Tag: finance

Today’s AM fix was USD 1,284.00, EUR 930.91 and GBP 771.26 per ounce.                      

Yesterday’s AM fix was USD 1,286.50, EUR 932.45 and GBP 772.67 per ounce.

Gold fell $2.80 or 0.22% yesterday to $1,280.50/oz. Silver rose $0.02 or 0.1% yesterday to $19.81/oz.

Webinar: Dr Marc Faber On Gold, Silver and Asset Allocation In An Uncertain World

This Friday, April 4th at 0900 BST, Dr Marc Faber will give insights into his strategies for protecting and growing wealth in 2014 and beyond. Register today and don’t miss this opportunity to hear one of the world’s most respected investment experts.


Dr Marc Faber and Jim Rickards at the World War D Conference in Melbourne

Gold climbed in London, its first rise in 3 days. It is believed that the seven week low will lead to renewed physical buying in China. Gold bullion of 99.99% purity for delivery in Shanghai traded at a premium to the London price earlier today, Bloomberg data showed. China was last year’s largest gold buyer and is already on course to surpass last years record demand.

Gold fell 3.2% in March due in large part to speculation that the Fed may reduce their massive monetary stimulus and return to more orthodox monetary policies. However, gold was  6.8% higher in the first quarter as many investors viewed the 28% sell off in 2013 as a buying opportunity.


Gold in U.S. Dollars – January 2011 To April 2014 (Thomson Reuters)

Geopolitical risk and the Ukraine crisis led to safe haven demand and may be leading to renewed central bank diversification into gold including from Russia itself.

Fed Chair Janet Yellen said in March that the central bank may end its bond-buying program this fall and increase borrowing costs six months after that. Yellen then changed her tune this week saying that the “considerable slack” in labor markets showed that accommodative policies will be needed for “some time.”

Faber: Gold “Is A Present From God And I Wish It Would Go Lower So I Could Buy More”
After a long first day of presentations at the World War D conference in Melbourne, the international keynote speakers, Marc Faber, Jim Rickards, Richard Duncan and John Robb got up on the stage to answer questions on topics ranging from Bitcoin, to China’s economy to gold.

Faber said his concern about Bitcoin was how reliant it is on the internet and electricity networks functioning properly, something that can’t be taken for granted in the age of digital warfare.

Technology risk is something we have warned of for sometime. It shows the importance of not having all your savings and wealth in digital currencies in banks, in digital currencies like bitcoin and emerging crypto currencies or indeed in digital gold formats whereby you are very dependent on and exposed to websites, servers and technology in general.

World War D: Money, War and Survival in the Digital Age heard from Faber that gold, unlike digital assets, is a physical asset and that it had performed superbly until September 2011.

Faber said that gold has been in a correction since then, which isn’t unusual in a money printing environment. On gold at today’s prices, Faber said that “the fact is that gold down is a present from God and I wish it would go lower so I could buy more,” he said.

The big proviso Faber added was that he had to physically own coins and bars. He also warned that people would be ‘mad’ to own any asset, including gold, in the U.S. Previously, Faber has said that he favors owning gold in fully allocated gold accounts in Singapore and Switzerland.

Jim Rickards said that gold should remain an essential part of diversified portfolios and Mark Faber pointed out that the question should be “how could you NOT own gold?”

The question echoes observations Faber made in January 2013, when he told a well known CNBC presenter that she was “in great danger because you don’t own any gold.” Before wittily reassuring her that she had “a golden personality.”

Webinar: Dr Marc Faber On Gold, Silver and Asset Allocation In An Uncertain World

This Friday only, April 4th, Dr Marc Faber will give insights into his strategies for protecting and growing wealth in 2014 and beyond. Register today and don’t miss this opportunity to hear one of the world’s most respected investment experts.

In this webinar, some of the topics covered with Dr Faber include:

Asian Century?
Western stagnation or collapse?
Implications of events in Ukraine
Allocations to precious metals?
How to own precious metals?
Dollar cost average or lump sum?
Take profits/ rebalance or buy and hold for long term?
When to sell?
Favoured asset allocation?
Other investment and business opportunities?

Dr Faber’s webinar takes place this Friday, April 4th, 2014, at 0900 BST (0900 British Standard Time or London and UK time). Register to attend the event or to receive a recording of the webinar.

 

via Zero Hedge http://ift.tt/PiLuCd GoldCore

As the world’s investors wait anxiously for the next piece of bad news from Japan, China, Europe, or US as a signal to buy, buy, buy on the back of a renewed “stimulus” of freshly printed money that has comforted them for 5 years, it seems the Fed is turning its attention elsewhere:

• BULLARD SAYS MONITORING FOR ASSET BUBBLES `IMPORTANT CONCERN’
  
• BULLARD SAYS ASSET PRICE BUBBLES MAY BECOME `BIG CONCERN’

The embarrasment continues:

• BULLARD DOESN’T SEE PRICE BUBBLE LIKE IN PRE-CRISIS HOUSING

Because the Fed was accurate in spotting the “pre-crisis housing” bubble, right?

And the punchline:

• BULLARD SAYS FED HAS BETTER `SYSTEMS’ FOR `FLAGGING’ BUBBLES

For now though, of course, the Fed’s Bubble-o-Flagger (which can also be yours for four easy payments of $29.95) has no batteries. Pointing out the irony that the Fed creates the bubbles… and then when it becomes a “big concern” it promises to do something about it if it every sees one.  Finally, we are delighted that the schizhophrenia of the central planners continues to be exhibited for all to see: first Yellen tells everyone to buy stocks on Tuesday with an uber-dovish retracement of her “6 month” flub, and now Bullard is saying to watch out for bubbles. What can one say but… economists.

As a gentle reminder of just how these bubbles are formed…

Bubble Formation: start at the bottom left…

Bubble Bursting: …and end with a ‘debt crisis’ and a ‘rush for the exits’

Rinse and Repeat – Simple. QED

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

Long-time readers may recall that in the early days of this website, in addition to HFT, one of our market structure pet peeves was the fact that Goldman Sachs was a Designated Market Maker on the NYSE, reaping various benefits primarily as a result of the firm’s role as of one of the only Supplementary Liquidity Providers at the stock exchange – a form of slower HFT “liquidity provider” if you will. Over time, as HFT became all encompassing and as increasingly more trade took place in the HFT domain, Goldman’s DMM role became less prominent especially with the arrival of such program traders as Latour Trading.

Why do we bring this up?

Because in what is a true double whammy of market structure stunners from Goldman over the past week, not only has the firm done an about face on HFT (we eagerly await Goldman’s pardon of “HFT market manipulator” and former Goldman employee Sergey Aleynikov) and is now actively bashing the high freaks (much to the chagrin of Virtu and its pulled IPO, whose lead underwriter Goldman just happened to be), overnight it was reported that Goldman is also in the process of selling its “designated market-maker” unit to Dutch firm IMC Financial Markets to sell the trading business.

Keep in mind that Goldman bought its presence on the NYSE as part of its 2000 acquisition of Spear Leeds & Kellogg, which it bought for $6.5 billion at the time. Incidentally, we had a few things to say about Goldman’s improprieties in this regard too. Recall from our July 2009 article, “Is Goldman Legally Frontrunning Its Clients?”:

Everyone who is anyone on Wall Street has at some point used the Goldman 360 portal whether for research, news, keeping a track of prime brokerage portfolio or, disturbingly, for trading, via the REDI Plus 9.0 platform (now loaded with enhanced algo trading features to make life for you, dear soon to be frontran Goldman client, so much easier). A second widely accepted Wall Street concept is that a disclaimer is the last thing that anyone reads, if ever. Yet after taking a close look at the Goldman disclaimer for the 360 portal, which is an umbrella waiver or all downstream websites, including REDI, one discovers the following gem:

 

Monitoring by GS: Your use of the products and services on this Web site may be monitored by GS, and that the resultant information may be used by GS for its internal business purposes or in accordance with the rules of any applicable
regulatory or self-regulatory organization.

 

One second: by using Goldman 360 a client voluntarily allows Goldman to provide keystroke by keystroke data of everything the client does, even if that includes launching trades via REDI, to Goldman for the internal business purposes. The third thing everyone on Wall Street agrees on is that “internal business purposes” usually (and in Goldman’s case, almost exclusively) means proprietary trading.

 

Are Goldman 360 clients (in)voluntarily signing off a release to be front ran by Goldman on any portal-based trade? Could Goldman please clarify just what “internal business purposes” means in the context of this overarching disclaimer, and also whether Goldman has ever actually used 360 submitted information in the decision making process of its prop trading desk? Lucas Van Pragg: the floor is yours.

And here are some additional Goldman Sachs and Spear, Leeds and Kellogg form documents that contain an even more crypitc warning in section 4(f) in Use Of Services:

 

You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation.

 

NOT FOR YOUR BENEFIT? I mean, come on, how more clearer does it need to get.

Anyway, back to the topic at hand and Goldman’s disposition of NYSE assets: according to the NYT, Goldman is seeking a paltry $30 million for the DMM post. In other words, a total loss on $6.5 billion in old school assets courtesy of HFT.

Not unexpected.

However, what is unexpected, is the complete transformation Goldman has undergone in in the past several weeks: first Goldman, the bank that everyone else on Wall Street always imitates, waving goodbye to HFT, and now departing the NYSE? 

When the world’s most intelligent FDIC-backed hedge fund, pardon, bank says the current market structure is no longer necessary to Goldman, people notice, and promptly imitate.

To be sure – if this is not indicative of a major storm coming for traditional “lit” market structure (as opposed to dark pools of which IEX, until recently, was one and where Goldman has nearly complete dominance with Sigma X), we don’t know what is.

Once again: if we were HFT vacuum tubes, we would be sweating nanobullets right about now.

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

As we entered the year, Goldman Sachs set out a target of 1,900 for the S&P 500 by the end of 2014. Thanks to the plethora of bad news (which, obviously, is great news) and the promise of more money printing if things get worse, with the mini-melt-up of the last few days (ahead of the ECB hope tomorrow and traders desire for a dismal print at Friday’s NFP), the S&P 500 is now within 10 points of Goldman’s year-end target (it seems 104.50 USDJPY will do it). The Dow is also about to go green year-to-date for the first time in 2014.

 

The S&P is within 10 points of Goldman’s year-end target (just 9 months early?)

 

Trannies are the best YTD but the Dow is about to go green for

 

Why?

via Zero Hedge http://ift.tt/1h2ODSA Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Right now China is at the top of the S-Curve, and the problems of stagnation are still ahead.

What happens after all the low-hanging fruit has been picked? We can phrase the same question using a different analogy: what happens when all the oxygen in a room has been consumed?

One way to understand why the global financial meltdown occurred in 2008 and not in 2012 is all the oxygen in the room had been consumed. In the U.S. housing market, there was nobody left to buy an overpriced house with a no-document liar loan because everyone who was qualified to buy a McMansion in the middle of nowhere had already bought three and everyone who wasn't qualified had purchased a McMansion to flip with a liar loan.

Once the pool of credulous buyers evaporated, the dominoes fell, eventually circling the globe.

What happens after the low-hanging fruit has been picked? Here's an analogy: erect an enormous 13-story building on a thin slab foundation that is barely adequate for a 2-story house, and tie that flimsy foundation to the earth with fragile hollow pilings. What happens? Collapse.

Analysis of the Collapse Of 13-Story Building in China
Shanghai building collapse (Telegraph, UK)

Anyone tracking the global economy has an eye on China, for obvious reasons.China has led the world's growth for the better part of two decades, and now the growth story has entered a new phase. China is weakening its currency (renminbi/yuan), and trying to throttle its vast credit/shadow banking expansion even as Chinese officials claim China's economy is still expanding at a phenomenal clip (7+% annually).

I think we can shed some insightful analytic light by saying that the low-hanging fruit in China has all been plucked, and this creates an entirely new set of problems and challenges.

The first thing to note about nations experiencing rapid growth is the mathematical impossibility of continued break-neck growth: when China's economy (in purchasing power parity (PPP) or nominal dollars) GDP was $500 billion, an expansion of $50 billion equated to 10% a year.

Now that China's PPP gross domestic product is around $13 trillion, a 10% growth rate would require an expansion of $1.3 trillion–roughly the entire GDP of Spain or Canada.

Obviously, fast growth is easy when the low-hanging fruit are abundant, and it becomes progressively more difficult to maintain as the economy expands.
This pattern of rapid growth, maturity and stagnation can be seen in the S-Curve, a pattern that natural and human-made systems alike track.

When a country lacks infrastructure, or the infrastructure has been destroyed by war, then building infrastructure is the dominant activity in the low-hanging fruit/fast growth phase. Nations such as Japan and Germany experienced rapid growth after World War II for much the same reason China has boomed: infrastructure.

China has reached the maturity phase of the S-Curve in a mere 20 years: every major city has a subway system, thousands of miles of rail and highways have been laid, tens of millions of housing units have been built, and so on. As a result of this single-minded pursuit of building, China now sports nearly empty cities, train stations, malls and highrise residential towers.

In other words, all the low-hanging fruit of infrastructure have been picked.
Observers in Beijing see (well, not very far, due to the severe smog) endless growth of housing, due to strong demand. But this rosy view overlooks the fact that housing throughout China is out of reach not just of the millions of poorly paid migrant workers pouring into the cities but for college graduates–assuming they can even find a job (Chinese College Graduates Cannot Secure Jobs)

Even the cheapest condos cost well over $100,000 (in USD) in 3rd tier cities and much more in 1st and 2nd tier cities. The average starting salary for graduates is 2,000 to 3,000 yuan ($326) a month (roughly $4,000 to $6,000 a year), and salaries of around 50,000 yuan a year ($8,600) are considered good.

As a result, a double-income middle class household can only own a flat if the parents' savings are devoted to the down payment, which is usually 50% of the purchase price in China.

So all the stories of housing demand being permanent are misleading, because only a tiny sliver of the millions of people coming to cities can afford even the cheapest flat in the suburbs.

The other problem is that the low-hanging fruit have all been stripped via an unprecedented expansion of credit. Credit has a pernicious characteristic: it inevitably leads to diminishing returns as low-value, high-risk projects get funded in the rush to build anything and everything everywhere.

In other words, once the high-value low-hanging fruit has been picked, the sensible, high-value investment opportunities have all been taken and all that's left is marginal malinvestments.

In the U.S., this led to the famous McMansions in the middle of nowhere. In China, the general faith is that every building project, no matter how marginal, will soon be filled (and regardless of demand, the government will never let housing decline, even in ghost cities).

But as pointed out above, this presumes the millions of poorly educated rural migrants and the 7 million students graduating from college every year will soon be earning upper-middle-class incomes. Once the fast growth phase has ended, this becomes much more problematic. And indeed, reports of unemployed college graduates are now the norm (see below). As for migrants, most toil in very marginal jobs with low, insecure pay.

Another systemic problem arises when the low-hanging fruit have been picked:expectations of future prosperity have been pushed into the stratosphere, and these expectations will inevitably be disappointed as growth slows.

Rapid industrialization leads to rampant pollution. China has spent very little of its GDP on environmental investments, and now the bill is coming due. It is mathematically impossible for China to spend what needs to be spent (say, 5% of GDP for a decade) on cleaning up the environment and maintaining 7.5% annual growth. Promising people both will only set up a profound disappointment as neither goal can possibly be met.

Lastly, China lacks the cultural capital of maintaining infrastructure. In the 20 years of picking low-hanging fruit, buildings have been routinely torn down and replaced. The idea that a building will have to last 50 years, never mind 100 years, does not compute: if a building shows signs of aging, the solution for the past 20 years has been to tear it down and replace it with something grander.

This was possible in the fast-growth phase, but it is impossible in the stagnation phase for the same reason noted above: it's possible to tear down and replace 1,000 major buildings a year in the early years, but it becomes physically and financially impossible to replace millions of aging housing units.

Those familiar with construction and this lack of infrastructure to oversee and fund maintenance foresee tens of thousands of buildings that will slowly but surely become uninhabitable as elevators break down, pumps stop working, leaks cause concrete to spall, etc.

Anyone with even modest construction experience can see that the foundation beneath the toppled 13-story building is not even remotely adequate; the slightest temblor will destabilize all such buildings, and such feeble footings built directly on grade will lead to cracked pipes and a host of other impossible-to-fix problems.

Right now China is at the top of the S-Curve, and these problems of stagnation are still ahead. The most severe challenge in my view is not material or fiscal, it's psychological: when sky-high expectations crash to earth, social discord starts its own S-Curve of rapid growth.

Chinese College Graduates Cannot Secure Jobs: 28% Of Beijing's 2013 Graduates And 44% Of Shanghai's Have Found A Job:

This year a total of 6.99 million students graduated with a master's, bachelor's or technical college degree in China, an increase of 190,000 from 2012. In contrast, the number of jobs available decreased by 15 percent compared with 2012, according to China Youth, a state-run youth newspaper. Combined, these statistics mean a large portion of graduates will not have a job coming out of school.

Making matters worse for graduates, the "lucky" ones with jobs can expect an average salary of 3,000 yuan per month ($487.89). Netizens have calculated that at this rate, a 2013 graduate will have enough money to purchase a bathroom in the suburbs of Beijing in 10 years, if she doesn’t eat and chooses to live on the street.

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

Non-Seasonally adjusted New Orders dropped 0.6% YoY – the biggest drop in 11 months (and Capital Goods New Orders plunged 10.2%) but of course, in the current weather-related slowdown-reality, despite a notable mark-down in last month’s seasonal data, the headline “common knowledge”-defining data will be the Factory Orders beat expectations (off a lower base).

Seasonally-adjusted MoM beat..

 

But non-seasonally adjusted this is the biggest drop YoY in New Orders in 11 months

 

By far the worst start to the year since 2009…

 

Charts: Bloomberg

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

Presented without commentary, taken verbatim from SAC Capital’s just relased Form ADV Brochure

Research and Other Soft Dollar Benefits

SAC may select broker-dealers in recognition of the value of various services or products, beyond transaction execution, that they provide to a SAC Fund or SAC. Selecting a broker-dealer in recognition of the provision of services or products other than transaction execution is known as paying for those services or products with “soft dollars.” The amount of compensation (including markups, markdowns and commission equivalents on principal transactions with market-makers) a SAC Fund pays a broker-dealer who provides such services and/or products may be higher than what another, equally capable broker-dealer might charge. Any research service received through a broker-dealer may be used by SAC in connection with client accounts other than those accounts which pay commissions to such broker-dealer. The research service received by SAC, through a soft dollar arrangement, may benefit clients’ accounts, regardless of whether such account or accounts paid commissions to the broker-dealer through which such research service was received. When SAC uses client brokerage commissions (or markups or markdowns) to obtain research or other products or services, it receives a benefit because it does not have to produce or pay for the research, products or services out of its own resources. SAC may have an incentive to select or recommend a broker-dealer based on its interest in receiving the research or other products or services, rather than on its clients’ interest in receiving the most favorable execution. The extent of any such conflict depends in large part on the nature and uses of the products and services acquired with soft dollars.

SAC may use a SAC Fund’s soft dollars to acquire a variety of brokerage and research products and services. Section 28(e) of the Exchange Act recognizes the potential conflict of interest involved in this activity but protects investment managers such as SAC from claims that the activity involves a breach of fiduciary duty to advisory clients, even if the brokerage commissions paid are higher than the lowest available, if certain conditions and requirements are met. To be protected under Section 28(e), SAC must, among other things, determine that “commissions” paid are reasonable in light of the value of the “brokerage” and “research” products and services acquired. For this purpose: “commissions” include both commissions paid on agency transactions and mark-ups, mark-downs and commission equivalents paid to dealers in “riskless principal” transactions in securities under certain circumstances; “research” means products or services used to provide lawful and appropriate assistance to SAC in making investment decisions for its clients; and “brokerage” products and services that relate to the execution of a trade for SAC’s clients (including a SAC Fund) from order transmission until the delivery of securities or the credit of funds to the account.

The types of “research” SAC may acquire include, but are not limited to, the following:

• reports on or other information about particular companies or industries;
• economic surveys and analyses;
• consulting services regarding products, technologies, issuers or industries;
• recommendations as to specific securities;
• non-mass-marketed financial publications (delivered in hard copy or electronically);
• financial database software and services;
• computerized pricing and market data services;
• pre-trade and post-trade analytics, software and other products that generate market research, including research on optimal execution venues and trading strategies;
• advice from brokers-dealers on order execution, including advice on execution strategies, market color and the availability of buyers and sellers (and software that provides such market research);
• the portion of proxy analysis services that are reports and analyses regarding issuers and industries (but not the portion used to vote proxies); and
• other products or services in the categories listed in Section 28(e) or regulations thereunder or SEC interpretations that enhance SAC’s investment decision making.

“Brokerage” products and services (beyond typical execution services) include, but are not limited to, the following: (i) trading software used to route orders to market centers, (ii) software that provides algorithmic trading strategies, (iii) software used to transmit orders to direct market access systems, (iv) connectivity services between SAC and an executing broker (including dedicated lines between SAC’s order management system and the executing broker, lines between the executing broker and order management systems operated by third parties, and message services used to transmit orders to brokers for execution of SAC Fund transactions), and (v) short-term custody of funds and securities relating to effecting, clearing and settling particular transactions.

SAC’s current policy provides that the use of “soft dollars” to pay for research products or services will fall within the safe harbor created by Section 28(e). SAC may, however, in the future, use “soft dollars” to pay for products or services outside of the safe harbor created by Section 28(e).

Brokers and dealers from which SAC obtains soft-dollar services or products generally establish “credits” based on past transactional business (including markups and markdowns on principal transactions, such as transactions with market-makers for NASDAQ securities), which may be used to pay or reimburse SAC for specified expenses. In some cases the process is less formal; a broker or dealer simply may suggest a level of future business that would fully compensate the broker or dealer for services or products it provides. A SAC Fund’s actual transactional business with a broker-dealer may be less than the suggested level but can, and often will, exceed that level, and credits established may exceed the amounts used to acquire products and services. This may be in part because the SAC Fund’s investment activities generate aggregate commissions in excess of the levels of future business suggested by all brokers and dealers who provide products and services. In addition, it may be in part because those brokers and dealers may also provide superior execution and may therefore be most appropriate for particular transactions. SAC may ask a broker or dealer who is executing a transaction to “step out” of a portion of the transaction in favor of a broker or dealer who has provided or is willing to provide products or services for soft dollars. That is, the executing broker or dealer will allow a portion of the overall commissions or other compensation to be paid to the soft-dollar broker-dealer. This assists SAC in acquiring products and services with soft dollars while continuing to seek best execution.

via Zero Hedge http://ift.tt/Pi5lBA Tyler Durden

Jon Stewart is stunned by the world of HFT (where “stock exchanges sell the right to advance information to high frequency traders [by locating their computers closest to the exchange]”) and the mainstream media’s immediate jump to defend it “as good for us”, but as Michael Lewis explains “anyone whose livelihood is dependent on Wall Street [from CNBC, FOX and even the SEC] is invested in this… it sounds like a conspiracy.”

In this excellent interview, The Daily Show doubter asks “we have set a standard for share buying (you can’t but 1/100th of a share) so why not set a standard for frequency of trading?” Lewis stoic response sums up our world perfectly, “in a sane world, we would… but the money is too big,” and adds that indeed that is what IEX is doing. The HFTs “function on volume and volatility” alone and “they know the prices before you do… which is illegal if it’s a person, but as a computer, meh?”

Michael Lewis and Jon Stewart Part 1: What is HFT? “HFT is a middle-man in a transaction they have no business being in.. it is totally unnecessary Wall Street intermediation” How does it work? “The stock exchanges in this country sell the right to advance information to high frequency traders [by locating their computers closest to the exchange]” What is front-running? “front-running as a person is illegal, but as a computer, meh”

 

 

Michael Lewis and Jon Stewart Part 2: Conspiracies – “It’s Not American; It’s Not Even Capitalism. It’s Cheating”, Trading Frequency standards, and independent exchanges

 

 

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

It didn’t take long for Russia to launch the first retaliatory salvo against the unexpected JPMorgan “act of aggression.” Moments ago Bloomberg just reported that Sberbank,  the largest bank in Russia and all of Eastern Europe, just halted the issuance of consumer loans in foreign currency. Bloomberg adds that “Sberbank, Russia’s biggest lender, holds 43.3% of nation’s consumer deposits, 32.7% of consumer loans and 32.1% of corporate loans.”

Why is this important? Well, it is possible that the biggest Russian bank is running low on foreign reserves with which to issue non-ruble loans, which is rather unlikely for a bank which is defacto part of the Russian financial system. Still, it would be problematic if Russia is indeed telegraphing its commodity-export driven economy is suddenly low on Dollars and/or Europe’s artificial, life-supported currency.

And then there is another possibility: as we explained yesterday, “what JPM may have just done is launch a preemptive strike which would have the equivalent culmination of a SWIFT blockade of Russia, the same way Iran was neutralized from the Petrodollar and was promptly forced to begin transacting in Rubles, Yuan and, of course, gold in exchange for goods and services either imported or exported.” And this: “One wonders: is JPM truly that intent in preserving its “pristine” reputation of not transacting with “evil Russians”, that it will gladly light the fuse that takes away Russia’s choice whether or not to depart the petrodollar voluntarily, and makes it a compulsory outcome, which incidentally will merely accelerate the formalization of the Eurasian axis of China, Russia and India.”

Judging by the first retaliation, which just showed what Russia thinks of the petrodollar regime by voluntarily isolating itself from it, this is certainly a growing possibility.

via Zero Hedge http://ift.tt/1igO2t5 Tyler Durden

"We're seeing basic Econ 101 coming into play," says one New York realtor, "when you have this much demand and so little inventory, prices will have to rise. And they have." And, as Bloomberg reports, that is definitely the case as Manhattan apartment sales surged 35% in the busiest start to a year since 2007, setting price records with the average price per square foot rose 24% to $1,363, the highest in 25 years of record-keeping. As a large broker noted, "we're finally at a point where you're seeing the chronic lack of supply push prices higher," adding "the market really isn’t fun for the buyer." But that freshly printed money from the world's central banks to the world's oligarchs has to go somewhere…

Via Bloomberg,

Sales of co-ops and condominiums in the first quarter jumped 35 percent from a year earlier to 3,307, according to a report today from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The median price climbed 19 percent to $972,428, while the the average price per square foot rose 24 percent to $1,363, the highest in 25 years of record-keeping.

 

Price gains are accelerating in a market where the inventory of homes for sale plummeted to record lows three times in the past year as buyer demand increased.

 

…

 

About 50 percent of deals in the quarter were completed with cash, Miller estimated.

 

…

 

“There’s been a real escalation in prices,” he said. “We knew it was going to come and now we’re starting to see it. The biggest question is why it took this long.”

 

…

 

On the Upper West Side, the increase in average prices ranged from 10 percent for two-bedroom apartments to 24 percent for one-bedroom units, according to the Brown Harris and Halstead report.

 

“I have buyers who need to finance, and unfortunately they find themselves losing out a lot to cash deals on a regular basis,” said Scott Harris, a broker with Brown Harris Stevens who handled the Wolfs’ co-op sale.

Nope, no bubble here… all seems very sustainable…

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