- So much for the euphoria: Stores open early on Thanksgiving but shoppers in no rush (Reuters)
- Get to work Mr. Chairwoman: Do-Nothing Congress Dithers on Budget as Deadline Nears (BBG)
- FX to Libor Probes Leave U.K. Traders Looking for Lawyers (BBG)
- Protesters Briefly Storm Thai Army Headquarters (WSJ)
- Berlusconi accused of bribing witnesses in prostitution trial (Reuters)
- Japan Price Gauge Rises Most Since ’98 in Boost to Abe (BBG)
- S&P downgrades Netherlands’ AAA credit rating (FT)
- GrainCorp Verdict Clouds Australia Open-For-Business Pledge (BBG)
- Hertz Fix in Dollar Thrifty Deal Fails as Insider Warned (BBG)
- Narrow Budget Agreement Comes Into View (WSJ)
It would likely also deal another blow to the U.S property market and the fragile U.S economy. JP Morgan, Bank of America and Wells Fargo appear to be most exposed - meaning that either taxpayers will again be asked to bail out banks or more likely the coming bail-in regime will confiscate cash from depositors.
The Economist found, rather sadly, despite all the glad-handing and happy-talk, that 53% of financial services executives believed that strict adherence to ethical conduct would make career progression difficult. As this former Wall Street trader told The Guardian, "a precedent needs to be set, to slow down Wall Street's wild behavior. A reminder that rules are there to be followed, not exploited." The reason, among others, is summed up by the following, "if a customer wants a red suit, you sell them a red suit. If that customer is Japanese, you charge him twice what it costs."
Goldman Reveals "Top Trade" Recommendation #2 For 2014: Go Long Of 5 Year EONIA In 5 Year Treasury TermsSubmitted by Tyler Durden on 11/26/2013 08:27 -0400
If yesterday Goldman was pitching going long of the S&P in AUD terms (the world renowned Goldman newsletter may cost $29.95 but is only paid in soft dollars) as its first revealed Top Trade of 2014, today's follow up exposes Top Trade #2: which is to "Go long 5-year EONIA vs. short 5-year US Treasuries." Goldman adds: "The yield differential between these two financial instruments is currently -61bp, and we expect it to reach around -130bp. On the forwards, the differential is priced at around -95bp at the end of 2014 at the time of writing. We have set the stop-loss on the trade at a spread of -35bp. The choice of Treasuries over OIS or LIBOR on the short leg is motivated by the fact that yields on the former could underperform more than they have already in relative space as the Fed scales down its asset purchase program."
"London Gold Market Fixing Ltd., a company controlled by the five banks that administers the benchmark, has no permanent employees. A call from Bloomberg News was referred to Douglas Beadle, 68, a former Rothschild banker, who acts as a consultant to the company from his home in Caterham, a small commuter town 45 minutes south of London by train. Beadle declined to comment on the benchmark-setting process."
"The average billionaire is incredibly well connected, with a social circle worth US$15 billion – five times the net worth of the average billionaire. This figure is based on a calculation of the net worth of only the three top connections of billionaires, and so it is likely to be even higher when considering the number of UHNW individuals the average billionaire interacts with while attending various meetings, dinners, and events." The bottom line from Weatlh X: "factoring in all of the connections between the world’s billionaires, this equates to a total social circle worth a combined US$33 trillion" or double the GDP of the US.
With gold once again getting the slamdown treatment this morning (even as stocks shrug off any taper tantrum fears) the following article from Venezuelan newspaper El Nacional seems quite prescient. As Liberty Blitzkrieg's Mike Krieger notes, it appears to imply that the struggling South American nation has agreed to sell or swap the gold it still holds overseas at the Bank of England to Goldman Sachs. Perhaps that helps explain where Maduro got the money for the Samsung deal...
However, while price manipulations may work in the short term, in the long term gold prices will be dictated by the real world forces of physical supply and demand for gold coins, bars and jewellery. The smart money is fading out the considerable noise regarding volatile intraday price falls and focusing on gold's importance as a long term diversification in a portfolio.
As everyone knows, and as we showed yesterday in our infographic du jour, Wall Street manipulates everything, EVERYTHING.... except gold. Which is why were absolutely floored by what just flashed on Bloomberg:
- GOLD BENCHMARKS SAID TO BE UNDER REVIEW BY U.K. AS PROBE WIDENS
More from Bloomberg: "The FCA review is preliminary and hasn’t risen to the level of a formal investigation, said the person, who asked not to be identified because the matter isn’t public. The person declined to say which gold benchmarks were under scrutiny. One of the key benchmarks is the London gold fixing, which determines the spot price for physical gold and is set twice daily by a panel of five banks."
No. That's not true. That's impossible.
In 1997, the SE Asian Tigers all faced severe economic stresses, partially triggered by a primarily foreign capital-funded massive real estate bubble in Thailand. Today the EXACT same thing is happening as untempered foreign investment into Thailand’s real estate market has created not a “soaring” real estate market as economists always incorrectly explain them, but massive real estate market distortions better known as a bubble.
Courtesy of the revelations over the past year, one thing has been settled: the statement "Wall Street Manipulated Everything" is no longer in the conspiracy theorist's arsenal: it is now part of the factually accepted vernacular. And to summarize just how, who and where this manipulation takes places is the following series of charts from Bloomberg demonstrating Wall Street at its best - breaking the rules and making a killing.
Move Over FX And Libor, As Manipulation And "Banging The Close" Comes To Commodities And Interest Rate SwapsSubmitted by Tyler Durden on 11/06/2013 14:20 -0400
While the public's attention has been focused recently on revelations involving currency manipulation by all the same banks best known until recently for dispensing Bollinger when they got a Libor end of day print from their criminal cartel precisely where they wanted it (for an amusing take, read Matt Taibbi's latest), the truth is that manipulation of FX and Libor is old news. Time to move on to bigger and better markets, such as physical commodities, in this case crude, as well as Interest Rate swaps. And, best of all, the us of our favorite manipulation term of all: "banging the close."
- US admits surveillance on foreign governments ‘reached too far’ (FT)
- He must be so proud: Obama halted NSA spying on IMF and World Bank headquarters (RTRS)
- Obamacare website gets new tech experts; oversight pressure grows (Reuters)
- R.B.S. to Split Off $61 Billion in Loans Into Internal ‘Bad Bank’ (NYT)
- Draghi’s Deflation Risk Complicates Recovery (BBG)
- Abenomics: Nissan slashes full-year profit forecast 15% (FT)
- Credit Suisse Dismisses London Trader Over 'Unusual Trading' Losses (WSJ)
- RBS avoids break-up with 38 billion pounds 'internal bad bank' (Reuters)
- Twitter Said to Attract More Than Enough Interest for IPO (BBG)
- Morning Humor from Hilsenrath - Fed Balance Sheet Not Seen Returning to Normal Until at Least 2019 (WSJ)
- Health Policies Canceled in Latest Hurdle for Obamacare (BBG)
- Was there anything RBS was not manipulating? RBS Said to Review Currency-Trading Practices Amid Probe (BBG)
- Sebelius to Testify Before House Panel (WSJ)
- And more humor: Spain's Statistics Institute Confirms End of Recession (WSJ) ... and now we await the triple dip
- Finally some credible reporting on Yellen's "foresight" - Yellen feared housing bust but did not raise public alarm (Reuters)
- Japan government moves closer to Fukushima takeover (FT)
- China to step up own security after new NSA allegations (Reuters)
- Blackstone Vies With Goldman in Spain Rental Housing Bet (BBG)
- In new U.S. budget talks, Republican proposal has flipped the script (Reuters)
One of the great things about the neverending series of Libor busts and settlements (which incidentally were once a "conspiracy theory" because it was supposedly impossible for so many people to keep their mouth shut, or so the always wrong conventional wisdom went until the summer of 2012 when theory became fact) is that they all thought they would never get caught, used communications that left a record visible from a mile away, and in the process described the criminal aspects, which lately it seems are the only ones left, of banking from the inside in greater detail than anyone else. Such as in the case of today's Rabobank $1.1 billion Libor manipulation settlement which also cost the CEO, Piet Moerland, his job. It is there that we read just how the Libor criminals saw their daily crimes, which amounted to millions in year end bonus terms: "Don’t worry mate -- there’s bigger crooks in the market than us guys!" There is (sic) indeed.