by ilene - February 19th, 2012 7:06 pm
Submitted by Tyler Durden.
Between the Chinese 'surprise' RRR and the Iran export halt to UK and France (and escalating tensions), Oil prices are off to the races this evening. WTI front-month futures have just broken $105 (now up more than 10% in the last two weeks), the highest levels in over nine months and just 8% shy of the 5/2/11 post-recession peak just under $115. Brent (priced in EUR) remains off last week's intraday highs (as EUR strengthens) but still above the pre-recession peak but in USD it traded just shy of $121 – well above last week's peak.
Of course, this will be heralded as a sign of demand pressure from a 'growing' global economy rather than the margin-compressing, implicit-taxation, consumer-spending-crushing supply constraint for Europe and the US that it will become in the not too distant future. As we post, The Guardian is noting that US officials are commenting that "Sanctions are all we've got to throw at the problem. If they fail then it's hard to see how we don't move to the 'in extremis' option." The impact of any escalation from here is gravely concerning with PIMCO's $140 minimum and SocGen's $150-and-beyond Brent prices rapidly coming into focus – and for those pinning their hopes on the Saudis coming to the rescue (and fill the Iranian output gap), perhaps the news that our Middle-East 'allies' cut both production and exports in December will stymie any euphoria.
From The Guardian: US officials believe Iran sanctions will fail, making military action likely
• Growing view that strike, by Israel or US, will happen
• 'Sweet spot' for Israeli action identified as September-October
• White House remains determined to give sanctions time
"It's not that the Israelis believe the Iranians are on the brink of a bomb. It's that the Israelis may fear that the Iranian programme is on the brink of becoming out of reach of an Israeli military strike, which means it creates a 'now-or-never' moment," he said.
"That's what's actually driving the timeline by the middle of this year. But there's a countervailing factor that [Ehud] Barak has mentioned – that they're not very close to making a decision and that they're also trying to ramp up concerns of an Israeli strike to drive the international community towards putting more pressure on the Iranians."
by Chart School - February 19th, 2012 6:44 pm
Courtesy of Declan Fallon
Part time Trader – no experience needed – Miami ($30-50K)
Trainee Trader – No experience needed – New York ($40-60K)
Trainee Trader – No experience needed – LA ($40-60K)
Stock Market Trader – No experience needed – LA ($50-70K)
Stock Market Trader – No experience needed – Miami ($50-70K)
Stock Market Trader – No experience needed – NYC ($50-60K)
Secondary Market Trader
Senior Trader – Proprietary
Sr Trader – Proprietary
Equity Trader ($50-70K)
Junior Trader wanted to work from home – LA ($30-53K)
Junior Traders wanted to work from home – Miami ($30-53K)
Junior Traders wanted to work from home – NYC ($30-53K)
Application Support Sr. Analyst – Global Credit – 11044168
ION – Fixed Income Trading Developer
Market Risk Manager, Foreign Exchange Desk
Portfolio Compliance Analyst
C# Developer – Trading
Financial Career Opportunity – NYC ($35,00-$45,000)
Software Engineer – Analytical Products (C++)
Brokerage Service Rep
Trade Desk Support ($48-55K)
Find more trading jobs here.
by Zero Hedge - February 19th, 2012 6:33 pm
Submitted by Tyler Durden.
Just in time for the latest headfake out of Europe where sentiment at least on thus Sunday afternoon is that Greece is somehow saved (on a rehash of an old story, namely that the ECB welcomes the combination of the EFSF and the ESM - something that Germany has previously expressly refused to comply with, and something which is utterly meaningless – where will the money come from – Italy and Spain? Or will China invest more than the single digit billions in EFSF bonds raised to date?), we look at the CFTC Commitment of Traders for an update on speculative sentiment. There we see that just as the general public was starting to comprehend that Germany may let Greece fail after all, a fact confirmed by Tom Stolper’s most recent flip flopping on the EURUSD, which caused the Goldman catalyst to end his call for a rise in the EUR currency (and for ZH to take the opposite side as usual, a trade which is now 160 pips in the money- recall “Needless to say, we are now closing our short reco at a profit 9 out of 9 times in a row, and doing the opposite – i.e., going long.”), speculators ended the two consecutive weeks in reducing net short exposure, and the week ended February 14 saw net short interest rise again from -140.6k to -148.6k. So if one is wondering what the weak hands are doing that just got burned shorting the pair in the past 10 days, the 100 pip move higher (which has sent the ES over 1370 and the DJIA futures over 13K) this afternoon explains it. For those wishing to bet on a contrarian outcome, which in Europe is pretty much a given, our advice is to wait for Tom Stolper to issue his latest EUR bullish forecast, which will likely be forthcoming any minute, and which will cement the FX strategist’s place in the FX anti recommendation hall of fame.
by Zero Hedge - February 19th, 2012 6:14 pm
Submitted by Tyler Durden.
Now that the bipolar market has once again resynced general risk appetite with the EURUSD (high Euro -> high ES and vice versa), everything in the macro front aside from European developments, is noise (and the occasional reminder by data adjusting authorities in the US that the country can in fact decouple with the entity responsible for half the world’s trade. This will hardly come as a surprise to anyone. In fact, the conventional wisdom as shown by Goldman’s latest client poll has European sovereign crisis worries far in the lead of all macro risks. Behind it are Iran and nuclear tensions, China hard-landing, the US recovery/presidential election and the Japanese trade deficit/record debt/JGB issues. Which for all intents and purposes means that the next big “surprise” to the market will be none of the above. What are some of the factor not listed as big macro risks? According to David Kostin ‘Risks that clients did not mention include late March US Supreme Court review of health care reform (implications for 12% of S&P 500); mid-year deadline to implement Dodd-Frank financial reform (14% of market); and the French Presidential election on April 22nd where polls show incumbent Nicolas Sarkozy trails opposition candidate Francois Hollande.” Oddly enough, one very crucial item missing is once again surging inflation courtesy of trillions in stealthy central banks reliquification, sending crude to the highest since May 2011, and the most expensive gas price in January on record.
That this has somehow failed to penetrate investors’ skulls shows just how erroneously transfixed the market is that Bernanke has inflation, or rather deflation, under control. As WTI passes $105 in the next few hours, look for Op-Eds lamenting the hundreds of billions in lost purchasing power that have already more than offset the benefit from extended tax cuts. Alas, as noted previously, the central bank tsunami is only just starting. Watch for inflation, and concerns thereof, to slowly seep into everything, especially in the chart below.
by Zero Hedge - February 19th, 2012 3:35 pm
Submitted by williambanzai7.
A symbol emerged from the sand
He fell to the ground
He knew what he found
Another poor victim of Rand
The Limerick King
Schauble was simply in shock
Merkel appeared like a rock
They’re theory was moot
They could not refute
Those Greeks sure know how to get into hock!!!
The Limerick King and WB7
A leader emerged from the pack
And carefully planned his attack
His first move was key
To ensure victory
The office of Goldman he’d sack!
The Limerick King
by Zero Hedge - February 19th, 2012 1:48 pm
Submitted by Tyler Durden.
Submitted by Ben Tanosborn
Our Tolerance For Fashionable Deception
Nothing appears as ugly as unmasked raw propaganda, or seems as fashionable as well-crafted deception. Yet, the catwalk for both forms of propaganda is one and the same, deception wearing the most titillating togs provided by the top fashion house, the House of Public Relations. And the deceptive PR isn’t limited to multinational firms or businesses in general; it is part and parcel of our daily existence, having infiltrated most if not all institutions, totally poisoning politics, and eroding away whatever little honesty might still be left in our elected officials.
During the past century we have seen the transformation of the raw epithet known as propaganda, and all its implied vilification, to that of an accepted social science with full academic accreditation, unashamedly sitting at the same table with all reputable and time-honored professions. We, members of society, have swallowed lock, stock and barrel the presumed need by notable individuals and institutions to receive help from specialized professionals to show us all the good things about them, their positive contribution to society. But much of what we get is tainted with deceit.
From press releases to the practice of damage control, public relations, the pseudo-science, is there more often than not ready to deceive us all. The alchemy of spinning factoids into facts, the use of euphemisms and constant truth cherry-picking, has reached such degree of sophistication that we are, as individuals, no longer able to discern fact from fiction. Yet, the one place we should be looking for help to unravel deception from truth, the government, is often complicit with those engaged in the deception… that is, when not being the source of the deception itself. Now, to further complicate matters, we have entered the age of Internet-mediated PR!
Americans have been victims – some might argue, beneficiaries – of three grand deceptions during the past three generations, in all cases having the government as either the deceiver or co-deceiver; the very instrument for the capitalist entrenched power. One of the three grand deceptions has to do with the very defense of predatory capitalism, a system we are told to equate with democracy and our very constitutional freedoms. That supreme deception has allowed the build-up of an imperial military, and permitted America’s…
by Zero Hedge - February 19th, 2012 1:47 pm
Submitted by MacroAndCheese.
What is the Volcker Rule?
The Volcker Rule (“VR”) is an addendum to the “Dodd-Frank Wall Street Reform and Consumer Protection Act.” The VR runs 298 pages. Its intent is to prohibit commercial banks from engaging in “proprietary trading” according to a limited, prescribed definition (see below). The VR does not prohibit banks from trading altogether, although it will require banks to document all trades that are not “exempted,” and to demonstrate that these trades follow procedures as mandated. The VR will be overseen by five separate government entities, including the Federal Reserve, SEC, CFTC, FDIC, and OCC (Office of the Comptroller of the Currency.)
What is the Dodd-Frank Act?
by Zero Hedge - February 19th, 2012 1:40 pm
Submitted by Bruce Krasting.
There’s been an ongoing row about changes in lease accounting. Big players in the leasing industry (think GE) have been fighting the changes tooth-and-nail. This article had some interesting data on the consequences of the new accounting rules:
Consulting firm Chang & Adams found that proposed standards for lease accounting will result in an increase in total reported debt liabilities of $1.5 trillion; increased costs of $10.2 billion annually; job losses of over 190,000; and a lowered GDP of $27.5 billion annually.
$1.5 trillion is a hell of a lot of money to suddenly appear on the balance sheet of these lessors, for that reason alone I expect that the new rules will be watered down. No one wants to see another $1.5T of debt exposed those days. From the C&A report:
Essentially, the standards will require tenants to place leases on their balance sheets—an enormous line item that consists of anything from office, business and farm machinery to, yes, real estate.
But really, it’s there. I can’t imagine how the accounting rules can bury this debt. I’m amazed there a is even any debate, after all we’ve been through. The conclusion that it could cost 190k jobs and $28b annually might be correct. I would like to see a different report. What is the cost (in both jobs and money) of allowing phony accounting to persist? A few years ago we were measuring this in the Trillions. We still are.
This week the Fed came out with its consensus forecast of inflation for the next three years. No surprises, the Fed governors believe that inflation is a non-event:
I’m not sure if the Fed is trying to fool us with this very tame view of inflation. But the Fed is not fooling the market. The Ten-Year TIPS/Bond spread is now forecasting inflation at 2.3%. That’s the highest reading in…
by Zero Hedge - February 19th, 2012 1:33 pm
Submitted by rcwhalen.
“I believe that the officers, and, especially, the directors, of corporations should be held personally responsible when any corporation breaks the law.”
– Theodore Roosevelt, speech at Osawatomie, Kansas
“The New Nationalism” August 31, 1910
For a while now I have been saying that the Volcker Rule is a bad idea. I share the respect and admiration we all have for its namesake, former Fed Chairman and full-time public citizen Paul Volcker. But Volcker has never been a hawk on bank superivision, especially when it comes to large banks like his former employer Chase Manhattan Bank. I called Volcker “the father of too big to fail” in my 2010 book, Inflated: How Money & Debt Built the American Dream. The epyhonimous rule that now terrorizes much of the financial industry is thus especially incongruous and for the following reasons.
The Volcker Rule seeks to forbid banks from acting as principal in the financial markets for tactical trading gains of any time duration, limiting the investments by the bank to held-to-maturity positions for the corporate treasury. Most of the comments by the industry, media and other observers have focused on the sales/trading area of the large universal banks affected by the Volcker Rule, but the changes imposed by this draconian prescription also impact the activities of the investment side of the house. Hold that thought.
In conceptual terms the Volcker Rule is a step back towards the 1930s era Glass-Steagall separation of investment and commercial banking, but only a half-step and this is the crucial point. The Volcker Rule imposes activity limits on the entire bank without separating the agency and principal functions into different corporate buckets with separate capital in a legal and financial sense. The Volcker Rule focus on imposing the limitation upon the whole organization does great mischief, as noted by the hundreds of public commenters on the rule.
Keep in mind that most of the capital in a bank is meant to support principal risk taking by the bank, not customers, in the form of either lending or investing, while the agency activities for customers such as brokerage, trust and asset management are relatively less capital intensive, like an order of magnitude less. By not bifurcating the capital inside the large universal banks between the…
by Zero Hedge - February 19th, 2012 12:53 pm
Submitted by Tyler Durden.
By Bill Buckler of The Privateer
The Greek “Glitch”
Cast your mind back to the first half of 2007. In the US, Fed Chairman Bernanke was telling his colleagues that the sub prime mess was “grave but largely contained”. Meanwhile, at the White House, President Bush was echoing his predecessor. When the first signs of the Asian Crisis of the late 1990s began to emerge, President Clinton called it a “glitch in the road”. Mr Bush used the same phrase to describe the sub prime situation in 2007. Fast forward to the new potential financial crisis, this time in Europe. As far as the global markets are concerned, this is yet one more in the long line of “glitches”.
The Asian crisis was not allowed to derail the global financial system. It was “fixed” by throwing a huge amount of money at it. The result was the “tech wreck” of 2000-2002. The sub prime mess in the US was not allowed to derail the global financial system. It was “fixed” by so much money that it made the Asian crisis bailouts look like a shower of loose change. The result was the global stock market swoon of late 2008 – early 2009. That one was “fixed” by trotting out the financial “nuclear option”, the direct monetisation of sovereign debt by central banks which came to be known as “Quantitative Easing” (QE).
The current crisis is a sovereign debt crisis. This one is focussed on Greece and has a publicised deadline of March 20 – just over a month from now. On that date, the Greek government must roll over a “tranche” of debt coming due. The amount of this debt is 14.5 Billion Euros. In the context of the serial reliquification of the global system which has been the recurring theme of the last two decades, this sum is less than a rounding error. It is a sub-atomic particle in the structure of the global system.
That fact, in itself, should be enough to starkly show how fragile the entire system is. When the prospect of a nation being unable to roll over a paltry few Euros of maturing debt is enough to galvanise the entire financial world into monetary excess exceeding anything imaginable as recently as late 2007, one must conclude that the…