- Unstoppable $100 Trillion Bond Market Renders Models Useless (BBG)
- Afghan president fumes at prisoner deal made behind his back (Reuters)
- Spain to Unveil $8.6 Billion Stimulus Package (AP)
- How fracking helps America beat German industry (Reuters)
- Obama to Urge European Allies to Stay Tough on Russia (WSJ)
- Frenchman 'admits' Brussels shooting in video (AFP)
- Heloc Payment Jump to Take Bite Out of Consumer Spending (WSJ)
- Obama Said to Propose Deep Cuts to Power-Plant Emissions (BBG)
- Lehman Lesson Lost as Bank Lobby Gains Clout (BBG)
- WSJ reports that WSJ reporting on Icahn insider trading probe may have killed it (WSJ)
- KKR liquidates former Goldman Sachs traders-run hedge fund (Reuters)
Ahead of this Thursday's ECB meeting, speculation is rife about what Mario Draghi will announce, and as the following Nomura chart highlights most pundits are convinced that the most likely announcement is a cut in the refi and deposit rate with a probability of around 90%, an LTRO in distant third at 34%, and a full blown QE dead last with 10%. However, as SocGen predicts, which is rather aggressive in its assumptions expecting a negative deposit rate of -0.1%, a targeted LTRO to "boost lending to the private sector", and a "signal" of €300 billion in asset purchases, the bulk of this new-found liquidity will almost exclusively go to boost capital markets, and the wealth effect. As for the broader economy? "We do not expect the 5 June measures to deliver a significant impulse to the real economy."
Has the next major economic downturn already started? The way that you would answer that question would probably depend on where you live. If you live in New York City, or the suburbs of Washington D.C., or you work for one of the big tech firms in the San Francisco area, you would probably respond to such a question by saying of course not. In those areas, the economy is doing great and prices for high end homes are still booming. But in most of the rest of the nation, evidence continues to mount that the next recession has already begun for the poor and the middle class.
Earlier today, as part of its latest macro markets research roundup, Goldman let a phrase slip, which probably better than anything we have seen in the past few years, captures just how truly broken the "market" is. To wit: "it is important to remember that weak global growth is generally negative for risky assets." That Goldman even had to remind its clients of this dramatic observation, puts to rest any doubts about just how much central banks' central-planning has perverted the cost/benefit analysis of the world.
- Ukraine Rebels Outfox Army to Dent Poroshenko Troop Goal (BBG)
- Russia Withdraws Most of Forces From Ukraine Border: U.S. (BBG)
- Super-Size Me! China’s ’Mini’ Stimulus Starts Expanding (BBG)
- Option B: The blueprint for Thailand's coup (Reuters)
- Big investors replace banks in $4.2tn repo market (FT)
- Draghi Shields Catalan Independence Bid From Market (BBG)
- U.S. companies seek cyber experts for top jobs, board seats (Reuters)
- Parsley CEO Emerges as One of Youngest U.S. Billionaires (BBG)
- Snowden: 'no relationship' with Russian government (Reuters)
- Bond Surge Worldwide Drives Index Yield to One-Year Low (BBG)
- Shares flirt with record highs on ECB easing bets (Reuters)
- Goldman Shuns Bonds Pimco’s Gross Favors in ‘New Neutral’ (BBG)
- Porn may be messing with your head (Reuters)
- Dish to Become Largest Company to Accept Bitcoin (AP)
- To Make a Killing on Wall Street, Start Meditating (BBG)
- Apple to get Beats, music mogul Iovine for $3 billion (Reuters)
- Fink Says Leveraged ETFs May ‘Blow Up’ Industry (BBG)
According to JPM, a pair of wrong-way bets made by clients at the start of the year is partly to blame for Wall Street’s trading slowdown. Namely: the two mega-pain trades so far in 2014: being long USDJPY and short Treasurys which everyone had put on with mega-conviction at the beginning of the year, have so far in 2014 generated mega-losses for all those involved. Bloomberg quotes Pinto who said succinctly summarized that "Neither of those trades paid." He added: "Essentially you start the year with the wrong momentum, where you lose money at the very beginning, and you ended up with probably a lower risk appetite than you would have otherwise." And, as a result of actually, gasp, losing money, "Clients appear to be hesitating in placing the larger hedges that typically happen earlier in the year."
- Yellen Concerned by Housing Slowdown She Has Scant Power to Cure (BBG)
- Because snow in Q1? Citigroup’s CFO Says Trading Revenue Could Slide 25% (BBG)
- Banks Raise Caution Flag on Trading (WSJ)
- The answer is yes: Hilsenrath asks if BOJ’s Kuroda Awakening to His Limits? (WSJ)
- Google Develops Prototype Cars for Fully Autonomous Driving (WSJ)
- Amazon Expects Lengthy Hachette Dispute (WSJ)
- Tencent $1 Billion Game Shows Global Hunt for Mobile Hits (BBG)
The only thing more ominous for the world than a Fed raising interest rates is a Bilderberg Group meeting. The concentration of politicians and business leaders has meant the organisation, founded at the Bilderberg Hotel near Arnhem in 1954, has faced accusations of secrecy. Meetings take place behind closed doors, with a ban on journalists. As InfoWars notes, the 2014 Bilderberg meeting in Copenhagen, Denmark is taking place amidst a climate of panic for many of the 120 globalists set to attend the secretive confab, with Russia’s intransigence on the crisis in Ukraine and the anti-EU revolution sweeping Europe posing a serious threat to the unipolar world order Bilderberg spent over 60 years helping to build.
- Vietnam, China trade accusations after Vietnamese fishing boat sinks (Reuters)
- SEC Set to Spur Exchange Trading (WSJ)
- Bank of Japan quietly eyes stimulus exit (Reuters)
- Japan Risks Low Growth Even as Easing Spurs Inflation (BBG)
- Hello Japan: Bond Market Message to Fed: Your 4% Rate Outlook Is Too High (BBG)
- Malaysia, UK firm release satellite data on missing MH370 flight (Reuters)
- Fighting rages in eastern Ukraine city, dozens dead (Reuters)
- Bad Credit No Problem as Balance-Sheet Bombs Rally 94% (BBG)
- Draghi’s Asset-Backed Drive Rouses Academic Skeptics (BBG)
- For-Profit Colleges Face Test From State, Federal Officials (WSJ)
It was all over the news last week, both mainstream and gold sites. Barclays was caught manipulating the gold price. This story is a big deal to the gold community.
On the same day in which we released our letter writing campaign to “End Gold Price Manipulation Now!”, Barclays Plc was fined $43.8 million and Barclays trader Daniel James Plunkett was fined more than $160,000 for manipulating the gold price to avoid a $3.9 million payout to a client that had placed options on gold in the market. Of course, these types of shenanigans have been going on for more than a decade now, but since this event marks the first significant fine against a bullion bank and a banker for gold price manipulation, it is groundbreaking in that regard.
European leaders will meet next week to discuss a three-tier plan to impose "costs" on Russia if today's Ukraine election is not deemed "free and fair." Reuters reports that the low-, medium-, and high-intensity scenarios that the always-so-smart EU leaders have created start with impose restrictions on imports of Russian luxury goods including diamonds, precious metals, furs, vodka and caviar. The sabre-rattlers then escalate up to the "stage three" measures against Putin with a complete ban on imports of oil and gas from Russia. In other words, in spite of German business damnation, EU leaders will commit economic suicide and stop importing gas just to teach Putin a lesson... well played... It seems Putin's words are more prophetic than ever... "Everything in the world is interdependent and once you try to punish someone, in the end you will cut off your nose to spite your face."
With relative front-runner Yulia Tymoshenko suggesting Ukraine hold a referendum on joing NATO in June - exactly the event that Putin has expressed grave concern about - this weekend's elections in the troubled nation are considerably more crucial to global geopolitical anxiety than the record low levels of implied volatility across FX, bond, and stock markets would suggest. AS Deutsche explains, Ukraine's new president will face challenges in almost all key spheres – in particular, de-escalating tensions within Ukraine, especially in the eastern provinces; conducting deep economic reforms in order to move Ukraine on the path of recovery along with dealing with the international lenders; finally, improving relations with Russia and the European Union. Below we outline the policy agendas of the candidates and assess the probable scenarios of further political development.