Month: June 2017

Via The Daily Bell

After a nerve-racking, jam-packed five-hour bus ride on a careening mountain road in the Nepalese countryside, I was seriously doubting my life choices. I had quit my job, moved my stuff back home with Mom and Dad, budgeted my modest savings for the next five months, and now I was in the middle of a remote town by a river with an over-stuffed backpack.

It had all started with an application to help rebuild a school in Nepal that had been destroyed by the 2015 earthquake.

And now I was finding my way an hour up the road, across a suspension bridge, and on top of a farming terrace, where I discovered an international coalition of kind-hearted volunteers taking part in a ceremony. The village of Nagpuje was celebrating the anniversary of its school. I looked around and saw temporary learning centers and CGI structures. I was moved by the celebration, but it also struck me that this was the entire extent of the village’s development.

In the coming days, I would wake early, labor all day with my soon-to-be-family, and settle by the fire with a warm cup of tea, reflecting on our day’s work. We moved rocks, dirt, and cement, all of the necessary simple tasks. We soon learned and started trying our hand at carpentry, bending and cutting rebar, and manually mixing concrete. The project was lead by engineers, both domestic and foreign, who employed local masons from the village in which we were staying. It was clear that there was an efficient plan with effective measures; and I had the privilege of helping.

All Hands

The Internet is inundated with charitable causes to which you can donate. And while a donation is admirable, there is a slight visceral shortcoming in the satisfaction of helping. For some, a monthly subscription to a charity works. For others, myself included, there is a need to go somewhere and help in order to know for certain the effects of my individual contribution.

When you research different types of international volunteer organizations, two things become apparent. In order to be involved, you either need a specific skill or vocation, such as nursing or engineering, or you can pay money to be a part of a program.

I was discouraged. I was just a guy in his mid-20s with a film degree (read: broke) and arguably no valuable skills. But then I discovered All Hands Volunteers – a non-governmental organization specifically to do with natural disaster response and recovery; everything from tsunamis to earthquakes, and much more.

When their founder David Campbell created this organization, he had one simple goal: No matter the qualification or skill set, find average people who have a desire to make a difference in the world. All Hands Volunteers runs on grants, partnerships, and donations. They don’t charge incoming volunteers to participate. All they ask is that you set up a personal fundraising page. You work 6 days a week, and in return, All Hands provides you with:

– Room and board (meals provided 6 days, meal options always near).

– Insurance.

– Spontaneous entry and flexible length of stay.

– Genuine work that needs doing.

– Authentic cultural experiences (even and especially in state-side projects).

Generally speaking, it makes sense to charge incoming volunteers, especially if they’re spontaneous. It takes money to keep people fed, continue work on the project, make sure facilities are kept up, etc. But despite the cold hard logistics of this business model, All Hands breaks the mold. They instead rely on the raw power of human generosity.

Were it not for a steady stream of donations, this NGO might not have a place in the world. Behind each carefully selected mode of operation, there is a reliance on the decency of the average person. Not to mention, this past year All Hands spent over 84% of its budget directly on its programs, with administrative costs just under 8%. You can view their financials here.

So I decided to apply.

The Work

Soon I was leading teams of people in the day’s work, directing workflow and working in tandem with Nepali masons. We hardly shared a language, but through working together, we came to know our shared responsibilities, and how to help each other accomplish our goal: to build a school that could withstand an earthquake.

With each passing day, I became a little closer to the local community. From the shopkeepers to the farmers, to the children who would pass by our worksite every day, waving and shouting “Namaste!” at the top of their lungs. Little did they know that they were providing a boon of motivation of a spiritual scope. Whenever we got sore, or tired, or when manually mixing concrete in the hot midday heat became too difficult; whenever we felt our strength waning with the setting sun, there they were, doing nothing other than just being kids. That was always enough.

As much as I grew to understand Nepali culture in an authentic way, I also learned so much about the world through other international volunteers. I’ve worked with people whose religious and political views are diametrically opposed to my own. We were able to learn from each other, entertain debates both serious and capricious, and learn about each other’s cultures. They were engineers, yoga teachers, travelers, students, and business owners. They were young, old, experienced, wide-eyed and determined. They were, and are, truly brilliant.

Our mission in Nagpuje, Sindhupalchowk is complete. We built two schoolhouses, a functioning bathroom, a DIY no-budget playground, and a community water tap, complete with a partition wall so women can bathe in privacy. Our goals were made manifest by the strangest group of misfits we’d ever have the pleasure of being a part.

In Nepal, it’s common to refer to everyone by a family name. Everyone is either a sister or brother, father or mother, aunt or uncle. It was this passive reinforcement that these relationships became real for me. Even though our hearts soared seeing these massive structures we built with our own bare hands, we were sad. We knew we had to leave, that’s just the nature of it.

After bidding farewell to many a volunteer, it was finally our turn. We celebrated a final night with many families in the village. We ate, sang, danced, drank, played with the kids late into the night. The following day was surreal for everyone. Our base was deconstructed. The villagers had to get used to our absence just as they got used to our presence.

But as we walked down the mountain, we could see from the far end of the path a bright, beautiful school. No matter where the road lay ahead of us, we all knew precisely what we left behind. Through nothing other than our own determination and willingness to help, we made lives measurably better. The feeling of accomplishment was so rewarding; the finest thing for which to live.

The results are fascinating. This organization attracts people from all around the world who fulfill a singular goal with a team of people. Not for pay, but for the intangible value that comes with making a genuine difference. Volunteering is only the illusion of selfless activity; the volunteer ends up receiving not just a broadened perspective, but also a changed life. In giving freely, you can reach out and hold a universal purpose: to aid the safety, growth, and development of the human race.

It’s very easy to be cynical in a 24-hour media cycle, where we are barraged by the conflict and turmoil at home and abroad. It’s even easier to make a positive change as an individual. It’s legitimately at our fingertips. If you are curious about doing something like this for yourself: this is your invitation.

The world is waiting to become a better place thanks to you.

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Authored by Michael Snyder via The Economic Collapse blog,

Even though I write about our ongoing long-term economic collapse every day, I didn’t realize that things were this bad.  In this article, I am going to show you that the average rate of growth for the U.S. economy over the past 10 years is exactly equal to the average rate that the U.S. economy grew during the 1930s.  Perhaps this fact shouldn’t be that surprising, because we already knew that Barack Obama was the only president in the entire history of the United States not to have a single year when the economy grew by at least 3 percent.  Of course the mainstream media continues to push the perception that the U.S. economy is in “recovery mode”, but the truth is that this current era has far more in common with the Great Depression than it does with times of great economic prosperity.

Earlier today I came across an article about President Trump’s new budget from Fox News, and in this article the author makes a startling claim…

The hard fact is that the past decade’s $10 trillion in deficit spending has produced the worst economic growth as measured by Gross Domestic Product in our nation’s history.  You read that right, in the past decade our nation’s economy grew slower than even during the Great Depression. This stagnant, new normal, low-growth economy is leaving millions of working age people behind who have given up even trying to participate, and has led to a malaise where many doubt that the American dream is attainable.

When I first read that, I thought that this claim could not possibly be true.  But I was curious, and so I looked up the numbers for myself.

What I found was absolutely astounding.

The following are U.S. GDP growth rates for every year during the 1930s…

1930: -8.5%
1931: -6.4%
1932: -12.9%
1933: -1.3%
1934: 10.8%
1935: 8.9%
1936: 12.9%
1937: 5.1%
1938: -3.3%
1939: 8.0%

When you average all of those years together, you get an average rate of economic growth of 1.33 percent.

That is really bad, but it is the kind of number that one would expect from “the Great Depression”.

So then I looked up the numbers for the last ten years…

2007: 1.8%
2008: -0.3%
2009: -2.8%
2010: 2.5%
2011: 1.6%
2012: 2.2%
2013: 1.7%
2014: 2.4%
2015: 2.6%
2016: 1.6%

When you average these years together, you get an average rate of economic growth of 1.33 percent.

I thought that was a really strange coincidence, and so I pulled up my calculator and ran all of the numbers again and I got the exact same results.

The 1930s certainly had more big ups and downs, but the average rate of economic growth during that decade was exactly the same as we have seen over the past 10 years.

And of course the early 1940s turned out to be a boom time for the U.S. economy, while it appears that our rate of economic growth is actually slowing down.  As I noted yesterday, U.S. GDP growth during the first quarter of 2017 was just 0.7 percent.

But you don’t hear any talk like this on the mainstream news, do you?

Instead, they tell us that everything is just peachy.

I often wonder what things would be like right now if Barack Obama and his minions in Congress had not added more than 9 trillion dollars to the national debt.  By stealing all of that money from future generations of Americans and spending it now, Obama was able to artificially prop up the U.S. economy.  If we were able to go back and remove 9 trillion dollars of government spending from the economy over the past 8 years, we would be in a rip-roaring economic depression right now.  For an extended analysis of this, please see my previous article entitled “The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy”…

But even though we have been adding more than a trillion dollars to the national debt each year, and even though the Federal Reserve pushed interest rates all the way to the floor during the Obama era, the U.S. economy has not grown by three percent or more on an annual basis since 2005.

When you take an honest look at the numbers, there is no way that anyone can possibly claim that the U.S. economy is doing well.  The best that you can say is that we have been staving off a complete economic meltdown and another Great Depression, but of course the measures that our leaders have been taking to do this have just been making our long-term problems even worse.

I feel bad for President Trump, because he has inherited the biggest economic mess in U.S. history.  When we finally reach the point when it is impossible to artificially prop up the U.S. economy any longer, he is going to get most of the blame, but he won’t deserve it.

It is not going to be possible for Trump or anyone else to fix our system, because it was fundamentally flawed from the very beginning.  The Federal Reserve was designed to create an endless spiral of government debt, and since the day it was created the U.S. national debt has gotten more than 5000 times larger and the value of the U.S. dollar has declined by about 98 percent.

If we truly want to fix the economy, the Federal Reserve must be abolished.  If I was President Trump, I would look to start issuing debt-free U.S. currency just like President Kennedy did in 1963 as soon as possible.

In addition, we need to push tax rates as low as possible.  Personally, I would like to see the day when the personal income tax is completely eliminated and the IRS is shut down.  The greatest period of economic growth in all of U.S. history was when there was no income tax and no Federal Reserve.  America once thrived in such an environment, and I believe that we can do it again.

Of course we need to also dramatically reduce the size and scope of the federal government.  Our founders intended to create a very limited federal government, but instead the left has just kept pushing to make it larger and larger.

Businesses all over America are being strangled to death by mountains of federal regulations, and if we could just get the government off of their backs the business community could start thriving again.  There are quite a few government agencies that could be shut down entirely, and I think that the EPA would be a good place to start.

Once upon a time the United States showed the world the power of free markets and capitalism, and if we want to make America great again, we should go back and do the things that made America great in the first place.

But would the American people be willing to go down that path?

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Even as attention has turned once again to Italy as the next possible source of European financial contagion, Spain’s sixth largest bank has found itself in freefall over the past few days as concerns grow that the bank may be liquidated unless a last-minute buyer, or source of capital, emerges. In addition to the shares of Banco Popular crashing as much as 27%, the biggest intraday drop since 1989, its perpetual bonds have likewise been in freefall mode as investors liquidate securities which “they do not want to hold going into the weekend”, according to Ignacio Cantos, of ATL Capital in Madrid, quoted by Bloomberg.

The latest twist in the ongoing saga of the bad debt-saddled Spanish bank was revealed yesterday, when El Confidencial reported that Banco Popular asked Deutsche Bank to come up with a plan for the troubled Spanish lender to raise capital after its previous adviser Morgan Stanley resigned. The paper reported that Popular was testing investor appetite for a capital increase of between €4 billion and €5 billion if its plans to find a merger partner or buyer fail. So far nobody has stepped up to throw more good money after bad. 

Earlier in the week, the European banking watchdog, the Single Resolution Board (SRB), warned European Union officials that Popular may need to be liquidated, or bailed-in, if it fails to find a buyer, according to Reuters.

The underlying problem with Popular, as with most European banks, is familiar: the bank has been unable to sell €37 billion of soured property loans fast enough, and is racing to find a partner after Spain’s Economy Minister Luis de Guindos declined to consider a public bailout, while a capital increase has faced resistance from existing shareholders. The bank has said previously it could extend a June 10 deadline for binding takeover offers. So far none have emerged.

Meanwhile, the government urged citizens to keep “complete calm”, and not to sell because, get this, the bank “passed its stress tests.” Alas, “passing stress tests” did not help either Bankia or Dexia, two other famously insolvent European banks. From Reuters:

The solution for troubled Spanish lender Banco Popular is either a capital raise or a sale, a spokesman for Spain’s government said on Friday, adding that it was not worried about the situation.”

 

(Popular) passed its stress tests … it is in the process of a sale or a capital raise, nothing more. Complete calm. We are going to wait for the next steps,” Inigo Mendez de Vigo told a news conference.

Of course, the alternative to “complete calm” is a bank run, which Spain – and the ECB – would prefer to avoid.

For those who are unfamiliar with the developing situation, Bloomberg recently posted a handy Q&A on what may soon be Europe’s biggest bank liquidation in years.

Banco Popular Espanol SA’s admission that it’s short of capital and may consider a sale caused turmoil in Spain’s banking industry, which wants to think its real-estate problems are in the past. Popular, with a balance sheet still groaning under the weight of toxic property assets, is a throwback to the boom-to-bust cycle that forced Spain to seek a bailout for its banking industry in 2012. A potential sale of Popular would hand its competitors the chance to buy a bank with a strong franchise in lending to small and medium-sized businesses. It also would allow the government to claim that Spain’s banking clean-up is finally complete.

 

1. Why is Popular so unpopular?

 

Short answer: real estate. Popular’s woes stem from the loans it made in the years before a housing crash pitched the economy into a five-year slump starting in 2008. Founded in 1926, Popular had prided itself on efficient management that made it one of the world’s most profitable banks. That story started to sour in 2007 as confidence in Spanish real estate ebbed away; Popular’s shares began a long slide from their peak to lose 98 percent of their value. Popular shunned the chance to take state aid in 2012, when a stress test uncovered a capital shortfall. Instead, it embarked on a series of share sales that so far have raised 5.5 billion euros. Angel Ron, who had run Popular as chairman since 2004, left the bank earlier this year to make way for Emilio Saracho, a former JPMorgan Chase & Co. vice-chairman charged with stemming losses and fixing its balance sheet.

 

2. Is a sale the likely next step?

 

Nobody knows for sure. Saracho told shareholders in April that the bank would need to raise more capital, with another option being a corporate transaction. Popular said earlier this month that some banks had expressed interest in combining businesses and that it had asked competitors to say whether they’d be interested in buying it. The bank says no final decision has been made about a sale versus other ways to raise money.

 

3. Who could buy Popular?

 

Banco Santander SA has hired Citigroup Inc. to analyse a purchase, people familiar with the plans said this month, while Banco Bilbao Vizcaya Argentaria SA is working with Rothschild to analyze the deal, according to newspaper Expansion. Economy Minister Luis de Guindos has said that Bankia SA, which is state-owned after being bailed out in 2012, is also looking.

 

4. What obstacles are there to a sale?

 

Despite years of taking charges to cover real-estate losses, the lender’s attempts to mop up all the soured assets are far from complete. It still has 37 billion euros of non-performing assets, booked a 3.6 billion-euro loss in 2016 and a further 137 million euros loss in the first quarter. Any bank that buys Popular would itself have to raise a lot of capital to absorb it. Societe Generale SA said in a report that Santander would need 12.5 billion euros, BBVA 9.3 billion euros and CaixaBank SA 7.5 billion euros. At 7.33 percent, Popular’s fully-loaded CET1 ratio, a measure of solvency, is one of the weakest in Western Europe.

 

5. Is there any urgency?

 

There could be. The bank said its first-quarter results, published May 5, showed only a modest 1 percent drop in customer deposits. Even so, Popular’s plight has generated plenty of headlines in the Spanish press since then, perhaps unnerving customers. The bank and its advisers may want to try to resolve its future before Spain’s long August break. A coupon payment on Popular’s riskiest bonds due in July is another focus of attention for investors. The bank has said it will make the payment as scheduled. It will cost about 30 million euros, based on Bloomberg data.

 

6. What’s attractive about Popular?

 

It has about 34 billion euros of performing loans to small and medium-sized enterprises, a high-margin business based on carefully crafted personal relationships. And who doesn’t like a bank with a bit of mystery to it? Popular is well-known in Spain for having close links to the Roman Catholic organization Opus Dei. The bank itself doesn’t say much on the subject. However, when Luis Valls, a former co-chairman Popular died in 2006, the lender said he had been a member.

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Well over 5 years ago, we first dubbed the economy under Barack Obama as the “Waiter and Bartender recovery”, because while most other job categories had grown at a moderate pace at best, the growth in the category defined by the BLS as “Food Service and Drinking Workers” has been nothing short of spectacular.

How spectacular? As the chart below shows, starting in March of 2010 and continuing through April of 2017, there have been 87 consecutive month of payroll gains for America’s waiters and bartenders, an unprecedented feat and an all time record for any job category. Putting this number in context, total job gains for the sector over the past 7 years have amounted to 2.378 million or just under 15% of the total 16.4 million in new jobs created by the US over the past 87 months.

As a tangent, putting the “waiter and bartender” recovery in the context of America’s manufacturing sector, the following chart shows that while nearly 816,000 “food service and drinking places” jobs were created since 2014, over the same period the number of manufacturing jobs created has been just 107,000. Also, after six months of increases, in May manufacturing jobs posted their first drop since last October.

Source: BLS

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After months of "smoking guns" and conspiracy theory dismissals, a Singapore-based Deutsche Bank trader (at the center of fraud allegations) finally confirmed (by admitting guilt) what many have suspected – the biggest banks in the world have conspired to rig precious metals markets.

The Deutsche Bank trader, David Liew, pleaded guilty in federal court in Chicago to conspiring to spoof gold, silver, platinum and palladium futures, according to court papers. Bloomberg notes that spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price.

Following an introductory period that included orientation and training, LIEW was eventually assigned to the metals trading desk (which included base metals and precious metals trading) in approximately December 2009. During the Relevant Period, LIEW was employed by Bank A as a metals trader in the Asia-Pacific region, and his primary duties included precious metals market making and futures trading.

 

…

 

Between in or around December 2009 and in or around February 2012 (the "Relevant Period"), in the Northern District of Illinois, Eastem Division, and elsewhere, defendant DAVID LIEW did knowingly and intentionally conspire and agree with other precious metals (gold, silver, platinum, and palladium) traders to: (a) knowingly execute, and attempt to execute, a scheme and artifice to defraud, and for obtaining money and property by means of materially false and fraudulent pretenses, representations, and promises, and in furtherance of the scheme and artifice to defraud, knowingly transmit, and cause to be transmitted, in interstate and foreign commerce, by means of wire communications, certain signs, signals and sounds, in violation of Title 18, United States Code, Section 1343,which scheme affected a financial institution; and (b) knowingly engage in trading, practice, and conduct, on and subject to the rules of the Chicago Mercantile Exchange ("CME"), that was, was of the character of, and was commonly known to the trade as, spoofing, that is, bidding or offering with the intent to cancel the bid or offer before execution, by causing to be transmitted to the CME precious metals futures contract orders that LIEW and his coconspirators intended to cancel before execution and not as part of any legitimate, good-faith attempt to execute any part of the orders, in violation of Title 7, United States Code, Sections 6c(a)(5)(C) and 13(a)(2); all in violation of Title 18, United States Code, Section 371.

 

…

 

Defendant LIEW's employer, Bank A, was one of the largest global banking and financial services companies in the world. Bank A's primary precious metals trading desks were located in the United States, the United Kingdom, and the Asia-Pacific region.

 

Defendant LIEW and other precious metals traders, including traders at Bank A, engaged in a conspiracy to commit wire fraud affecting a financial institution and spoofing, in the trading of precious metals futures contracts traded on the CME.

 

Defendant LIEW placed, and conspired to place, hundreds of orders to buy or to sell precious metals futures contracts that he intended to cancel and not to execute at the time he placed the orders (the "Spoof Orders").

 

…

 

Bank A operated a global metals trading team with traders in the United States, the United Kingdom, and the Asia-Pacific region. Throughout his tenure on the metals trading desk at Bank A, defendant LIEW was supervised by and interacted with more experienced traders on the team. LIEW was supervised by other metals traders in the Asia-Pacific region, and, due to the nature of the nearly 24-hour trading cycle, LIEW interacted with members of the trading team in the United States and the United Kingdom. It was after joining the metals trading desk that LIEW was taught to spoof by other metals traders, including other metals traders at Bank A.

 

Defendant LIEW generated Spoof Orders manually. That is, LIEW physically clicked his computer mouse or keyboard keys to enter each Spoof Order, and physically clicked his mouse or keyboard keys to cancel that order.

 

A common technique employed by defendant LIEW was to place and cancel one or more Spoof Orders on one side of the prevailing market price. The intent of these Spoof Orders was to facilitate the execution of an existing Primary Order on the opposite side of the market. By placing Spoof Orders opposite the Primary Order, LIEW intended to create a false appearance of supply or demand and induce other market participants to react to this false information in order to move the market price and/or increase the available quantity at the desired price of the relevant futures contract. During the time the Spoof Order was live in the market, or shortly after it was cancelled, LIEW's Primary Order on the other side of the market would often execute at a more favorable price than was otherwise available before the Spoof Order had been placed.

 

…

 

Coordinated spoofing involved one or more additional participants. When engaging in coordinated spoofing, defendant LIEW and/or one or more co-conspirators would place one or more Spoof Orders on one side of the market in order to facilitate the execution of Primary Orders placed on the opposite side of the market by either LIEW or a coconspirator. For example, LIEW would place a Spoof Order in order to facilitate the execution of a Primary Order placed by a co-conspirator, or a co-conspirator would place a Spoof Order in order to facilitate the execution of a Primary Order placed by LIEW. At other times, LIEW and one or more co-conspirators would each place one or more Spoof Orders in order to facilitate the execution of a Primary Order placed by LIEW or a co-conspirator.

 

During and in furtherance of the conspiracy, defendant LIEW engaged in solo spoofing or coordinated spoofing with traders at Bank A hundreds of times.

Prosecutors have brought very few cases against alleged spoofers but have stepped up their enforcement since the adoption of the Dodd-Frank financial law.

Deutsche Bank declined to comment.

From a July 2012 blog post, we discover that Liew quit banking then to start a tech company…

A bit like Vinicius, I was (and still am) in my third year out of University and making a very comfortable living as a trader at Deutsche Bank. Here in Singapore (sadly), a sort of toxic culture has been brewing that your “success” is deemed by your salary. Yes, I was getting a 6 digit annual salary, yes I was in the top % of wage earners of my age group (I’m turning 27 this year). A lot of people have labelled me “crazy” to “throw all I had away”, to which I would reply “This is my life, not yours. But thanks and good luck to you too”

This is not the first time Deutsche Bank has been involved, implicated, and exposed to rigging the precious metals markets.

As we noted in December, when we first reported that Deutsche Bank had agreed to settle allegations it had rigged the silver market in exchange for $38 million, we revealed something stunning: "in a curious twist, the settlement letter revealed that the former members of the manipulation cartel have turned on each other", and that Deutsche Bank would provide docments implicating other precious metals riggers. To wit: "In addition to valuable monetary consideration, Deutsche Bank has also agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement. In Plaintiff’s estimation, the cooperation to be provided by Deutsche Bank will substantially assist Plaintiffs in the prosecution of their claims against the non-settling defendants."

Overnight we finally got a glimpse into what this "production" contained, and according to documents filed by the plaintiffs in the class action lawsuit, what Deutsche Bank provided as part of its settlement was nothing short of "smoking gun" proof that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms rigged the silver market. The allegation, as Bloomberg first noted, came in a filing Wednesday in a Manhattan federal court lawsuit filed in 2014 by individuals and entities that bought or sold futures contracts.

In the document records surrendered by Deutsche Bank and presented below, traders and submitters were captured coordinating trades in advance of a daily phone call, manipulating the spot market for silver, conspiring to fix the spread on silver offered to customers and using illegal strategies to rig prices.

“Plaintiffs are now able to plead with direct, ‘smoking gun’ evidence,’ including secret electronic chats involving silver traders and submitters across a number of financial institutions, a multi-year, well-coordinated and wide-ranging conspiracy to rig the prices,” the plaintiffs said in their filing.

The latest evidence is critical because as the plaintiffs add, the new scheme “far surpasses the conspiracy alleged earlier.” As a result, the litigants are seeking permission to file a new complaint with the additional allegations, i.e., demand even more reparations from the defendants who have not yet settled, and perhaps even more evidence of ongoing market rigging. Their proposed complaint broadens the case beyond the four banks initially sued to include claims against units of Barclays Plc, BNP Paribas Fortis SA, Standard Chartered Plc and Bank of America Corp.

Representatives of UBS, BNP Paribas Fortis, HSBC, Standard Chartered and Scotiabank didn’t immediately respond to e-mails outside regular business hours seeking comment on the allegations. Barclays and Bank of America declined to immediately comment.

The Deutsche Bank documents show, among other things, how two UBS traders communicated directly with two Deutsche Bank traders and discussed ways to rig the market. The traders shared customer order-flow information, improperly triggered customer stop-loss orders, and engaged in practices such as spoofing, all meant to destabilize the price of silver ahead of the fix and result in forced selling or buying. It is also what has led on so many occasions to the infamous previous metals "slam", when out of nowhere billions in notional contracts emerge, usually with the intent to sell, to halt any upside moment in the precious metals/ 

"UBS was the third-largest market maker in the silver spot market and could directly influence the prices of silver financial instruments based on the sheer volume of silver it traded," the plaintiffs allege. "Conspiring with other large market makers, like Deutsche Bank and HSBC, only increased UBS’s ability to influence the market."

Some examples of the chats quoted are shown below. In the first example a chart between DB and HSBC traders in which one HSBC trader says "really wanna sel sil[ver" to which the other trader says "Let's go and smash it together."

Another chat transcript from May 11, 2011 reveals a Deutsche Bank trader telling a UBS trader that the cartel "WERE THE SILVER MARKET"(sic) based on feedback from outside traders to which UBS replies, referring to the silver market "we smashed it good", leading to the following lament "fking hell UBS now u make me regret not joining."

Finally, for all those traders who wonder what happened to their stops as a result of dramatic moves in the price, here is the answer: a June 2011 chat between a UBS and a DB trader comes down to the following: "if you have stops… who ya gonna call… STOP BUSTERS"

 

Liew's admission of guilt to a conspiracy to spoof precious metals markets seems like the final nail in the coffin of any conspiracy theory deniers – theory is now fact once again. The question is – will the regulatory crackdown on these manipulations actually reduce rigging in the markets?

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After last month’s “much stronger than expected” jobs report, Goldman was convinced that the Fed would hike in June and September, while disclosing its balance sheet tapering announcement in December. However, after today’s disappointing jobs report, Jan Hatzius has flipped the last two, and says that he “now expects the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December).”

The reason for the switch is that “the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation.“

Key excerpt:

Given the drop in the U3 and U6 unemployment rates and the lack of additional catalysts between now and the June meeting, we are increasing our subjective probability of a hike at that meeting from 80% to 90%. We are also moving forward our forecast for balance sheet normalization. We now expect the committee to announce a tapering of maturity reinvestments in September, and we now expect the third hike of 2017 to occur at the December meeting (we previously expected a hike in September and a balance sheet in announcement in December). This change reflects recent detailed discussion of the balance sheet among committee members, as well as our view that the committee will prefer to wait for clarity on the outlook before implementing a third hike this year – particularly given signs of slowing job growth and the recent drop in core inflation.

Expect the rest of Wall Street to jump on the bandwagon shortly,

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If May was supposed to be the “tiebreaker” month, after a disastrous March and a solid (if now downward revised) April, then the US economy is not doing well: with only 138K jobs added in the past month, while over 200K actual jobs were lost (per the Household Survey), it was no surprise that the biggest missing link of the so-called recovery, wage growth, was simply not there again.

How is it that with the labor market supposedly near full employment, and the unemployment rate sliding to a post 2001 low of 4.3%, wages simply can not rise?

The answer was once again to be found in the quality of jobs added because in addition to the previously noted plunge in full-time jobs, the biggest in three years, the granular detail from the BLS revealed that all the jobs growth was again in low or minimum-wage sectors such as education and health, which added 47,000, leisure and hospitality up 31,000 jobs of which food services and drinking places workers, aka waiters and bartenders, added another +30,300. Temp help services, by definition the lowest paying job category, added another 12,900 jobs. Combined, these three minimum-wage categories accounted for two-thirds of all April job gains.

Looking at retail workers, which have suffered steep job losses recently as a result of the widespread shuttering of bricks-and-morter outlets, the BLS revised the reported rebound in the last two months, converting it into a job loss. As a result, retail workers have dropped for 4 consecutive months, and at 15.836 million, have dropped to 11 month lows.

Another notable observation: after rising by 11,000 last month, manufacturing workers declined once again, down 1,000 jobs, the first drop in the sector since last October.

Some further observations on the job breakdown, courtesy of Southbay Research:

• Healthcare (+32K): As expected, with ACA repeal dead, Healthcare hiring returns
• Leisure/Hospitality (+31K): As expected, restaurant demand kicks in
• Professional Services ex temp (+25K): As expected, relatively mild Temp worker demand
• Construction (+11K): Mild weather pulled in payrolls, leaving little for May
• Financial (+11K): Housing boom continues to drive financial payrolls
• Transportation (+4K): Supply chain pressure and manufacturing pause slowed demand for trucking
• Manufacturing (-1K): Factories hit the pause button (Trump rhetoric not yet translating into actual activity boost)
• Wholesale (-2K): Consistent with general macro trends (lack of inflation, retail supply chain pressure, inventory pressure)
• Retail (-6K): Grocery store and brick-and-mortar store pressure

The complete breakdown of changes in key job categories in April and May is shown below.

via http://ift.tt/2rsjiSc Tyler Durden