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In what has to be the most disappointing denial of central bank manipulation of a market in recent history, and probably never, the Bank of England today announced that it “has seen no evidence to back media allegations that it condoned or was aware of manipulation of reference rates in the foreign exchange market.” As a reminder, last week we reported, that according to a Bloomberg, “Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms” or, in other words, the highest monetary authority in England, and the oldest modern central bank, explicitly condoned and encouraged manipulation. Fast forward to today when Andrew Bailey, the Bank’s deputy governor and chief executive of the Bank’s Prudential Regulation Authority, told parliament’s Treasury Select Committee on Tuesday it had no evidence to suggest that bank officials in any sense condoned the manipulation of the rate-setting process. In other words, it very well may have… but there just is no evidence – obviously in keeping with the bank’s very strict “smoking manipulation gun document retention policy.“

Then again, such evidence already was presented to UK regulators: “Bloomberg News said on February 7 that the Bank officials told currency traders at the April 2012 meeting that it wasn’t improper to share impending customer orders with counterparts at other firms.  A senior trader gave his notes from the meeting to the Financial Conduct Authority, Bloomberg said.“

Hence, Mr Bailey had to modestly revise his statement:

“I should say that we have no evidence yet, and we have not seen the evidence that was in the Bloomberg report,” he added.

He added that the Bank of England review was in close cooperation with the Financial Conduct Authority (FCA), which is also investigating broader allegations of manipulation in the foreign exchange markets.

Which obviously means that should the BOE never be “confronted” with the evidence, and it mysteriously “disappears”, it simply means that one of Mark Carney’s henchmen pulled a few levers at the FCA, and made it disappear: of course, on national security grounds, because should it surface that a central bank is merely a criminal organization, then faith and confidence in the Ponzi system might falter. It would also mean confirm what most people who care about these things know: when it comes to UK governance, the buck stops with Threadneedle. And not only there, but everywhere else too.

The rest of the report is trivial fluff and generic spin:

“The Bank does not condone any form of market manipulation in any context whatsoever,” Bailey told the lawmakers on Tuesday.

“On the evidence we have currently, we have no evidence to substantiate the claim that bank officials in any sense condoned or were informed of price manipulation or the sharing of confidential client information,” Bailey added.

“We’ve released the minutes of that meeting, but obviously there are now allegations that there are different versions of what happened at that meeting,” Bailey said.

 

Bailey said the claims, which the central bank first heard about last October, were being taken “very seriously” and a full review was now underway, led by the Bank’s internal legal counsel with support from an external counsel.

Perhaps just to confirm how serious the “review” is, Bailey should also release a few photos of the internal and external counsels operating the paper shredders with the passion of 2nd year Arthur Andersen intern.

via Zero Hedge http://ift.tt/1dG46k7 Tyler Durden

The clean debt ceiling bill has just passed the House where it got the required majority in a 221 to 201 final vote, with just 28 Republicans voting Yea (and 199 voting Nay) which means that with a Senate passage assured, the US can now spend away until March 15, 2015. The final breakdown:

• GOP: Yea – 28; Nay -199
• DEM: Yea – 193; Nay -2
• Total: Yea – 221; Nay – 201

Considering that the vast majority of Republicans voted against John Boehner’s latest “plan” to do the Democrats’ work for them, and pass a clean debt ceiling, perhaps it is time to look for a speaker who represents the interests of more than just a tiny fraction of the party… and the Democrats of course.

“I’m grateful to the speaker and the Republican leadership for giving this House this opportunity to act in a way that is consistent with the constitution,” said Minority Leader Nancy Pelosi, D-Calif., speaking in the chamber in advance of the vote. “I thank my Democratic colleagues for never wavering from this position and standing firm on behalf of all Americans.”

We will post the final vote roll call once it is released.

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

Will John Boehner fold – as he always does – with style, or will he fail to whip enough Republicans to where he can’t even do the Democrats’ “clean debt ceiling hike” bidding for them and round up the required 218 vote majority? Find out momentarily.

via Zero Hedge http://ift.tt/1ju9MpO Tyler Durden

By: Chris Tell at http://ift.tt/146186R

That’s what its being called. Crowdfinance or crowdfunding, is a space we’ve spoken about repeatedly on this site. Mainstream media have been a little slow to wake up to it, but wake up to it they will.

It is MASSIVELY DISRUPTIVE, and the implications for traditional brokers, investment bankers, venture capitalists and the numerous flow-on and related industries cannot be underestimated. 

For the last few years we’ve watched the crowdfunding space intently and have deep connections in the industry. 2013 landed up being a pivotal year for crowdfinance and 2014 looks even better.

In a regulatory environment that has appeared to be sleepwalking into high-vis misery, the SEC removal of the 80 year ban on general solicitation for private companies was a step in the opposite, yet right direction. Catalytic mainstream acceptance was further solidified, and a number of high profile investments were made. Google led a $125 million deal buying a stake in Lending Club, valuing the world’s largest p2p lending platform at $1.55 billion. Blackrock came in as a strategic investor to Prosper, to name but two.

Our friend Dara Albright, Co-founder of NowStreet Wire, has 4 predictions for 2014. Incidentally we don’t disagree.

1. CAPITAL WILL BE REALLOCATED FROM TRADITIONAL FIXED INCOME PRODUCTS INTO PEER-TO-PEER (P2P) LOANS2013 was an extraordinary year for p2p lending. The domestic market grew 177%, the global market exceeded $8B, and the industry began winning over an initially skeptical media. As the financial press increasingly draws attention to p2p’s greater and more stable returns, we should experience an exodus from bond funds into p2p. This past year, many active bond managers underperformed their benchmarks, and investors began withdrawing money from bond funds at record paces. According to Lipper US Fund Flows data, over $60B has been pulled from municipal bond funds alone in 2013 – the most since 1992. With p2p garnering mainstream attention, conventional fixed income asset classes languishing, and wealth managers becoming more knowledgeable about p2p investing, more capital is likely to find its way into a diversified portfolio of p2p loans.
2. EQUITIES CROWDFINANCE WILL GERMINATE THROUGH SELL-SIDE CHANNELSWhereas p2p lending sprouted from the yield-hungry investing public before being chased by the institutional buy-side, the equity side of crowdfinance is more likely to germinate through sell-side channels such as boutique investment banks and small cap underwriters who possess decades of experience selling “story stocks”. In 2014 brokerage firms will quickly discover additional revenue streams emanating from corporate crowdfinance products such as PIPRs (“Private Issuers Publicly Raising) and crowdfinanced IPOs. Instead of leaving money on the table, BD’s will embrace these new products that not only contain more attractive commission structures, but mitigated compliance risk.
3. OTHER CROWDFINANCE STRUCTURES WILL PROVE MORE VIABLE THAN TITLE III CROWDFUNDING.Despite what most crowdfunding enthusiasts would like to believe, Title III Crowdfunding, as proposed by the SEC, will not be the holy grail of capital formation. There are more feasible and cost-effective options available to issuers such as PIPRs, intrastate crowdfunding and even rewards-based crowdfunding. Title III Crowdfunding will likely undergo a number of legislative iterations, such as increasing the $1M offering threshold, before it becomes practicable for most emerging businesses. While national securities-based crowdfunding remains in flux, “locavesting” or intrastate crowdfunding will be a better way for most regional businesses to raise funds. As more states follow Georgia and Kansas in bypassing the SEC and implementing their own crowdfund legislation, more businesses will have an opportunity to reach out to their community for growth capital.
4. VENTURE CAPITAL WILL CHASE CROWDFINANCE INFRASTRUCTURE PLAYSVenture capitalists, looking for ways to capitalize on crowdfinance, will recognize that a vast amount of wealth will be generated in infrastructure plays. In 2014, venture capital will flow into those companies that provide settlement & clearing functionality, supply market data to the global investing community, and facilitate secondary transactions of crowdfinanced offerings and p2p debt.Finally, it must be asserted, that no nation has ever succeeded, or will ever succeed, by printing or taxing its way to prosperity. Nor can a nation stimulate its economy by restricting its middle class investors and entrepreneurs from accessing portfolio yield and growth capital. However, employing the doctrines of crowdfinance – granting all citizens the ability to freely invest in the ingenuity and invention of fellow citizens – has proven to be a winning formula. In fact, it is what enabled a simple farmland to become a global innovation leader and the greatest economic superpower in the history of the world. And it is crowdfinance that what will fund the innovation that will fuel the next economic boom. As the crowdfinance industry crosses these new milestones in 2014, it will be paving the way for new medical cures, technological advancement and greater wealth equality.

It is this last prediction which we’re seeing happen already and we absolutely, 110% wholeheartedly agree.

The early signs are evident. We have a dedicated staff member who’s job is to provide us with a weekly data dump of all that is new in the world of crowdfunding, p2p, etc… Naturally, out of this we hear about a lot of “experts” popping up. Bloggers who clearly know close to nothing about private equity, and nothing about investing in-fact, entering the space touting how you too can make millions in private equity. Yes, you too can become obscenely rich investing in the next Google. Let the games begin. A bubble here we come.

I think we are still a ways off the sector really gathering momentum. To front run this inevitable bubble, Mark and I, together with our CPAN members, have just made our first investment in this space. It’s an infrastructure play, per Dara’s 4th prediction above.

I think 2014 will be a banner year for equity crowdfunding and push us further towards bubblicous territory, which will likely peak in a few years time. Just a guess. An educated one, but a guess nonetheless.

I’ll add another couple of predictions to the pot.

1. We’ll see a new version/s of “Shark Tank”;
2. Much like co-ops in the third world aggregate community projects, I can envision local communities crowdfunding social projects such as playgrounds, theaters and even community gardens.

Let us know what you think in the comments section. We’d love your feedback!

– Chris

“Venture capital is a bad business” – Fred Wilson (well known venture capitalist and partner at Union Square Ventures)

via Zero Hedge http://ift.tt/1ju9JKy Capitalist Exploits

SEC Lashes Out At Wolves Of Wall Street- Suspends 225 Companies

Courtesy of Joao Peixe of OilPrice.com

The US Securities and Exchange Commission (SEC) has suspended 255 shell companies from trading until 14 February to prevent “pump and dump” fraud, and stocks will not be relisted if companies fail to prove they are operational.

The suspension took hold at the start of trading on 3 February and will end at 11:50 p.m. on Feb. 14. Suspended stocks can’t be relisted unless the company can prove it is still operational, a requirement that the SEC said was “extremely rare.”

The SEC suspension covers shell companies in 26 US states and two unnamed foreign countries, with the US regulator describing the targets as “ripe for abuse”.

These “pump and dump schemes” being targeted by the SEC generally occur when violators talk up a thinly traded microcap stock through false and misleading statements about the company to the market. The violators buy up the company’s shares cheaply and the pump up the stock price by creating the appearance of market activity and then dump the stock for a massive profit.

This activity was made famous through the 2014 Hollywood movie, The Wolf of Wall Street, which is based on the true story of former US stockbroker Jordan Ross Belfort, who served 22 months in prison for causing investors to lose $200 million through a pump and dump scheme.

The SEC moved to suspend 61 other shell companies in June last year, along with 379 shell companies in 2012. This is part of the SEC’s ongoing initiative dubbed “Operation Shell-Expel,” which was launched in 2012.

The suspension will end at 11:50 p.m. on 14 February, and according to the SEC, the “trading suspension essentially renders the shells worthless and useless to scam artists.”

Because these shells all too often are used by those looking to manipulate stock prices, we will continue to protect unwary investors by suspending trading in shells,” Andrew J. Ceresney, director of the SEC’s enforcement division, said in a statement.

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. Click here to learn more about the Free Oilprice.com Energy Intelligence Report.

via Zero Hedge http://ift.tt/1ju9LSJ ilene

Submitted by Simon Black of Sovereign Man blog,

631 people renounced their US citizenship in the 4th quarter of 2013.

This is an entire order of magnitude higher than the 45 people who renounced in 4Q/2012. And in total, 3,000 Americans renounced their citizenship in 2013– another record high.

The previous record (1,777) was set in 2011, which shattered the previous record before that (1,534) which was set in 2010, which was more than twice the number (742) that renounced in 2009.

You can see the trend here. And it’s not hard to figure out why it’s happening.

As the United States Taxpayer Advocate Nina Olsen recently told Congress in her scathing report about US tax policy:

“[T]ax requirements have become so confusing and the compliance burden so great that taxpayers are giving up their U.S. citizenship in record numbers.”

In her report, Ms. Olsen specifically points to the Foreign Account Tax Compliance Act (FATCA), which was passed by Congress four years ago. She states that FATCA “has the potential to be burdensome, overly broad, and detrimental to taxpayer rights.”

That’s putting it politely.

I have written several times before that FATCA is one of the most destructive, insidious pieces of legislation ever passed. And the worst effects are only now -starting- to be felt.

Among other things, the law requires new disclosures for US citizens with foreign accounts. And just to make sure it’s absolutely clear how the US government views its tax serfs, they put this little ditty in the instructions:

“The fact that a foreign jurisdiction would impose a civil or criminal penalty on you if you disclose the required information is not reasonable cause [to NOT file this form].”

Basically they’re saying, ‘Even if disclosing this information would cause you to go to jail in a foreign country due to their confidentiality laws, we don’t give a damn. We still expect you to file this form. Otherwise we will throw you in jail in the US.’

(yes, there are potential criminal penalties for not filing this form…)

This isn’t exactly how a free society treats its citizens. It’s a constant threat of force with these people. Even the most mundane, bureaucratic tasks are cause for intimidation.

As I have pointed out so many times before, you can’t even apply for a passport (i.e. permission to leave the country) in the Land of the Free without being threatened with fines and imprisonment.

All of this has come at tremendous cost. Aside from permanent damaging the US government’s reputation and its role in the global banking system, the human cost is nearly incalculable.

Think about it– it’s not the Obamaphone recipients who are renouncing their citizenship and leaving the country. These are smart, talented, energetic people who could have actually contributed something.

And as this productive class gets out of dodge, they leave behind more people who want something for nothing… and fewer people to pay the bill.

It’s the same situation the Romans were in back in the 5th century.

Undoubtedly there are folks out there who would call the thousands of people who have renounced ‘cowards’ and ‘traitors’ (though they are in respected company given that the British considered George Washington a traitor).

But lest we judge ‘renunciants’ poorly, we should first ask– is it more honorable to lay down and let yourself be plundered by a bunch of blundering, bungling, deceitful politicians…?

Doubtful. Besides, divorcing yourself from your bankrupt, insolvent government is not the same as divorcing yourself from your culture or values.

You are who you are no matter what color your passport is.

via Zero Hedge http://ift.tt/1bTc3Gn Tyler Durden