Bank of America

Bank of America

Fact Or Fiction: Financial Sector Thinks It’s About Ready To Ruin World Again

Claiming that enough time had surely passed since they last caused a global economic meltdown, top executives from the U.S. financial sector told reporters Monday that they are just about ready to completely destroy the world again. Representatives from all major banking and investment institutions cited recent increases in consumer spending, rebounding home prices, and a stabilizing unemployment rate as confirmation that the time had once again come to inflict another round of catastrophic financial losses on individuals and businesses worldwide.  “It’s been about five or six years since we last crippled every major market on the planet, so it seems like the time is right for us to get back out there and start ruining the lives of billions of people again,” said Goldman Sachs CEO Lloyd Blankfein. “We gave it some time and let everyone get a little comfortable, and now we’re looking to get back on the old horse, shatter some consumer confidence, and flat-out kill any optimism for a stable global economy for years to come.”

Frontrunning: June 21

  • Turmoil Exposes Global Risks (WSJ)
  • China Money Rates Retreat After PBOC Said to Inject Cash (BBG)
  • Fed Seen by Economists Trimming QE in September, 2014 End (BBG)
  • Booz Allen, the World's Most Profitable Spy Organization (BBG)
  • Abe’s Arrows of Growth Dulled by Japan’s Three Principles (BBG)
  • China steps back from severe cash crunch (FT)
  • Smog at Hazardous as Singapore, Jakarta Spar Over Fires (BBG)
  • U.S. Weighs Doubling Leverage Standard for Biggest Banks (BBG)

Frontrunning: June 20

  • Bonds Tumble With Stocks as Gold Drops in Rout on Fed (BBG)
  • Bernanke Sees Beginning of End for Fed’s Record Easing (BBG)
  • Gold Tumbles to 2 1/2 Year-Low After Fed as Silver Plummets (BBG)
  • PBoC dashes hopes of China liquidity boost (FT)
  • U.S. Icons Now Made of Chinese Steel (WSJ)
  • Emerging Markets Crack as $3.9 Trillion Funds Unwind (BBG)
  • Everyone joins the fun: India sets up elaborate system to tap phone calls, e-mail (Reuters)
  • China Manufacturing Shrinks Faster in Threat to Europe (BBG)
  • More on how Syria's Al-qaeda, and now US, supported "rebels", aka Qatar mercenaries, operate (Reuters)
  • Echoes of Mao in China cash crunch (FT) - how dare a central bank not pander to every bank demand?
  • French watchdog tells Google to change privacy policy (Reuters)

Guest Post: Who Are The Real Traitors?

Over the course of decades we have allowed ourselves to be corrupted by the love of material possessions, the lure of a debt based faux wealth, the money for nothing entitlement promises of dishonorable politicians, the evil of currency debasement, the effectiveness of mass media propaganda, and the belief that we could sacrifice freedom and liberty for promises of safety and security made by a cabal of powerful rich men. Power has been concentrated into the hands of the few, who operate in secrecy and despise the people. They don’t want transparency or open debate. Freedom of speech is nothing but a thorn in their side. They believe they are smarter than the serfs and have no morality when it comes to committing illegal acts and disregarding the Constitution. They are not acting in the public interest. Their abuse of power and looting of the national wealth have put us on a path towards a bloody revolution. This is not a time for conformity, obedience or submission. It’s time to stand up and expose the evil doers. It’s time to rally around those who care about this country. Who are the real traitors? You know the answer.

Frontrunning: June 7

  • Reports on surveillance of Americans fuel debate over privacy, security (Reuters)
  • Apple to Yahoo Deny Providing Direct Access to Spy Agency (Bloomberg)
  • Misfired 2010 email alerted IRS officials in Washington of targeting (Reuters)
  • Spy vs Spy: Cyber disputes loom large as Obama meets China's Xi (Reuters)
  • When NSA Calls, Companies Answer (WSJ)
  • How the Robots Lost: High-Frequency Trading's Rise and Fall (BBG)
  • Japan's Pension Fund to Buy More Stocks  (WSJ)
  • ‘Frankenstein’ CDOs twitch back to life (FT)
  • China’s ‘great power’ call to the US could stir friction (FT)
  • Toyota Tries on Corolla Look That’s Just Different Enough (BBG)

Markets On Edge Following No Dead Japanese Cat Bounce, Eyeing ECB And Payrolls

Another day, another sell off in Japan. The Nikkei index closed down 0.9%, just off its lows and less than 1% away from officially entering a bear market, but not before another vomit-inducing volatile session, which saw the high to low swing at nearly 400 points. Hopes that a USDJPY short-covering squeeze would push the Nikkei, and thus the S&P futures higher did not materialize. And while the weakness in Japan is well-known and tracked by all, what may come as a surprise is that the Chinese equities are down for the 6th consecutive session marking the longest declining run in a year. Elsewhere in macro land, the Aussie Dollar continues to get pounded on China derivative weakness, tumbling to multi-year lows of just above 94 as Druckenmiller, who called the AUDUSD short nearly a month ago at parity shows he still has it.

Frontrunning: June 5

  • National Security Advisor Tom Donilon resigning, to be replaced by Susan Rice - Obama announcement to follow
  • Japan's Abe targets income gains in growth strategy (Reuters), Abe unveils ‘third arrow’ reforms (FT) - generates market laughter and stock crash
  • Amazon set to sell $800m in ads (FT) - personal tracking cookie data is valuable
  • 60 percent of Americans say the country is on the wrong track (BBG)  and yet have rarely been more optimistic
  • Jefferson County, Creditors Reach Deal to End Bankruptcy (BBG)
  • Turks clash with police despite deputy PM's apology (Reuters)
  • Rural US shrinks as young flee for the cities (FT)
  • Australia holds steady on rate but may ease later (MW)
  • The Wonk With the Ear of Chinese President Xi Jinping (WSJ)
  • Syrian army captures strategic border town of Qusair (Reuters)

Frontrunning: June 3

  • BIS lays out "simple" plan for how to handle bank failures (Reuters) - Are we still holding our breath on Basel III?
  • Deficit Deal Even Less Likely - Improving U.S. Fiscal Health Eases Pressure for a 'Grand Bargain' Amid Gridlock (WSJ)
  • IRS Faulted on Conference Spending (WSJ)
  • Deadly MERS-CoV virus spreads to Italy (CNN)
  • Turkish PM Erdogan calls for calm after days of protests (Reuters)
  • Financial system ‘waiting for next crisis’ (FT)
  • Russia to send nuclear submarines to southern seas (Reuters)
  • China Nuclear Stockpile Grows as India Matches Pakistan Rise (BBG)
Vitaliy Katsenelson's picture

Are We There Yet?

One of the problems with QE is that the Fed is forcing people to buy riskier investments than they otherwise would have. The immorality of their actions aside, they create a significant psychological mismatch between assets and their holders. Stocks are in weak hands, insuring one great stampede for the chairs when the music stops.

"I Give A Damn": A Capitalist Manifesto For The Productive Class

Corruption thrives when good people do nothing. Societies rebound when good people do something. Isn't it time to make democratic capitalism happen. Democratic capitalism is about worthwhile production and exchange by communities of people who give a damn. It is expressly not about either crony-driven concentration of wealth or government redistribution.

Japan Central Bank Admits Sending Schizophrenic Signals To Market As JGB Liquidity "Evaporates"

It doesn't take an Econ Ph.D to realize that what Japan is trying to do: which is to recreate the US monetary experiment of the past four years, which has had rising stocks and bonds at the same time, the first due to the Fed's endless monetary injections (and pent up inflation expectations) and the second due to quality collateral mismatch and scarcity and shadow bank system funding via reserve currency "deposit-like" instruments such as TSYs, is a problem. After all, those who understand that the BOJ is merely taking hints from the Fed all along the way, have been warning about just that, and also warning that once the dam breaks, and if (or when) there is a massive rotation out of bonds into stocks, it is the Japanese banks - levered to the gills with trillions of JGBs - that will crack first. Apparently, this elementary finance 101 logic has finally trickled down to the BOJ, whose minutes over the weekend revealed that members are pointing out "contradictions" in the Kuroda-stated intent of doubling the monetary base in two years, unleashing inflation, sending the stock market soaring, all the while pressuring bondholders to not sell their bonds. As the FT reports, "According to the minutes of the April 26 policy meeting, released on Monday, a “few” board members said the BoJ’s original stance “might initially have been perceived by market participants as contradictory”, causing “fluctuations in financial markets”.