The EU assembly just voted affirmatively to impose a spate of rules to control 'high-frequency-trading
that, as the WSJ reports, was advanced by Germany following their
concerns that speedy traders have brought instability to markets. It is
somehow reassuring that
three-years after we first brought HFT to the mainstream's agenda, at
least one nation is taking it seriously, doing something about it,
instead of being filibustered into the 'liquidity-providing' meme.
The rules will initially require registration, collect fees on
excessive use of HFT methods, and install circuit breakers with the
goals to "limit the risks associated with high-frequency trading" per a
senior German FinMin; but the more stringent rules to come will have
the greatest impact as they intend to include requirements for orders to rest on the exchange book for at least half-a-second, and potentially order-to-trade ratio caps. Not surprisingly, the HFTs believe a "one-size-fits-all approach would be very harmful." Indeed - to their profits.Europe Goes Pear-Shaped
We
warned yesterday that European credit markets were sending very
different signals to the equity markets and sure enough today saw a
bloodbath across European equity, credit, and sovereign bond markets. Portugal and Spain 10Y spreads are now +46bps wider on the week
(and Italy +30bps) with Spain back over 6% yield (460bps spread) and at
more than three-week wides. While plenty will say 'but look where we
came from' when today's dumpfest is put in context, but the critical
aspect is the velocity and severity of today's 3-4% drop in
Italy and Spain's equity markets and European banks now down over 9%
from their post-FOMC peak (retraced more than 60% of the post-ECB rally). Europe's VIX jumped to over 22% as credit spreads (most notably subordinated financials - thanks to the 'AAA'nxiety over the banking union) were smashed wider. It
seems Ben's all-in move was the catalyst to bring a realization that
things may indeed be worse than we thought - as sovereigns have blown
wider since.Blackhawk Ben Down: Stocks Have Now Faded QEternity
8
days after the rapturous calls of all-in 'Ben's got yer back' so
buy-everything (coz retail will support you now and don't forget the
beta chase?), the S&P futures have fully retraced the 40 points of
S&P spikeworthiness that Ben's FOMC QEternity statement provided.
Treasury yields are already notably below pre-FOMC levels, as is Oil;
and the USD is higher - as Gold holds gains too but is fading.Globalist Think Tank Suggests Using Engineered Event As Excuse For War With Iran
What
is interesting about this discussion by the Washington Institute For
Near East Policy, a Neocon (Globalist) think-tank, is that its primary
purpose is not necessarily to debate the current political elements of
the Iranian question. They aren't contemplating the viability or
morality of a war with Iran. Instead, they are attempting to devise
strategies by which the government could CONVINCE the American public
and the world that a war with Iran is the "right thing to do", even if
it means fabricating their own justification. For them, the war is a
forgone conclusion, and they will do anything to make it a reality.California Screaming As 4th Muni Bankruptcy Looms in Atwater
Whether
Atwater, California will join the prodigious ranks of Stockton, San
Bernardino, and Mammoth Lakes to become the 4th Muni bankruptcy is up
for vote on October 3rd (before a $2mm bond payment in November). As
Bloomberg notes, the 28,000-strong Merced county town is suffering under
the same weight of public employee costs, lost revenue, and a stagnant economy leaving it with a $3.3 million budget deficit. While
some put their hope in the FB IPO, perhaps Bernanke should have
mandated investment in AAPL for all these municipal comptrollers?
The median income is 19% below the national average as the foreclosure
crisis - which saw Atwater's median home price drop by more than half -
has depleted property-tax revenues dramatically. "We just started negotiating with our unions and they are going to have to take a major cut,"
Mayor Joan Faul said. "We hope that once we declare a fiscal
emergency, that they will realize that we are definitely in an
emergency. If they want to save all the jobs, everyone is going to have to take a cut,"The Bitching Indicator Suggests A Fishing Hook Forming
Eric De Groot at Eric De Groot - 12 minutes ago
Jim’s email indicator implies that the community is beginning to believe
that QE won’t work and gold and silver are dead. I suspect that computer
analysis incoming email sentiment would yield a highly productive trading
tool called the “bitching indicator.” Casual observations of Jim’s 'stand
strong, tall, etc' posts relative to my timing technique imply impeccable
timing. Gun slinging...
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content, and more! ]]
39% Of South African Gold Production Is Now Offline
Over a month ago, when discussing the implications of the South African miner strike that will not end until all local mining companies' income statements are crippled after succumbing to wage hike demands, we said "Expect more South African mines to shutter, as gold production in the world's third largest gold producer grinds to a halt, and the local workers grasp they had the leverage all along. Should the South African example spread to other countries, then expect the price of gold to soar regardless of how much printing the central planners engage in the coming weeks and month." Today, we find out just what the final tally is , as this too prediction is proven correct: "Strikes at South African gold mines have shut about 39 percent of capacity, including at AngloGold (AGG) Ashanti Ltd. and Gold Fields Ltd. (GFI), as unofficial walkouts spread across the country in demand of above-inflation pay increases." And boom: "AngloGold, the world’s third-largest gold producer, today said all of its South African mines have been halted. Gold Fields Ltd. also lost a metric ton, or about 32,000 ounces, of production after strikes at its KDC and Beatrix operations." That's ok, Bernanke will just print more gold.
China Buys North Korea's Gold Reserves As South Korea Increased Gold Reserves By 30%
Desperate North Korea has exported more than 2 tons to gold hungry China over the past year to earn US $100 million. Even in tough times during the Kim Il-sung and Kim Jong-il regimes, North Korea refused to let go of its precious gold reserves. Chosun media reports that “a mysterious agency known as Room 39, which manages Kim Jong-un's money, and the People's Armed Forces are spearheading exports of gold, said an informed source in China. "They are selling not only gold that was produced since December last year, when Kim Jong-un came to power, but also gold from the country's reserves and bought from its people." This is a sign of the desperation of the North Korean regime and also signals China’s intent to vastly increase the People’s Bank of China’s gold reserves.Intraday Trends In Gold and Silver: Five Year Rolling Average
When Draghi Speaks, Sell Bunds; When He Shuts Up, Buy 'Em Back
The markets mood is shifting from certainty to uncertainty. The
unpalatable truth about a stable Europe is it takes all its many and
diverse participants to be singing off the same hymn sheet.
Unfortunately they aren't. The different objectives and aims of each
group are becoming increasingly apparent. The Bottom line remains if the
Euro can be held together, then Italy and Spain bond yields will
tighten. Simple. Unfortunately, the tensions inherent in the system
threaten to pull it apart. A brief study of history will show conflict and naked self-interest are the only permanent features inherent to any human system.
Name me an alliance, an empire, a union, a nation or any large
political unit that has, at some point, not tried to pull itself apart?
Meanwhile... the global recession gets deeper. Yesterday the slowing
European economy caused Volvo to acknowledge slowing truck demand... Who could have predicted that? And its going to get worse. Total Donations over the last 3 1/2 years. approx $165.00 (Thank You). Donations will help defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.
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Real Estate Bulls Getting Closer But Nowhere Near Understanding The Cyles In Play
Eric De Groot at Eric De Groot - 59 minutes ago
Add another tens years and replace peak with bottom (in real terms) and
you'll start to comprehend how many body bags have yet to be filled in the
real estate market. Only the investors with the ability to stand alone and
flush with cash generated from the great gold bull market will be
interested in real estate by 2032. Headline: Home prices may not return
to peak until...
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Investing: The Best Way To Learn Is To Do It Yourself
Admin at Jim Rogers Blog - 4 hours ago
The best way to learn is to do it yourself; there`s nothing quite like it.
I have read a lot of books (I have written books myself) and talked to a
lot of people, but I`ll tell you there is nothing like doing it.
You can invest on paper and learn that you`re a great investor, but when
you actually do it, it`s a whole lot different. I don`t know of any other
profession where it`s quite the same - you have got to do it in order to
know whether you are good at it, because your emotions, your passions and
your thought process are a whole lot different when you have got real money
bon th... more »
Video: The Failure Of The Interventionism
Admin at Marc Faber Blog - 5 hours ago
Latest video interview with FNN Australia.
*
**Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*Less Than Expected 31,000 New Homes Sold In August; Dent "Recovery" Meme
Moments ago, the Census Bureau released the August new single-family house sales number: at 373,000 on an annualized basis, it missed expectations of a rise to 380,000, and was down from a revised 374,000. This is only the second miss in 2012, and confirms that all talk of a housing recovery is misguided, and merely represents one particular segment of the housing market: that of existing home sales where buyers have all cash, are price indiscriminate, and are willing to take advantage of the NAR's exemptions from anti-money laundering provisions. I.e., US real estate is merely a place to park cash for those who have obtained it using questionable means. Looking at the number on a non-SAAR basis reveals that only 31,000 actual houses sold in August, of which 3,000 in the Northeast: surely a reason to keep on bidding up the builders into the stratosphere: fear not, actual sales will come. Eventually. Finally, and demonstrating that rich buyers focus primarily on dumping money into existing mansions, was the distribution of purchases by price bucket, which showed a (Z), or under 500 houses sold, in the $750,000+ category. This was the first time there was a (Z) in this bucket since February.
The ESM Investor Presentation - Home-Study Guide For All Sovereign Wealth Fund Suckers
To
all those willing to part with their country's (or their own)
hard-earned cash to fund more experimental and unfounded
financially-engineered debt for the nations of the union in Europe, the
EFSF's Regling has prepared a 30-page investor presentation. The
slide-deck explains the machinations, support, and payback (highly liquid, regular issuance, broad yield curve coverage)
of this great and good grand ESM plan that will - no doubt - save the
known universe and fund Europe across one more bridge. This time it's
different - with all its 'paid-in' capital and promises - should any
nation decide to abdicate its sovereignty. Hhmm, no mention of 2x
leverage...Meanwhile, At The Greece 'Mass Strike' Protest-Cam
Tens of thousands of Greeks are in the streets (according to various media and livestreams - expected to grow to 100,000)
and what was a peaceful (though loud) protest against the 'criminal
TROIKA' appears to have begun sporadically to turn a little ugly as
police are organizing and smoke (believed to be tear gas and petrol bombs being exchanged) is seen in the Square. The live-stream shows hundreds of riot police as the protesters begin to arrive in the main Square.Frontrunning: September 26
- China To Maintain Prudent Monetary Policy (China Daily)
- Why Exit Is An Option For Germany (FT)
- China-Japan Ministers Hold 'Severe' Talks As Spat Damages Trade (Bloomberg)
- Eurozone Deal Over Bank Bailout In Doubt (FT)
- UBS Co-Workers Knew of Fake Trades, Adoboli Told Lawyer (Bloomberg)
- Banks Seek Changes To Research Settlement (FT)
- Secession Crisis Heaps Pain On Spain (FT)
- SEC: NY Firm Allowed HFT Manipulation (Bloomberg) - busted 'providing liquidity'?
- Germany To Tap Brakes ON High-Speed Trading (WSJ)
- Rajoy Outlines Fresh Overhauls (WSJ)
- BBC Apologizes To Queen Over Radical Cleric Leak (Reuters)
- British Banks Step Back From Libor Role (WSJ)
- Obama Seeks To Recast Ties With Arab World (FT)
Spanish 10Y Bond Yield Breaches 6% - Highest In 3 Weeks As Nothing Still Fixed
The yield on 10Y Spanish bonds just broke back above 6% for the first time in three weeks as the spread to Bunds also broke above 450bps. Now up over 33bps this week (along with Italy +20bps and Portugal +36bps), it seems the market is waking to the idea that words are simply not as good as actions and even actions are irrelevant if they simply kick the can. The front-end of the Italian and Spanish curves are underperforming today (Italy 2Y +12bps and Spain +22bps) as the OMT-front-running exuberance a-la-LTRO is being unwound. It seems European credit markets were indeed on to something yesterday as they underperformed. Spanish and Italian equity markets are down around 3% with France off more than 2% and credit spreads widening notably further in financials and corporates - as EURUSD slides to 1.2850.
Next Steps For Spain
With the ESM passing through the German high court, and the ECB formally announcing their OMT bond-buying programme, the next headache for European asset classes to digest comes from the will-they-won’t-they speculation regarding a Spanish sovereign bailout. With Spain’s withering finances, elevated borrowing costs and rapidly shrinking tax revenues, the need for governmental assistance is known by all. As such, this report has been compiled to run through each possible bailout scenario and the possible impact across the asset classes.European Risk Is Back: CDS Surge, Spain 10 Year Back Over 6%, Germany Has Second Uncovered Auction In Three Weeks
Remember when we said two months ago that one way or another the market will need to tumble to enforce the chain of events that lead to Spain demanding the bailout which has long been priced in, and (especially after yesterday's violent protest) Rajoy handing in his resignation? Well, it's "another." After nearly 3 months of suspending reality, in hopes to not "rock the boat" until the US presidential election, reality has made a quick and dramatic appearance in Europe, where after a day in which the EURUSD tumbled, events overnight have finally caught up. What happened? First, ECB's Asmussen said that the central bank would not participate in any debt restructuring, confirming any and all hopes that the ECB would ever be pari passu with regular bondholders were a pipe dream. Second, Plosser in the US said additional QE probably won't boost growth which has reverberated across a globe in which the only recourse left is, well, additional QE. Finally, pictures of tens of thousands rioting unemployed young men and women in Madrid did not help. The result: Spain's 10 Year is over 20 bps wider, and back over 6%, Germany just had a €5 billion 10 Year auction for which it only got €3.95 billion in bids, which means it was technically a failure, and the second uncovered auction in one month, and finally CDS across the continent, not to mention the option value that is the Spanish IBEX which may fall 3% today, have finally realized they are priced far too much to perfection and have, as a result, blown out.What To Expect From Post-Election Year Markets
There
has been a lot of ink spilled about how the stock market performs
during Presidential election years generally leaning to why investors
should be fully invested to the hilt. The current election year, with
just three months remaining, has certainly played out to historical
norms with the markets advancing on expectations of continued
government interventions even as economic and fundamentals deteriorate.
To wit Bespoke Investment Group wrote back in July:
"We have highlighted the similarities between this year and prior
Presidential Election years numerous times. Most recently, in early July
we noted the fact that based on the historical pattern, the S&P
500 could see a modest pullback in mid-July coinciding with the
kick-off of earnings season. Sure enough, the market saw some
choppiness about a week and a half ago and subsequently rebounded in
the middle of last week. Holding to the historical pattern, that
rebound came right at the same time that the market historically sees
its summer low. If the pattern continues, the S&P 500 could be set
up for a nice rally to end the Summer. Will it hold? Only time will
tell, but if the historical pattern has worked so far, what's to stop it from continuing?"Barely Literate High School Students Have a Better Understanding of Jobs Creation Than Washington
09/26/2012 - 10:05
Today’s Items:
Courtesy of the unsuspecting German
public, they are about to fund the bloc’s permanent bailout fund to more
than 2 trillion euros and rescue big countries if necessary. Or will
Germany stop at the 190 billion euro mark as per their Constitutional
court? If so, the euro situation will go down hill fast.
Here are some signs that Spain is in big trouble…
1. There are more than 47 million people living in Spain today. Only about 17 million of them have jobs.
2. Two of Spain’s biggest banks have announced that they are going to stop increasing their holdings of Spanish government debt.
3. The Spanish government has announced a ban on all cash transactions larger than 2,500 euros.
4. Spain’s debt to GDP ratio is projected to rise by more than 11 percent during 2012.
5. Spanish authorities are locking up trash cans to prevent people from foraging for food.
1. There are more than 47 million people living in Spain today. Only about 17 million of them have jobs.
2. Two of Spain’s biggest banks have announced that they are going to stop increasing their holdings of Spanish government debt.
3. The Spanish government has announced a ban on all cash transactions larger than 2,500 euros.
4. Spain’s debt to GDP ratio is projected to rise by more than 11 percent during 2012.
5. Spanish authorities are locking up trash cans to prevent people from foraging for food.
If economic and corporate news continues
to deteriorate, the FED may juice up its quantitative easing. As it
stands, the latest round of easing will see the Fed create $40 billion a
month out of thin air. Of course, its not like Bernanke is declaring war on the Canadian economy… Wait, he is because QE hurts exports from Canada to the US.
James Turk believes that there is a fierce
battle taking place between the bulls and the bears in the gold and
silver markets. It appears that physical buyers of gold and silver are
gaining the upper hand, while shorts and central planners are losing.
None of the underlying reasons for the bull market have gone away. In
fact, mining shares are starting to do better than the precious metals
themselves – which is bullish for the metal themselves. Remember, after
preparing, keep stacking physical.
Because of lower taxes and more business
friendly regulations, these 10 states are the destinations for
Californians… Texas, Nevada, Arizona, Oregon, Washington, Colorado,
Idaho, Utah, Georgia, and South Carolina.
Here are some of the repercussions of the First Wookie’s err. Lady’s Lunch program.
1. Costs per plate, that has food that kids are revolted by, have increased 20 to 25 cents.
2. Capitalist kids are black-marketing chocolate syrup by the squeeze.
3. Elementary children are actually thumbing their noses up at hummus and black bean salads and are having hunger pains through the day.
4. Kids are blaming the government for their hunger and government officials are acting like children blaming the kids.
Michelle… Go back to gardening and leave the children alone… You pervert.
1. Costs per plate, that has food that kids are revolted by, have increased 20 to 25 cents.
2. Capitalist kids are black-marketing chocolate syrup by the squeeze.
3. Elementary children are actually thumbing their noses up at hummus and black bean salads and are having hunger pains through the day.
4. Kids are blaming the government for their hunger and government officials are acting like children blaming the kids.
Michelle… Go back to gardening and leave the children alone… You pervert.
Howard Stern does it again with his Man-on-the-street interview of Obama supporters.
Did you know that Obama is pro-life, anti-gay marriage, a Mormon, and chose Paul Ryan, who is black, as his Vice President?
Did you know that Mitt Romney is black and is pro-gay marriage?
Did you know that we are still hunting for Osama Bin Laden?
Did you know that John McCain may get 40% of the vote in the coming election?
Do you really believe that these people interviewed are shining examples of our education system?
Needless to say, one could easily find just as brilliant supporters for Romney as well.
Did you know that Obama is pro-life, anti-gay marriage, a Mormon, and chose Paul Ryan, who is black, as his Vice President?
Did you know that Mitt Romney is black and is pro-gay marriage?
Did you know that we are still hunting for Osama Bin Laden?
Did you know that John McCain may get 40% of the vote in the coming election?
Do you really believe that these people interviewed are shining examples of our education system?
Needless to say, one could easily find just as brilliant supporters for Romney as well.
Total Donations over the last 3 1/2 years. approx $165.00 (Thank You). Donations will help defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.
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