As the proof piles up, and retired/suspended traders increase, Bloomberg reports that talks to reach the first settlement in the FX-rigging probe are accelerating, with Britain’s markets regulator preparing to reach a deal with a group of banks this year, people with knowledge of the talks said.
*FCA SAID TO BE SEEKING FAST-TRACK SETTLEMENT WITH NARROW SCOPE
*FCA TALKS SAID TO INCLUDE BARCLAYS, CITIGROUP, JPMORGAN, UBS, RBS, AND HSBC
The question remains, will guilt be admitted... or is the pending fine just another cost of doing business in the trillion dollar market manipulation miasma in which we find ourselves.
- BRICS set up bank to counter Western hold on global finances (Reuters)
- Fed's Yellen Hedges Her View on Rates (Hilsenrath)
- China GDP Grows 7.5% in Second Quarter (WSJ)
- Get More Acquainted With Your Knees as Boeing Reworks 737 (BBG)
- Israel Warns Gazans of New Attack After Hamas Rejects Truce (WSJ)
- Israel poised for Gaza incursions after truce collapses (Reuters)
- China Housing Sales Fall in First Half of 2014 (WSJ)
- IBM to offer iPads and iPhones for business users (Reuters)
- Fed's George says strengthening economy warrants quick rate rise (Reuters)
Now that the World Cup is over, and following last week's global macro reporting slumber (aside for the Portuguese risk flaring episode of course), things pick up quite a bit in the coming week. Here are the key events.
Blythe Masters is perhaps the most maligned human being on earth by silver investors due to suspicions of JP Morgan’s manipulation in the silver market (and rightly so). Well she’s back in the news, but it has nothing to do with silver. Rather, the news relates to the fact that her ex-husband and commodities traders, Daniel Masters, has just launched a Bitcoin hedge fund from the island of Jersey, a British Crown dependency.
It is no secret that unlike other banks who, while directly intervening in the bond market only manipulate equity prices in relative secrecy (usually via HFT-transacting intermediaries such as Citadel), the Bank of Japan has historically had no problem with buying equities outright, traditionally in the form of REITs and equity-tracking ETFs. Which explains why overnight it was revealed that in order to boost the stock market, pardon, economy, the Bank of Japan is preparing to purchase exchange-traded funds based on the JPX-Nikkei Index 400 as an "option to boost the impact of unprecedented easing," according to people familiar with BOJ discussions.
"US lending to businesses is reaching record levels but banks are privately warning that the activity should not be seen as evidence of an economic recovery." And the stunner: "Much of the corporate lending is going to fund payouts to shareholders, finance acquisitions and fuel the domestic energy boom, bankers say, rather than to support companies’ organic growth."
It appears that having pushed France forcefully into the Russia-China Eurasian, and anti-US camp, the US will now do the same with Germany. Because by infuriating the German population with first refusing to return their gold contained (the legend goes) at the New York Fed, and then with scandal after spying scandal, now the time has come to "punish" Germany's largest banks for the same kind of money laundering that BNP was engaged in. As the NYT and Reuters report, the time has come to shift away from the BNP scandal and focus on what will soon be the Commerzbank and Deutsche Bank fallout. According to the NYT, the money laundering crackdown is "bound for another European financial center: Germany. As NYT adds, correctly, "The Commerzbank investigation features an added twist: The bank is 17 percent owned by the German government. It is unclear whether — as in the BNP case, which led French authorities to intervene on the bank’s behalf — the settlement talks could inflame diplomatic tensions between Washington and Berlin."
- Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar (BBG), as reported first by Zero Hedge
- As Food Prices Rise, Fed Keeps a Watchful Eye (WSJ)
- Yellen’s Economy Echoes Arthur Burns More Than Greenspan (BBG)
- Draghi’s $1.4 Trillion Shot: Silver Bullet or Misfire? (BBG)
- Israel's Netanyahu phones father of murdered Palestinian teen (Reuters)
- Ukraine says forces will press forward after taking rebel stronghold (Reuters)
- Goldman Sachs Brings Forward Rate Forecast as Treasuries Drop (BBG)... you mean rise?
- Super typhoon takes aim at Japan (Reuters)
- Kidnapped Nigerian girls 'escape from Boko Haram abductors' (Independent)
- Merkel says U.S. spying allegations are serious (Reuters)
- France's Sarkozy faces corruption probe in blow to comeback hopes (Reuters)
- Ukraine Says Military Offensive Against Rebels Yielding Results (WSJ)
- JPMorgan Investors Show Support for Dimon in Cancer Fight (BBG)
- World’s ATM Moves to Frankfurt as Yellen’s Fed Slows Cash (BBG)
- Argentina Seen Backtracking on Fernandez Vows as Legacy at Risk (BBG)
- Palestinian teen killed in possible revenge attack (Reuters)
- The Bill and Hillary Clinton Money Machine Taps Corporate Cash (WSJ)
- London House Prices Surge the Most Since 1987, Nationwide Says (BBG)
- Last Jew in Afghanistan faces ruin as kebabs fail to sell (Reuters)
- Yellen Spending Recipe Lacking Key Ingredient: Bigger Wage Gains (BBG)
- Ukraine signs trade agreement with EU, draws Russian threat (Reuters)
- GM Documents Show Senior Executive Had Role in Switch (WSJ)
- Australian Report Postulates Malaysia Airlines Flight 370 Lost Oxygen (WSJ)
- World’s Biggest Debt Load Lures Distressed Funds to China (BBG)
- GPIF Rushing Into Riskier Assets Before Ready, Okina Says (BBG)
- Japan Prices Rise Most Since ’82 on Tax, Utility Fees (BBG)
- Italian Debt Swells to Rival Germany as Bond Yields Slide (BBG)
- China’s Manhattan Project Marred by Ghost Buildings (BBG)
- BOE's Carney Says Rates Won't Rise to Levels Previously Considered Normal (WSJ)
At the heart of the last financial crisis, some compared CDS to buying home insurance on a neighbor's home and burning it down; it appears the USA has come a long way in the last few years. As NDTV reports, employees at The Orange County Register received a rather unusual request from their employer - Freedom Communications - writing to request workers' consent to take out life insurance policies on them.... But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Because such life insurance policies receive generous tax breaks, they are ideal investment vehicles for companies looking to set aside money to pay for pension plans. But in many cases, companies and banks can use the tax-free gains for whatever they choose, "Companies don't promise regulators they will use it for any specific purpose." Of course, it is the banks that are the biggest utilizers of this. Forget buybacks, just unleash some anthrax to really juice EPS this quarter?
The numbers that you are about to see are likely to shock you. They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine. The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises. It is literally a miracle that it has survived for so long without collapsing already. But at some point a day of reckoning is coming, and when it arrives it is going to be the most painful financial crisis the world has ever seen.
Timothy Geithner is likely to go down in American history as one of the most dangerous, destructive cronies to have ever wielded government power. The man is so completely and totally full of shit it’s almost impossible not to notice. The last thing we’d ever want to do in our free time is read a lengthy book filled with Geithner lies and propaganda, so we owe a large debt of gratitude to former Congressional staffer Matt Stoller for doing it for us. Stoller simply tears Geither apart limb from limb, detailing obvious lies about the financial crisis, and even more interestingly, Geithner’s bizarre bio, replete with mysterious and inexplicable promotions into positions of power..."Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance..."
Meet Mieko Tatsunami, a 70 year old retired kimono dresser from Tokyo. Unlike the scores of paid actors ordered to pitch Abenomics and to spread the gospel of rising asset prices, Mieko shares a most rare commodity in this day of pervasive propaganda: the truth. “The price of everything we eat on a daily basis is going up,” Tatsunami, 70, a retired kimono dresser, said while shopping in Tokyo’s Sugamo area. “I’m making do by halving the amount of meat I serve and adding more vegetables.” Ironically, that's what Americans are doing too. Only here the "halving" of the food is done by the food producers, while the consumers rarely if ever notices that they are paying the same amount for ever lesser amounts of food. At least in Japan they are honest about the food inflation. As Bloomberg shows, Tatsunami’s concerns stem from the price of food soaring at the fastest pace in 23 years after April’s sales-tax increase. Rising prices helped push the nation’s misery index to the highest level since 1981, while wages adjusted for inflation fell the most in more than four years.
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.