When it comes to the recent sharp slump in Emerging Market currencies (and the ongoing surge in the dollar), few banks have been as accurate in calling the current lay of the land as SocGen, which has been bullish the dollar and bearish EMs for a long time (by comparison, virtually every other bank was until recently bearish the dollar; many of them still are resulting in massive losses for their clients). And if the French bank’s EM strategist Jason Daw, is correct there is much more pain to come for the emergers, and especially the yuan, which after sliding below 7.00 for the first time ever this week, is now expected to plummet as low as 7.70, a level which would certainly prompt currency war retaliation from the Trump administration.
As Daw writes overnight, the US and China are increasingly engaged in an entrenched tit-for-tat escalation phase, and as he correctly predicts “one of the two sides probably need to reach their pain limit before there is a chance of a de-escalation phase.” And since such a breaking point has yet to emerge, policymakers could tolerate USD-CNY staying above 7.0 on a sustainable basis unless the unlikely situation evolves that the US tariff threat is retracted, a solution is reached prior to Sep 1, or somehow global / Chinese growth spontaneously improves, according to Daw. While none of that is expected to happen, it nonetheless won’t be a straight line higher in USD-CNY.
Meanwhile, “the Chinese authorities can deploy their formidable defenses to stop or slow the depreciation”, as they may want to see the impact on capital flows before permitting another leg higher. However, as the SocGen strategist cautions, the upside risks to USD-CNY have intensified and he now forecasts USD-CNY modestly higher than our previous forecasts (to 7.10, 7.15, 7.20, 7.25) over the next four quarters.
Worse, if the US escalates the tariff fight further (i.e. 25% tariffs on the remaining $300bn of Chinese imports) or takes other additional measures against China, “it would not be inconceivable for USD-CNY to rise to 7.50 or 7.70.”
If Daw is right, the trade is simple: buy either the USDCNH or the USDCNH +12 month forward outright, which as of today is pricing in that the Offshore Yuan will only drop to just 7.1335 in 12 months time.
That said, even the bearish FX strategist concedes that it is important to remember that the Chinese authorities have strong policy tools and it is likely that CNY will only weaken as much and as quickly as they want it to. In other words, if China really wants to devalue its currency, it can, and will do so with relish. The question is what Trump will do to provoke such a devaluation.
via ZeroHedge News https://ift.tt/2KybbNJ Tyler Durden
U.S. farmers have never experienced a year quite like this. During the first half of 2019, endless rain and unprecedented flooding were the major problems. As a result of the incredibly wet conditions, millions of acres of prime farmland didn’t get planted at all, and tens of millions of other acres are going to yield a lot less than usual. Even without anything else happening, we were going to see farm bankruptcies soar to absolutely crazy levels, but now the Chinese government is essentially cutting off U.S. agricultural imports.
This will greatly depress the prices that U.S. farmers get for their crops, and so many farmers that were still hoping to squeeze out a profit for this year will be hit with a loss instead. Ultimately, the truth is that 2019 is going to be a death blow for countless U.S. farmers that were barely hanging on financially after a string of really tough years. Many will leave the industry entirely and never go back to farming again, and our nation will be worse off because of it.
“This is a body blow to farmers and ranchers all across the country,” Dale Moore, executive vice president of the American Farm Bureau, told FOX Business. “That’s one of the things that we are feeling the effects of, and this is on top of a year when mother nature has been a terrible business partner in many parts of the country. It’s just a really tough, tough time for farmers and ranchers in this country.”
Shares of industrial, farming, oil and transportation companies have plummeted, a direct result of the increased tensions between the world’s two largest economies.
Of course President Trump is trying to be upbeat and he is promising that the Chinese will not be able to hurt our farmers, but the truth is that they already have.
Chinese imports of U.S. agricultural products fell by more than half from 2017 to 2018, and now they are going to zero. The following comes from Fox Business…
Despite Trump’s tweet, American farmers now stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017.
Unfortunately for U.S. farmers, they are caught right in the middle of a tug of war between the Chinese government and President Trump, and China specifically went after U.S. farmers in order to hurt Trump politically…
China’s new agricultural ban has an additional benefit to the Chinese of maximizing negative political impact to Trump.
Important presidential election swing states in the Midwest grain belt such as Iowa and Wisconsin were vital to his 2016 election victory. Cutting this particular area of bilateral trade at a time when American farmers are recovering from the after-effects of this year’s floods is a potent way for Beijing to punch back against President Trump’s new tariffs.
If the presidential election was held this November, it would be really difficult for Trump to win in Iowa in Wisconsin. Of course much can change between now and November 2020, but right now Trump is definitely losing support in the middle of the country.
Since last June, there have been a staggering 535 Chapter 12 bankruptcy filings, a 13 percent increase. Kansas, Minnesota and Wisconsin had the highest number of filings.
As a result, Congress passed the Family Farmer Relief Act to update the eligibility requirements for Chapter 12 bankruptcy, raising the debt limit from $4.1 million to $10 million — giving more farmers the chance to declare bankruptcy, thereby offering their producers and creditors a better chance to recognize and avoid mass liquidation.
President Trump will try to keep as many farms going as possible with his massive aid packages, but the truth is that even with those aid packages it is inevitable that farm bankruptcies will continue to surge.
In fact, they are already at the highest level that we have seen since the last recession.
What U.S. farmers really need is an end to the trade war and for the Chinese to start buying from them again.
Sadly, that is just not going to happen. At this point, even Goldman Sachs is admitting that there will not be a trade deal with China before the 2020 presidential election…
Analysts at Goldman Sachs no longer think the U.S. and China will manage to negotiate a trade deal ahead of the 2020 presidential election — which is more than 15 months away.
“We had expected a final round of tariffs targeting remaining Chinese imports at a 10 percent rate,” the analysts, led by chief U.S. economist Jan Hatzius, wrote in a note to clients. “But news since President Trump’s tariff announcement last Thursday indicates that U.S. and Chinese policymakers are taking a harder line, and we no longer expect a trade deal before the 2020 election.”
This means that things will continue to go from bad to worse for U.S. farmers, and this will take a major toll on the U.S. economy as a whole.
We have entered the time of “the perfect storm”, and things are definitely not going to get any easier in the months ahead.
I wish that I had better news for you, but I don’t. Global events are starting to greatly accelerate, and so many of the things that we have been warned about are starting to happen right in front of our eyes.
via ZeroHedge News https://ift.tt/2YxjeUH Tyler Durden
Iron ore futures have yet to find a bottom, remained under pressure on Wednesday, hitting its lowest point in six weeks amid rising supply and deteriorating demand.
Iron ore on the Dalian Commodity Exchange, for January 2020 delivery, plunged 4.6% to 95.52 per ton, the lowest level since late June.
The steel-making commodity dove into a bear market in about a week is a red flag after several indicators from rising port stockpiles in China to declining profits for steel mills foreshadowed the plunge in prices, reported Reuters.
“Supply-and-demand drivers have been tilting to a bearish stance for weeks now — the fall was in the making, and we only needed a trigger,” Marex Spectron Group analyst Hui Heng Tan told Bloomberg, referring to the latest escalation in the trade war.
The recent weakening of the Chinese yuan, which cuts the purchasing power of steel mills already experiencing margin compression, sparked the selloff in iron ore prices, he added.
Traders dumped iron ore contracts on US-China trade war developments that started spiraling out of control last week. Then the Chinese yuan was allowed to move over seven earlier this week by the People’s Bank of China, which extended the selloff in iron ore.
Earlier this week, the China Iron & Steel Association reported that iron ore prices would remain depressed in 2H19 as mainland consumption declines.
“Mills in China are reportedly reluctant to increase iron ore stockpiles given the weak demand backdrop,” Commonwealth Bank of Australia said.
“Demand concerns reflect the U.S.-China trade tensions,” including Washington’s recent designation of Beijing as a currency manipulator, the bank said in a note.
Dalian iron ore has plummeted 10% in the last four trading days with signs that a global supply shortage is easing, and waning demand factors from China is fueling the lastest correction.
Stockpiles of iron ore at Chinese ports stopped declining in late June and turned up through July.
Jefferies on Tuesday lowered its ratings on several miners and reduced iron ore’s price targets.
“A slowdown in construction and a decline in Chinese manufacturing and exports due to trade wars would be significant negatives for metals’ demand, even if fiscal/monetary stimulus leads to some recovery in the broader Chinese economy,” the brokerage said in a note.
All it took for iron ore to revert to fundamentals and crash into a bear market was the Chinese yuan moving past seven amid a deepening trade war between the US and China.
via ZeroHedge News https://ift.tt/2ZIBBCS Tyler Durden
Only in Illinois does a surprise increase in tax revenues and more pension debt equal “stability” for a state’s finances.
Fitch Ratings just improved Illinois’ rating outlook from negative to stable, partly basing its decision on an unanticipated $1.5 billion state revenue surge and an on-time fiscal 2020 budget. It said “the potential for a downgrade in the near term has receded.”
Here’s what Fitch said:
The Outlook revision to Stable from Negative reflects key developments over the last three months for the state including an unanticipated revenue surge in April 2019 that positioned the state to resolve a sizable fiscal 2019 mid-year budget gap and enact an on-time fiscal 2020 budget. The positive April revenue surprise seen in Illinois, and other states, supported a significant increase in fiscal 2020 estimated revenues, easing the path to budget adoption and allowing the state to reduce (but not eliminate) reliance on non-recurring measures. The state now has a plausible and achievable 2020 budget plan, leaving it better positioned from a fiscal perspective, and the potential for a rating downgrade in the near-term has receded. The recent gains, however, are somewhat tenuous and their sustainability hinges on the state’s actions over the next several years, particularly around the November 2020 ballot initiative on the graduated individual income tax.
But if anything, Fitch’s points in favor of stability are just the opposite – they actually made Illinois weaker.
Windfall revenues allowed politicians to push off spending and structural reforms once again. And a “balanced” budget based on phony accounting means lawmakers will let the state’s retirement debts grow by billions in 2020. (Illinois’ “balanced” budgets don’t require the state to make its full, actuarial pension payments. See the details here.)
Even more, politicians did nothing to address Illinois’ absolute lack of preparedness for the next inevitable recession. Illinois has no resources to weather a downturn and, along with New Jersey, is the nation’s least prepared state.
Fitch’s “stable” outlook is for the benefit of bondholders, who may breathe a sigh of relief after years of downgrades. Since bondholders are the first in line to get repaid, they benefit from any short-term games politicians might play.
But for ordinary Illinoisans, the situation has only gotten worse. The 2020 budget puts Illinois into an even deeper hole.
via ZeroHedge News https://ift.tt/2OKCHg8 Tyler Durden
Reuters reports intense clashes broke out Wednesday along the Line of Control in contested Kashmir between Indian and Pakistani troops.
Citing local media, Reuters described that “troops on the border had exchanged heavy fire and that Pakistani troops have fired mortars in the clashes.” The exchange of fire took place according to local media at the Sunderbani Sector along the Line of Control (LOC) after 10pm local time, with each side blaming the other for breaching a ceasefire.
Kashmir fighting illustrative file image.
Though few details were given, especially with a near total communications blackout on the Indian-administered side in Jammu and Kashmir (J&K), military observers have been expecting intensifying shelling and clashes between the nuclear armed rivals after earlier this week the Hindu nationalist Bharatiya Janata leadership in New Delhi revoked Article 370 of the constitution which protected Muslim-majority J&K’s special autonomous status.
Unverified social media reports from regional observers say the death toll is mounting amid a broad Indian crackdown on its side of the LOC.
I have received confirmed reports of over 250 casualties of civilians clashing with Indian security forces in Kashmir. Just one hospital in Srinagar has recieved 50 bodies so far….
I have also seen around 14 dead bodies of Indian troops killed in the violent clashes.
Pakistan’s Prime Minister Imran Khan placed his armed forces on alert and on Wednesday recalled its ambassador while expelling its Indian envoy, and crucially took the drastic step of suspending bilateral trade with India.
PM Khan further directed the military to “continue vigilance” after previously saying Pakistan would take “all possible options” in support of Kashmir’s Muslim-majority population – this after regional media reported “tens of thousands” of Indian troops have surged into Kashmir, while a phone and internet blackout is in place.
A day prior to the fresh clashes, which are likely to escalate without external mediation, Khan had suggested a “genocide” could be unfolding as Indian reinforcements continued pouring into the restive border region.
This is Srinagar, Kashmir – some of the first images we’ve seen since the lockdown. At least one protestor has been killed and over 100 people have been arrested by Indian military forces. pic.twitter.com/EFpTsr0Ac7
India and Pakistan have fought two wars specifically over Kashmir, resulting in the deaths of tens of thousands amid a nearly three decade armed revolt.
via ZeroHedge News https://ift.tt/2Yv0JQV Tyler Durden
Most people assume that, if they have money on deposit in a bank, they own that money. That’s not necessarily the case. Decades ago, some of the world’s most powerful countries began to pass legislation that, if you deposit money in the bank, it becomes the property of the bank. In those countries, if you open a bank account and make a deposit, you sign off legal title to that cash. It becomes an asset of the bank.
The reason they got away with this obvious “theft through legislation” was that the banks were required to henceforth regard your deposit as a debt in your favour. So, technically, you were still owed the money as a bank liability, even though it was no longer truly yours.
On the surface, the change of ownership may seem to be a moot point, as, surely any bank would allow you to withdraw whatever you have deposited, or there would be a run on the bank and the bank would fail.
Well, that’s a definite “maybe.”
What if there were a financial crisis, such as in Greece, where an anticipated run on the banks was circumvented by freezing all accounts, then partially reopening them? If that were the case, the bank in question could allow small amounts of cash to be withdrawn by its depositors each week or each month until the crisis had been safely averted.
Surely, that would be a good thing to do, yes?
Well, there might be a problem there. It’s just possible that the bank would decide that it was enjoying the revised relationship, that it would like to continue to take in deposits the normal way but only pay out “allowances” to depositors as it saw fit.
And that’s just what’s happened. The end of the Greek banking crisis has never been acknowledged, and depositors have to accept whatever the banks choose to allow them to withdraw, long after the crisis ended.
If other banks, throughout the world, were to do the same as Greece, depositors would, in effect, be on an “allowance” from the bank.
But if that were the only concern, depositors could feel assured that, as their deposits were a liability on the bank’s books, the debt to them would remain, albeit without the depositor having free access to the deposit.
Well, unfortunately, the US came up with an idea that further lessened the chances of bank deposits being redeemed at some point.
A law was passed in 2010 that allowed any bank, if it declared a bank emergency, to confiscate deposits in such a way that the liability could be diminished or eliminated by the bank unilaterally. In effect: a license to steal.
This law was then tested.
A trial balloon went up in Cyprus, where deposits were confiscated as a result of a declared but unannounced bank emergency. Since Cyprus is merely a small island nation, most people outside the country paid the event little heed, but it established the principle that it was all right to confiscate deposits if the bank felt an emergency condition existed. (And remember, the bank wasn’t required to announce the emergency prior to confiscation.)
Since the trial balloon was so successful, Canada also passed confiscation legislation (in 2013), as did the EU (in 2014).
Then, in 2017, Greece began seizing bank accounts due to alleged unpaid taxes. It’s important to bear in mind that, since these confiscations were taken directly from bank accounts, the seizures were not a part of any agreement of level of debt between the taxpayer and the government, but were determined by the government, unilaterally, then taken.
In reviewing all the above, it would be reasonable if the reader were to conclude that, if he does his banking in the EU, US, or Canada, his government and his bank have him in a financial straightjacket that he cannot escape. He is, in effect, a turkey that’s trussed up and ready for slaughter, and in terms of a pending economic crisis, “Thanksgiving” is rapidly approaching.
It would seem clear, then, that any deposits that are in any bank within these jurisdictions should be regarded as sacrificial. It may be convenient to have some expense money in one of these banks, but any “wealth” should be removed to a safer place as soon as possible.
But where would it be moved to? Are there safer jurisdictions? Well, yes. What you’d want to do would be to seek out jurisdictions whose government revenue is based on foreign depositors using their systems, more than locals.
This would indicate the many small countries that depend primarily on foreign deposits – whose political class would lose their careers if they were to alienate foreign investors.
There are quite a few to consider using: Singapore, the Channel Islands, the British Virgin Islands, Hong Kong, the Cayman Islands, Switzerland, etc.
Next you may want to do some research on what form of legal system is used in each of those countries. In the Western Hemisphere, there are two predominant systems: Civil Law, as is employed in most Spanish countries, and English Common Law, which is found in most all non-Spanish countries.
Under Civil Law, not everyone has the same rights within the country. Those who are not citizens tend to take a lesser position than citizens, under the law. This provides a layer of opportunity for fraud by local banks with regard to deposits of non-nationals.
In Mexico, such fraud has become a lucrative business. In 2018 alone, there were an astonishing 7.3 million complaints of fraud, amounting to about $1 billion. And under Civil Law, such fraud can be difficult for the foreigner to address.
So, does this mean that you’re toast, no matter where you move your wealth for safekeeping?
No, quite the contrary. What it means is that you select those countries that do not come under the wings of the US, EU, or Canada. Then focus on those remaining jurisdictions that operate under English Common Law (or a similar-based system).
Then, narrow your study to those smaller jurisdictions whose economy depends upon serving foreign investors well.
Most countries have no confiscation laws, and for the US, EU, or Canada to confiscate your deposits in other countries, they’d need to adhere to the laws of those countries. In your home country, you could suffer confiscation without warning. But in a country without confiscatory laws, any attempt would need to pass through that country’s court system, which would be, at a minimum, ponderous and time consuming for your home country to pursue. And if the economic future of the country you’d chosen depended on keeping overseas investors happy, the political will would exist to make any confiscation by your home country difficult, if not impossible.
Above all, if your wealth is no longer yours in your home jurisdiction, you can benefit by expatriating it to one or more carefully chosen non-confiscatory jurisdictions.
* * *
The US, Canada and the EU have already passed laws that open the door to future theft by banks. In an economic crisis, deposits in these jurisdictions could get the Cyprus treatment—in which a bank emergency is used as justification for confiscation.
The good news is there are far more favorable banking options. That’s why The New York Times best-selling author Doug Casey and his team have created a comprehensive offshore banking guide outlining our favorite banks and offshore banking jurisdictions. It includes crucial information on the limited jurisdictions that still accept American clients and allow them to open accounts remotely with small minimums. Click here to download the free PDF now.
via ZeroHedge News https://ift.tt/2GVx2xx Tyler Durden
Millionaire pedophile Jeffrey Epstein remained in the good graces of Wall Street titans both during and after his 13-month work-release jail stint in 2008 – 2009, who only severed ties with the registered sex offender when the heat was back on, according to Bloomberg.
Barclays CEO Jes Staley
For example, Barclays CEO and longtime associate Jes Staley “visited Epstein on the private island, accompanied by his wife Debora,” in 2015 – seven years after everyone knew Epstein was a pedophile. They would sever ties months later as new accusations of sexual abuse were levied against the financier, while weeks later the now-defunct Webstie Gawker published his “little black book” containing over 1,000 names of prominent individuals and their contacts.
Within months of the Bequia sailing from Little St. James, Staley cut ties to Epstein, according to a person with knowledge of the situation. The banker was in the running for the top job at Barclays, a position that required interviews and approvals by U.K. regulators. The wisdom of breaking from Epstein became apparent when the British press reported on their relationship. –Bloomberg
While not accused of participating in any of Epstein’s illegal activities, Staley – who visited Epstein at his Palm Beach office while the Epstein was on prison work-release, has come under fire by those who want to know exactly how close the two were. By all accounts, Epstein played a pivotal role in Staley’s rise while running JP Morgan’s private bank – referring wealthy clients to the banker and helping to arrange the bank’s 2004 acquisition of Highbridge Capital Management.
Staley left JPMorgan in 2013 before joining hedge fund BlueMountain Capital Management. In December 2015 joined Barclays as CEO.
Going back about two decades, Epstein regularly brought Staley business when he ran JPMorgan’s private bank and the two were close professionally, according to a person familiar with the matter. One of those introductions Epstein made was to hedge fund billionaire Glenn Dubin, the New York Times reported. –Bloomberg
Staley aside, Epstein somehow managed to maintain his relationships on Wall Street despite his sex-offender pedophile lifestyle,including billionaire Leon Black, former Israeli Prime Minister (and current candidate for the job) Ehud Barak – and was able to secure preferable stock allocations in dozens of IPOs. Via Bloomberg:
Apollo Global Management’s Black met with Epstein at the company’s New York offices. Black dispatched Apollo co-founder Marc Rowan to attend a meeting at Epstein’s Manhattan mansion with representatives of Edmond de Rothschild Group to discuss how the two firms could work together more closely, people with knowledge of the meeting said. Florence Gaubert, a spokeswoman for Edmond de Rothschild, said she wasn’t aware of any meeting and that the bank has no business links with Apollo or Epstein.
BV70 LLC, a charity controlled by Black, donated $10 million to Epstein’s foundation Gratitude America, even as the New York Attorney General’s Office questioned whether another of Epstein’s foundations was complying with state registration requirements.
Epstein invested in a partnership started in 2015 by Barak, prime minister from 1999 to 2001, according to the Israeli newspaper Haaretz.
Meanwhile, Epstein’s travel became far more frequent in 2015 – as he flew between New York, the US Virgin Islands, New Mexico (where he owns a compound), and Paris.
In 2017, filings for Epstein’s Gratitude America charity reveal investment income of $899,417 from 52 trades – most of which involved IPOs. Clearly nobody had a problem associating with the pedophile or his money.
“The IPO trading is evidence of Mr. Epstein’s level of access to the offerings,” said Jacob Frenkel, chair of government investigations and securities enforcement at Dickinson Wright.
Enter the Miami Herald
In 2018, Epstein became truly radioactive after the Miami Herald published a series of reports beginning in November – titled Perversion of Justice. Not only did the Herald catalogue Epstein’s many accusers – the series focused on the sweetheart deal he was given by former Trump Labor Secretary Alexander Acosta despite dozens of accusers levying claims. Acosta resigned last month amid the controversy.
Meanwhile, Deutsche Bank fired Epstein as a client earlier this year, and has been actively assisting the case against him, according to court filings.
via ZeroHedge News https://ift.tt/2Ku0tYA Tyler Durden
Today Echoes Great Recession, Euro Crisis & 2016 Election
There are moments of inflection in the market when the phrase ‘prices have changed more than the facts’ becomes particularly apropos and today’s Treasury rally ostensibly qualifies. We’ll caution here however that the devolving macro narrative is very consistent with with such a repricing.
The overnight round of Asian central bank cuts combined with the weakest yearly change in German industrial production since 2009 are symptoms of changing expectations rather than the root cause of the move. Nonetheless, 10-year German yields dipped as low as -0.613% to a fresh record low. The selloff in domestic equities offers echoes of Q4 2018, with the primary difference being the Fed just cut rates versus the December hike-too-far.
Our primary concern linked to the sharp selloff in stocks is a spike in equity vol that tightens financial conditions to rapidly price in the Fed’s series of three quarter-point-eases.
An inter-meeting ease isn’t on our radar; although the futures market shows the August contract trading with an implied rate of 2.115% — 1.5 bp of easing (or a 6% chance of a quarter-point emergency move).
What is even more compelling are the odds of a 50 bp cut in September jumped >50% — 54% depending on how one slices it or 38.5 bp net easing. To say the Fed’s fine tuning ambitions just became a lot more complicated would be an understatement.
We’ve included a chart of the absolute 5-day change in 30-year yields dating back to 1990 to illustrate just how dramatic the recent 40 bp rally in the long bond has been. Every time the market moved in a comparable fashion, ‘something has changed’ was invariably the takeaway.
The last three episodes were 1) 2016 US Election, 2) Euro crisis and Twist/QE, and of course 3) the Global Financial Crisis/Great Recession. If there was ever any question whether or not there is a significant shift in investor expectations afoot, the performance of the long bond should make it abundantly clear — particularly in light of the proximity to the August refunding auctions.
Remember when supply events warranted a concession? So pre-crisis.
In keeping with our efforts to demonstrate the relevance of the magnitude of the recent move, we offer a chart of 3-month 30-year swaptions implied volatility — in both percentage and basis point terms.
The significance of the spike is difficult to overstate.
via ZeroHedge News https://ift.tt/2Tg5oAm Tyler Durden
Jon Corzine, the former CEO of Goldman (and New Jersey) and the man who singlehandedly brought down trading powerhouse MF Global with a few Italian bonds is back, baby… with a few conditions.
As Bloomberg first reported, Corzine’s application to register his new hedge fund, JDS-JSC, LP, was approved by the Securities and Exchange Commission, however in a novel spin, “it attached a series of seldom-seen conditions” for the fund of the former executive who many claim should have been barred from working in the industry.
Among the restrictions on Corzine’s firm, are limitations on his ability to handle customer cash and invest in less-liquid assets. Amusingly, the SEC order includes “trading parameters” that bar JDC-JSC from engaging in prop trading – which is bizarre for an investing vehicle whose entire operation is prop trading by definition – and also require it to have a “reasonable basis” to expect that, under normal conditions, each of its funds could be “orderly liquidated” within five trading days. According to David Tawil, co-founder of Maglan Capital, that would restrict Corzine to trading in only the most liquid of markets, such as those for currencies and large-cap stocks.
“There aren’t many assets you can blow out in five days,” Tawil said in a telephone interview. “I really don’t understand what magic Corzine thinks he is going to perform in markets with these shackles on.”
The answer may be simpler than David thinks: inside information, which is one thing the formerly best connected executive on Wall Street will have plenty of. Although in this age when all that matters are central banks, it is unclear if even having inside information will allow one to consistently generate P&L.
Separately, each fund is ordered to have investors give 65 days notice in order to withdraw capital, though the firm may agree to shorten this to no less than 30 days, according to the order, making it a glorified E-Trade account with virtually no lock-ups (and certainly no gates). Each fund also must have an independent administrator to handle client subscriptions, redemptions and cash; Corzine himself “will not be involved” in these activities.
Those limits ironically reflect the events at MF Global Holdings that unfolded under Corzine, when seeking to boost trading revenue, he commingled client funds to make at least $6 billion in proprietary bets on European sovereign debt. Then when the bonds tumbled and the firm faced a margin call, some $1 billion in client funds went “temporarily missing” and MF Global filed for bankruptcy overnight.
Ironically, whereas the CFTC permanently banned Corzine from the futures industry, he somehow was given a pass by the SEC, although one assume his tenure at Goldman had something to do with it.
As Bloomberg notes, earlier this month, a group of execs and traders from the National Futures Association had circulated a petition to send to the SEC to deny Corzine’s application, citing his role in the MF Global bankruptcy. Kyle Bass was among those who signed the petition.
“Corzine levered the firm to make big sovereign bets on euro debt and then they misappropriated their customers’ money to pay for the margin calls,” Bass said in an email. “Why on earth should the SEC allow him to have a license to handle customer money once again?”
Well, Kyle, think of it as natural selection: any idiot who gives money to Corzine to manage, deserves to lose it all. Which means that within a few weeks, we expect Corzine to be managing several billion.
For those curious, we previously reported that the JDC-JSC Opportunity Fund, which bears the initials of Corzine’s late son Jeffrey and his own, will launch this quarter and aims to attract $100 million to $300 million in its first trading year. Corzine and former Taconic Capital Advisors investment director Richard Chappelear will share the chief investment officer role.
via ZeroHedge News https://ift.tt/31rnmCR Tyler Durden
Facebook said that the removal of the “Storm Area 51” event was an accident.
The page, which has garnered over a million sign-ups, was removed from the social media website for several days.
It’s now live again.
“This was a mistake and the event page is now available again,” a Facebook spokesperson told Fox News.
Matty Roberts, who launched the event earlier this year, said that the page vanished “with no reason” for about two days.
After media outlets started reporting on the disappearance, Roberts told Fox, “the event was restored as if nothing happened.”
Roberts posted a screenshot on his personal Facebook page of a message that the company sent him claiming the event was removed because it violated Facebook’s “community standards.”
“I never got any reason behind the event being removed,” Roberts told CNETbefore the page was restored.
“I created a sister event which amassed about 15,000 people before being taken down for no reason.”
Roberts said yet another page, which was for a festival that would be held somewhere else, was also taken down.
An Extraterrestrial Highway sign covered with stickers is seen along state route 375 on July 22, 2019 near Rachel, Nevada, and the secure U.S. Air Force Facility people apparently want to raid in September. (David Becker/Getty Images)
“I think it’s pretty reckless of Facebook, especially because I’m trying to direct people away from storming the base,” Roberts said.
“And now I’ve lost my entire audience.”
The “Storm Area 51” event, subtitled “they can’t stop us all,” is slated to start on Sept. 20 and run for two days.
“We will all meet up in Rural Nevada and coordinate our parties. If we naruto run, we can move faster than their bullets. Lets see them aliens,” Roberts wrote on the page, referring to the mystery surrounding the desert U.S. military base, which is located north of Las Vegas.
A pinned post on the Facebook page said, “Hello US government, this is a joke, and I do not actually intend to go ahead with this plan. I just thought it would be funny and get me some thumbsy uppies on the internet.”
The Defense Department has advised people to not come into the area.
″[Area 51] is an open training range for the U.S. Air Force, and we would discourage anyone from trying to come into the area where we train American armed forces,” Air Force spokeswoman Laura McAndrews told the Washington Post. “The U.S. Air Force always stands ready to protect America and its assets.”
Sources told TMZ on July 15 that people who commit a crime near Area 51, including trespassing, will be arrested and prosecuted. One source said that local police are prepared to use tear gas and pepper spray to deter anyone near the premises.
Alien and Area 51 themed gifts are displayed for sale at the Little A’le’Inn restaurant and gift shop on July 22, 2019, in Rachel, Nevada. (Photo by David Becker/Getty Images)
UFO Expert Weighs In
A UFO expert said last month that he doubts people will proceed with the event despite the high number of sign-ups, but that if people do it could be a disaster.
Nick Pope, who has investigated unidentified flying objects for Britain’s Ministry of Defense, told “Fox & Friends First” that people “won’t go” but that it “shows the huge level of interest in this subject.”
Even in the unlikely scenario some people made it inside secure government facilities, they’d only find drones and next-generation aircraft, he said.
Pope also spoke to the British news outlet Metro, saying, “‘Storm Area 51’ clearly implies illegal trespass onto a military installation and that’s a recipe for disaster. I utterly condemn such an action. It’s irresponsible, illegal, and potentially dangerous.”
“Trespass on a military base is a federal offense and people run the risk of getting jail time, a fine and a criminal record,” Pope continued. “Warning signs at Area 51 even state that the use of lethal force is authorized.”
via ZeroHedge News https://ift.tt/2yJq1vh Tyler Durden
