Merrill

Bank of America advocates adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.”

"The public criticisms of the TPP have been vague. That’s by design—anyone who has read the text of the agreement could be jailed for disclosing its contents. I’ve actually read the TPP text provided to the government’s own advisors, and I’ve given the president an earful about how this trade deal will damage this nation. But I can’t share my criticisms with you. I can tell you that Elizabeth Warren is right about her criticism of the trade deal. We should be very concerned about what's hidden in this trade deal—and particularly how the Obama administration is keeping information secret even from those of us who are supposed to provide advice."

History has been so fascinated with oil and its price movements that it is indeed hard to imagine our future without oil. The world is still myopic when it comes to energy. Yes, it wants to embrace renewables but not at the cost of oil. Whatever happens to oil prices in the coming years, one thing is certain: that the age of oil isn’t ending anytime soon, at least not in the next 30 years.

What is extremely clear is that there is something amiss with the statistical headline employment and economic data. While there are indeed pockets of improvement, which should be expected following a recessionary contraction, there is a lack of widespread recovery. That sentiment is clearly reflected in every major poll of American's over the last year. What is important is that there is a clear disconnect between the financial markets, statistical economic headlines, and the reality of the vast majority of American consumers. So, riddle me this - what happens when that disconnect is eventually resolved?

In the coming months, however many hours Clinton spends introducing herself to voters in small-town America, she will spend hundreds more raising money in four-star hotels and multimillion-dollar homes around the nation. The question is: "Can Clinton claim to stand for 'everyday Americans,' while hauling in huge sums of cash from the very wealthiest of us?" This much cannot be disputed: Clinton's connections to the financiers and bankers of this country - and this country's campaigns - run deep. As Nomi Prins questions, who counts more to such a candidate, the person you met over that chicken burrito bowl or the Citigroup partner you met over crudités and caviar?

On a day full of exultation for The Oracle of Omaha, we could not help but see the irony of Warren Buffett losing yet another bet and not paying up...

When we first exposed in February how yet another bank - Bank of America - has been quietly preserving the post Glass-Steagall world in which cash depositing taxpayers are on the hook for a bank's stupidity, some shrugged it off and looked to stress test to solve all the problems. However, it appears - for once - the SEC is not willing to just ignore the bank's actions. Just as JPMorgan's CIO Office, aka the London Whale, took advantage of fungible, taxpayer-insured funding in the form of excess US deposits over loans, to corner the US credit market (in what was clearly a directional prop trade); so, as WSJ reports, The SEC is investigating whether BofA broke rules designed to safeguard client accounts, potentially putting retail-brokerage funds at risk in order to generate more profits using large complex trades.

Moments ago the NY Department for Financial Services announced that, in what is the largest Libor settlement in history, Deutsche Bank would pay $2.5 billion "in connection with the manipulation of the benchmark interest rates, including the London Interbank Offered Bank ("LIBOR"), the Euro Interbank Offered Rate ("EURIBOR") and Euroyen Tokyo Interbank Offered Rate ("TIBOR") (collectively, "IBOR")."  Most importantly for DB's 98,138 employees is that while DB will "terminate and ban individual employees who engaged in misconduct" nobody will go to jail. Again. In other words it just cost DB's about $25,474 per employee to keep its Libor-manipulating employees (and thus, senior level management because the stench always goes to the very top) out of prison.

• Clinton charities will refile tax returns, audit for other errors (Reuters)
• China Warns North Korean Nuclear Threat Is Rising (WSJ), or another country realizes war is the only "exit"
• Shares, euro sag after euro zone PMIs disappoint (Reuters)
• China Manufacturing Gauge Drops to Lowest Level in 12 Months (BBG)
• Deutsche Bank Said to Pay $2.14 Billion in Libor Case (BBG), or roughly a €20,000 per banker "get out of jail" fee
• Brazil’s Petrobras Reports Nearly $17 Billion in Asset and Corruption Charges (WSJ)
• Can This Oil Baron’s Company Withstand Another Quake? (BBG)
• Bad for Q1 GDP: Raytheon sales fall amid weak U.S. defense spending (Reuters)

• Because it just gets funnier: UK speed trader arrested over role in 2010 'flash crash' (Reuters)
• ... and funnier: Mystery Trader Armed With Algorithms Rewrites Flash Crash Story (BBG)
• Presidential hopeful Rubio reaches out to gay Republicans (Reuters)
• Varoufakis Sees Differences Narrowing in Creditor Talks (BBG)
• China Debt Mess Brings Out the Yin and Yang in Policy Makers (BBG)
• Hedge Fund That Made 18% on Dollar Strength Now Bets on Drop (BBG)
• Whistleblower Jim Marchese Scores Millions in Payout—Again (WSJ)
• Release of Benghazi Report on Hillary Clinton Likely Pushed to Election Season (BBG)

• FUTURES TRADER ARRESTED FOR ALLEGED ROLE IN 2010 FLASH CRASH
• FUTURES TRADER CHARGED WITH ILLEGALLY MANIPULATING STOCK MKT
• SARAO HAS BEEN CHARGED WITH COMMODITIES, WIRE FRAUD: GOELMAN
• SARAO WAS ARRESTED AT HIS HOME IN LONDON TODAY, GOELMAN SAYS
• CFTC FILES CIVIL CASE AGAINST NAVINDER SINGH SARAO

Nothing exposes the fallacies of the Fed’s policies  like its horror at the prospect of raising rates even a little bit. Rates have been effectively zero for five years. 

One look at BofA's earnings report shows why contrary to popular opinion, the bank that bailed out insolvent Merrill Lynch is far better off to be pnealized with tens of billions in legal fees than running its business unbothered by the racketeering government. The reason: a year after BofA reported $6 billion in litigation charges, moments ago Bank of America announced only $0.4 billion in legal fees, which meant it barely had any credible addbacks. So when looking at its numbers on a realistic, GAAP basis, BofA once again missed EPS, with the bottom line printing at $0.27, or below the $0.29 estimate.

"In some instances, malfunctioning algorithms have interfered with market functioning, inundating trading venues with message traffic or creating sharp, short-lived spikes in prices as a result of other algorithms responding to the initial erroneous order flow."... "If liquidity is as bad as it is now, what’s going to happen when things really get adverse?” said Richard Schlanger, who co-manages about $30 billion in bonds as vice president at Pioneer Investments in Boston.

“In my 30-year career, it’s one of the most unattractive risk-return propositions that I’ve seen,” DoubleLine's Bonnie Baha says. Between abysmally low yields, heightened rate sensitivity heading into a rate hike cycle, and balance sheet re-leveraging on the part of US corporations, it’s a bad time to be betting on corporate credit.