JPM Refuses To Comply With Broad PFG Subpoena

Last week we wrote that we were not surprised to learn that the first party of interest in the PFG bankruptcy was "none other than JPMorgan, which together with various other banks, will be the target of a subpoena by the PFG trustee." We added "How shocking will it be to find that Dimon's company is once again implicated in this particular episode of monetary vaporization." It appears that we were not the only ones shocked to learn that Jamie Dimon's firm could make a repeat appearance again when it comes to missing client money: JPM itself seems to not have expected this development. The result, as just reported by Reuters: "JPMorgan Chase & Co on Monday sought to limit the power the bankruptcy trustee for Peregrine Financial Group has to subpoena information from financial institutions that did business with the failed brokerage." Why, whatever may JPMorgan be hiding, and whyever is it taking preemptive steps from preventing such information from leaking into the public domain: because it is too "burdensome" - it is only logical that Jamie can not dedicate one person of his 261,453 employees to this modest matter. No fear though: even if it is found that just like in the MF Global bankruptcy JPM may have overreached just a tad when it comes to money that doesn't belong to it, the CFTC can just say that as a result of an extensive 4 year investigation, JPM was found to have done nothing wrong, and if the public can please already disperse.

Explaining The Knightmare

On the day Knight blew up, and its stock tumbled initially to the $7 range, when the market speculated the loss may be "only" as large as $150-$250MM, we calculated courtesy of a Nanex analysis which suggested the modus operandi of the "berserk" algo, that the finaly loss would be far greater. This was confirmed a day later when it was made public that the final loss KCG experienced in just 45 minutes of trading was at least $440 million, and will be far greater when the losses associated with all the external trading reroutes are calculated. Nonetheless, with the SEC still completely mum on the whole issue (for one simple reason: it has no idea what happened, and is quiet not out of malice, but sheer incompetence), there is still an open question of just what happened. Here, once again from Nanex, is the complete post-mortem of a firm that was almost fully mortem, explaining everything that happened.

(Economic) Drivers, (QE) Drive By's And Dives

In the weeks and months directly ahead, we need to monitor the tone of business capital spending and hiring. If businesses freeze up, economic growth will slow even further. This may be great for Bernanke in terms of providing cover to implement more QE, but for the real economy and financial asset investors it’s another story entirely. In fact it’s a story that stands in direct contrast to outcomes in the latter parts of 2010 and 2011. Moreover for equity investors, we need to remember that in the latter half of 2010 and 2011, the trajectory of corporate earnings growth was very strong. That’s not the case any longer in terms of growth rate. That tells us that economic growth must reaccelerate in good part to justify the already seen upward movement in financial assets largely driven to this point by QE sugar plum fairies dancing. Stay tuned. We know the key drivers to monitor. In the months ahead, it’s all about the interaction of key economic drivers, central bank QE drive by’s, and potential US fiscal cliff dives.

Summer Doldrums: Unchanged Market On Collapsing Volume

This is the where we would normally do our daily market summary, but frankly there is no longer a market left to summarize: today's volume may not have been the lowest of 2012, including holidays, but it was close. Total volume on Tape A for all exchanges was just above 3 billion shares, 20% below the YTD average, which in turn is 20% below the 2011 average, and so on. As more and more firms such as Knight are carted out, and as confidence in the market follows the US corn reports percentage of corn in "good excellent" condition lower to zero, and then negative (why not? We have NIRP in half the developed world after all) more firms will have no choice but to go out of business: some may blame their extinction on a rogue algo, some on a social network IPO, but the reality is that unless trading volume picks up, banks and trading desks, in their current shape, are doomed.

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Currency Wars: Move to Make Treasury's Geithner a Permanent Member of US National Security Council

Keys to Success

Admin at Jim Rogers Blog - 1 hour ago

Jim Rogers' Keys to Success (taken from the titles and sub headings of each chapter of the new book, "A Gift To My Children"): 1. Do not let others do your thinking for you 2. Focus on what you like 3. Good habits for life & investing 4. Common sense? not so common 5. Attention to details is what separates success from failure 6. Let the world be a part of your perspective 7. Learn philosophy & learn to think 8. Learn history 9. Learn languages (make sure Mandarin is one of them) 10. Understand your weaknesses & acknowledge your mistakes 11. Recognize change & embrace it 12. Lo... more » 

 

 

 

Faulty London Financial times story on silver/Summer doldrums

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 1 hour ago

Good evening Ladies and Gentlemen: Gold closed up today up by $6.90 to $1612.90.  Silver finished the comex session up by 6 cents. We have lot of ground to cover as I guess you all saw the London Financial times article by Jack Farchy which suggests that the silver manipulation is over.  I can tell you that it is bogus.  We will go over this story and others from Europe, but first let us head

 

 

 

In The Near-Term Markets Can Still Rally

Admin at Marc Faber Blog - 1 hour ago

In the near-term, I believe that markets can still rally somewhat for the simple reason that in every market you have a few strong stocks and they are breaking out on the upside. And then you have a lot of stocks that are down 40-50% and very oversold, so they can also rebound. We have a lot of liquidity in the world that has been created essentially by central bankers. We have negative real interest rates practically everywhere. So if people keep their money on deposits, they are losing out in terms of purchasing power. The sentiment among investors, at the beginning of June, was v... more » 

 

 

 

Gold Daily and Silver Weekly Charts - More Confusion and Concerns at the Comex

SP 500 and NDX Futures Daily Charts - Technical Trade on Light Volume

Bart Chilton's Brave and Outspoken Defense of the Investing Public's Interests

 

To Be Or Not To Be, Is The Silver Market Truly Free?

Dave in Denver at The Golden Truth - 4 hours ago

*We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals and our banks destroy the economy* - Chris Hedges, "Days of Destruction, Days of Revolt" Moment of silence for the end of the CFTC investigation into silver manipulation - or is it? In the back of my mind when I read last night's Financial Times article, behind the immediate swell of anger and frustration, I was wondering if the article was a "plant" by someone motivated to force the ... more »

 

 

Knight Capital Implosion: The Latest Wall Street Alarm Bell That Everyone Will Ignore

Eric De Groot at Eric De Groot - 4 hours ago

"Ok folks, shows over, nothing to see here, OH MY GOD!" Everyone looks but no one really wants to see. Alarm bells always get swept under the rug until a full-blown crises makes it impossible to ignore them. This is followed by lots of finger pointing, taxpayer money, and regulations designed to avert the next crisis that always comes. Law schools teach it... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Get A Citi Rewards Card, Buy Women

When spending rewards dollars on things like knife sets, LCD TVs and restaurant reservations is just a little too 2011, here comes Citi to spice things up a bit.

The Olympic Evolution Of The World's Fastest Men

With 40 minutes trading left, stock trading volume is so abysmal (we will present the final tally shortly) one would be forgiven to think that not even the Knight algo is giving today's stock levitation the old plunge protection college try. And as warned yesterday, expect the balance of the week to be just as lethargic - meaning banks will have no choice but to take out even more competitors as fundamentally, in the absence of end trading demand, one has to remove supply: by any means necessary. So in a complete tangent, and in light of last night's latest Olympic record in the 100 M spring by Jamaica's Usain Bolt, below we show the evolution of gold medals in the Men's Olympic sprint. The Y axis is not logarithmic, and as such the growth is not quite up to par with Moore's Law, but the ever faster sprint is unmissable, and makes one wonder at what point will human speed top out, or will new, improved and completely undetectable stimulants keep pushing homo sapiens until such point as one cross the finish line before the starter pistol has even gone off.

Gold, Price Stability & Credit Bubbles

Eventually — because the costs of the deleveraging trap makes organicy growth very difficult — the debt will either be forgiven, inflated or defaulted away. Endless rounds of tepid QE (which is debt additive, and so adds to the debt problem) just postpone that difficult decision. The deleveraging trap preserves the value of past debts at the cost of future growth. Under the harsh discipline of a gold standard, such prevarication is not possible. Without the ability to inflate, overleveraged banks, individuals and governments would default on their debt. Income would rapidly fall, and economies would likely deflate and become severely depressed. Yet liquidation is not all bad.  The example of 1907 — prior to the era of central banking — illustrates this. Although liquidation episodes are painful, the clear benefit is that a big crash and depression clears out old debt. Under the present regimes, the weight of old debt remains a burden to the economy.

Quarto Reich: Italy Goes "There" Again

Just because Italy's 2 Year bond yield has plunged, bringing its cost of short term funding to manageable levels, if only for a day or two, it is suddenly "obvious" that it will not need Germany's goodwill ever again. Sure enough...

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