Jim Sinclair’s Commentary
What a dark humor joke this is.
The CME Cracks Down On Another Gold Spoofing Mastermind
Tyler Durden on 06/01/2015 13:57 -0400
One month ago, days after explicit Zero Hedge step-by-step guide of precisely how gold manipulation takes place, the CME cracked down on the evil Indian market manipulating mastermind Nasil Salim (and his ostensibly less evil sidekick) Heet Khara, for spoofing and otherwise rigging the gold market for months on end. His punishment: a 60 day denial of access to the CME. A week late, a seven person crack CFTC team finally figured out how to read the charts posted on ZH 10 days earlier, and charged the two with illegal market spoofing.
Well, it is time for another sacrificial gold market manipulation crackdown (the same gold market, mind you, which CFTC commissioner and HFT lobby sellout extraordinaire Bart Chilton said was completely unrigged). Only it’s not Barcalys, JPM, Virtu, Citadel, the NY Fed, the Bank of England, or even the PBOC – i.e., the real market manipulators – who is the receiving end of the CME’s special breed of “justice.” It is another “trade from his parents’ home” Indian.
NON-MEMBER: HIMANSHU KALRA
EXCHANGE RULES: Rule 432. General Offenses (in part)
It shall be an offense:
B.2. to engage in conduct or proceedings inconsistent with just and equitable principles of trade;
Q. to commit an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange;
EURUSD Up 300 Pips In Last 24 Hours, Dollar’s 2nd Biggest Drop In 6 Years
Tyler Durden on 06/02/2015 13:24 -0400
As EURUSD surges towards 1.1200 once again, we note that it is now 300 pips stronger than 24 hours ago. This is the 2nd biggest collapse in the USD since March 2009… Treasuries and Bunds are getting monkey-hammered… and US stocks just want higher (as Dax slides)…
Roundtripping to May 22nd’s plunge…
This is the 2nd biggest down day for the Dollar since March 2009…
Robert Shiller: Unlike 1929 This Time Everything – Stocks, Bonds And Housing – Is Overvalued
Submitted by Tyler Durden on 05/29/2015 18:19 -0400
Robert Shiller is a professor of economics and finance at Yale University. He is the author of Irrational Exuberance, which in 2000 predicted the collapse of the tech bubble and is now in its third edition. He was awarded the Nobel Prize in Economic Sciences in 2013 for his work on asset prices and financial market behavior.
In the attached interview he observes that the recent equity run-up seems to be driven more by fear than by exuberance, as a lack of confidence in the future prompts investors to save more and thereby bid up asset prices.
Below is an interview he gave to Goldman Sachs’ Allison Nathan
Allison Nathan: Are US stocks overvalued today?
Robert Shiller: I think that compared with history, US stocks are overvalued. One way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio that I created with John Campbell, now at Harvard, 25 years ago. The ratio is defined as the real stock price (using the S&P Composite Stock Price Index deflated by the CPI) divided by the ten-year average of real earnings per share. We have found this ratio to be a good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it has been that high or higher were in 1929, 2000, and 2007—all moments before market crashes.
But the CAPE ratio is not the only metric I watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) I discuss several metrics that help judge what’s going on in the market. These include my stock market confidence indices. One of the indicators in that series is based on a single question that I have asked individual and institutional investors over the years along the lines of, “Do you think the stock market is overvalued, undervalued, or about right?” Lately, what I call “valuation confidence” captured by this question has been on a downward trend, and for individual investors recently reached its lowest point since the stock market peak in 2000. The fact that people don’t believe in the valuation of the market is a source of concern and might be a symptom of a bubble, though I don’t know that we have enough data to prove it is a bubble. In general, I try to get a sense of investors’ excitement and anxieties through these kinds of measures and even by just reading the news. You might say that’s very unscientific, but I do what I can to understand the state of mind of investors, which I think is very important in understanding market moves.
Allison Nathan: Wharton professor Jeremy Siegel argues that using S&P 500 earnings data for the CAPE ratio inflates it. What is your response to this?
Robert Shiller: Jeremy Siegel’s 2013 paper that makes this argument does say that the CAPE ratio is useful. He just wants to make an improved CAPE ratio. And he proposes an alternative based on National Income and Product Account (NIPA) earnings, which he says yields a CAPE ratio that has predicted returns better, at least over the time period for which he has these earnings data. I think it is an interesting paper. But I am not ready to endorse the switch to NIPA earnings partly because they are conceptually a little different, valuing not just publicly traded stocks but also other companies. But the critical point he makes is that NIPA earnings—at least as of 2013—were higher than S&P 500 earnings, which made the market look less overvalued. Given that market valuations have continued to rise, I think that discussion has faded somewhat.
Jim Sinclair’s Commentary
Finance can be dangerous today if you know too much but are not on the inside of the insiders.
Wall Street Banker Deaths Continue; Where Are the Serious Investigations?
By Pam Martens and Russ Martens: June 2, 2015
1 West Street, Manhattan, Where Thomas Hughes Allegedly Took His Life
Last Thursday, 29-year old Thomas J. Hughes, later described by his brother as “one of the happiest people I know,” allegedly took his life by jumping from a luxury apartment building at 1 West Street in Manhattan. Before any serious investigation had taken place, the New York tabloids had dismissed the matter as a suicide. Hughes was an investment banker on Wall Street.
In any serious investigation, law enforcement is required to look at any potential motive for foul play. But when it comes to serial deaths among Wall Street bankers and technology personnel, occurring repeatedly over the last 18 months in highly unusual circumstances, the deaths are almost instantaneously labeled non-suspicious by the police. But there are two glaring motives for foul-play in almost all of these deaths involving Wall Street or global banks.
First, major Wall Street banks hold hundreds of billions of dollars of life insurance on their workers, and even prior workers, effectively betting that an early death will pay off big for the corporation. The bank collects the death benefit as tax free income, an added perk. In most cases, neither the employee, public nor shareholders know how much life insurance is held on any one individual. The death of a technology vice president could generate a $3 million tax free payment to the Wall Street bank and there is no public acknowledgement and no way to obtain the data.
As of December 31, 2013, the four largest Wall Street banks, JPMorgan Chase, Wells Fargo, Bank of America and Citigroup, held a total of $68.1 billion in Bank-Owned Life Insurance (BOLI) assets according to their financial filings. Since the ratio of life insurance in force to assets can run as high as ten to one, just these four banks alone may hold $681 billion or more in life insurance on their current or past workers.