It should come as no surprise to anyone that major commercial banks manipulate Libor submissions for their own benefit. As Jefferies David Zervos writes this weekend, money-center commercial banks did not want the “truth” of market prices to determine their loan rates. Rather, they wanted an oligopolistically controlled subjective survey rate to be the basis for their lending businesses. When there are only 16 players – a “gentlemen’s agreement” is relatively easy to formulate. That is the way business has been transacted in the broader OTC lending markets for nearly 30 years. The most bizarre thing to come out of the Barclays scandal, Zervos goes on to say, is the attack on the Bank of England and Paul Tucker. Is it really a scandal that central bank officials tried to affect interest rates? Absolutely NOT! That’s what they do for a living. Central bankers try to influence rates directly and indirectly EVERY day. That is their job. Congresses and Parliaments have given central banks monopoly power in the printing of money and the management of interest rate policy. These same law makers did not endow 16 commercial banks with oligopoly power to collude on the rate setting process in their privately created, over the counter, publicly backstopped marketplaces.
We posted this on Monday. With the SCOTUS ruling due out in minutes, here again is a preview of the various permutations that can come out today, and their impact on capital markets: "BofA outlines five possible scenarios and their potential impact across the healthcare sectors. They base the likelihood of their scenarios on a review of the March oral arguments, previous circuit court decisions, as well as surveys of legal experts and former Supreme Court clerks. Everything you need to know about the possible outcomes and actions to take."
Sell side Wall Street vs Reggie Middleton on FB - 6 buys, 3 neutrals, avg price target $39. NOBODY came out with a short @ IPO besides moi. Guess where I stand now...
With the Supreme Court likely to announce its decision on the constitutionality of Health Care Reform Law this Thursday, BofA outlines five possible scenarios and their potential impact across the healthcare sectors. They base the likelihood of their scenarios on a review of the March oral arguments, previous circuit court decisions, as well as surveys of legal experts and former Supreme Court clerks. Everything you need to know about the possible outcomes and actions to take.
Only when the lack of visibility on forward revenue and earnings was obvious to all did Moody's act
The middle class has a gut feeling they are being screwed by somebody, they just can’t figure out who to blame. The ultra-wealthy elite keep up an endless cacophony of propaganda and misinformation designed to confuse an increasingly uneducated and willfully ignorant public while blurring the facts for those educated few capable of understanding the truth. They have been able to keep the masses dumbed down through government run education; distracted by sports, reality TV, Facebook, internet porn, and igadgets; lured by mass media messages of materialism; and shackled with the chains of debt used to acquire the goods sold by mega-corporations. We’ve become a society oppressed by a small faction of ultra-wealthy masters served by millions of impoverished, uneducated, sedated slaves. But the slaves are getting restless and angry. The illegally generated wealth disparity chasm is growing so large that even the ideologue talking head representatives of the elite are having difficulty spinning it. Even uneducated rubes understand when they are getting pissed on.
SemGroup in 2008 and the London Whale in 2012 have given the people a blueprint to kill JP Morgan's alleged massive manipulative position in the silver market.
Nobody on the Buy Side wants to sue JPM, Goldman Sachs, Morgan Stanley et al for securities fraud on the more problematic deals of the past decade.
The significant rise in global systemic risk that occurred in 2008 remained until mid 2010 when it began to subside a little as Jackson Hole and QE2 seemed to allay fears somewhat. However, in the last year or so, BofA's market fragility index has soared higher alarmingly signaling higher systemic risks than in the peak pre-Lehman era. This confirms the massively elevated signal for global systemic risk that credit markets are also sending.
"Risk on, risk off" might be the most essential hallmark of the current market, but just focusing on the day-to-day whims of capital markets ignores longer term changes to investor risk preferences. Nic Colas, of ConvergEx looks at the topic from the vantage point of gender-specific investment choices. For example, more women are participating in deferred compensation (DC) plans, and the data from millions of 401(k) accounts tells a useful story. Their retirement accounts still lag those of their male counterparts in total value and they remain a bit more risk-averse. But for the first time in at least a decade they are more likely than men to contribute to a retirement account and are contributing a greater percentage of their earnings. You’ll never see pink or blue dots on the “Efficient Frontier” of academic models, to be sure. However, both empirical data and psychological studies do point to subtle – but notable – differences in how men and women consider the classic risk-reward tradeoff inherent in the challenge of investing. Nick suggests it may make sense to reconsider the notion that continued money flows into bonds and other safe haven investments are really "Risk off" market behavior. At least a piece of it may well be "Risk shifting," driven by the demographic and psychological factors as assets controlled by women are clearly increasing. "Risk off" may well be "risk shift."
DAVID BIANCO NO LONGER WORKS AT BOFA, SPOKESWOMAN SAYS
Now, we are even more delighted to bring you the following breaking news:
BLACKROCK CHIEF EQUITY STRATEGIST BOB DOLL TO RETIRE
And then there were three...
The first step toward the terminal McClendon ouster is here, because as a reminder, broken management teams are fixable, as we explained last week. Not surprisingly, stock is up 5% in the premarket. Next steps: a big balance sheet suitor? Carl C. Icahn, Chesapeake’s second largest shareholder, said, “We appreciate the Board’s willingness to listen to shareholders and to respond appropriately. Under Aubrey’s leadership, Chesapeake has assembled great assets and I am confident I can help the Company create significant shareholder value from these assets. We enjoyed a very good relationship when I acquired almost 6% of the Company’s stock in late 2010 and I look forward to a similarly constructive relationship now.”
- Spain Seeks Joint Bank Effort as Pressure Rises on Merkel (Bloomberg)
- Banks Cut Cross-Border Lending Most Since Lehman: BIS (Bloomberg)
- Shirakawa Bows to Yen Bulls as Intervention Fails (Bloomberg)
- Merrill Losses Were Withheld Before Bank of America Deal (NYT)
- Investors Brace for Slowdown (WSJ)
- China's lenders ordered to check bad loans (China Daily)
- Obama Seeks Way Out of Jobs Gloom (WSJ)
- Noda Reshuffles Japan Cabinet in Bid for Support on Sales Tax (Bloomberg)
- China to open the market further (China Daily)
- Australian Industry Must Adapt to High Currency, Hockey Says (Bloomberg)
- Tax-funded projects to be more transparent (China Daily)