Dear Mr. Draghi, we are very sorry but we messed up on the 'stress test'. The Royal Bank of Scotland shares are sliding after it admitted that it made an error - not in favor the bank - in its stress test calculations...
*RBS: CET1 STRESS TEST RATIOS OVERSTATED ON CALCULATION ERROR
Under the corrected Adverse Scenario, RBS capital cushion was slashed from 6.7% to 5.7% (just barely above the 5.5% minimum). Still - we should all trust the stress tests as 'proof' how strong Europe's banking system is. What a farce!!
- They go all in: China’s PBOC Cuts Interest Rates for First Time Since 2012 (BBG)
- And all in-er: ECB's Draghi throws door to quantitative easing wide open as recovery wanes (Reuters)
- Global Markets Rally: ECB Head Says Central Bank Is Ready to Expand Stimulus Program After China Cuts Rates (WSJ)
- Obama unveils U.S. immigration reform, setting up fight with Republicans (Reuters)
- U.S. increasing non-lethal military aid to Ukraine (Reuters)
- Russia warns U.S. against arms to Ukraine as Biden due in Kiev (Reuters)
- Ukraine slashed gold holdings in October, Russia added more - IMF (Reuters)
- Abe Dissolves Japan’s Lower House of Parliament (WSJ)
- Banks Had Unfair Advantage From Commodity Units (Bloomberg)
- Report Notes Deals Between Goldman, Deutsche and Others Drove Up Aluminum Prices (WSJ)
- Goldman, Morgan Stanley Commodity Heyday Gone as Units Faulted (BBG) - because when you can no longer manipulate, you move on...
- Lenders Shift to Help Struggling Student Borrowers (WSJ)
- Immigrants face major hurdles in signing up to new Obama plan (Reuters)
- Distressed Debt in China? Ain’t Seen Nothing Yet, Buyers Say (BBG)
- Banking culture breeds dishonesty, scientific study finds (Reuters)
- Amazon Robots Get Ready for Christmas (WSJ)
- Scuttled deals worth $580 billion put hedge funds on back foot (Reuters)
- Mounting Pressure on OPEC Spurs More Wagers on Oil Rally (BBG)
- It's not just US real estate: Chinese Students at U.S. Universities Jump 75% in Three Years (BBG)
- Frankfurt Open for Yuan Clearing as Liquidity Rises (BBG)
- Obama defends healthcare law after adviser criticism (Reuters)
- Michael Hasenstab Bets Big in Controversial Places (WSJ)
- Facebook seeks foothold in your office (FT)
- Russia Seen as Greatest Threat in Poll as Oil Erodes Putin Power (BBG)
- Falling Oil Prices Test OPEC Unity (WSJ)
- "The hate us for our..." Americans’ Cellphones Targeted in Secret U.S. Spy Program (WSJ)
- Ukraine and Russia take center stage as leaders gather for G20 (Reuters)
- Moscow and Kiev trade accusations; U.S. warns Russia against escalation (Reuters)
- Heartland Central Banker Calls Asset Bubbles Top Concern (BBG)
- U.S. Said to Give Banks December Deadline in FX Probe (BBG)
- Series of Failures Enabled White House Breach, Report Finds (WSJ)
- Yen plumbs seven-year trough on likely Japan sales tax delay (Reuters)
- JPMorgan Chase Bankers Said to Lead Moscow Departure (BBG)
As today's latest example of pervasive, apparently endless criminality at the world's largest banks, where once again the shocked public is exposed to a culture of sociopathic, unchecked greed and perpetual raping of clients, showed, one is either part of the all too literal "cartel", or one loses money. However, for those who are unfamiliar with the nuances of FX trading, one doesn't even have to be on the other side of the world's most criminal, above the law, cartel of bankers to have no P and only L: the fundamental premise of currency trading, whereby one can and will be stopped out thanks to leverage as high as 50x - by others but mostly by one's own brokers as we learned today courtesy of JPM, Citi, RBS, HSBC and UBS - is the very same reason why as retail FX trader Dan Gratton, a 71-year-old retiree who lives on Social Security in Kingman, Arizona has found out: "Probably the most consistent thing is losing."
Putting Things In Context ...
We finally have the answer, courtesy of the FCA's partial and very much selective disclosure of FX rigging findings by "The Cartel", the "Bandits" and so on, as part of its wrist-slapping settlement, just how the big boys make millions in FX on every single fix. Hopefully one day the regulators, who are as corrupt and conflicted as the banks they quote-unquote police, will reveal all the documents in their possession and let the public decide what is important and what isn't. But in the meantime, for all those curious just why the Too Big To Fail are also Too Big To Prosecute, here is the blow by blow.
- Banks to Pay $3.3 Billion in FX-Manipulation Probe (BBG)
- Symbolic being the key word: U.S., China sign symbolic emissions plan, play down rivalry (Reuters)
- Europe (so really Russian sanctions) is the new "snow in the winter" - Carney Sees Europe Stagnation Impact as Growth Outlook Cut (BBG)
- Eurozone Industrial Output Points to Weak Third Quarter Growth (WSJ)
- Not everyone around Abe is insane: Kuroda Ally Flags Warning on Delaying Sales-Tax Increase (BBG)
- Hong Kong to scrap daily yuan conversion limit to boost stock investment (Reuters)
- Barclays Falls After FX Settlement Delay Reduces Discount (BBG)
- Some unhappy Yahoo investors asking AOL for rescue (Reuters)
With the USDJPY repeatedly hitting 116.00 as a result of the same pair of headlines hitting either Reuters, the Nikkei or Sankei every 6 or so hours for the past 3 days, namely that Japan will delay its sales tax hike by almost two years, and that Abe is preparing early elections, perhaps the algos realized they were pricing in the same event about 4 times in one day, and unable to break the 7-year-high resistance level, slid dropping nearly 100 pips to just over 115 at least check, which may well be today's "tractor" level, which in turn has also dragged down both European stocks and US futures. But the thing that made the vacuum tubes really spark is that at a press conference yesterday in Beijing, Abe was quoted as saying that he "has never made any reference to the dissolution of parliament", this came after the chief cabinet secretary Suga saying that the decision on whether or not to go to the polls would be Abe’s only.
while the algos would have been delighted to let October 15 slide into the collective memory made obsolete by a constantly rising market (because investors are only truly angry when the market plunges not when it surges) just as the regulators made a mockery of their fiduciary responsibilities in the aftermath of May 6, and now markets are more fragile than ever as HFTs comprise the vast majority of all trades, some appear to be complaining and even, gasp, asking questions how it is possible that the $12 trillion US Treasury market traded like an illiquid Pink Sheets pennystock, or worse, the Nikkei.Here is the WSJ with some of the complaints: “It starts moving faster and faster, and you can’t point to anything."Actually, yes you can.
- LOL@Fundamentals: European Stocks Fall as Investors Seek Stimulus Clarity (BBG)
- Obama, Republicans sound conciliatory note but battles loom (Reuters)
- Firms drop Pimco funds from managed accounts (Reuters)
- Not All QE Is Created Equal as U.S. Outpunches ECB-BOJ (BBG)
- Ukraine Accuses Russia of Sending Troops as Truce Wobbles (BBG)
- Lenovo Slumps After Projecting China ‘Hypergrowth’ to End (BBG)
- Palo Alto Networks discovers new malware targeted at Apple devices (Reuters)
- IPO That Brought In $1 Billion in March Implodes in Denmark (BBG)
- Republicans expect gains, but many races close on election day (Reuters)
- Ahead of tough election, White House blames dismay with Washington (Reuters)
- On Election Day, a Tale of the Young and the Old (WSJ)
- Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
- Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
- Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
- More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
- Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
- Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)
Lack Of Daily Central Bank Intervention Fails To Push Futures Solidly Higher, Yen Implosion ContinuesSubmitted by Tyler Durden on 11/03/2014 06:47 -0500
While it is unclear whether it is due to the rare event that no central bank stepped in overnight with a massive liquidity injection or because the USDJPY tracking algo hasn't been activated (moments ago Abe's deathwish for the Japanese economy made some more progress with the USDJPY hitting new mult-year highs just shy of 113.6, on its way to 120 and a completely devastated Japanese economy), but European equities have traded in the red from the get-go, with investor sentiment cautious as a result of a disappointing the Chinese manufacturing report. More specifically, Chinese Manufacturing PMI printed a 5-month low (50.8 vs. Exp. 51.2 (Prev. 51.1)), with new orders down to 51.6 from 52.2, new export orders at 49.9 from 50.2 in September. Furthermore, this morning’s batch of Eurozone PMIs have failed to impress with both the Eurozone and German readings falling short of expectations (51.4 vs Exp. 51.8, Last 51.8), with France still residing in contractionary territory (48.5, vs Exp and Last 47.3).
Yesterday's record-breaking surge in the Ruble appears, as we warned, to have been front-running today's rate-hike announcement... and despite its surprise size, it is disappointing the market. The 5%-plus swing higher in the Ruble yesterday has been notably retraced as the Russian currency plunges after the central bank hiked rates 150bps (expectations were broadly of a 50bps hike) but it appears the 'whisper' number was a 200bps hike and a shift in FX policy to more active intervention. The inituial rip rally instantly faded and despite low liquidity due to Russian holidays, USDRUB is back over 43 - which would be a new record low close if it holds.