Every couple of years the same identical European drill repeats itself: 1) Greece makes loud noises as it approaches an election, 2) Europe says it couldn't care what the outcome is and that Greece should stay in the Euro but if it exits it won't be a disaster, 3) the ECB reminds everyone of the lie that it is not preparing for Plan B (it is) despite holding on to over €100 billion in "credibility-crushing" Greek bonds, 4) panicking Greek banks say the deposit outflow situation is completely under control (adding that "The Bank of Greece along with the European Central Bank are monitoring closely the developments and intervene whenever this is necessary," which is code word for far more familiar, five-letter word), and meanwhile 5) all non-Greek banks quietly start preparing for the worst case scenario. So far this time around, we had everything but step "5". We do now.
To most people it would be shocking that after $60 billion in litigation charges, i.e., the "cost of doing criminal business" for just the first 9 months of 2014 and a ridiculous $178 billion since Lehman the there would be those who are stunned that bonuses on Wall Street may take a hit as a result of all this rampant, and caught, criminality. Well, "those" exist. They are called bankers, the same group which in poll after poll heading into the end of 2014 predicted that this bonus season would be far better than what was paid out in 2013 (and most of which spent the money well in advance). Alas, that is not going to be the case.
- Deutsche Bank 200K
- HSBC 211K
- Citigroup 220K
- Goldman Sachs 230K
- Morgan Stanley 240K
- JP Morgan 240K
- Credit Suisse 250K
- UBS 270K
- Police Surround Paris Terror Suspects Near CDG Airport (BBG)
- ECB Said to Study Bond-Purchase Models Up to 500 Billion Euros (BBG)
- How OPEC Weaponized the Price of Oil Against U.S. Drillers (BBG)
- German Industrial Production Falls Amid Plunge in Energy Output (BBG)
- Car Loans See Rise In Missed Payments (WSJ)
- Jim O'Neill threatens he will replace BRICs with ICs (BBG)
- Oil heads for seventh weekly loss as supply glut drags (Reuters)
- Armed man takes hostage in kosher grocery in Paris (AFP)
- Janus Chairman Didn’t Know Details of Gross’s Investment (WSJ)
- Kaisa Bondholders Dream of White Knight as Default Becomes Real (BBG)
The price of crude has collapsed by 50% in a few months (and 40% since the end of QE3), which can only mean one thing: the Wall Street penguin brigade is out in full force with its spate of energy sector downgrades, none of which is more bombastic than that of Citigroup's Robert Morris who in 118 pages just crucified the entire energy space, lowering his target price for every single company in his coverage universe, and declaring that "Goldilocks has left the building."
- French policewoman killed in shoot-out, hunt deepens for militant killers (Reuters)
- The Bold Charlie Hebdo Covers the Satirical Magazine Was Not Afraid to Run (BBG)
- Evans Says Fed Shouldn’t Rush Rate Rise as Inflation Undershoots (BBG)
- Oil holds above $51 as traders search for floor (Reuters)
- Gross Helps Fuel New Fund With His Own Cash (WSJ)
- ECB warns Greek funding access hinges on keeping bailout (Reuters)
- Greece Jolts QE Juggernaut as ECB Gauges Deflation Risk (BBG)
- Analysts Say There's No Telling How Low Oil Prices Could Go (BBG)
- Scientists find antibiotic that kills bugs without resistance (Reuters)
History literally appears to be repeating. The mainstream media and our politicians are promising Americans that everything is going to be okay somehow, and that seems to be good enough for most people. But the signs that another massive financial crisis is on the horizon are everywhere.
Just 2 short months ago we warned of the rising voice among the cognoscenti tilting their windmills towards the concept of "helicopter money," as Deutsche bank noted, "perhaps there's an increasing weariness that more QE globally whilst inevitable, is a blunt growth tool and that stopping it will be extremely difficult (let alone reversing it) without a positive growth shock." Committing what Commerzbank calls "the ultimate sin" is now reaching the mainstream as Germany's Der Spiegel notes it is becoming increasingly clear that Draghi and his fellow central bank leaders have exhausted all traditional means for combatting deflation; and many economists are demanding that the European Central Bank hand out money to consumers to stimulate the economy.
- Twelve shot dead in Paris (Reuters)
- Eurozone Consumer Prices Fall for First Time Since 2009 (NYT)
- Euro's Drop is a Turning Point for Central Banks Reserves (BBG)
- How $50 Oil Changes Almost Everything (BBG)
- Mercedes-Benz Moving U.S. Headquarters to Atlanta (WSJ)
- Greek 10-Year Bond Yields Exceed 10% for First Time Since 2013 (BBG)
- How Even Dairy Farmers Get Squeezed by Rigging in the $5.3 Trillion Currency Market (BBG)
- AirAsia jet tail found underwater, black box may be close (Reuters)
- Italy Unemployment Rises to New High (Bloomberg)
- Average 10-year yield of U.S., Japan and Germany dropped below 1% for the first time ever: Free Money in Bond Markets Shows Global Economy Still Struggling (BBG)
- Brent falls below $52 as oil hits new five and a half year lows (Reuters)
- China Fast-Tracks $1 Trillion in Projects to Spur Growth (BBG)
- Saudi Arabia Raises Price of Main Oil Grade for Asian Buyers (BBG)
- Oilfield Writedowns Loom as Crude Slump Guts Drilling Values (BBG)
- Biggest Oil-Rig Drop Since 2009 Spells Tough Year Ahead (BBG)
- CIA says its inspector general is resigning at end of month (Reuters)
- Pipeline IPOs Climb on Demand for Returns Immune to Oil (BBG)
- Natural Gas No Savior for Investors Seeking Oil Refuge (BBG)
- Euro zone economy ended 2014 in poor shape (Reuters)
Something stunning and unexpected took place in the third quarter: Citigroup, or rather its FDIC-insured Citibank National Association entity, just surpassed JPM and is now the biggest single holder of total derivatives in the US. Furthermore, as the charts below show, while every other bank was derisking its balance sheet, Citi not only increased its total derivative holdings by $1 trillion in Q2, but by a whopping, and perhaps even record, $9 trillion in the just concluded third quarter to $70.2 trillion!
- Economists sceptical ECB bond-buying would revive eurozone (FT)
- Indonesia naval captain says may have located missing plane's tail section (Reuters)
- Oil hits five and a half year low under $55 (Reuters)
- Samaras Warns of Euro Exit Risk as Greek Campaign Starts (BBG)
- The death of active investing: Vanguard Sets Record Funds Inflow (WSJ) - thank you Fed
- Oil Downturn Has Many Wondering How Lone Star State Will Weather a Bust (WSJ)
- Hollande Says France Must Exceed 1% Economic Growth to Spur Jobs (BBG)
The problem is inherent in the knowing “that it will end badly” and yet turning a blind eye and making money anyway. For that’s what a good Wall Street aficionado does after all, right? I mean, who cares about arguing about real economics or fundamentals. Who cares – I’m up 8%!! As if that’s all that now matters. For if that’s all that matters why don’t we embrace crony capitalism, embrace stagnant wages, embrace the 99% vs the 1% as that’s the best it’ll ever be. Who cares, as long as we’re getting ours. This disgusting bloated behemoth of an adulterated Central Bank infused market is now getting downright scarier.
To all those wondering if everything is rigged, we have a very simple answer: Yes.