http://www.zerohedge.com/fullrss2.xml/wp-content/plugins/ubillboard/korean%20buying%20spree%20boosts%20brent%20price en Greek Municipal Union Refuses To Hand Over "Confiscated" Cash To Central Bank http://www.zerohedge.com/news/2015-04-27/greek-municipal-union-refuses-hand-over-confiscated-cash-central-bank <p>A week ago the world and Greece alike were <a href="http://www.zerohedge.com/news/2015-04-20/did-greece-just-launch-capital-controls-mandatory-cash-transfer-decreed">stunned to learn </a>that the financial situation in Athens is so atrocious, the government, through an emergency decree, was forced to not only "borrow" funds from pensioners, but would also confiscate any available cash held by municipal entities such as mayor's offices, the national opera, the art gallery and even hospitals and kindergartens, in order to make its upcoming payments to the Troika, as well as to help with rolling over debt maturities, of which as a reminder there are <em><strong>many</strong></em>.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150424_gre.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150424_gre_0.jpg" width="500" height="809" /></a></p> <p>&nbsp;</p> <p>The government had hoped this act of desperation would raise up to €2.5 billion in funding, carrying Greece though the end of May, however according to initial media reports the practical limits of this action would lead to at most €500-600 million in new funds raised, not nearly enough to cover the €1 billion in Greek payments due to the IMF in May alone.</p> <p>Earlier today, while the European markets were caught in the latest myopic buying frenzy resulting from the hope that an imminent termination of Yanis Varoufakis may mean a Greek debt deal is imminent, the Central Union of Municipalities and Communities of Greece ("KEDE") <a href="http://www.kedke.gr/?p=10437">held a meeting </a>in which it said that while it "<strong>declares it support for the national negotiating effort</strong>", <strong>it would not transfer any funds to the Bank of Greece. </strong></p> <p>As Bloomberg confirms, the union said "they won’t transfer cash reserves to Bank of Greece until PM’s promises to them are passed into law, according to statement today on Athens-based body’s website. Govt must also make clear how the Bank of Greece will manage these funds."</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/KEDE.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/KEDE_0.jpg" width="497" height="333" /></a></p> <p>On its <a href="http://www.kedke.gr/?p=10437">website</a>, the Union added that it would consider whether it would change its position on Thursday, May 7, one day ahead of a €1.4 billion T-Bill maturity, and five days ahead of a €760 million payment to the IMF. </p> <p>Not unexpectedly, the municipalities are less than excited by the prospect of handing over their rainy day slush fund just so the IMF can pay its muppet regime in Ukraine for a few more months. As a result, they have objected to the government's emergency decree, and have come up with conditions of their own before they hand over the funds (if ever):</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>the exclusion of compensatory fees from the current law, the exclusion of the municipalities budgets have financial commitments, the assumption by the State's liability to cover legal issues for payment of clauses or Municipalities responsibilities and Mayors, <strong>to clarify the mechanism by which it will be managing our money through the Bank of Greece once submitted</strong>, to ensure immediate cash management from commercial banks. </p> </blockquote> <p>Long story short, what was originally supposed to be an emergency rainy day fund collection of €2.5 billion will be €0.0 billion instead, at least for the next 10 days, and probably beyond. </p> <p>Which, in a world where Greece's obligations to the Troika can not be simply met with a Yanis Varoufakis resignation, means that the latest bout of Greek risk asset optimism will be very short-lived. </p> <p>Which brings us to the flowchart of the day: what UBS dubs the "likely consequences of non-payment by the Greek government." It is relevant, because unless Varoufakis can come up with another plan to "confiscate" a few billion from some Greek entity, it is precisely what next steps fore Greece are.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/Grexit%20likely%20consequenc3s.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/Grexit%20likely%20consequenc3s_0.jpg" width="499" height="380" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1024" height="683" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/KEDE.jpg?1430159372" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/greek-municipal-union-refuses-hand-over-confiscated-cash-central-bank#comments Greece Ukraine Mon, 27 Apr 2015 18:30:42 +0000 Tyler Durden 505582 at http://www.zerohedge.com 2010 Flash Crash Arrest Motivated By Greed http://www.zerohedge.com/news/2015-04-27/2010-flash-crash-arrest-motivated-greed <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">By&nbsp;<a href="http://www.econmatters.com/search/label/EconMatters">EconMatters</a>&nbsp;&nbsp;</p> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Whistleblower Program</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The past week we have made markets safer by arresting the dangerous flash crash villain who was a threat to national security and the health of the entire financial market system. Like I always say when in doubt follow the money trail in identifying motives and what is really going on here in this Flash Crash arrest.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">In this case there is this whistleblower who is trying to cash in on the U.S. Commodity Futures Trading Commission's (CFTC) whistleblower program, created after the 2010 Dodd-Frank Wall Street regulatory reform bill which awards tipsters between 10 percent and 30 percent of the total sanctions collected if the government collects $1 million or more.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Small Fry</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <p class="separator" style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal; clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-yW6NZaIAk3k/VT2BN5Ky42I/AAAAAAAAFJ8/fyzuGjX2f3s/s1600/Flash-Crash-Chart.gif" style="margin-left: 1em; margin-right: 1em;"><img src="https://images-blogger-opensocial.googleusercontent.com/gadgets/proxy?url=http%3A%2F%2F4.bp.blogspot.com%2F-yW6NZaIAk3k%2FVT2BN5Ky42I%2FAAAAAAAAFJ8%2FfyzuGjX2f3s%2Fs1600%2FFlash-Crash-Chart.gif&amp;container=blogger&amp;gadget=a&amp;rewriteMime=image%2F*" width="640" height="416" border="0" style="cursor: move;" /></a></p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The trader Navinder Singh Sarao who traded from the suburbs of London has made an estimated 40 Million dollars in profits from trading over the time period in question with his questionable trading practices and the CFTC will go after the full amount. The whistleblower could net between $4 million to $12 million for his ‘original analysis’ of the 2010 flash crash depending on what the legal proceedings are able to claw back from the trader.</span></p> </div> <div style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; text-align: center;"> <p style="margin: 0px;"><strong>Read:&nbsp;<a href="http://www.econmatters.com/2015/04/october-15th-bond-market-crash-explained.html">October 15th Bond Market Crash Explained</a>&nbsp;</strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">It is easy to see how the DOJ got involved since they have been regularly involved in making high profile cases against Wall Street over the last several years. It is good for their visibility effort, and making a name for those involved in the department and enforcement function.&nbsp;</span></p> </div> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The problem is that there is nothing ‘original’ in this analysis on behalf of the whistleblower, this type of high frequency trading market manipulation goes on every day in every financial market in almost every asset class across the broad trading spectrum. It has been outlined by everybody from Nanex, Zero Hedge, Michael Lewis and many others in the industry. Computer driven market manipulation strategies are so pervasive in financial markets, they are far worse today than the flash crash period of 2010, and incorporated not just by the HFT firms, but by the large financial institutions, hedge funds, market makers, and many other market participants.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <p class="separator" style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal; clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-wGKlenQDrzo/VT2B_YiLxjI/AAAAAAAAFKM/tJCykgBhcmc/s1600/images%2B(3)4.jpg" style="margin-left: 1em; margin-right: 1em;"><img src="https://images-blogger-opensocial.googleusercontent.com/gadgets/proxy?url=http%3A%2F%2F1.bp.blogspot.com%2F-wGKlenQDrzo%2FVT2B_YiLxjI%2FAAAAAAAAFKM%2FtJCykgBhcmc%2Fs1600%2Fimages%252B(3)4.jpg&amp;container=blogger&amp;gadget=a&amp;rewriteMime=image%2F*" width="640" height="535" border="0" style="cursor: move;" /></a></p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Does the DOJ really want to go down this Rat Hole?</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">Literally the problem for the DOJ is that if this guy is guilty, then the DOJ has to arrest the entire financial community, because all the DOJ or CFTC has to do is pull up a Trading Dom (Depth of Market) price ladder in anything from bonds, oil to S&amp;P 500 futures and spoofing and many other volume based manipulative trading practices are regularly occurring right out in the open on a large scale. The real indictment here is that the CFTC or the DOJ needs any type of original analysis to identify this type of illegal trading activity, as it happens right out in the open for everybody to see. You don`t even have to pull trading records to see it, it is just that blatant. It has definitely gotten progressively worse from the 2010 period. In fact, spoofing is so commonplace that market participants probably don`t even think a millisecond whether it is an illegal tactic to manipulate prices. Furthermore, the arrest for spoofing sure didn`t scare any firms from incorporating this spoofing strategy because it was happening every day last week, and as of Friday`s trading was as rampant as ever in Friday`s price action.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; text-align: center;"> <p style="margin: 0px;"><strong>Read: &nbsp;<a href="http://www.econmatters.com/2015/04/us-oil-glut-how-high-can-you-go.html">U.S. Oil Glut: How High Can It Go?</a></strong></p> </div> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Follow the Money Trail</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;"><span style="font-family: Calibri;">Why go after this small trader? This frankly just shows the ignorance by the DOJ and the CFTC on this matter, they could go after Goldman Sachs, JP Morgan Chase and every other major financial institution for spoofing, as the practice has been adopted across the trading community as acceptable behavior. When the oil market has 8 or 9 Spoofing events going on at the same time, and the sizes and capital necessary to enact such strategies, it is pretty obvious that more than just a few high frequency trading firms are employing spoofing to influence market direction for profits.</span></p> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">Why go after 40 million from this small independent trader, this is peanuts for the DOJ, they could easily go after another 100 billion in fines from the likes of Deutsche Bank, UBS, Morgan Stanley, HSBC, Bank of America and the entire lot of the large financial institutions. I guarantee you traders at all the large financial institutions employ volume based and spoofing manipulative price action influencing strategies on a daily basis. It has just become that pervasive due to the advent of sophisticated computer programs and algo based trading programs. Why do you think Goldman Sachs went so ballistic over that proprietary trading program that the developer who left Goldman Sachs wanted to take with him at his next position? Most of the data represented on the price displays regarding bids and offers and volume is completely artificial and fake, created by computers for the sake of deception, and gaining an advantage; everyone knows this in the trading community. Nobody in the options community believes anything they see as to the posted bids and offers or contracts available to trade because these are all artificially computer driven facades meant to trick market participants and gain an edge in the markets. &nbsp;</span></p> <p style="margin: 0px;"><span style="font-family: Calibri;"><br /></span></p> <div style="text-align: center;"> <p style="margin: 0px;"><strong><span style="font-family: Calibri;">Read :&nbsp;<a href="http://www.econmatters.com/2015/04/china-easing-to-combat-darkest-period.html">China Easing to Combat the 'Darkest Period' of 2015</a></span></strong></p> </div> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;"><br /></span></span></strong><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Programming &amp; Edges</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The issue is that computers started taking over more and more of the everyday market making activity and trading volume responsibilities. As a result the traders and programmers constantly evolved more advanced trading algos in response to what other firms were doing in this area. It became an arms race where traders had more coding language books on their desks than any fundamental research data. The computer driven arms race is so pervasive in financial markets that if one applied the literal interpretation to spoofing which the DOJ seems to have taken the first step in enforcing. Then this includes even some sophisticated Inventory Selling algos employed by conservative market participants to counter high frequency trading ‘predatory’ algos from front running their exiting of large positions because these algorithms have become highly manipulative of the underlying price action in a given instrument. Everybody is trying to disguise what their true intentions are in financial markets these days, and the DOJ and CFTC it seems is so behind the curve that they jumped all over this small case like it was a goldmine landing in their lap. It could be a curse because now they could be tasked with doing something about this illegal practice that has been going on for over a decade!</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">Is the spoofing activity illegal because it was associated with a crash event, or is it illegal in and of itself? That is the real question the DOJ and CFTC needs to ask themselves. And if it is then literally you can run a simple trading algorithm filter on the historical trading data which is easily available and retroactively apply such large fines across the financial market community that the fines and settlements would be in the 200 Billion dollar range conservatively. Computer driven market manipulation trading programs and practices are incorporated by every large financial institution and have been the standard in the industry at an ever evolving rate of progress for the last 20 years!</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <p class="separator" style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal; clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-6hhUr5iL79k/VT2BsQW0V5I/AAAAAAAAFKE/bCG9xleU9YU/s1600/ialgochart.jpg" style="margin-left: 1em; margin-right: 1em;"><img src="https://images-blogger-opensocial.googleusercontent.com/gadgets/proxy?url=http%3A%2F%2F2.bp.blogspot.com%2F-6hhUr5iL79k%2FVT2BsQW0V5I%2FAAAAAAAAFKE%2FbCG9xleU9YU%2Fs1600%2Fialgochart.jpg&amp;container=blogger&amp;gadget=a&amp;rewriteMime=image%2F*" width="640" height="480" border="0" style="cursor: move;" /></a></p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Trillion Dollar Practice</span></span></strong></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The amount of money that has been taken out of the market based upon spoofing, volume manipulation and many other manipulative computer based trading strategies over the last decade is literally in the trillions and trillions of dollars. Did the CFTC and the DOJ just not have the expertise to identify that this was going on, were they locked into their own regulatory paradigms, and couldn`t see the larger forest right in front of their eyes and noses? Come on what did they think was going on in financial markets when a populous author like Michael Lewis happened to stumble across an idea for a book topic to cash in on the trend. You know by the time it gets on Michael Lewis`s radar screen it has been going on for a long time, and has gotten so pervasive that even financial journalists become privy to the fringe of the underlying activity. &nbsp;</span></p> <p style="margin: 0px;">&nbsp;</p> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;">Cab Driver starts giving&nbsp;</span></span></strong></p> <p style="margin: 0px;"><strong><span style="font-size: 12pt; line-height: 17.1200008392334px;"><span style="font-family: Calibri;"><br /></span></span></strong></p> </div> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">The DOJ literally could pay almost any trader a consultancy fee and he could pull up a Trading DOM, Options Chain, or Futures Market and point out illegal activity after illegal activity hour after hour in the trading day. It is just that out in the open, and blatant! And Michael Lewis was freaking clueless on the topic, the guy has literally no clue what is really going on in regards to the pervasiveness of modern computer driven manipulative trading practices and strategies. He literally is your typical populous author trying to cash in on a vague book idea for a mainstream audience that is shocked by his story.&nbsp;</span></p> <div style="text-align: center;"> <p style="margin: 0px;"><span style="font-family: Calibri;"><br /></span></p> </div> <div style="text-align: center;"> <p style="margin: 0px;"><strong><span style="font-family: Calibri;">Read:&nbsp;<a href="http://www.econmatters.com/2015/03/michael-lewis-is-right-spoofing-proves.html">Michael Lewis is Right “Spoofing” Proves Market Rigged on Daily Basis</a></span></strong></p> </div> </div> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">If the CFTC and the DOJ are serious the entire financial landscape of trading is about to change. Of this I have serious doubts, there is just too much money being made from market manipulation strategies, and this poor fall guy just happened to be at the wrong place at the wrong time.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">Because if the DOJ and CFTC is going to be consistent, then they have to indict the entire financial community from the CME, Exchanges, Brokers, Institutions, Investment Banks, Hedge Funds, Management Funds and High Frequency Trading Firms.</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <div class="MsoNormal" style="font-family: 'Times New Roman'; font-size: medium; line-height: normal; margin: 0in 0in 8pt;"> <p style="margin: 0px;"><span style="font-family: Calibri;">It will be interesting to see if some of the large financial firms who have exposure in this area start reigning in traders and programmers in some of these spoofing and other computer driven manipulative trading practices. I bet half the upper management doesn`t even know that the traders at their firms are even employing some of these strategies. They only care about the bottom line profits of the trading group until investigators start asking for documents, trading records, and e-mails. But spoofing is so mainstream today that nobody seems to be worried about regulatory enforcement, and somebody is really out of touch. Either the DOJ &amp; CFTC, or Traders are in for one major wakeup call!</span></p> </div> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">&nbsp;</p> <p style="margin: 0px; font-family: 'Times New Roman'; font-size: medium; line-height: normal;">©&nbsp;<a href="http://www.econmatters.com/">EconMatters</a>&nbsp;All Rights Reserved |&nbsp;<a href="http://www.facebook.com/EconMatters">Facebook</a>&nbsp;|&nbsp;<a href="http://twitter.com/#!/EconMatters">Twitter</a>&nbsp;|&nbsp;<a href="http://feedburner.google.com/fb/a/mailverify?uri=EconForecast">Free Email</a>&nbsp;|&nbsp;<a href="http://astore.amazon.com/econforecast-20?_encoding=UTF8&amp;node=80">Kindle</a></p> http://www.zerohedge.com/news/2015-04-27/2010-flash-crash-arrest-motivated-greed#comments Bank of America Bank of America Bond China Deutsche Bank Front Running Futures market goldman sachs Goldman Sachs HFT High Frequency Trading High Frequency Trading Market Crash Market Manipulation Michael Lewis Morgan Stanley national security Price Action Trading Strategies Twitter Twitter Mon, 27 Apr 2015 18:18:46 +0000 EconMatters 505581 at http://www.zerohedge.com Investors Are Giving Up On The "Low Oil Prices Are Unequivocally Good For America" Meme http://www.zerohedge.com/news/2015-04-27/investors-are-giving-low-oil-prices-are-unequivocally-good-america-meme <p>For 6 months, investors have been buying the idea - pitched by any and every status-quo-sustaining talking head, politician, and central banker -<em> that low oil prices are unequivocally good for America</em>. This has manifested itself in retail stocks handily outperforming the S&amp;P. However, <a href="http://www.bloomberg.com/news/articles/2015-04-24/retail-stocks-flash-bearish-signal-on-oil-u-s-spending-pause">as Bloomberg notes,</a> the <strong>last few weeks has seen that reverse </strong>dramatically as it appears investors, losing faith in the big-takers, have realized that <strong><em>"consumers aren't spending as much of the money saved from lower gasoline prices."</em></strong></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_oil_1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_oil_1_0.jpg" width="600" height="315" /></a></p> <p>&nbsp;</p> <p><a href="http://www.bloomberg.com/news/articles/2015-04-24/retail-stocks-flash-bearish-signal-on-oil-u-s-spending-pause"><em>As Bloomberg adds,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>In the past year, there’s been an inverse relationship between the price of crude oil and the relative performance of retail stocks.</strong> An almost 60 percent decline in oil between June 2014 and mid-March contributed partly to the rally in shares of these companies as “investors anticipated a boost to consumption that would benefit retailers’ profitability,” Maley said. <strong>“The retail fund’s recent underperformance reflects a partial reversal of this bet,”</strong> which could be more pronounced if oil trades above $60 a barrel.</p> <p>&nbsp;</p> <p>As it turns out, <strong>“consumers aren’t spending as much of the money saved from lower gasoline prices,” </strong>Maley said.</p> <ul> <li>Retail sales, excluding automobiles and gasoline, have been below the median forecast of economists surveyed by Bloomberg in each of the last four months.</li> <li>Americans saved 5.8 percent of their disposable personal income in February, the highest since December 2012</li> </ul> <p>There are other reasons that underscore a bearish outlook for retail stocks, Andrew Burkly, head of institutional portfolio strategy at Oppenheimer &amp; Co. in New York, said.</p> <ul> <li><strong>The ETF formed a so-called divergence relative to the broader market, falling this month after nearly matching the previous high reached in October 2013.</strong> The ETF’s failure to surpass the previous high relative to the S&amp;P 500 is a bearish signal because it indicates investors are allocating less money to the retail group.</li> <li><strong>Short interest is near the lowest level since 2007, reflecting bullish investor sentiment. </strong>That may set the stage for early betting against the retail group and invite an increase in short selling.</li> </ul> </blockquote> <p>*&nbsp; *&nbsp; *<br />Is the dream over?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="957" height="503" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150427_oil.jpg?1430154001" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/investors-are-giving-low-oil-prices-are-unequivocally-good-america-meme#comments Crude Crude Oil Investor Sentiment Personal Income Short Interest Mon, 27 Apr 2015 18:11:35 +0000 Tyler Durden 505580 at http://www.zerohedge.com O-MeRiCa... http://www.zerohedge.com/news/2015-04-27/o-merica <p style="text-align: center;"><iframe src="https://www.flickr.com/photos/expd/17246209226/player/" width="825" height="1024" frameborder="0"></iframe></p> http://www.zerohedge.com/news/2015-04-27/o-merica#comments Mon, 27 Apr 2015 17:51:05 +0000 williambanzai7 505579 at http://www.zerohedge.com "Highway Robbery": Are Patients Paying For Biotech M&A Bubble? http://www.zerohedge.com/news/2015-04-27/highway-robbery-are-patients-paying-biotech-ma-bubble <p>It’s no secret that biotech has been on an incredible run over the past several years. In fact, as we <a href="http://www.zerohedge.com/news/2015-03-27/are-we-biotech-bubble-you-decide">pointed out</a> late last month, it’s been the top performing sector for five years running, has outperformed the S&amp;P by a count of 3.5:1, and is up four-fold since the dot-com bubble. Additionally, there were a record 82 IPOs in the space in 2014, eclipsing the previous record of 67 and the number of companies with valuations greater than $2 billion has tripled in just four years.&nbsp;</p> <p>One of the drivers behind the sector’s strength has been M&amp;A. For instance, there were $17 billion worth of deals on March 30 alone, a record for the healthcare industry and an indication that 2015 may well top 2014 to become the best year ever for healthcare takeouts as buyers, anxious to plug holes in their pipelines and snap up new drugs that treat rare diseases, have paid an average of more than 30 times revenue for billion-plus deals over the past three years, <a href="http://www.bloomberg.com/news/articles/2015-03-30/busiest-day-for-health-care-deals-is-set-to-spawn-more-real-m-a">Bloomberg noted</a> last month. The following chart is quite telling:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/BiotechMABBG.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/BiotechMABBG_0.jpg" width="600" height="457" /></a></p> <p>The same dynamic appears to be driving the M&amp;A binge that often drives speculative manias: everyone fears missing the boat. “Health care is obviously dominating the M&amp;A scene. There seems to be a self-imposed pressure that if they identify a target they like, then they have to move quickly because somebody else might come along and pick it off,” one analyst who spoke to Bloomberg said. The following chart shows the sector’s performance along with plots for the various M&amp;A deals that have gone off over the course of the rally:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/BiotechM%26ACiti.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/BiotechM%26ACiti_0.jpg" width="600" height="418" /></a></p> <p>While it’s an open question as to whether acquirers are grossly overpaying in the race to find drug targets that fit well with their existing pipelines and offer the best chance for marketing synergies, it appears that at least in some cases, the premiums paid in healthcare M&amp;A deals are being passed right along to patients. Here’s <a href="http://www.wsj.com/articles/pharmaceutical-companies-buy-rivals-drugs-then-jack-up-the-prices-1430096431">WSJ</a> with more:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.</em></strong></p> <p>&nbsp;</p> <p><em>Neither of the drugs, Nitropress or Isuprel, was improved as a result of costly investment in lab work and human testing, Valeant said. Nor was manufacture of the medicines shifted to an expensive new plant. The big change: the drugs’ ownership…</em></p> <p>&nbsp;</p> <p><em>More pharmaceutical companies are buying drugs that they see as undervalued, then raising the prices…</em></p> <p>&nbsp;</p> <p><em>Some payers and health-care providers complain they are already feeling the hit from large and sudden price increases for drugs like Isuprel and Nitropress.</em></p> <p>&nbsp;</p> <p><em>Cleveland Clinic says the price hikes for the two Valeant drugs is unexpectedly adding $8.6 million, or 7%, to this year’s budget of roughly $122 million for medicines administered at its hospitals…</em></p> <p>&nbsp;</p> <p><em><strong>Early last year, Mallinckrodt PLC paid $1.4 billion for Cadence Pharmaceuticals, though the Ofirmev pain injections that were the crown jewel of the deal were projected to have just $110.5 million in 2013 revenue,</strong> according to a Mallinckrodt conference call with analysts discussing the deal.</em></p> <p>&nbsp;</p> <p><em><strong>Three months later, the list price for a package of 24 Ofirmev vials jumped almost 2½ times to $1,019.52,</strong> according to health-care data firm Truven Health Analytics, which publishes average wholesale prices based on information from drug companies.</em></p> <p>&nbsp;</p> <p><em><strong>“It seemed like highway robbery,”</strong> said Erin Fox, who directs the drug-information service at University of Utah Health Care. After the increase, three of the Salt Lake City health system’s four hospitals were spending as much as $55,000 a month on the drug, up from $20,000 to $25,000 a month, Ms. Fox said.&nbsp;</em></p> <p>&nbsp;</p> <p><em>The price increases can be very lucrative for companies. Horizon Pharma PLC upped the price of Vimovo pain tablets after buying the rights from AstraZeneca in late 2013. <strong>On Jan. 1, 2014, its first day selling Vimovo, Horizon raised the list price for 60 tablets to $959.04, a 597% increase, according to Truven.</strong></em></p> </blockquote> <p>Here's a rather alarming chart that demonstrates the above:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/OverpricedDrugs.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/2015/04/OverpricedDrugs_0.jpg" width="600" height="210" /></a></p> <p>But for all of those out there who depend on these medications, do not despair because Kyle Bass is on your side and he'll be glad to shell out the $27,000 it costs to <a href="http://www.zerohedge.com/news/2015-03-21/hedge-funds-exploit-patent-laws-push-down-biotechs">file a patent dispute</a> so long as he can maybe short the stock of the patent owner ahead of time — of course it's all in the interest of cheaper drugs.&nbsp;</p> <p><strong>Although we can't be sure, the WSJ piece could be at least partially responsible for <a href="http://www.zerohedge.com/news/2015-04-27/biotech-bubble-buckles-tumbles-almost-7-3-week-lows">the weakness</a> in biotech today as it could draw attention to the industry's pricing practices.</strong></p> <p>* &nbsp;* &nbsp;*</p> <p>Perhaps the most absurd thing about all of the above is the following which outlines Valeant's stance on the two "life saving" heart drugs the company acquired:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>After Valeant agreed to buy the drugs in early January, the company hired a consultant to look at their prices.<strong> The consultant found the prices didn’t reflect the benefits of the drugs to patients.</strong></em></p> </blockquote> <p>Assuming there is no amount of money that one would not pay to save their own life, then according to the logic employed by Valeant's consultant, the price of the two drugs should just be "infinity."</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="851" height="298" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/OverpricedDrugs.jpg?1430156490" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/highway-robbery-are-patients-paying-biotech-ma-bubble#comments Kyle Bass Kyle Bass Mon, 27 Apr 2015 17:46:59 +0000 Tyler Durden 505578 at http://www.zerohedge.com Bull Market Most Overbought/Leveraged In History http://www.zerohedge.com/news/2015-04-27/bull-market-most-overboughtleveraged-history <p><a href="http://streettalklive.com/index.php/daily-x-change/2702-bull-market-most-overbought-leveraged-in-history.html"><em>Submitted by Lance Roberts via STA Wealth Management</em></a>,</p> <div class="highslide-gallery"> <p>Last week, I stated the market was approaching a fairly important decision point. <a href="http://streettalklive.com/index.php/blog.html?id=2695">To wit:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;As shown in the chart below, the market has been remained trapped in a tightening pattern of higher lows and lower highers. This type of action is like the compression of spring. In the next few days, the markets will make an important decision. A breakout to the upside of this consolidation will confirm the current bullish trend, and portfolio actions should remain allocated and tilted more heavily towards equity related risk. However, a break to the downside will likely suggest a more significant correction in the near term. <strong>It is worth noting that this consolidation in the market is happening during a decline of relative strength</strong>. This is a warning sign that generally bodes poorly for the bulls.&quot;</p> </blockquote> <p><span style="color: #005dab;"><em>(<strong>Note</strong>: The chart has been updated to Friday&#39;s close to show the breakout of that consolidation.)</em></span></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2015/SP500-Consolidation-042715.png" target="_blank" title="SP500-Consolidation-042715"><img alt="SP500-Consolidation-042715" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2015/SP500-Consolidation-042715.png" style="height: 305px; width: 600px;" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Since <a href="http://streettalklive.com/index.php/newsletter/current-issue.html?archive=04-24-15">portfolios are currently fully allocated</a> to the market, if the market breaks out to the upside of the current consolidation this will simply confirm that the <em>&quot;bulls&quot;</em> are still currently in charge of the market. No action will be required.&quot;</p> </blockquote> <p>As shown, that breakout did occur this past Friday,which suggests that the bullish trend is still intact and that portfolios should remain currently tilted towards equity exposure.&nbsp;</p> <p>However, this <strong>does NOT mean that all market risk is now resolved,</strong> or that investors should return to their complacent slumber.</p> <p>As discussed in this past <a href="http://streettalklive.com/index.php/newsletter/current-issue.html?archive=04-24-15">weekend&#39;s missive</a> the <strong>market is currently more overbought now that at any other point in history going back to 1940.</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2015/SP500-Overbought-Sold-042715.PNG" target="_blank" title="SP500-Overbought-Sold-042715"><img alt="SP500-Overbought-Sold-042715" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2015/SP500-Overbought-Sold-042715.PNG" style="height: 305px; width: 600px;" /></a></p> <p>The vertical dashed white lines show that when the extreme overbought condition begins to decline it is coincident with past historical peaks in the market.&nbsp; Furthermore, the long term MACD <em>(moving average convergence divergence)</em> has also turned down which has also historically aligned with more significant market peaks and corrections.</p> <p>Importantly, this overbought indication is <em>&quot;longer-term&quot;</em> in nature and is slow to move. This means that in the short-term, stocks can, and most likely will, continue to try and advance further due to underlying price momentum. As <a href="http://streettalklive.com/index.php/blog/daily-x-change/2632-think-like-a-bear-invest-like-a-bull.html">I have discussed previously:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;The effect of <strong>momentum is arguably one of the most pervasive forces in the financial markets.</strong> Throughout history, there are episodes where markets rise, or fall, further and faster than logic would dictate. However, this is the effect of the psychological, or behavioral, forces at work as &#39;greed&#39; and &#39;fear&#39; overtake logical analysis.</p> <p>&nbsp;</p> <p><strong>This is the basic application of Newton&#39;s Law Of Inertia, that states &#39;an object in motion tends to remain in motion unless acted upon by an unbalanced force.&#39; </strong>In other words, when markets begin strongly trending in one direction, that direction will continue until an &#39;unbalanced&#39; force stops it.&quot;</p> </blockquote> <p>Currently, with Central Banks fully engaged in monetary interventions on an unprecedented global scale, there is <strong>seemingly nothing that can stop the current advance.</strong> Of course, it is that very&nbsp;<em>&quot;thought process&quot;</em> that has been a hallmark of exuberant markets in the past.</p> <h2><u><strong>Margin Debt Strikes New High</strong></u></h2> <p>Along with the markets currently being more overbought now than at any other point in history, they are also more leveraged as well.</p> <p>Late last week the NYSE released its latest margin debt figures for March. Despite a rather sluggish market, investors piled on margin debt pushing levels to all-time highs as shown below.</p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2015/Margin-Debt-SP500-Events-042715.PNG" target="_blank" title="Margin-Debt-SP500-Events-042715"><img alt="Margin-Debt-SP500-Events-042715" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2015/Margin-Debt-SP500-Events-042715.PNG" style="height: 391px; width: 601px;" /></a></p> <p>It is worth noting that when net credit balances have plunged very negative levels it has been coincident with major mean reverting events in the market.&nbsp;</p> <p>While <em>&quot;this time could certainly be different,&quot;</em> the reality is that leverage of this magnitude is <em>&quot;gasoline waiting on a match.&quot;</em> When an event eventually occurs, that creates a rush to sell in the markets, the decline in prices will reach a point that triggers an initial round of margin calls. Since margin debt is a function of the value of the underlying <em>&quot;collateral,&quot;</em> the forced sale of assets will reduce the value of the collateral further triggering further margin calls. Those margin calls will trigger more selling forcing more margin calls, so forth and so on.</p> <p>Notice in the chart above that margin debt reductions begins innocently enough before accelerating sharply to the downside.</p> <h2><u>Tending The Garden</u></h2> <p>The combined overbought, overleveraged condition of the financial markets is of extreme risk to investors currently. While the bullish trend remains intact currently, it is extremely prudent to perform some risk management in portfolios. As discussed <a href="http://streettalklive.com/index.php/newsletter/current-issue.html?archive=04-24-15">this past weekend:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;...it is worth remembering that portfolios, like a garden, must be carefully tended to otherwise the bounty will be reclaimed by nature itself. &nbsp;If fruits are not harvested <em>(profit taking)</em> they &#39;<i>rot on the vine.&#39;</i> If weeds are not pulled <em>(sell losers),</em> they will choke out the garden. If the soil is not fertilized <em>(savings),</em> then the garden will fail to produce as successfully as it could.</p> <p>&nbsp;</p> <p>So, as a reminder, and considering where the markets are currently, here are the rules for managing your garden:</p> <p>&nbsp;</p> <p>1) <strong>HARVEST:&nbsp;</strong><span style="color: #dc0000;"><strong><i>Reduce &ldquo;winners&rdquo; back to original portfolio weights.</i></strong> </span>This <strong>does NOT</strong> mean sell the whole position. You pluck the tomatoes off the vine, not yank the whole plant from the ground.</p> <p>&nbsp;</p> <p>2) <strong>WEED:&nbsp;</strong><span style="color: #dc0000;"><strong><i>Sell losers and laggards and remove them garden.</i></strong></span> If you do not sell losers and laggards, they reduce the performance of the portfolio over time by absorbing &#39;nutrients&#39; that could be used for more productive plants. The first rule of thumb in investing &#39;sell losers short.&#39;</p> <p>&nbsp;</p> <p>3) <strong>FERTILIZE AND WATER:&nbsp;</strong><strong><i><span style="color: #1f497d;"><span style="color: #dc0000;">Add savings on a regular basis</span>. </span></i></strong>A garden cannot grow if the soil is depleted of nutrients or lost to erosion. Likewise, a portfolio cannot grow if capital is not contributed regularly to replace capital lost due to erosion and loss. If you think you will <strong>NEVER LOSE money</strong> investing in the markets&hellip;then STOP investing immediately.</p> <p>&nbsp;</p> <p><strong>4) WATCH THE WEATHER:&nbsp;</strong><span style="color: #dc0000;"><strong><i>Pay attention to markets.</i></strong></span><span style="color: #1f497d;"> </span>A garden can quickly be destroyed by a winter freeze or a drought. Not paying attention to the major market trends can have devastating effects on your portfolio if you fail to see the turn for the worse. As with a garden, it has never been harmful to put protections in place for expected bad weather that didn&rsquo;t occur. Likewise, a portfolio protected against &#39;<i>risk&#39;</i> in the short-term, never harmed investors in the long-term.&quot;</p> </blockquote> <p>With overall market trend still bullish, there is little reason to become overly defensive in the very short-term. However, I have this nagging feeling that the <i>&ldquo;spring&rdquo;</i> is now wound so tightly, that when it does break loose, it will likely surprise most everyone.</p> </div> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="587" height="372" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150427_STA.jpg?1430152826" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/bull-market-most-overboughtleveraged-history#comments Central Banks Fail MACD Reality Risk Management Mon, 27 Apr 2015 17:25:03 +0000 Tyler Durden 505577 at http://www.zerohedge.com Will 5th Time Be The Charm For Dip-Buyers Today? http://www.zerohedge.com/news/2015-04-27/will-5th-time-be-charm-dip-buyers-today <p>BTFD is FUBAR for now...</p> <p>&nbsp;</p> <p>BTFD?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_BTFD.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_BTFD_0.jpg" width="600" height="491" /></a></p> <p>&nbsp;</p> <p>It seems the machines need to get Europe and US back together again...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_BTFD1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_BTFD1_0.jpg" width="600" height="316" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1260" height="1031" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20150427_BTFD.jpg?1430155181" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/will-5th-time-be-charm-dip-buyers-today#comments Mon, 27 Apr 2015 17:20:09 +0000 Tyler Durden 505576 at http://www.zerohedge.com Dealers Carry Weak 2 Year Auction; Indirect Bid Slides http://www.zerohedge.com/news/2015-04-27/dealers-carry-weak-2-year-auction-indirect-bid-slides <p>While pricing right on the <em>When Issued </em>screws, or 0.540%, tied for the lowest high yield since October 2014, today's $26 billion auction of 2 Year paper was nothing to write home about. From a low Bid to Cover, which at 3.30 was down from March's 3.457%, and the lowest of 2015, to a slide in the Indirect bid to only 38.1%, also the lowest for 2015, to the highest Dealer take down of 2015, with commercial banks left with 47.8% of the short-end issue, there was not much demand for the paper which pays a 0.50% cash coupon and which matures on April 30, 2017. </p> <p>Still, the lack of a tail is what the algos were looking at, and they got it. As a result the bid following the auction across the curve which has pushed the 3Y yield to the LOD, quickly erased any lingering doubts one may have had about the auction's strength.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/2Y%20April%202015.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/04/2Y%20April%202015_0.jpg" width="600" height="358" /></a></p> <p>And yet one thing is certain: when the maturity date rolls by, the Fed will still be scrambling to explain why, over a decade later, it still hasn't done even one rate hike (spoiler alert: snow in the winter).</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1633" height="973" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2Y%20April%202015.jpg?1430154585" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/dealers-carry-weak-2-year-auction-indirect-bid-slides#comments Across the Curve High Yield Mon, 27 Apr 2015 17:09:51 +0000 Tyler Durden 505575 at http://www.zerohedge.com Clinton Charity CEO Explains Tax Reporting "Mistakes" http://www.zerohedge.com/news/2015-04-27/clinton-charity-ceo-explains-tax-reporting-mistakes <p>Last week, Hillary Clinton had what we called a “<a href="http://www.zerohedge.com/news/2015-04-23/hillarys-charities-suffer-geithner-moment-will-refile-5-years-taxes">Geithner moment</a>” when a Reuters investigation revealed that the Presidential candidate’s family charities had failed to report “tens of millions” in contributions from foreign governments on annual tax returns. For its part, The Clinton Foundation was quick to point out that when it comes to charities, it is exemplary in terms being forthright, but the missing disclosures will likely serve to fan the flames for Republicans who claim Clinton’s ties to the charities could make her susceptible to the influence of outside interests.&nbsp;</p> <p>Meanwhile, the Foundation’s claims to transparency will surely be put to the test as the former First Lady ramps up her bid to return to The White House and as questions linger regarding contributions from foreign governments while Clinton was Secretary of State. Here’s an excerpt from a <a href="http://www.washingtonpost.com/politics/foreign-governments-gave-millions-to-foundation-while-clinton-was-at-state-dept/2015/02/25/31937c1e-bc3f-11e4-8668-4e7ba8439ca6_story.html">Washington Post piece</a> published in February:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>The Clinton Foundation accepted millions of dollars from seven foreign governments during Hillary Rodham Clinton’s tenure as secretary of state, including one donation that violated its ethics agreement with the Obama administration…</em></p> <p>&nbsp;</p> <p><em>Some of the donations came from countries with complicated diplomatic, military and financial relationships with the U.S. government, including Kuwait, Qatar and Oman…</em></p> <p>&nbsp;</p> <p><strong><em>Rarely, if ever, has a potential commander in chief been so closely associated with an organization that has solicited financial support from foreign governments.</em></strong></p> </blockquote> <p>Now, the Clinton Foundation is out with a public admission of its reporting “errors” as acting CEO Maura Pally describes, in a lengthy blog post, the supposedly innocent nature of the mistakes and the “unprecedented” steps the Foundation has taken in the past to avoid conflicts of interest between Hillary and foreign donors. Judge for yourself:</p> <p>* &nbsp;* &nbsp;*</p> <p><strong>A Commitment to Honesty, Transparency, and Accountability</strong></p> <p>By Maura Pally</p> <p>Over the past few days, many questions have been raised about the Clinton Foundation, its initiatives, and the financial support that allows us to do the uniquely impactful philanthropic work that we do at home and around the world.</p> <p>Without question the Foundation’s accomplishments stand on their own. From fighting obesity by helping create healthier learning environments for more than 16 million students; to working to combat one of our greatest global threats, climate change; to lowering the price of lifesaving antiretroviral drugs that have benefited more than 9 million people fighting HIV/AIDS; one thing is clear, the Clinton Foundation has not been afraid to take on big challenges and see real results. &nbsp;</p> <p>Just as important as the results we see, is how the Foundation has transformed philanthropy into a collaborative effort by bringing NGOs, local stakeholders, government officials, private sector actors, and others together to maximize their collective investments. It seems logical, but fifteen years ago, that just wasn’t how philanthropy was done.</p> <p>As the Foundation’s impact has grown, so too has its commitment to transparency. <strong>When Hillary Clinton was appointed Secretary of State, we took unprecedented steps to avoid potential conflicts of interest by going above and beyond what is required of any philanthropy and instituted voluntarily annual disclosure of all of our donors on our website. We also established a policy around the foreign government contributions we accept, recognizing that in order to continue our life improving work we rely on the contributions of government, as is the case with most large scale global charities.</strong></p> <p>Today, our donor disclosure and foreign government contributor policy is stronger than ever. <strong>Since Secretary Clinton decided to run for President, we have committed to disclosing all of our donors on a quarterly basis.</strong> &nbsp;In addition, we announced that we will only accept funding from a handful of governments, many of whom the Foundation receives multi-year grants from, to continue the work they have long partnered on.</p> <p>The Foundation has 11 different initiatives, some of which function in organizationally different ways. One of these 11 initiatives is the Clinton Giustra Enterprise Partnership (CGEP), which is focused on advancing innovative solutions to poverty alleviation on a global scale. CGEP has come under heightened scrutiny this past week and I want to explain how it operates.</p> <p>The Clinton Foundation executes all of the work that CGEP does. CGEP does receive financial backing for projects from an independent Canadian charity called the Clinton Giustra Enterprise Partnership (Canada), which Frank Giustra established so that Canadians could support the initiative’s valuable work and receive a charitable tax credit. CGEP (Canada) provides funding on a project-by-project basis and this money goes exclusively to CGEP projects, not to the Foundation’s general operating fund.&nbsp;</p> <p>Like every contributor to the Foundation, the Clinton Giustra Enterprise Partnership (Canada) is publicly listed as a donor on our website. But as it is a distinct Canadian organization, separate from the Clinton Foundation, its individual donors are not listed on the site. This is hardly an effort on our part to avoid transparency – unlike in the U.S., under Canadian law; all charities are prohibited from disclosing individual donors without prior permission from each donor.</p> <p>I also want to address questions regarding our 990 tax forms. We have said that after a voluntary external review is completed we will likely refile forms for some years. &nbsp;While some have suggested that this indicates a failure to accurately report our total revenue, that is not the case. Our total revenue was accurately reported on each year's form – our error was that government grants were mistakenly combined with other donations. Those same grants have always been properly listed and broken out and available for anyone to see on our audited financial statements, posted on our website.</p> <p><strong>So yes, we made mistakes, as many organizations of our size do, but we are acting quickly to remedy them, and have taken steps to ensure they don't happen in the future. </strong>We are committed to operating the Foundation responsibly and effectively to continue the life-changing work that this philanthropy is doing every day.&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="282" height="145" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/HillaryTeaser.png?1430152996" /> </div> </div> </div> http://www.zerohedge.com/news/2015-04-27/clinton-charity-ceo-explains-tax-reporting-mistakes#comments Kuwait Reuters Transparency White House Mon, 27 Apr 2015 16:50:14 +0000 Tyler Durden 505574 at http://www.zerohedge.com Who Is Really Choosing America's Next President? http://www.zerohedge.com/news/2015-04-27/who-really-choosing-americas-next-president <p><a href="http://www.propublica.org/article/rapid-rise-in-super-pacs-dominated-by-single-donors"><em>Submitted by Robert Faturechi and Jonathan Stray via ProPublica,</em></a></p> <p><span style="text-decoration: underline;"><strong>Rapid Rise in Super PACs Dominated by Single Donors</strong></span></p> <p>Super PACS that get nearly all of their money from one donor quadrupled their share of overall fund-raising in 2014.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_vote.jpg"><img height="395" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_vote_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>The wealthiest Americans can fly on their own jets, live in gated compounds and watch movies in their own theaters.</p> <p>More of them also are walling off their political contributions from other big and small players.</p> <p><strong>A growing number of political committees known as super PACs have become instruments of single donors, according to a ProPublica analysis of federal records.</strong> During the 2014 election cycle, $113 million &ndash; 16 percent of money raised by all super PACs &ndash; went to committees dominated by one donor. That was quadruple their 2012 share.</p> <p><strong>The rise of single-donor groups is a new example of how changes in campaign finance law are giving outsized influence to a handful of funders.</strong></p> <p><u><strong>The trend may continue into 2016.</strong></u> Last week, National Review <a href="http://www.nationalreview.com/article/416643/meet-ted-cruzs-billionaire-donors-eliana-johnson">reported</a> that Texas Senator Ted Cruz&rsquo;s bid for the Republican presidential nomination would be boosted not by one anointed super PAC but four, each controlled by a <a href="http://www.thedailybeast.com/articles/2015/04/10/meet-ted-cruz-s-tax-dodging-sugar-daddy.html">single donor</a> or donor family.</p> <p>The Supreme Court&rsquo;s 2010 Citizens United ruling helped usher in the era of super PACs. Unlike traditional political action committees, the independent groups can accept donations of any dollar size as long as they don&rsquo;t coordinate with the campaign of any candidate. Previously, much of the focus in big-money fundraising was on &ldquo;bundlers&rdquo; -- volunteers who tap friends and associates for maximum individual contributions of $5,400 to a candidate, then deliver big lump sums directly to the campaigns. Former president George W. Bush awarded his most prolific bundlers special titles such as &ldquo;Ranger&rdquo; and &ldquo;Pioneer.&rdquo;</p> <p>While bundling intensified the impact of wealthy donors on campaigns, the dollar limits and the need to join with others diluted the influence of any one person. With a super PAC, a donor can single-handedly push a narrower agenda. Last year, National Journal profiled <a href="http://www.nationaljournal.com/magazine/this-man-is-the-future-of-super-pacs-20140505">one such donor</a> &ndash; a California vineyard owner who helped start the trend by launching his own super PAC and becoming a power player in a Senate race across the country.</p> <p>Beyond the single-donor groups, big donations are dominant across all kinds of super PACs, according to the analysis. Six-figure contributions from individuals or organizations accounted for almost 50 percent of all super PAC money raised during the last two cycles.</p> <p><strong><em>&ldquo;We are anointing an aristocracy that&rsquo;s getting a stronger and stronger grip on democracy,&rdquo;</em></strong> said Miles Rapoport, president of Common Cause, an advocacy group that seeks to reduce the influence of money on politics.</p> <p>ProPublica&rsquo;s analysis identified 59 super PACs that received at least 80 percent of their funding from one individual during the 2014 cycle. They raised a total of $113 million, compared with the $33 million raised by the 34 such groups that existed in 2012.</p> <p><strong>Donors who launch their own PACs are seeking more control over how their money is spent.</strong> And many have complained about the commissions that <a href="http://www.nytimes.com/2015/02/06/us/in-invisible-world-of-political-donor-advisers-a-highly-visible-player.html">fundraising consultants</a> take off the top of their donations to outside groups. But the move carries risks if the patron is new to the arena.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_votes.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2015/04-overflow/20150427_votes.jpg" style="width: 600px; height: 738px;" /></a></p> <p>&nbsp;</p> <p><strong>In one cautionary tale, </strong>a reclusive 89-year-old Texas oilman with no political experience launched Vote2ReduceDebt, one of the nation&rsquo;s highest-spending conservative super PACs. A <a href="http://www.propublica.org/article/super-pac-men-how-political-consultants-took-texas-oilman-on-wild-ride">ProPublica investigation found</a> that much of the donor&rsquo;s millions went to entities run by the group&rsquo;s consultants or their close associates. <strong>The super PAC imploded as principals traded allegations including self-dealing, faked campaign events and a plot to siphon the PAC&rsquo;s money to a reality TV show.</strong></p> <p>Bill Burton, a former Obama administration official who helped found Priorities USA, the juggernaut super PAC affiliated with the president&rsquo;s reelection campaign, said he expects donors to face more problems if they continue to go it alone.</p> <p><strong>&ldquo;One of two things is going to happen,&rdquo; he said. &ldquo;We will either see widespread flaunting of coordination rules or we will see some pretty spectacular failures to the tune of millions of dollars.&rdquo;</strong></p> <p>The single-donor super PACs identified by ProPublica span the political spectrum. Among the top conservative donors were Richard Uihlein, a packaging supplies businessman, and casino magnate Sheldon Adelson. Former New York City mayor Michael Bloomberg spent heavily on both sides but leaned Democrat. Hedge fund titan Tom Steyer dominated on the left.</p> <p>In 2012 the largest single-donor super PAC was former TD Ameritrade CEO Joe Ricketts&rsquo; Ending Spending Action Fund, which raised over $14 million, 89 percent of which came from Ricketts. It was the ninth-largest super PAC by spending. In 2014 Steyer&rsquo;s Nextgen Climate Action was the largest super PAC, raising almost $78 million, 85 percent from Steyer. (Steyer&rsquo;s wife, Kat Taylor, is a member of ProPublica&rsquo;s board of directors, and the couple has donated to ProPublica.)</p> <p>In addition to the super PACs dominated by a single individual, dozens more received the great majority of their funding from one corporation, labor group or advocacy organization. In 2014, those PACs represented 8.6 percent of super-PAC fundraising.</p> <p>PACs dominated by one donor could run afoul of disclosure laws, according to Larry Noble, the former top lawyer for the Federal Election Commission. Under the rules, political ads must include disclosures about who funded them. Noble said election law would require groups funded by one person to list that donor&rsquo;s name, not just the name of the PAC &ndash; though he couldn&rsquo;t recall the FEC addressing such a case.</p> <p>Naming the super PAC instead of the donor in the ad, Noble said, also allows the groups to delay disclosing where their money comes from until the next FEC filing date &ndash; potentially weeks after the ad runs.</p> <p><strong><em>&ldquo;It defeats the purpose of the law to allow someone to hide behind a super PAC if they are the only funder,&rdquo;</em></strong> Noble said.</p> <p><strong><em>&ldquo;They want to make it more authoritative, like there&rsquo;s more support. It looks better to say the ad is from Americans for Good Government than from John Smith&hellip; That just makes a mockery of the law.&rdquo;</em></strong></p> http://www.zerohedge.com/news/2015-04-27/who-really-choosing-americas-next-president#comments New York City Nomination Obama Administration Reality Sheldon Adelson Mon, 27 Apr 2015 16:30:50 +0000 Tyler Durden 505573 at http://www.zerohedge.com