Archive for the ‘Uncategorized’ Category
What Rate Hike: Only 4 Regional Feds Support Discount Rate Increase Compared To 9 Back In November
By Tyler Durden
Moments ago, the Fed’s discount rate minutes for the months of March/April suggested that a rate hike may be indeed closer than some expect, because after just two regional Feds – those of Richmond Fed and Kansas City – requested an increase in the rate charged on direct loans from the central bank to 1.25% from 1% in the Feb/March meeting, this number doubled to four, with the inclusion of the San Fran and Cleveland Feds joining the group of regional Feds pushing for a 25 bps rate hike to the discount rate.
The four regional Feds, however, were overriden by the balance of the 12 regional Feds, including the Boston, New York, Chicago, Minneapolis, Dallas, Philadelphia, Atlanta, St. Louis Feds, all of whom recommended keeping the discount rate unchanged.
From the minutes:
Subject to review and determination by the Board of Governors, the directors of the Federal Reserve Banks of Chicago, Minneapolis, and Dallas had voted on April 14, 2016, and the directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Atlanta, and St. Louis had voted on April 21, to reestablish the existing rate for discounts and advances (1 percent) under the primary credit program (primary credit rate). The directors of the Federal Reserve Banks of Cleveland, Richmond, Kansas City, and San Francisco had voted on April 14 to establish a rate of 1-1/4 percent (an increase from 1 percent). At its meeting on April 11, the Board had taken no action on requests by the Richmond and Kansas City Reserve Banks to increase the primary credit rate.
Federal Reserve Bank directors cited continued improvement in labor markets, including significant payroll gains and increases in labor force participation. Although many directors noted a recent slowdown in economic growth, they were generally positive about the prospects for moderate increases in economic activity going forward. Directors provided mixed reports on consumer spending, including some easing in the growth of auto sales. Several directors noted steady-to-increasing housing-sector activity, but others cited ongoing weakness in the agriculture and energy sectors. Some directors noted the potential implications of global economic and financial developments for export-related activity. Some directors reported moderate wage pressures for certain jobs, as well as difficulty hiring and retaining some types of skilled and unskilled workers. Inflation remained below the Federal Reserve’s 2 percent objective.
Against this backdrop, most Federal Reserve Bank directors recommended that the current primary credit rate be maintained. Other Federal Reserve Bank directors recommended increasing the primary credit rate to 1-1/4 percent, in light of current and anticipated economic conditions, improvements in the labor market, and expectations that inflation would rise toward the Federal Reserve’s 2 percent objective over the medium term.
Today, Board members considered the primary credit rate and discussed, on a preliminary basis, their individual assessments of the appropriate rate and its communication, which would be discussed at the meeting of the Federal Open Market Committee this week. No sentiment was expressed for changing the primary credit rate …read more
Source: What Rate Hike: Only 4 Regional Feds Support Discount Rate Increase Compared To 9 Back In November
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Nobody is ready, willing, or able to ask and/or answer questions of substance.
In observing politicians, the media, and American citizens, one thing is clear to me about the presidential, congressional, and local campaigns. Nobody is ready, willing, or able to ask and/or answer questions of substance.
Quite some time ago, my family and I ran across one of our elected representatives, our United States Congressman, campaigning at the town square. We observed more than 100 of our fellow Texans shaking hands with him, and offering their support, which he was grateful to accept. Not one person asked a question about his party’s platform, or his voting record. The congressman did not make a single statement of substance about any issue. Sure. There were a few comments and jokes exchanged about the personalities of other candidates, but nothing at all about policy.
Finally, our family approached him, introduced ourselves, told him where we live (in his district) and exchanged warm greetings. I asked, “Considering that you voted for both TARP bills in 2008, the most recent of many tax-payer bailouts of bank shareholders, and considering that you reported owning more than $100,000 of JPMorgan Chase Common Stock and Employee Stock in 2007, Congressman Brady, what is your position on the Federal Reserve Banks being responsible for regulating and supervising the very same banks that own them, such as JPMorgan Chase?
Immediately, a twenty-something woman stepped around from behind our elected representative, and in between him and us. Our congressman stepped backwards several steps. She said to us, without even a hint of the Texas twang used by Brady, “The congressman believes strongly in protecting our nation’s financial system for the benefit of ever American.”
I said, “Well, like the vast majority of Americans, I did not, and do not, own any bank stocks or receive any bank dividends, especially New York banks. Back to my question, please. Doesn’t self-regulation and bailouts put the fox in charge of guarding the tax payer’s hen house? And hasn’t our congressman shown himself to be one of the foxes?”
Congressman Brady was smiling, waving, and making his escape to a waiting vehicle. One of children shouted, “Dad! He’s getting away!”
I laughed and nodded.
The un-elected twenty-something woman simultaneously smiled and glared at me. She said, “America has the strongest banking system in the world, and the most stringent regulation. Your congressman has worked hard to ensure that. Thank you.” Then she also left the town square.
I love the United States of America. But as a parent, I have learned that two very important parts of love is not accepting wrong behavior and holding our loved ones accountable. If we do not, then we are enabling wrong behavior, and that is not loving.
Many years ago, in high school journalism class, I was taught that journalists held politicians accountable. In fact, the media used to be known as The Fourth Estate. However, today, I …read more
Source: Nobody is ready, willing, or able to ask and/or answer questions of substance.
Herbalife First Soars Then Dumps After FTC Settlement Report Is Denied
By Tyler Durden
Update: According to CNBC, there will be no imminent settlement report, which just confirms that as we warned in the original post, the NY Post continues to be mostly a source of disinformation and hedge funds peddling their own positions.
The market may be surging again, but that will hardly comfort Bill Ackman who later today is expected to report later today that his hedge fund remains roughly 20% YTD, or perhaps even worse following news from the NY Post, that his most hated stock ever, Herbalife, has reached “an agreement in principle with the Federal Trade Commission to settle a years-long probe into whether it was a pyramid scheme”, as a result of which the stock is soaring.
This follows the company’s announcement earlier this month that it was close to a settlement with the FTC.
As a reminder, the FTC’s probe into whether or not HLF is a pyramid scheme is also the basis for Ackman’s massive roughly $1 billion short in the name. If the FTC says no, then Ackman may have no choice but to cover.
This is what the Post reported:
An announcement of a deal could come as soon as Tuesday, sources said, although the agreement is not final and could still fall apart. Terms of the settlement — including what could be a sizeable financial penalty — could not be learned.
“I do not believe the FTC is requiring a substantial change in the business model,” a source close to the matter said. Herbalife has, though, agreed to pay a hefty fine, the source said.
The Los Angeles-based company has been operating under a cloud since Dec. 20, 2012, when hedge fund billionaire Bill Ackman announced a $1 billion bet that Herbalife was a fraud and that its shares would go to zero after regulators found it was a pyramid scheme.
The company has strongly denied the accusations.
The FTC subsequently opened a probe into the matter as did some state attorneys general.
The stock is already trading as if Ackman will have no choice but to cover, and was up 8% on the report (which however we would urge readers to take with 2 grains of salt, coming from a publication with a known axe to grind either for or against Bill Ackman in the past).
Source: Herbalife First Soars Then Dumps After FTC Settlement Report Is Denied
Sumner Redstone names new trustees who are ‘loyal’ to him
Sumner Redstone named three new board members to his trust, including his granddaughter, to replace among others Viacom CEO Philippe Dauman. Redstone said he picked people who would be “loyal to me.” …read more
Source: Sumner Redstone names new trustees who are ‘loyal’ to him
Americans Bought The Most New Homes In 8 Years Just As The Median Price Hit An All Time High
By Tyler Durden
There was a lot of headscratching in today’s New Home Sales reported released moments ago by the Census Bureau, according to which there was a whopping 619K new home sold in April, up from the upward revised 531K (was 511K), and smashing expectations of a 523K print, driven by a surge in Northeast home sales which soared unexpectedly from 36K in March to 55K in April, a completely unexplained 53% spike.
The head-scratching is most prevalent among the 75 economists who attempted to forecast this number… but missed by 17 standard deviations!!
Here is what drove the overall surge: a clearly “goalseeked” number resulting from a massive surge in Northeast sales, one which will be promptly revised lower next month.
Finally, adding fabricated data insult to intellectual injury, we learn that Americans – the same consumers who according to recent retail data are loath to even go out and buy clothes – rushed out to buy new homes in the month when the median new home sale price just hit an all time high of $321,100.
Ok Janet, we get it, you want to telegraph a rate hike, but surely there are more subtle and less entertaining ways to do that.
Source: Americans Bought The Most New Homes In 8 Years Just As The Median Price Hit An All Time High
These Are The Most Widely Held Stocks By Hedge Funds
By Tyler Durden
In a world in which hedge funds are increasingly struggling to come up alpha, not to mention original investment ideas, last week we showed what the top stock holdings of the 50 top hedge funds are.
Today, using Goldman data, we flip this data, and show the Top 50 stock holdings among the entire hedge fund universe. Not surprisingly, the usual suspects regain their top positions, led by the FAG stocks, namely the Facebook; Allergan, and Google, with Apple and Microsoft in 4th and 5th spot. Here is the result.
We have previously discussed why the ever greater pile up by hedge funds into a handful of stocks that “work” is also the reason why the HF community has seen such dramatic underperformance in recent months.
Another way to visualize just how full the “hedge fund hotel” is, comes courtesy of the following chart of HF portfolio “density”, confirming that the smart money has never been more reliant on a few key stocks.
This is what Goldman had to say about this:
Hedge fund portfolio density rose to record levels in March, exceeding even the Financial Crisis highs. Hedge fund returns continue to grow more dependent on the performance of a few key stocks. The typical hedge fund has 68% of its long-equity assets invested in its 10 largest positions. This statistic compares with 32% for the typical largecap mutual fund, 22% for the average small-cap mutual fund, 18% for the S&P 500 and just 3% for the Russell 2000 Index.
Finally, for those who wish to continue outperforming the “smart money” by investing in the stocks least held by hedge funds, a strategy we first suggested in February and one which has outperformed the market substantially since then, here is the list of the 20 least concentrated names.
The pair trade here is simple: stay long the least concentrated names, short the most popular stocks, and outperform 99% of your peers.
Source: These Are The Most Widely Held Stocks By Hedge Funds
In Historic First, Singapore Shuts Local Private Bank Due To "Worst Gross Misconduct" Is Has Ever Seen
By Tyler Durden
Following the demise of the thousand year-long tradition of Swiss banking secrecy, crushed virtually overnight by Barack Obama’s demands to make the central European nation’s banking industry transparent, one of the major consequences was the shift in money laundering from Geneva and Zurich to the latest and greatest “anonymous” banking and tax evasion hub located halfway around the world, namely Singapore. And overnight, we got the first shot across the bow of the city state’s “Swiss banking model”, when Singapore ordered the closure of Swiss private bank BSI SA’s unit as criminal proceedings were started against the firm as part of global investigations into a the troubled Malaysian 1MDB state fund.
As Bloomberg reports, in an unprecedented until now move, the Monetary Authority of Singapore said it will withdraw BSI Bank’s status as a merchant bank for breaches of money laundering rules as the Swiss Attorney General said it was taking legal action based on information from criminal probes into 1Malaysia Development Bhd, or 1MDB. EFG International AG said it received approval on Tuesday from the Swiss authorities to take over BSI and still expects the transaction to be completed, although at a reduced price.
Over one year after the collapse of 1MDB, aided and abetted by none other than Goldman Sachs, officials have finally started to piece together the fund flows, and BSI was the first casualty: “BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector,” Ravi Menon, managing director of MAS, said in the statement. “It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously.”
But why when the US NAR has an explicit exemption from AML responsibilities courtesy of the US government just to make money laundering in US real estate that much easier. Oh wait, now we get it…
The crackdown is part of the global money laundering and embezzlement investigations surrounding 1MDB. As reported before, a Malaysian parliamentary committee identified at least $4.2 billion of irregular transactions by the state fund, and recommended the advisory board headed by Prime Minister Najib Razak be disbanded. BSI’s Group CEO Stefano Coduri resigned as the Swiss regulator said it will seize 95 million Swiss francs ($96 million) from the firm and start enforcement procedures against two former bank employees.
1MDB didn’t immediately reply to a request for comment on its links to BSI. Both 1MDB and Najib have consistently denied wrongdoing. BSI said Tuesday that it has cooperated fully with the investigations into 1MDB by the Singapore and Swiss authorities. BSI remains well capitalized, it said.
As Bloomberg adds, Singapore’s central bank said it will allow the transfer of the BSI Singapore unit’s assets and liabilities to the Singapore branch of EFG or to the parent entity BSI SA. The MAS will also impose S$13.3 million ($9.6 million) in financial penalties on the BSI unit for 41 breaches, including its failure to conduct due diligence on high-risk accounts and monitor suspicious customer transactions.
What …read more
Hackers could bring down banks, warns network boss
The head of banking communications network SWIFT has put global banks on notice: Hackers will strike again, and if they’re successful, they could bring down a bank. …read more
Source: Hackers could bring down banks, warns network boss
Trump Goes For Hillary’s Jugular: Releases Video Featuring Bill Clinton Rape Accusers
By Tyler Durden
In a video that some accuse of being crass and tasteless while others say will provoke Hillary Clinton to finally respond to a topic that she has so far eagerly avoided, but is most likely just a foreshadowing of many more such attacks to come, Donald Trump on Monday released a clip that uses audio of two women who have accused President Clinton of rape to attack Hillary Clinton.
As reported originally by The Hill, the new black-and-white video plays audio of two women – Kathleen Willey and Juanita Broaddrick – who have made accusations against Bill Clinton.
It plays the audio against a black-and-white backdrop of the White House and an image of Bill Clinton with a cigar in his mouth. It then pivots to audio of Hillary Clinton laughing.
While Trump has previously sought to use allegations of sexual misconduct against Bill Clinton to attack Hillary Clinton, this is the first time it has been encapsulated in internet media, and seeks to provoke an angry response by his presidential challenger.
A Trump senior adviser warned last week Trump’s attacks would escalate after Trump accused Bill Clinton of rape.
So far Hillary Clinton has declined to respond to the attacks, instead focusing on Trump’s issue-oriented remarks and slamming him as a “loose cannon” on foreign policy, although if the clip generates enough publicity Hillary (and Bill) may have no choice but to open a very unpleasant can of worms.
Willey, who accused Clinton of sexaul assault in 1993, can be heard from a 2007 interview with Sean Hannity saying, “No woman should be subjected to it. It was an assault.”
The audio then shifts to Broaddrick, an Arkansas woman who accussed Clinton of raping her in a hotel room when he was Arkansas’s attorney general.
The audio of Clinton appears against a backdrop of the couple with the headline “here we go again?”
Is Hillary really protecting women?
A video posted by Donald J. Trump (@realdonaldtrump) on May 23, 2016 at 8:27am PDT
Which brings us to another point: as NewsBusters wrote last week, CBS co-host Norah O’Donnell hammered Ivanka Trump on Wednesday’s CBS This Morning when O’Donnell highlighted the New York Times piece investigating Mr. Trump and reminded, “It says many of the women interviewed, quote, ‘reveal unwelcomed romantic advances, unending commentary on the female form, a shrewd reliance on ambitious women, and unsettling workplace conduct.’”
O’Donnell pressed, “Is there unending commentary on the female form?” The journalist wouldn’t leave the subject, demanding, “But you have worked so closely with your dad. There’s another woman who is quoted in the article that says that Donald Trump groped her at a… meeting.”
Speaking of Hillary Clinton, O’Donnell demanded, “Do you think bringing up her husband’s past infidelities, this discussion, is worthy of a presidential campaign?” Regarding Mr. Trump, the reporter lectured, “He’s running against a woman, and he has said that he’s already using gender as a way to run against her.”
Meanwhile, <a target=_blank rel="nofollow" …read more
Source: Trump Goes For Hillary’s Jugular: Releases Video Featuring Bill Clinton Rape Accusers
