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Tyler Durden

Tyler Durden is a reference to the lead character in Fight Club. It's the pseudonym for Zero Hedge's key author(s) used to hide their identities.

Articles by Tyler Durden

SocGen: Beware The Ghost Of 1993

14 days ago

With Monday’s financial media blasting reports about the VIX collapse to levels not seen in 24 years, going all the way back to 1993, it is worth remembering that the near record low volatility collapse of 1993 did not end well either for stocks, or for bonds, with the great 1994 bond tantrum.  Reminding us of that, and of broader implications for the cross-asset space, is SocGen’s Kit Juckes with his overnight note, “The ghost of 1993”

The ghost of 1993
First things first: Collapsing vol is bad for the yen (and possibly worse for the Swiss franc, in this context) and good for yieldier currencies generally. It’s an invitation to add risk and yield to a portfolio if volatility-adjusted returns are expected to be higher as a result of the low vol. We’re happy to stay short JPY vs EUR, SEK, or indeed HUF and PLN. And SEK, HUF and PLN are all likely to remain supported for a while longer against the Swiss franc as the SNB finally gets the relief they crave, albeit with the caveat that it wouldn’t be at all surprising if the SNB were to use the rise in EUR/CHF to reduce its FX reserve mountain a bit.
Beyond the immediate reaction though, too little vol is too much of a good thing. Is it evidence of a quiet, news-free world? Not really.

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How The US Government Let A Giant Bank Pin A Scandal On A Former Employee

14 days ago

The following is an excerpt from David Enrich’s nonfiction financial and legal thriller The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History.  (Read part of the prologue here; another excerpt can be found here) This excerpt takes place shortly after the accused mastermind of the Libor scandal, Tom Hayes, is fired from his job at Citigroup, kicking government investigations into interest-rate-rigging into a higher gear.
– Click to enlarge
How The US Government Let A Giant Bank Pin A Scandal On A Former Employee
Chris Cecere handed in his resignation from Citigroup shortly after his subordinate Tom Hayes was fired for manipulating Libor in September 2010. Cecere’s departure was voluntary, but Citigroup had told him he might be fired if he didn’t step down on his own. His cell phone and e-mail were quickly disconnected. Always the salesman, Cecere described his resignation to Hayes as an act of protest — he said he did it “in disgust.” Cecere wasn’t terribly worried about the future: He was already in talks to join a huge international hedge fund, Brevan Howard, as a trader in its Geneva headquarters.

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A Problem Emerges: Central Banks Injected A Record $1 Trillion In 2017… It’s Not Enough

15 days ago

Two weeks ago Bank of America caused a stir when it calculated that central banks (mostly the ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record.” 

Aggregate Balance Sheet Of Large Central Banks, 2000 – 2017 – Click to enlarge
BofA’s Michael Hartnett noted that supersized central bank intervention which he dubbed a “liquidity supernova” is “the best explanation why global stocks & bonds both annualizing double-digit gains YTD despite Trump, Le Pen, China, macro…”

Central Bank Balance Sheet, 2006 – 2017 – Click to enlarge
To be sure, Hartnett’s “discovery” did not come as a surprise to regular readers: back in October 2014, Citi’s Matt King calculated that it costs central banks $200 billion per quarter to avoid a market crash, or as he put it:

For over a year now, central banks have quietly being reducing their support. As Figure 7 shows, much of this is down to the Fed, but the contraction in the ECB’s balance sheet has also been significant.

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Europe, US Futures Slip Despite Brent Bouncing Back To $51

15 days ago

Asian stocks rose lifted by commodity names; European equities trade mostly lower but with little in the way of conviction or firm direction while the Italian banking index is at the highest level in a year following domestic earnings; S&P index futures are modestly in the red after the cash market closed at a record high Wednesday and investors prepared for earnings from retailers; we expect the now general vol selling program to promptly lift the S&P into new all time highs minutes after today’s open.
Global sentiment was boosted for the second day by a rebound in energy shares as oil prices rose, with Brent regaining the $51 level and reverse all of last week’s losses, after U.S. fuel inventories declined and Saudi Arabia cut supplies of crude to Asia more than expected.
The MSCI’s gauge of global stock markets was up 0.1 percent, bringing their gains for the year to nearly 10 percent, and into fresh record territory. After starting off deep in the red, the Shanghai Composite managed to recover and close green, despite another tumble in iron ore on SGX AsiaClear in Singapore, where it fell as much as 4.5% to $59 a ton, the lowest since October amid a clampdown on leverage in China, the top consumer, and expanding global supply.

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“Mystery” Central Bank Buyer Revealed, Goes On Q1 Buying Spree

18 days ago

In the first few months of the year, a trading desk rumor emerged that even as institutional traders dumped stocks and retail investors piled into ETFs, a “mystery” central bank was quietly bidding up risk assets by aggressively buying stocks. And no, it was not the BOJ: while the Japanese Central Bank’s interventions in the stock market are familiar to all by now, and as we reported last night on sessions when the “the BoJ comes in big, the average return on the [Nikkei] is about 14 basis points higher” with Nomura calculating that “the BoJ has provided a cumulative boost to the Nikkei of about 1,400 points”…

Nikkei 225 vs. BoJ ETF Holdings 2011-2017 – Click to enlarge
… the one thing about the BOJ is that it keeps its interventions local, and tends to mostly prop up Japanese stocks, whether the Nikkei 225 or the Topix.
The answer was revealed on Friday when the hedge fund known as the “Swiss National Bank” posted its latest 13-F holdings. What it showed is that, as rumored, the Swiss National Bank had gone on a record buying spree in the first quarter, boosting its total equity holdings to an all time high $80.4 billion, up $17 billion from the $63.4 billion at the end of 2016, the biggest quarterly increase in “AUM” in history.

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How The US Government Let A Giant Bank Pin A Scandal On A Former Employee

20 days ago

The following is an excerpt from David Enrich’s nonfiction financial and legal thriller The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History.  (Read part of the prologue here; another excerpt can be found here) This excerpt takes place shortly after the accused mastermind of the Libor scandal, Tom Hayes, is fired from his job at Citigroup, kicking government investigations into interest-rate-rigging into a higher gear.
How The US Government Let A Giant Bank Pin A Scandal On A Former Employee
Chris Cecere handed in his resignation from Citigroup shortly after his subordinate Tom Hayes was fired for manipulating Libor in September 2010. Cecere’s departure was voluntary, but Citigroup had told him he might be fired if he didn’t step down on his own. His cell phone and e-mail were quickly disconnected. Always the salesman, Cecere described his resignation to Hayes as an act of protest — he said he did it “in disgust.” Cecere wasn’t terribly worried about the future: He was already in talks to join a huge international hedge fund, Brevan Howard, as a trader in its Geneva headquarters.
Before leaving Tokyo, Cecere had one last thing he wanted to do: take a shot at Mike Pieri, a UBS manager who had previously been Hayes’s boss.

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These Are The Most Expensive (And Best) Cities Around The World

20 days ago

Every year Deutsche Bank releases its fascinating index of real-time prices around the world which looks at the cost of goods and services from a purchase-price parity basis, to determine the most expensive – and in this year’s edition, best – cities. As have done on several occasions in the past, we traditionally focus on one specific subindex: the cost of “cheap dates” in the world’s top cities.
The index consists of i) cab rides, ii) dinner/lunch for two at a pub or diner, iii) soft drinks, iv) two movie tickets and a v) couple of beers. Deutsche Bank’s advice to those in Zurich is either to marry young or choose your blind dates carefully as its “cheap date” index continues to see Zurich as the most expensive place for courtship. Tokyo climbs to second and Oslo, Copenhagen and Stockholm make up the top 5. Indeed these 5 cities are also the most expensive for a haircut so the pre-date investment costs are also high!
If you’re in the Philippines, Indonesia, Malaysia, India and Mexico a date is around a quarter of the cost of that in Zurich and a haircut about a tenth of the price. So if you’re young, free and single in Zurich, depending on how much you date it might be profitable to migrate to parts of Asia even after the salary sacrifice, the German bank suggests.

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These Are The Most Expensive (And Best) Cities Around The World

21 days ago

Every year Deutsche Bank releases its fascinating index of real-time prices around the world which looks at the cost of goods and services from a purchase-price parity basis, to determine the most expensive – and in this year’s edition, best – cities. As have done on several occasions in the past, we traditionally focus on one specific subindex: the cost of "cheap dates" in the world’s top cities.
The index consists of i) cab rides, ii) dinner/lunch for two at a pub or diner, iii) soft drinks, iv) two movie tickets and a v) couple of beers. Deutsche Bank’s advice to those in Zurich is either to marry young or choose your blind dates carefully as its "cheap date" index continues to see Zurich as the most expensive place for courtship. Tokyo climbs to second and Oslo, Copenhagen and Stockholm make up the top 5. Indeed these 5 cities are also the most expensive for a haircut so the pre-date investment costs are also high!
If you’re in the Philippines, Indonesia, Malaysia, India and Mexico a date is around a quarter of the cost of that in Zurich and a haircut about a tenth of the price. So if you’re young, free and single in Zurich, depending on how much you date it might be profitable to migrate to parts of Asia even after the salary sacrifice, the German bank suggests.

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Where There’s Smoke…

April 25, 2017

Central banks around the world have colluded, if not conspired, to elevate and prop up financial asset prices.  Here we’ll present the data and evidence that they’ve not only done so, but gone too far.
When we discuss elevated financial asset prices we really are talking about everything; we’re talking not just about the sky-high prices of stocks and bonds, but also of the trillions of dollars’ worth of derivatives that are linked to them, as well as real estate in dozens of countries and locations.  All are intricately linked together. For instance, stocks are elevated, in part, because bond yields are so low.  Sam for real estate.
Here are three questions most alert investors are asking:
Question #1: When will financial assets ever ‘correct’ and fall in price?
Question #2: How much does overt propping by the central banks have to do with today’s elevated prices?
Question #3: How much does covert propping by central banks play a role in these inflated markets?
These are important questions to consider because if central banks have been too involved and gotten themselves mixed up in trying to ‘wag the dog’ by using elevated financial asset prices as a means to drive economic expansion — then the risk is a big implosion in financial asset prices if their efforts fail.

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Life Expectancy Indicates A Nation’s Overall Well Being – So Why Is America’s Dropping?

April 14, 2017

‘Exceptional’ America is seriously lagging behind in global life expectancy…
Via: MesoTreatmentCenters.org
Some additional details…
Life Expectancy Indicates a Country’s Overall Well Being—So Why Is Ours Dropping?
The last time U.S. life expectancy declined at birth
1992-1993: 75.8 to 75.5 years
Resulting from high death rates from AIDS, flu epidemic, homicide, and accidental deaths

After years of life expectancy gains, there is decline all across the board
2014-2015: 78.9 to 78.8 years
Death rates rose for 8 out of 10 leading causes of death
Heart disease causes more than 4X as many deaths as the rest of the leading causes
Prescription opioid painkillers and heroin abuse are probably fueling increases in unintentional injuries
In 2014, the CDC reported 28,000 died due to opioid overdoses

In 2015, Obesity Related Problems Caused 10% of US Deaths
Obesity increases the likelihood of heart disease, stroke, type 2 diabetes, and some cancers
6 million or ? of Americans are obese
Being 40 lbs overweight cuts about 3 years off life expectancy
Being 100 lbs overweight reduces lifespan by about 10 years

The US has higher obesity rates than countries with longer lifespans
Japan 3.3%
Switzerland4%
Germany 20.1%
Spain 23.7%
United Kingdom 28.1%
Australia 28.6%
USA 33.

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Life Expectancy Indicates A Nation’s Overall Well Being – So Why Is America’s Dropping?

April 14, 2017

‘Exceptional’ America is seriously lagging behind in global life expectancy…
Via: MesoTreatmentCenters.org
Some additional details…
Life Expectancy Indicates a Country’s Overall Well Being—So Why Is Ours Dropping?
The last time U.S. life expectancy declined at birth
1992-1993: 75.8 to 75.5 years
Resulting from high death rates from AIDS, flu epidemic, homicide, and accidental deaths

After years of life expectancy gains, there is decline all across the board
2014-2015: 78.9 to 78.8 years
Death rates rose for 8 out of 10 leading causes of death
Heart disease causes more than 4X as many deaths as the rest of the leading causes
Prescription opioid painkillers and heroin abuse are probably fueling increases in unintentional injuries
In 2014, the CDC reported 28,000 died due to opioid overdoses

In 2015, Obesity Related Problems Caused 10% of US Deaths
Obesity increases the likelihood of heart disease, stroke, type 2 diabetes, and some cancers
6 million or ? of Americans are obese
Being 40 lbs overweight cuts about 3 years off life expectancy
Being 100 lbs overweight reduces lifespan by about 10 years

The US has higher obesity rates than countries with longer lifespans
Japan 3.3%
Switzerland4%
Germany 20.1%
Spain 23.7%
United Kingdom 28.1%
Australia 28.6%
USA 33.

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Saxo Warns Reflation Trade Ends In Q2 With “Healthy Correction”

April 11, 2017

The reflation trade that started before Donald Trump’s victory in the US presidential elections accelerated in Q1 as global economic data improved and surprised against expectations. Global equities are up 6.5% in dollar terms with markets such as Hong Kong, emerging markets, and Brazil the clear outperformers.
In its Q2 2017 Outlook report, Saxo Bank warns that the reflation trade will end in Q2 with a healthy correction in global equities.

 
The biggest perception-versus-reality gap remains this risk of recession. While the market at large sees less than a 10% chance of recession, we at Saxo –together with our friends at South Africa’s Nedbank – see more than a 60% chance.
No, we are not “predicting a recession”, but our economic model does indicate a significant slowdown as the large credit impulse from China and Europe in the early part of 2016 has not reversed to negative, which should make the market conservative and risk averse (and certainly long US fixed income).
Along with Q2, spring is now upon us, so we will enjoy both the season and the “fake” economic spring we see now as a slowdown is coming. In this slowdown, Europe will do better than the US, EUR will do better than USD, and Asia will be under pressure to reform its way away from debt as the main driver of growth.

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Credit Suisse Offices Raided In Multiple Tax Probes: Gold Bars, Paintings, Jewelry Seized

April 1, 2017

Credit Suisse has confirmed that the Swiss bank, some of its employees and hundreds of account holders are the subjects of a major tax evasion probe launched in UK, France, Australia, Germany and the Netherlands, setting back Swiss attempts to clean up its image as a haven for tax evaders.
According to Bloomberg, Dutch investigators seized jewellery, paintings and even gold bars as part of a sweeping investigation into tax evasion and money laundering in the Netherlands. They added that the sums involved amounted to “many millions” of lost tax revenue.
Doorzoekingen tijdens internationale actiedag in verband met onderzoek naar #zwartsparen bij een #Zwitsersebank: https://t.co/dhymVvlyHr. pic.twitter.com/VRha4rlTHb — FIOD (@FIOD) March 31, 2017

Two individuals who were arrested on Thursday in connection with the raids were accused of concealing millions of euros from authorities by placing them, where else, in Swiss bank accounts, the Fiscal Information and Investigation Service said in a statement Friday. Criminal investigations are also underway in Australia, Germany, the U.K. and France.

The Swiss bank also said Friday that its offices in London, Paris and Amsterdam were raided Thursday by authorities in connection with client tax matters.
In a statement by the U.K.

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Credit Suisse Offices Raided In Multiple Tax Probes: Gold Bars, Paintings, Jewelry Seized

March 31, 2017

Credit Suisse has confirmed that the Swiss bank, some of its employees and hundreds of account holders are the subjects of a major tax evasion probe launched in UK, France, Australia, Germany and the Netherlands, setting back Swiss attempts to clean up its image as a haven for tax evaders.
According to Bloomberg, Dutch investigators seized jewellery, paintings and even gold bars as part of a sweeping investigation into tax evasion and money laundering in the Netherlands. They added that the sums involved amounted to “many millions” of lost tax revenue.
Doorzoekingen tijdens internationale actiedag in verband met onderzoek naar #zwartsparen bij een #Zwitsersebank: https://t.co/dhymVvlyHr. pic.twitter.com/VRha4rlTHb
— FIOD (@FIOD) March 31, 2017
Two individuals who were arrested on Thursday in connection with the raids were accused of concealing millions of euros from authorities by placing them, where else, in Swiss bank accounts, the Fiscal Information and Investigation Service said in a statement Friday. Criminal investigations are also underway in Australia, Germany, the U.K. and France.
The Swiss bank also said Friday that its offices in London, Paris and Amsterdam were raided Thursday by authorities in connection with client tax matters.
In a statement by the U.K. tax authority, it said it was investigating "senior employees" at a global financial institution.

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100 Years Ago, Russian Stocks Had A Very Bad Day

March 28, 2017

In recent months, Ray Dalio seems to be undergoing a deep midlife and identity crisis, which has not only led to dramatic recent management changes at the world’s largest hedge fund, Bridgewater, but also resulted in some fairly spectacular cognitive dissonance, as Dalio first praised, then slammed, president Trump. Yesterday. in the latest expression of his building anti-Trumpian sentiment, Bridgewater released a 61-page report looking at “Populism: the Phenomenon“, which describes what Bridgewater sees as the “archetypical populist template,” which the fund built out through studying 14 past populist leaders in 10 different countries.
The unspoken message in the report is that the US is the 15 example of the “populist leader”, and since all 14 cases presented by Dalio had less than happy endings, the implication is that Bridgewater is hardly optimistic or excited about the near-term future for the US.
Dalio’s politics aside, however, the report, among other notable historical observations, has a fascinating aside into what happened some 100 years ago in post-World War I and Tsarist Russia under Vladiir Lenin and the Russian Revolution.

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Global Stocks Slide, S&P Futures Tumble Below 50DMA As “Trump Trade” Collapses

March 27, 2017

Global stocks are lower across the board to start the week, as concerns about Trump’s administration to pull off a material tax reform plan finally emerge, pressuring S&P futures some 20 points lower this morning, following European and Asian shares lower, while crude oil prices fall unable to find support in this weekend’s OPEC meeting in Kuwait where a committee recommended to extend oil production cuts by another 6 months. Safe havens including the yen and bonds climbed as did gold, which continued its advance above the key resistance level of $1,250, while industrial commodities dropped.
So-called "Trumpflation trades" – bets that Trump’s pro-business policies would stoke growth and inflation in the U.S. and global economies, boosting assets such as commodities – came under heavy selling pressure.  The dollar, whose index had surged more than 6 percent in the aftermath of Trump’s election to hit 14-year highs at the start of 2017, slipped to its lowest since Nov. 11, two days after the results of the presidential vote.
"Investors are viewing this setback as a broader loss of faith in the Trump administration’s ability to deliver on other campaign pledges – namely tax and spending policies, which have underpinned asset prices since the U.S. elections," said ING currency strategist Viraj Patel, in London.
U.S.

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SNB Spent $68 Billion On Currency Manipulation In 2016

March 24, 2017

While Donald Trump has repeatedly expressed his displeasure with China for manipulating its currency, he appears to have recently figured out that over the past 2 years Beijing has been spending hundreds of billions in dollar to strengthen, not weaken, the Yuan and to halt the ~$1 trillion in capital flight from China. But while everyone knows that the biggest currency manipulation in the world, and perhaps the Milky Way galaxy is Japan, which now owns 40% of all JGBs in its ongoing attempt to pressure the Yen lower and explains why Abe was trembling when he met with Trump, terrified the US president would tell him to stop, one place where Trump may want to look is Europe’s famously “neutral” country, which however continues to be quite bellicose when it comes to currency warfare. Overnight, the SNB announced that in 2016 it spent 67.1 billion Swiss francs, or $67.6 billion, to purchase foreign currencies in an effort to weaken its currency.

The amount, published in the central bank’s annual report on Thursday, was roughly CHF20 billion lower than the 2015 total of 86.1 billion francs and a record of 188 billion spent in 2012. What is notable is that in 2015, the Swiss National Bank ended its 1.20 EURCHF peg, which ended up costing the SNB tens of billions in FX losses.

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CS and UBS Tell Wealthy Retail Clients To Buy Stocks…”Here, Can You Please Hold This Bag”

March 17, 2017

Warren Buffett has frequently advised aspiring investors to take a contrarian view on markets and “be fearful when others are greedy and be greedy when others are fearful.”  In fact, being dismissive of the wall street ‘herd mentality’ has resulted in some of Buffett’s most successful trades over the years including his decision to load up on bank stocks during the ‘great recession’.
But the market wizards at Credit Suisse and UBS are apparently advising their wealthy retail clients to ignore Buffett’s sage advice and instead follow a strategy that can loosely be summarized as “Buy The Fucking Dip.”  It’s a genius plan, if we understand it correctly.  Per Bloomberg:

Credit Suisse Group AG and UBS Group AG have a message for their wealthy clients: it’s not too late to buy equities.
Political risk is keeping many rich individuals on the sidelines of a rally that’s sent global stocks surging to records amid a recovering world economy. Now’s the time for them to jump back in and take advantage of the gains still to be made, say the people looking after their cash.

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CS and UBS Tell Wealthy Retail Clients To Buy Stocks…”Here, Can You Please Hold This Bag”

March 16, 2017

Warren Buffett has frequently advised aspiring investors to take a contrarian view on markets and "be fearful when others are greedy and be greedy when others are fearful."  In fact, being dismissive of the wall street ‘herd mentality’ has resulted in some of Buffett’s most successful trades over the years including his decision to load up on bank stocks during the ‘great recession’.
But the market wizards at Credit Suisse and UBS are apparently advising their wealthy retail clients to ignore Buffett’s sage advice and instead follow a strategy that can loosely be summarized as "Buy The Fucking Dip."  It’s a genius plan, if we understand it correctly.  Per Bloomberg:

Credit Suisse Group AG and UBS Group AG have a message for their wealthy clients: it’s not too late to buy equities.
 
Political risk is keeping many rich individuals on the sidelines of a rally that’s sent global stocks surging to records amid a recovering world economy. Now’s the time for them to jump back in and take advantage of the gains still to be made, say the people looking after their cash.
 
“Whenever it feels really difficult and challenging to put money at work, ultimately those are often the better investments,” Burkhard Varnholt, deputy chief investment officer of Credit Suisse, said at a roundtable discussion at Bloomberg’s Zurich office on Feb. 27.

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Turkey Vows “Harsh Retaliation” After Dutch PM Says “Not Apologizing, Are You Nuts”

March 12, 2017

The diplomatic scandal between Turkey and the Netherlands deteriorated overnight, when Prime Minister Binali Yildirim warned on Sunday that Turkey would retaliate in the "harshest ways" after Turkish ministers were barred from speaking in Rotterdam, leading to a major protest in front of the Turkish consulate in Rotterdam, while the Dutch embassy in Istanbul was closed off due to "safety concerns."
"This situation has been protested in the strongest manner by our side, and it has been conveyed to Dutch authorities that there will be retaliation in the harshest ways … We will respond in kind to this unacceptable behavior," Yildirim said in a statement.
Turkey’s Prime Minister Binali Yildirim
At the same time, continuing his ongoing tirade in which he has compared virtually all of his political foes to Hitler or Nazis, president Tayyip Erdogan said "Nazism is still widespread in the West" after the Netherlands joined other European countries worried about political tensions inside Turkey spilling beyond its borders that have prevented Turkish politicians from holding rallies.
As reported on Saturday, the Dutch government first barred Turkish Foreign Minister Mevlut Cavusoglu from flying to Rotterdam and later stopped Family Minister Fatma Betul Sayan Kaya from entering the Turkish consulate in the port city, before escorting her out of the country to Germany.

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The Oscars – Gold Plated And Debased Like The Dollar

February 26, 2017

Submitted by Jan Skoyles via GoldCore.com,
The Oscars – Worth Their Weight in Gold?

89th Oscars to air this weekend
Oscars have been dipped in 24 karat gold since 1929
If the Oscars were made of solid gold they would weigh 330 ounces
330 ounces of gold is worth $408,210 at today’s prices (nearly €400k & £330k)
Only some $630 worth of gold in Oscar statue
Oscars cannot be sold due to regulations
Steven Spielberg keeps his gold Oscar with the Academy for ‘safe-keeping’
Shows importance of owning gold in safest ways
Price of gold has climbed from $20.67 since the first Oscars ceremony to over $1,237 today

‘We All Dream In Gold’ read the strap line for last year’s Academy Awards. This is no doubt still the case for the nominees of the 24 awards set to be given out at this Sunday’s 89th Oscars.
Since the first awards in 1929 nearly 3,000 oscar statues have been awarded to the lucky darlings of the film industry. After the teary speeches, after-parties and press junkets following their win, what is left for those who have achieved the highest-level of recognition in the film industry?

Winning an Oscar is an expensive business, studios spend millions trying to get their hands on at least one, each year. But film and celebrity is a fickle trade and few people can remember who received Oscars last year, let alone when they were first launched in 1929.

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Here Are The Best Hedges Against A Le Pen Victory

February 13, 2017

On Friday, after it emerged that as part of Marine Le Pen’s strategic vision for France, should she win, is a return to the French franc as well as redenomination of some €1.7 billion in French (non-international law) bonds, both rating agencies and economists sounded the alarm, warning it would “amount to the largest sovereign default on record, nearly 10 times larger than the €200bn Greek debt restructuring in 2012, threatening chaos to the world financial system on top of the collapse of the single currency.”
This morning, Bank of France Governor Francois Villeroy de Galhau doubled down on the warning and cautioned French voters about the costs of withdrawing from the euro, noting that local interest rates are already rising on concerns about this year’s presidential election. “The recent increase in French rates – which I believe is temporary – corresponds to a certain worry about the exit from the euro,” Villeroy de Galhau said Monday on France Inter radio.
As of Monday, Le Pen has the support of about 26% of the electorate for the first round of voting in April, compared with 20.5% for independent Emmanuel Macron and 17.5 percent for Republican Francois Fillon, according to the latest Ifop daily rolling poll.

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The Megacity Economy: How Seven Types Of Global Cities Stack Up

February 12, 2017

Back in 1950, close to 30% of the global population lived in cities.
As Visual Capitalist's Jeff Desjardins notes, that has shifted dramatically, and by 2050, a whopping 70% of people will live in urban areas – some of which will be megacities housing tens of millions of people.
This trend of urbanization has been a boon to global growth and the economy. In fact, it is estimated today by McKinsey that the 600 top urban centers contribute a whopping 60% to the world’s total GDP.

Courtesy of: Visual Capitalist
 
SEVEN TYPES OF GLOBAL CITIES
With so many people moving to urban metropolitan areas, the complexion of cities and their economies change each day.
The Brookings Institute has a new way of classifying these megacities, using various economic indicators.
According to their analysis, here’s what differentiates the seven types of global cities:
Important note: This isn’t intended to be a “ranking” of cities. However, on the infographic, cities are sorted by GDP per capita within each typology, and given a number based on where they stand in terms of this metric. This is just intended to show how wealthy the average citizen is per city, and is not a broader indicator relating to the success or overall ranking of a city.
1. Global Giants
These six cities are the world’s leading economic and financial centers.

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FX Traders Have To (Re)Learn A New Skill

February 11, 2017

Dear FX traders: forget the dot plot, and prepare to learn a new – or to some forgotten – skill: how to read trade flows.
As Bloomberg’s Vincent Cignarella and Andrea Wong point out, currency traders accustomed to analyzing the Fed’s dot plot and monthly U.S. jobs figures to predict the direction of the world’s reserve currency are having to learn, or in some cases re-learn, a largely forgotten ability: how to scrutinize trade data. With protectionism, border tax, VAT and trade wars the buzzword of the day, suddenly international trade is all that seems to matter, and yet “It’s been decades since investors gave significant thought to the data amid easing trade tensions.”
What’s more, traders will have to learn to think small again – the flows represent a drop in the bucket for a currency market where about $5 trillion exchanges hands every day. In a world of $4 trillion central bank balance sheets, a syplus measured in billions may seem like an anachronism, but it suddenly matters a lot.
With the dollar near a 14-year high and Donald Trump accusing countries including China and Japan of keeping their currencies weak to gain trade advantages, Cignarella writes, the risk is any widening in the U.S. trade deficit may prompt a reaction from the president and spur a dollar selloff.

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How The Flash Crash Trader Was Scammed Out Of A $50 Million Fortune

February 10, 2017

The sad saga of Navinder Sarao, who on April 20, 2015 became the scapegoat for the May 2010 flash crash and was sentenced to up to 360 years in prison – he will find out later this year the actual length of his prison sentence – got its latest twist today thanks to a fascinating report how in addition to having lost his freedom, Nav also lost all of trading fortune, some $50 million of it.
As Bloomberg’s Liam Vaughn recounts, "it took Navinder Singh Sarao a long time to accept that he might have been scammed out of $50 million. Stuck in London’s Wandsworth prison, wracked with anxiety and unable to sleep, the realization dawned on the man dubbed the “Flash Crash Trader” as slowly as spring turned to summer outside the barred window of his jail cell."

Regular readers are familiar with the background story: according to the U.S. government, the British day trader had made tens of millions of dollars using an illegal practice called spoofing, including on May 6, 2010, when the Dow Jones Industrial Average fell almost 1,000 points in minutes before bouncing back. The extent of Sarao’s culpability for the flash crash is fiercely contested, but the incident exposed the shaky foundations on which the hyper-fast, computer-dominated financial markets now rest, and we this website warned about since its inception in 2009.

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Swiss National Bank’s U.S. Stock Holdings Hit A Record $63.4 Billion

February 10, 2017

Being able to print your own money and buy stocks at any price sure can be fun. Just as the SNB which unlike many other (if ever fewer) central banks admits to doing just that.
In its latest 13F filing, the Swiss National Bank reported that the value of its portfolio of US stocks rose again in the fourth quarter, increasing by 1.6% from $62.4 billion as of Sept. 30 to a record high $63.4 billion at the end of the year.
Over the past two years, the total Assets under management of this massive hedge fund, which occasionally engages in massive currency manipulation with disastrous results, have increased from $26.7 billion to $63.4 billion, a 138% increase, mostly as a result of relentless currency manipulation and monetization of various assets, including both bonds and stocks.

Value of Swiss National Bank US Stock Holdings, June 2014 – December 2016(see more posts on Swiss National Bank, ) – Click to enlarge
In its latest 13F, the SNB reported stakes in 2,564 companies, up from 2,536 in the previous quarter.
SNB policy makers, among them Governing Board Member Andrea Maechler, have said many times that they invest for the benefit of monetary policy, replicating broad-based indexes, and not to generate a profit, although with the S&P500 at all time highs, they have also achieved that.

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Frontrunning: February 9

February 9, 2017

Airlines, Airports to Meet President Amid Travel-Ban Uncertainty (WSJ)
Legal battle pits Trump’s powers against his words (Reuters)
Trump’s Oval Office Tweets Force CEOs to Choose Fight or Flight (BBG)
Companies Plow Ahead With Moves to Mexico, Despite Trump’s Pressure (WSJ)
Trump’s Labor Pick Loves Burgers, Bikinis, and Free Markets (BBG)
NATO allies lock in U.S. support for stand-off with Russia (Reuters)
Sessions Takes Reins at Justice Ready to Walk the Line for Trump (BBG)
Washington Turns Attention to Yemen, Pleasing Gulf States (WSJ)
Tesla pausing factory for Model 3 preparation this month (Reuters)
Twitter reports slowest quarterly revenue growth, shares slide (Reuters)
Goldman hedge fund folding London operations, shifting staff to U.S.: sources (Reuters)
Big Meat Braces for a Refugee Shortage (BBG)
Islamic State-linked group claims rocket attack on Israeli resort (Reuters)
Manhattan landlords can’t stop setting new records for giveaways  (BBG)
Zurich Insurance Falls as Greco Fails to Convince on Growth (BBG)
China’s changing debt risks drive up bond futures volumes (Reuters)
Northeast U.S. Bracing for Powerful, Fast-Moving Snowstorm (BBG)
Singapore Airlines places $13.

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Largest Retail FX Broker FXCM Banned By CFTC, Fined $7 Million For Taking Positions Against Clients

February 8, 2017

The CFTC on Monday fined Forex Capital Markets, parent FXCM Holdings LLC and founding partners Dror Niv and William Ahdout to pay $7 million to settle charges it defrauded retail foreign exchange customers and engaging in false and misleading solicitations. As part of the settlement, FXCM agreed to withdraw its registration and never seek to register with the CFTC again, effectively banning it from operating in the US. The CFTC found the retail FX broker had an undisclosed interest in the market maker that consistently won the largest share of FXCM’s trading volume, and was therefore taking positions opposite its retail customers.
The CFTC also found that FXCM willfully made false statements to the National Futures Association in order to conceal FXCM’s role in the creation of its principal market maker as well as the fact that the market maker’s owner had been an FXCM employee and managing director.
The commodity regulator said in a statement that “between Sept. 4, 2009 though at least 2014, FXCM engaged in false and misleading solicitations of FXCM’s retail customers by concealing its relationship with its most important market maker and by misrepresenting that its ‘No Dealing Desk’ platform had no conflicts of interest with its customers.

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Switzerland: Chocolate, Watches, And Jihad

February 3, 2017

Submitted by Judith Bergmann via The Gatestone Institute,

Swiss authorities are currently investigating 480 suspected jihadists in the country.
"Radical imams always preached in the An-Nur Mosque… Those responsible are fanatics. It is no coincidence that so many young people from Winterthur wanted to do jihad." — Saïda Keller-Messahli, president of Forum for a Progressive Islam.
Switzerland is the answer to those who claim that Islamic terrorism is reserved for those countries that have participated in operations against ISIS or other Muslim terror organizations. Switzerland has done neither, yet its flag figured among sixty other enemy flags shown in an ISIS propaganda video.
"Huge sums of money from Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Turkey are flowing to Switzerland… There is a whole network of radically-oriented mosques in Switzerland. The Muslim World League is behind it…. The network is a hub for Salafists. The Swiss authorities make a big mistake of not looking into the mosques." — Saïda Keller-Messahli.
There are around 70 Turkish mosques financed directly from Turkey through the Diyanet Foundation in Switzerland.
The Swiss government appears to give Qatar, one of the primary propagators of Wahhabi Salafism in the world today, extremely special treatment.

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ECB Assets Rise Above 36 percent Of Eurozone GDP; Draghi Now Owns 10.2 percent Of European Corporate Bonds

January 31, 2017

The ECB’s nationalization of the European corporate bond sector continues. In the ECB’s latest update, the six central banks acting on behalf of the Euro system provided an update on the list of corporate bonds they bought. They bought into 810 issuances with a total of €573bn in amount outstanding. For the week ending 27th January, the bond purchases stood at €1.9bn across sectors. This increases the number of securities held by the ECB to 813, and lift the ECB’s total corporate bond holdings to €58.82b, which means that as of the latest weekly data, the ECB now owns 10.2% of the total €575.42BN in European corporate debt outstanding.
Since one month ago, the ECB owned 9.2% of the corporate bond market, the rate of nationalization of the private, outstanding corporate bonds is roughly 1% per month. Tangentially, 52 or 6.4% of the 813 securities held by the ECB are negative yielding.
Which corporate bonds did Mario Draghi generously subsidize this week? According to the ECB’s holdings, utilities remain the largest industry group with 215 securities, while according to Bloomberg, in the latest week  the ECB bought bonds issued by Atlantia, BASF, Carmila, Enel, Fresenius, Italgas, LEG Immobilien, Linde, Legrand, RTE, Snam and Telefonica Emisiones.

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