Ever since Goldman's anti-HFT Op-Ed less than a month ago, and since the even more recent full-hearted support by Goldman of Michael Lewis' most recent entry into the anti-HFT crusade (one promoting the Goldman-supported IEX exchange), one thing has been clear: the days of market structure in its current format are numbered. This was further confirmed after Goldman exited both its legacy Spear Leeds & Kellogg designated market making post at the NYSE, and is said to be winding down its market-dominating dark pool, Sigma X. Sure enough, Post reports that just three weeks after the Gary Cohn Op-Ed, the SEC is "preparing to remove some high-frequency trading firms."
One Killed, Many Wounded After Shooting Breaks Out Between Ukraine Special Forces And Pro-Russia SeparatistsSubmitted by Tyler Durden on 04/13/2014 07:37 -0500
"Ball is in Kiev's court." That is how we concluded our article yesterday reporting that Moscow won't accept force against demonstrators after Kiev warned it would use special forces to quell ongoing "terrorist" uprisings across cities in east Ukraine. Predictably, Ukraine couldn't wait to shoot the ball right back at Russia and re-escalate (in hope that the west will finally stand up and side along the acting government in what continues to be a very foolish gambit) and early this morning local time, units of the Ukraine special forces started an anti-terrorist operation in eastern town of Slavyansk, where police station was seized yesterday by separatist protesters, as reported by the Interior Minister Arsen Avakov posts on Facebook, who also warned local residents to stay inside, saying separatist protesters have opened fire in direction of approaching special police units. Moments later the operation turned deadly after at least one member of the special forces was killed and as many as 9 wounded, as well as an unknown number of casualties on the "separatist" side. But most importantly, Russia now has a pretext to step in and "defend" its ethnic population just as it warned it would do.
The bull market in stocks is showing more signs of fatigue. Are we about to witness a change in trend?
Following more firefights and government building seizures amid the so-called "liberation of Southeast Ukraine," the Maidan's demands that the government not "give up like in Crimea" appear to be resonating woth leadership. Ukraine's interior minister Arsen Avakov has declared: "The Ukrainian authorities consider the events of the day as a display of external aggression from Russia," adding that, ""Units of the interior and defense ministries are implementing an operational response plan." Russia was quick to respond with threats of war action if Ukraine suppresses pro-Russia 'self-defense' forces. As Reuters adds, with the crisis escalating militarily, the specter of "gas wars" is looming with Ukraine's Energy Minister declaring, "we are probably steering towards Russia turning off its gas provision."
While the primary story regarding the Ukraine remains the stand off between Russia and Ukraine over nat Gazprom's gas deliveries and Kiev's overdue, and as of today - officially halted payments - not a weekend passes without some city in eastern Ukraine falling to what are now called "pro-Russian separatists" and this Saturday is no different. While last week it was the eastern cities of Luhansk, Donestk and Kharkiv that saw their government building taken over and occupied by the "separatists", today it was the turn of Slaviansk, where masked men armed with pistols and rifles stood guard near the police station as hundreds of locals gathered around, some building barricades with car tyres.
After warning that hardware is dead, my thesis has foreshadowed the slashing of the equity values of Apple, Blackberry, Samsung, Nokia and HTC despite the fact that the sell side has said otherwise. Now I've enabled the whole world to profit on the premise
In a world filled with innuendo, false flags, and more one thing remains constant: What is Goldman Sachs (GS) up to and more importantly – why?
Rickards does not expressly say one should put 33% of one’s wealth in gold but suggests that an allocation of between 10% and 33% would be prudent. In this regard, he echos Dr Marc Faber who suggested a 25% allocation to precious metals last week.
- Sensitive Market Data Leaked After Government Phone Call (WSJ)
- This is a actual Bloomberg headline: China Fake Data to Skew More Export Numbers (BBG)
- This is another actual BBG headline: U.S. as Global Growth Engine Putt-Putts Instead of Purring (BBG)
- Ukraine wants to buy European gas to boost energy security (Reuters)
- JPMorgan Profit Falls 19% on Trading, Mortgage Declines (BBG)
- Record Europe Dividends Keep $2.8 Trillion From Factories (BBG)
- Why is Goldman shutting down Sigma X: SEC eyes test that may lead to shift away from 'dark pools' (Reuters)
- Ebola Outbreak Empties Hotels as West Africa Borders Closed (BBG)
- Australian PM says searchers confident of position of MH370's black boxes (Reuters)
- Gross Says El-Erian Should Explain Reason for Exit (BBG)
After a selloff as violent as that of last night, usually the overnight liftathon crew does a great job of recovering a substantial portion of the losses. Not this time, which coupled with the sudden and quite furious breakdown on market structure, leads us to believe that something has changed rather dramatically if preserving investor confidence is not the paramount issue on the mind of the NY Fed trading desk. Nikkei 225 (-2.38%) suffered its worst week since March'11 amid broad based risk off sentiment following on from a lower close on Wall St. where the Nasdaq Biotech index suffered its largest intra-day decline since August 2011. Negative sentiment carried over into European session, with stocks lower across the board (Eurostoxx50 -1.17%) and tech under performing in a continuation of the recent sector weakness seen in the US. JP Morgan (JPM) due to report earnings at 7:00AM EDT and Wells Fargo (WFC) at 8:00Am EDT.
Last night's devastating trade data from China had the bad-news-is-good-news crowd chomping at the bit over the next massive stimulus that 'surely China will unleash...because they've got so much in reserves'. However, as we have explained previously, Chinese premier Li Keqiang destroyed those expectations last night when he ruled out major stimulus to fight short-term dips in growth. Unlike his 'desperate for a short-term fix' colleagues in the west, Li stated more thoughtfully (and perhaps more knowingly given his country's pending credit bubble crash), "we will instead focus more on medium- to long-term healthy development."
European partners have left Russia with "no alternative" but to halt supplies of gas to Ukraine and Europe, according to a letter from Russian president Putin to European leaders. The remarks, as Reuters reports, were the strongest sign yet that Russia could curtail supplies of gas to (and through) Ukraine affecting supplies of gas to Europe (as they fear Ukraine will siphon off Russian gas meant for Europe). Russia is getting angry, and an angry Russia can simply turn the gas switch to the "Off" position and hibernate for a bit.
- J.P. Morgan's Dimon Describes Year of Pain (WSJ)
- SAC Faces a Final Reckoning for 14 Years of Insider Scam (BBG)
- New Standards for $693 Trillion Swaps Market Increase Risk of Blowup (BBG)
- China says no major stimulus planned; March trade weak (Reuters)
- As we said in 2012 would happen: Record Europe Dividends Keep $3 Trillion From Factories (BBG)
- Blame it on the algo: Deutsche Bank Said to Find Improper Communication in FX Case (BBG)
- Coke Sticks to Its Strategy While Soda Sales Slide (WSJ)
- Ukraine’s Rust Belt Faces Ruin as Putin Threatens Imports (BBG)
- RBC Joins Goldman in Suing Clients After Singapore Crash (BBG)
- U.S. House panel to look at aluminum prices, warehousing (Reuters)
- Brooklyn Apartment Rents Jump to a Record as Leases Surge (BBG)
The main overnight event, which we commented on previously, was China's trade data which was a disaster. March numbers turned out to be well below market consensus with exports falling 6.6% YoY (vs +4.8% expected) and imports falling 11.3% YoY (vs +3.9% expected). The underperformance of imports caused the trade balance to spike to $7.7bn (vs -$23bn in Feb). Pricing on the Greek 5-year syndicated bond is due later today, with the final size of the bond boosted to EUR 3bln from EUR 2.5bln as order books exceed EUR 20bln (equating to a rough bid/cover ratio of over 6) as the final yield is set at 4.75% (well below the 5.3% finance ministry target and well above our "the world is a bunch of idiots managing other people's money" 3% target). Ireland sold EUR 1bln in 10y bonds, marking the third successful return to the bond market since the bailout. Also of note, this morning saw the release of lower than expected French CPI data, underpinning fears of potential deflation in the Eurozone.
I contend that Lewis should have done a lot more to identify the parties involved and tell the full story of latency arbitrage in Sigma X.