DOJ confirms criminal investigation of Forex manipulation by banks

Oct 29 (Reuters) - The U.S. Justice Department is investigating the manipulation of foreign exchange rates, a top federal prosecutor said on Tuesday, in the first public acknowledgement of such a probe in the United States.

Criminal and antitrust authorities have an "active, ongoing investigation" into the possible manipulation, Mythili Raman, the acting head of the department's criminal division, said.

The confirmation comes on the same day Dutch bank Rabobank agreed to pay more than $1 billion to resolve allegations that it manipulated Libor and other benchmark rates. And other European banks that face related probes disclosed they set aside major sums to cover legal costs.

 http://www.reuters.com/article/2013/10/29/forex-probe-idUSL1N0IJ19820131029?feedType=RSS&feedName=financialsSector

 Deutsche Bank confirmed it was cooperating with regulators probing the foreign exchange market as investigators across the globe look into the multi-trillion industry that sets foreign currency rates.

 http://www.reuters.com/article/2013/10/29/forex-probe-deutschebank-idUSL5N0IJ3PK20131029?feedType=RSS&feedName=financialsSector

Banks fined over Libor scandal

Dutch bank Rabobank says it has agreed to pay fines of 774m euros ($1bn; £662m) imposed by US, UK and Dutch regulators over the Libor interest rate-fixing scandal.

http://www.bbc.co.uk/news/business-24730242

Deutsche Bank AG (DBK), Europe’s largest investment bank by revenue, said third-quarter profit slid 94 percent after it set aside 1.2 billion euros ($1.65 billion) to cover potential legal costs and income from debt trading fell.
Net income in the three months through September dropped to 41 million euros from 747 million euros in the year-earlier period, the Frankfurt-based bank said in a statement on its website today. That missed the 430 million-euro average estimate of 12 analysts surveyed by Bloomberg.

http://www.bloomberg.com/news/2013-10-29/deutsche-bank-profit-falls-94-as-trading-revenue-slumps.html

Nasdaq indexes resume trading

The Nasdaq was hit with another market glitch on Tuesday, as index data froze just before lunchtime and remained frozen for nearly an hour.
In a statement at 12:15 p.m. ET, Nasdaq OMX Group said it was looking into an issue with index data feeds. Stocks on Nasdaq were trading normally, however.
The indexes resumed normal quotation just after 12:37 p.m. ET, Nasdaq said.
Before the freeze, the Composite index last stood at 3,940.02. Once it resumed, it rose 3 points to 3,943.
(Read more: Nasdaq takes responsibility for August 'flash freeze')
Nasdaq also reported at one point that some options had halted trading because of a lack of index data. That trading was set to resume starting at 12:55 p.m. ET.

http://www.cnbc.com/id/101151953

Former PFG customers approached with Phishing attack

It was extremely disconcerting for NFA to learn earlier this month that fraudsters were soliciting customers and creditors of Peregrine Financial Group (PFG) who currently are awaiting the resolution of their claims by the U.S. Bankruptcy Court.

Former PFG customers called NFA to inquire about the legitimacy of an email that was sent on October 4. The email requested personal information from the recipients, and insinuated that if this information was provided, they would receive $250,000.

Upon learning of the email, NFA immediately worked with the PFG bankruptcy trustee to verify that it was a fraud, and sent an announcement to PFG's customers to notify them of the email's illegitimacy. NFA also posted a notice from the trustee about the deceptive email on the homepage of its website to warn visitors and Members of the fraud.

This type of online scam is known as "spear phishing"—where fraudsters target specific groups of people who share a commonality and trick them into divulging their personal information via email. Perpetrators typically get hold of some form of inside information to deceive the list of recipients, like the list of PFG customers, and then send a legitimate-looking message, typically citing urgent and plausible-sounding explanations as to why they need your personal data.

Once the fraudsters have your personal information, they can access your bank accounts, credit cards and even create new identities.

The Federal Bureau of Investigation suggests keeping the following points in mind to avoid becoming a spear phishing victim:

• Most companies, banks, agencies, etc. don't request personal information via email. If you're ever in doubt about the veracity of an email, call the sender. However, don't use the phone number contained in the email—that's typically also phony.
• Use a phishing filter; many current web browsers have them built in or offer them as plug-ins
• Never follow a link to a website from an email—always enter the URL manually
• Don't be fooled by the latest scams

Additionally, October is National Cyber Security Awareness month for the National Consumers League, the Department of Homeland Security and the National Cyber Security Alliance. According to their list of the top 10 reported scams of 2012, phishing ranked No. 4—the second-most common form of online fraud. The group suggests people take note of the following online safety habits to avoid falling prey to scammers.

You likely have heard the famous adage, "there is no honor among thieves." The venerable Sir John Falstaff bemoaned this very point in "Henry IV, Part 1." So please beware when you receive seemingly legitimate emails that request any personal information.

http://www.nfa.futures.org/NFA-investor-information/investor-newsletter/index.HTML#Phishing

EES: What is Hybrid Trading

Get EES Portfolio of EAs as a Premium Member of Global Intel Hub for $100/month..Become a Premium member of Global Intel Hub today!

How to Protect Your Money When the U.S. Debt Bill Comes Due

You don’t want to be around when that bill comes due!
Well, as a quasi-government organization with the authority to suck down your hard-earned money through the act of inflation, the U.S. Federal Reserve is “that guy,” and you could be the responsible one left with its bill.
Did you know that the Fed has been inflating the supply of dollars at a stunning 33% annual rate over the past five years? Or that it plans to continue inflating the supply of dollars at least into 2014 and has kept open the possibility that it will do so indefinitely?
When the Fed’s party is over, who do you think will be left with the bill?
Not the Wall Street bankers! We’ve learned that lesson already.
It’s Main Street investors like you who get the bill.
But you can protect yourself -- though your window of safety is closing rapidly.
Robert Prechter, market forecaster and leading opponent of the Federal Reserve, has just released a report that that will help you understand the risks of deflation that most mainstream sources cannot see because they are blinded by decades of inflationary Fed policy.
At just 8 pages, "How to Protect Your Money When the U.S. Debt Bill Comes Due" is a quick read -- well worth any independent investor’s time.
Follow this link to download your free deflation-protection report now >>
Report Excerpt:
The Federal Reserve's efforts to rescue the economy have been historically aggressive, starting with the initial round of quantitative easing in 2008 and continuing through 2013.
The central bank's assets have skyrocketed due to the Fed's bond purchases, which you can see clearly in this eye-opening report that Robert Prechter presented to the Market Technicians Association and his Elliott Wave Theorist subscribers.

The main reason investors are expecting runaway inflation is illustrated in [the chart above], which shows the value of assets held at the Federal Reserve. The Fed has been inflating the supply of dollars at a stunning 33% annual rate over the past five years. ... [N]o wonder investors expect inflation and have aggressively positioned for it.
Look just about anywhere else, however, and you will see subtle evidence of deflationary pressures. Given knowledge only of the Fed’s inflating, many people would expect the Producer and Consumer Price Indexes to be rising at a rate of 33% annually. But, as you can see in Figure 2, the PPI’s annual rate of change is stuck at zero and the CPI has been rising at only a 2% rate.

In an interview at the recent San Francisco Money Show with financial author Jim Mosquera, EWI's Chief Market Analyst Steven Hochberg explains why the Fed has gotten so little in return from its stimulus programs. Here's a brief excerpt from the interview published on Aug. 18 on the Examiner.com website.
Question: The Fed wizards have been pushing buttons and pulling levers rather furiously since 2008. The discount rate is rock bottom, and the Fed balance sheet has swelled to the tune of trillions. What button is left for them to push?
Steve Hochberg: That is a really interesting question the way you phrased it because the fact that they have been pushing buttons and have gotten very little in return tells us … that the Fed is not in control. The Fed does not control the markets, and it doesn’t control the economy. Both are bigger than the Fed.
You say they have been doing this furiously. They have been doing this historically! Yet if you look at inflationary measures, such as the Personal Consumption Expenditures, which is the Fed's favorite way of measuring inflation, it's bumping along at 1%.
We have had historic fiscal and monetary stimulus and yet no inflation. Why? The forces of deflation are overwhelming the forces of inflation. The Fed dropped interest rates in 2000 to 2002 and that did not stop the Nasdaq from dropping 78%. The Fed dropped rates from 2007 to 2009 and it did not stop the Dow from going down 59%. There is historical evidence that the Fed does not control the markets but that the markets control the Fed.
As the next leg of the bear market starts unfolding, they are going to do more unconventional things. Things will accelerate to the downside when the public realizes the central banks aren't in control.
For a limited time, you can read Robert Prechter’s 6-page report to prepare for what EWI sees ahead. In this report you'll learn why the risk of deflation is mounting and how you can see it coming in the prices of gold, gas, real estate, crude oil and other markets.

http://www.marketoracle.co.uk/Article42863.html

The Distinction Between Human And Algo-Trading

Submitted by The World Complex
One more time--the distinction between human- and algo-trading
The markets do not act like they once did. The trading in certain stocks is operating on time-scales so small that they cannot be in response to human thought. Not only are certain individuals able to access key information before others and so respond to news releases faster than the speed of light, but certain entities have free range to post and cancel orders on a microsecond basis, and queue-jump by shaving off (or adding on) tiny fractions of a penny from their orders.
Stocks traded by humans tend to make significant moves on a timescale of minutes to days. Even when there is a news event that radically changes the apparent value of a company, if there are only humans in the market, the move takes time to occur. Below are a couple of charts for Detour Gold (I currently have no position in this stock)

Normally, when looked at on a ms timescale, the graph is not really distinguishable from a straight line.

The little squares occur because all the price-changes I saw in the course of the day were a penny. On this scale it scarcely matters which axis is the current price and which is the lagged-price.
Once the algos get involved, the millisecond phase space plots get a lot more interesting. Some of them are works of art! Below, some plots for Century Casinos (I have no position in this one, either). Data here.

Algos playing tug-o-war.

Nice to look at, but maybe not so nice to trade against.
Remember the adage about playing poker: If you don't know who the sucker is 

http://www.zerohedge.com/news/2013-10-26/distinction-between-human-and-algo-trading

Obamacare Nightmare

 As for Obamacare, the hits just keep on coming:

“I feel like we’re sort of back in the era of control-alt-delete where we’re trying to figure out the different tricks that facilitate people’s enrollment,” said Jennifer Ng’andu, director of health policy for the National Council of La Raza, a Hispanic advocacy group that has been helping to publicize the Affordable Care Act.

The administration for the first time on Friday said it expected the health exchange website serving 36 states should be in good shape in about a month. “We’re confident by the end of November, HealthCare.gov will be smooth for a vast majority of users,” said Jeff Zients, the former White House aide and management expert brought into oversee the repair drive.

But for now, with HealthCare.gov crippled by design flaws and a morass of messy code, the president and health officials have been using a variety of posts and announcements to urge people to try low-tech ways of enrolling. Basically they are saying while the front door is stuck, try the side.

This is where it gets really funny:

Of course, reading an 800 number on national TV — as the president did in the Rose Garden the other day — created a flood of callers who couldn’t get through. That led to another wave of frustration and Obamacare punch lines. But Health and Human Services Secretary Kathleen Sebelius tweeted on Thursday that HHS bulked up the call center to include more than 10,000 trained representatives.

POLITICO reporters who got recorded announcements earlier in the week — sometimes directing them to try HealthCare.gov — can now get through to the call center. Once they connect, staffers like “Justin” try to get people’s information into the online system.

But “Justin” doesn’t have a fast track. Asked if the website works better for him than the general public, he responded: “No.”

“The site does not work for us either,” he said.

Raucous laughter aside, there really are no words to describe the gross incompetence that has been revealed, even if many knew long ago that when the government really sets its mind to it, it can screw something up better than the entire private sector possibly ever could.
And since there are no words, back to the raucous laughter:

Sometime, the call center staff can get in and process the application while the caller waits. If not, the staff can take the information, put it in a PDF and finish later. Even then, it’s just the application — once that’s processed, the customer still has to call back or get online to select the specific health plan they want and enroll.

People do not have to stay on hold indefinitely — a good thing because Sebelius said earlier in the week that the center has handled about 1.6 million calls.

It’s similar in the world of paper applications.
Even before the tech problems, the government had a private contractor, Serco, to handle paper applications, which were expected to come primarily from less Web-savvy people. On Thursday, the company’s program director John Lau told the House Energy and Commerce Committee that it had completed between 3,000 and 4,000 applications.

Lau said the company does have the capacity to handle more than what’s expected — a paper surge. But he also said the customer’s data has to be entered into the Web portal and hinted there could be problems if volume dramatically increases. Lau didn’t say how long that takes, but a customer service representative said it would take about three weeks to complete the enrollment process.

“Our challenges have included coping with the performance of the portal as that is our means of entering data just as it is for the consumer,” Lau said, referring to HealthCare.gov. “With the relatively low volumes of applications we have received thus far, this has not been a problem for us.”

But Serco will be flooded with paper applications if the website glitches persist, predicted John Gorman, founder of the Gorman Health Group, which has advised some of the insurance exchanges. “Serco is going to be swimming in paper within the next two to three weeks,” he said.

http://www.zerohedge.com/news/2013-10-26/obamacares-website-debacles-migrate-paper-phone-applications

Michelle Obama’s Princeton classmate is executive at company that built Obamacare website

Posted By Patrick Howley On 4:57 PM 10/25/2013 In | No Comments

First Lady Michelle Obama’s Princeton classmate is a top executive at the company that earned the contract to build the failed Obamacare website.
Toni Townes-Whitley, Princeton class of ’85, is senior vice president at CGI Federal, which earned the no-bid contract to build the $678 million Obamacare enrollment website at Healthcare.gov. CGI Federal is the U.S. arm of a Canadian company.
Townes-Whitley and her Princeton classmate Michelle Obama are both members of the Association of Black Princeton Alumni.
Toni Townes ’85 is a onetime policy analyst with the General Accounting Office and previously served in the Peace Corps in Gabon, West Africa. Her decision to return to work, as an African-American woman, after six years of raising kids was applauded by a Princeton alumni publication in 1998
George Schindler, the president for U.S. and Canada of the Canadian-based CGI Group, CGI Federal’s parent company, became an Obama 2012 campaign donor after his company gained the Obamacare website contract.
As reported by the Washington Examiner in early October, the Department of Health and Human Services reviewed only CGI’s bid for the Obamacare account. CGI was one of 16 companies qualified under the Bush administration to provide certain tech services to the federal government. A senior vice president for the company testified this week before The House Committee on Energy and Commerce that four companies submitted bids, but did not name those companies or explain why only CGI’s bid was considered.
On the government end, construction of the disastrous Healthcare.gov website was overseen by the Centers for Medicare and Medicaid Services (CMS), a division of longtime failed website-builder Kathleen Sebelius’ Department of Health and Human Services.
Update: The Daily Caller repeatedly contacted CGI Federal for comment. After publication of this article, the company responded that there would be “nothing coming out of CGI for the record or otherwise today.” The company did however insist that The Daily Caller include a reference to vice president Cheryl Campbell’s House testimony. This has been included as a courtesy to the company.
Follow Patrick on Twitter

http://dailycaller.com/2013/10/25/michelle-obamas-princeton-classmate-is-executive-at-company-that-built-obamacare-website/?print=1

NSA Website Hacked Ahead Of "Stop Watching Us" Rally

Update: As of 6:30 pm Eastern, the NSA's website has been down for 5 hours.
Following our earlier comments on the vulnerabilities of the Obamacare websites, the fact that the United States National Security Agency suddenly went offline Friday is still surprising. As RT reports [11], NSA.gov has been unavailable globally as of late Friday afternoon, and Twitter accounts belonging to people loosely affiliated with the Anonymous hacktivism movement have suggested they are responsible.


It is perhaps not entirely coincidental that there is a major “Stop Watching Us” rally scheduled for Saturday [12] in Washington, DC.
[12]

where the following letter was sent to Congress:

Dear Members of Congress,
We write to express our concern about recent reports published in the Guardian and the Washington Post, and acknowledged by the Obama Administration, which reveal secret spying by the National Security Agency (NSA) on phone records and Internet activity of people in the United States.
The Washington Post and the Guardian recently published reports based on information provided by an intelligence contractor showing how the NSA and the FBI are gaining broad access to data collected by nine of the leading U.S. Internet companies and sharing this information with foreign governments. As reported, the U.S. government is extracting audio, video, photographs, e-mails, documents, and connection logs that enable analysts to track a person's movements and contacts over time. As a result, the contents of communications of people both abroad and in the U.S. can be swept in without any suspicion of crime or association with a terrorist organization.
Leaked reports also published by the Guardian and confirmed by the Administration reveal that the NSA is also abusing a controversial section of the PATRIOT Act to collect the call records of millions of Verizon customers. The data collected by the NSA includes every call made, the time of the call, the duration of the call, and other "identifying information" for millions of Verizon customers, including entirely domestic calls, regardless of whether those customers have ever been suspected of a crime. The Wall Street Journal has reported that other major carriers, including AT&T and Sprint, are subject to similar secret orders.
This type of blanket data collection by the government strikes at bedrock American values of freedom and privacy. This dragnet surveillance violates the First and Fourth Amendments of the U.S. Constitution, which protect citizens' right to speak and associate anonymously, guard against unreasonable searches and seizures, and protect their right to privacy.
We are calling on Congress to take immediate action to halt this surveillance and provide a full public accounting of the NSA's and the FBI's data collection programs. We call on Congress to immediately and publicly:

1. Enact reform this Congress to Section 215 of the USA PATRIOT Act, the state secrets privilege, and the FISA Amendments Act to make clear that blanket surveillance of the Internet activity and phone records of any person residing in the U.S. is prohibited by law and that violations can be reviewed in adversarial proceedings before a public court;
2. Create a special committee to investigate, report, and reveal to the public the extent of this domestic spying. This committee should create specific recommendations for legal and regulatory reform to end unconstitutional surveillance;
3. Hold accountable those public officials who are found to be responsible for this unconstitutional surveillance.

Thank you for your attention to this matter.

Via RT, [11]
Twitter users @AnonymousOwn3r and @TruthIzSexy both were quick to comment on the matter, and implied that a distributed denial-of-service attack, or DDoS, may have been waged as an act of protest against the NSA

 http://www.zerohedge.com/print/480628




Allegations that those users participated in the DDoS — a method of over-loading a website with too much traffic — are currently unverified, and @AnonymousOwn3r has previously taken credit for downing websites in a similar fashion, although those claims have been largest contested.


The question, of course, is whether this is retalization from Europe (or Brazil) for the 'denied' allegations over spying?

The cost of the financial crisis hits Americans harder than banks

What’s the real cost of a financial crisis? Apparently, it depends on who’s paying.
If you’re Jamie Dimon, the CEO of JP Morgan Chase, or Brian Moynihan, the CEO of Bank of America, it’s a price your $2tn bank can easily afford to make trouble go away.
If you’re a homeowner, it’s a price that has rendered your past five years a struggle of financial anxiety. If you’re an American, it’s a price that has resulted in a recession and recovery characterized by historically high poverty – with 42 million Americans on food stamps – and historically low rates of Americans working, with only 63% of the population gainfully employed.
As you rise up the financial ladder, the consequences of the financial crisis are increasingly arbitrary. The Department of Justice is looking for scalps – finally, after five years of drowsy hibernation – but some banks are whining about merely getting haircuts.
This week, two mortgage-crisis settlements hit the news: one potential and one official. The idea of a $13bn rumored fine to JP Morgan and an $848m fine to Bank of America would indicate two things.
The first conclusion is that the Justice Department, largely led by US Attorney for the Southern District Preet Bharara, is finally slapping Wall Street for the things that went wrong five years ago. Fine, let’s go with that.
The second conclusion, to any outside observer, is that JP Morgan was guiltier than Bank of America of mortgage abuses because it’s paying a bigger fine. Nope. Whether JP Morgan, Bank of America or Citigroup, guilt in the mortgage crisis was more or less evenly distributed across Wall Street. It’s only the fines that aren’t.
JP Morgan is paying more largely because it can afford to, and its rivals can’t. In the context of JP Morgan’s $21bn of income in 2012, $13bn is manageable. JP Morgan, sitting on over $2tn of assets, can easily take the pain, and Dimon still received an $11.5m pay package last year.
Bank of America, which has already shelled out $40bn in clean-up costs for its acquisition of Countrywide, made a paltry $4.2bn in net income last year: one-fifth of the income of JP Morgan. Bank of America had, at the start of the year, only $1.5bn socked away to pay for mortgage settlements. These are numbers so small that JP Morgan would find them laughable.
Bank of America would find its back broken by the kind of fine facing JP Morgan; it would need a bailout to afford a $13bn settlement. So would Citigroup, which made $7.5bn in 2012 – a third of JP Morgan’s haul – and only paid back its 2008 bailout this year; Citi is still such a work in progress that the Federal Reserve still won’t allow the bank to give its investors dividends.
There’s another difference between the two fines. Bank of America knows its screwed up by doubling down on the mortgage business. In 2011, Moynihan sounded like he was beating himself up daily: "Obviously, there aren't many days when I get up and think positively about the Countrywide transaction."
Dimon, on the other hand, has been in an imperious state of denial.
There has also been a totally erroneous whisper campaign, backing Dimon, that JP Morgan deserves no blame for the mortgage troubles, which came primarily from stepchildren Washington Mutual and Bear Stearns. “We’re doing a good job,” Dimon told employees this month after the bank reported its first loss since 2004, due to its legal settlement costs.
Dimon’s charisma detracts from what really happened. To be clear, JP Morgan and Dimon knew exactly what they were getting into back in 2008 when JP Morgan bought both Bear Stearns and Washington Mutual with government help. These were sweetheart deals that JP Morgan bragged about.
The government allowed JP Morgan three weeks advance notice of WaMu’s demise and allowed JP Morgan to shave $20bn in liabilities off the bank. JP Morgan estimated it might have to take as much as $54bn of losses on mortgages, which it managed to avoid.
Executives also beat their chests to investors at the time of the acquisition:

We had a lot of detail and a lot of very direct conversations. We had probably 75 people at JP Morgan Chase involved in the process, both going through data as well as talking to members of the company,” said one executive. “And it was not a rushed analysis.” Another: “I’ll just tell you it was probably one of the most thorough things we’ve ever done.”

“We bid to win because we wanted to win for a lot of obvious reasons,” Dimon told investors about buying WaMu. “We’re pretty sure we did the right thing for the shareholders.”
That hardly sounds like a bank shoved into a bad deal, does it?
About Bear Stearns, for which JP Morgan predicted $33bn of potential exposure, a former JP Morgan executive was similarly proud in 2008: “we were very pleasantly surprised to see that it was a very well run, tight operation with good risk controls and a risk discipline that was very similar to our own,” he said. Another added about the Bear Stearns mortgage business: “Needless to say, a very, very good strong business and one that in the long run will be very additive ... it’s a business that we are looking to pick up market share in.”
That’s a pretty far cry from JP Morgan’s tune these days, about how it was victimized by two bad banks that were forced on it.That's not surprising. Most banks could sell ice to Eskimos, and they're good at marketing lines that don't stand up to scrutiny.
So here JP Morgan bought two banks that could have had over $80bn in losses together, and did not. JP Morgan is likely to pay $13bn, and it will continue to sail on with its reputation and, eventually its profits, totally untouched.
What’s the cost to you?
If you own a home, the cost of the financial crisis could have been foreclosure, which swept up 4.4m homes. Or the cost could have been standing back and watching your home value go “underwater,” its value sinking below the mortgage you were paying. That was the cost for 12 million people in 2011. Were all these people irresponsible borrowers who splashed out on real estate in an HGTV-impelled frenzy of status-seeking capitalism? No. The consequences of the financial crisis were largely arbitrary to most Americans. It was not only house-flippers who lost their jobs, or mortgage brokers who found themselves deep in debt. Everyone shared the pain with no real rhyme or reason.
We like to believe that history has a karmic arc, that wrongdoing faces punishment equal to the extent of the crime, but recent history shows us that’s not how things work. We can collect only pennies on financial crimes that cost the country trillions in lost growth, productivity and jobs.

http://www.theguardian.com/commentisfree/2013/oct/24/cost-of-financial-crisis-jpmorgan/print

China is Now the World’s Largest Importer of Oil—What Next?

Last month the world witnessed a paradigm shift: China surpassed the United States as the world’s largest consumer of foreign oil, importing 6.3 million barrels per day compared to the United States’ 6.24 million. This trend is likely to continue and this gap is likely to grow, according to the EIA’s October short-term energy outlook. Wood Mackenzie, a leading global energy consultancy, echoed this prediction, estimating Chinese oil imports will rise to 9.2 million barrels per day (70% of total demand) by 2020.

This trend has been driven by a combination of factors. Booming American oil production, slow post-recovery growth, and increasing vehicle efficiency have all served to reduce crude imports. In China, however, continued economic growth has brought with it a growing middle class eager to take to the road. While the automobile market had cooled earlier this year, September saw sales rise by 21%—a trend that is putting increasing strain on China’s infrastructure and air quality in addition to oil demand.

Some of the world’s largest traffic jams are now commonplace in major Chinese cities, and air quality issues have pushed authorities to pursue synthetic natural gas technology to offset the need for coal-fired electricity. Increasing oil consumption will only serve to exacerbate these issues.

http://oilprice.com/Energy/Crude-Oil/China-is-Now-the-Worlds-Largest-Importer-of-OilWhat-Next.html

CHART OF THE DAY Still think its "all about the fundamentals"...?

All of these things are not like the other... except one!

In all the following charts, the green line is the S&P 500...

Crude Oil is diverging...


High Yield Credit is diverging...


US Macro Fundamentals are diverging...


10Y Yields are diverging...


The USD is diverging...


Earnings expectations are diverging...

and Current earnings are diverging...


Current US GDP is diverging...


US GDP expectations are diverging...


and Dr. Copper is diverging...


But... there is one "asset" that is not diverging from the S&P 500...


Still think its "all about the fundamentals"...?

12 Shocking Clues For What America Will Look Like When The Next Great Economic Crisis Strikes

Submitted by Michael Snyder via The Economic Collapse blog,
The collapse of American society is accelerating.  For the moment, much of our social decay is being masked by the tremendous level of affluence that we are experiencing in aggregate.  It has been reported that 4 out of every 5 adults in the United States "struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives", but in general Americans still enjoy a debt-fueled standard of living that is far beyond what most of the rest of the world enjoys.  When that debt-fueled standard of living permanently disappears, it is going to unleash chaos unlike anything that America has ever seen before.
Right now, economic conditions in this country are not anywhere close to where they were before 2008, but this is just the beginning.  We are in the midst of an ongoing economic collapse which is going to get much, much worse in the years ahead.  When the next major wave of the economic crisis strikes, millions of people are going to become extremely desperate.  And desperate people do desperate things.  We are already starting to see this play out all over the nation, but this is only a preview of coming attractions.  What we are going to witness in future years is going to be almost too horrible for words.
So how can I be so sure that this is going to happen?  After all, the United States didn't descend into complete and utter chaos during the Great Depression of the 1930s.  Wouldn't an economic depression unfold in a similar manner today?
Unfortunately, a lot has changed since then.  A lot more Americans were self-sufficient back in those days, and the truth is that the character of our nation has been rotting and decaying for decades.  In a previous article, I described it this way...

"We are simply not the same country that we used to be.  Americans are proud, selfish, greedy, arrogant, ungrateful, treacherous and completely addicted to entertainment and pleasure.  Our country is literally falling apart all around us, but most Americans are so plugged into entertainment that they can't even be bothered to notice what is happening."

Just last weekend, there were "mini-riots" in several U.S. states when "technical issues" caused the food stamp system to go haywire for a few hours.
What would have happened if there had been an extended outage or if the political crisis in D.C. had caused food stamps to be completely cut off at some point in November?
Let's be thankful that we did not have to find out.
But even though major food stamps riots may have been averted (at least for now), there are a whole host of other signs that America is going to become a very unstable place during the next major economic downturn.  The following are 12 shocking clues about what America will look like when the next great economic crisis strikes...
#1 Would you continue to work as a bus driver if you were stabbed while driving or if a passenger poured urine all over you?  Just check out what has been going on in Detroit lately...

After two drivers were recently stabbed and another had urine poured on her by an angry rider, union officials representing bus drivers for the city of Detroit are set to protest in front of city hall at 10 a.m. on Monday.

#2 We are starting to see a lot of "group crimes" happen all over America.  For example, just the other day in Brooklyn, New York a gang of 10 young thugs dragged a young couple out of their vehicle and brutally beat them...

Ronald Russo was dragged to the ground. Then he was punched and kicked in the head. He felt more blows all over his body, investigators said. He suffered a fractured nose, a broken septum, a blood clot and abrasions to his shoulder. He was treated and released from Beth Israel Medical Center.

In the midst of the attack, there was a steady chorus of epithets. “White motherf-----!” screamed the attackers, who ranged in age from 12 to 18.

Alanna Russo, 30, was calling 911 when the 12-year-old girl pulled the woman’s hair and threw her to the ground. The victim’s head slammed into the concrete. She suffered a black eye, bleeding and difficulty breathing, prosecutors said, but she refused medical attention.

#3 A lot of people assume that they are perfectly safe inside their own vehicles but that is not the case at all.  A story in the New York Post about a gang of bikers that ruthlessly hunted down a young family that was driving an SUV made national headlines a few weeks ago...

A gang of bikers terrorized a dad driving with his wife and baby daughter on the West Side Highway — chasing after their SUV and then dragging the man out and beating him to a pulp in front of his horrified family, authorities said.

When the bikers caught up with this family they showed the father of the baby daughter absolutely no mercy...

One biker can be seen on the video ripping off his helmet and using it to bash in Lien’s driver’s-side window.

The crew pummeled Lien on the pavement in front of his wife, Rosalyn Ng, and their 2-year-old daughter, police sources said.

Lien, who also was slashed during the melee, was rushed to Columbia University Medical Center. He needed stitches to his face and chest and had two black eyes.

#4 We are living at a time when hearts are becoming very cold.  Some Americans are becoming so desperate for money that they will do almost anything to get it.  In fact, one couple in Tennessee has actually been charged with selling their four daughters for use in sex films...

An East Tennessee couple is facing a list of charges, accused of selling their children to take part in sex films.

Connie Sue McCall, 40, and her husband, Ronnie Lee McCall, 61, of Johnson City have been charged by a federal grand jury.

Paperwork shows the couple was selling their four daughters.

Prosecutors say the four girls were between the ages of 5 and 16 when this happened.

Could you imagine such a thing happening in your neighborhood?
Perhaps it is happening, but you just don't know that it is going on.
#5 And it is not only older people that are having their hearts grow cold.  It is happening to young people too.  Last week, a 17-year-old girl was caught carrying around a dead baby (which she probably gave birth to) in a shopping bag in a Victoria's Secret store right in the heart of Manhattan...

The dead baby found in the teen’s shopping bag at a Victoria’s Secret store in Manhattan was born alive and then asphyxiated, police said Friday, as the macabre discovery turned toward a possible homicide case.

Police believe 17-year-old Tiana Rodriguez gave birth to the baby at a friend’s house and that the infant was later asphyxiated. However, the city medical examiner’s office said an autopsy was inconclusive, and more tests were needed.

Who does something like that?

#6 Sadly, a lot of mothers appear to be losing the natural affection that they should have for their children.  Just check out another incident that happened in New York City recently...

So much for no child left behind.

A stroller-toting mom who used her 1-year-old son as cover during a massive candy shoplifting spree at a downtown Duane Reade used the tot's pram as a battering ram when workers confronted her — and then ran away without the baby, the NYPD said.

#7 One of the clearest signs that American society is decaying is the fact that groups of kids are banding together and agreeing to commit absolutely horrible crimes.  We have seen this with the "flash mob" robberies that are plaguing many cities, but what is even worse is when groups of kids band together to commit violent acts.  In Pennsylvania recently, a group of teens cheered on attackers as they beat up a 15-year-old girl...

Speaking exclusively to CBS 3, a 15-year-old high school student, whose identity we are concealing, described a terrifying attack by a gang of at least nine teenage boys as she was leaving an Interboro High School football game Monday night.

The teenage victim described first being taunted by the attackers, who followed her down a neighborhood street, cursing and spitting at her, before she was repeatedly kicked and punched, suffering at least one blow to her head.

The attackers even tried to throw her in front of a passing vehicle and nobody tried to stop them...

The victim says as at least two of the teenagers pummeled her, the others cheered them on shouting, “Come on, let’s get her!” At one point, the victim says, the gang tried to throw her under the wheels of a passing car, which swerved, narrowly missing her.

What is happening to this country?

#8 We have also been hearing about a lot of "gang rapes" lately as well.  The following is an excerpt from a first-hand account from a 14-year-old girl in Missouri that experienced this type of horrible ordeal...

About five shots tall, I drank it. I guess I didn't know how badly it would mess me up. But the boys who gave it to me did.
Then it was like I fell into a dark abyss. No light anywhere. Just dark, dense silence -- and cold. That's all I could ever remember from that night. Apparently, I was there for not even an entire hour before they discarded me in the snow.

You can read the rest of her sobering story right here.
Are you starting to understand why I am so convinced that we have a major problem with our young men in America today?
Instead of raising young gentlemen, we are raising wild animals that seem to have very little self-control.
#9 And sometimes the public does not do anything to stop sexual assaults even when they happen on public streets.  In a recent incident in Athens, Ohio, not only did the public not stop a sexual assault, many actually took photos of the assault and posted them on social media websites...

Horrific photos of an alleged rape in progress have been shared on social media after crowds at a college homecoming celebration chose to take pictures and videos of the sex act rather than stopping it.

Would such a thing have happened in our country 50 years ago?
Of course not.
We need to come to grips with how far we have fallen.
#10 In America today, young kids can beat a homeless man to death and it barely even makes a blip on the news.  I'll bet hardly any of you have heard about what happened recently to a homeless man in New Jersey...

Three teenagers were in custody Saturday morning, on charges of beating a homeless man to his death in Hoboken, N.J.

As CBS 2’s Janelle Burrell reported, Hudson County Acting Prosecutor Gaetano T. Gregory said two 13-year-olds and a 14-year-old were charged in the Sept. 10 death of Ralph Eric Santiago, 46.

What would cause 13-year-olds and 14-year-olds to behave so savagely?
Could it be because we are raising them in a society where basic morality is not taught any longer?
#11 Our young people certainly do not have much respect for the very elderly anymore either.  Instead, the elderly are looked at as "weak" and "easy prey".  Just check out what recently happened to a 70-year-old man in upstate New York...

A 70-year-old man was seriously injured early Saturday morning after being attacked outside of a 7-Eleven in Syracuse.

Police say James Gifford had just left the store at the intersection of Valley Drive and South Street just after 6:00 a.m. and was attacked by a group of five or six black males, according to Syracuse Police.

Police also said this appears to be an unprovoked incident with an innocent victim.

#12 In this day and age, it is very hard to tell who you can trust.  You might meet someone on the street and they might smile and seem very nice, but inside they may be full of all kinds of garbage.  For example, just check out what one man in the Boston area planned to do…

A Boston-area man, who was planning to kidnap children, lock them in a basement dungeon, rape and eat them, should be imprisoned for at least 27 years, federal authorities said in court documents filed this week.

Geoffrey Portway pleaded guilty in May to distribution and possession of child pornography and solicitation to commit a crime of violence, according to court documents. He is scheduled to be sentenced on September 17.

“Portway has pled guilty to some of the most vile and heinous crimes known to our society,” federal prosecutors wrote in a sentencing recommendation.

This is how twisted and perverted our society has become.
A lot of Americans believe that if we could just elect "the right politicians" or if we could just change our economic system or if we could just fix one particular issue that everything would be right in America again.
Unfortunately, what we are facing is not so simple.  Our problems are not just in Washington D.C. or on Wall Street.  The truth is that our biggest problem is what is going on inside of us.
America is rotting and decaying on the inside, and the next great economic crisis is going to reveal just how bad things have gotten.

http://www.zerohedge.com/news/2013-10-21/12-shocking-clues-what-america-will-look-when-next-great-economic-crisis-strikes

Panic Buying Continues

Despite NFLX giving back half its after-hours gains, the NASDAQ is surging to new 13-year highs, the S&P cash crosses 1750 (to new all-time highs), and the Dow Transports explodes higher (to yet another record) for the ninth of the last 10 days. All of this as the USD is monkey-hammered and the EUR surges to 2-year highs... Treasury yields are dropping fast (down 5-7bps across the curve). As we noted last week, US equities have caught up entirely to the Fed balance sheet. Gold (back above its 100DMA) and silver are surging and oil is pressing back up towards $100. The reason for all this exuberance: the jobs number was sufficiently horrible it has moved the tapering consensus to March 2014 of beyond...
Gold has broken above its 100DMA...


Treasury yields are dropping fast...


EURUSD at 2-year highs...


US equities just won't stop...


and this is why...

Perhaps equities will stall here as they have reached their short-term Fed balance sheet fair value... or not...