Have They Decided To “Get Out Of The Way?”
Author : Bill Holter
Published: April 9th, 2014
Yesterday the Wall Street journal wrote that Goldman Sachs may be in the process of shutting down their “Sigma X” dark pool clearing. Little more than 2 weeks ago they first announced that they would no longer “play” in the HFT games and followed this by announcing they would give up their “Designated Market Maker” status on the NYSE. Why, what’s up with this?
Speculation on my part but it seems to me like “they know.” They know that something VERY BIG is afoot. This “something” could be one of many possibilities but a firm like Goldman Sachs who has gorged at the table of American financial plenty forever would never ever leave if there was still food at the table. Please remember that they are second only to JPM with their “trading” prowess over the last few years. They have had less than a handful of “losing days” while JPM has had 1,300+ straight days of trading gains without a single loss. I have written on this before and won’t go into it again but I will say that this is absolutely impossible. This track record could never mathematically or statistically happen except where the casino is “rigged” with an iron fist.
Maybe this is exactly what Goldman is looking at. Maybe they see that the “iron fist” is just beginning to or will lose its grip? Maybe they see that regulators cannot look the other way anymore? Maybe their “profits” have gotten skinny and they are making a business decision that the only thing left is bone as the flesh and muscle have already been consumed? Maybe they feel like they are expending too much “effort” and not being “paid” for this effort. Maybe they feel like there are just too many markets with “loose threads” hanging out there to keep track of? Maybe they feel like the “weight” of painting all markets 24/7 to keep the rig in place has gotten too heavy for them? Or, maybe it’s a little of all of the above and they know what is coming and have decided to simply “get out of the way?” “Getting out of the way” would be my guess.
Thinking back to 2003 or ’04, Rothschilds made this decision regarding gold and exited the “London price fix” arrangement in my opinion because they knew what was coming. They knew that the “pressure” was to the upside and decided to no longer lean against it. I believe that Goldman understands that what is coming will take almost everything with it. There will be no “bail outs” this time and there will be no “TARP’s” because the funds available and the ability of governments to sack the Treasuries (again) no longer exists…they are broke. I believe that Goldman is adopting the “every man for himself” strategy and pulling in their horns. They don’t want their capital “in the way” and are simply withdrawing it similar to a player standing up and walking away from the poker table.
The thing is this, Goldman was the “house” or at least was betting with the house and they obviously see that something is wrong. I believe that they understand that everything is “mispriced.” Not just mispriced but grossly mispriced and that their trading played a huge part in the “mispricing” as they provided capital used to push, pull, smash and levitate the various markets. I have said all along that the markets were all, each and every market, part of a grand “painting.” This painting has been used by Washington and Wall Street (and their foreign counterparts) to point to as proof that their policies were working. LOOK! They would say at the stock market…or interest rates or what have you as proof that “all is well.”
De-invest from the West: Russia urges companies to return assets to the motherland
Published time: April 09, 2014 12:08
As the US and Europe escalate talks of sanctions, Russia is recommending companies unregister abroad and bring their shares to the Moscow Exchange to protect from possible future sanctions and provide economic security.
“Companies that have listed shares on the New York Stock Exchange, London need to seriously reconsider,” Russia’s Deputy Prime Minister Igor Shuvalov told reporters in Moscow on Tuesday.
Sanctions by the West have ramped up over the geopolitical action in Ukraine, and Russian business and politicians have been the target of asset freezes and visa bans.
The government will not force companies to delist and return to Russia, but Shuvalov said the Russian state and the Moscow Exchange will work together to create “attractive conditions” for companies to make the switch.
“This is a question of economic security,” the minister said. The US continues to ramp up economic sanctions against Russia, which has spooked investors and resulted in a massive $70 billion outflow of capital since the beginning of 2014, according to Economics Minister Andrei Klepach.
Israel’s PM Office voices extreme disappointment in Kerry
DEBKAfile April 9, 2014, 6:03 PM (IDT)
A high-ranking member of Binyamin Netanyahu’s bureau issued a statement Wednesday expressing “extreme disappointment with US Secretary John Kerry for putting on Israel the blame” for the breakdown of Middle East peace talks. “Kerry knows perfectly well that the Palestinians repeatedly interrupted the talks with refusals to carry on, said ‘no’ to dialogue with Israel, rejected his own framework proposal for the extension of talks, and refused to address Israel as the Jewish national state.” The Israeli official reminded the US Secretary that the Palestinians refused even to meet him, or even consider prolonging the negotiations.
By letting the Palestinians off the hook, Kerry encourages them to harden their rejectionist attitude and so undermine the chances of the talks getting anywhere, the official said. He added Israel was willing to continue peace efforts, but would also take its own unilateral steps in response to Palestinian unilateral actions. Wednesday, Netanyahu ordered government ministries to suspend cooperation with the Palestinian Authority and its heads.
Long-Term Unemployment Trend for Older Workers Is Terrifying
By Amanda Alix
April 6, 2014
Even as the national unemployment rate has remained elevated compared to its pre-financial-crisis level, workers aged 55 years and older have enjoyed a much lower rate of joblessness when compared with younger Americans.
Unfortunately, this scenario is a double-edged sword. While many employees of the baby boomer generation lucky enough to have secure jobs are continuing to work, often past the traditional retirement age of 65, those who lose their jobs during midlife are not so lucky. Many of these workers are now faced with becoming a special subset of the long-term unemployed: the permanently jobless.
A desperate situation
Being out of work for 27 consecutive weeks will earn you the moniker "long-term unemployed", but for older workers, the situation is more dire. While many younger workers experience loss of employment for about 34 weeks, those over 55 suffer joblessness for an average of 45 weeks.
Why are things so very tough for the older crowd? A few theories exist, all of which have some merit. Some point to age discrimination, noting that complaints filed with the Equal Employment Opportunity Commission have shot up markedly since the onset of the financial crisis. Others note that employers doubt older workers’ ability to catch up with workplace technology, or worry that their skills have become too rusty overall.
Moldova’s breakaway region ‘dreams of being with Russia’: leader
April 7, 2014 5:37 PM
Chisinau (AFP) – The leader of Moldova’s pro-Moscow breakaway region on Monday urged the country’s politicians to start discussions that would allow Transdniestr to formally join Russia.
"Our dream is a prosperous independent Trasndniestr together with Russia," Yevgeny Shevchuk said in a state of the nation address.
"The time for solutions over Trasndniestr has come," he added in the hour-long speech.
Pro-Western Moldova warned Moscow last month against trying to annex its Russian-speaking region after Trasndniestr officials appealed to be brought under the Kremlin’s control.
Chisinau’s warning came in the wake of Moscow’s takeover of Ukraine’s Black Sea peninsula of Crimea after locals voted to split from Kiev last month.
"I propose that Moldova’s politicians make a wise, bold and responsible move and start discussing how to legally formalise the real state of affairs," Shevchuk said.
The move, he said, would strengthen stability in the region.
Fed dropped jobless target in secret meeting
April 9, 2014, 2:00 p.m. EDT
By Greg Robb
WASHINGTON (MarketWatch) — Federal Reserve officials had a secret video conference call in early March to discuss overhauling its communication to the market and reached a general consensus that the 6.5% unemployment rate threshold for the first rate hike was outdated, the central bank said Wednesday. A summary of the video conference was included in the minutes of the Fed’s March 18-19 meeting released by the Fed. On the conference call, the central bankers were clearly worried that changing the forward guidance would impact markets. They noted that, going into the video conference, the Fed and the markets were on the same page about the outlook for short-term interest rates. The minutes of the March 18-19 meeting also reveal that there was concern that the markets would read too much into the "dot plot" which showed an upward shift in the Fed’s expectations for short-term rates. Officials also spelled out headwinds that would keep rates low even after the first rate hike. These headwinds included higher precautionary savings by consumers.
Minutes Show Fed Struggled To Agree On Rate Policy
By MARTIN CRUTSINGER, AP Economics Writer
Wednesday April 9, 2014 2:02 PM
WASHINGTON (AP) — The Federal Reserve struggled last month over how to convey to investors the pace at which it will raise short-term interest rates once it increases them from record lows.
Two weeks before the Fed’s regular meeting March 18-19, it held an unusual and previously unannounced videoconference to debate the issue, according to minutes of the meeting released Wednesday.
In the end, the Fed settled on an open-ended approach: That even after employment and inflation are nearly back to normal, short-term rates may need to stay unusually low for a while because the economy isn’t fully healthy.
Stock and bond investors read the minutes to signal that the Fed plans to favor low short-term rates longer than many had assumed. Stocks rose sharply after the minutes were released, and bond yields fell. The Dow Jones industrial average, which had risen modestly before the minutes were released, was up 154 points 30 minutes later.
Investors have been intensely following the Fed’s guidance on rates because higher short-term rates would elevate borrowing costs and could hurt stock prices.
The minutes covered the first Fed meeting at which Yellen presided as well as the March 4 videoconference. At both sessions, the issue of the language the Fed uses in its statements to signal the timing of future policy actions was a topic of extended debate.
Gold Erases Losses After Fed Meeting Minutes Released
By Debarati Roy
April 09, 2014 2:16 PM EDT
Gold erased declines after minutes from the Federal Reserve’s March meeting showed several policy makers said a rise in their median projection for the main interest rate exaggerated the likely speed of tightening.
“Several participants noted that the increase in the median projection overstated the shift in the projections,” the minutes of the March 18-19 Federal Open Market Committee meeting showed. Fed Chair Janet Yellen said last month that the central bank may end its debt-buying program this year and raise interest rates in 2015.
Gold slid 28 percent in 2013, partly as the outlook for less monetary stimulus dimmed the appeal of metal as an inflation hedge. Prices rebounded this year, climbing 8.9 percent through yesterday, partly as U.S. economic growth faltered.
“The Fed sounds less hawkish than it did last month, which is good for gold,” Michael Gayed, the chief investment strategist at Pension Partners LLC, said in a telephone interview. “The market is confused because there are so many contradicting signals from the Fed.”
Gold for immediate delivery gained less than 0.1 percent to $1,309.12 an ounce at 2:15 p.m. New York time. Earlier, prices fell as much as 0.6 percent.
The precious metal jumped 70 percent from December 2008 to June 2011 as the Fed bought debt and cut interest rates to a record in a bid to boost the U.S. economy.
Spot gold pares losses after Fed minutes; futures end lower
Spot gold pared earlier losses on Wednesday after the minutes of the U.S. Federal Reserve’s latest policy meeting showed the central bank struggled over how to convey to investors how fast it will raise short-term interest rates once it increases them from record lows.
The Fed held a previously unannounced March 4 videoconference to debate the issue in advance of its regular March 18-19 meeting.
Spot gold was last at $1,312 an ounce, up 0.3 percent and off an earlier high of $1,314 an ounce. U.S. gold futures for June delivery settled $3.20 lower at $1,305.50 an ounce ahead of the Fed announcement,
Worries over Ukraine, as well as technical momentum after a break above $1,300, helped lift gold nearly 1 percent on Tuesday, but uncertainty over U.S. monetary policy and weak physical and investment appetite curbed that rally.
U.S. Stocks Rise as Fed Minutes Ease Concern on Rates
By Callie Bost
April 09, 2014 2:31 PM EDT
U.S. stocks rose, after the Standard & Poor’s 500 Index yesterday snapped a three-day slide, as minutes from the Federal Reserve’s last meeting eased concern about the timing of future interest rate hikes.
Alcoa Inc. (AA) advanced 3.6 percent after earnings topped estimates and the company forecast that global demand for aluminum will exceed production this year. Facebook Inc. climbed 5.6 percent, extending a rebound in technology stocks after a selloff. Regeneron Pharmaceuticals Inc. surged 5.8 percent as shares of biotechnology companies rallied the most in seven sessions.
The S&P 500 gained 0.9 percent to 1,868.85 at 2:30 p.m. in New York. The Nasdaq 100 Index climbed 1.4 percent, after a 0.9 percent advance yesterday. The Dow Jones Industrial Average increased 152.49 points, or 0.9 percent, to 16,408.63. Trading volume of S&P 500 stocks was in line with the 30-day average at this time of day.
“These minutes are calming for the markets,” Jeffrey Kleintop, chief market strategist at LPL Financial LLC, which manages about $414 billion, said by phone from Boston. “It was clearly stated that the projections overstated the likely shift in rates. A slower pace of interest rates seems more likely here than from the statements.”
Several Fed policy makers said a rise in their median projection for the main interest rate exaggerated the likely speed of tightening, according to minutes of their March 18-19 meeting released today.
Jim Sinclair’s Commentary
The Secretary doth protest too much.
Kerry: Administration’s Foreign Policy Not ‘Spinning Out of Control’
April 8, 2014 – 7:31 PM
By Patrick Goodenough
(CNSNews.com) – Secretary of State John Kerry took exception Tuesday to an assertion by a Republican senator that the Obama administration’s foreign policy is “spinning out of control,” declaring that “that’s just not true.”
“You can’t help but get the impression our foreign policy is just spinning out of control,” Sen. Jim Risch (R-Idaho) said during a Senate Foreign Relations Committee hearing on the State Department budget. “And we are losing control in virtually every area that we are trying to do something in.”
Risch cited developments in Russia, Iran, North Korea, Afghanistan, Pakistan, China and the Israeli-Palestinian negotiations – but focused on the Russia-Ukraine situation.
“This administration said they were going to hit the reset button [with Moscow] and I can’t help think that somebody hit the wrong button,” he said.
The Russians were behaving “worse than they have in decades,” Risch said, pointing to Russia’s continued presence in Georgian territory it seized in 2008, its current actions in Ukraine, and its support for the Assad regime in Syria as tens of thousands continue to die.
Dr. Paul Craig Roberts: Gold and The Dollar Are In A Fight to the Death!
Donetsk’s pro-Russian activists prepare referendum for ‘new republic’
Protesters declare Kiev government illegitimate and fire its officials appointed to east Ukraine region
Alec Luhn in Donetsk
The Guardian, Tuesday 8 April 2014 15.56 EDT
Irina Grinenko rushed through the barbed-wired barricades and into the occupied regional administration building in Donetsk, rolls of toilet paper in one hand and a bag of bandages in the other.
"If they attack us, I will bandage people," the pro-Russian protester said, adding that she expected an assault by non-local law enforcement personnel.
"We will be here until the end, until they beat us out or meet our demands … I want an autonomous region on good terms with Russia," she added.
Pro-Russian protesters built new barricades and dug in for a long occupation of the administration building on Tuesday, readying themselves for expected "provocations" by Ukrainian police or demonstrators sympathetic to the Euromaidan protests and to the new government in Kiev.
Meanwhile, a loosely organised temporary government inside the building began laying the groundwork for a referendum on the "sovereignty" of the newly declared Donetsk republic, which it plans to hold simultaneously with similar referendums in Lugansk and Kharkiv some time before 11 May.
At a session on Tuesday afternoon, the temporary body declared illegitimate the regime that had "violently usurped" the government in February, and announced it was firing all the officials it had appointed in Donetsk.
Russia to meet EU and US for talks over Ukraine crisis
Top-level talks scheduled for next week as tense standoff with pro-Russia separatists continues in eastern Ukraine
theguardian.com, Wednesday 9 April 2014 08.18 EDT
The Ukrainian authorities have said they will end the occupation of administrative buildings by pro-Russian separatists in the east of the country, either by negotiations or force, within 48 hours, as four-way talks between Russia, Ukraine, the US and the EU were announced for next week in an attempt to defuse the tense situation.
"A resolution to this crisis will be found within the next 48 hours," said the interior minister, Arsen Avakov, in Kiev, referring to the eastern cities of Luhansk and Donetsk where protesters remained in control of government buildings.
"For those who want dialogue, we propose talks and a political solution. For the minority who want conflict, they will get a forceful answer from the Ukrainian authorities," he said.
In Luhansk, the protesters did not appear in the mood to compromise, and on Wednesday they were reinforcing the barricades around the security services building they have seized and preparing petrol bombs.
In Donetsk, protesters remain in control of the local administration building, from where on Monday they proclaimed Donetsk an independent republic and said they would hold a referendum within a month on the region’s status and whether it should appeal to join Russia.
Ukraine tries to quell pro-Moscow uprisings
By PETER LEONARD
DONETSK, Ukraine (AP) — Ukrainian authorities moved to quell pro-Moscow uprisings along the Russian border with mixed results Tuesday, retaking one occupied regional headquarters and watching protesters consolidate their hold on another.
In a third city, Luhansk, Ukraine’s Security Service said separatists armed with explosives and other weapons were holding 60 people hostage inside the agency’s local headquarters.
Those occupying the building issued a video statement saying they want a referendum on the region’s status and warning that any attempt to storm the place would be met with armed force.
In the video, posted by Ukrainian media, a masked man identified the occupiers as Ukrainian veterans of the Soviet war in Afghanistan and said that if authorities try to retake the building, "Welcome to hell, then!"
The Ukrainian government and the U.S. have accused Moscow of fomenting the unrest as a pretext for another Russian military incursion like the takeover of Crimea last month. Up to 40,000 Russian troops are massed along the Ukrainian border, according to NATO.
Jim Sinclair’s Commentary
Each step forward for the Chinese currency is a small step backwards for the US dollar.
Central banks’ investment in yuan puts currency nearer reserve status
Investment by dozens of central banks comes despite currency not being fully convertible
PUBLISHED : Monday, 07 April, 2014, 4:38am
UPDATED : Monday, 07 April, 2014, 6:24pm
Jeanny Yu in Singapore
At least 40 central banks have invested in the yuan and several others are preparing to do so, putting the mainland currency on the path to reserve status even before full convertibility, Standard Chartered said.
Twenty-three countries have publicly declared their holdings in yuan, in either the onshore or offshore markets, yet the real number of participating central banks could be far more than that, said Jukka Pihlman, Standard Chartered’s Singapore-based global head of central banks and sovereign wealth funds.
Pihlman, who formerly worked at the International Monetary Fund advising central banks on asset-management issues, said at least 12 central banks had invested in yuan assets without declaring they had done so.
The US dollar is still the world’s most widely held reserve currency, accounting for nearly 33 per cent of global foreign exchange holdings at the end of last year, according to IMF data. That ratio has been declining since 2000, when 55 per cent of the world’s reserves were denominated in US dollars.
The IMF does not disclose the percentage of reserves held in yuan, but the emerging market countries’ share of reserves in "other currencies" has increased by almost 400 per cent since 2003, while that of developed nations grew 200 per cent, according to IMF data.
Pihlman said "a great number of central banks are in the process of adding [yuan] to their portfolios".
"The [yuan] has effectively already become a de facto reserve currency because so many central banks have already invested in it," he said. "The [yuan] may become a de facto reserve currency before it is fully convertible."