Category: zerohedge

The infamous ‘scourge on insider-traders everywhere’ Preet Bharara has taken a day off from Wall Street duties to focus on what could be considerably more of a concern. The NY Attorney General just disclosed that  Daniel Wilson – the Chemistry Manager at the Indian Point Nuclear Power plant – falsified and fabricated test results for diesel fuel contamination used to power emergency generators.. in order that the plant would not have to be shut down. Have no fear though US public… especially those who live near White Plains, Bharara’s punishment for this potentially disastrous ‘deliberate misconduct’ – a $500 fine and 18 months probation. Well that will teach him, eh?

 

Full statement:

Former Indian Point Supervisor Sentenced In White Plains Federal Court For Falsifying Nuclear Facility Records
FOR IMMEDIATE RELEASE
Thursday, January 16, 2014

Preet Bharara, the United States Attorney for the Southern District of New York, announced that DANIEL WILSON was sentenced today in White Plains federal court to 18 months’ probation for engaging in deliberate misconduct while serving as Chemistry Manager at Indian Point Energy Center (“Indian Point”), a nuclear power plant in Westchester County. WILSON was sentenced by United States District Judge Nelson Román, who also imposed a $500 fine.

U.S. Attorney Preet Bharara stated: “The safe operation of the Indian Point nuclear power facility is of critical importance to our communities in and around it. This Office will be vigilant about prosecuting criminal misconduct that takes place at the facility.”

According to the felony Information to which WILSON pleaded guilty, the Complaint, and information provided for purposes of sentencing:

Indian Point maintains a backup system of emergency generators for use in part to provide power in the event of a power outage and shutdown. WILSON, the Chemistry Manager at Indian Point from 2007 through 2012, was responsible for, among other things, ensuring that certain aspects of the operation at Indian Point were in compliance with technical specifications required by the Nuclear Regulatory Commission (“NRC”).

 

One such requirement related to the amount of particulate matter in the diesel fuel used to power emergency generators at Indian Point, which could not exceed a set limit. In 2011, tests of the diesel fuel maintained for use in powering the emergency generators at Indian Point showed that the ratio of particulate matter in the diesel fuel exceeded the limit set by the NRC.

 

In February 2012, WILSON concealed material facts from his employer and the NRC by fabricating test data, falsely showing that resampling tests of diesel fuel tested below the applicable NRC limit. In fact, no such resamples were taken, and the purported test data were fabrications. Later in February 2012, WILSON, in response to questioning by other employees of Indian Point in advance of an inspection by the NRC, wrote a report – the kind on which the NRC ordinarily relies in inspecting nuclear facilities for safety – in which he gave a false explanation for the lack of supporting documentation for his fabricated test results. In a subsequent interview with NRC personnel, WILSON admitted that he had fabricated the test results so that Indian Point would not have to shut down.

In April 2012, Wilson resigned from Indian Point.

On October 16, 2013, WILSON pleaded guilty to a one-count Information charging him with deliberate misconduct in connection with a matter regulated by the NRC, in violation of Title 42, United States Code, Section 2273.

*                      *                      *

Mr. Bharara praised the efforts of the NRC Office of Investigations in connection with the investigation.

The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Benjamin Allee is in charge of the prosecution.

via Zero Hedge http://ift.tt/1dyL7fB Tyler Durden

Forensic Asia, a Hong-Kong-based reserch firm issued a "sell" recommendation on HSBC on the basis of "questionable assets" on its balance sheet. As The Telegraph reports the analysts involved actually worked at HSBC for 15 years and suggest the ginat bank could have overstated its assets by more than £50bn and ultimately need a capital injection of close to £70bn before the end of this decade. "HSBC has not made the necessary adjustments, during the quantitative easing reprieve…The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners of capital forebearance globally… This charade appears to be ending."

 

Via The Telegraph,

…

 

Forensic Asia on Tuesday began its coverage of Britain’s largest banking group with a ‘sell’ recommendation, warning the lender had between $63.6bn (£38.7bn) and $92.3bn of “questionable assets” on its balance sheet, ranging from loan loss reserves and accrued interest to deferred tax assets, defined benefit pension schemes and opaque Level 3 assets.

 

The broker’s note is written by two of its senior analysts, Thomas Monaco (a former senior bank examiner at the Federal Reserve Bank of New York) and Andrew Haskins (previously worked at HSBC for 15 years).

 

…

 

In the report, the analysts apply what they describe as a “moderate stress test” to the balance sheets of HSBC’s major subsidiaries.

 

…

 

Taking the analysis further, the report sets out the impact of incoming Basel III capital rules and says HSBC could be required at a minimum to raise close to $60bn in new capital by 2019 and potentially as much as $111bn.

 

“In our view, HSBC has not made the necessary adjustments, during the quantitative easing reprieve. Rather, it has allowed legacy problems to linger as new ones in emerging markets gather pace. The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners of capital forebearance globally. This charade appears to be ending, given how few earnings levers remain besides selling off core elements of the franchise and the stringencies of Basel III compliance,” wrote Forensic Asia.

 

The broker adds: “While having stated capital ratios well above peer averages is all well and good, HSBC’s stated capital ratios would appear to be nothing more than a mirage if our analysis is correct.”

Interestingly, these findings do not include litigation costs which can only make matters worse. Of course, this kind of "mirage" is just as applicable to the entirely opaque Level 3 assets of all the majot TBTF US banks so one can only imagine just how large the capital shortfalls really are. But don;t worry – Cramer says NIM will be huge (but the banks themselves don't)…

via Zero Hedge http://ift.tt/1atfWxJ Tyler Durden

You really can’t make this shit up. From the funniest person on financial comedy TV (whose most memorable TV appearance will always be roaring that Bear Stearns is fine days before its collapse), here is his “opinion” on Best Sell Buy, entirely in his own words.

November 20: Jim Cramer opines on Best Buy:

Pillars of Strength in Retail

 

The homework doesn’t dovetail with the shares. That’s how I felt about the way Best Buy (BBY), Home Depot (HD) and Dick’s (DKS) traded in the wake of the earnings calls — because all three were basically in all-systems-go mode for suppliers.

 

Regarding Best Buy, it looks as if the tablet is the standout. I know that Apple (AAPL) has become a hated equity, but I keep hearing good things, so I can’t join the nitpicker mob. You did get a nice Chrome call-out for Google (GOOG), but that’s just icing on the Google lovers’ cake.

 

All three chain stores — Home Depot, Dick’s and Best Buy — are pictures of strength, not weakness. All three stocks should be bought, not sold, on share weakness, despite whatever the “action” says about how well the companies performed. They have performed superbly against both their fields and against retail in general.

Then the next day, November 21, just in case the message was lost:

Best Buy Co. Inc. Jim Cramer ranked this stock a Buy. Cramer previously ranked this stock a Buy on November 15, 2013. The news about tablets also bodes well for Best Buy, a company that has turned around its ailing retail position to once again become one of the stronger names selling technological products to consumers. Cramer said that retail stocks were especially well-positioned at the moment, and he did not neglect to mention Best Buy near the top of his list of retail all-stars.

Fast forward to today, following a 30% collapse in the stock price in one day. From TheStreet:

It really makes you wonder what went wrong when you see a company down 30% in a single trading session, TheStreet’s Jim Cramer said of Best Buy.

 

The co-portfolio manager of the Action Alerts PLUS portfolio said most analysts had been bullish on the stock, all the way into the upper $30s.

Uhm, just the analysts?

Those expectations were way off, Cramer said. The company reported sales fell 0.8% for the nine weeks ended Jan. 4, while analysts had expected growth and no real degradation in gross margins.

 

Cramer advised investors who want to buy the stock to wait until Friday because these types of violent moves tend to pan out over a two-day period.

So buy, buy, buy Best Buy at $40, but wait at $26? Gotcha.

And the piece de resistance comes from CNBC this morning:

Cramer said the electronics retailer needs a “big reset,” and that analysts erred in thinking the company could compete with online shopping outlets. He said the holidays were an “Amazon quarter.”

…

 

A steady stream of positive analyst notes before the busy holiday season helped set up Best Buy for its huge 30 percent drop Thursday, CNBC’s Jim Cramer said.

 

“Each day one came out and then another came out,” Cramer said Thursday on “Squawk on the Street.” “If they had all come out at once, the stock wouldn’t have been pumped to where it was. It was a serial rollout of positives.”

Wait a minute. It was precisely the “steady stream of positive analyst notes” that Cramer used to pitch as the buying catalyst in Best Buy just back on November 19 and as the reason why people should not sell the stock!!!

The people who are selling [Best Buy] don’t realize the power of the reiteration of [analyst] recommendations we are going to get in the next few days.

 

But… but… less than two months later it was this very reason that Cramer used as an excuse why the company sold off! It really isn’t… it doesn’t… it can’t… it makes no…

Aghhhh #Ref!

Summarizing it all below:

 

And now we eagerly await the sequel: “Get Poor Instantly“

via Zero Hedge http://ift.tt/Lc3tbe Tyler Durden

You really can’t make this shit up. From the funniest person on financial comedy TV (whose most memorable TV appearance will always be roaring that Bear Stearns is fine days before its collapse), here is his “opinion” on Best Sell Buy, entirely in his own words.

November 20: Jim Cramer opines on Best Buy:

Pillars of Strength in Retail

 

The homework doesn’t dovetail with the shares. That’s how I felt about the way Best Buy (BBY), Home Depot (HD) and Dick’s (DKS) traded in the wake of the earnings calls — because all three were basically in all-systems-go mode for suppliers.

 

Regarding Best Buy, it looks as if the tablet is the standout. I know that Apple (AAPL) has become a hated equity, but I keep hearing good things, so I can’t join the nitpicker mob. You did get a nice Chrome call-out for Google (GOOG), but that’s just icing on the Google lovers’ cake.

 

All three chain stores — Home Depot, Dick’s and Best Buy — are pictures of strength, not weakness. All three stocks should be bought, not sold, on share weakness, despite whatever the “action” says about how well the companies performed. They have performed superbly against both their fields and against retail in general.

Then the next day, November 21, just in case the message was lost:

Best Buy Co. Inc. Jim Cramer ranked this stock a Buy. Cramer previously ranked this stock a Buy on November 15, 2013. The news about tablets also bodes well for Best Buy, a company that has turned around its ailing retail position to once again become one of the stronger names selling technological products to consumers. Cramer said that retail stocks were especially well-positioned at the moment, and he did not neglect to mention Best Buy near the top of his list of retail all-stars.

Fast forward to today, following a 30% collapse in the stock price in one day. From TheStreet:

It really makes you wonder what went wrong when you see a company down 30% in a single trading session, TheStreet’s Jim Cramer said of Best Buy.

 

The co-portfolio manager of the Action Alerts PLUS portfolio said most analysts had been bullish on the stock, all the way into the upper $30s.

Uhm, just the analysts?

Those expectations were way off, Cramer said. The company reported sales fell 0.8% for the nine weeks ended Jan. 4, while analysts had expected growth and no real degradation in gross margins.

 

Cramer advised investors who want to buy the stock to wait until Friday because these types of violent moves tend to pan out over a two-day period.

So buy, buy, buy Best Buy at $40, but wait at $26? Gotcha.

And the piece de resistance comes from CNBC this morning:

Cramer said the electronics retailer needs a “big reset,” and that analysts erred in thinking the company could compete with online shopping outlets. He said the holidays were an “Amazon quarter.”

…

 

A steady stream of positive analyst notes before the busy holiday season helped set up Best Buy for its huge 30 percent drop Thursday, CNBC’s Jim Cramer said.

 

“Each day one came out and then another came out,” Cramer said Thursday on “Squawk on the Street.” “If they had all come out at once, the stock wouldn’t have been pumped to where it was. It was a serial rollout of positives.”

Wait a minute. It was precisely the “steady stream of positive analyst notes” that Cramer used to pitch as the buying catalyst in Best Buy just back on November 19 and as the reason why people should not sell the stock!!!

The people who are selling [Best Buy] don’t realize the power of the reiteration of [analyst] recommendations we are going to get in the next few days.

 

But… but… less than two months later it was this very reason that Cramer used as an excuse why the company sold off! It really isn’t… it doesn’t… it can’t… it makes no…

Aghhhh #Ref!

Summarizing it all below:

 

And now we eagerly await the sequel: “Get Poor Instantly“

via Zero Hedge http://ift.tt/Lc3tbe Tyler Durden

Submitted by Simon Black via Sovereign Man blog,

There’s a nasty little parasite that exists in nature known as the nematomorph hairworm (Spinochordodes tellinii) which typically infects grasshoppers and crickets.

Once fully grown, the worm is able to profoundly affect the behavior of its host; most notably, the worm can actually compel a grasshopper to throw itself into water.

This is great for the worm as it needs the moisture to reproduce. But for the grasshopper, it’s deadly.

There’s another vile protozoan known as Toxoplasma gondii. According to a 2007 study, rats and mice who are infected with it demonstrate a marked reduction in natural defenses, making them far more susceptible to being eaten by cats.

Nature is full of these unpleasant parasites which cause their hosts to engage in irrational, destructive, or even suicidal behavior.

Of course, they exist for humans too… especially for investors. In fact probably the number one parasite which affects investors is a very peculiar emotion: fear.

Specifically, it’s the fear of missing out that drives so much irrational investment behavior. Nobody wants to miss a big boom, no matter how baseless the fundamentals.

It’s this fear of missing out that compels people to continue investing in stocks, even though they are near all-time highs and trading at Price/Earnings ratios that are historically dangerous.

Ironically, this fear of missing out is stronger than the fear of loss. But if everyone else is jumping in, it’s easier to ignore the obvious risks of losing our life’s savings investing in ridiculously overvalued stocks.

Following the crowd is a great way to lose a lot of money.

Some of the most successful investors in history have been those who had the courage to go against the investment herd mentality. They conquered the fear of missing out, and they bought what everyone else hated… or looked where nobody else was looking.

In today’s investment climate, though, where central bankers are printing trillions of dollars per year and pushing up the prices of assets everywhere, it’s hard to find too many sectors or asset classes that are ‘hated’. But a few exist:

1) Precious metals

The market has all but stuck a fork in gold. It’s done. Or at least, so says the conventional wisdom. Taper talk and sentiment of stronger economic growth have prompted investors to mostly abandon gold, silver, platinum, etc.

2) Mining companies

With losses in the metals and mining margins declining, share prices for mining companies have gone from ugly to bufugly… and many long-term mining investors are collectively ripping their faces off.

3) Emerging market currencies

Currencies across the developing world– Turkey, India Indonesia, Uruguay, etc. have been battered senselessly over the last few months on fears of a global slowdown despite many of those nations’ stronger economic and demographic fundamentals.

As for what’s not hated– that’s easy. Stocks in the US and Western Europe are at/near all-time highs.

The Chinese renminbi is at a multi-year high. And inexplicably, the market is showing a lot of confidence in both the euro and the dollar right now.

Government bonds of heavily indebted western governments are still viewed as no-brainer safe havens.

The governments of Spain and Italy, in fact, just issued new bonds at a record low yields… nevermind 57.7% youth unemployment or obscene levels of debt and deficit spending.

And, despite gradually rising interest rates which adversely impact prices and affordability, US housing is once again front and center in the media as a safe investment.

Last– what’s not even on the radar of the collective investment herd?

In my view, few conventional investors are even thinking about farmland overseas (ex-US), or private equity in developing markets. More on those soon.

via Zero Hedge http://ift.tt/1cwv0KH Tyler Durden

Submitted by Simon Black via Sovereign Man blog,

There’s a nasty little parasite that exists in nature known as the nematomorph hairworm (Spinochordodes tellinii) which typically infects grasshoppers and crickets.

Once fully grown, the worm is able to profoundly affect the behavior of its host; most notably, the worm can actually compel a grasshopper to throw itself into water.

This is great for the worm as it needs the moisture to reproduce. But for the grasshopper, it’s deadly.

There’s another vile protozoan known as Toxoplasma gondii. According to a 2007 study, rats and mice who are infected with it demonstrate a marked reduction in natural defenses, making them far more susceptible to being eaten by cats.

Nature is full of these unpleasant parasites which cause their hosts to engage in irrational, destructive, or even suicidal behavior.

Of course, they exist for humans too… especially for investors. In fact probably the number one parasite which affects investors is a very peculiar emotion: fear.

Specifically, it’s the fear of missing out that drives so much irrational investment behavior. Nobody wants to miss a big boom, no matter how baseless the fundamentals.

It’s this fear of missing out that compels people to continue investing in stocks, even though they are near all-time highs and trading at Price/Earnings ratios that are historically dangerous.

Ironically, this fear of missing out is stronger than the fear of loss. But if everyone else is jumping in, it’s easier to ignore the obvious risks of losing our life’s savings investing in ridiculously overvalued stocks.

Following the crowd is a great way to lose a lot of money.

Some of the most successful investors in history have been those who had the courage to go against the investment herd mentality. They conquered the fear of missing out, and they bought what everyone else hated… or looked where nobody else was looking.

In today’s investment climate, though, where central bankers are printing trillions of dollars per year and pushing up the prices of assets everywhere, it’s hard to find too many sectors or asset classes that are ‘hated’. But a few exist:

1) Precious metals

The market has all but stuck a fork in gold. It’s done. Or at least, so says the conventional wisdom. Taper talk and sentiment of stronger economic growth have prompted investors to mostly abandon gold, silver, platinum, etc.

2) Mining companies

With losses in the metals and mining margins declining, share prices for mining companies have gone from ugly to bufugly… and many long-term mining investors are collectively ripping their faces off.

3) Emerging market currencies

Currencies across the developing world– Turkey, India Indonesia, Uruguay, etc. have been battered senselessly over the last few months on fears of a global slowdown despite many of those nations’ stronger economic and demographic fundamentals.

As for what’s not hated– that’s easy. Stocks in the US and Western Europe are at/near all-time highs.

The Chinese renminbi is at a multi-year high. And inexplicably, the market is showing a lot of confidence in both the euro and the dollar right now.

Government bonds of heavily indebted western governments are still viewed as no-brainer safe havens.

The governments of Spain and Italy, in fact, just issued new bonds at a record low yields… nevermind 57.7% youth unemployment or obscene levels of debt and deficit spending.

And, despite gradually rising interest rates which adversely impact prices and affordability, US housing is once again front and center in the media as a safe investment.

Last– what’s not even on the radar of the collective investment herd?

In my view, few conventional investors are even thinking about farmland overseas (ex-US), or private equity in developing markets. More on those soon.

via Zero Hedge http://ift.tt/1cwv0KH Tyler Durden

The theme of both the robot-ization of the global workforce and the populist desire for a hike in the minimum wage have been popular and ongoing ones here at Zero Hedge. However, never has it been more clear just where the future lies than this chart from BofAML’s Michael Hartnett… As he says, “we are long robots, and short human beings.”

 

 

Of course – from Applebees to Jamba Juice and now fast-food restaurants, the robots are coming and cries of millions of minimum-wage-hike-demanding union workers will do nothing but encourage it… (oh and the Fed’s financial repression)

 

 

Chart: BofAML

via Zero Hedge http://ift.tt/1cwv2Ci Tyler Durden

Equity markets were stumbling lower into the close of the US day session and volume was picking up… the powers that be clearly decided that was not to be allowed and the NASDAQ needed to close green (as we noted previously). JPY was not going to help as overnight volatility had reduced carry games so… slam dat VIX was the game. While not much in nominal size, the 0.3 vols smackdown in VIX starting at 1550ET lifted the S&P 3.5 points to close at the afternoon highs (and helped NASDAQ green and new highs)… But, seconds later (as INTC and AXP earnings disappointed), the entire ramp – and more – was dissolved before S&P futures closed. Ah, the efficient markets…

 

S&P 500 Cash index traders were treated (green oval) to a late-day VIX smashdown momentum ignition fantasy to lift the index up to highs… and then (as is clear from the futures in blue, the markets crumbled after hours)…

 

Charts: Bloomberg

 

via Zero Hedge http://ift.tt/1dymvmV Tyler Durden

While victory was declared yesterday, today was a let-down for the exuberant. High beta (NASDAQ and Russell) pushed on but the S&P, Dow, and Trannies slid leaving the NASDAQ YTD best performer (+1%) and the S&P back into the red for 2014. Financials underperformed, Utilities outperformed. Treasuries rallied all day – with the long-end underperforming and a notable flattening across the curve (30Y -2bps on the week, 5Y +2bps). The USD had a quiet day as JPY strengthened modestly (hence the weakness in the S&P) as overnight AUD weakness (poor jobs data) left that carry pair alone in the dark. VIX and credit markets have been notable underperformers relative to stocks in the last 2 days. Commodities were quiet all day with some early downside pressure in the precious metals unwound (leaving then down 0.5% on the week). Of course, it wouldn't be the US equity market without the ubiquitous VIX slam attempt to ignite momentum and get the S&P green – it failed for once!

 

VIX is not amused… (but of course – the last few minutes saw a VIX smasher…)

 

Nor is credit…

 

But the NASDAQ and Russell don't care – if it worked yesterday, it will tomorrow, right?

 

on the day the late-day ramp saved the NASDAQ from a red close and rammed Trannies higher…

 

Treasuries rallied back into the green for the week…

 

Commodities were relatively quiet aside from some pressure in the early European session…

 

Charts: Bloomberg

Bonus Chart: Stock Sentiment vs Bond Sentiment is at a worrying level for stocks bulls (h/t @Not_Jim_Cramer)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CfjmUhoWkBg/story01.htm Tyler Durden

While victory was declared yesterday, today was a let-down for the exuberant. High beta (NASDAQ and Russell) pushed on but the S&P, Dow, and Trannies slid leaving the NASDAQ YTD best performer (+1%) and the S&P back into the red for 2014. Financials underperformed, Utilities outperformed. Treasuries rallied all day – with the long-end underperforming and a notable flattening across the curve (30Y -2bps on the week, 5Y +2bps). The USD had a quiet day as JPY strengthened modestly (hence the weakness in the S&P) as overnight AUD weakness (poor jobs data) left that carry pair alone in the dark. VIX and credit markets have been notable underperformers relative to stocks in the last 2 days. Commodities were quiet all day with some early downside pressure in the precious metals unwound (leaving then down 0.5% on the week). Of course, it wouldn't be the US equity market without the ubiquitous VIX slam attempt to ignite momentum and get the S&P green – it failed for once!

 

VIX is not amused… (but of course – the last few minutes saw a VIX smasher…)

 

Nor is credit…

 

But the NASDAQ and Russell don't care – if it worked yesterday, it will tomorrow, right?

 

on the day the late-day ramp saved the NASDAQ from a red close and rammed Trannies higher…

 

Treasuries rallied back into the green for the week…

 

Commodities were relatively quiet aside from some pressure in the early European session…

 

Charts: Bloomberg

Bonus Chart: Stock Sentiment vs Bond Sentiment is at a worrying level for stocks bulls (h/t @Not_Jim_Cramer)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CfjmUhoWkBg/story01.htm Tyler Durden