In a few moments, a major showdown will take place in Congress when on the same table Valeant's outgoing CEO Michael Pearson will sit next to Valeant's most prominent investor Bill Ackman and also the former CFO, Howard Schiller, who the company recently tried to scapegoat for most of the problem that sent the stock price of VRX crashing 85% from its summer 2015 highs.
If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told.
There’s no respite in sight.
U.S. officials have warned of “diplomatic and economic fallout from the [looming 9/11] legislation.” So what sort of economic fallout do they envision? Part of the concern is no doubt related to the impact on global financial markets from a Saudi fire sale, but there’s a potentially even bigger concern at play. Specifically, Saudi Arabia pays Washington insiders an exorbitant amount of money to put the monarchy’s interests ahead of what’s best for the American people.
Days After Wells Fargo Admits Defrauding The Government, NY Fed Rewards It With Primary Dealer StatusSubmitted by Tyler Durden on 04/18/2016 21:00 -0400
Ten days ago, in the latest example of how criminal Wall Street behavior leads to zero prison time, Wells Fargo admitted that it deceived and defrauded the U.S. government. Its punishment: a $1.2 billion settlement, one which will ultimately be paid by the bank's shareholders as no executives go to prison. And now, less than two weeks later it's time for Wells to get its reward: the NY Fed just announced it would grant Wells Fargo the much coveted Primary Dealer status.
Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.”
- Global stocks, dollar and oil cool ahead of Doha meeting (Reuters)
- Oil Falls Before Doha as Global Markets Brace for Weekend Risk (BBG)
- China Growth Slows; Revival Policies Appear to Gain Traction (WSJ)
- White House hopefuls Clinton, Sanders joust in Brooklyn brawl (Reuters)
- Trump talks up 'New York values' as protesters demonstrate against him (Reuters)
- Sanders Can’t Clarify Wall Street Plan in Testy Clinton Debate (BBG)
Good news is still bad news after all. After last night's China 6.7% GDP print which while the lowest since Q1 2009, was in line with expectations, coupled with beats in IP, Fixed Asset Investment and Retail Sales (on the back of $1 trillion in total financing in Q1) the sentiment this morning is that China has turned the corner (if only for the time being). And that's the problem, because while China was a good excuse for the Fed to interrupt its rate hike cycle as the biggest "global" threat, that is no longer the case if China has indeed resumed growing. As such Yellen no longer has a ready excuse to delay. This is precisely why futures are lower as of this moment, because suddenly the "scapegoat" narrative has evaporated.
Wells Fargo Finally Reveals Its Dire Energy Exposure: $32 Billion To Junk-Rated Oil And Gas CompaniesSubmitted by Tyler Durden on 04/14/2016 10:25 -0400
The punchline in Wells Fargo's earnings report is in the reminder of just how generous Wells has been in lending to junk-rated oil and gas companies in the recent past to compensate for its eclining NIM: Wells reported that ~22%, or $8.8 billion, of exposure to investment grade companies, which means $32 billion is to junk-rated companies!
In another quiet overnight session, the biggest - and unexpected - macro news was the surprise monetary easing by Singapore which as previously reported moved to a 2008 crisis policy response when it adopted a "zero currency appreciation" stance as a result of its trade-based economy grinding to a halt. As Richard Breslow accurately put it, "If you need yet another stark example of the fantasy storytelling we amuse ourselves with, juxtapose today’s Monetary Authority of Singapore policy statement with the storyline that the Asian stock market rally intensified on renewed optimism over the global economy. Singapore is a proxy for trade and economic growth ground to a halt last quarter." The Singapore announcement led to a sharp round of regional currency weakness just as the dollar appears to have bottomed and is rapidly rising.
We were not surprised to read this morning that federal regulators announced that five out of eight of the biggest U.S. banks do not have credible plans for winding down operations during a crisis without the help of public money. Which is precisely the point: now that the precedent has been set and banks know they can rely on the generosity of taxpayers (with the blessing of legislators) why should they even bother planning; they know very well that if just one bank fails, all would face collapse, and the only recourse would be trillions more in taxpayer aid.
"In September, regulators from the OCC, the Federal Reserve and the Federal Deposit Insurance Corp. met with dozens of energy bankers at Wells Fargo’s office in Houston... Regulators pushed lenders to focus instead on a borrower’s ability to make enough money to repay the loan, according to the person familiar with the discussions."
Fraud Is An Economy-Killer, And Trying To Prevent a Depression While Allowing A Breakdown In the Rule of Law Is Like Pumping Blood Into a Patient Without Suturing His Gaping Wounds