Credit Default Swaps
Days After Wells Fargo Admits Defrauding The Government, NY Fed Rewards It With Primary Dealer StatusSubmitted by Tyler Durden on 04/18/2016 21:00 -0400
Ten days ago, in the latest example of how criminal Wall Street behavior leads to zero prison time, Wells Fargo admitted that it deceived and defrauded the U.S. government. Its punishment: a $1.2 billion settlement, one which will ultimately be paid by the bank's shareholders as no executives go to prison. And now, less than two weeks later it's time for Wells to get its reward: the NY Fed just announced it would grant Wells Fargo the much coveted Primary Dealer status.
Negative rates on savings accts., life insurers & banks suffering as central bankers push NIRP/QE, increasing FICC risk. So, what's now more stable than Brazilian real & gold & close to the yen & euro? Hint: Technology will put an end to this nonsense.
First it was Connecticut, now another state is in the crosshairs following the imminent "exstatiation" of another prominent hedge fund billionaire, David Tepper. The decision by billionaire hedge-fund manager David Tepper to quit New Jersey for tax-friendly Florida has put the Garden State in fiscal peril, and could complicate estimates of how much tax money the struggling state will collect, the head of the Legislature’s nonpartisan research branch warned lawmakers.
In the same way that FDR had an existential political interest in generating inflation and preventing volatility in the US labor market, so does the US Executive branch today (regardless of what party holds the office) have an existential political interest in generating inflation and preventing volatility in the US capital markets. Transforming Wall Street into a political utility was an afterthought for FDR; today the relative importance of the labor markets and capital markets have completely switched positions. Today, the quote would be "markets are too important to be left to investors."
Sweden beats USA and Germany as the least likely to default on its bonds but at the other end of the global sovereign risk spectrum lie two socialist utopias - Venezuela (CDS just shy of 6000bps) and Greece (CDS around 1800bps) are the nations most likely to default.
Bears Exit Hibernation As Rally Fizzles On Dismal Chinese Trade Data; Commodities Slide; Gold HigherSubmitted by Tyler Durden on 03/08/2016 07:49 -0400
Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011. The world got a harsh reminder of this last night when China reported the third largest drop in exports in history, which crashed by over 25%, the third biggest drop on record, and no, it was not just the base effect from last February's spike, as otherwise the combined January-February data would offset each other, instead it was a joint disaster, meaning one can't blame the Lunar New Year either. In short, one can't really blame anything aside from the real culprit: despite all the lipstick that has been put on it, global trade is grinding to a halt.
In a market where fraud is tolerated or even encouraged, no amount of capital will suffice to maintain investor confidence.
The fiat currency system, fractional reserve banking fraud, insane Keynesian fiscal policies, and consumer debt based consumption economy are mathematically unsustainable, so they won’t be sustained. The world is about to sit down to a banquet of consequences, served by deranged central bankers.
As bad as the month of January was for the global economy, the truth is that the rest of 2016 promises to be much worse.
Last week, we noted that Italy is rushing to defuse a €200 billion time bomb in the country’s banking sector as investors fret over banks’ exposure to souring loans. On Wednesday we learn that Italy has indeed managed to strike a deal with Brussels to help alleviate banks’ NPL burden but the agreement falls well short of the type of comprehensive "solution" the market was hoping to see.
Despite Larry Fink's relentless efforts to convince everyone how safe ETFs are, these products and their bastard offspring - ETNs - continue to demonstrate exactly how rigged financial markets have become. Barron's uncovered the cause of the huge anomaly in the OIL ETN: The wide premium developed after Barclays limited how many new shares could be created, inhibiting the normal mechanism that keeps an ETN's price in line with its index.
A week ago we warned of some insane movements and mysterious bid in OIL (the Barclays iPath oil tracking ETN) as it traded a stunning 36% rich to its underlying NAV. Well with oil resurgent today, as contracts roll, something just imploded in OIL...
Let’s just say that if you are focused on domestic North American issues…you are missing the point.