Keycorp

• China’s Recovery Falters as Manufacturing Growth Cools (BBG)
• Gloomy eurozone output points to rate cut (FT)
• Limit Austerity, EU appartchik Barroso Says (WSJ)
• Regulators Get Banks to Rein In Bonus Pay (WSJ)
• SEC looks to ease rules for launching ETFs (Reuters)
• Easy come, easy go: U.S. Seizes $21 Million From Electric Car Maker Fisker (WSJ)
• Japan nationalists near disputed isles (Reuters)
• OECD in fresh warning on Japan debt (FT)
• S&P says more than one-third chance of Japan downgrade, cites risks to Abenomics (Reuters)

• When the cash runs out: Nokia to Omit Dividend for First Time in 143 Years (BBG)
• Passing Debt Bill, GOP Pledges End to Deficits (WSJ)
• Japan logs record trade gap in 2012 as exports struggle (Reuters)
• so naturally... Yen at 100 Per Dollar Endorsed by Japan Government’s Nishimura (BBG)
• Japan rejects currency war fears (FT)
• In Amenas attack brings global jihad home to Algeria (Reuters)
• Investors grow cagey as Italy election nears (Reuters)
• Mafia Victim’s Son Holds Key to Bersani Winning Key Region (BBG)
• Bernanke Seen Pressing On With Stimulus Amid Debate on QE (BBG)
• U.S. to lift ban on women in front-line combat jobs (Reuters)
• Red flags revealed in filings of firm linked to Caterpillar fraud (Reuters)
• Apple Sales Gain Slowest Since ’09 as Competition Climbs (BBG)
• Spanish Jobless Rate Hits Record After Rajoy’s First Year (BBG)
• North Korea Threatens Nuclear Test to Derail U.S. Policies (BBG)

• A Bold Dissenter at the Fed, Hoping His Doubts Are Wrong (NYT)
• China and Japan step up drone race as tension builds over disputed islands (Guardian)
• How Mario Draghi is reshaping Europe's central bank (Reuters)
• Merkel Economy Shows Neglect as Sick Man Concern Returns (BBG)
• US oil imports to fall to 25-year low (FT)
• China Loan Share at Record Low Shows Financing Risks (BBG)
• Dimon Says Some JPMorgan Execs ‘Acted Like Children’ on Loss (BBG) - children that reveleased who 'excess reserves' are truly used
• Fed injects new sell-off risk into Treasuries (FT) - really? So the Fed will stop monetizing the US deficit some time soon?
• Obama aide presses Republicans to accept more tax revenues (Reuters)
• Ex-SAC analyst named 20 alleged insider traders (FT)
• BOJ easing bets help dollar regain ground vs yen (Reuters)
• Goldman Sachs Said to Be Part of Fed-Led Foreclosure Settlement (BBG)
• Venezuela postpones inauguration for cancer-stricken Chavez (Reuters)

Back in the summer of 2010, when the SEC was still desperate to (laughably) scapegoat the May 6 Flash Crash on Waddell and Reed, in an attempt to telegraph to the public that it was in control of the HFT takeover of the stock market (an attempt which has since failed miserably as days in which there are no occult trading phenomena have become the outlier and have resulted in the wholesale dereliction of stock trading by retail investors), we first presented and endorsed the Nanex proposal that the flash crash was an "on demand" (either on purpose or by mistake) event, one which occurred as a result of massive quote stuffing which prevented regular way trading from occuring and resulting in a 1000 DJIA point plunge in minutes  (the audio track to which is still a must hear for anyone who harbor any doubt the market is "safe"). It turns out that in the nearly 3 years since that fateful market crash, not only has nothing been done to repair the market (ostensibly broken beyond repair and only another wholesale crash, this time without DKed trades, and bailed out banks, could possible do something to change the status quo) but the Denial of Service (DoS) attacks that HFT algos launch, for whatever reason, have become a daily occurrence as the following demonstrations from Nanex confirm beyond a shadow of a doubt.

All you need to know by www.thetrader.se

• Bernanke May Sustain Stimulus to Avoid ‘Cold Turkey’ End to Aid (Bloomberg) -  a plan that will be woefully insufficient as discussed extensively before
• Asia voices confidence in U.S. debt after S&P jolt (Reuters)
• Americans Shun Cheapest Homes in 40 Years as Owning Loses Appeal (Bloomberg)
• Funds accuse banks of Libor manipulation (FT)
• Deutsche Bank’s $4 Billion Las Vegas Bet (NYT)
• Obama Embarks on Tour to Sell Debt Plan, Not Dwell on S&P (Bloomberg)
• Greek bond fears intensify debt debate (FT)
• With much at stake, Asia voices confidence in US debt after S&P jolt (Reuters)
• Deutsche Bank Algo Cribs HFT Strategies (Traders Magazine)

Following the clusterflock of black swans that has hit world markets in the past month, the Fed has realized it needs to act quick to distribute money to undercapitalized bank shareholders ahead of the upcoming bank sector bail out, which will naturally be funded by taxpayers all over again. According to the Fed, the 19 worst banks in America (in other words those that are allowed to issue dividends) are: Ally Financial Inc. (no, really, f/k/a GMAC is healthy), American Express Company, Bank of America Corporation, The Bank of New York Mellon Corporation, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Fifth Third Bancorp, The Goldman Sachs Group, Inc., JPMorgan Chase & Co., Keycorp, MetLife, Inc., Morgan Stanley, The PNC Financial Services Group, Inc., Regions Financial Corporation, State Street Corporation, SunTrust Banks, Inc., U.S. Bancorp, and Wells Fargo & Company. The surge in share prices of the mentioned banks confirms that this is nothing but the latest round of Fed-endorsed taxpayer rape, which nobody can do anything against as the Fed is an "unsupervised" entity, DC is owned by Wall Street, and the peasantry is downloading porn on their iPad.

It was only a matter of time: back in March, following revelations of the Lehman Repo 105 scam, we speculated that the days of Ernst & Young are numbered. Back then we said "we are confident that (again, with the assumption that we live in some
semblance of a sane/ration world), E&Y's Financial Services Office
is done...
and quite possibly the entire firm. Integrity is the number one
currency for an auditor, and just like Anderson, E&Y's just went out
in a puff of green-colored smoke." Today we learn that Andrew Cuomo is about to make E&Y's life a whole lot more difficult. Per the WSJ "State Attorney General Andrew Cuomo is close to filing the case, which
would mark the first time a major accounting firm was targeted for its
role in the financial crisis." Too bad - E&Y was surely hoping that just like everything else in this corrupt country, out of sight would mean out of mind, and soon everyone would forget about the firm's involvement in the biggest bankruptcy in history. Better luck next time...

• Bernanke says Fed may take more action to curb joblessness.
• Euro Finance Chiefs meet today as Belgium seeks bigger crisis fund.
• Most Asian stocks climb as commodity prices gain; Canon leads drop by exporters.
• Qatar shares surge to 2-year high on winning World Cup 2022 bid.
• US, S Korea, in finalizing a sweeping free-trade agreement.
• White House officials and congressional Republicans closing in on a deal that would extend current income-tax rates for all Americans.
• BofA says it has met condition of Tarp exit; close to raising required $3B via asset sales.

Since world leaders and economists continually display a lack of even the most rudimentary of understanding about the unsound nature of our monetary system, I’ve decided to write them a “Monetary Policy for Dummies” to help them understand why the policies and solutions they constantly advocate amount to legalized theft that destroys the wealth of the nations.

This week the S&P 500 was up 7.3% for the month, corporate earnings have been looking good, retail sales inched up last week, the CPI is low, interest rates are low, Dr. Bernanke is ready to pump money into the economy if things go awry, most European banks passed their stress test, and we've got a new financial markets regulation bill which will save us from economic collapse. What's to worry?

• Euro, Asian finance stocks fall on Greece concerns.
• Eurostat agency suggested Greece's debt crisis is worse than investors believed.
• Geithner harnesses G-20 behind Yuan push as India, Brazil raise pressure.
• Greece may seek Euro-region bridge loan as $11.3B redemption looms.
• Japan's bank minister not too keen on financial regulation.
• Air China swings to profit in 2009 of $709.4M on fuel hedging gains.
• Amazon.com's Q1 profit jumped 68% to $299M on a 46% rise in revs to $7.13B.

• Asia stocks rise on speculation Bank of Japan will ease policy.
• Builders in Feb probably broke ground on the fewest U.S. homes since October.
• China plans to keep its foreign trade policies, including the yuan exchange rate, stable.
• China, Japan reduce holdings of US Treasury debt as global demand wanes.
• China plans to keep its foreign trade policies, including the yuan exchange rate, stable.
• Continental Airlines Inc. will start charging for food for economy-class

Ultimately the biggest loser from the whole Repo 105 scandal may not be the perpetrators, i.e., Fuld, the firm's numerous CFOs, Tim Geithner and Mary Schapiro, but the alleged "fact-checkers" - auditors Ernst & Young. Just like Enron's Star Wars-based off balance sheet accounting gimmicks brought down Arthur Anderson, so "Repo 105" may likely be responsible for the downfall of E&Y. Although while in Enron's case, it was just the accounting that brought the firm down, in Lehman's case the confluence of numerous factors will render each individual one relatively less critical, potentially to the point of irrelevance. And while book cooking was just as big of an issue for Lehman as it was for Enron, the fact that the bank did pretty much every other borderline illegal thing possible, will take away focus from just the Repo 105 fiasco, or just the liquidity misrepresentations, or just the commercial real estate book mismarking, and so forth. So to facilitate a decision on E&Y culpability, we present a candid look at Ernst & Young's Financial Services Office, the company's presentation on Paragraph 10 of IAS 39 overseeing Repo agreements, E&Ys analysis of FAS 140 "Accounting for Financial Transfers and Repurchase Financial Transactions", the Examiner's conclusions on the firm's breach of conduct, the firm's soon to be dwindling banking client base, and last, and most certainly least, a snapshot of E&Y's Lehman co-lead partner, Hillary Hansen, against whose negligent actions, as part of the Lehman E&Y practice, the Examiner concludes "that sufficient evidence exists to support a colorable claim for malpractice."

Regulatory capture has allowed what was just a bunch of stinky bank balance sheets to literally threaten the economy. Here is another shining (or stinking, depending on your perspective) example.