Tag: finance

While Grant Williams can’t speak for anybody else, his nearly thirty years immersed in equity, bond, and commodity markets all around the world, have shown him enough to absolutely confirm in his own mind that the markets are rigged. Not just some of them. All of them. In different ways, to be sure, but they’re all rigged. Not only are they rigged, but they are rigged in ways that beggar belief; and in many places they are rigged by the very people who ought to be responsible for stopping any rigging.

…

Whether Bill O’Brien likes it or not, Michael Lewis was speaking the truth when he said the market was rigged. He was talking about US equity markets, but rigging goes much, much deeper.

Whether Bob Pisani, Stephanie Ruhle, or any of the other talking heads who form the informational front lines between the public and the markets care to admit it or not is immaterial; the markets are rigged.

Arguing about whether the rigging is a “tax” on investors is so spurious as to be ridiculous.

In order for market rigging to be stopped, the changes have to come from those entrusted with regulation, in the form of stern punishments for those caught rigging them, and there must be changes to the rules to close the loopholes that allowed this kind of activity to occur in the first place.

Instead, the bodies which supposedly oversee the markets are involved in the most serious rigging of all.

What chance is there that we will see any change?

Get used to it, folks. As anyone who looks at financial markets up close with their eyes open will tell you, they are all rigged — it’s simply a question of degree.

The question is, do you adapt and work around the rigging, or do you simply decide not to play?

Central banks and governments seriously hope you choose the former option.

…

(Dictionary.com): rig: verb (used with object), rigged, rig·ging.

1. To put in proper order for working or use…
2. To manipulate fraudulently

Now, the Fed will argue that the first definition applies to their actions and that they are putting the market in “proper order for working or use.” I would assert, however, that (a) their manipulation of the market is utterly beyond contention and (b) it would be hard to find a more egregious example of fraud than the creation of money out of thin air.

Manipulation and fraud. To me, definition 2 is the correct one.

But IT DOESN’T MATTER which definition you choose. BOTH apply to the action of “rigging.” The anomaly here is that the people rigging the market are essentially the same people in charge of policing it; so, of course, everybody simply looks the other way. It helps that the Fed’s particular form of manipulation is moving asset prices of all descriptions in predictable  directions, which makes money for everybody who tags along for the ride. When manipulation leads to profit, investors are willingly complicit.

Yes, the US government is the largest buyer of its own debt. This is not something we didn’t know, but think of the practice in terms of whether it’s “rigging” a market.

Is the world’s largest market trading where it would be under normal conditions and with freemarket forces allowed to exert themselves?

Of course not. It’s rigged.

Greek, Italian, and Spanish bonds? UK gilts? JGBs? Rigged, rigged, and rigged. Rigged. Rigged.

Like the Fed, the forces at work in these supposedly free markets will point towards the first definition of rigging and suggest they are putting those markets in proper order; but the truth is, creating a marketplace whereby Greece can sell $4 billion of 5-year debt at a yield of only 4.95% (as they did this week in a triumphant return to the bond market) made possible an implicit backstop by the ECB is fraudulent. It ensures that the price does NOT accurately reflect the underlying risk.

Thank heavens the bond markets are rigged. If they weren’t, this could get ugly.

Want more “rigging”?

 

Grant Williams’ Full letter below…

TTMYGH – Whats the Frequency

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

A few hours ago, Obama and Putin held their sixth phone conversation since the fate of Ukraine rekindled the second cold war. As usual, much was said, the generic talking points were uttered, and nothing was resolved nor will anything change.

First, here is the White House repeating, literally for the sixth time, the “costs” line:

Readout of the President’s Call with President Putin

 

At Moscow’s request, President Obama spoke with Russian President Putin today about the situation in Ukraine.  The President expressed grave concern about Russian government support for the actions of armed, pro-Russian separatists who threaten to undermine and destabilize the government of Ukraine.  The President emphasized that all irregular forces in the country need to lay down their arms, and he urged President Putin to use his influence with these armed, pro-Russian groups to convince them to depart the buildings they have seized.  The President reiterated the importance of Russia withdrawing its troops from Ukraine’s border in order to defuse tensions.  President Obama noted that despite the rhetoric from Russian officials, the government of Ukraine has acted with remarkable restraint, and he praised the Ukrainian government’s efforts to unify the country by holding free and fair presidential elections on May 25, pursuing inclusive constitutional reform and proposing concrete steps toward the decentralization of power.  The President noted Russia’s growing political and economic isolation as a result of its actions in Ukraine and made clear that the costs Russia already has incurred will increase if those actions persist.  The President noted the upcoming contact group meeting in Geneva and said that while he continues to believe that a diplomatic solution is still possible, it cannot succeed in an environment of Russian military intimidation on Ukraine’s borders, armed provocation within Ukraine, and escalatory rhetoric by Kremlin officials.

And from the perspective of the Kremlin:

Vladimir Putin had a telephone conversation with President of the United States of America Barack Obama.

 

The leaders discussed various aspects of the crisis in Ukraine, first and foremost in the southeastern regions engulfed by mass protests against the policies of the current authorities in Kiev.

 

The Russian side stressed that the protests in Donetsk, Lugansk, Kharkov, Slavyansk and other cities in southeastern Ukraine are the result of the Kiev authorities’ unwillingness and inability to take into account the interests of the Russian and Russian-speaking population. Vladimir Putin called upon Barack Obama to use the American side’s capabilities to prevent the use of force and bloodshed.

 

In response to the US President’s expressed concern about Russia’s alleged interference in southeastern Ukraine, the President of Russia noted that such speculations are based on inaccurate information. The current Ukrainian authorities must think first and foremost about truly involving all the main political forces and regions in a transparent process for developing a new constitution that guarantees the main rights and freedoms for citizens, the nation’s federal structure and its non-aligned status.

 

The two sides agreed to continue efforts to seek diplomatic cooperation in the context of the Ukrainian situation ahead of the four-party meeting (EU, Russia, US and Ukraine) scheduled to take place in Geneva on April 17.

Meanwhile, East Ukraine is preparing for a full-blown military operation.

In lieu of an actual updated photo op, here is the stock footage from the first such conversation. It will do the job since it could as easily have been taken in Hollywood.

via Zero Hedge http://ift.tt/1jFYwV5 Tyler Durden

“Copper is on the edge of resuming its downtrend,” is how BofA begins it brief note on the evolution of China’s crucial credit-collateral commodity (as we noted earlier). Copper futures limped lower today – fading even as the exuberant stock market ripped on 330pm fundamentals today.

 

For sure, Gartman will be hoping they are wrong…

 

As BofAML notes, Copper is on the edge. 

The early April break of 3wk Bearish Wedge support says that the counter trend rally of the past several weeks has come to a conclusion and that the larger bear trend is poised to resume. HOWEVER, we need to see a closing break of the Apr-07 6577 low to confirm, until then, bears must stay patient.

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

Submitted by James H. Kunstler of Kunstler.com,

The situation in Ukraine hotted up this weekend and threatens to blow this morning with the Kiev government affecting to send “anti-terrorist” troops into the eastern cities where ethnic Russians seized buildings. (In the olden times of Europe, they had witches and devils. Now, thanks to our example, they have “terrorists.”) While this impending civil war would be rather dire for Ukraine, it presents the obvious questions: 1) does it matter to anyone outside the region? And in particular, 2) is it any business of the USA?

War hawk kibitzers on the sidelines (e.g. The New York Times) are making a big deal of the 40,000 Russian troops marshaled around the border of eastern Ukraine. So what? That’s just a few thousand more than the 33,000 US troops deployed to Afghanistan, America’s current “nation-building” project. But the troop numbers swing to our side of the balance beam if you throw in the nearly 3,000 American boots-on-the-ground stationed in Kyrgyzstan, a former Soviet republic, and the roughly 15,000 in Kuwait and Bahrain. I don’t remember the Russians complaining very much about all this US military hyper-activity in their part of the world over the past decade.

At least somebody has stuffed a cheese Danish (or something) in John Kerry’s pie-hole the past week. The walking haircut-in-search-of-a-brain has stopped making ridiculous commitments to the US-and-EU-installed Kiev government. And President Obama has stopped drawing laugh-out-loud lines in the sand. I suspect if they resume beating that drum, they could provoke some unrest in our own country. Not everyone is glued to the Kardashian Channel with his fist in the Cheez Doodle bag. And not all of the army vets returned from operations in Muslim lands (the ones that haven’t committed suicide, that is) have such a high opinion of the overall outcome there.

Barack Obama, who I voted for twice, is on his way to becoming the worst US president in my lifetime, at least — and maybe in the whole cavalcade going back to the very start of the republic. I don’t want to get too sidetracked in this brief blog space today, but isn’t it stupendously asinine that Mr. Obama’s Justice Department and his SEC appointees only just last week became interested in the pervasive swindle of high frequency trading on Wall Street after author Michael Lewis went on 60 Minutes. Like, they hadn’t heard about this years-long orgy of front-running until now? Strange to relate, I actually might feel more comfortable if Vladimir Putin was massing troops on the Mexican side of the US border to keep Americans safe from our own bungling and destructive government.

Aren’t a number of things obvious about the Ukraine situation? Such as: the Russians have a greater interest in preventing chaos there than the US has in any provisional disposition of the Ukrainian border and the composition of its government. Such as: for most of the 20th century Ukraine was essentially a Russian province, and at various times before that the ward of several other eastern European kingdoms. Such as: Russia has a huge investment in gas pipeline infrastructure in Ukraine upon which depends a substantial portion of its national income, not to mention the winter-time comfort of most of the countries in western Europe.

Hence my plea: will parties in the USA (including Obama camp “progressives”) stop cheerleading for a showdown over this hapless doormat of a faraway nation whose destiny is not entwined with the people of Ohio, Nebraska, Rhode Island, or any of the other fifty states? We have enough to do in our own country to adjust to the new realities of the unraveling turbo-industrial global economy — and, by the way, we are not doing a damn thing to address any of it. Our domestic political conversation at all levels is juvenile and idiotic. I’d rather see US troops shut down WalMart, which has been way more destructive to the US economy (and the livelihoods of our people) than the bandits in any central Asian rat-hole. I’d rather see the US spend its dwindling capital restoring our passenger railroads than paying off the debts of strangers half a world away.

This is turning into a Vietnam moment for the US political scene. Where are the Fullbrights and Bobby Kennedys of today who have the guts to rally US citizens against insane government behavior? What elected officials among all the bought-off Koch Brother catamites and Wall Street errand boys will stand up for reality-based principle? When will the young people of this country pull their eyeballs away from their iPhones and their heads out of their cloacal vents? When will the United States begin the long-overdue task of getting its own act together?

via Zero Hedge http://ift.tt/1kqG6IS Tyler Durden

With Italian and Spanish bond yields at record lows (and spreads – risk premia – near record lows) one can only ascertain that Europe is fixed, Draghi has no need to do QE, and everything in the world is fine again. Except it’s not… Draghi is cornered from QE by a lack of uncommitted collateral and a banking system glued at the hip to the sovereign bond markets. But perhaps, for those who are buying Italian and Spanish bonds, it is not enough to see record high unemployment, record loan delinquencies, and record low credit creation… In order to help further with the BTFD, we offer the following chart – showing Spanish and Italian home prices continue to slump (along with Cyprus).

 

 

As Bloomberg Brief’s Niraj Shah notes, annual euro-area house prices dropped 1.4 percent in the final quarter of 2013, as values fell in the four largest economies. Prices dropped in half of the 14 countries reporting data. Eurostat used unofficial ECB figures for germany. Cyprus and Spain registered the largest declines with minus 9.4 percent and minus 6.3 percent, respectively. Estonia and Ireland made the biggest gains.

 

But, the recovery is here any minute…

via Zero Hedge http://ift.tt/1gy84Bk Tyler Durden

While the CIA-staged government coups in Libya and Egypt at least managed to last nearly a year before the inevitable “Thermidorian reaction” resulted in a blowback response that saw a overthrow of the interim US-handpicked rulers, Ukraine may not even last that long. According to reports by both Russian Interfax and Ukraine’s Unian press services, for the first time since the coup that overthrew Ukraine’s president Yanukovich in late February, hours ago a group of protesters assembled in front of the parliament building and on Independence Square in central Kiev, with demands for the resignation of both the interior minister Avakov as well as the acting president Turchinov.

Additionally, VZ.com reports that the protesters have issued a 24 hour ultimatum to the government to suppress protests in the South East where, as is widely known, “pro-Russian separatists” have effectively taken over the bulk of the cities bordering with Russia.

Simply stated, the people are tired of a figurehead government that already folded when it handed over Crimea to Russia on a silver platter and are demanding at least a token resistance before the rest of the cities in the east flip over to Russia effectively splitting the country in two.

A clip of the protesters taken earlier this evening.

 

More from Unian:

The Interior Ministry of the capital noted that it is unknown to what protesters are demanding positions remove Turchinova.

 

According to law enforcement treated protesters politely, but for law enforcement in the event of a breach to the scene, police officers directed.

 

Also in the Interior Ministry of Ukraine in Kiev urged protesters not to resort to radical actions and do not disturb the public order “as any problematic issues could be resolved through dialogue.”

Ironically, the protesters may just get their wish. Russian RT reported that “Ukrainian tanks and heavy military equipment are moving towards the eastern town of Slavyansk, ITAR-TASS reported quoting acting mayor Vyacheslav Ponomarev as saying. On Monday, protesters ignored the ultimatum to leave by 9 am, and a Russian flag continued to fly over the besieged police HQs in Slavyansk. Ponomarev added that they are getting ready and are monitoring the situation. “We don’t want bloodshed, we are committed to negotiations,” he said.”

Finally, and rather surprising, a clip was also released earlier today showing Ukraine troops and APC dispersing anti-tank “hedgehogs” along the Odessa coastline, as if in anticipation of a marine landing.

Finally, while all this is happening, Obama keeps on talking:

• IN PHONE CONVERSATION, PUTIN AND OBAMA AGREED TO CONTINUE DIPLOMATIC EFFORTS BEFORE APRIL 17 GENEVA TALKS ON UKRAINE – KREMLIN

That… and this pearl: “White House warns Russia of more ‘costs’ over Ukraine.”  Does the White House mean these “costs” we wonder?

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

Submitted by Martin Armstrong via Armstrong Economics,

 

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

Preface:  A recent Gallup poll showed that 34% of American adults worried “a great deal” about “global warming”.  This essay is written for that 34%.

Many well-intentioned people are desperately trying to stop climate change …

And yet they are proposing things that will put more C02 and methane into the air and otherwise do more harm than good.

Frack That

Many propose nuclear and fracking as a way to reduce carbon emissions.

In reality, scientists say that fracking pumps out a lot of methane … into both our drinking water and the environment.

Methane is a powerful greenhouse gas: 72 times more potent as a warming source than CO2.

As such, fracking actually increases – rather than decreases – global warming.

Are Nukes the Answer?

It turns out that nuclear is not a low-carbon source of energy … and funding nuclear crowds out the development of better sources of alternative energy.

Mark Jacobson – the head of Stanford University’s Atmosphere and Energy Program, who has written numerous books and hundreds of scientific papers on climate and energy, and testified before Congress numerous times on those issues – notes that nuclear puts out much more pollution (including much more CO2) than windpower, and 1.5% of all the nuclear plants built have melted down. More information here, here and here.

Jacobson also points out that it takes at least 11 years to permit and build a nuclear plant, whereas it takes less than half that time to fire up a wind or solar farm. Between the application for a nuclear plant and flipping the switch, power is provided by conventional energy sources … currently 55-65% coal.

Scam and Trade

One of the main solutions to climate change which has long been pushed by the powers that be – cap and trade – is a scam. Specifically:

• The economists who invented cap-and-trade say that it won’t work for global warming

• Many environmentalists say that carbon trading won’t effectively reduce carbon emissions

• Our bailout buddies over at Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup and the other Wall Street behemoths are buying heavily into carbon trading (see this, this, this, this, this and this).

As University of Maryland professor economics professor and former Chief Economist at the U.S. International Trade Commission Peter Morici writes:

Obama must ensure that the banks use the trillions of dollars in federal bailout assistance to renegotiate mortgages and make new loans to worthy homebuyers and businesses. Obama must make certain that banks do not continue to squander federal largess by padding executive bonuses, acquiring other banks and pursuing new high-return, high-risk lines of businesses in merger activity, carbon trading and complex derivatives. Industry leaders like Citigroup have announced plans to move in those directions. Many of these bankers enjoyed influence in and contributed generously to the Obama campaign. Now it remains to be seen if a President Obama can stand up to these same bankers and persuade or compel them to act responsibly.

In other words, the same companies that made billions off of derivatives and other scams and are now getting bailed out on your dime are going to make billions from carbon trading.

War: The Number One Source of Carbon

The U.S. military is the biggest producer of carbon on the planet.

Harvey Wasserman notes that fighting wars more than wipes out any reduction in carbon from the government’s proposed climate measures.

Writing in 2009 about the then-proposed escalation in the Afghanistan war, Wasserman said:

The war would also come with a carbon burst. How will the massive emissions created by 100,000-plus soldiers in wartime be counted in the 17% reduction rubric? Will the HumVees be converted to hybrids? What is the carbon impact of Predator bombs that destroy Afghan families and villages?

The continuance of fighting all over the Middle East and North Africa completely and thoroughly undermines the government’s claims that there is a global warming emergency and that reducing carbon output through cap and trade is needed to save the planet.

I can’t take anything the government says about carbon footprints seriously until the government ends the unnecessary wars … all over the globe.

So whatever you think of climate change, all people can agree that ending the wars is important.  (War also destroys the economy.)

Anyone who supports “humanitarian war” by the U.S. is supporting throwing a lot of carbon into the air.

Dumb as a Mongoose In Hawaii

Many scientists suggest “geoengineering” the Earth’s climate. But that could actually worsen climate change. It could also increase the risk of drought.

Moreover, geoengineering would increase ocean acidification and decrease available sunlight for solar power.

And once we started, we could never stop.

Some of the geoengineering proposals are downright nuts.  For example, “government scientists are studying the feasibility of sending nearly microscopic particles of specially made glass into the Earth’s upper atmosphere to try to dampen the effects of ‘global warming.’ ” Others are currently suggesting cutting down trees and burying them. Other ways to geoengineer the planet are being studied and tested (and see this and this), involving such things as dumping barium, aluminum and other toxic metals into the atmosphere.

Remember, the mongoose was introduced to Hawaii in order to control the rats (which were eating the sugar cane used to make rum). It didn’t work out very well … mongeese are daylight-loving creatures while rats are nocturnal. So the mongeese trashed the native species in Hawaii, and never took care of the rats.

Similarly, the harm caused by many of these methods have not been thought through … and they could cause serious damage to our health and our ecosystems.

So – whatever you think about climate – you can obviously agree that we should approach climate change from the age-old axiom of “first, do no harm”, making sure that our “solutions” do not cause more damage than the problems.

So What’s the Answer?

If nuclear, fracking, cap and trade and geoengineering aren’t the answer, what is?

There are 3 main strategies which both climate activists and climate skeptics can agree on, because they have big upsides whether or not the Earth is warming:

(1) Reducing soot will quickly reduce melting of ice and snow. Reducing soot will be cheaper than the “decarbonation” which many policy-makers have proposed. And it would increase the health of millions of people worldwide

 

(2) Use specific smart combinations of solar, wind and geothermal energy

 

(3) Decentralize power generation and storage.  That would empower people and communities, produce less carbon, prevent nuclear disasters like Fukushima, reduce the dangers of peak oil (and thus prevent future oil spills like we had in the Gulf), and have many other positive effects

We don’t need fascism to make this happen …  We just need a sound plan.

via Zero Hedge http://ift.tt/1p4qtvs George Washington

Months of BTFD momo mentality lost in days… so we thought this was appropriate

 

 

Source: TradingMemes

via Zero Hedge http://ift.tt/1eGQk2F Tyler Durden

The market appears to currently be tracing out a pattern that we have seen multiple times. That pattern is:

 

1)   A spring mini-crisis (usually March)

2)   A summer rally

3)   An autumnal collapse

 

This pattern played out in 1907, 1929, 1987, 2000 and 2008.

 

The most recent example we can point to is 2008. In that year, the market experienced a mini-crisis in March with the collapse of Bear Stearns.

 

However, the Fed stepped in, merging Bear with JP Morgan. The relieved markets rallied into the summer on low volume. But come July, when Fannie Mae and Freddie Mac failed, it became clear that the summer rally would not be exceeding the previous market top.

 

Then AIG failed, and the markets nosedived, collapsing into an autumnal crash.

 

Could the markets experience another similar autumnal collapse in 2014?  It all hinges on #2 in the list above: the summer rally.

 

The markets usually stage some kind of summer rally/ dead cat bounce following spring crises. The key issue is the volume and force of the move. If the market rallies hard on heavy volume during the summer, this negates the pattern.

 

However, if the market rallies on weak volume after a spring crisis, and fails to exceed its previous top, then LOOK OUT.

 

Here’s the market’s current chart:

 

 

This time around, the spring crisis involved political and geopolitical instability in Ukraine. As you can see, the market bounced off of its trendline and is now  trending sideways.

 

Provided we hold this line, we should see a summer rally back up to the 1,900 area on the S&P 500.

 

However, if we take out the trendline, then the market is in more serious trouble.

 

This concludes this article. For a FREE Special Report on how to protect your portfolio from a bear market collapse, swing by

http://ift.tt/RQfggo

 

Best Regards

Phoenix Capital Research

 

 

 

via Zero Hedge http://ift.tt/1hFENGA Phoenix Capital Research