Nasdaq fined $10 Million for poor systems and decision making

Nasdaq OMX Group Inc. (NDAQ) agreed to pay $10 million to settle Securities and Exchange Commission charges that its mishandling of Facebook (FB) Inc.’s initial public offering last year was a violation of securities laws.

Regulators cited the second-largest operator of U.S. equity markets for its “poor systems and decision-making” during the IPO in May that was delayed by a computer malfunction. The settlement is the largest with an American exchange, which enjoy legal protections because of their self-regulating role.

http://www.bloomberg.com/news/2013-05-29/nasdaq-agrees-to-pay-10-million-to-settle-sec-facebook-charges.html

Liberty Reserve founders charged unmasking $6 Billion in illicit funds

Liberty Reserve SA, whose operators are charged with running a scheme that masked more than $6 billion of criminal proceeds, was designed to help users evade scrutiny, U.S. prosecutors said.

The digital currency company, unlike traditional banks or legitimate online payment processors, didn’t require users to validate their identity and allowed accounts to be opened under fictitious names such as “Russia Hackers” and “Hacker Account,” according to prosecutors. Liberty Reserve Joe Bogus Account Said to Reflect Evasion - Bloomberg

Chart: Stocks relative to Copper

Got Wood? A Housing Recovery Built On Faith

With lumber prices limit-down again (and now over 28% from their March highs), we are left assuming that they are building houses with hopium, as opposed to wood, these days...

 [3]

Of course this is not the first time we have mentioned the precipitous limit-down day-after-day collapse in Lumber prices (here [4]) and why it is relevant (here [5]) but the fact that we havs roundtripped to when QE3 was announced is perhaps notable in its own right (while homebuilders are up 50%)

The question now is - who will be the big bad wolf to blow these housing dreams down?

Charts: Bloomberg

http://www.zerohedge.com/print/474506

Liberty Reserve forced offline

Liberty Reserve - a Costa Rican-based digital currency service - has been shut down after the reported arrest of its founder.

Authorities in the Central American country said Arthur Budovsky had been taken into custody in Spain on suspicion of money laundering, following an investigation which also involved the US.

They added that police had raided several of Mr Budovsky's properties and seized his computer servers.

The site went offline on Thursday.

Liberty Reserve had described itself as being the internet's "oldest, safest and most popular payment processor... serving millions all around a world".

It had allowed users to open accounts and transfer money, only requiring them to provide a name, date of birth and an email address.

Cash could be put into the service using a credit card, bank wire, postal money order or other money transfer service. It was then "converted" into one of the firm's own currencies - mirroring either the Euro or US dollar - at which point it could be transferred to another account holder who could then extract the funds.

The service promised that payment transfers were "instantaneous" and it charged a maximum of $2.99 (£1.98) for each transaction. It also offered a private messaging facility which it said was "much more private and secure than email or instant messenger services".

Security expert Bryan Krebs said Liberty Reserve's features had made it a popular among cybercriminals who wanted to move funds and make payments anonymously.

However, others said they had used the service for legitimate means, viewing it as a cheaper alternative to PayPal. They fear they will now lose money still sitting in its accounts.

http://www.bbc.co.uk/news/technology-22680297

Caterpillar North America Sales Collapse Suggests US Economy Back To 2010 Levels

While we have wondered on numerous occasions previously [4]if the collapse in lumber prices is the far more accurate indicator of end demand for housing (as confirmed by the recent collapse in multi-family housing starts [5]), perhaps an even better indicator of trends in housing (and by implication the broader economy) is private sector intermediate end demand, such as Caterpillar North America sales, which unlike government data, are far less subject to political intervention, interpolation, guesswork, seasonal adjustments and otherwise, general manipulation.

And even though we have previously reported [6]on the woes ailing the world's largest seller of bulldozers, excavators and wheel loaders, such focus was primarily targeted in the offshore markets, and especially China (the abysmal European market needs no mention). So maybe the time has come to shift attention to the US, where as Caterpillar just reported, not only are all foreign markets still trending at several impacted levels, but where US machine retail sales just saw the biggest tumble in three years, falling 18% Y/Y: the most since early 2010. What is more disturbing is that CAT equipment is used in far-broader economic activities than merely housing, and likely is a far more accurate indicator of true industrial end-demand than any other number cherry-picked by the government.

 [7]

Whether one can extrapolate general trends in the US economy based on how Caterpiller is doing in its North American market, is an open-ended (rhetorical) question which we leave to readers.

However, maybe a far better question is whether CAT NA sales is the same true proxy for the state of the US economy, as electric consumption - that Achilles heel of Chinese economic data manipulation - is to China.

Compare and contrast the chart above, with the chart below, showing the collapse in Chinese electricity consumption.

 [8]

If the answer is yes, and if indeed both the US and Chinese economies are now operating at a true level not seen since 2010, then just how bad is the rest of the world, if somehow the US continues to be perceived as the cleanest dirty shirt while the world's fastest marginal growing economy is in fact, crashing to earth?

Source: CAT Dealer Statistics [9] [9]

http://www.zerohedge.com/print/474168

CME Halted Silver Trading 4 Times Sunday as Prices Slid 9%

NEW YORK--Exchange operator CME Group Inc. ( CME ) said it halted silver trading four times Sunday evening due to highly volatile markets, a spokesman told Dow Jones Newswires.

The trading halts came as silver futures slumped 9.4% to a low of $20.250 a troy ounce in the first few minutes following the open of electronic trading on the Comex division of the New York Mercantile Exchange.

Silver trading was stopped for two 20 second intervals at 6:07 p.m. EDT and 6:09 p.m. EDT, and two consecutive 20 second halts at 6:09 p.m. and 6:10 p.m., the spokesman said. CME Group owns and operates both the Nymex and the Comex exchanges.

Known as Stop Logic, the trading halts are triggered in highly volatile markets to prevent excessive price movements, the spokesman said.

Silver futures were recently trading down 76.2 cents, or 3.4%, at $21.590 a troy ounce.

CME Halted Silver Trading 4 Times Sunday as Prices Slid 9%

Growing Discontent in the EU

Growing Discontent in the EU

Save Europe: Split the Euro

On the eve of the American Civil War, Abraham Lincoln famously said that “a house divided cannot stand.” Today, the European Union -- committed for decades to the quest for “ever closer union” -- must confront an agonizing truth. Lincoln’s maxim must be inverted. For the EU to survive, the euro must divide.

Between the Treaty of Rome in 1957 and the Single European Act in 1986, Europe’s governments brought about the one great peaceful revolution the continent has seen in its long and troubled history. The creation of a single European currency would build on this remarkable success. It was the next vital step to greater unity and prosperity. The economic crisis in southern Europe shows that the euro system, at least in its current form, has instead become a mortal threat to both.

Greece, Spain, Portugal, Italy and Cyprus are trapped in a recession and cannot restore their competitiveness by devaluing their currencies. The euro area’s northern economies have had to join in repeated bailouts and put aside their notions of prudent finance. A vicious circle of resentment and populism in the south and strengthening nationalism in the north is tearing the union apart.

And the crisis isn’t yet abating. France, Europe’s second-largest economy, is now sinking into a grave economic slump. Like the southern countries, it must restore its competitiveness; like them, as part of the euro system, it lacks the means. Because of its size and because of the guiding role it has played in the EU’s development, France, we’ll argue in Part 2 of this article, will be crucial in breaking the vicious circle.

http://www.bloomberg.com/news/print/2013-05-14/save-europe-split-the-euro.html

NYSE Breaks Trades That Sent Anadarko Petroleum Shares Down 99%

The New York Stock Exchange broke trades in Anadarko Petroluem Corp. executed at or below $87.56 in the final minute of today’s session.

The transactions drove Anadarko down as much as 99 percent to 1 cent in the final second of trading, theoretically wiping out almost its entire $45 billion in market value. The stock recovered and ended the session at $90.03, up 2.5 percent on the day. Trades at $87.56 were 0.3 percent lower than the stock’s closing price yesterday and 2.7 percent below its close today. NYSE Breaks Trades That Sent Anadarko Petroleum Shares Down 99% - Bloomberg

The New York Stock Exchange on Friday canceled rogue Anadarko Petroleum Corp.APC +91.54% stock trades in the last second of the trading day that took the stock to from $90 to one cent in some trades.

Data on FactSet Research also showed erratic moves in the last hour of trading, with at least one bringing the price under $20 a share. But the sudden drop to near zero occurred in the final second of trading, FactSet showed. Shares of Anadarko ended Friday 2.2% higher at $90.03. The company deferred comment to the NYSE.

The stock exchange initiated a “clearly erroneous execution review,” which it defines as “an execution with an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security,” and eventually canceled all trades executed at or below $87.56 a share in that last second.

“The NYSE has determined to cancel all trades in Anadarko Petroleum Corp, executed at or below $87.56 between 15:59:59 and 16:00:00 today,” the exchange said in a statement. It said the decision wasn’t subject to appeal.

Exchanges regularly review such rogue trades and eventually cancel most, if not all, of them. “Broken trades,” however, have started to gather more attention — and concern — after the May 2010 “flash crash” highlighted weaknesses in trading systems stretched to the max by high-frequency and other specialized trading programs.

http://blogs.marketwatch.com/energy-ticker/2013/05/17/nyse-cancels-rogue-anadarko-trades/ 

Risks for Cyprus are "unusually high"

May 17 (Reuters) - The IMF said on Friday that risks for Cyprus were "unusually high" given its weak banking sector and economy and the island's full adoption of an economic austerity plan was imperative.

The island's 17.5 billion euro economy faced risks from the uncertain impact of the crisis in its banking sector and the possibility that its economic contraction could be deeper than projected, the IMF said in a staff report.

"Given substantial risks to the outlook and debt sustainability, there is no room for implementation slippages," it said.

The Fund said the impact of Cyprus's debt crisis on its economy will last longer than for other euro zone members that have had debt problems, with the exception of Greece.

Risks for Cyprus are unusually high, adoption of austerity plan imperative -IMF | Reuters

Is a New World Currency Regime Coming?

EES: Meta Trader 4 adds one click trading functionality

Argentina Peso Gap Between Official And Black Market Rate Hits To 100%, BMWs Become Inflation Hedge

Despite efforts by the government to quell the black-market (or blue-dollar) for Argentina's foreign exchange, the unofficial rate surged yesterday to 10.45 Pesos per USD. This is now double the official rate of 5.22 Pesos per USD. This implicit 50% devaluation comes amid the growing realization that there is no savings option to maintain the purchasing power of the peso in the context of sustained high inflation (no matter what the officials say) and negative real interest rates. The government is not amused, suggesting the devaluation won't happen (just as Mexico did right up until the day before they devalued), "those who seek to make money at the expense of devaluations must wait for another government." Perhaps the government should be careful with their threats? And of course, this could never happen in the US or Japan, right?

And in the meantime, looking to hedge their inflation risk while taking advantage of the massive FX rate differential, the local population has found a new and original inflation hedge: BMWs.

Argentines are buying more BMWs, Jaguars and other luxury cars as a store of value as inflation decimates their deposits and pummels the nation’s bonds.

Purchases of cars from Germany’s Bayerische Motoren Werke AG (BMW) and Jaguar Land Rover Automotive Plc, owned by India’s Tata Motors Ltd. (TTMT), jumped the most in April among brands sold in Argentina. The sales were part of a 30 percent surge in car sales from a year earlier that was the biggest increase in 20 months, according to the Argentine Car Producers Association. While used-car prices rose in line with inflation last year, or about 25 percent, peso bonds tied to consumer prices fell 13 percent. The drop was the biggest in emerging markets.

Car sales in Argentina increased by the most in almost two years last month as a ban on buying dollars made Argentines turn to vehicles to protect savings against the fastest inflation in the Western Hemisphere after Venezuela. Luxury models are becoming more attractive because they are imported at the official dollar rate, said Gonzalo Dalmasso, vehicle industry analyst at Buenos Aires research company Abeceb.com. Argentines with savings in dollars are able to purchase cars at half the cost by trading in the unofficial currency market.

“I’m seeing a lot of people buying high-end cars for the first time, trading Minis for middle of the market models,” Ignacio Monteserin, a salesman at BMW’s Mini Cooper dealership in Buenos Aires’s Libertador Avenue, said. “It’s become very convenient to own luxury cars in general because of the big gap in the exchange rates and you get to have a quality good that will preserve the value of your money with time.”

http://www.zerohedge.com/news/2013-05-14/argentina-peso-gap-between-official-and-black-market-rate-hits-100

EU to start talks with Switzerland on bank secrecy

BRUSSELS, May 14 (Reuters) - European Union finance ministers gave the green light on Tuesday to start talks with Switzerland, Liechtenstein and three other countries on new rules for swapping bank account information, officials said.
The talks had long been opposed by EU members Luxembourg and Austria, which were seeking to defend their own bank secrecy rules, but on Tuesday their finance ministers dropped those objections.
"Ministers have adopted a negotiating mandate on (the) savings tax with Switzerland, Liechtenstein, Andorra, Monaco and San Marino," said one EU official, with knowledge of the talks. The basis of the talks with Switzerland will be the so-called EU savings tax directive.
By giving the European Commission the go-ahead to negotiate with Switzerland, EU finance ministers hope to push for the same rules to be applied to Switzerland as would be applicable to Austria and the wider European Union.UPDATE 1-EU to start talks with Switzerland on bank secrecy | Reuters