Submitted by Tyler Durden on 09/08/2015 - 08:55 While we already knew that China was selling - and following the record selling of FX reserves in August, so does everyone else - an even more interesting question emerged: who is buying? Thanks to the WSJ we now know the answer: "A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of U.S. Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street."
Submitted by Tyler Durden on 09/08/2015 - 12:10 For the fifth time in two decades, Turkish soldiers have launched a ground incursion into Iraq in pursuit of PKK "terrorists" who have orchestrated a series of deadly attacks on security personnel over the past several days. Of course Turkish soldiers aren't the only ones fighting Kurds in Iraq. So is ISIS. And that means that just like in Syria, Turkey (with Washington's implicit blessing) is at best distracting from and at worst impeding the battle against Islamic State, the same Islamic State which is being used by Ankara as a cover for the PKK crackdown.
China Loses All Control, Spends 600 Billion Yuan On Plunge Protection In August, Tightens Capital ControlsSubmitted by Tyler Durden on 09/08/2015 - 07:38 So much for exiting the market. According to Goldman's estimates, China spent CNY600 billion propping up the stock market in the month of August alone. Meanwhile, MNI reports that in the wake of the yuan devaluation, SAFE began "'urging' [companies to] actively take measures to limit foreign exchange purchase for advance payment under imports... and postpone forex purchases."
Submitted by Tyler Durden on 09/08/2015 - 09:51 Fool me once, shame on me; fool me twice, shame on you; fool me a third time, you must think we are all just idiots!! Following The ECB's Benoit Coeure "internal procedure error" where he leaked the imminent actions of the central bank to a group of well-heeled hedge fund managers - who proceeded to dump EURUSD ahead of the announcement, The ECB has decided - in all its arrogant wisdom - to decamp to Luxembourg to speak, once again, to participants in the world of high finance behind closed doors. The media aren’t invited (though the ECB will publish some prepared remarks from the board members.).
Criminal Charges Filed Against Nomura Traders For Skimming Off Bid/Ask Spreads, Making Millions In The ProcessSubmitted by Tyler Durden on 09/08/2015 - 11:46 Today, in the first official criminal action following the Litvak bust from 2013, the SEC confirmed that our assessment was indeed spot on after the regulator announced fraud charges against three traders "accused of repeatedly lying to customers relying on them for honest and accurate pricing information about residential mortgage-backed securities (RMBS)." In the complaint, the SEC alleges that traders misrepresented the bids and offers being provided to Nomura for RMBS as well as the prices at which Nomura bought and sold RMBS and the spreads the firm earned intermediating RMBS trades. They also trained, coached, and directed junior traders at the firm to engage in the same misconduct.
Doom and gloom “porn”, this is the new troll term to describe the realities being described by those who use math and pure logic to derive conclusions. What other conclusions can one come to than “it’s been a great ride but it’s nearly over”? We are only a week away from the Fed meeting where interest rates may come off of “zero” (I dare them). Just reported was an unemployment rate at 5.1% …while 47 million Americans are on food assistance. Totally “unexpected” was the chemical “explosion of the week” in China Another Chinese Chemical Plant Explodes, Huge Clouds Of Black Smoke Billow Skyward.
I ask, what happens when you raise interest rates on a wobbly creditor (system) living day to day shuffling funds around just to settle? What happens when one of these well known creditors cannot and do not “settle”? I am talking of course about derivatives. You know, those wonderful contracts that allow creditors (even entire countries like Greece, Italy etc.) to hide true debt because they are “insured”. What happens when the insurance does not pay or the insurer goes broke?
Submitted by Tyler Durden on 09/08/2015 - 11:20 In our day-to-day world, old lessons regarding markets are easily forgotten. Nowhere is this observation more true than in the stock market where people expect stocks to always rise.
Submitted by Tyler Durden on 09/08/2015 - 11:05 The chart below warrants the question: if an even modest slowdown in Europe's pace of credit creation resulted in unprecedented economic and social upheavals for the "southern" part of the continent, what happens when deleveraging finally hits one of the other places around the globe, be it the BRICs in particular, the EMs in general, or - heaven forbid - the US itself.
All ‘majority rule’ political systems suffer from the same problem. If you happen to have a minority political opinion in your state or community, you’re completely screwed, because even if you stand with 49% of the population, your voice can’t be heard. Ultimately, the people who live under these systems have only one way to assert themselves. They have to vote with their feet.
As you might expect, this kind of voting is becoming more common in the United States. The average American voter is highly invested in the left-right paradigm. Both sides of this (admittedly false) paradigm seek to impose their will against the other side by capturing the government through the democratic process. The side that fails to capture the government during an election, has to live under the government of the other side. This of course, leads the losers to move to places that are dominated by their own beliefs.
Submitted by Tyler Durden on 09/08/2015 - 10:56 "We shouldn't pass on the bill for the tasks that are facing us now to future generations. Being in favour of more debt and a further flooding of the markets with central bank money is neither original nor serious."
Submitted by Tyler Durden on 09/08/2015 - 10:30 Rig productivity and drilling efficiency are red herrings. Although the barrels produced per rig is increasing, the barrels per average producing well is decreasing.
Submitted by Tyler Durden on 09/08/2015 - 10:12 Overnight we got an unexpected call from perpetual optimist JPMorgan (yes, we all miss Tom Lee), which released a report by Mislav Matejka warning that it is not "time to re-enter the US" because "upside is limited at this stage of cycle." To wit: "some of the longer term cycle signals are increasingly worrying, with rising risk that US equities start making sustained losses next year. At best, the upside potential for the US remains limited, in our view." Still, just like BofA, JPM felt the need to hedge: "too early to position for recession."
Submitted by Tyler Durden on 09/08/2015 - 09:45 Copper prices have surged over 4% this morning, breaking above the 50-day moving average (trading 2.41, near 2-month highs). Aside from Glencore's demise and modest strength in the Chilean peso today, this seems more like an algo-driven run off China's massive intervention-driven momentum.
Submitted by Tyler Durden on 09/08/2015 - 09:18 One can only hope they will continue to remain “behind schedule”. Haven’t these hapless planners done enough damage yet?
Submitted by Tyler Durden on 09/08/2015 - 08:30 While we wait for Greece to pick a side between the US and Russia by either allowing Moscow to use its airspace on the way to supplying Assad at Latakia or else snubbing the Kremlin and jeopardizing a potentially lucrative gas deal, at least one country has been quick to make a decision.
Submitted by Tyler Durden on 09/08/2015 - 08:19 Update: *MOSCOW EXCHANGE PREPARING TO RESUME TRADING W/BACKUP EQUIPMENT
It appears the 'virus' of broken markets has spread...
*MOSCOW EXCHANGE SAYS TRADING HALTED IN ALL MKTS, CHECKING ON REASONS FOR GLITCH
Yet another 'glitch' strikes yet another crucial convergence point of technology and business. Wil The Russians blame the Chinese? Or The Americans?
Submitted by Tyler Durden on 09/08/2015 - 08:10 We all know the global economy is slowing, so why would stocks soar from here? The basic answer is simple: The Fed has no choice, because this game is now for all the marbles.
Submitted by Tyler Durden on 09/08/2015 - 07:50 "Strength is to be sold into... How far down do we expect this bear market to run? Our answer is that we can imagine that the S&P might make its way all the way down toward 1600 which would simply take the market back to the trend line going back all the way to the “generational” lows in ’09. That would be nearly a 25% correction from the highs made earlier this year... We remain here at TGL modestly net short of the market generally and we’ve no intention of changing that focus other than to become a bit shorter still as time and market conditions demand."
The refugee chaos that is now pushing deep into Europe – dramatized by gut-wrenching photos of Syrian toddler Aylan Kurdi whose body washed up on a beach in Turkey – started with the cavalier ambitions of American neocons and their liberal-interventionist sidekicks who planned to remake the Middle East and other parts of the world through “regime change.”
Instead of the promised wonders of “democracy promotion” and “human rights,” what these “anti-realists” have accomplished is to spread death, destruction and destabilization across the Middle East and parts of Africa and now into Ukraine and the heart of Europe. Yet, since these neocon forces still control the Official Narrative, their explanations get top billing – such as that there hasn’t been enough “regime change.”
Thousands of refugees and asylum seekers head for safe havens daily – a human flood entering Europe, risking life and limb to get there. Why?
Washington bears full responsibility. Endless US direct and proxy wars force desperate people to seek safety out of harm’s way.
Numbers fleeing war and destabilized areas are greater than any time since WWII – increasing exponentially as conflicts and chaos rage in Afghanistan, Iraq, Syria, Libya, Yemen, Donbass, Somalia, South Sudan, and elsewhere.
A previous article cited a UNHCR report saying 60 million people were forcibly displaced by end of 2014. Globally one in every 122 people are asylum seekers, refugees or internally displaced persons. More than half the world’s refugees are children.
I am not an unbiased observer of the Syrian refugee crisis, for we have a Syrian friend. She is a young woman, with legal residency in the U.S. She is completing her university studies in computer science. Her uncle served honorably in the U.S. Army for many years in theater (Iraq) and recently retired in California’s Central Valley.
Her brother is completing his medical studies and wants to practice medicine in the U.S.
If you’ve been to a major hospital in the U.S. recently, you know that if all foreign-born doctors vanished, the current shortage of physicians would be much, much worse.
Donald Trump posted a new video on Instagram Wednesday hitting the Obama administration over the Iranian nuclear deal, which the presidential candidate describes as “terrible.”
The video begins with audio from President Obama announcing the deal as: “A powerful display of American leadership and diplomacy shows what we can accomplish when we lead from a position of strength. Iran could move closer to a nuclear bomb.”
Photos appear of the four U.S. hostages held by Iran: Christian pastor Saeed Abedini, former Marine Amir Hekmati, Washington Post Iran Bureau Chief Jason Rezaian and retired FBI Agent Robert Levinson.
Today’s lesson in how propaganda works: The rumor mill turns a trickle of a story early this week about “thousands” of Russian soldiers deploying to Syria any day — a wholly unsourced story originating on an Israeli website — into a torrent of hyperventilating about the “Russian invasion” of Syria.
Today neocon convicted felon Eliot Abrams took to the Council on Foreign Relations website to amplify the Israeli article (again with no sources or evidence) to a whole new and more dramatic article ominously titled “Putin in Syria.” Abrams adds “reporting” by Michael Weiss, who has long been on the payroll of viscerally anti-Putin oligarch Michael Khodorkovsky, without revealing the obvious bias in the source. Never mind, all Weiss adds to Abrams’ argument is that the Pentagon is “cagey” about discussing Russian involvement in Syria before again referencing the original (unsourced) Israeli article.
Now that 495 of the S&P 500 companies have reported second quarter earnings, something has become abundantly clear: 2015 is going to be a nasty year for corporate revenues.
Blended revenue for the S&P 500 companies dropped 3.4% in Q2, according to FactSet. “Blended” because it includes estimates for the five companies that have not yet reported. This follows the first quarter, during which reported revenues also declined. The last time year-over-year revenues declined two quarters in a row was in Q2 and Q3 2009 during the Financial Crisis.
Analysts liberally blame the strong dollar. It’s convenient. But numerous companies that mostly benefit from the strong dollar, such as GM (more on that in a second), still reported shrinking revenues in the quarter.
Christianity is being criminalized in the United States. No, I am not talking about the kind of Christianity that is so prevalent in America today where “Christians” just ignore what the Bible says and do whatever they wanted to do in the first place anyway. Rather, I am talking about the kind of faith that Kim Davis has demonstrated. Christians all over this country are being put into positions where they must choose to either submit to the “new morality” or potentially lose their jobs. For Kim Davis, deciding to take a stand meant that she was thrown into prison. The radical judge that threw her into prison has said that she will stay there until she is willing to change her mind.
Chaos and conflict at the very top of the Western financial system has created a unique opportunity to permanently put an end to Khazarian mafia control of the West. Furthermore, a new group of leaders will be assuming power in the Pentagon and, if they are able to coordinate with the worldwide resistance movement, humanity can be freed from Babylonian debt slavery as early as this autumn.
The important thing to drill into the heads of military, police and intelligence officials worldwide is that the West has been taken over by a group of mass murdering gangsters who need to be arrested and removed from power ASAP.
The euro’s founding father has warned that Europe’s latest plan for an EMU-wide finance ministry is a dangerous attempt to smuggle through political union, and breaches the basic tenets of modern democracy.
Professor Otmar Issing, the chief architect of monetary union through its early years, said it would be “dangerous” to transfer control over tax and spending to the EU federal level before full political union has been established first on democratic foundations.
Such a quantum leap in the constitutional structure of Europe – effectively the creation of an EU superstate, with a parliament comparable in power to the US Congress – is unthinkable in the current political atmosphere.
In keeping with their new policy, the People’s Bank of China today announced their updated gold reserves, stated as a part of their total foreign currency reserves update for August.
Again, after finally announcing a new alleged total for their gold reserves back in July, the PBoC also stated that they would begin updating their gold reserves every month going forward. Our man, StevenBHorse was the first to catch the July update back on August 10 and we posted the information here, nearly three full days before other websites caught on: