Just last week the European Central Bank (ECB) unveiled a self-produced exposé on its now openly celebrated trading operation. Only an Ivory Tower’d academic or Ph.D economist who’s never spent a day in the real world of business and/or market place could envision this as helping to bolster an image of surety or confidence.
In what may be a long overdue victory for the "good guys", the WSJ reports that the SECs staff has recommended that the agency approve IEX Group Inc.’s "controversial" bid to launch a new stock exchange, signaling likely approval when the agency’s commissioners vote on the order Friday.
We are in the midst of a Greater Depression, with the most trying times still ahead. Fourth Turnings never de-intensify. They intensify into a chaotic whirlwind, where the future of our civilization hangs in the balance. The climax of this play is a long way off. The election of Trump in November will trigger the transformational change that always happens during a Fourth Turning. An ill wind is beginning to blow. You can’t avoid the coming storm, but you can mentally and physically prepare. Our choices will make a difference.
Simply put, "humans are predisposed to irrationality," explains Michael Lewis in his new book, which we hope will be heavily distributed to the Marriner Eccles building, as it will explain to the Fed why all of the models in the world can't help centrally plan an economy in which irrational behavior exists.
Less than a week after Reuters broke the story that the Department of Justice is probing HFT powerhouse Citadel, which admits it executes 35% of all trades by retail investors in U.S.-listed stocks, whether it is also frontrunning those orders (an allegation that many are convinced is a rock-solid fact) we find that billionaire Ken Griffin is not at all concerned about the outcome of the investigation on his core business model and is instead expanding. Citadel is acquiring the equity-trading operations of Citigroup’s Automated Trading Desk division, one of the pioneers of high-frequency trading.
We were not surprised, though certainly delighted, to see that after years of railing against Citadel's dominant position at the intersection of HFT trading and retail orderflow - recently Citadel was found to be the largest private US trading venue - this morning Reuters reports that Federal authorities are investigating the market-making arms of Citadel LLC and KCG Holdings looking into the possibility that the two giants of electronic trading are giving small investors a poor deal when executing stock transactions on their behalf. In other words, the DOJ is looking into whether Citadel is frontrunning its clients, something we have claimed for years.
Despite his proclamation that he "saved the world from a Great Depression," the fact is that Obama will be the first President ever to not see a single year of 3% GDP growth - but only cynical fiction-peddlers would mention facts at a time like this. In yet more legacy-defending narrative, Obama told The NYTimes today that his biggest failure was being unable to sell his success in putting the American economy back on track to the American people (no matter the actual realities) careful to blame Republicans for slowing growth "by a percentage point or two." And then in a final affront to fact, Obama dismisses the conclusion of "The Big Short" proclaiming that he reined in Wall Street, overhauled the banking system, and made water from wine "the financial system substantially more stable."
In 1977, the total indebtedness of U.S. government, corporate and household borrowers was $323 billion. By 1985, that figure had grown to $7 trillion. Volcker left the Fed in August of 1987 after handing the reins over to Alan Greenspan. By year’s end 2015, U.S. indebtedness had swelled to $45.2 trillion. Tack on financials, which few do, and it’s $64.5 trillion and unabashedly growing. We are a nation transformed. What has today’s vast store of debt purchased? Certainly not freedom.
It's time for try number two. Moments ago BATS announced that it has just priced its second attempt at going public by pricing its (second) initial public offering at a price to the public of $19.00 per share (this time the high end of the range). The size of the offering has been increased from the initially announced 11,200,000 shares of common stock to 13,300,000 shares of common stock.
Given the financial establishment’s astonishingly short-term memory and capacity to make even bigger mistakes than ever before, we now find ourselves in a very similar position today. Once again, the financial system is in desperate condition. And the data is all there for anyone who cares to look.
Corporate earnings reports for the fourth quarter are pretty much in the books. The deception, falsification, accounting manipulation, and propaganda utilized by mega-corporations and their compliant corporate media mouthpieces has been outrageously blatant. It reeks of desperation as the Wall Street shysters attempt to extract the last dollar from their muppet clients before this house of cards collapses.