Two years after correctly abandoning his long-held bullish perspective on the US economy’s growth prospects, Deutsche Bank’s chief economist Joe LaVorgna has reportedly left the bank, “planning to work elsewhere in financial services.”
This post was published at Zero Hedge on Jun 26, 2017.
One week ago, Deutsche Bank issued a loud warning that as a result of the aging of the current economic expansion, now the third longest in history at 32 quarters, if with the lowest average growth rate of just 2%…
This post was published at Zero Hedge on Jun 24, 2017.
It is exactly one year since the UK held the historic referendum vote on EU membership. As Deutsche Bank’s Jim Reid notes, whether you think that has passed quickly or not probably depends on if you’re a Sterling FX trader, in which case it’s more than likely been a long year. With today being the anniversary we thought we would see how assets have performed over the past year since the vote…
First and foremost the standout is the currency has been pounded with a huge decline for Sterling versus both the Dollar (-15%) and Euro (-13%). That massive move in the currency has helped to prop up local currency returns however and we’ve seen the FTSE 100 surge an impressive +22% (clearly boosted by big UK exporters) while GBP credit has returned between +8% and +15% and Gilts have returned +7%.
This post was published at Zero Hedge on Jun 23, 2017.
With the VIX slammed at the close of trading on “quad-witch” Friday, sending it just shy of single-digits once again and pushing stocks back in the green in the last seconds of trading, the much discussed topic of (near) record low volatility simply refuses to go away, which means even more attempts to i) explain it, ii) predict what ends the current regime of “endemic complacency” and iii) forecast the “catastrophic” damage to markets when it does finally end as JPM’s Kolanovic did earlier this week, when he set the bogey on a modest increase in the VIX from 10 to just 15.
Overnight, applying his typical James Joycean, stream-of-consciousness approach to capital markets, Deutche Bank’s derivatives analyst Aleksandar Kocic penned his latest metaphysical essay on this topic, which covered most of the above bases, and which postulates that far from “stable” the current market equilibrium is one which can be described as “metastable”, the result of widespread complacency, and which he compares to an avalanche:”a totally innocuous event can trigger a cataclysmic event (e.g. a skier’s scream, or simply continued snowfall until the snow cover is so massive that its own weight triggers an avalanche.”
He also inverts the conventionally accepted paradigm that lack of volatility means lack of uncertainty, and writes that to the contrary, it is the ubiquitous prevalence of uncertainty that has allowed vol to plunge to its recent all time lows, keeping markets “metastable.”
How does the regime change from the current “metastable” regime to an “unstable” one? To Kocic the transition will take place when uncertainty, for whatever reason, is eliminated: “Big changes threaten to explode not when uncertainty begins to rise, but when it is withdrawn.” He also points out that while there is punishment for those who seek to defect from a “complacent regime”…
This post was published at Zero Hedge on Jun 17, 2017.
It must have been painfully awkward for the Commodity Futures Trading Commission (CFTC).
Last year, Deutsche Bank settled a civil suit involving blatant market rigging and turned over reams of information, including chat logs and voice recordings. The trove contained plenty of damning evidence which had gone overlooked by the CFTC.
CFTC investigators supposedly spent 5 years searching for illegal market manipulation, but somehow, managed to find nothing.
The cheating became hard to ignore after Deutsche Bank turned over voice recordings and 350,000 pages of documents which revealed bank trading desks being run like the back office of a crooked casino.
This post was published at GoldSeek on 13 June 2017.
Strengths
The best performing precious metal for the week was palladium, up 5.10 percent. Grant Sporre, an analyst at Deutsche Bank, noted there is a genuine physical tightness in the market, but the spike had all the hallmarks of someone being caught short and being squeezed. Bullionvault’s Gold Investor Index, which measures the balance of client buyers against sellers, rose the most in two years reaching a high of 55.3 in May versus 52.1 in April, reports Bloomberg. In India, gold imports jumped fourfold in May to 126 metric tons from 31.5 metric tons in the same month last year. In a report by the World Gold Council, consumption in India could climb dramatically this year as a ‘simple’ nationwide Goods Services Tax will boost the economy, making the gold industry more transparent to benefit buyers, reports Bloomberg. Amid unease over a congressional hearing on possible links between Russia and the Trump campaign, holdings in SPDR Gold Shares (the world’s largest gold-backed ETF) climbed to the highest this year on the back of safe-haven demand, reports Bloomberg. In the two weeks through the end of May, hedge funds and other large speculators boosted their bullish bets on the precious metal by 37 percent, notes another Bloomberg article, the most since 2007 according to government data. Japanese investors sold a record amount of U. S. debt in April, reports Bloomberg. ‘Political turmoil in Washington and uncertainty about French elections pushed down Treasury yields, diminishing their attractiveness,’ the article continues. Japanese investors cut holdings of U. S. debt by $33.2 billion in April, the most in data going back to 2005, according to a Ministry of Finance balance-of-payments report.
This post was published at GoldSeek on 12 June 2017.
Beijing’s ability and eagerness, to create and roll from one bubble, whether it is in housing, equities, commodities, cars, bitcoin and so on, into the next has been extensively documented, however, of all recurring bubbles to impact the Chinese economy, housing is by far the most important. The reason for that is that housing provides Chinese society with a dramatic wealth effect, far greater than the stock market, and as Deutsche Bank calculated in March, in 2016 the rise of property prices boosted household wealth in 37 tier 1 and tier 2 cities by CNY 24 trillion, almost twice their total disposable income of RMB12.9 trillion (fig.11).
This post was published at Zero Hedge on Jun 11, 2017.
One month ago, when observing the record low vol coupled with record high stock prices, we reported a stunning statistic: central banks have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record” according to Bank of America. Today BofA’s Michael Hartnett provides an update on this number: he writes that central bank balance sheets have now grown to a record $15.1 trillion, up from $14.6 trillion in late April, and says that “central banks have bought a record $1.5 trillion in assets YTD.”
The latest data means that contrary to previous calculations, central banks are now injecting a record $300 billion in liquidity per month, above the $200 billion which Deutsche Bank recently warned is a “red-line” indicator for risk assets.
This post was published at Zero Hedge on Jun 9, 2017.
David Liew was a quick study. Less than a year into his metals-trading job at Deutsche Bank in Singapore, he joked with a colleague about their latest win.
“Tricks from the … master,” Liew typed in a chat after working with a colleague to move gold futures prices while Liew executed a trade. In the course of a year, Liew and his colleagues used fake orders to try to manipulate prices, an illegal practice called spoofing, more than 50 times.
After pleading guilty to fraud charges last week and agreeing to cooperate, Liew has become a prime government witness for U.S. prosecutors investigating whether traders at the world’s biggest banks conspired to manipulate prices in silver, gold, platinum and palladium. His chats with colleagues — part of an FBI affidavit filed in Chicago and placed under seal — provide a window into the investigation by the Justice Department, which began looking into such activities at a dozen of the biggest global banks two years ago.
The U.S. is also looking beyond precious-metals trading and planning more criminal spoofing charges against Wall Street traders, according to people familiar with the matter. Working with the Commodity Futures Trading Commission, prosecutors in the Justice Department’s criminal division in Washington have been developing spoofing cases across markets since the 2010 adoption of the Dodd-Frank financial law, which made the practice illegal.
This post was published at bloomberg
All you need to know about tomorrow’s general election in the UK, broken down into several parts.
From RanSquawk, Deutsche Bank, Lloyds, and WSJ
Why has a Snap Election been called?
On April 18th PM Theresa May surprised many by calling for a snap election for June 8th . May stated that her reason in doing so was to ‘strengthen her hand in Brexit negotiations’. While at the time that the snap election had being called, the Conservative party had a commanding 20ppt lead in the opinion polls, an opportunity that may not occur again. As such, a result of this size would make it harder for parliament to overthrow any deal May returns with from Brussels, potentially leading to a cleaner Brexit with the risk of a ‘no deal’ lower.
Polling Intentions
UK pollsters were originally predicting a landslide for PM May backin April, subsequently leading many to believe that the risk surrounding the election is relatively low, with the Conservative party seen increasing their current majority by some 75-125 seats. However, a notable shift in the polls has been observed since the release of both the Conservatives and Labour parties’ manifestos, moving in favour of the latter. In turn, this has resulted in some modest pullback from 2017 highs in recent weeks and somewhat elevating the risk regarding the election with some polls narrowing the Conservatives lead to as low as 4ppts. However, given the recent performance of UK pollsters over the 2015 election and EU referendum, they could be taken with a pinch of salt.
This post was published at Zero Hedge on Jun 7, 2017.
I was shocked by Friday’s announcement by the CFTC of an order and simultaneous settlement of manipulation charges in COMEX gold and silver futures. I first saw it in a Zero Hedge article and subsequent articles on Bloomberg and in The Wall Street Journal, but all those accounts were somewhat off target compared to the CFTC announcement itself. This was one of those rare cases where the source announcement was much clearer than the articles describing it. I would ask you to take the time to read and reread the actual announcement from the CFTC, including both the press release itself and the complete order.
In essence, for the first time in history, the Commodity Futures Trading Commission has brought charges against someone for manipulating the gold and silver markets exactly in the manner I have described for decades. This is so astounding on its face, that I hardly know where to begin. In addition, I am writing this less than 24 hours after reading the announcement, so I reserve the right to alter my opinion as time evolves. But there is much to say at this point.
While it is true that the agency brought these charges against a former junior trader of an unnamed foreign bank (said to be Deutsche Bank), the price manipulation occurred during the time of the CFTC’s infamous five-year formal silver investigation. You’ll remember that the original investigation by its Enforcement Division previously concluded that there were no manipulation charges worthy of pursuing. Clearly, something changed the CFTC’s mind. Also, please note that all the alleged price manipulation took place on the cesspool also known as the COMEX and not on any of the foreign exchanges often bandied about.
This post was published at Silverseek
Say what you like about Bilderberg, but they’ve got a sense of humour. The agenda for this year’s secretive summit of the global elite is full of in-jokes. They get big laughs straight off the bat by describing themselves as ‘a diverse group of political leaders and experts’.
They’re trumpeting the diversity of a conference where less than 25% of the participants are female. Which would be a huge step forward, if it were currently 1963.
And as for racial diversity, there are more senior executives of Goldman Sachs at this year’s Bilderberg than there are people of colour.
Perhaps by ‘diverse’ they mean that some of the participants own hedge funds, whereas others own vast industrial conglomerates. Some are on the board of HSBC, others are on the board of BP. Some are lobbyists, others are being lobbied. That sort of thing.
Dafter still is the agenda item: ‘Can globalisation be slowed down?’ You think that the assembled heads of Google, AT&T, Bayer, Airbus, Deutsche Bank, Ryanair, Fiat Chrysler, and the Frankfurt Stock Exchange want to see a brake on globalisation? It’s the air that they breathe.
This post was published at The Guardian
In its latest weekly Economic Indicators Update, Goldman charts the ongoing paradoxical divergence between the Fed’s professed tightening path and what is actually taking place in the US stock market, where it finds that financial conditions are the easiest they have been in two years.
One month ago, Goldman discussed this topic in depth when Jan Hatzius implicitly asked if Yellen has lost control of the market, and warned that in order to normalize fin conditions, the Fed may be forced to follow through with a “policy shock.”
Overnight, Deutsche Bank also focused on the ongoing divergence between Fed intentions and market reality, noting that despite another weak Q1 for US growth and several soft inflation prints in recent months, “the Fed has for the most part stuck to the script for policy over the remainder of the year.” The German bank notes “recent communication has continued to signal that at least one rate hike – the first likely coming at next week’s June FOMC meeting – and a reduction in the balance sheet are still likely by year-end.” It posits one reason why the Fed has remained on message “is that financial conditions have persistently eased despite two rate hikes since December. In fact, our financial conditions index has recently neared the loosest (i.e., most supportive of growth) levels since 2014.”
We consider these questions through the lens of our financial conditions index (FCI). In brief, our high-frequency FCI is a composite of various financial market indicators – the trade-weighted dollar, equities, the 10-year Treasury term premium, VIX, mortgage spread, and corporate bond spread. The variables are transformed when needed (e.g., by taking growth rates), standardized by their pre-crisis mean and standard deviation, and then aggregated into an index using weights based on each variable’s historical relative ability to forecast out-ofsample real GDP growth. The index is constructed such that positive values indicate that financial conditions are supportive of growth, while negative values are consistent with tight financial conditions that exert a drag on growth.
This post was published at Zero Hedge on Jun 6, 2017.
A trader who admitted Thursday to conspiring to manipulate futures contracts in precious metals committed those actions while working at Deutsche Bank AG, according to a person familiar with the matter.
The trader, David Liew, pleaded guilty in federal court in Chicago to a fraud conspiracy over the spoofing of futures contracts for gold, silver, platinum, and palladium futures, according to court papers. Along with spoofing — which is placing orders without the intent of executing them in an attempt to manipulate the price — he acknowledged front-running customers’ orders.
The matter indicates more potential trouble for Deutsche Bank as it attempts to shake the financial and reputational drag of more than a half-dozen settlements in recent years with U.S. authorities over wrongdoing. The documents state that Liew worked on his own but also with at least three other traders at the bank hundreds of times in coordinated spoofing. Liew admitted that he learned spoofing practices from others at Deutsche Bank. Because Liew is cooperating with the investigation, prosecutors examining the metals market could take action against other traders at Deutsche Bank. …
The case against Liew also provides the deepest insights yet into a federal criminal investigation of whether traders at some of the world’s biggest banks conspired to manipulate prices in precious-metals markets. Liew’s cooperation, and allegations that he conspired with a trader at another global bank, suggests that prosecutors continue to press forward with the probe.
This post was published at bloomberg
GOLD: $1279.30 up $3.10
Silver: $17.55 up 6 cent(s)
Closing access prices:
Gold $1279.95
silver: $17.57
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1287.16 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1279.70
PREMIUM FIRST FIX: $7.46
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1288.54
NY GOLD PRICE AT THE EXACT SAME TIME: 1280.30
Premium of Shanghai 2nd fix/NY:$8.24
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est $1280.70
NY PRICING AT THE EXACT SAME TIME: $1281.25
LONDON SECOND GOLD FIX 10 AM: $1279.95
NY PRICING AT THE EXACT SAME TIME. $1280.15
For comex gold:
JUNE/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 57 NOTICE(S) FOR 5700 OZ.
TOTAL NOTICES SO FAR: 1912 FOR 191200 OZ (5.9471 TONNES)
For silver:
For silver: JUNE
229 NOTICES FILED TODAY FOR 1,145,000 OZ/
Total number of notices filed so far this month: 447 for 2,235,000 oz
This post was published at Harvey Organ Blog on June 5, 2017.
After months of “smoking guns” and conspiracy theory dismissals, a Singapore-based Deutsche Bank trader (at the center of fraud allegations) finally confirmed (by admitting guilt) what many have suspected – the biggest banks in the world have conspired to rig precious metals markets.
The Deutsche Bank trader, David Liew, pleaded guilty in federal court in Chicago to conspiring to spoof gold, silver, platinum and palladium futures, according to court papers. Bloomberg notes that spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price.
Following an introductory period that included orientation and training, LIEW was eventually assigned to the metals trading desk (which included base metals and precious metals trading) in approximately December 2009. During the Relevant Period, LIEW was employed by Bank A as a metals trader in the Asia-Pacific region, and his primary duties included precious metals market making and futures trading.
This post was published at Zero Hedge on Jun 2, 2017.
After months of “smoking guns” and conspiracy theory dismissals, a Singapore-based Deutsche Bank trader (at the center of fraud allegations) finally confirmed (by admitting guilt) what many have suspected – the biggest banks in the world have conspired to rig precious metals markets.
The Deutsche Bank trader, David Liew, pleaded guilty in federal court in Chicago to conspiring to spoof gold, silver, platinum and palladium futures, according to court papers. Bloomberg notes that spoofing involves traders placing orders that they never intend to fill, in an attempt to manipulate the price.
Following an introductory period that included orientation and training, LIEW was eventually assigned to the metals trading desk (which included base metals and precious metals trading) in approximately December 2009. During the Relevant Period, LIEW was employed by Bank A as a metals trader in the Asia-Pacific region, and his primary duties included precious metals market making and futures trading.
Between in or around December 2009 and in or around February 2012 (the “Relevant Period”), in the Northern District of Illinois, Eastem Division, and elsewhere, defendant DAVID LIEW did knowingly and intentionally conspire and agree with other precious metals (gold, silver, platinum, and palladium) traders to: (a) knowingly execute, and attempt to execute, a scheme and artifice to defraud, and for obtaining money and property by means of materially false and fraudulent pretenses, representations, and promises, and in furtherance of the scheme and artifice to defraud, knowingly transmit, and cause to be transmitted, in interstate and foreign commerce, by means of wire communications, certain signs, signals and sounds, in violation of Title 18, United States Code, Section 1343, which scheme affected a financial institution; and (b) knowingly engage in trading, practice, and conduct, on and subject to the rules of the Chicago Mercantile Exchange (“CME”), that was, was of the character of, and was commonly known to the trade as, spoofing, that is, bidding or offering with the intent to cancel the bid or offer before execution, by causing to be transmitted to the CME precious metals futures contract orders that LIEW and his coconspirators intended to cancel before execution and not as part of any legitimate, good-faith attempt to execute any part of the orders, in violation of Title 7, United States Code, Sections 6c(a)(5)(C) and 13(a)(2); all in violation of Title 18, United States Code, Section 371.
This post was published at Zero Hedge on Jun 2, 2017.
Over the past three years, gold has found itself in an odd place: while it still remains the ultimate “safety” trade and store of value should everything go to hell following social and monetary collapse, when it comes to “coolness” it has been displaced by various cryptocurrencies, all of which have vastly outperformed the yellow metal in recent months. Meanwhile, central banks continue to pressure the price of gold to avoid a repeat of 2011 when gold nearly broke out above $2,000, putting the fate world’s “reserve currency” increasingly under question. As a result, gold has traded in a rather somnolent fashion, range bound between $1,100 and $1,300 over the last few years, failing to break out on either side.
But is that a fair price for gold?
That is the question Deutsche Bank’s Grant Sporre set out to answer in a special report released overnight, which among other things finds that gold is a “metal” full of paradoxes.
Here is what Deutsche Bank found: as Sporre contends, in order to determine whether gold is cheap or expensive, one must first define what gold actually is.
At its simplest form and yes we are stating the obvious, gold is a shiny yellow metal, relatively scarce and mined from the earth’s crust. Valuing the metal should then be just as easy? Gold is a simple commodity, governed by supply and demand, and valuing it should bear some relationship to the cost of digging it out of the earth? But it turns out; gold’s nature is far more mercurial. Gold can be many things to many different people – a store of value, a financial asset, a medium of exchange, a currency, an insurance policy against disruptive events or global uncertainty and even a ‘barbarous relic*’ according to John Maynard Keynes. (*As with any famous quote, there are suggestions that the term was not originally coined by Keynes himself, nor that he was actually referring to gold, but rather to the constraints of the gold standard at the time).
This post was published at Zero Hedge on Jun 1, 2017.
The collapse in volatility is finally trickling up to the big banks.
Moments ago, JPM CFO Marianne Lake speaking at a Deutsche Bank conference in New York, warned that contrary to expectations for an ongoing rebound in revenue and profits, the bank’s second quarter revenue has been 15% lower from a year ago. And while she said that US economic figures are “solid, not stellar”, she blamed the same thing that has been the nightmare of daytraders everywhere: collapsing volatility.
From the newswires
JPMORGAN 2Q MARKET REVENUE HAS BEEN DOWN ABOUT 15 PERCENT FROM YEAR EARLIER, CFO SAYS JPMORGAN CFO SAYS MARKET REVENUE LOWER ON LOWER VOLATILITY THAN YEAR EARLIER JPMORGAN CFO: LOW RATES, LOW VOLATILITY HAVE LEAD TO LOW CLIENT FLOWS JPMORGAN CFO: DOESN’T SEE REASON 2Q TREND WOULD CHANGE IN JUNE
This post was published at Zero Hedge on May 31, 2017.
