As reported on Friday, the most recent example of a breach in informational Chinese walls was confirmed at Bloomberg, where it was discovered that reporters have the same degree of client surveillance as workers on the API/terminal side. The reason why this is problematic is that since Bloomberg is a monopolist in the financial terminal industry, with such competitor attempts as Reuters' Eikon being massive failures, virtually every finance professional needs a terminal (even if the rate of sale of such terminals is slowing down as a result of the ongoing financial margin headaches). Which means that Bloomberg journos, an increasingly competitive service to the likes of Dow Jones, Reuters and AP, may have had an unfair advantage when it comes to tracking their "pray" - Bloomberg's own clients. And now, following the original Goldman complaint which Bloomberg said ended such informational commingling, it is the turn of the Treasury and the Fed (certainly very heave users of the BBG Trading terminal) to complain. What is left unsaid in all of this is the simple question of just why is it material information what the Fed, arguably an entity that at least in a normal world should not have any day to day trade interactions with financial markets, looked up on its trading terminal.
A major issue in America today is the growing gap between the rich and the poor, and the popular narrative is that the disparity is caused by capitalism run wild and only the firm hand of government can fix the problem. But what if this narrative has it backwards? What if the growing wealth disparity in America is actually caused by the government? Take Warren Buffet, a man often at the center of this debate, as not only is he a billionaire, but also a vocal advocate for higher income taxes on the rich. Many are aware of his acumen in making investments that have a “margin of safety” – or minimal downside – but few are aware of the greatest source of such safety for Mr. Buffet in recent years, the US Government.
- Euro-Area Unemployment Increases to Record 12.1% Amid Recession (BBG)
- Fed faces calls for radical reform (FT) - Has Jamie Dimon approved of this message? No? Carry on then
- CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law (BBG)
- Ex-UBS Executive Convicted of Paid Sex With Underage Girl (BBG)
- Six months after Sandy, New York fuel supply chain still vulnerable (Reuters)
- Older, richer shoppers lead Japan’s surge in consumer spending (FT)
- Sharp euro zone inflation fall, joblessness point to ECB rate cut (G&M)
- Gold Rush From Dubai to Turkey Saps Supply as Premiums Jump (BBG)
- Japan Industrial Output, Retail Sales Disappoint (MW)
- Gunmen surround Libyan justice ministry (Reuters)
- Insider-Trading Probe Trains Lens on Boards (WSJ)
- Best Buy exits Europe (WSJ)
- Banker Roommates Follow Zuckerberg Not Blankfein With IvyConnect (BBG)
The Treasury Department planted a "dirty bomb" at the Bank of Japan, and tossed a grenade at the Swiss National Bank.
One element of the President's budget is a sham.
As of later this month, we’ll receive the final picture on China’s U.S. bond sales over late 2011 and early 2012, and the reaction isn’t likely to be much different than it was last year. But, we argue that there’s actually quite a lot to see. Namely, there’s a brand new reason to be concerned about America’s access to foreign capital. In a nutshell, America needs foreigners to be both willing and able to buy its bonds. China is able but much less willing than it used to be. (Treasury data that isn’t shown here suggests its interest in U.S. securities recovered somewhat in late 2012, but remains far short of the levels of two years ago.) Other countries are willing but not nearly as able as China, notwithstanding the sharp increase in purchases in the recent period. And overall, the message in the preliminary TIC data is more worrisome than it may appear on the surface. Should the final report on April 30th confirm the message, consider it a warning of a potentially disastrous future decline in foreign purchases of U.S. debt.
Fed Releases Names Of Early FOMC Minutes Recipients: Include Employees Of ECB, Goldman, Barclays, JPM, Law And PE FirmsSubmitted by Tyler Durden on 04/10/2013 16:31 -0400
We will release the full list of named recipients once we get it, but here is what we now for now, via BBG and CNN:
- EMPLOYEES AT GOLDMAN SACHS, BARCLAYS, JP MORGAN, CITI, NOMURA, UBS, HSBC RECEIVED FED MINUTES EARLY YESTERDAY
- MOST OF THE BANK EMPLOYEES APPEAR TO WORK IN GOVERNMENTAL RELATIONS (Lobbies)
- ABA, SIFMA, SENATE STAFFERS RECEIVED FED MINUTES EARLY
- FED NAMES 154 RECIPIENTS OF EARLY RELEASE OF FOMC MINUTES
- FED MINUTES SENT EARLY TO BANKS, LAW FIRMS, PRIVATE EQUITY
- FED EARLIER SAID RELEASE WENT MAINLY TO CONGRESS, TRADE GROUPS
- NONE OF THE PEOPLE ON THE LIST ALERTED THE FED THAT THEY RECEIVED NONPUBLIC INFO A DAY EARLY
In other words: absolutely everyone who trades risk assets for a living.
There is the potential for some drama - a Cyprus style raid on wealth is a potential outcome.
- Helicopter QE will never be reversed (Evans-Pritchard)
- Bank of Japan Launches Easing Campaign under new leadership (WSJ)
- Draghi Considers Plan B as Sentiment Dims After Cyprus Fumble (BBG)
- Spain threatened by resurgent credit crunch (FT)
- U.S. Dials Back on Korean Show of Force (WSJ)
- Gillard Urges Aussie Firms to Emulate German Deutschmark Success (BBG)
- Bank watchdog warns on retail branches (FT)
- Xi's Russia visit confirms continuity of ties (China Daily)
- Portuguese Government Survives No-Confidence Vote (WSJ)
- Mortgage rates set for fall, Bank of England survey shows (Telegraph)
- Russia’s bank chief warns on economy (FT)
- Fed member hints at summer slowing of QE3 (FT)
Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency ConvertibilitySubmitted by Tyler Durden on 03/31/2013 12:46 -0400
A month ago we pointed out that as a result of Australia's unprecedented reliance on China as a target export market, accounting for nearly 30% of all Australian exports (with the flipside being just as true, as Australia now is the fifth-biggest source of Chinese imports), the two countries may as well be joined at the hip. Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world's "reserve currency" in its trade dealings with the world's biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process "slashing costs for thousands of business" and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar's reserve currency status until one day it no longer is.
Last November, in an act of sheer monetary desperation, the ECB issued an exhaustive, and quite ridiculous, pamphlet titled "Virtual Currency Schemes" in which it mocked and warned about the "ponziness" of such electronic currencies as BitCoin. Why a central bank would stoop so "low" to even acknowledge what no "self-respecting" (sic) PhD-clad economist would even discuss, drunk and slurring, at cocktail parties, remains a mystery to this day. However, that it did so over fears the official artificial currency of the insolvent continent, the EUR, may be becoming even more "ponzi" than the BitCoins the ECB was warning about, was clear to everyone involved who saw right through the cheap propaganda attempt. Feel free to ask any Cypriot if they would now rather have their money in locked up Euros, or in "ponzi" yet freely transferable, unregulated BitCoins. And while precious metals have been subject to price manipulation by the legacy establishment, even if ultimately the actual physical currency equivalent asset, its "value" naively expressed in some paper currency, may be in the possession of the beholder, to date no price suppression or regulation schemes of virtual currencies existed. At least until now: it appears that the ever-benevolent, and always knowing what is "in your best interest" Big Brother has decided to finally take a long, hard look at what is going on in the world of BitCoin... and promptly crush it.
Bernanke Entirely Fails to Answer Question
Government to Spy On Everyone Who Banks In the U.S.
- Cardinals head to conclave to elect pope for troubled Church (Reuters)
- Hyperinflation 'Unthinkable' Even With Bold Easing: Abe (Nikkei)
- Ryan Plan Revives '12 Election Issues (WSJ)
- Italy 1-yr debt costs highest since Dec after downgrade (Reuters)
- Republicans to unveil $4.6tn of cuts (FT) - Obama set to dismiss Ryan plan to balance budget within decade
- CIA Ramps Up Role in Iraq (WSJ)
- Hollande Hostility Fuels Charm Offensive to Show He’s No Sarkozy (BBG)
- SEC testing customized punishments (Reuters)
- Judge Cans Soda Ban (WSJ)
- Hungary Lawmakers Rebuff EU, U.S. (WSJ)
- Even Berlusconi Can’t Slow Bulls Boosting Euro View (BBG) - luckily the consensus is never wrong
- Funding for Lending ‘put on steroids’ (FT)
- Investigators Narrow Focus in Dreamliner Probe (WSJ)
- With new group, Obama team seeks answer to Karl Rove (Reuters)
It's an odd question, we know - especially ahead of today's Stress Tests, but given today's testimony on assessing the bank secrecy act, apparent trouble-maker Elizabeth Warren pokes and prods (correctly we would add) at the surreality that exists between the Department of Justice, The Treasury, and the financial system. David Cohen, Tom Curry, and Jerome Powell dodged bullets and blame, "does that mean essentially we have a prosecution-free zone for large banks in America?" But Warren wasn't going to be fobbed off with useless banter as she pointed out, "if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." Indeed Ms. Warren.