The Rigging Triangle Exposed: The JPMorgan-British Petroleum-Bank Of England Cartel Full Frontal

Submitted by Tyler Durden  –  ZeroHedge

The name Dick Usher is familiar to regular readers: he was the head JPMorgan FX market manipulator, who waspromptly fired after it was revealed that JPM was the bank coordinating the biggest FX rigging scheme in history, as initially revealed in “Another JPMorganite Busted For “Bandits’ Club” Market Manipulation.” Subsequent revelations – which would have been impossible without the tremendous reporting of Bloomberg’s Liam Vaughan – showed that JPM was not alone: as recent legal actions confirmed, virtually every single bank was also a keen FX rigging participant. However, the undisputed ringleader was always America’s largest bank, which would make sense: having a virtually unlimited balance sheet, JPM could outlast practically any margin call, and make money while its far smaller peers were closed out of trades… and existence.

But while the past year revealed that FX rigging was a just as pervasive, if not even more profitable industry for banks than the great Libor-fixing scandal (for details see “How To Rig FX Like A Pro “Bandit”, And Make Millions In The Process“), the conventional wisdom was that it involved almost exclusively bankers at the largest global banks including JPM, Goldman, Deutsche, Barclays, RBS, HSBC, and UBS.

Now, courtesy of some more brilliant reporting by Vaughan, we can finally link banks with the other two facets of what has emerged to be an unprecedented FX-rigging “triangle” cartel: private sector companies that have no direct banking operations yet who have intimate prop trading exposure, as well as central banks themselves. Continue reading

Will Cheap Oil Bail Out The Consumer?

Submitted by Michael Pento – Pento Portfolio Strategies

Analysts on every financial news network are screaming about how the lower oil and gas prices will spur on the U.S. consumer and lead to a stronger economy.  It is true that total retail sales rose 0.7 percent in November, beating analysts’ expectations of 0.4 percent. And the Thomson-Reuters University of Michigan survey of consumers saw its December 2014 “preliminary index of consumer sentiment” soaring to 93.8–well above last month’s 88.8 reading. Yet, despite this, global markets are throwing off many deflationary signals that should not be ignored.

The first important market signal is the dramatic decline in oil prices.  Since peaking at just over $100 a barrel this summer, prices have since fallen by 45 percent. In fact, the last time we have seen a decline nearing this magnitude was during the financial crisis of 2008.  If this one data point existed in a vacuum, it may be easy enough to attribute it to just an increase in the oil supply.

If happening in isolation, a surge in the supply of oil would lead to less spending at the pump and be a boost to the consumer. However, that is not what is occurring today. First off, years’ worth of QE and ZIRP have caused massive economic imbalances to occur. Capital spending by the energy industry accounted for 33% of all capital spending in the last few years. States where fracking is prevalent have accounted for all the job growth in the nation. This would never be feasible if oil prices weren’t drive into bubble territory in the first place. Continue reading

The Imperial Collapse Playbook

Submitted by Dmitry Orlov  –  The ClubOrlov Blog

Some people enjoy having the Big Picture laid out in front of them—the biggest possible—on what is happening in the world at large, and I am happy to oblige. The largest development of 2014 is, very broadly, this: the Anglo-imperialists are finally being forced out of Eurasia. How can we tell? Well, here is the Big Picture—the biggest I could find. I found it thanks to Nikolai Starikov and a recent article of his.

Now, let’s first define our terms. By Anglo-imperialists I mean the combination of Britain and the United States. The latter took over for the former as it failed, turning it into a protectorate. Now the latter is failing too, and there are no new up-and-coming Anglo-imperialists to take over for it. But throughout this process their common playbook had remained the same: pseudoliberal pseudocapitalism for the insiders and military domination and economic exploitation for everyone else. Much more specifically, their playbook always called for a certain strategem to be executed whenever their plans to dominate and exploit any given country finally fail. On their way out, they do what they can to compromise and weaken the entity they leave behind, by inflicting a permanently oozing and festering political wound. “Poison all the wells” is the last thing on their pre-departure checklist. Continue reading

Commodity Prices Are Cliff-Diving Due To The Fracturing Monetary Supernova—The Case Of Iron Ore

Crude oil is not the only commodity that is crashing. Iron ore is on a similar trajectory and for a common reason. Namely, the two-decade-long economic boom fueled by the money printing rampage of the world’s central banks is beginning to cool rapidly. What the old-time Austrians called “malinvestment” and what Warren Buffet once referred to as the “naked swimmers” exposed by a receding tide is now becoming all too apparent.

This cooling phase is graphically evident in the cliff-diving movement of most industrial commodities. But it is important to recognize that these are not indicative of some timeless and repetitive cycle—–or an example merely of the old adage that high prices are their own best cure.

Instead, today’s plunging commodity prices represent something new under the sun. That is, they are the product of a fracturing monetary supernova that was a unique and never before experienced aberration caused by the 1990s rise, and then the subsequent lunatic expansion after the 2008 crisis, of a cancerous regime of Keynesian central banking.

Stated differently, the worldwide economic and industrial boom since the early 1990s was not indicative of sublime human progress or the break-out of a newly energetic market capitalism on a global basis. Instead, the approximate $50 trillion gain in the reported global GDP over the past two decades was an unhealthy and unsustainable economic deformation financed by a vast outpouring of fiat credit and false prices in the capital markets. Continue reading

Olympic Waste Isn’t Just For The Olympics

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

Every once in a while it is heartening to think that world’s people may finally be awakening from their economic anesthesia and experiencing rightful revulsion about what has occurred. We are told that the global economy fell on its own into a pit of despair in 2008 and has been unable to escape it all “despite” the best efforts and heavy doses of government (including monetary) “stimulus.” The theoretical underpinning of government “stimulus” is the very Keynesian notion that spending on anything during periods of “slack” is far, far better than doing nothing.

That is a notion that has been swallowed whole by not just neo-Keynesian academics but monetarists that are practicing it through central banks all over the world. The mantra of “aggregate demand” is activity for the sake of activity. Better to do something, so they say, with “idle” resources than do nothing and let the economy languish.

With another round of Olympic bidding, for 2024 games, opening up, there is indeed a pushback against the massive “costs” that hosting entails. Even Italy, the sick big man of Europe, is planning on making a pitch but one that isn’t universally applauded.

“Proposing Rome as a future Olympic city is like painting an old Fiat 500 red and hoping that people will believe it’s a Ferrari,” said Luca Zaia, the governor of the Veneto region and a heavyweight in the Right-wing Northern League party.
“This is madness, they’ll be the Olympics of Waste,” said Matteo Salvini, the head of the Northern League, who added that arrests are being made in Rome on an almost daily basis as investigators probe the links between politicians and the mafia.

Continue reading

Greek Turmoil Could Spread – Risk of Bail-Ins in U.S. and Globally

Submitted by Mark O’Byrne  –  GoldCore

Greece’s financial markets are in turmoil again as a vote in parliament – failing to elect a new president – made a general election inevitable. Greek markets saw severe sell offs , with yields on Greek government bonds rising and shares prices collapsing 13% at one point yesterday and closing 7% lower on the day.

Greece 10 Year – 3 Months (Thomson Reuters)

Greek bank shares collapsed by even more. Two of Greece’s largest banks, Piraeus bank and Alpha bank, shed more than 14% of their share value as concerns of bank solvency, bank runs and Cyprus style bail-ins reemerged.

Market reaction elsewhere was mixed with markets in low volume Christmas trading. Northern European stock markets, the FTSE, DAX and CAC, eked out small gains while southern markets saw renewed jitters.

The Greek result led to sell offs in Spain and Italy, which narrowly escaped the sovereign debt crisis that led to Greece’s 2010 bailout. Spanish and Italian bond yields rose, pushing Madrid’s IBEX stock market down 1 percent while Italy’s FTSE MIB fell 1.2 percent.
Greece and the risk of new Eurozone debt crisis will now – again – be a key focus for investors in 2015. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

Greece Comes Back To Haunt Eurozone As Anti-Troika Rebels Scent Power (AEP)
Syriza Can Transform The EU From Within (Costas Lapavitsas)
‘Perfect Storm’ Could Send Euro Even Lower (CNBC)
Oil Falls Further But Saudi Arabia Doesn’t Care (CNBC)
Oil Industry Set For Year Of Mergers And Takeovers, Says PwC (BBC)
The Cartel: How BP Used a Secret Chat Room for Insider Tips (Bloomberg)
Iron-Ore Slump Fails to End Glut as Australia Mines Grow (Bloomberg)
Bernanke Tells UK’s King: We Saved Our Economies (MarketWatch)
Goldman Sachs Set for Fight Over $835 Million Loan to Banco Espírito Santo (WSJ)
Petrobras Deadline Prompts Bondholders To Push For Default (Reuters)
Foreign Automakers Taken To Task In China Over Dealers’ Inventories (Reuters)
Ditching Dollar: China, Russia Launch Financial Tools In Local Currencies (RT)
Jeb Bush and the Making of a $236 Million Federal Contract (Bloomberg)
Inside the NSA’s War on Internet Security (Spiegel)
Bill Cosby Hires PI’s To Dig Up Dirt On Women Who Accuse Him of Rape (Ind.)
Large Hadron Collider To Switch Back On At Double Power (Ind.)
The Trigger (James Howard Kunstler)
Ebola Spurs Call for Global Health Reserve Corps, Challenging WHO (Bloomberg)
Ebola in UK: One Patient Diagnosed With Ebola, Two More Tested (Independent)

Continue Reading: Debt Rattle December 30 2014 – The Automatic Earth