Is the U.S. economy steamrolling toward another recession? Will 2014 turn out to be a major "turning point" when we look back on it? Before we get to the evidence, it is important to note that there are many economists that believe that the United States never actually got out of the last recession. In fact, that would fit with the daily reality of tens of millions of Americans that are deeply suffering in this harsh economic environment. But no matter whether we are in a "recession" at the moment or not, there are an increasing number of indications that we are rapidly plunging into another major economic slowdown. The following are the top 12 signs that the U.S. economy is heading toward another recession...
- High Stakes Limit Bid to Cow Putin (WSJ)
- Russia says can't control Crimea troops ahead of U.S. talks (Reuters)
- Crimea Crisis Haunted by Ghosts of Bungled World War I Diplomacy (BBG)
- Putin’s Ukraine Gambit Hurts Economy as Allies Lose Billions (BBG)
- Germany Says It Provided Equipment and Training to Ukraine's Riot Police (WSJ)
- China signals focus on reforms and leaner, cleaner growth (Reuters)
- China Shares in Hong Kong Decline Amid Default Concern (BBG)
- Beijing Signals New Worry on Growth (WSJ)
- European Bonds Surge on Slowing German Inflation, Ukraine Tumult (BBG)
- Ukraine tensions hit shares (Reuters)
- Debating Geithner’s Appearances in 2008 Transcripts (Hilsenrath)
- Tensions in Asia Stoke Rising Nationalism in Japan (WSJ)
- GM Investigated Over Ignition Recall Linked to 13 Deaths (BBG)
- Smartphone wars shift from gadgetry to price (Reuters)
- Some Companies Alter the Bonus Playbook (WSJ)
- London’s Subterranean Luxury Manors Lure New Breed of Lenders (BBG)
- Japan No Country for Old Farmers as 7-Eleven Takes Plow (BBG)
- Dream of U.S. Oil Independence Slams Against Shale Costs (BBG)
"The extent of unproductive investment in China today is much greater than was the case for Japan at a comparable phase of development," warns Deutsche's EM strategist John-Paul Smith, and one glance at the chart below suggests China is tracing an ominous path towards the same "lost-decade" that un-inspired Japan since the mid-80s. While the PBOC is less interested in goosing its own stock market (since ownership is so low), Chinese stocks (down 60% from 2007 highs) "seem to be saying that there is a significant risk of a major slowdown."
Ocwen Financial, dubbed by Moody's as poised to become the "next generation" of subprime lenders, has come under considerably pressure this morning amid news that NY State regulators are investigating the firm for "conflicts of interest"...
- *NY DEPT FINL SERVICES FINDS POTENTIAL CONFLICTS OF INTEREST
- *NY CITES REVIEW OF OCWEN'S MORTGAGE SERVICING PRACTICES
- *NY SEEKS INFO ON FINL INTEREST OF OCWEN EXECS IN AFFILIATED COS
It is the Mortgage Servicing Rights (MSRs) that has Moody's the most-concerned as the volumes required may force Ocwen (and others) to shift their business model to ever lower quality loans.
- California couple finds $10 million in buried treasure while walking dog (Reuters) ... not bitcoin?
- Dimon Says Threats to JPMorgan Span Google to China Banks (BBG)
- Stocks So Many Love to Hate Buoyed by Fed’s Jobs Priority (BBG)
- White House Weighs Four Options for Revamping NSA Phone Surveillance (WSJ) ... to pick the fifth one
- Credit Suisse Executives Weren’t Aware of U.S. Tax Dodges (BBG)
- Militias Hunt Kiev Looters From Central Bank to Bling Palace (BBG)
- Crisis Gauge Rises to Record High as Swaps Avoided (BBG)
- Obama to Propose Highway-Repair Program (WSJ)
- Ukraine Pledges to Protect Deposits as Kiev Rally Called (BBG)
JPMorgan may have had zero trading loss days in 2013 but 2014 is not shaping up well for Jamie Dimon's firm. Just out from Reuters and BBG, which is reporting what the firm just announced at its investor day:
- JPMORGAN CHASE & CO EXECUTIVE: MARKET REVENUE YEAR-TO-DATE DOWN ABOUT 15 PCT VS YEAR AGO
- JPMORGAN CHASE & CO EXECUTIVE: MARKET REVENUE DOWN BROADLY YEAR-TO-DATE, BUT WORSE IN FIXED INCOME
- JPMORGAN SAYS HAS SEEN LOWER CLIENT ACTIVITY, ESP FIXED INCOME
And if the company feels compelled to report this now, one can only imagine what ridiculous addbacks JPM will have to do on earnings day: we can certainly expect at least $2 billion in loan loss reserves releases to make up for a reality that firmtly refuses to comply with Ph.D. economist models. And what is really funny, is that judging by the stock reaction, it is almost as if the algos don't know that nobody trades bonds when it snows outside. Duh.
Having sold his 7-bedroom NY mansion, the CEO of Virtu Financial (the high-frequency-trading firm that accounts for 5% of US equity trading volume) appears to believe investors are ripe for him to IPO his firm. As The FT reports, New York-based Virtu is aiming to raise between $250-$350m from a listing that would make it the first electronic trading business that trades with its own funds to launch an IPO. The question, of course, is, will Virtu be the top-ticking, greater-fool-finding IPO of this bubble that Blackstone was for the last one?
Even as the primary housing market was slowly circling the drain, the one silver lining was that the US rental market, largely dominated by several Wall Street investment firms, most notably Blackstone, was doing relatively well. It was doing so well that equity sponsors such as Blue Mountain couldn't wait to offload their prized REIT property to the public, culminating with last August's IPO of American Homes 4 Rent, the second-largest US homes-for-rent operator after Blackstone. And since the stock price of all these corporations was performing admirably or at all time highs, supported by the record fungible liquidity sloshing among the world's interconnected markets, nobody was very concerned.
It is time to get concerned.
The banker suicide wave that started in late January has now become an epidemic, and it seems to be focusing on one bank: JP Morgan. After the first suicide that took place in JPM's London headquarters, ending the life of 39 year old Gabriel Magee, a vice president in the investment bank’s technology department, next it was 37 year old Ryan Crane, an executive director in the firm's program trading division, who died under still unknown circumstances. Moments ago a third JPMorgan banker committed suicide, this time at the JPMorgan Charter House Asia headquarters in central Hong Kong, where a 33 year old man who was said to have been an FX trader for JPM, just jumped to his death.
"The Vampire Squid Strikes Again"- Matt Taibbi Takes On Blythe Masters And The Banker Commodity CartelSubmitted by Tyler Durden on 02/13/2014 17:15 -0400
The story of how JPMorgan, Goldman and the rest of the Too Big To Fails and Prosecutes, cornered, monopolized and became a full-blown cartel - with the Fed's explicit blessing - in the physical commodity market is nothing new to regular readers: to those new to this story, we suggest reading of our story from June 2011 (over two and a half years ago), "Goldman, JP Morgan Have Now Become A Commodity Cartel As They Slowly Recreate De Beers' Diamond Monopoly." That, or Matt Taibbi's latest article written in his usual florid and accessible style, in which he explains how the "Vampire Squid strikes again" courtesy of the "loophole that destroyed the world" to wit: "it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is "complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally." Complementary to a financial activity. What the hell did that mean?... Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination."
We all knew that cultures were different and that we all had a unique way of doing things that run our daily lives. In Europe they tell the banks that they will die if they are weak (apparently, after the statement issued by Danièle Nouy, overseer of the Singe Supervisory Mechanism).
I crush the JP Morgan Managing Director and Head of FX, John Normand, and his false-factual rant against Bitcoin. Fear, envy & loathing in seeing your bonus floating margin at cryptocurrency risk!
- Frustrated by Karzai, U.S. Shifts Afghanistan Exit Plans (WSJ)
- Yellen Testimony Guide From Payrolls Report to Emerging Markets (BBG)
- Gold hits three-month high, shares up ahead of Yellen (Reuters)
- Tightfisted New Owners Put Heinz on Diet (WSJ)
- Senator describes "gruesome" bin Laden photos (Reuters)
- More reasons for the ongoing economic contraction: U.S. Winter Storm Seen Spreading Snow, Sleet Across South (BBG)
- Barclays Cuts Up to 12,000 Jobs as Quarterly Profit Falls (BBG)
- Boeing Considering 787-Size Medium-Range Jetliners (WSJ)
- AOL Chief Apologizes for ‘Distressed Babies’ Comment (BBG)
Earlier today, the non-profit organization Better Markets did what so many others have only dreamed of doing - they sued JPMorgan. We wish them the best of luck, as in a "crony jsutice" system as corrupt as this one - perhaps best described, paradoxically enough by the fictional movie The International - where the same DOJ previously implicitly admitted it will not prosecute "systemically important" firms like JPM to the full extent of the law and instead merely lob one after another wrist slap at them to placate the peasantry, any hope for obtaining true justice is impossible.