Category: zerohedge

In recent months unexpected calls have emerged from unexpected sources questioning whether capitalism is even working any more in a world in which corporate profits refuse to drop leading to paltry wage gains and thus, lack of the all-important wage inflation. Most recently it was none other than Goldman who wrote in February that “we are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism.”

Maybe Goldman should ask the Fed about its thoughts on mean reverting “capitalism” in a world in which creative destruction is no longer possible.

Over the weekend, it was Deutsche Bank’s rather outspoken credit strategist Dominic Konstam who, in a post-script to a note in which he ominously warned that
the “worst kind of recession” may have already started (based on Friday’s nonfarm payrolls report), goes on to conclude that the crisis facing the “developed” world is a far deeper one than just that of profits and demographics. It is a crisis of capitalism itself.

This is what he said.

The reason that inflation is the historical exception rather than the rule is because of the over-supply issue. Say’s Law says that supply creates its own demand, but only until it doesn’t! This truism created Keynes’ theory to work off deficient demand. It also includes the logic of negative rates to reduce the attractiveness of profits into cash that is superior to “goods” that will lose their value if hoarded, i.e. profits not being reinvested in the business.

 

Capitalism can be successful for long periods when it can identify new sources of demand that run in tandem with the production possibilities frontier. Demographics and globalization have heretofore been key: a billion Chinese consumers need cars; a baby boomer generation became consumers in the ‘90s. However, now the developed world is old and getting older. China has grown too quickly and needs its own time out.

 

Capitalism has a crisis. If only this was a Fed problem or better yet a negative demand shock that could be easily reversed. As it is, it looks more like a line in the sand for profits. Productivity has been too weak for too long. Things will need to get worse before policy can become radically better. That may involve piling more debt from government onto existing debt, coupled with “helicopter money” elements to reduce some of the burden for existing debtors. It could involve a direct transfer away from profits and savers to workers and spenders via negative rates and wealth taxes that banks collect either way.

 

There is light at the end of the tunnel. But we have yet got to the right tunnel and probably won’t until the US falls into a recession.

 

This is a bull flattener and with Europe and Japan where they are, raises the probability of more deeply negative rates – including in the US. A few more labor market prints will decide. The Fed will be lucky to raise rates again this year.

Then again it is not capitalism, but crony capitalism that has a crisis: after all, how can one call a world in which both China and the US actively bail out not only money losing companies but the very capital markets every time there is even a modest deviation from centrally-planned trendlines, capitalism?

Even so, if Konstam is right, the Fed – which has staked not only its credibility but its very existence on keeping the US stock market propped up and artificially inflated – has a big problem.

via http://ift.tt/1UNbapv Tyler Durden

Submitted by Soeren Kern via The Gatestone Institute,

Labour Party politician Sadiq Khan has been sworn in as mayor of London. He is the first Muslim to lead a major European capital.

Khan, 45, is the London-born son of Pakistani immigrants. His father was a bus driver and he grew up with seven siblings in a government-subsidized apartment. He studied law, became a university professor and served as chairman of the civil liberties pressure group Liberty. He was elected to Parliament in 2005. Khan's supporters say he is the epitome the Muslim immigrant success story.

Khan – who won 57% of the ballot, or 1.3 million votes, a number which happens to be roughly equal to Muslim population of London — has promised to be "the British Muslim who takes the fight to the extremists." Others are not so sure. During the election campaign, Khan faced a steady stream of allegations about his past dealings with Muslim extremists and anti-Semites.

Khan's opponent, Conservative Party politician Zac Goldsmith, drew attention to Khan's past career as a human rights lawyer that included repeated public appearances alongside radical Muslims.

Goldsmith accused Khan of giving "platform, oxygen and cover" to Islamic extremists. He also accused Khan of "hiding behind Britain's Muslims" by branding as "Islamophobes" those who shed light on his past.

In an interview with the London Evening Standard, Goldsmith said:

"To be clear, I have never suggested he [Khan] is an extremist but without a shadow of doubt he has given platform, oxygen and cover to people who are extremists.

 

"I think he is playing with fire. The questions are genuine, they are serious. They are about his willingness to share platforms with people who want to 'drown every Israeli Jew in the sea.'

 

"It's about his having employed someone who believed the Lee Rigby murder was fabricated. It's about his career before being an MP, coaching people in how to sue the police.

 

"It just goes on and on and on. To pretend those are not legitimate questions, to pretend that by asking those questions newspapers, Londoners or my campaign are engaging in Islamophobia is unbelievably irresponsible.

 

"It is just obscene that somebody who wants to be the mayor of the world's greatest city, to be in charge of our police and security, should behave not only with such bad judgment but in a way that is totally shameless."

Goldsmith also drew attention to Khan's ties with Suliman Gani, a Muslim cleric in Tooting, the constituency in South London where Khan is an MP. "To share a platform nine times with Suliman Gani, one of the most repellent figures in this country, you don't do it by accident," Goldsmith said.

Goldsmith was referring to a Sunday Times exposé, which revealed that between 2004 and 2013, Khan had spoken alongside Gani on at least nine occasions, "even though Gani has called women 'subservient' to men and condemned homosexuality, gay marriage, and even organ transplants."

Gani — who has ties to the extremist Islamist group Hizb-ut-Tahrir, and has rallied in support of Shaker Aamer, an al-Qaeda terrorist who was detained at Guantanamo Bay — is also linked to the London-based Tayyibun Institute, which the British government says "tolerates or promotes non-violent extremism."

According to the Times, on the night of the Paris attacks in November 2015, Gani appeared at an "Islamic question time" event in Bedford, where speakers reportedly told British Muslims to "struggle" for an "Islamic state."

Khan and Gani first shared a platform in August 2004 at an event organized by Stop Political Terror, a group supported by Anwar al-Awlaki, a radical American imam who was killed in 2011 by a CIA-led drone strike in Yemen. According to the Times, Khan spoke at least four times at events organized by Stop Political Terror, which has since merged with CAGE, a group that called the Islamic State butcher Jihadi John a "beautiful young man."

In an interview with the Times, Davis Lewin, deputy director of the Henry Jackson Society, an anti-extremism think tank, said:

"Gani has campaigned on behalf of convicted terrorists, appeared at events designed to undermine government counter-radicalization strategies, including sharing platforms with a pro-terrorist organization such as CAGE, and is said to hold repugnant views about women and the lesbian, gay, bisexual, trans community.

 

"Given that the UK, and London in particular, is a major target for Islamist-inspired terrorist attacks, it is intolerable to see any politician, much less one seeking such a vitally important office as mayor of London, associate with an individual such as this.

 

"Mr Khan's reportedly repeatedly sharing a platform with this man, whose views are widely available, is deeply alarming."

Khan also spent years campaigning to prevent Babar Ahmad from being extradited to the United States on charges of providing material support to terrorism. Ahmad, who admitted his guilt, later said that his support for the Taliban was "naïve."

In 2002, Khan represented the leader of the Nation of Islam, Louis Farrakhan. Khan tried to reverse a decision by the Home Office, which had banned Farrakhan from entering the UK due to fears that his anti-Semitic views would stir up racial hatred. Farrakhan has called Jews "bloodsuckers" and referred to Judaism as "a gutter religion."

At the time, Khan said: "Mr. Farrakhan is not anti-Semitic and does not preach a message of racial hatred and antagonism." Khan added:

"Farrakhan is preaching a message of self-discipline, self-reliance, atonement and responsibility. He's trying to address the issues and problems we have in the UK, black on black crime and problems in the black community. It's outrageous and astonishing that the British Government is trying to exclude this man."

Khan now says: "Even the worst people deserve a legal defense."

In 2004, Khan was the chief legal advisor to the Muslim Council of Britain, a group linked to the Muslim Brotherhood. Khan defended Yusuf al-Qaradawi, an Egyptian-born Islamist who has been banned from entering the UK. Al-Qaradawi has expressed support for Hamas suicide bombings against Israel: "It's not suicide, it is martyrdom in the name of Allah." According to Khan, however, "Quotes attributed to this man may or may not be true."

Also in 2004, Khan shared a platform with a half-dozen Islamic extremists in London at a political meeting where women were told to use a separate entrance. One of the speakers was Azzam Tamimi, who has said he wants Israel destroyed and replaced with an Islamic state. Another speaker was Daud Abdullah, who has led boycotts of Holocaust Memorial Day. Yet another speaker was Ibrahim Hewitt, a Muslim hardliner who believes that adulterers should be "stoned to death."

In 2006, Khan attended a mass rally in Trafalgar Square to protest the publication of cartoons of Mohammed by Western newspapers. One of those present at the rally was Tamimi, who told Sky News: "The publication of these cartoons will cause the world to tremble. Fire will be throughout the world if they don't stop." Khan defended Tamimi: "Speakers can get carried away but they are just flowery words."

In 2008, Khan gave a speech at the Global Peace and Unity Conference, an event organized by the Islam Channel, which has been censured repeatedly by British media regulators for extremism. Members of the audience were filmed flying the black flag of jihad while Khan was speaking.

Also in 2008, Khan wrote that Turkey should be allowed to join the European Union in order to prove that the bloc is not a "Christian Club" that discriminates against Muslims:

"Muslims across Europe will see the question for Turkish admission to the EU as a clear test of European inclusion. If the door is slammed shut it will be understood by 20 million Muslim citizens of the EU that the basis of the decision to treat Turkey differently to new members like Bulgaria or Romania has been made on the basis that Europe is a 'Christian Club.'

 

"Some will see this as a clear indication that Muslims can never be a part of the story of Europe or the West. That will undermine everybody working to say that of course one can be British, European and Muslim, or French, European and Muslim."

In 2009, when Khan was the Minister for Community Cohesion in charge of government efforts to eradicate extremism, he gave an interview to the Iran-backed Press TV. He described moderate Muslims as "Uncle Toms," a racial slur used against blacks to imply that they are too eager to please whites.

In the same interview, Khan expressed support for boycotts of Israeli products: "You know, there's nothing wrong, and I encourage people to protest, to demonstrate, to complain, to write into newspapers and TV, to, if you want to boycott certain goods, boycott certain goods — all lawful means open in a democratic society."

In 2012, Khan addressed and praised the Federation of Student Islamic Societies (FOSIS), an umbrella group founded by activists from the Muslim Brotherhood. The British government has criticized FOSIS for promoting Islamic extremism.

In 2014, Khan expressed support for Baroness Warsi, who resigned from Prime Minister David Cameron's cabinet because she felt that Cameron was insufficiently critical of Israel. In an essay for the Guardian, (which has now been removed from the Guardian's website) Khan wrote:

"Warsi must be listened to when she says, 'our response to [Gaza] is becoming a basis for radicalization that could have consequences for us for years to come' […] The government's failure to criticise Israel's incursion is not just a moral failure — it goes directly against Britain's interests in the world and risks making our citizens less safe as a result."

Commentator Anthony Posner wrote:

"Although Khan has assured Londoners that he would not use the mayoral office as 'a pulpit to pronounce on foreign affairs,' one wonders if he would really be able to remain neutral if London was once again dealing with large anti-Israel demos. On the basis of his response to Warsi's resignation, it seems unlikely that he would show restraint."

In March 2016, Khan was pressured to fire a top aide, Shueb Salar, after the Daily Mail revealed that Salar was sending misogynistic messages on social media: "Along with homophobic and sexist comments, Salar jokes about rape and murder, claims Bengali people 'smell' and said he thought the slaying of soldier Lee Rigby by extremists in 2013 may have been fabricated."

In May, a close ally of Khan, Labour politician Muhammed Butt, apologized for sharing a Facebook post which compared Israel with Islamic State.

In an election debate aired by the BBC on April 18, Khan said he had "never hidden" the fact that he had represented "some pretty unsavory characters." When asked if he regretted sharing a platform with extremists, he said: "I regret giving the impression I subscribed to their views and I've been quite clear I find their views abhorrent."

Former Labour Party manager Rob Marchant said he was worried about Khan's links to extremists, but that he should be given the benefit of the doubt:

"While this dabbling with Islamist politics may well have been more to do with a streak of ruthless populism in Khan in building political support, than a genuine meeting of minds with the Islamists, it does cast some doubt upon both his judgement and his values."

By contrast, British politician Paul Weston, who has long cautioned about the Islamization of Britain, warned that Khan's rise is a harbinger of things to come:

"The previously unthinkable has become the present reality. A Muslim man with way too many extremist links to be entirely coincidental is now the Mayor of London. I suppose this is hardly a shock, though. The native English are a demographic minority (and a rapidly dwindling one) in London, whilst Muslims from Pakistan and Bangladesh are a rapidly expanding demographic…

 

"In a couple more decades Britain may well have its first Muslim Prime Minister, and I think we can safely assume he will be of the same ideological stock as Sadiq Khan…. Reality cannot argue with demographics, so the realistic future for Britain is Islamic."

via http://ift.tt/1ObMLbD Tyler Durden

The “most shorted” stocks have fallen for 6 of the last 7 days, dropping almost 6% – the biggest in 3 months – as the S&P 500 fell just 1%.

 

Year-to-date, ‘shorts’ are outperforming with “most shorted” down 3.3% compared to the broad market’s unchanged return.

 

As Credit Suisse noted, short squeeze pain appears to be abating… 3 data points illustrating shorts re-establishing themselves:

1. Our short basket in energy today underperforming by 60 bps… materials short basket underperforming by ~100 bps
2. Prime service data —Losses associated with the covering of crowded energy shorts appears to be slowing as measured by the recent Outperformance of the top 100 shorts driven by Energy shorts, a first in 2016 –Connors Prime Services
3. Futures desk — EU equity shorts, after being squeezed for several weeks, re-established themselves in a big way last week as we fell back through 3000… US equity shorts also increased as macro figures disappointed –Glanville

via http://ift.tt/24GRRRz Tyler Durden

One week after Donald Trump made the surprising announcement that he hired former Goldman Sachs partner and Soros employee, Steve Mnuchin as his national finance chairman as he begins to roll out his presidential fundraising operation (Mnuchin has said he hopes to raise as much as $1 billion), Trump announced moments ago that he has picked Chris Christie to lead his transition team, which would prepare the political neophyte turned presumptive GOP nominee for the White House if he wins in the general election.

Quoted by The Hill, Trump said that “Governor Christie is an extremely knowledgeable and loyal person with the tools and resources to put together an unparalleled Transition Team, one that will be prepared to take over the White House when we win in November.” Trump added that he is grateful to Governor Christie for his contributions to this movement.

The campaign’s statement also notes that Trump “has begun shifting towards a general election strategy and implementing an infrastructure capable of securing a victory.” A big part of that plan has been bringing on long-time operatives and those familiar with the intricacies of a general election race.

The campaign said it expects to have the transition team running in an “official capacity” in November.  With six months until the general election and eight until the next president’s inauguration, President Obama took his first step toward the eventual transition last week with an executive order creating the White House Transition Coordinating Council.

Christie was an early supporter of Trump, jumping on board in the heat of primary season after his own failed bid. The New Jersey governor has also been working to help repair Trump’s image with the GOP, telling reporters Thursday that he’d meet with House Speaker Paul Ryan to help ease his concerns after the top Republican said he would not yet endorse Trump. Christie is also seen as a potential Trump cabinet or vice presidential pick if he wins the White House.

via http://ift.tt/277Vnq2 Tyler Durden

"We as a company are neutral – we have not and will not use our products in a way that attempts to influence how people vote."

That is a quote from a Facebook spokesperson given in response to a leaked internal poll which asked what responsiblity Facebook had in preventing Donald Trump from becoming the next president.

In light of the fact that a former employee is now admitting Facebook routinely suppresses conservative news stories from its trending news section, we're curious if that same response will be used.

An individual who worked on the project told Gizmodo that Facebook prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the trending news section. Additionally, several former Facebook "news curators" as they are known internally, told Gizmodo that they were instructed to artificially "inject" stories into the news flow, even though they weren't popular enough to be included.

As Gizmodo reports, Facebook's "news" team is just a group of young journalists educated at Ivy League or other private East Coast universities injecting their liberal views into a news stream that 167 million in the U.S. alone are reading at any given moment.

"Depending on who was on shift, things would be blacklisted or trending" said a former curator who was one of very few conservatives on staff. "I'd come on shift and I'd discover that CPAC or Mitt Romney or Glenn Beck or popular conservative topics wouldn't be trending, because either the curator didn't recognize the news topic or it was like they had a bias against Ted Cruz." added the individual.

 

A list of stories that were deep-sixed was provided to Gizmodo, which included stories such as Lois Lerner and the IRS targeting, Wisconsin Governor Scott Walker, anything from the Drudge Report, Former Nave Seal Chris Kyle, and former Fox News contributor Steven Crowder. "I believe it had a chilling effect on conservative news" the former curator said.

 

Another former curator agreed, saying "it was absolutely bias. We were doing it subjectively. It just depends on who the curator is and what time of day it is. Every once in a while a Red State or conservative news source would have a story. But we would have to go and find the same story from a more neutral outlet that wasn't as biased."

 

Examples of that would be anything from outlets such as Breitbart, Washington Examiner, and Newsmax, would have to be excluded unless mainstream sites like the New York Times, BBC, and CNN were covering the story.

 

Although there is no evidence that management directed such actions, managers did instruct curators to put stories into the feed that management felt were important, even if they weren't being covered enough to be picked up by the trending algorithms.

 

"We were told that if we saw something, a news story was on the front page of these ten sites, like CNN, the New York Times, and BBC, then we could inject the topic. If it looked like it had enough news sites covering the story, we could inject it even if it wasn't naturally trending. We would get yelled at if it was all over Twitter and not on Facebook" said the former curators.

Facebook not only manipulated the trending news flow, but also pretended it was covering 'hard news'.

"People stopped caring about Syria, and if it wasn't trending on Facebook, it would make Facebook look bad. Facebook got a lot of pressure about not having a trending topic for Black Lives Matter. They realized it was a problem, and they boosted it in the ordering. They gave it preference over other topics." said a former curator.

So, as it turns out, Facebook is just another liberal leaning organization with a news platform that is manipulated to show what it deems important to convey to its users. As yet another conspiracy theory turns to conspiracy fact, this will be a difficult for Facebook to unwind – even if Zuckerberg wears his coolest hoodie while trying to do so.

via http://ift.tt/1s7JSPI Tyler Durden

Real demand for steel in China dropped at least 7% in April from the year before, according to Citigroup’s Tracy Liao estimates, so it should not be a total surprise that the frenzied speculative buying in Iron Ore, Rebar, and various other industrial metals in China has crashed back to reality as volumes plunge, dragging The Baltic Dry Freight Index with it as yet another government-manipulated 'signal' collapses into a miasma of malinvestment and unintended consequences.

As The Wall Street Journal reports, to the extent that China’s industrial recovery explains why iron ore and steel prices have jumped this year, China’s latest trade data served as a reminder of how brittle this reason is.

China’s steel net exports rose 8.8% in April from a year before and 9.4% between January and April from a year ago. That raises the question: Why are mills exporting more steel when Shanghai front-month futures prices for rebar steel rocketed 48% between January and April, and signaled a potential rise in demand? Shouldn’t mills be selling more of what they make at home? And steel production is weak, so it isn’t as if producers are churning out more steel available for exports.

 

The answer may be that there is no sustainable increase in Chinese steel demand. Steel use picked up around March, but this was seasonal, and even then it wasn’t so dramatic. Steel traders, whose job is to anticipate demand from property developers and the like, held lower inventories at the start of this construction season than last year, suggesting they saw limited real demand in the pipeline.

 

Real demand for steel in China dropped at least 7% in April from the year before, Citigroup’s Tracy Liao estimates, based on changes in exports and inventories. The drop was at least 5% between January and April from the year before.

That reinforces fears that easy money-fueled speculation is the prime mover of steel and iron ore prices today. That "Churn" is over…

 

Chinese futures prices in both commodities fell sharply again Monday.

 

With Iron Ore now down 22% from the meltup highs, entering a bear market…

 

And Steel Rebar down 25%, extending losses in the US session…

 

And The Baltic Dry Index now down 7 days in a row, down 14% from its "everything is fine in China" highs from 715 to 616 today…

 

Given that underlying demand isn’t there, don’t be surprised if these prices further crack.

via http://ift.tt/1ObCWuq Tyler Durden

Late last week, we shared what may be the most concise summary of the ongoing political theater involving the impeachment process of Dilma Rousseff, who as is well known has already been impeached, but where virtually every other actor is just as guilty of corruption and/or kickbacks. To wit:

A Brazilian Supreme Court justice ruled on Thursday that the powerful lawmaker who orchestrated the effort to impeach President Dilma Rousseff must step down as he faces graft charges, ratcheting up tensions in the country.

 

And in a further blow to Brazil’s scandal-plagued political establishment, Vice President Michel Temer, the man preparing to take control of the government from Ms. Rousseff, had his conviction on charges of violating limits on campaign financing upheld earlier this week, a ruling that makes him ineligible to run for elected office for eight years.

 

The rulings are not expected to save Ms. Rousseff’s presidency. Support for her ouster remains strong in the Senate, which is preparing to vote next week on whether to remove her from office and put her on trial over claims of budgetary manipulation. But the decisions reflect the potential for greater political turmoil in the country.

Today, the story of Rousseff's impeachment took another unexpected, and sharp U-turn when moments ago, Bloomberg reported that the interim chief of Brazil’s lower house, Waldir Maranhao, accepted a request from the government's attorney general to annul the procedure that approved the impeachment motion in the house, according to reports from Folha de S.Paulo newspaper and Epoca magazine. The stated reason: procedural flaws.

Waldir Maranho

More details from Reuters and Bloomberg:

• LOWER HOUSE ACTING SPEAKER MARANHAO SAYS IN DOCUMENT IMPEACHMENT VOTE MUST BE ANNULLED DUE TO PROCEDURAL FLAWS
• BRAZIL LOWER HOUSE CHIEF CALLS NEW SESSION TO VOTE IMPEACHMENT
• BRAZIL HOUSE CHIEF ASKS SENATE TO RETURN IMPEACHMENT MOTION

Whether this means that Rouseff's entire impeachment process has now been derailed (arguably as a lot of money has been transferred under the table) will be revealed shortly.

And while nobody expected Rousseff to exit without a fight, if this new twist in the Brazilian political soap opera is confirmed and is actually implemented – just three months before the Rio Summer Olympics – it would mark a dramatic anticlimax to a process that was supposed to conclude with the expulsion of Dilma from the presidential seat and unveil a new (if just as corrupt) government, which has been the catalyst for a 40%+ surge in Brazilian stocks YTD, even as Brazil's economy has continued to deteriorate sharply.

The immediate result: a slump for both Brazilian stocks and the currency, both of which are sharply lower on the initial report.

via http://ift.tt/1WVBfTq Tyler Durden

For the fourth month in a row, Labor Market Conditions – according to The Fed – have contracted, the longest streak since the financial crisis. At the same time, despite having fallen from recent highs, the government’s Labor Department proclaims non-farm payrolls continue to improve… because the narrative of consecutive monthly job gains must stand.  

 

 

The Government, of course, wants the appearance of economic recovery, job gains, and confidence inspiration – especially into the election.

The Fed, however, may not be so keen to promote the idea of a strong economy… because good news is bad news for over-inflated asset prices.

The question is – who is telling the truth?

via http://ift.tt/1s7BJL5 Tyler Durden

Originally posted at Themis Trading,

Sometimes it’s nice to get a sanity check and hear other investors and market professionals views on how the stock market has changed over the past few years.  We hear more and more from various market participants that the market seems to be one big correlated beast that doesn’t trade on supply and demand anymore.  We have opined on this topic many times in the past,  so today we would like to let you read what three other very well respected professionals recently had to say on the topic:

Steve Wynn, Chairman and CEO of Wynn Resorts

 

Steve Wynn knows a little something about gambling so it was only fitting that he made some comments on the way his stock has been trading:

 

“The other day I was watching the stock open up, and it went up on share volumes of a few thousand shares. I mean, every trade was a tick up. That’s not the way it should operate in an honestly or intelligently run exchange. But that’s the thing, all those guys sold their dark pools and their order flow and the positioning on the floors of the servers to the high frequency traders. And it’s made a couple of guys that I’m friendly with very rich because they are high-frequency traders. But don’t respect the activity, and I’m severely critical of it. And I don’t mind saying so, either.”

 

Wynn also was critical of regulators:

 

“The activity in the stock markets is, in my view, poorly regulated and irresponsibly policed, especially with regard to short sales. ”

 

Wynn said he has “very little respect for the integrity of the trading on the exchange of most stocks, and I have particular disdain for the fact that the SEC has failed to deal with high frequency traders.”

 

Jim Cramer, CNBC

 

Jim has been critical of market structure issues in the past and seems as frustrated as us when it comes to the regulatory changes that have occurred since the May 2010 Flash Crash.  On last week’s 6th Anniversary of the Flash Crash, Cramer said:

 

“Nothing has really changed to stop the market from once again losing its integrity in 15 minutes of insane, manipulated trading.”

 

Cramer also commented on Steve Wynn’s comments:

 

“I think Wynn’s dead right. I see this activity all of the time in his stock. It is a play thing for the shorts and the high frequency traders. He’s been able to take advantage of the shorts who he says helped drive it down, by getting great prices ahead of what turned out to be a bottom in Macau. But as for the day-to-day trading? It’s ridiculous. None of us would play cards at a table where the guy ahead of us knows our cards.  Yet, that’s’ what’s going on. Wynn knows it.  But most CEOs don’t. I guess it takes a gamer to know when the game’s rigged, and Wynn knows it better than anyone.”

 

Leon Cooperman, Chairman and CEO of Omega Advisors

 

In the past, Lee has been very critical of high frequency traders and the lack of regulatory oversight.  You might recall that back in September 2012, we co-wrote a Financial Times op-ed with Lee which was titled “SEC Must Put A Stop To Casino Markets” .  We’re glad to see that Lee is still speaking out  and had this to say last week about the trading that is done in today’s market:

 

“The market of today is not the one our fathers and grandfathers traded. Dodd frank. Demise of specialists. Demise of uptick rule. It’s a new game. The uptick rule worked for 70 years. In July 2007, they got rid of it for some reason. Now these momentum HFT’s are scaring people out of the market – including me! Whether the S&P is up or down 50 points in an hour – that’s not a real market!”

We hope the SEC reads these comments and takes them into account when deciding on upcoming regulatory issues.  However, regulators and policy makers are often not seeing these types of comments and rather are just seeing the comments of entrenched industry insiders who would like to maintain the status quo.  These insiders often hire well-paid lobbyists to support their case and will often try and discredit anybody who challenges their viewpoints.  They will often claim that the critic doesn’t know what he is talking about or that he doesn’t have the data to back up the accusations.  Longtime savvy professionals like Steve Wynn, Jim Cramer and Leon Cooperman might not have the data but they know that something is wrong with today’s stock market and they are sounding the warning alarms.  But is anybody at the SEC listening?

via http://ift.tt/24GDhwS Tyler Durden

On the heels of downward price momentum from positive headlines out of Alberta with regard the wildfires, Genscape has just reported a forecast 1.4 million barrel build at Cushing – significantly above expectations and recent activity. This has pushed WTI crude further below the pre-Saudi oil minister levels and back to a $43 handle…

 

via http://ift.tt/1T73Wdz Tyler Durden