In yet another indication that manipulation may well be unspoken (or perhaps even spoken) policy at the BOE, new details regarding the UK Serious Fraud Office's investigation into emergency liquidity auctions conducted during the crisis suggest the central bank may have played a direct role in rigging the bids.
Unlike previous gold probe cases, this one will have major consequences. How do we know? Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers. As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices." Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties. UBS, as usual, choice the former.
At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.
News That Matters
News That Matters
What was one "one and done", just became "none and done" as the Fed will no longer hike in 2015 and will certainly think twice before hiking ahead of the presidential election in 2016. By then the inventory liquidation-driven recession will be upon the US and the Fed will be looking at either NIRP or QE4. Worse, the Fed just admitted it is as, if not more concerned, with the market than with the economy. Worst, suddenly the market no longer wants a... dovish Fed?
In today's centrally planned world, the proliferation of NIRP means that nothing is sacred - not even a Swiss bank account...
"Our Investor Desk would comply with a weekly request from (a client) for details of Central Bank activity that Citi had transacted."
"Public services, infrastructure, the very fabric of the nation: these too are being converted into risk-free investments. Social cleansing is transforming central London into an exclusive economic zone for property speculation. From a dozen directions, government policy converges on this objective. Property in this country is a haven for the proceeds of international crime. Sometimes the UK looks to me like an ever so civilised mafia state."
Thousands of investors with stop-loss orders on their ETFs saw those positions crushed in the first 30 minutes of trading last Monday, August 24th. Seeing a price blow right through your stop is perhaps the worst experience in all of investing because it seems like such a betrayal. “Hey, isn’t this what a smart investor is supposed to do? What do you mean there was no liquidity at my stop? What do you mean I got filled $5 below my stop? Wait… now the price is back above my stop! Is this for real?” Welcome to the Big Leagues of Investing Pain.
- Jobs Report Could Seal the Deal on Rates (WSJ)
- The Jobs Report and the August Curse: Jobs Day Guide (BBG)
- Migrants hold out on Hungarian 'freedom train'; Orban says millions coming (Reuters)
- Migrant Crisis Divides Europe (WSJ)
- German industry orders fall in July on weak foreign demand (Reuters)
- Alibaba’s Jack Ma, Joe Tsai to Borrow $2 Billion Against Shares (WSJ)
- U.K. Retailers Post Worst Sales Decline Since Financial Crisis (BBG)
In the past, readers have been alerted to numerous “impossible” trends in our markets and economies, all manufactured by the Western banking crime syndicate. Here are just a few of those highlights (low-lights?)
"Time is now rapidly running out," warns The Telegraph's John Ficenec as the British paper takes a deep dive into the dark realities behind the mainstream media headlines continued faith in central planning. Sounding very "Zero Hedge", Ficenec warns that from China to Brazil, the central banks have lost control and at the same time the global economy is grinding to a halt. It is only a matter of time before stock markets collapse under the weight of their lofty expectations and record valuations.
Earlier today, one of the biggest farces of 2015 was remedied when a UK judge granted Sarao a bail reduction from £5m to £50,000 and was allowed to leave prison as soon as today. As profiled before, Sarao had been at the infamous Wandsworth prison - Britain's worst - since his arrest. As the FT reports, at a court hearing at Westminster Magistrates Court in London today, a lawyer for the US said he would not oppose the bail reduction.
To help remind readers of what happens when the entire world engages in wholesale currency war, here is a complete list of all the recent FX interventions, courtesy of Stone McCarthy.