Blythe Masters Withdraws From CFTC : Furious Twitter Backlash Blamed

Following our post yesterday which included the occasional F-bomb and got well over 40K reads since its posting late last night, the reaction was sharp and severe. So severe in fact that less than 24 hours later, Blythe Master has withdrawn from the CFTC. The culprit for Masters’ resignation in just 24 hours? A very angry Twitter.

From Bloomberg

Blythe Masters, JPMorgan Chase & Co.’s commodities head, withdrew from an advisory committee of the U.S. Commodity Futures Trading Commission a day after her appointment was disclosed,  according to two people with direct knowledge of the decision.

 

The regulator may include another executive from New York-based JPMorgan on the committee, said one person close to the bank who requested anonymity because the move hasn’t been publicly announced. Masters, 44, withdrew because the company’s sale of its physical commodities unit will keep her occupied, the person said.

 

JPMorgan is selling a division that deals in assets such as metals and oil, as government watchdogs examine whether federally backed lenders should be involved in such markets. Masters’s appointment drew criticism from Twitter users who questioned the propriety of her advising the regulator of futures and swaps.

 

Masters, whose appointment was listed on the CFTC’s website yesterday, had been scheduled to participate in a Feb. 12 meeting to discuss cross-border guidance on rules. She was invited to the panel by acting Chairman Mark Wetjen, said one of the people.

 

Brian Marchiony, a JPMorgan spokesman, said the company had no comment.

Perhaps there is some justice in the world.

We do, however, have one question for Ms. Masters even though we understand she will be “very occupied due to the sale of JPM’s physical commodities unit”: does this premature resignation confirm that the allegations against the JPMorganite, who had so far been wrapped up in “neither admissions nor denials“, are in fact true and accurate? 

And while we have her attention, can Ms. Masters also please advise what other markets she was manipulating?


    



via Zero Hedge http://ift.tt/1iC0lRy Tyler Durden

Scandal: Bank Of England Encouraged Currency Manipulation By Banks

Raise your hand if you are surprised that, as has emerged, virtually every major bank was manipulating currencies (and everything else) whether as part of the “Bandits’ Club”, the “Cartel” or some other – until recently- secret message room.

That’s what we thought.

Now raise your hand if you thought the manipulation could be so pervasive, so glaring and so in your face, that even the oldest central bank – the Bank of England – and who knows how many other monetary authorities, were openly encouraging traders from these private banks to do more of the illegal activity they had been engaging in – namely manipulating currencies – with their explicit blessing knowing very well such behavior is undisputedly illegal.

We hope at least one or two hands went up, because which it is one thing to be cynical about what is going on behind the scenes, it is something else to see the edifice of global corruption and criminality, whose only purpose was to preserve the status quo, unwinding before your very eyes substantiated by actual facts.

Such as this report by Bloomberg which confirms that yet another conspiracy theory is fact, as at least one central bank has been exposed to not only have known about a criminal activity that is now costing the jobs of hundreds of traders (and should lead to jail time), but to have urged it on.

From Bloomberg:

Bank of England officials told currency traders it wasn’t improper to share impending customer orders with counterparts at other firms, a practice at the heart of a widening probe into alleged market manipulation, according to a person who has seen notes turned over to regulators.

A senior trader gave his notes from a private April 2012 meeting of currency dealers and two central bank staff members to the Financial Conduct Authority about six weeks ago because of mounting media coverage of the investigation, said the person, who asked not to be named while probes are under way.

 

Traders representing some of the world’s biggest banks told officials at the meeting that they shared information about aggregate orders before currency benchmarks were set, three people with knowledge of the discussion said. The officials said there wasn’t a policy on such communications and that banks should make their own rules, according to the people. The notes could drag the U.K. central bank into another market-rigging scandal two years after it was criticized by lawmakers for failing to act on warnings that Libor was vulnerable to abuse.

 

If traders can show “they made Bank of England officials aware of practices in the FX market some time ago, then the bank will be at risk of being characterized as having endorsed, by its silence and inaction, the very practices which are now under investigation,” said Simon Hart, a lawyer at RPC LLP in London.

Wait for it, wait for it… Here it comes: “If the BOE did not encourage currency manipulation by bankers, then the world would have crashed” – did we get the excuse that the Bank of England (and soon after, the Fed, the SNB, the BOJ and all other banks as there is never just one cockroach) will use to justify their criminal behavior? Why, of course.

But for now the bank had this to say:

A spokeswoman for the Bank of England declined to comment about the 2012 meeting beyond what was contained in a summary provided to Bloomberg News last month. Those notes included a reference to “a brief discussion on extra levels of compliance that many bank trading desks were subject to when managing client risks around the main set-piece benchmark fixings.” No further details of the discussion were provided.

“Allegations that banks may have been rigging the forex market are extremely serious, particularly for firms but also for regulators who had been telling Parliament that banking standards were improving,” Andrew Tyrie, the British lawmaker who led an inquiry into practices in the banking industry following the Libor scandal, said in a statement today.

 

The Bank of England officials said they viewed the practices as positive to reduce market volatility and wouldn’t take the matter to the standing committee, according to the people with knowledge of the meeting. That body included a representative from the Financial Services Authority, the FCA’s predecessor, according to central bank records.

 

By pooling information on client orders, current and former traders interviewed by Bloomberg News have said they could gain an impression of probable moves in currency markets, knowledge they said they sometimes used to place their own bets before the benchmark WM/Reuters rates are set at the 4 p.m. London close.

The details of the BOE’s loathsome conduct:

Dealers at the April 2012 meeting with Martin Mallett, the Bank of England’s chief currency dealer, and James O’Connor, who works in its foreign-exchange division, were told not to record the discussion or take notes, one of the people said. One trader wrote down what was said soon after leaving because of concerns spawned by investigations of attempted manipulation of the London interbank offered rate, or Libor, the person said.

 

Two traders at the meeting — Citigroup Inc. (C)’s Rohan Ramchandani and UBS AG (UBSN)’s Niall O’Riordan — are among at least 20 employees of global banks who have been fired, suspended or put on leave since Bloomberg News first reported in June that dealers said they shared information about client orders to manipulate benchmark rates used in the $5 trillion-a-day currency market, the world’s biggest.

In other news, head FX traders for Goldman, JPMorgan, RBC and Deutsche have resigned in recent weeks, in what are clearly unrelated actions. Maybe they will want to also avoid flying in the coming weeks and months, as the last thing the market needs now are more revelations not only how manipulated everything is, but that the orders for such manipulation originate at the very top of the banker oligarchy.

Alternatively, maybe instead of perpetuating the “fair and efficient markets” lie, the world’s central banks will be kind enough to just let everyone in on where they determine to close what once were “markets” at any given day so that everyone can benefit from a broken and corrupt system, instead of just a few not so good bankers. After all, with everyone profiting from the no risk, guaranteed return market all the time, at least inflation will finally go off the charts.


    



via Zero Hedge http://ift.tt/1b9jaMZ Tyler Durden

Stocks Fading As Hilsenrath Kills Hope Taper To Taper, EMs Currencies Sliding

It was all going so well. It appeared the “market” had decided that this was not weather-related (as we showed) but real weakness and that real weakness can mean only one thing – a fickle Fed re-primes the pump by un-tapering the taper. However, as we noted last night, it is Jon Hilsenrath of the Wall Street Journal that creates the “common knowledge” upon which we should act. The bounce in stocks was evidently hope of the un-taper for as Hilsy noted in a Q&A that the “Fed is likely to stick to its course on rates and bond-buying in the wake of the mixed jobs report,” stocks, USDJPY, and Emerging Market FX started to fade.

 

Bonds never bought the un-taper by the look of it…

 

And EM FX started to fold pretty quickly…

 

as, of course, JPY is in charge…

 

 

Charts: Bloomberg


    



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The Biggest Job Winners (Construction) And Losers (Government) In January

When you have one after another “polar vortex” out there, and feet of snow covering the country and supposedly crushing economic activity, what do you do? Why you hire construction workers of course. As the following breakdown of the best and worst jobs of December shows, the one job category to benefit the most from January’s horrifying weather which was the reason for all those weak January numbers (if one listens to the propaganda pundits and other TV anchors) was construction workers, which saw 48K jobs created. Which in some parallel universe surely makes sense. Just not this one.

The only good if just as non-credible news in this jobs report: fewer government workers.

The full breakdown of biggest job winners and losers:

Oh, and naturally the surge in construction jobs “explains” perfectly why New Home Sales in January plunged by the most since July – must have been all those new workers put to work… doing nothing.

 

 


    



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

Spot The “It’s All The Weather’s Fault” Lie

December and January saw dismal job gains based on the NFP data… but as we now know, thanks to Zandi and Liesman, that we should ignore it because it’s all about the weather. So, confused, we looked at the number of employed people who are “not working due to weather” (thank you for the convenient series BLS) to gauge the significance of the impact… it appears, from the chart below, that more people were out of work due to weather in 2008, 2009, 2010, 2011, and 2012…?

 

 

 

Paging Dr. Zandi?

Though of course, as Steve Liesman noted this morning, this doesn’t matter since “jobs are not critical for growth.”

Charts: Bloomberg


    



via Zero Hedge http://ift.tt/1ey2IWZ Tyler Durden

Spot The "It's All The Weather's Fault" Lie

December and January saw dismal job gains based on the NFP data… but as we now know, thanks to Zandi and Liesman, that we should ignore it because it’s all about the weather. So, confused, we looked at the number of employed people who are “not working due to weather” (thank you for the convenient series BLS) to gauge the significance of the impact… it appears, from the chart below, that more people were out of work due to weather in 2008, 2009, 2010, 2011, and 2012…?

 

 

 

Paging Dr. Zandi?

Though of course, as Steve Liesman noted this morning, this doesn’t matter since “jobs are not critical for growth.”

Charts: Bloomberg


    



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Goldman’s Payroll Postmortem: “Confusing”, “Disappointing”, “Little Negative Weather Impact”

Just out from Goldman’s Jan Hatzius

January Payrolls Disappoint, Stronger Household Survey

BOTTOM LINE: The January employment report contained a confusing set of data, as payroll job growth significantly disappointed, but the unemployment rate declined by one-tenth, reflecting large gains in household employment. Overall we see the report as slightly weaker than expected.

Nonfarm payroll employment rose a disappointing 113k in January (vs. consensus +180k). By industry, retail trade declined 13k (vs. +63k in December), while health and education services?normally a consistent support for headline job growth?declined for the second consecutive month (-6k). Construction employment, which declined 22k in December amid adverse weather, added 48k, suggesting little negative weather impact in the January report. Government employment fell 29k, the worst performance since October 2012, split between federal (-12k) and state and local (-17k). Payroll job growth in November and December was revised by a cumulative 34k, consistent with the general tendency for positive back-revisions in the January report. Over the past three months, payroll employment rose an average rate of 154k per month.

The January report also contained annual benchmark revisions to the establishment survey data, which increased the level of employment in March 2013 by 369k, compared with +345k in the preliminary estimate. However, the upward revision was mainly due to adding new categories of home health care workers under the scope of payroll employment.

The unemployment rate declined by one-tenth to 6.6% in January. Employment rose by 638k according to the household survey, while “payroll-consistent” employment?adjusting for definitional differences between the two surveys?rose by 901k. Labor force participation rose two-tenths to 63.0%, against expectations that the expiration of Emergency Unemployment Compensation benefits might lead some unemployed workers to stop reporting that they were actively seeking employment. The effect of new population controls accounted for only 22k of the rise in employment and did not affect the unemployment rate or the participation rate. The January report also showed a four-tenths decline in the broader “U6” underemployment rate to 12.7% as a result of a decline in the number of involuntary part-time workers.

Average hourly earnings rose 0.2% in January (vs. consensus +0.2%), and increased 1.9% over the past year (vs. consensus +1.8%). The average workweek remained unchanged at 34.4 hours (vs. consensus 34.4), consistent with little adverse weather impact in the report.

With payrolls, unemployment claims, consumer sentiment, and a number of business surveys in hand, our preliminary read on the January current activity indicator (CAI) is 2.7%, up from December’s 1.9%.


    

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Goldman's Payroll Postmortem: "Confusing", "Disappointing", "Little Negative Weather Impact"

Just out from Goldman’s Jan Hatzius

January Payrolls Disappoint, Stronger Household Survey

BOTTOM LINE: The January employment report contained a confusing set of data, as payroll job growth significantly disappointed, but the unemployment rate declined by one-tenth, reflecting large gains in household employment. Overall we see the report as slightly weaker than expected.

Nonfarm payroll employment rose a disappointing 113k in January (vs. consensus +180k). By industry, retail trade declined 13k (vs. +63k in December), while health and education services?normally a consistent support for headline job growth?declined for the second consecutive month (-6k). Construction employment, which declined 22k in December amid adverse weather, added 48k, suggesting little negative weather impact in the January report. Government employment fell 29k, the worst performance since October 2012, split between federal (-12k) and state and local (-17k). Payroll job growth in November and December was revised by a cumulative 34k, consistent with the general tendency for positive back-revisions in the January report. Over the past three months, payroll employment rose an average rate of 154k per month.

The January report also contained annual benchmark revisions to the establishment survey data, which increased the level of employment in March 2013 by 369k, compared with +345k in the preliminary estimate. However, the upward revision was mainly due to adding new categories of home health care workers under the scope of payroll employment.

The unemployment rate declined by one-tenth to 6.6% in January. Employment rose by 638k according to the household survey, while “payroll-consistent” employment?adjusting for definitional differences between the two surveys?rose by 901k. Labor force participation rose two-tenths to 63.0%, against expectations that the expiration of Emergency Unemployment Compensation benefits might lead some unemployed workers to stop reporting that they were actively seeking employment. The effect of new population controls accounted for only 22k of the rise in employment and did not affect the unemployment rate or the participation rate. The January report also showed a four-tenths decline in the broader “U6” underemployment rate to 12.7% as a result of a decline in the number of involuntary part-time workers.

Average hourly earnings rose 0.2% in January (vs. consensus +0.2%), and increased 1.9% over the past year (vs. consensus +1.8%). The average workweek remained unchanged at 34.4 hours (vs. consensus 34.4), consistent with little adverse weather impact in the report.

With payrolls, unemployment claims, consumer sentiment, and a number of business surveys in hand, our preliminary read on the January current activity indicator (CAI) is 2.7%, up from December’s 1.9%.


    

via Zero Hedge http://ift.tt/1ey2I9x Tyler Durden

BLS Revises Historical Job Numbers Higher By Half A Million: A Look At The “Before” And “After”

With the HFT brigade selling then buying, and trying to goalseek an explanation of why this happened after the fact, one key aspect of today’s release that was ignored is that the BLS just revised its Establishment Survey data, in the process changing all historical job numbers. To wit: “Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2014 reflect updated population estimates.” As a result of this revision, while the monthly changes were not that dramatic, what happened is that the “stock” level of jobs as reflected in the Establishment Survey rose by half a million as of December 31, from 136,877 to 137,386. And so all key historic data – from GDP in early 2013 to jobs – has now been revised to reflect a more rosy economy, and instill consumers with even more confidence in hopes they will spend, spend, spend.

A table summary of the change: before and after.

And the monthly change in the Establishment Survey in the pre and post-revision numbers.

Some more details from the BLS on the revision:

In accordance with annual practice, the establishment survey data released today have been benchmarked to reflect comprehensive counts of payroll jobs for March  2013. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which enumerates jobs covered by the UI tax system. The benchmark process results in revisions to not seasonally adjusted data from April 2012 forward. Seasonally adjusted data from January 2009 forward are subject to revision. In addition, data for some series prior to 2009, both seasonally adjusted and unadjusted, incorporate revisions.

 

The total nonfarm employment level for March 2013 was revised upward by 369,000 (+347,000 on a not seasonally adjusted basis, or 0.3 percent). The average benchmark revision over the past 10 years was plus or minus 0.3 percent.

 

This revision incorporates the reclassification of jobs in the QCEW. Private household employment is out of scope for the establishment survey. The QCEW reclassified some private household employment into an industry that is in scope for the establishment survey–services for the elderly and persons with disabilities. This reclassification accounted for an increase of 466,000 jobs in the establishment survey. This increase of 466,000 associated with reclassification was offset by survey error of -119,000 for a total net benchmark revision of +347,000 on a not seasonally adjusted basis. Historical time series have been reconstructed to incorporate these revisions.

 

The effect of these revisions on the underlying trend in nonfarm payroll employment was minor. For example, the over-the-year change in total nonfarm employment for 2013 was revised from 2,186,000 to 2,322,000 seasonally adjusted. Table A presents revised total nonfarm employment data on a seasonally adjusted basis for January through December 2013.

And now, if only the Department of Truth can revise away the Great Financial Crisis, and all shall be well.


    



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