Thursday, November 1, 2012

Barclays Fined Record Amount For Channelling Enron, Manipulating California's Electricity Market

It just is not Barclays' year. After being exposed (so far the only one) as a ringleader in a massive LIBOR-rigging scandal which cost Bob Diamond his job, yesterday the British bank added insult to injury, after the Federal Energy Regulatory Commission (FERC) fined it $470 million - the largest penalty ever levied by the energy regulator, and even larger than the bank's LIBOR fine - for getting caught doing what Enron got caught doing about a decade ago: manipulating California's electricity markets. Although while the former ended up being the biggest corporate bankruptcy at the time, led to the end of one of the nation's largest auditors and sparked a scandal so great it was all corporate America spoke for about for the next year, this time the news has come and gone, and nobody cares. Perhaps this is to be expected: in a time when none other than the central bank intervenes each and every day in every single market to preserve the "wealth effect", habituation to epic corporate manipulation of every imaginable kind is perfectly normal.

GM Channel Stuffing Soars To Record

For a few months there, we were worried that GM may have actually found a (government-funded) natural subprime buyer of its vehicles after the company managed to keep its channel stuffing in check for several months. Those fears ended today with the company's October car sales report, according to which GM sold 4.7% more cars, or 42,759 in absolute terms (from 153,005 to 195,764) in October than September, below expectations of a 7.8% increase. So far so good. What however will hardly get any mention from Government Motors cheerleaders is that GM auto inventory at dealers as of October 31 was a record 739,034 (a massive 98 days of supply), an increase of 49,700 from October's 689,334. In other words, the entire incremental rise in sales, and then some, was due to the firm stuffing dealers with even more inventory than they can possibly handle!

And The Best (and Worst) Performing Asset In October (And 2012 To Date) Is....

If you bought the deep OTM, high theta option that is the Greek stock market on October 1, or wheat on January 1, 2012, you can now retire. For everyone else who still hasn't gotten the hang of this here "New Normal" Cramer market, better luck next time.

Initial Claims Beat Expectations, Last Week's Beat Revised To Miss

Last week, when we reported last week's lucky Initial Claims expectations beat of 369K, we explicitly said the following: "today's Initial Claims number which magically "beat" expectations by 1K, printing at 369K, on expectations of 370K, will be revised to a miss of 372K next week." And guess what last week's number was just revised to? That's right: 372K, which means that last week's beat was actually a miss. But who cares. Oh, and this week's just as manipulated print of 363K, which was a beat of expectations of 370K, will be spun as a 9K drop in initial claims of course. Next week this number will be revised to 365K-366K as usual, because the BLS has now upward revised its weekly claims number for something like 80 weeks in a row.

Your support is needed...
Thank You

I'm PayPal Verified

ADP "Jobs" Number Unsurprisingly Beats Post-Revision Expectation

That by now absolutely nobody can possibly take any number out of the ADP seriously is beyond question. For those confused why, just read "ADP "Cancels" 365,000 Private Jobs Created In 2012." And yet the establishment, and its very serious PhD pretend this "advance look" into NFP is relevant for one simple reason: it provides an anchor for HFT algos to send risk ramping, even though everyone knows it is a purely goalseeked, statistical aberation. To that end, moments before it was announced we tweeted the following: "October ADP "beats", ES jumps, then after one year it is revised lower by 50%" Sure enough, seconds ago, the ADP reported that after its October number was revised from 162K to 88K, the November print just came out at 158K, on expectations of a 131K print (and a very serious sell side range of 80K to 170K).  Now all we need is the October 2013 revision of this data series, which will say the ADP was only kidding and the number was really half of what was reported. "Automatic Data Processing" indeed...

ISM, Consumer Confidence And Construction Spending Data Trifecta: Two Misses, One Beat

  • ISM Manufacturing: 51.7, Exp. 51.0, Last 51.5
  • Consumer Confidence: 72.2, Exp. 73.0, Last 68.4
  • Construction Spending: 0.6%, Exp.  0.7%, Last -0.1%

More Greek Drama: Coalition Member PASOK "In Turmoil As It Seeks To Quell Rebellion"

First it was news that Europe's weakest link may be broken following a Greek court doing the unthinkable, and actually enforcing the constitution, and now we learn that in addition to at least one definite defection from the Greek coalition government - PASOK (as reported earlier), the entire party is now on edge as its leader, former PM Evangelos Venizeloz seeks to quell a "rebellion" ahead of next week's vote which will hardly make the government any more popular in the eyes of the general population. From Kathimerini: "PASOK has plunged into turmoil as one MP and a prominent official quit the party following a fractious vote on the government’s privatization bill on Wednesday. The draft law paving the way for the sell-off of a number of utilities and ports passed narrowly and the failure of 17 PASOK MPs to support the legislation led to party leader Evangelos Venizelos, who failed to take part in the vote himself, calling an urgent meeting with his 33 lawmakers on Wednesday evening." Why is this relevant? Because two days ago, as reported, the third member of the ruling coalition: the Democratic Left, which mans 16 votes, announced it would vote against the Troika demands. This leaves the coalition with 160 votes on a matter in which it needs a majority. Should Pasok's 17 votes also be in danger of pulling out (assuming nobody from New Democracy votes no), then one can see why Greece may once again hold the fate of the Eurozone in its hands just as the US is voting for its next president and hardly needs more European drama.

Your support is needed...
Thank You

I'm PayPal Verified

Risk Off: Greek Court Warns Troika-Demanded Austerity May Be Unconstitutional

While Europe continues to plan and scheme, content in the knowledge that Greece can do nothing to derail plans of status quo preservation, especially ahead of next week's critical parliamentary vote that will see the country imposing even more austerity on its people (see the great profile in the AP today in "Hit by crisis, Greek society in free-fall"), Greece has just decided to pull a "Karlrushe Kardinals who say Nein" move, and as Reuters reported moments ago, the entire process may be scuttled by none other than yet another court, this time in Greece:
What this means is that suddenly Greece once again has all the leverage (recall that last year the mere threat of a Greek moratorium cost G-Pap his job), a development which in June sent Europe plunging on fears that Greece may vote itself out of the Eurozone, leading to a Grexit, the return of the Drachma, redenomination, collapse in risk levels, the apocalypse and other bad things.

As Redemptions Surge, The Dreaded Hedge Fund "Gate" Is Back

Hedge Fund "gating", or the forced administrative limit on how much money hedge fund investors can redeem at any given moment, is one of those bad memories that most wish could remain dead and buried with the peak of the credit crisis, when virtually every hedge fund was swamped with redemption requests as impatient LPs couldn't wait to get what was left of their money back. However, the problem for hedge funds, in addition to underperforming the market substantially for a 5th year in a row, with almost all hedge funds now returning far less than the broader market (which continues to successfully defend the 1400 barrier every day) especially after October when the two biggest hedge fund darling stocks GOOG and AAPL finally reincountered gravity, is that their LPs have once again gotten restless and are now again actively seeking their money back from underperformers. Sadly, it was thus only a matter of time before the "gates" returned. As of this weekend they have.

The Economy Is Crumbling

Dave in Denver at The Golden Truth - 31 minutes ago
*If you lie down with dogs, you wake up with fleas* (attributed to Benjamin Franklin) Before I chat briefly about the subject of the title, I want to point out that today's action in the mining stock HUI index (-1.8% vs. the SPX +1%) is largely a result of American Barrick and it's big earnings miss released today. ABX is currently down 9%. ABX accounts for 15.4% of the HUI index. Barrick announced crappy operating results plus a pretty big bump in cash costs, which led to the huge earnings miss. Plus there's this item: "$71 million in unrealized losses on non-hedge derivat... more » 

A Desert Is Like A Tough Market

Admin at Jim Rogers Blog - 2 hours ago
I`d always enjoyed traveling through deserts. There was a romance to them, a poetry of starkness. A desert like this was like a tough market. It did not forgive mistakes and it forced you to be attentive, to be fully awake - and God, was it beautiful! - *in Investment Biker* *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

Taxes Don't Drive Out California Rich: Study

Eric De Groot at Eric De Groot - 4 hours ago
Normal 0 MicrosoftInternetExplorer4 A study of limited scope and duration does not change historical precedence that money moves with its feet. Always has and always will. The tireless game of misdirection forces most citizens to either chase their tails in confusion or throw up their hands in utter frustration. Whether this community joins them... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Why Germany Wants to See its US Gold

Eric De Groot at Eric De Groot - 4 hours ago
The old expression "possession is nine-tenths of the law" reminds us that ownership is easier to maintain and enforce with possession of something. Ownership of gold, silver, or stock certificates (fractional ownership of corporations) is easier to prove with possession. It appears that the Germans understand this point. American investors would be wise to follow, but lure of convenience and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Bank of Japan Announces Fresh Economic Stimulus

Eric De Groot at Eric De Groot - 4 hours ago
The Bank of Japan (BOJ) wants a weaker but controlled Yen. Instead, they get rising Yen despite a growing number of interventions because the invisible hand controls the trend (chart). The Yen will decline, but it won't be controlled descent. Chart: Japanese Yen (FXY) and Yen Diffusion Index (DI) Headline: Bank of Japan Announces Fresh Economic Stimulus TOKYO — The... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Consumer spending up 0.8% in September; 3rd straight monthly gain

Eric De Groot at Eric De Groot - 5 hours ago
This time series has been corrupted by numerous statistical adjustments over the years, but its the direction of the trend that's most important. Since consumption accounts for nearly 71% of US GDP, a reversal of the trend of dissaving towards saving would be significant challenge to the US economy. Watch it close. Chart 1: Personal Consumption As A % of Personal... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Money Printing: Where Does It Flow Into?

Admin at Marc Faber Blog - 5 hours ago
"You can print money, but you can't control where the money will flow into." - *in Seeking Alpha * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

Recession Cycles

Admin at Jim Rogers Blog - 5 hours ago
We have had recessions every four to six years since the beginning of the republic, and next year is "four to six years". - *in MoneyNews* *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

Monthly Gold charts

Trader Dan at Trader Dan's Market Views - 12 hours ago
October is the first month since May that gold has posted a monthly loss. Initial resistance still begins near the $1720 - $1725 level. Above that, selling will show up near $1740. The market remains rangebound with a bit of a near term friendly bias. It remains below the 50 day moving average which comes in at $1737. That corresponds closely with the resistance level I noted above. To see the longer term bullish trend reassert itself, the market will need to convincingly close through this level. Downside support still is holding firm near the $1700 level as bargain buying out of ... more » 

Something Goes Bump On European Halloween: ECB's Marginal Facility Usage Soars

Europe is, supposedly, fixed: between the upcoming one year anniversary of the 3 year LTRO, which has flooded the continent in excess €1 trillion of liquidity, and the OMP, which has supposedly backstopped sovereigns in perpetuity (even though the market has fully frontrun what now appears to be a massively unpopular political decision, as Spain has been demonstrating for the past 2 months), European bank liquidity needs are supposed to be fully taken care of. Yet something went bump on Halloween. As the ECB reports, borrowing on the prohibitive, and largely "last resort" ECB "Marginal Lending Facility" (whose rate is an usurious 1.50%), one or more banks saw their need for EUR explode in the last day of the month, sending overall usage on this credit line to €7.8 billion, the most since mid-March, and a surge of over €7 billion overnight. What spooked European banks so much (whose liquidity needs are not month or quarter-end window dressing driven) that the ECB had to step in on top of everything else it has already done? We will surely find out soon.

"The Economist" Endorses Obama For President

And for a second there we thought financial publications were supposed to at least pretend they are impartial. It appears that is not the case. Now we eagerly await to learn whom Playboy, the National Enquirer, and TMZ endorse...


Daily US Opening News And Market Re-Cap: November 1

As we enter the North American session, equity markets are seen marginally higher, as concerns over the never-ending Greek debt drama are offset by the release of an encouraging data from China. Chinese HSBC Manufacturing PMI printed a fresh 8-month high, while the official Chinese Manufacturing PMI came in line with expectations. In addition to that, a state researcher has said that the countries economy has bottomed and is stabilizing. Meanwhile in Greece, the fact that debt is now seen climbing to 192% in 2014 and an agreement on how to defuse the situation has yet to be found may lead to another speculative attack not only on Greek paper, but also other southern states. As a result, GR/GE 10s spread is seen wider by 30bps, however other peripheral bond yield spreads with respect to the German Bund are tighter. The second half of the session sees the release of the latest weekly jobs report, consumer confidence and the weekly DoE from the US.

Today’s Items:

Greece’s 2013 Budget Is A Total Disaster
The Greece 2013 budget, that has to be approved by their leaders does the following…
1. Increases the Debt-to-GDP to 189.1%
2. Create a budget deficit of 5.2% of GDP.
3. Result in their GDP contracting 4.5%
The people who came up with this budget obviouslywould fail a urine drug test folks.

Euro-zone Unemployment at 11.6%
With the addition of 169,000 for a total of 25.8 million, unemployment for the 27 member Euro-zone reached another record at 11.6% last month as the financial crisis continues to take its toll.   The lowest unemployment rates were in Austria and Luxembourg at 4.4 and 5.2% respectfully.   The highest unemployment rates were in Spain and Greece at 25.8 and 25.1% respectfully.   If we had honest figures, the US would probably be in the same neighborhood.

Bribes Using “Gold cards” in China
In cases where some Chinese, who want to hide their wealth, have to bribe officials in Hong Kong, instead of using cash or electronic transfers, they simply set up a meeting and hand the official one, or more, gold cards that are made of physical gold.   You see it all the time in business, where business cards are handed around.   Gives a whole new meaning to having a gold card.   Perhaps, there will be silver cards soon.

The Possible Black Swan For Skyrocketing Gold
Just imagine if a credible whistle-blower, from the Bundesbank, came out and said that the German gold is gone.   In fact, the German gold audit could easily spark others and make the situation more interesting.   Also, it is very likely that 227.7 million ounces, or 87%, from the US gold reserves, were sold into the market to keep the gold price in check.   The idea that Central Banks do not have the gold they claim they have would unleash pure pandemonium in the gold, and soon later, the silver market because people would realize there is no physical backing paper.   With that said, after preparing, keep stacking physical.

$250 Million Grant Creates 400 Jobs
Battery maker A123 Systems received about $250 million to create thousands of new jobs in late 2009.   Since 2009, this now bankrupt energy business pushed by Obama, created only 408 positions.   This is about $300,000 per job.   Officials state that the grant was used for manufacturing equipment which now sits idle.   Pretty much like Obama when he is not on the golf course.

Got Grandma?
More grandparents, parents and kids are living together under the same roof, driven to cohabitate because of the economy. More than 4.3 million, or 5.6 percent, of the 76 million family households in the U.S. today are multigenerational households.    Among the states, Hawaii, at 11%, had the highest percentage with North Dakota having the lowest at 2%.   How long before families have multigenerational beds?

Finally, please prepare now for the escalating economic and social unrest.    Good Day!

Your support is needed...
Thank You

I'm PayPal Verified

No comments:

Post a Comment