- Germany will pay Greek aid (Spiegel)
- Spain Banks Face More Pain as Worst-Case Scenario Turns Real (Bloomberg)
- China’s Growth Continues to Slow (WSJ)
- Executives Lack Confidence in U.S. Competitiveness (WSJ)
- Poor Market Conditions will See 180 Solar Manufacturers Fail by 2015 (OilPrice)
- Wen upbeat on China’s economy (FT)
- Gold remains popular, despite the doubts of economists (Economist)
- Armstrong Stands to Lose $30 Million as Sponsors Flee (Bloomberg)
- IMF urges aid for Italy, Spain but Rome baulking (Reuters)
- EU Summit Highlights Financial Divide (WSJ)
- FOMC Straying on Price Target, Former Fed Officials Say (Bloomberg)
- Putin defiant over weapons sales (FT)
The acquisition of CRBC by FMER provides a stark illustration of the fundamental conflict between the Fed’s “dual mandate” and its legal responsibility to supervise the nation’s banks.
The official release, just issued by HM Treasury, is below. The unofficial one is as follows: "The successful candidate must have proficiency with the CTRL and P buttons. Must sound confident and sophisticated when talking in circles while saying nothing. Must be malleable to financial sector suggestions. All other considerations secondary."
Too Big Leads To Destruction of the Rule of Law
This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied - The SequelSubmitted by Tyler Durden on 07/19/2012 19:05 -0400
Two years ago, in January 2010, Zero Hedge wrote "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" which became one of our most read stories of the year. The reason? Perhaps something to do with an implicit attempt at capital controls by the government on one of the primary forms of cash aggregation available: $2.7 trillion in US money market funds. The proximal catalyst back then were new proposed regulations seeking to pull one of these three core pillars (these being no volatility, instantaneous liquidity, and redeemability) from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal would give money market fund managers the option to "suspend redemptions to allow for the orderly liquidation of fund assets." In other words: an attempt to prevent money market runs (the same thing that crushed Lehman when the Reserve Fund broke the buck). This idea, which previously had been implicitly backed by the all important Group of 30 which is basically the shadow central planners of the world (don't believe us? check out the roster of current members), did not get too far, and was quickly forgotten. Until today, when the New York Fed decided to bring it back from the dead by publishing "The Minimum Balance At Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market FUnds". Now it is well known that any attempt to prevent a bank runs achieves nothing but merely accelerating just that (as Europe recently learned). But this coming from central planners - who never can accurately predict a rational response - is not surprising. What is surprising is that this proposal is reincarnated now. The question becomes: why now? What does the Fed know about market liquidity conditions that it does not want to share, and more importantly, is the Fed seeing a rapid deterioration in liquidity conditions in the future, that may and/or will prompt retail investors to pull their money in another Lehman-like bank run repeat?
- JPMorgan dips into cookie jar to offset "London Whale" losses: firm has sold $25 billion to offset CIO losses (Reuters)
- Storied Law Firm Dewey Files Chapter 11 (WSJ)
- The European "Wire Run" - Southern Europeans wire cash to safer north (Reuters)
- Bankia Tapping Depositors for Bonds Leaves Spain on Bailout Hook (Bloomberg)
- Glitches halt new Goldman trade platform (FT) such as reporting prices and seeing trading spreads collapse?
- Japan, China To Launch Yen-Yuan Direct Trading June 1 (WSJ)
- Another fault line? Italy Quake Kills Nine in North of Country (Bloomberg) shortly following another Italian quake
- RIM Writedown Risked With $1 Billion Inventory (Bloomberg)
- China’s Wage Costs Threaten Foreign Investment, EU Chamber Says (Bloomberg)
- Dollar Scarce as Top-Quality Assets Shrink 42% (Bloomberg)
Despite closed US stock markets today, FaceBook stock still managed to decline, while Europe dipped yet once again on all the same fears: Greece, Spain, bank runs, contagion, etc. Shortly Europe will reopen, this time to be followed by the US stock market as well. While in turn will direct market participants' attention to a shortened week full of economic data, which as Goldman says, will likely shape the direction of markets for the near future. US payrolls and global PMI/ISM numbers are expected to show a mixed picture with some additional weakness already fully anticipated outside the US. On the other hand, consensus does expect a moderate improvement in most US numbers in the upcoming week, including labour market data and business surveys. As a reminder, should the Fed wish to ease policy at its regular June meeting, this Friday's NFP print will be the last chance for an aggressive data-driven push for more QE. As such to Zero Hedge it is far more likely that we will see a big disappointment in this week's consensus NFP print of +150,000. Otherwise the Fed and other central banks will have to scramble with an impromptu multi-trillion coordinated intervention a la November 30, 2011 as things in Europe spiral out of control over the next several weeks. Either way, risk volatility is most likely to spike in the coming days.
Gold’s London AM fix this morning was USD 1,555.00, EUR 1,229.44, and GBP 989.56 per ounce. Yesterday's AM fix this morning was USD 1,575.75, EUR 1,233.95, and GBP 998.76 per ounce.
Gold fell $26.20 or 1.64% in New York yesterday and closed at $1,566.80/oz. Gold fell in Asia and those falls continued in Europe where gold has been trading in a $16 range.
The Elite Financial Players Are Manipulating the Game So that They Get the Stimulus ... and the Little Guy Gets the Austerity
All you need to read and some more.
- China Industrial Output Growth Slows Sharply In April (WSJ)
- Indian industrial output shrinks unexpectedly (AFP)
- China’s Inflation Moderates, Adding Room for Easing (Bloomberg)... a nickel for every "imminent RRR-cut" prediction
- Drew Built 30-Year JPMorgan Career Embracing Risk (Bloomberg)
- Spain Offered Time to Curb Deficit (FT)
- France Entrepreneurs Flee From Hollande Wealth Rejection (BBG)
- Venizelos Eyes Unity Deal After Agreement With Democratic Left (Ekathimerini)
- Berlin Reaches Out to the Periphery (FT)
- Bernanke Speaks About Risks From End of Pro-Growth Plans (Bloomberg)
Forget Competing Theories … What Do the Facts Say about Quantitative Easing?
New meaning to the words, use it or lose it.
UPDATE: Added COMEX Silver Inventory Watch shenanigans from Jesse's Cafe Americain
We have long-discussed the currency debasement, fiat-fiasco thesis for owning hard assets and only last night noted the discussion between Biderman and Sprott on the practicalities of this plan. What we found interesting was this week we have seen a number of quite bearish articles on the precious metals - most notably Bloomberg's chart-of-the-day has had two notes citing inventory build for Silver's imminent demise and lagging futures open interest as a sign of investor's losing conviction in gold. Given that we are fair-and-balanced we thought it worth sharing these technical insights and perhaps reflecting on what Eric Sprott noted as the only thing that could break his 'hard asset' thesis - that the political and banker elite "come to their financial senses" and Dylan Grice poignantly described "eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability."
Addressing his perception of lessons learned from the financial crisis, Ben Bernanke is speaking this afternoon on poor risk management and shadow banking vulnerabilities - all of which remain obviously as we continue to draw attention to. However, more worrisome for the junkies is the total lack of QE3 chatter in his speech. While he does note the words 'collateral' and 'repo' the proximity of the words 'Shadow, Institutions, & Vulnerabilities' are awkwardly close.