Category: Markets

Markets

GlobalIntelHub2

Central Bank Buying Of S&P 500 Futures Extended Until End Of 2015

Elite Forex Blog - Market Research & Analysis
Three months ago, we revealed that – with absolute certainty – foreign central banks trade (and by “trade” we mean “buy”) S&P 500 futures such as the E-mini, in both futures and option form, as well as full size, and micro versions, in addition to the well-known central bank trading in Interest Rates, TSY and FX products. The reason for the certainty was that one of the world’s largest futures exchange, the CME, was quietly peddling a service geared exclusively to central banks, called the Central Bank Incentive Program, whose purpose was to “incentivize” central banks to provide market liquidity, i.e., limit orders, by charging them 34% less than ordinary customers on every E-Mini trade.
Back then we left readers wondering “the next time you sell some E-minis, ask yourself: is the ECB on the other side? Or the BOE? Or, perhaps, you are selling S&P 500 futures to Kuroda. Who knows: there is no paper trail anywhere, although a FOIA request and/or the discovery from a lawsuit, class action or otherwise, of the CME’s central bank incentive program would likely yield some stunning results.”
Actually no it won’t: it is now a national security issue that nobody have proof that the biggest marginal buyer of equities are central banks themselves. Otherwise, “confidence” in central planning may crumble, even if everyone knows all too well that without central banks, the equity market’s artificially propped up prices would be obliterated overnight.
There was one small piece of good news: the foreign central bank rigging (because the Fed is still technically not allowed to buy equity derivatives directly: instead it has been doing so via Citadel) would end on December 31, 2014:
Well, we have some bad news.
According to a modification of the Central Bank Incentive Program, central bank rigging of, well, everything and certainly the E-mini S&P future, will go on for a much longer time, with the revised deadline now going through December 31, 2015. Further, as the CME notes, “The Exchanges certify that the Program complies with the CEA and the regulations thereunder.There were no substantive opposing views to this Program or the proposed modifications.”
Of course, there weren’t.
It is amusing to note that the CME decided to hike the fee for US Treasury Futures and Options: the central bank demand there must be soaring.
But that’s not the only place where the demand prompted the CME to hike rates. It did so with gold as well:
One wonders just what percentage of the total gold trading on the Globex takes place among the world’s central banks, if the CME felt compelled to push up the cost per side.
Finally, for those curious to learn more about this program, or if they are perhaps eligible to enjoy preferential “central bank” terms, they should send an email to [email protected] or contact CME Group’s International Department in Chicago at 312.466.7473. As the CME conveniently advises, “staff at this office can provide you with additional information and assist you through the application process.”
Continue Reading
GlobalIntelHub2

After Abysmal Thanksgiving Spending, Cyber Monday Is Latest Dud, Rising Less Than Half 2013 Pace

Elite Forex Blog - Market Research & Analysis
Prepare to hear much more of the “retail spending slowed down because the economy is just too strong” excuses today, used most hilariously by the NRF on Sunday to explain the unprecedented 11% collapse in the 2014 4-day holiday weekend spend, when pundits “justify” why Cyber Monday sales were only the latest proof the US consumer – that 70% driver of US GDP – is being crushed day after day, pardon, basking in the warm glow of America’s centrally-planned golden age.
Here are the facts: Internet holiday shopping rose only 8.1% on Cyber Monday yesterday, usually the busiest day for Web shopping as people return to their desks after the U.S. Thanksgiving holiday weekend. This was a big miss to expectations, and is less than half then growth posted just last year, when online sales grew at 17.5%, according to IBM.
Enter the spin doctors:
… Cyber Monday sales growth is slowing as consumers embrace the convenience of online shopping, spreading out their purchases instead of being lured by one-day specials.
… The declining pace of growth reflects an earlier start to the year-end shopping season, with Amazon.com Inc. and other online retailers offering online deals a week before Black Friday, when stores traditionally began offering holiday discounts.
… “We’re still getting really strong growth on Black Friday and Cyber Monday, but people are realizing it’s a season of shopping,” Soren Mills, chief marketing officer at Newegg Inc., an online electronics retailer. “We’re releasing new deals all the time. We refresh constantly and bring in new deals to keep the excitement there. People are turning it from a day-long occasion to a monthlong occasion.”
… “Consumers are definitely shopping earlier,” said Scot Wingo, ChannelAdvisor’s chief executive officer. “Thanksgiving eats into Black Friday, and Saturday and Sunday are eating into Cyber Monday.”
NRF’s CEO Matt Shay attributed the drop to a combination of factors, including the fact that retailers moved promotions earlier this year in attempt to get people out sooner and avoid what happened last year when people didn’t finish their shopping because of bad weather. He also attributed the declines to better online offerings and an improving economy where “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals,” he said.
Yes, consumer spending is plunging due to a stronger economy. Clearly this guy went to Princeton.
All of which is not only funny, but an outright lie as well, because as reported previously, when aggregating all the Thanksgiving spending data from Thursday to Sunday, we find that shoppers spent an average $159.55 online, down 10.2% from $177.67 last year. This took place as there was an actual decline in the percentage of Black Friday weekend shopping taking place online. So not only did Americans buy less online, they spent less online!
Which is why, of course, one needs spin. The problem is when people no longer buy, pardon the pun, the bullshit:
This year, many shoppers stayed home. The NRF had predicted that 140.1 million customers would visit retailers last weekend. Instead, only 133.7 million showed up. The slow start may make it harder for retailers to hit sales targets over the next month. The NRF had predicted a 4.1 percent sales gain for November and December — the best performance since 2011.
And it may still get it… if all retailers go “full Amazon” and liquidate their wares well below cost, leading to another wave of retail bankruptcies and even more evil, evil deflation.
Continue Reading
GlobalIntelHub2

Exclusive: FBI warns of ‘destructive’ malware in wake of Sony attack

Elite Forex Blog - Market Research & Analysis
BOSTON (Reuters) – The Federal Bureau of Investigation warned U.S. businesses that hackers have used malicious software to launch a destructive cyberattack in the United States, following a devastating breach last week at Sony Pictures Entertainment.
Cybersecurity experts said the malicious software described in the alert appeared to describe the one that affected Sony, which would mark first major destructive cyber attack waged against a company on U.S. soil. Such attacks have been launched in Asia and the Middle East, but none have been reported in the United States. The FBI report did not say how many companies had been victims of destructive attacks.
“I believe the coordinated cyberattack with destructive payloads against a corporation in the U.S. represents a watershed event,” said Tom Kellermann, chief cybersecurity officer with security software maker Trend Micro Inc. “Geopolitics now serve as harbingers for destructive cyberattacks.”
The five-page, confidential “flash” FBI warning issued to businesses late on Monday provided some technical details about the malicious software used in the attack. It provided advice on how to respond to the malware and asked businesses to contact the FBI if they identified similar malware.
The report said the malware overrides all data on hard drives of computers, including the master boot record, which prevents them from booting up.
“The overwriting of the data files will make it extremely difficult and costly, if not impossible, to recover the data using standard forensic methods,” the report said.
The document was sent to security staff at some U.S. companies in an email that asked them not to share the information.
The FBI released the document in the wake of last Monday’s unprecedented attack on Sony Pictures Entertainment, which brought corporate email down for a week and crippled other systems as the company prepares to release several highly anticipated films during the crucial holiday film season.
A Sony spokeswoman said the company had “restored a number of important services” and was “working closely with law enforcement officials to investigate the matter.”
She declined to comment on the FBI warning.
The FBI said it is investigating the attack with help from the Department of Homeland Security. Sony has hired FireEye Inc’s (FEYE.O) Mandiant incident response team to help clean up after the attack, a move that experts say indicates the severity of the breach.
While the FBI report did not name the victim of the destructive attack in its bulletin, two cybersecurity experts who reviewed the document said it was clearly referring to the breach at the California-based unit of Sony Corp (6758.T).
“This correlates with information about that many of us in the security industry have been tracking,” said one of the people who reviewed the document. “It looks exactly like information from the Sony attack.”
FBI spokesman Joshua Campbell declined comment when asked if the software had been used against the California-based unit of Sony Corp, although he confirmed that the agency had issued the confidential “flash” warning, which Reuters independently obtained.
“The FBI routinely advises private industry of various cyber threat indicators observed during the course of our investigations,” he said. “This data is provided in order to help systems administrators guard against the actions of persistent cyber criminals.”
The FBI typically does not identify victims of attacks in those reports.
Hackers used malware similar to that described in the FBI report to launch attacks on businesses in highly destructive attacks in South Korea and the Middle East, including one against oil producer Saudi Aramco that knocked out some 30,000 computers. Those attacks are widely believed to have been launched by hackers working on behalf of the governments of North Korea and Iran.
Security experts said that repairing the computers requires technicians to manually either replace the hard drives on each computer, or re-image them, a time-consuming and expensive process.
Monday’s FBI report said the attackers were “unknown.”
Yet the technology news site Re/code reported that Sony was investigating to determine whether hackers working on behalf of North Korea were responsible for the attack as retribution for the company’s backing of the film “The Interview.”
The movie, which is due to be released in the United States and Canada on Dec. 25, is a comedy about two journalists recruited by the CIA to assassinate North Korean leader Kim Jong Un. The Pyongyang government denounced the film as “undisguised sponsoring of terrorism, as well as an act of war” in a letter to U.N. Secretary-General Ban Ki-moon in June.
The technical section of the FBI report said some of the software used by the hackers had been compiled in Korean, but it did not discuss any possible connection to North Korea.
(Reporting by Jim Finkle. Additional reporting by Lisa Richwine; Editing by Ken Wills)

http://mobile.reuters.com/article/idUSKCN0JF3FE20141202?irpc=932 

Continue Reading
GlobalIntelHub2

The American Dream Has Moved to Scandinavia

Elite Forex Blog - Market Research & Analysis
We noted in 2010 that the American Dream – the possibility of a “rags to riches” success story – has moved abroad … since social mobility in the U.S. is much lower than in many other developed nations [5].
(And we pointed out that conservatives are as disturbed as liberals [6] by the collapse of social mobility in modern America.)
A paper published last year by University of Ottawa economics professor Miles Corak tells us [7] exactly where the American Dream has gone … to Scandinavia.  Here’s a chart from the study:
 [8]Denmark, Norway and Finland have the most social mobility (and Sweden is not that far behind).
On the other hand, the UK, Italy and America have the least social mobility.
True, the UK and Italy are a tiny bit worse than the U.S. in terms of social mobility.  But the U.S. has the most inequality.  Indeed, the U.S. arguably has the worst inequality anywhere in the world at any time in history [9]. Indeed, inequality is so severe in America that most of the profits are flowing into the hands of an incredibly small group [10] of people … and you’re not very likely to become one of them.
On the other hand, Sweden, Finland, Denmark and Norway have the least inequality. In other words, it’s a lot more likely that you can get a reasonable slice of the pie there.
Indeed, Norway is arguably the world’s most prosperous [11] country. Denmark is 4th; Sweden is 6th; and Finland is 8th … but the U.S. has dropped down to 10th [12] place.
Sadly, the American Dream is now spoken with a Scandinavian accent.
Continue Reading
GlobalIntelHub2

Netherlands, Germany Have Euro Disaster Plan – Possible Return to Guilder and Mark

Elite Forex Blog - Market Research & Analysis
The Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis it has emerged. These plans remain in place.

German Gold Deutsche Mark – (Special Edition)
The Dutch finance ministry prepared for a scenario in which the Netherlands could return to its former currency – the guilder. They hosted meetings with a team of legal, economic and foreign affairs experts to discuss the possibility of returning to the Dutch guilder in early 2012. 
The Dutch finance minister during the period has confirmed that Germany also discussed such scenarios.
At the time the Euro was in crisis, Greece was on the verge of leaving or being pushed out of the Euro and the debt crisis was hitting Spain and Italy hard. The Greek prime minister Georgios Papandreou and his Italian counterpart Silvio Berlusconi had resigned and there were concerns that the eurozone debt crisis was spinning out of control – leading to contagion and the risk of a systemic collapse.
A TV documentary broke the story last Tuesday. The rumours were confirmed on Thursday by the current Dutch minister of finance, Jeroen Dijsselbloem, and the current President of the Eurogroup of finance ministers in a television interview which was covered by EU Observer andBloomberg.
“It is true that [the ministry of] finance and the then government had also prepared themselves for the worst scenario”, said Dijsselbloem.
“Government leaders, including the Dutch government, have always said: we want to keep that eurozone together. But [the Dutch government] also looked at: what if that fails. And it prepared for that.”
While Dijsselbloem said there was no need to be “secretive” about the plans now, such discussions were shrouded in secrecy at the time to avoid spreading panic on the financial markets.
When asked about Germany, Dijsselbloem said he couldn’t say whether that country’s government had made similar preparations.
German Silver Deutsche Mark – (1951-1974)
However, Jan Kees de Jager, finance minister from February 2010 to November 2012, acknowledged that a team of legal experts, economists and foreign affairs specialists often met at his ministry on Fridays to discuss possible scenarios.
“The fact that in Europe multiple scenarios were discussed was something some countries found rather scary. They did not do that at all, strikingly enough”, said De Jager in the TV documentary.
“We were one of the few countries, together with Germany. We even had a team together that discussed scenarios, Germany-Netherlands.”
When the EU Observer requested confirmation from Germany, the German ministry of finance did not officially deny that it had drawn up similar plans, stating simply:
“We and our partners in the euro zone, including the Netherlands, were and still are determined to do everything possible to prevent a breakup of the eurozone.” 
This is quite a revelation. At that time the German finance minister Wolfgang Schauble had said that the Euro could survive without Greece. Whether it could survive without the Dutch is another matter entirely.
A Euro without Holland and especially Germany is currently inconceivable. De Jager also states that other countries found the prospect of a Euro break-up frightening.
So much so that they buried their heads in the sand rather than deal with the situation facing them. It appears that no emergency contingency plans were made in the unfortunately named PIIGS nations – Portugal, Ireland, Italy, Greece and Spain.
One has to wonder if the plans would have been made public had a TV documentary not forced the Dutch government to confirm the claim.
It is interesting to note that it is these two countries, Germany and Netherlands, whose citizens have also been at the forefront of the gold repatriation movement currently sweeping across Europe – France’s second largest party entered the fray this week.
In a climate with a lack of faith in fiat currencies, any return to a purely fiat guilder or mark would be risky in the absence of the confidence that gold backing provides.
Despite the implication that secrecy is no longer necessary because Europe is over the worst we believe the Dutch repatriation of 20% of it’s sovereign gold from the U.S. indicates that the Dutch are still, wisely, preparing for the worst – whether that be a euro crisis or indeed a dollar crisis and an international monetary crisis.
Their stated reason for returning their 122 tonnes of gold to Netherland’s soil was to instil public confidence in the Dutch central bank.
The prospect of a Euro-break up is a frightening one. It would appear that most Eurozone nations are ill-prepared and indeed unprepared for. 
As always we recommend investors act as their own central bank by taking delivery of bullion or keeping gold and silver in secure, allocated and segregated vaults in safer jurisdictions such as Switzerland and Singapore.
For investors and savers currently using the euro, it begs the important question do you have a euro failure contingency plan? 
Indeed, for investors and savers internationally using other fiat currencies, it begs the important question do you have a currency failure contingency plan? 
While the risks in peripheral European nations of reversion to their national currencies and currency devaluations have diminished – some risks still remain.
The risk is that individual national governments may elect to take this route rather than suffer deflationary economic collapse and Depressions. Alternatively, it could happen through contagion or a systemic event like the collapse of a large European bank, a la Lehman Brothers, that leads to a domino effect jettisoning a member state out of the monetary union.
It could also come about should the German people and politicians decide that the European monetary project is not worth saving or they decide that it cannot be saved and elect to return to the Deutsche mark.
All significantly indebted nations, so called PIIGS and non PIIGS such as Japan, the UK and the U.S. are at risk of currency devaluations.
Competitive currency devaluations or the debasement of currencies for competitive advantage and currency wars poses real risks to the long term stability and prosperity of all democracies in the world and to the finances and savings of people in all countries.
Get Breaking News and Updates On Gold Markets Here

Open a Forex Account and trade with CLM Forex or select another broker with Open Forex Account

Continue Reading
GlobalIntelHub2

UC Davis Economics Professor: There Is No American Dream

Elite Forex Blog - Market Research & Analysis

DAVIS (CBS13) — A UC Davis economics professorhas determined there is no American Dream.
Gregory Clark is sharing his research as a hard truth with no hope—whether or not you can get ahead in America is as predictable as any formula.
In fact, he says, the formulas for social mobility in the United States show there’s nothing to dream about.
“America has no higher rate of social mobility than medieval England, Or pre-industrial Sweden,” he said. “That’s the most difficult part of talking about social mobility is because it is shattering people s dreams.”
Clark crunched the numbers in the U.S. from the past 100 years. His data shows the so-called American Dream—where hard work leads to more opportunities—is an illusion in the United States, and that social mobility here is no different than in the rest of the world.
“The status of your children, your grandchildren, your great grandchildren your great-great grandchildren will be quite closely related to your average status now,” he said.
UC Davis students CBS13 spoke to dismissed the findings.
“The parents’ wealth has an effect on ones life but it’s not the ultimate deciding factor,” Andy Kim said.
Clark has heard the naysayers before.
“My students always argue with me, but I think the thing they find very hard to accept, is the idea that much of their lives can be predicted from their lineage and their ancestry,” he said.
Stuck in a social status is no American Dream—Clark says it’s the American reality.
“The good news is that this is coming from an economist, because economists are used to being unpopular, and so we are the right people to bear this message that the world is a limiting place,” he said.
There’s one caveat to the study, and that is for any one of us, there is always an exception to the rule.
Clarks’ study was published by the Council on Foreign Relations.

http://sacramento.cbslocal.com/2014/11/26/uc-davis-economics-professor-there-is-no-american-dream/

Continue Reading
GlobalIntelHub2

Russia-China trading settlements in yuan increases 800%

Elite Forex Blog - Market Research & Analysis
Settlements in yuan between China and Russia have increased ninefold in annual terms between January and September 2014, says the Chinese Ministry of Economic Development.
“The settlement in national currencies between China and Russia in bilateral trade amounted to about 2 percent in 2013. There has been a significant growth in 2014. In particular, the use of the yuan in mutual settlements increased nine times in the first nine months of 2014.” TASS quotes Lin Zhi, head of the Europe and Central Asia Department of the Chinese Ministry of Economic Development.
“About 100 Russian commercial banks are now opening corresponding accounts for settlements in yuan. The list of commercial banks where ordinary depositors can open an account in yuan is also growing.”the official said.
On November 18 Russia’s Sberbank became the first Russian bank to begin financing letters of credit in Chinese yuan.
Half of the trade between Russia and China could be carried out in yuan and rubles provided China removes restrictions on currency transactions for Russian banks, said Deputy Finance Minister Aleksey Moiseyev in September. The restrictions don’t allow Russian banks to keep yuan received from exporters for a long time.
Russia and China have been boosting cooperation primarily in the financial and energy sectors and are planning to have a trade turnover of $200 billion by 2020.
Switching to settlements in domestic currencies can largely contribute to balancing the global economy by reducing the impact of the dollar on the world financial and energy markets, President Vladimir Putin said at the APEC Summit last week.
Continue Reading