Donald Trump’s modeling agency has profited from the very same visa program that the presidential candidate himself has slammed – and appears to have violated federal laws in the process, a CNNMoney investigation has found.
Source: Attorneys: Trump agency broke immigration laws
By Tyler Durden
Ever since the start of ECB’s QE, one of the biggest concerns has been how will the ECB continue monetizing €60 billion in debt in a market that is increasingly illiquid and running out of collateral. Moments ago we got the answer when the ECB not only went even deeper into negative rates territory, cutting all three of its main rates, but boosted QE by €20BN.
To be sure, if the ECB had maintained the universe of eligible assets as currently, it would immediately drain the govie market of what little liquidity there was, sending the Bund curve negative until the 30Y. Recently Goldman Sachs Group estimated that had it boosted QE by just €10 billion with the same collateral pool, the ECB would run out of German government debt to buy in 10 to 12 months.
Which is why the ECB had no choice but to expand its universe of eligible securities to include EUR-denominated, European non-financal Investment Grade bonds.
In doing so Draghi has officially opened the Pandora’s box of purchasing not only sovereign securities but corporate ones, something the BOJ has been doing for years with REITs and ETFs, and leads to the question: once the bonds the ECB holds are equitized (along the lines of what China announced earlier today), will the European Central Bank be an active, or passive, equity shareholder. Better: if the ECB is buying IG bonds, why not Junk, or stocks, or oil, or anything else?
Actually, there is no definitive answer, which is why sooner or later the ECB will do just that.
Here are some more thoughts from Bloomberg:
The next target for the European Central Bank’s expanding asset purchase program: the region’s 900 billion-euro ($980 billion)corporate-bond market.
The ECB will buy investment grade euro-denominated bonds issued by non-bank corporations established in the euro area, according to a press release on Thursday.
Corporate bonds are the latest assets to be added to a growing list of securities, from government debt to mortgage-backed notes, the central bank is snapping up to combat weak growth and inflation. Buying company bonds may also demonstrate a greater tolerance for risk at the central bank as the securities are typically unsecured.
The ECB has bought 786.8 billion euros of assets since October 2014. It expanded its purchasing target to 80 billion euros a month starting in April, according to the statement. Government bonds have accounted for the largest portion of ECB acquisitions, at 77 percent, while asset-backed securities account for less than 3 percent.
The central bank has already dipped its toe into the water of corporate debt markets by adding state-backed company bonds, including securities from Italian utility Enel SpA, to the list of assets eligible for purchase last year.
The following, however, is paramount, because there is no such thing as a free lunch, especially when Central Banks are going …read more
Source: This Is The €1.6 Trillion In European IG Bonds Which The ECB Is Now Buying
The European Central Bank has cut interest rates and stepped up its stimulus program as it tries to get the eurozone economy moving again.
Source: European Central Bank pulls out all the stops
By Tyler Durden
2016 has been the year that investors turned bearish on central banks.
Something snapped in the market’s collective psyche when Kuroda went NIRP and things haven’t been the same since. It’s as though everyone suddenly realized just how utterly insane this global monetary experiment has become.
In all likelihood, fiscal policymakers (i.e. elected officials) will also come to the conclusion that this has gone (way) too far – but not soon enough. Monetary authorities should have been reined in long ago, but they weren’t, and as a consequence, we are all guinea pigs in a global experiment that, if no one intervenes, is going to end with the abolition of physical banknotes and the possible imposition of deeply negative deposit rates.
Today we’ll get what may turn out to be the last gasp for previously unassailable central banks as Mario Draghi is widely expected to announce a flurry of easing measures including a further cut to the depo rate and both an extension and expansion of PSPP.
We documented how to trade the ECB announcement on Wednesday evening, but from a longer-term perspective, the record suggests equity markets are Fed up. “Mario Draghi is having no success convincing stock investors that the European Central Bank has the firepower to reignite growth,” Bloomberg notes. “In the first year of quantitative easing, the Euro Stoxx 50 Index fell 17 percent, and volatility reached levels not seen since 2008. The gauge has dropped in each month but one following an ECB meeting since April.”
As it turns out, “reality” trumps central bank fiction. Here’s the visual:
But that likely won’t stop the ECB from “trying.” This (hopefully) temporary descent into insanity still has a few more rounds to go. But Draghi will face his Waterloo on Thursday. There’s no way he can exceed expectations. In order to “impress” markets, he would need to cut by at least 20 bps, expand PSPP by €20 billion per month, and extend QE by at least six months. That’s a tall order, to say the least. Here’s what economists think:
On top of that, Draghi will need to devise some manner of tiered deposit scheme if he cuts the depo rate further. Europe’s banks are already under siege in the market and a further cut to the depo rate isn’t going to do them any favors from a NIM perspective. The last thing the ECB needs is a swift sell-off in euro bank stocks. Here’s a look at predictions for today’s ECB announcement:
Expectations for today’s ECB meeting are high, but without consensus pic.twitter.com/7psqOvIciG
— Bond Vigilantes (@bondvigilantes) March 10, 2016
And here’s WSJ’s preview:
1. The rate decision
No rate cut would be a major disappointment for markets. Most analysts expect the ECB to cut the deposit rate by 10 basis points to take it further into negative territory, to minus 0.4%. The refinancing …read more
Source: Draghi Faces Day Of Communication Reckoning In Final Test Of Central Bank Omnipotence
By Tyler Durden
In what may be the biggest news of the day, and certainly with far greater implications than whatever Mario Draghi will announce in a few hours when we will again witness the ECB doing not “whatever it takes” but “whatever it can do”, moments ago Reuters reported that China is preparing for an unprecedented overhaul in how it treats it trillions in non-performing loans.
Recall that as we first wrote last summer, and as subsequently Kyle Bass made it the centerpiece of his “short Yuan” investment thesis, the “neutron bomb” in the heart of China’s impaired financial system is the trillions – officially at $614 billion but realistically anywhere between 8% and 20% of China’s total $35 trillion in bank assets – in non-performing loans. It is the unknown treatment of these NPLs that has been the greatest threat to China’s just as vast deposit base amounting to well over $20 trillion, which has been the fundamental catalyst behind China’s record capital flight as depositors have been eager to move their savings as far from China’s domestic banks as possible.
As a result, conventional thinking such as that proposed by Bass, Ray Dalio, KKR and many others, speculated that China will have to devalue its currency in order to inflate away what is fundamentally an excess debt problem as the alternative is unleashing a massive debt default tsunami and “admitting” to the world just how insolvent China’s state-owned banks truly are, not to mention leading to the layoffs of tens of millions of workers by these zombie companies.
However, China now appears to be taking a surprisingly different track, and according to a Reuters report China’s central bank is preparing regulations that would allow commercial banks to swap non-performing loans of companies for stakes in those firms. Reuters sources said the release of a new document explaining the regulatory change was imminent.
According to Reuters, the move would represent, “on paper, a way for indebted corporates to reduce their leverage, reducing the cost of servicing debt and making them more worthy of fresh credit.”
It gets better.
It would also reduce NPL ratios at commercial banks, reducing the cash they would need to set aside to cover losses incurred by bad loans. These funds could then be freed up for fresh lending for investment in the new wave of infrastructure products and factory upgrades the government hopes will rejuvenate the Chinese economy.
It is certainly possible that this is merely a trial balloon, one which as was the case repeatedly during Europe’s crisis uses Reuters as a sounding board to gauge the market’s reaction, however the reality is that China may truly be desperate enough to pursue this option.
Because what is lacking in the Reuters explanation is that this proposal entails nothing short of a nationalization on a grand scale, one which gives China’s impaired commercial banks – all of which are implicitly state controlled …read more
By Tyler Durden
Submitted by Brandon Smith via Alt-Market.com,
Many investors today are not very familiar with market history and tend to live only in the day-to-day mainstream narrative while watching little red and green graphs move up and down. This is not so much an issue in a relatively stable economic environment. The problem is, today we live in the most unstable economic conditions possible.
These investors and analysts are simply not aware that some of the most exciting stock rallies occur during the most volatile crises, and so they interpret every rally of a few days to a few weeks as a signal for recovery. However, in this kind of fiscal environment, all the gains made in a few weeks can be lost in moments.
After the Great Depression began to take hold in U.S. markets, massive rallies unfolded over the span of weeks and sometimes months, only to end in a collapse to even lower depths. For example, in 1930 the Dow Jones enjoyed historic rallies twice, gaining 48% only to lose it all, then gaining more than 16% and crashing down to a 50% loss for the year. Each consecutive year there were multiple rallies of more than 25% and each time they disintegrated. By 1932 stocks were only worth approximately 20% of what they were worth in 1929. Bear market rallies continued to give false hope to investors and the public throughout the crisis, and mainstream banks and economists continued to exploit such rallies to capitalize on those false hopes.
I mention this to put our markets today in perspective. Mainstream analysts and some banking moguls are already declaring a reversion of the instability that was launched at the beginning of this year due to the spike in stocks over the past three weeks. I explained the reason behind this comparatively short term rally in my article “Markets Ignore Fundamentals And Chase Headlines Because They Are Dying.” In desperation, the investment world has placed all its hopes on renewed stimulus measures this March by China and the European Central Bank. They have also made bets that the Fed will not raise rates again until the end of this year, if they raise rates again at all.
I believe the next two weeks will be very telling in terms of how the rest of the year in markets will progress. If mainstream analysts and investors are placing faith in further central bank intervention, they may be greatly disappointed.
Every action of the central bankers this year has indicated a shift away from open intervention. The taper of quantitative easing (QE) has run its course and no new QE has been announced since. The rate hikes were launched in December despite all traditional logic to the contrary and now, Fed officials appear to be staying on track for more hikes in the near term. Kansas City Fed President Esther George told Bloomberg that a fed rate hike in March should “absolutely remain on …read more
Source: Central Banks Are About To Leave Fiat Addicted Stock Markets In Agony
Millions of women in Europe are now deathly afraid to walk outside their own homes at night, and with each passing day more news reports of absolutely horrific rapes and sexual assaults come pouring in from all over the continent. So who is to blame for this epidemic of rape? I think that the answer might surprise you, because a very famous politician in the United States is at least partially responsible. But first, let’s examine why women all over Europe are living in such fear right now. I have written previously about this rape epidemic, but since that time it has gotten even worse. At this point, this plague is even affecting small towns in the far northern portions of the continent. For example, just consider what is happening in a small town in northern Sweden known as Ostersund…
Women in a town in northern Sweden have been warned not to walk alone at night in the wake of a spike in violent assaults and attempted rapes.
Police in Östersund made the unusual move to ask women not to go out unaccompanied after dark, after reports of eight brutal attacks, some by ‘men of foreign appearance’, in just over two weeks.
Speaking at a press conference on Monday, police said they ‘have never seen anything like it in Östersund’, a small town in the north of Sweden with a population of just 45,000.
Of course things were not always this way in Sweden.
At one time, Sweden had some of the lowest rates of violent crime in the world, but now the number of reported rapes in Sweden has risen by more than 1,000 percent since the mid-1970s.
So what is causing this?
A massive influx of immigrants from the Middle East and other third world nations is fundamentally changing Swedish society. During 2015, Sweden brought in an additional 163,000 migrants and refugees, and that was the highest level in all of Europe per capita.
Politically-correct Swedish citizens have opened up their arms to warmly welcome their new friends, but all of this kindness has not prevented an absolutely chilling wave of sexual crime. In particular, public pools have quickly gained a reputation as places where young Swedish women are very likely to be raped or sexually assaulted. The following is an excerpt from an outstanding article by Ingrid Carlqvist…
In 2015, when roughly 163,000 asylum seekers came to Sweden, the problems at public pools increased exponentially. More than 35,000 young people, so-called “unaccompanied refugee children,” arrived — 93% of whom are male and claim to be 16-17 years old. To prevent complete idleness, many municipalities give them free entrance to the public pools.
During the past few months, the number of reports of sexual assaults and harassment against women at public pools has been overwhelming. Most of the “children” are from Afghanistan, widely considered among the most dangerous places in the world for women. When the daily Aftonbladet visited the country in 2013, 61-year-old Fatima <a target=_blank rel="nofollow" href="http://www.aftonbladet.se/nyheter/article17440087.ab" …read more
Source: Who Is To Blame For The Rape Epidemic That Is Sweeping Across Europe?
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By Tyler Durden
China’s plunge protection team may be scrambling to prop up the Shanghai Composite for the duration of the People’s Congress, but the moment the NPC is over, the stock “market” goes with it, and the people know it. But now that China has its favorite bubble back – housing – few care: after all the stock bubble was meant purely as a placeholder until houseflipping mania returns.
However, the bursting of the stock bubble is hardly bad news, and certainly not for Macau, because now that China’s habitual gamblers no longer have a market where to bet it all, they can finally go back to their original stomping grounds.
Here is Bloomberg’s take with “
Source: China’s Gamblers Ditch The Burst Stock Bubble, Return To Macau’s Casinos
By Tyler Durden
The European Central Bank promised in January to “review and reconsider” its monetary stance this week. The question, as BloombergBriefs notes, is not if policy makers will ease but how. Haruhiko Kuroda's humbling in FX markets shows what Mario Draghi is up against tomorrow: namely, that even the most forceful policy decisions can be overwhelmed by events, positioning, or sentiment. Draghi has a number of options (some more and some less priced in) but most crucially there two large gaps to be filled in European Stock indices – the question is which is filled first?
To offset some of the pain for banks, the ECB might impose the most punitive rate on only a portion of banks’ reserves. Japan, Switzerland and Sweden already have such multi-tier systems. Another way to ease the pressure on banks could be to cut the ECB’s main interest rate to zero from 0.05%.
They could also expand quantitative easing.
The ECB is currently buying about €60 billion a month of mainly eurozone government bonds, as well as asset-backed securities and covered bonds. Economists expect the ECB to accelerate its purchases by at least €10 billion per month, to €70 billion, and perhaps extend their duration by six months, to September 2017.
Taken together, those two measures would boost the program by €540 billion to €2 trillion, or around 20% of eurozone gross domestic product, said Ken Wattret, an economist at BNP Paribas in London.
When the ECB first announced its bond buying program, European stocks rallied, and bond yields tumbled. A bigger than expected expansion could have this effect again, as the purchases raise the price of bonds and shift investors into other markets.
Part of any expansion could be a loosening the restrictions on QE.
There are five major constraints right now.
Dropping the latter requirement would be the least contentious tweak, economists say, and would greatly expand the pool of eligible assets, particularly of German bonds.
Cutting the deposit rate as expected would, of course, make more bonds with negative yields eligible for the bond buying program. However, yields are likely to fall in reaction to any rate cut too, making some bonds ineligible again.
The ECB could also buy other stuff.
The ECB could buy corporate or senior bank bonds. That would be a “highly effective signal” with powerful effects, but would likely encounter serious resistance from some council members, said Holger Schmieding, chief economist at …read more
Source: How To Trade Tomorrow’s ECB Meeting
By Tyler Durden
Liquidity worries are so 2015.
In the new year, there are much more pressing concerns.
Like a possibly imminent, overnight yuan float, which would quite simply torpedo every risk asset on the planet even as it would probably be just the thing Beijing’s economy needs to secure long-term stability.
And then there’s crude prices which, when you strip out the volatility and near daily OPEC headline hockey, are poised to remain suppressed in perpetuity (don’t get lost in the daily melee, this is a story about fundamentals, and from a fundamental perspective, the outlook is bearish – just look at storage overflow and Iranian supply). That means the global deflationary impulse is likely to persist and that, in turn, translates to more central bank meddling and less liquidity.
The funny thing is, although the punditry has apparently forgotten about liquidity, the issue now looms larger than ever because the junk bond liquidation is upon us, and that’s just the start of what’s ultimately going to be a bursting of the entire financial asset bubble central banks have inflated since 2009. HY is just ground zero for liquidity issues, and make no mistake, you’re going to see this take center stage in the months ahead.
Apparently, all of the above isn’t lost on Deutsche Bank’s research team (bless their hearts, because they’ll all be fired in the space of 12 months as their employer crashes and burns in what will end up being the largest banking disaster in Europe’s history) who are out with a rather insightful presentation on market liquidity.
We present, below, several slides which help to underscore the fact that “liquidity” is a lot like health insurance. You don’t need it until you do. But if you get sick and don’t have it… well… you may well end up sleeping in a cardboard box.
And to carry that analogy further, markets are headed for Skid Row.
Source: Deutsche Bank Goes "Searching For Liquidity;" Can’t Find Any
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