markets Are Manic - The Fed Is Addicted To The "Easy Button"





Honest price discovery is essential to capitalist prosperity since it is the miraculous mechanism by which capital is raised from savers and investors and efficiently allocated among producers, entrepreneurs and genuine market-rate borrowers. What the central banks have generated, instead, is a casino that is blindly impelled to churn the secondary capital markets and inflate the price of existing assets to higher and higher levels - until they ultimately roll-over under their own weight. The Easy Button addiction of our central bankers is thus not just another large public policy problem. It is the very economic and social scourge of our times.

 
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