At the end of the day, the current preposterous $325 billion market cap has nothing to do with the business prospects of this firm or the considerable entrepreneurial prowess of its leader and his army of disrupters. It is more in the nature of financial rigor mortis - the final spasm of the robo-traders and the fast money crowd chasing one of the greatest bubbles still standing in the casino.
Blogger Ben’s work is already done. In his very first substantive post as a civilian he gave away all the secrets of the monetary temple. The Bernank actually refuted the case for modern central banking in one blog. The truth is the real world of capitalism is far, far too complex and dynamic to be measured and assessed with the exactitude implied by Bernanke’s gobbledygook. In fact, what his purported necessity for choosing a rate “somewhere” actually involves is the age old problem of socialist calculation.
There is a much larger structural risk for markets and investors than HFT and the whole Flash Boys brouhaha, it’s just totally under the radar and hasn’t surfaced yet. Investors may not know better yet, but they will soon, one way or another. Tomorrow a handful of governments will influence aggregate political behaviors by triggering small communications that Big Data tells them will be voluntarily magnified by individual citizens, snowballing into outsized, long-lasting, and untraceable “popular” actions. Tomorrow a handful of hedge funds will influence aggregate market behaviors by triggering small trades that Big Data tells them will be voluntarily magnified by individual traders, snowballing into outsized, long-lasting, and untraceable “market” actions. Tomorrow Big Data will be primarily an instrument of social control, with a powerful and ubiquitous impact on all citizens and all investors.
Here Are The Highlights From The Senate's Finding That Banks Manipulate Physical Commodities - Live Hearing FeedSubmitted by Tyler Durden on 11/20/2014 09:28 -0500
After two years, and 396 pages of report, the Senate investigations committee finds (translating their gobbledygook into English) that the banks did indeed corner and rig the commodity market. As Bloomberg reports, the Senate panel said the firms have eroded the line separating banking from commercial activities to the detriment of consumers and the financial system. The holdings give banks access to non-public information that could move markets and increase the likelihood that industrial accidents will spur taxpayer bailouts, the report said... (i.e. manipulated the system). The hearing, involving bankers from Goldman, Morgan Stanley, and JPMorgan begins at 930ET...
Previewing Yellen's Jackon Hole "Gobbledygook": Not One Analyst Thinks Yellen Will Say Anything Remotely HawkishSubmitted by Tyler Durden on 08/21/2014 12:55 -0500
Ahead of Yellen's Jackson Hole speech tomorrow, the sell-side, hypnotized by 6 years of Fed bubble-inflating generosity, refuses to even consider the possibility that the Fed could possibly pull the punch bowl away, and the absolutely unanimous consensus is that despite yesterday's minutes (or perhaps due to, because as the Chinese Department of Truth has taught us, one must first and foremost baffle with BS), Yellen will go uber-dove. So without further ado, here is what the Penguins expect Yellen's "gobbledygook" will reveal tomorrow, and as a reminder, yesterday Citi warned that there is "tremendous" downside risk if Yellen doesn't go "full-dovish".
Snowden Is a Good Guy ... But There's a LOT that He Doesn't Know
In addition to our recent discussion of the macro-economic data in the US rolling over, and the epic proportions of net risk-taking longs, Credit Suisse outlines ten further indications that equities might be due for a 'consolidation'. Translating from sell-side research gobbledygook into reality, equity bulls are merely demonstrating the traditional phases of momentum-inspired euphoria in the face of ongoing fundamental contraction (not to mention a decline in consumption and marginal US purchasing power) - and earnings expectations, US fiscal tightening, and a modest rise in deficit-increasing real bond yields will not help.
Politics and economics, or the better term, political economics, for the most part rules our lives: the political activity of the nation as a collective of economic groups and super- wealthy individuals, whatever the defining orthodoxy turns out to be. As the United States enters the final days in the much-hoped resolution of its “fiscal cliff,” there are a number of prominent individuals from both present and past – politicians, economists and business leaders – who regale us with their two-cent worth of admonition and advice. For the most part, that’s what the value is really worth. Meantime, here is the American citizenry reverting to their pre-recession days, with the highest confidence level in four and a half years, starting to spend beyond their capacity to produce thanks to that misplaced confidence, the resurgence of home equity loans, and the promise of governing politicians that things are on the mend... when they really are not, and the job market continues to decay for jobs with a living wage.
If you live long enough—knock on wood—pretty soon it’ll add up to real money.
But those Shanghai office towers across the river in Pudong were already standing empty a decade ago – not that you would know from any contemporary reporting. Former Prime Minister Rhu Rongji publicly pleaded with provincial bureaucrats to stop fabricating figures because it made it impossible for him to know what was going on.
If the pundits are counting on the US to be the engine that drives Global growth - it's going to be a very slow year indeed!
On the right hand side of the Treasury Department website homepage, under the subheading Wall Street Reform, is the following lofty statement: "It is time to restore responsibility and accountability to our financial system." That's the spin. Now, it's been spinning there awhile, so it's not exactly news. But today, in complete contrast to the meaning of that statement, Geithner suggested backing a 'risk-retention' proposal that excludes banks that meet high underwriting standards (probably those that got high marks on the latest Fed stress tests for which the Fed isn't releasing any details) from having to retain portions of the deals they securitize, you know, of having to maintain a stake in the outcome of those deals and the performance and integrity of their underlying loans. To recap, as a result of the 2008 debacle, banks that passed their stress tests, effectively borrow money at next to zero percent. The aftermath of the financial crisis is the loosest monetary policy in our nation's history. Even with all that help, banks don't want to be bothered holding anything that could screw around with their capital ratios. Of course.