Merrill

Merrill

Frontrunning: August 7

  • Libor Settlements Said to Ease CFTC’s Path in Rate-Swaps Probe (BBG)
  • Manhattan Homes Under $3 Million Never Harder to Buy (BBG)
  • Just two years late: Abe Pledges Government Help to Stem Fukushima Water Leaks (BBG)
  • Chesapeake drops energy leases in fracking-shy New York (Reuters)
  • Hedge Fund Magnetar Won't Face Charges Tied to Mortgages (WSJ)
  • U.S. envoy leaves Cairo after talks declared over (Reuters)
  • Credit-Crisis Oracle Rajan to Head India’s Central Bank (BBG)
  • Bank of England Changes Policy Tack (WSJ)

Frontrunning: August 6

  • Washington Post Company Chairman and CEO Donald Graham talks about the sale, what it means for the future of The Post (WaPo)
  • Private-equity firms are adding debt to companies they own to fund payouts to themselves at a record pace (WSJ)
  • U.S., U.K. Urge Citizens to Leave Yemen (WSJ)
  • India Names Rajan Central Bank Governor as Rupee Plunges (BBG)
  • Family Offices Chasing Wealthy’s $46 Trillion in Assets (BBG)
  • UK 'bad bank' repays $2.9 billion to taxpayers in first half (Reuters)
  • Sony rebuffs Daniel Loeb’s push for entertainment spin-off (FT)
  • Public Pensions Up 12% Get Most in 2 Years as Stocks Soar (BBG)
  • Hidden Billionaire Found With Food Fortune in California (BBG)
  • Fonterra under fire over milk scare; more product recalls (Reuters)
  • Crédit Agricole Profit Rises After Greek  (WSJ)

Guest Post: Trying To Stay Sane In An Insane World - Part 2

This insane world was created through decades of bad decisions, believing in false prophets, choosing current consumption over sustainable long-term savings based growth, electing corruptible men who promised voters entitlements that were mathematically impossible to deliver, the disintegration of a sense of civic and community obligation and a gradual degradation of the national intelligence and character. There is a common denominator in all the bubbles created over the last century – Wall Street bankers and their puppets at the Federal Reserve. Fractional reserve banking, control of a fiat currency by a privately owned central bank, and an economy dependent upon ever increasing levels of debt are nothing more than ingredients of a Ponzi scheme that will ultimately implode and destroy the worldwide financial system. Since 1913 we have been enduring the largest fraud and embezzlement scheme in world history, but the law of diminishing returns is revealing the plot and illuminating the culprits. Bernanke and his cronies have proven themselves to be highly educated one trick pony protectors of the status quo. Bernanke will eventually roll craps. When he does, the collapse will be epic and 2008 will seem like a walk in the park.

Guest Post: Still Waiting

We do not inhabit a “normal” economy. We live in a financialised world in which our banks cannot be trusted, our politicians cannot be trusted, our money cannot be trusted, and – not least thanks to ongoing spasms of QE and expectations of much more of the same – our markets cannot be trusted. At some point (though the timing is impossible to predict), asset markets that cannot be pumped artificially any higher will start moving, under the forces of inevitable gravitation, lower.

Goldman Sued For Monopolizing US Aluminum Warehousing Market

Over two years after Zero Hedge first accused Goldman and JPMorgan of becoming monopolists in the commodity warehousing business (see "Goldman, JP Morgan Have Now Become A Commodity Cartel"), and two weeks after the NYT's reminder the world of just this leading to the latest Kangaroo Court congressional hearing on the matter, which may or may not have resulted in JPMorgan announcing it would exit the physical commodities business, the long overdue legal fight began this Friday when lead plaintiff Superior Extrusion sued Goldman and London Metal Exchange owner HKEx for engaging in "anticompetitive and monopolistic behaviour in the warehousing market in connection with aluminium prices" and accusing the firms of violating the Sherman anti-trust act. Precisely what Zero Hedge said, some 26 months ago.

Guest Post: Enron Redux – Have We Learned Anything?

Greed; corporate arrogance; lobbying influence; excessive leverage; accounting tricks to hide debt; lack of transparency; off balance sheet obligations; mark to market accounting; short-term focus on profit to drive compensation; failure of corporate governance; as well as auditors, analysts, rating agencies and regulators who were either lax, ignorant or complicit. This laundry list of causes has often been used to describe what went wrong in the credit crunch crisis of 2008-2010. Actually these terms were equally used to describe what went wrong with Enron more than twenty years ago. Both crises resulted in what at the time was the biggest bankruptcy in U.S. history — Enron in December 2001 and Lehman Brothers in September 2008. Naturally, this leads to the question that despite all the righteous indignation in the wake of Enron's failure did we really learn or change anything?

Frontrunning: August 2

  • Low Wages Work Against Jobs Optimism (WSJ)
  • Tourre’s Junior Staff Defense Seen Leading to Trial Loss (BBG)
  • Russia gives Snowden asylum, Obama-Putin summit in doubt (Reuters)
  • Fortress to Blackstone Say Now Is Time to Sell on Surge (BBG)
  • Brazil backs IMF aid for Greece and recalls representative (FT), previously Brazil refused to back new IMF aid for Greece, says billions at risk (Reuters)
  • Google unveils latest challenger to iPhone (FT)
  • Swaps Probe Finds Banks Manipulated Rate at Expense of Retirees (BBG)
  • Academics square up in fight for Fed (FT)
  • Potash Turmoil Threatens England’s First Mine in Forty Years (BBG)
  • Dell Deal Close but Not Final (WSJ)

Bank Of America Reveals Pending DOJ Civil Charges Against It, Merrill Lynch

Lurking deep in the just filed Bank of America 10-Q (alongside data on its quarterly trading acumen which as usual made a mockery of random statistical probability distribution with just 7 days of losses and profits on 57) is this nugget which shows BAC's litigation expenses may be set to surge once more.

The Most Important Number In The Entire U.S. Economy

There is one vitally important number that everyone needs to be watching right now, and it doesn't have anything to do with unemployment, inflation or housing.  If this number gets too high, it will collapse the entire U.S. financial system.

Frontrunning: August 1

  • Headlines only idiots, Schrodinger and Goebbels could love:
    • China Manufacturing Gauge Shows Unexpected Strength (WSJ)
    • China's factory activity shrank for a third straight month in July to its lowest level in nearly a year as new orders fell (Reuters)
  • For nuns and analysts alike, bank commodity earnings are a mystery (Reuters)
  • US spying comes under fresh attack (FT)
  • Summers Backed Yellen for Fed Before Rivals Now Prove More Alike (BBG)
  • Good Luck Leaving Your Wireless Phone Plan (WSJ)
  • Spain's Rajoy says he was wrong to trust treasurer in party funding scandal (Reuters)
  • Shell's Profit Falls on Shale Write-Down (WSJ)
  • Why Rand Paul and Chris Christie went to war  (Politico)
  • Sony Returns to Profit Aided by TV Business (WSJ)

Frontrunning: July 31

  • Ackman Says Pershing Square Takes 9.8% Stake in Air Products (BBG) - So is APD Carl Icahn's biggest ever short yet
  • Latest Hilsenplant: Summers Hedges His Doubts on Fed's Bond Buying (WSJ)
  • China Stocks World’s Worst Losing $748 Billion on Slump (BBG)
  • U.S. Spy Program Lifts Veil in Court (WSJ)
  • Abenomics on the rock again: Japan July manufacturing PMI shows growth at 4-month low (Reuters)
  • EADS to be renamed Airbus in shake-up (FT)
  • Goldman's GSAM has significantly increased its exposure to European equities (FT) - there is a reason why this is Goldman's worst division
  • Japanese Megabanks Post Mega Profit Gains (WSJ) - when one excludes MTM impact from rate surge of course
  • Ex-workers sue Apple, seek overtime for daily bag searches (Reuters)
  • Hong Kong Yuan Deposits Snap Eight-Month Increase on Cash Crunch (BBG)
  • Downtown NYC Landlords Remake Offices in Shift From Banks (BBG)

Frontrunning: July 30

  • "Ooops": Barclays reveals £12.8bn balance sheet hole (FT), Barclays Bows to Pressure With Share Sale (WSJ)
  • Bank of Italy Inspecting Top Lenders' Books (WSJ)
  • Obama to propose 'grand bargain' on corporate tax rate, infrastructure (Reuters)
  • China injects funds into money markets, quelling fears (FT)
  • Berlusconi faces verdict that could endanger Italian government (Reuters)
  • Shale Threatens Saudi Economy, Warns Prince Alwaleed (WSJ)
  • Qatar Finds Revolution Abroad Not as Easy as Stock Picks (BBG)
  • Cities Begin Hiring Again (WSJ) - not to mention filing for bankruptcy
  • Big Question Hangs Over Small-Caps (WSJ)
  • China Politburo Pledges to Press On With Restructuring Economy (BBG)
  • Bank Revenues Surge on Trading Over What Fed Will Do (BBG)

Frontrunning: July 29

  • More Doctors Steer Clear of Medicare (WSJ)
  • Syrian Looters in Bulldozers Seek Treasure Amid Chaos (BBG)
  • Siemens CEO Peter Löscher Is Set to Leave His Post After Series of Earnings Misses (WSJ)
  • Silver Vault for 200 Tons Starts in Singapore as Wealthy Buy (BBG)
  • Omincom and Publicis merger shows that advertising is now firmly in the business of Big Data: collecting and selling the personal information of millions of consumers (NYT)
  • Apple supplier accused of labour violations (FT)
  • 'BarCap was the Wild Wild West – that’s what we called it’ (Telegraph)
  • P&G chief seizes opportunity in era of three-day stubble (FT)
  • Federal Reserve 'Doves' Beat 'Hawks' in Economic Prognosticating (WSJ) - LOL: Fed "hawks"

It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today

If our leaders could have recognized the signs ahead of time, do you think that they could have prevented the financial crisis of 2008?  That is a very timely question, because so many of the warning signs that we saw just before and during the last financial crisis are popping up again.  Many of the things that are happening right now in the stock market, the bond market, the real estate market and in the overall economic data are eerily similar to what we witnessed back in 2008 and 2009. It is almost as if we are being forced to watch some kind of a perverse replay of previous events, only this time our economy and our financial system are much weaker than they were the last time around. We have been living so far above our means for so long that most of us actually think that our current economic situation is "normal."

Frontrunning: July 26

  • The Citadel-SAC connection (BBG) - just wait until the Citadel-FRBNY connection emerges
  • Letter backs Yellen for Federal Reserve role (FT) - or said otherwise, the Democrats would like the Fed to rule (and monetize deficits) for ever
  • Obama, Republicans gear up for bruising U.S. budget fight (Reuters)
  • Up for Debate at Fed: A Sharper Easy-Money Message (WSJ)
  • UBS to Pay $885 Million to Settle U.S. Mortgage Suit (BBG), Banks shiver as UBS swallows $885 million U.S. fine (Reuters)
  • Japan finmin Aso: CPI shows gradual shift to inflation from deflation (Reuters)
  • Japan's PM calls for high-level talks with China (Reuters)
  • Holder Targets Texas in New Voting-Rights Push (WSJ)
  • Another Nightmareliner incident: Probe opened as Air India Boeing Dreamliner oven overheats midair (Reuters)
  • Samsung Boosts Capital Spending as High-End Phone Demand Slows (BBG)