- Spot the inaccuracies: Stocks rise on Ukraine diplomacy, ECB easing speculation (Reuters)
- Bank of England Extends Record-Low Rates Into a Sixth Year (BBG)
- China's Chaori Solar poised for landmark bond default (Reuters), explained here previously
- EU leaders meet in Brussels to address Ukraine crisis (FT)
- Nine-month-old baby may have been cured of HIV, U.S. scientists say (Reuters)
- China Raises Defense Spending 12.2% for 2014 (WSJ)
- China Stock Index Rises as Developers Jump on Policy Speculation (BBG)
- VTB Cancels New York Forum as U.S. Relations Sour (BBG)
- IBM workers strike in China over terms of Lenovo takeover (FT)
- College Board Redesigns SAT Exam Making Essay Portion Optional (BBG)
"This extensive review of documents, e-mails and other records has to date found no evidence that Bank of England staff colluded in any way in manipulating the foreign exchange market or in sharing confidential client information,” the Bank of England said today in a statement. Yet, as Bloomberg reports, a staff member was suspended amid the probe of a widening rigging scandal though "no decision has been taken on disciplinary action." As far back as 2006, they show concerns over the FX "fixings" that are at the core of this collusion but are careful not to condone any form of market manipulation. Well that's that then - until the next whistleblower exposes them.
All you need to know about the New Normal breed of crony capitalism and unbridled hypocrisy is once again best exemplified by the following quote by Charlie Munger - the lifetime business partner of crony capitalist par excellence Warren Buffett - from May 2013, in which he said that "I think it is very stupid to allow a system to evolve where half of the trading is a bunch of short term people trying to get information one millionth of a nanosecond ahead of somebody else. It's legalized front-running. I think it is basically evil and I don't think it should have ever been allowed to reach the size that it did. Why should all of us pay a little group of people to engage in legalized front-running of our orders?" Noble, noble words Charlie. What Munger, however, did not disclose is that as part of the Berkshire Hathaway-owned Business Wire news service, the company was enabling just this "basically evil" frontrunning, by allowing some, those who could afford the hefty fee of course, to make Munger and Buffett even richer and to subscribe to BW's HFT direct news access which gave them a few millisecond headstart and in the process frontrun everyone else.
The Inteligencia Financiera Global blog (Global Financial Intelligence Blog) is honored to present another exclusive interview now with GATA’s Bill Murphy.
I crush the JP Morgan Managing Director and Head of FX, John Normand, and his false-factual rant against Bitcoin. Fear, envy & loathing in seeing your bonus floating margin at cryptocurrency risk!
- Anti-Euro Party’s Le Pen Gains Supporters, French Poll Shows (BBG)
- Carney Renews BOE Low-Rate Pledge to Fight Slack in Economy (BBG)
- Bank of England hints at 2015 rate rise (Reuters)
- ECB bond-buying intact and ready after court decision-Coeure (Reuters)
- Canada scraps millionaire visa scheme, dumps 46,000 Chinese applications (SCMP)
- Scrap this then? Vancouver facing an influx of 45,000 more rich Chinese (SCMP)
- China's January Exports Power Higher, Up 10.6% (WSJ) ... and nobody believes the number
- Emerging-Market Shakeout Putting Reserves Into Focus (BBG)
- Wall Street's most eligible banker Fleming waits for suitor (Reuters)
- Kazakh Devaluation Shows Currency War Stirring as Ruble Dips (BBG)
In what has to be the most disappointing denial of central bank manipulation of a market in recent history, and probably never, the Bank of England today announced that it "has seen no evidence to back media allegations that it condoned or was aware of manipulation of reference rates in the foreign exchange market." As a reminder, last week we reported, that according to a Bloomberg, "Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms" or, in other words, the highest monetary authority in England, and the oldest modern central bank, explicitly condoned and encouraged manipulation. Fast forward to today when Andrew Bailey, the Bank's deputy governor and chief executive of the Bank's Prudential Regulation Authority, told parliament's Treasury Select Committee on Tuesday it had no evidence to suggest that bank officials in any sense condoned the manipulation of the rate-setting process. In other words, it very well may have... but there just is no evidence - obviously in keeping with the bank's very strict "smoking manipulation gun document retention policy."
It is not easy for one bank to anger more people with one announcement than what Barclays did in the past 24 hours. In one fell swoop, the British bank infuriated shareholders after announcing dismal earnings (an adjusted Q4 profit of about 200 million pounds and a statutory profit of less than 100 million as investment banking income slumped 37% as income fell 9% to 10.7 billion due to a fall in fixed income, and it took further charges related to a cleanup of the banking industry in the wake of the 2008 financial crisis) which sent the share price sliding, it then pissed off UK workers and taxpayers after it announced it would hike investment bank bonuses by 13% despite the abovementioned profit slump, and finally it crushed 9% of its workforce, or 12,000 workers, who are set to prepare pink slips as the bank "streamlines."
Earlier today, the non-profit organization Better Markets did what so many others have only dreamed of doing - they sued JPMorgan. We wish them the best of luck, as in a "crony jsutice" system as corrupt as this one - perhaps best described, paradoxically enough by the fictional movie The International - where the same DOJ previously implicitly admitted it will not prosecute "systemically important" firms like JPM to the full extent of the law and instead merely lob one after another wrist slap at them to placate the peasantry, any hope for obtaining true justice is impossible.
Raise your hands if you are surprised that, as has emerged, virtually every major bank was manipulating currencies (and everything else) whether as part of the "Bandits' Club", the "Cartel" or some other - until recently- secret message room. That's what we thought. Now raise your hand if you thought the manipulation could be so pervasive, so glaring and so in your face, that even the oldest central bank - the Bank of England - and who knows how many other monetary authorities, were openly encouraging traders from these private banks to do more of the illegal activity they had been engaging in - namely manipulating currencies - with their explicit blessing knowing very well such behavior is undisputedly illegal. We hope at least one or two hands went up, because which it is one thing to be cynical about what is going on behind the scenes, it is something else to see the edifice of global corruption and criminality, whose only purpose was to preserve the status quo, unwinding before your very eyes substantiated by actual facts.
- Here is why AAPL bounced off $500: Apple Repurchases $14 Billion of Own Shares in Two Weeks (WSJ)
- German Court Refers OMT Decision to Europe's Top Court (WSJ)
- Inflation Fuels Crises in Two Latin Nations (WSJ)
- U.S. job growth seen snapping back from winter chill (Reuters)
- Google to own $750 million Lenovo stake after Motorola deal closes: HK exchange (Reuters)
- Frigid Winter Spells Trouble for U.S. Economy (BBG)
- Winter Games to open, Putin keen to prove doubters wrong (Reuters)
- Regulators Ready to Proceed on Bank Leverage Limit (WSJ)
- Abe Eyes Window for Biggest Military-Rule Change Since WWII (BBG)
- Draghi as ECB Master of Suspense Keeps Investors on Edge (BBG)
- Abe lays out detailed plan for expanding defense powers (Nikkei)
- Inflation Fuels Crises in Two Latin Nations (WSJ)
- Obama walks into crossfire of Asian tensions (FT)
- Harvard Makes Professor Disclose More After Blinkx Slides (BBG)
- Hedge Funds Rework Currency Positions in Market Drop (BBG)
- Canada, U.S. Strike Tax-Information Sharing Deal (WSJ)
- Indonesia calls for greater clarity from Fed on tapering (FT)
- Sony to cut 5,000 jobs, split off PC, TV operations (Reuters)
When Reuters reported earlier today that Anil Prasad, the global head of foreign exchange at Citigroup, the world's second largest currency trader, is leaving the bank, our ears perked up. The reason is the news overnight that according to the British financial watchdog, Martin Wheatley, the allegations for FX manipulation, "are every bit as bad as they have been with Libor" which supposedly means they are taking them seriously. Could this departure have anything to do with a probe that has already snared head FX trades at JPM, Deutsche and countless other banks? Well, Reuters promptly clarified that Prasad's departure is not related to the global investigation into allegations of currency market manipulation, a source familiar with the matter said. "Anil's decision is his own and entirely unrelated to the on-going FX investigations," the source said. So we had little reason to believe that Prasad's departure is tied to the probe... Until we read this: GOLDMAN SACHS HEAD OF FX TRADING STEVEN CHO TO LEAVE, DJ SAYS
So far in 2013, Bank of America lost money on 9 trading days out of a total 188. Statistically, this result is absolutely ridiculous when one considers that the bulk of bank trading revenues are still in the form of prop positions disguised as "flow" trading to evade Volcker which means the only way a bank could make money with near uniform perfection is if it either i) consistently has inside information that it trades on or ii) it consistently front-runs its clients (the latter incidentally was a topic we covered back in 2009 relating to Goldman Sachs, and which the bank sternly rejected). We now know that when it comes to Bank of America at least one of the two happened.
Earlier this week we reported that at JPMorgan, the many will pay for the crimes of the few, after the bank revealed that compensation for most workers would be flat with 2012, and no raises were planned for the bank's employees as a result of the massive, $20+ billion legal bill the bank has raked up in recent months as one after another market manipulation, fraud and malfeasance by current and former JPM workers has been revealed. One person, however, will be exempt from this blanket punishment: the firm's CEO Jamie Dimon, of course. Because there is always a reason Jamie is richer than you...