The Chicago Board Options Exchange has agreed to pay a $6 million fine relating to what regulators call "various systematic breakdowns" in the policing of its own procedures.
The Securities and Exchange Commission announced the charge Tuesday and accused CBOE of "a failure to enforce or even fully comprehend rules to prevent abusive short selling."
In addition to the $6 million fine, the SEC said CBOE will implement major remedial measures to settle the charges. The fine is the first levied against an exchange for violations related to its own regulatory oversight.
The SEC said its investigation found that CBOE failed to adequately regulate and control a conflict for one of its member firms, Chicago-based optionsXpress. The SEC later charged that firm in a so-called naked short-selling scheme, or illegally selling shares it did not own.
The SEC claims CBOE didn't properly investigate the firm's compliance and interfered with the SEC's inquiry.
"CBOE demonstrated an overall inability to enforce (its own procedures) with an ineffective surveillance program that failed to detect wrongdoing despite numerous red flags," the SEC said.
CBOE fined $6 million in naked short selling scheme - chicagotribune.com
Thursday, June 13, 2013
Wednesday, June 12, 2013
Banks hoard nearly $1 Trillion at Fed
FORTUNE -- U.S. banks now have $1 trillion at the Federal Reserve. It's far more than they have ever had before, and it could be a big problem.
And it's a new one. Before the financial crisis, the amount of cash banks kept idle at the Fed rarely topped $25 billion, which in terms of a multi-trillion dollar banking system is peanuts. But shortly after the start of the financial crisis, as a move to help the banks and save the economy (or perhaps the other way around), the Fed began paying interest on money banks deposited at the Fed.
Money flowed in. It has been rising ever since, but the rate of increase has picked up recently. In the first three months of this year, bank reserves at the Fed rose nearly $200 billion, or 25%, after barely budging in 2012. The amount passed the trillion dollar mark for the first time in April. Still, all that extra cash has done little to boost lending, which dropped in the first quarter.
MetaQuotes clashes with ZuluTrade, Myfxbook, Tradency and Tradeo – Shakeup in Copy-Trading World
MetaQuotes, the company behind the popular trading software MetaTrader 4, has warned brokers not to work with Zulutrade, Myfxbook, Tradency and Tradeo. These third party providers are accused by MetaQuotes of hacking the MT4 platform.
http://www.forexcrunch.com/metaquotes-clashes-with-zulutrade-myfxbook-tradency-and-tradeo/
http://www.forexcrunch.com/metaquotes-clashes-with-zulutrade-myfxbook-tradency-and-tradeo/
Tuesday, June 11, 2013
FX Traders manipulate fix rate
Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.
Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.
The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives, the two traders said. The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.
“The FX market is like the Wild West,” said James McGeehan, who spent 12 years at banks before co-founding Framingham, Massachusetts-based FX Transparency LLC, which advises companies on foreign-exchange trading, in 2009. “It’s buyer beware.”
The $4.7-trillion-a-day currency market, the biggest in the financial system, is one of the least regulated. The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges. http://www.bloomberg.com/news/2013-06-11/traders-said-to-rig-currency-rates-to-profit-off-clients.html
Citi could lose 7 Billion due to Forex
Citigroup Inc. (C) could lose as much as $7 billion on currency swings if Charles Peabody is right, putting the analyst at odds with peers who say the stock will be the best performer among big U.S. banks in the year ahead.
Peabody, who leads research at Portales Partners LLC, is among only four analysts out of 34 tracked by Bloomberg who recommend investors sell Citigroup shares. He estimates the bank may lose $5 billion to $7 billion in regulatory capital this year if the dollar gains against the yen, euro and currencies in emerging markets, which provide about half the firm’s profit. That would be its worst translation loss in five years, exceeding the $3.5 billion deficit in 2011.
Former Chief Executive Officer Vikram Pandit expanded Citigroup’s overseas businesses to help it recover from 2008’s U.S. credit crisis. Peabody, who predicted the mortgage market’s plunge as early as January 2005, said the firm’s reliance on revenue from abroad is now driving his concern that a global economic slowdown will hurt the bank more than U.S. rivals. Citigroup Facing $7 Billion Hit on Dollar Gain, Peabody Says - Bloomberg
Monday, June 10, 2013
Treasury Yields Spike To New 14 Month Highs
30Y rates are up 4bps and 10Y rates up 5bps as a combination of MBS convexity hedging, Taper chatter, and growth hopiness flutter across the bond market. This has backed 10Y and 30Y rates up to their highest since April 2012 - getting close to some significant support/resistance from the last few years. Mortgage spreads have stabilized up here at their highest since July (around 83bps) but just as a delicate reminder, the last time bond yields spiked to this degree, equities began to wonder just what was going on? With so much of the investing public having bought bond-like-stocks at the behest of every talking head and asset-gatherer under-the-sun, we wonder at what point do the arguments about a great rotation from bonds to stocks (since gosh, 10Y bond prices are down 3% in the last month) turn to a rotation from bond-like-stocks to bond-like-bonds...
[5]
Or more simply, the market's (or the Fed's) realization that 'normalizing' rates here will crush the economy as interest expense surges (think Japan...)
Charts: Bloomberg
Whistleblower comes forward "Verax"
The individual responsible for one of the most significant leaks in US political history is Edward Snowden, a 29-year-old former technical assistant for the CIA and current employee of the defence contractor Booz Allen Hamilton. Snowden has been working at the National Security Agency for the last four years as an employee of various outside contractors, including Booz Allen and Dell.
The Guardian, after several days of interviews, is revealing his identity at his request. From the moment he decided to disclose numerous top-secret documents to the public, he was determined not to opt for the protection of anonymity. "I have no intention of hiding who I am because I know I have done nothing wrong," he said.
Snowden will go down in history as one of America's most consequential whistleblowers, alongside Daniel Ellsberg and Bradley Manning. He is responsible for handing over material from one of the world's most secretive organisations – the NSA.
In a note accompanying the first set of documents he provided, he wrote: "I understand that I will be made to suffer for my actions," but "I will be satisfied if the federation of secret law, unequal pardon and irresistible executive powers that rule the world that I love are revealed even for an instant."
Despite his determination to be publicly unveiled, he repeatedly insisted that he wants to avoid the media spotlight. "I don't want public attention because I don't want the story to be about me. I want it to be about what the US government is doing."
HE COMES FORWARD!Code name 'Verax'...
VIDEO: 29-year-old source behind biggest intel leak in NSA history explains motives...
'I don't want to live in society that does these sort of things'...
'I believed in Obama's promises'...
'Presidents openly lie to secure the office'...
'Government has granted itself power it is not entitled to'...
Suggests he's defecting -- to China?
Former CIA Officer: 'Potential Chinese Espionage'...
REPORT: Intel officials overheard saying NSA leaker should be 'disappeared'...
Snowden Checked Out Of Hong Kong Hotel...
Friday, June 7, 2013
15 ms NFP leak
On Monday we brought to you proof of a 15 millisecond frontrunning of the Mfg ISM number by what turned out to be HFT clients of Reuters which admitted subsequently it had "inadvertently" leaked the number to select clients. However, that was child's play compared to the absolute market farce that happened today which we can visualize courtesy of Nanex, and which impacted gold, ES, and Treasury Futures altogether.
In sequential order: 62 milliseconds before the NFP number a massive dump of gold took place in what can merely be described as yet another of the infamous gold take downs we know so well which however take place just around the time of the London fixing. That it happened right before the NFP number is either an indication of an early NFP data leak reaching "some" HFT traders, or merely an attempt to set the "mood" for further selling by someone who decided that the NFP print would be negative for gold no matter what it was...
August 2013 Gold Futures trades and quote spread.
However, manipulated gold markets are nothing new, and frankly we would have been surprised if they did not happen.
What was more amusing was the action after the NFP release in both the eMini and the T-Bond futures, all of which had to be halted for a whopping 5 seconds until the algos, selling everything at first, got the memo out that good news today was in fact good news, and promptly ramped risk to the moon. Either that, or someone called in a code Red, made it so all selling was literally prohibited, and with the only path of no resistance up, resulted in today's epic melt up on what was initially a very bearish kneejerk response to the NFP print.
First: September 2013 T-Bond Futures trades and quote spread. The deluge of selling hits 482 milliseconds before the NFP release, leading to a 5 second circuit breaker and halting the OTR future contract of the world's largest bond market. Abe would be proud.
Ultra-low interest rates are making bonds unsafe
Sooner or later, interest rates are going to rise sharply from current levels. And that'll hurt.
Bill Gross.
FORTUNE -- What do you call a supposedly safe investment in which a five-week hiccup can wipe out more than a year of income? Answer: a bond mutual fund.
Yes, that sounds extreme, if not demented. But it's true—as I'll show you in a bit, using numbers from the nation's biggest mutual fund, Pimco Total Return, which is run by bond-dom's most prominent investor, Bill Gross.
If you're a typical investor—especially, if you're a typical investor of my age (68)—you've heard for decades about bonds providing a safe haven. But as people like my Fortune colleagueShawn Tully and I have been warning you for quite awhile now, buying bonds at today's ultra-low interest rates isn't at all safe.
Wednesday, June 5, 2013
It's A "0.6%" World: Who Owns What Of The $223 Trillion In Global Wealth
Back in 2010 we started an annual series looking at the (re)distribution in the wealth of nations and social classes. What we found then (and what the media keeps rediscovering year after year to its great surprise) is that as a result of global central bank policy, the rich got richer, and the poor kept on getting poorer, even though as we predicted the global political powers would, at least superficially, seek to enforce policies that aimed to reverse this wealth redistribution from the poor to the rich (a doomed policy as the world's legislative powers are largely in the lobby pocket of the world's wealthiest who needless to say are less then willing to enact laws that reduce their wealth and leverage). Now that the topic of wealth distribution (or rather concentration) is once again in vogue, below we present the latest such update looking at a global portrait of household wealth. The bottom line: 29 million, or 0.6% of those with any actual assets under their name, own $87.4 trillion, or 39.3% of all global assets.
Here are the key highlights via Credit Suisse:
- Global household wealth in mid-2012 totaled $223 trillion, equivalent to USD 49,000 per adult in the world. This is a decline of $12.3 trillion mostly due to a $10.9 trillion decline in European wealth, however it is double the $113 trillion in total wealth at the start of the millennium
- Losses in Africa, India and the Latin American countries were offset by modest gains in North America (USD 880 billion) and China (USD 560 billion),
- CS expects total household wealth to rise by almost 50% in the next five years from $223 trillion in 2012 to $330 trillion in 2017. What CS does not say is that the bulk of this increase is courtesy of Federal Reserve-facilitated wealth redistribution from the lower and middle classes to the upper class.
- The number of millionaires worldwide is expected to increase by about 18 million, reaching 46 million in 2017.
- China is expected to surpass Japan as the second wealthiest country in the world. However, the USA should remain on top of the wealth league, with $89 trillion by 2017.
Drilling down the distribution of global wealth, in charts:
By the middle of 2011, global wealth had recovered from the 2007 financial crisis; at that time, total wealth matched or exceeded the pre-crisis levels in all regions except Africa.
Global wealth by country: The figure for average global wealth masks the considerable variation across countries and regions (see Figure 3). The richest nations, with wealth per adult over USD 100,000, are found in North America, Western Europe, and among the rich Asia- Pacific and Middle Eastern countries. They are headed by Switzerland, which in 2011 became the first country in which average wealth exceeded USD 500,000. Exchange rate fluctuations have reduced its wealth per adult from USD 540,000 in 2011 to USD 470,000 in 2012; but this still remains considerably higher than the level in Australia (USD 350,000) and Norway (USD 330,000), which retain second and third places despite falls of about 10%. Close behind are a group of nations with average wealth above USD 200,000, many of which have experienced double-digit depreciations against the US dollar, such as France, Sweden, Belgium, Denmark and Italy. Countries in the group which have not been adversely affected have moved up the rankings – most notably Japan to fourth place with wealth of USD 270,000 per adult and the USA to seventh place with USD 260,000 per adult.
Interestingly, the ranking by median wealth is slightly different, favoring countries with lower levels of wealth inequality. As was the case last year, Australia (USD 195,000) tops the table by a considerable margin, with Japan, Italy, Belgium, and the UK in the band from USD 110,000 to 140,000, and Singapore and Switzerland with values around USD 90,000. The USA lags far behind with median wealth of just USD 55,000.
Trends in wealth per adult and its components: As Figure 5 shows, average household net worth trended upwards from 2000 until the crisis in 2007, then fell by approximately 10% before recovering in 2011 to slightly above the pre-crisis level. Further setbacks this year have pushed wealth per adult back below the previous peak. However, exchange rate movements account for much of the year-onyear variation. Using constant USD exchange rates yields a smoother time trend and a single significant downturn in 2008, after which point the recovery has continued more or less unabated.
At the start of the millennium, financial assets accounted for well over half of the household portfolio, but the share declined until 2008, at which point the global wealth portfolio was equally split between financial and nonfinancial assets (mostly property). In the period since 2008, the balance has again tipped slightly towards financial assets.
On the liabilities side of the household balance sheet, average debt rose by 80% between 2000 and 2007, and subsequently leveled out. It now amounts to USD 8,600 per adult, about 7% lower than it was the same time a year ago. Expressed as a proportion of household assets, average debt has moved in a narrow range, rising over the period, but never exploding.
The composition of household portfolios varies widely and systematically across countries. The most persistent feature is the rise in the relative importance of both financial assets and liabilities with the level of development. For instance, financial assets account for 43.1% of gross assets in Europe and 67.1% in North America, but just 15.9% of gross assets in India. Household debt as a percentage of gross assets is 16% in Europe and 18.1% in North America, but only 3.7% in India and 8.7% in Africa. There is also variation in portfolios unrelated to the level of development. Some developed countries, like Italy, have unusually low liabilities (10.0% of gross assets), while others have surprisingly high debt, like Denmark (33.7% of gross assets). In addition, the mix of financial assets varies greatly, reflecting national differences in financial structure. The share of equities in total financial assets, for example, ranges from 43.4% in the USA, down to just 20.1% and 6.5% in Germany and Japan respectively.
Changes to household wealth from mid-2011 to mid-2012; The adverse global economic climate and the USD appreciation that occurred during the year until mid-2012 meant that household wealth rose by more than USD 100 billion in only four countries: the USA (USD 1.3 trillion), China (USD 560 billion), Japan (USD 370 billion) and Colombia (USD 100 billion). Figure 6 shows that Eurozone members suffered the largest losses, led by France (USD 2.2 trillion), Italy (USD 2.1 trillion), Germany (USD 1.9 trillion) and Spain (USD 870 billion). These losses were exacerbated by the unfavorable euro-dollar exchange rate movement, but even in euro terms, wealth declined by EUR 50 billion in Germany, EUR 148 billion in France, EUR 177 billion in Spain and EUR 286 billion in Italy. Sizeable USD wealth reductions were also recorded in the UK (USD 720 billion), India (USD 700 billion), Australia (USD 600 billion), Brazil (USD 530 billion), Canada (USD 440 billion) and Switzerland (USD 410 billion).
The largest percentage gains and losses generate a slightly different list. A steady USD exchange rate, combined with an 11% improvement in market capitalization, helped Colombia to top the country rankings with a 16% rise in household wealth. Algeria, Hong Kong, Peru and Uruguay also recorded gains of more than 5%. The downside is more evident, especially in Eurozone countries, where double-digit losses were recorded everywhere (see Figure 7). Other sizeable declines were recorded for Russia (–13%), Mexico (–14%), South Africa (–15%) and India (–18%), while Eastern Europe had a very poor year, led by the Czech Republic and Poland (both with –18%), Hungary (–25%) and Romania (–36%).
* * *
But in a globalized world with virtually unlimited capital flows (for now: see Cyprus) physical borders mean little. Which is why next we look at the global wealth pyramid which breaks down wealth as percentage of the world population: i.e., who owns how much without geographic prejudice. It is here that is becomes most obvious how global policies since the Great Financial Crisis have benefitted the wealthiest at the expense of everyone else.
Presenting the global wealth pyramid:
Here are the stunning facts:
- In 2012, 3.2 billion individuals – more than two-thirds of the global adult population – have wealth below USD 10,000, and a further one billion (23% of the adult population) are placed in the USD 10,000–100,000 range.
- The average wealth holding is modest in the base and middle segments of the pyramid, total wealth amounts to USD 39 trillion, underlining the potential for new consumer trends products and for the development of financial services targeted at this often neglected segment.
- The remaining 373 million adults (8% of the world) have assets exceeding USD 100,000.
- And then the top of the pyramid: 29 million US dollar millionaires, a group which contains less than 1% of the world’s adult population, collectively owns nearly 40% of global household wealth.
- Some 84,500 individuals are worth more than USD 50 million, and 29,000 are worth over USD 100 million.
- The composition of the wealth pyramid in 2012 is broadly similar to that of the previous year, except for the fact that the overall reduction in total wealth increases the percentage of adults in the base level from 67.6% to 69.3% and reduces the relevant population share higher up the pyramid by a corresponding amount. The respective wealth shares are virtually unchanged.
Breaking it down by class.
Lower Class (base level of pyramid):
The various strata of the wealth pyramid have distinctive characteristics. Although members of the base level are spread widely across all regions, representation in India and Africa is disproportionately high, while Europe and North America are correspondingly underrepresented (see Figure 2). The base tier has the most even distribution across regions and countries, but it is also the most heterogeneous, spanning a wide range of family circumstances. In developed countries, only about 30% of the population fall into this category, and for most of these individuals, membership is a transient or life cycle phenomenon associated with youth, old age, or periods of unemployment. In contrast, more than 90% of the adult population in India and Africa are located within this band. In many low-income African countries, the percentage of the population is close to 100%. Thus, for many residents of low-income countries, lifetime membership of the base tier is the norm rather than the exception. However, lower living costs mean that the upper limit of USD 10,000 is often sufficient to assure a reasonable standard of living.
While bottom-of-the-pyramid countries have limited wealth, it often grows at a fast pace. In India, for example, wealth is skewed towards the bottom of the wealth pyramid, yet it has tripled since 2000. Indonesia has also seen dramatic growth, and aggregate wealth in Latin America is now USD 8.7 trillion, compared to USD 3.4 trillion in 2000. In contrast, while North Americans dominate the top of the wealth pyramid, wealth in the USA has grown more modestly, from USD 39.5 trillion in 2000 to USD 62 trillion today.
Middle Class (middle level of pyramid):
The one billion adults located in the USD 10,000–100,000 range are the middle class in the global distribution of wealth. The average wealth holding is close to the global average for all wealth levels, and the total wealth of USD 32 trillion gives this segment considerable economic weight. The regional composition of this tier most closely corresponds to the global pattern, although India and Africa are underrepresented. The comparison of China and India is particularly interesting. India is host to just 3% of the global middle class, and the share has been relatively stagnant in recent years. In contrast, China’s share has been growing fast and now accounts for over one-third of members, ten times higher than India’s.
Upper Class (upper level of pyramid):
High wealth segment of the pyramid The regional composition changes significantly when it comes to the 373 million adults worldwide who make up the “high” segment of the wealth pyramid – those with a net worth above USD 100,000. North America, Europe and the Asia- Pacific region together account for 89% of the global membership of this group, with Europe alone home to 141 million members (38% of the total). This compares with about 2.4 million adult members in India (0.6% of the global total) and a similar number in Africa.
The number of people in a given country with wealth above USD 100,000 depends on three factors: population size, the average wealth level, and wealth inequality within the country concerned. In 2012, only 15 countries have more than 1% of the global membership. The USA leads with 21% of the total. In this instance, the three factors reinforce each other: a large population, combined with high mean wealth and an unequal wealth distribution. Japan is a strong second and is currently the only country that challenges the hegemony of the USA in the top wealth-holder rankings. Although its relative position has declined over the past couple of decades due to the lackluster performance of its equity and housing markets, Japan has 18% of individuals with wealth above USD 100,000, a couple of points more than a year ago.
The most populous EU countries – Italy, the UK, Germany, and France – each contribute 6%–8% to the high wealth segment, and each country has experienced a small decline in its membership share during the year. For many years, these countries have occupied positions three to six in the global rankings, but this year China edged France out of sixth place, a dramatic improvement from the situation in 2000, when China’s representation in the top wealth groups was too small to register. Brazil, Korea and Taiwan are other emerging market economies with at least four million residents with a net worth above USD 100,000. Mexico accounted for more than 1% of the group in 2011, but has dropped below this benchmark this year.
The Ultra-High Class (the very Top of the pyramid):
A different pattern of membership is again evident among the world’s millionaires at the top of the pyramid (see Figure 3). Compared to individuals with wealth above USD 100,000, the proportion of members from the United States almost doubles to 39%, and the shares of most of the other countries move downwards. There are exceptions, however. France moves up to third place in the rankings, and Sweden and Switzerland both join the group of countries with more than 1% of global millionaires. Thank you Federal Reserve.
Welcome to (say goodbye to) the Millionaire's Club:
Changing membership of the “millionaire group”; Changes to wealth levels since mid-2011 have affected the pattern of wealth distribution. The overall decline in average wealth has raised the proportion of adults with wealth below USD 10,000 from 67.6% in mid-2011 to 69.3% in mid-2012 (as the poor get poorer), and reduced the number of millionaires by slightly more than one million (see Table 1). There were 962,000 new millionaires in the United States and 460,000 in Japan, but no significant increase in numbers elsewhere. However, Europe shed almost 1.8 million US dollar millionaires, most notably in Italy (–374,000), France (–322,000),Germany (–290,000), Denmark (–179,000), Sweden (–142,000) and Spain (–87,000). Australia, Canada, Brazil and Taiwan are the other countries in the group of the top ten losers. The losses were sufficient to drop Brazil, Denmark and Taiwan (along with Belgium) from the list of countries with more than 1% of the total number of millionaires worldwide.
High net worth individuals; To estimate the pattern of wealth holdings above USD 1 million requires a high degree of ingenuity because at high wealth levels, the usual sources of wealth data – official statistics and sample surveys – become increasingly incomplete and unreliable. We overcome this deficiency by exploiting wellknown statistical regularities in the upper parts of the wealth distribution to ensure that the top wealth tail is consistent with the annual Forbes tally of global billionaires and similar “rich list” data published elsewhere. This produces plausible estimates of the global pattern of asset holdings in the high net worth (HNW) category from USD 1 million to USD 50 million, and in the ultra high net worth (UHNW) range from USD 50 million upwards. While the base of the wealth pyramid is occupied by people from all countries of the world at various stages of their life cycles, HNW and UHNW individuals are heavily concentrated in particular regions and countries, and tend to share a similar lifestyle, participating in the same global markets for high coupon consumption items, even when they reside on different continents. The wealth portfolios of individuals are also likely to be similar, dominated by financial assets and, in particular, equity holdings in public companies traded in international markets. For these reasons, using official exchange rates to value assets is more appropriate than using local price levels.
There are about 28.5 million HNW individuals with wealth between USD 1 million and USD 50 million in mid-2012, of whom the vast majority (25.6 million) fall in the USD 1–5 million range (see Figure 4). One year ago, Europe overtook North America as the region with the greatest number of HNW individuals, but tradition has been restored this year, with 11.8 million residents (42% of the total) in North America and 9.2 million (32%) in Europe. Asia-Pacific countries excluding China and India have 5.7 million members (20%), and we estimate that there are currently a fraction under one million HNW individuals in China (3.4% of the global total). The remaining 753,000 HNW individuals (2.6% of the total) reside in India, Africa or Latin America.
Ultra high net worth individuals
There is an estimated are 84,500 UHNW individuals in the world, defined here as those with net assets exceeding USD 50 million. Of these, 29,300 are worth at least USD 100 million and 2,700 have assets above USD 500 million. North America dominates the regional rankings, with 40,000 UHNW residents (47%), while Europe has 22,000 individuals (26%), and 12,800 (15%) reside in Asia-Pacific countries, excluding China and India. In terms of individual countries, the USA leads by a huge margin with 37,950 UHNW individuals, equivalent to 45% of the group (see Figure 5). The recent fortunes created in China have propelled it into second place with 4,700 representatives (5.6% of the global total), followed by Germany (4,000), Japan (3,400), the United Kingdom (3,200) and Switzerland (3,050). Numbers in other BRIC countries are also rising fast, with 1,950 members in Russia, 1,550 in India and 1,500 in Brazil, and strong showings are evident in Taiwan (1,200), Hong Kong (1,100) and Turkey (1,000). Although there is very little comparable data on the past, it is almost certain that the number of UHNW individuals is considerably greater than it was a decade ago. The overall growth in asset values accounts for part of the increase, together with the appreciation of currencies against the US dollar over much of the period. However, it also appears that, notwithstanding the credit crisis and the more recent setbacks, the past decade has been especially conducive to the establishment of large fortunes.
Hail Bernanke (and Kuroda, and Draghi, and Carney, and Jordan, and so on), the ultra high net worth individuals on the chart below salute you.
Tuesday, June 4, 2013
The Great Plunge is Coming
Are you ready for the next stock-market crash of the century? The Hindenburg Omen was spotted by eagle eyes on April 15th. It was confirmed by a sighting on May 29th. That gives us 40 days approximately before the market takes a plunge (apparently). That’s enough to spark fears on the market that we are in for a shaky time, but are those fears really justified and will the market plunge as the Hindenburg Omen predicts?
The Hindenburg is a technical analysis pattern that predicts highs and lows of the stock market based upon Norman G. Fosback’s High Low Logic Index (HLLI). It was invented by Jim Miekka in 1995. It’s used as a way of predicting big turndowns.
The Hindenburg has to meet four criteria and it is calculated using Wall Street Journal figures daily.
1. The sum of new 52-week highs and the sum of new 52-week lows must be equal or greater to 2.8% of the sum of NYSE issues advancing or declining on any given day.
2. NYSE must be greater in terms of value than it was 50 days beforehand.
3. The McClellan Oscillator (money entering and leaving the market) must be negative on that day also (in other words, below zero equals a bearish market).
4. The 52-week highs must not be more than twice the 52-week lows (but the opposite does not hold).
The two sightings mean that the Hindenburg Omen has met the criteria.
Eurozone to expand with 18th member Latvia
The Baltic state, which has endured years of tough austerity measures to rehabilitate its economy after a 2008 crisis, is expected to be deemed eligible for single currency membership by the European Commission on Wednesday.
For a member state to join the eurozone, it must achieve a public deficit of less than 3pc of GDP and public debt no higher than 60pc of GDP. The EU also demands that the country's central bank operates independently of government and that inflation is under control.
Latvia's determination to join the eurozone has seen it undergo a painful internal devaluation involving deep spending cuts and tax hikes, in order to keep its currency, the lat, pegged to the euro. This strict fiscal discipline has seen Latvia achieve public debt of 41pc, one of the lowest in the EU.
While it posted the fastest economic growth in the EU in the last three months of 2012, when GDP grew 5.1pc year-on-year, Latvia remains one of the poorest countries in the bloc.
Valdis Dombrovskis, the country's premier, has made eurozone membership a central pillar of his four years in power. But his enthusiasm to join the eurozone is not wholly reflected among the Latvian people, who have repeatedly called for a referendum on the matter.
IRS victims testify as new agency scandal emerges
WASHINGTON (AP) -- Conservative groups who were targeted by the Internal Revenue Service are getting their say on Capitol Hill just as the details of another IRS controversy are being made public.
The leaders of six conservative groups were scheduled to tell lawmakers Tuesday about their mistreatment at the hands of IRS agents. Several of the groups say their applications for tax-exempt status were delayed while agents asked intrusive questions that the IRS has since acknowledged were inappropriate. One group, the National Organization for Marriage, says the IRS publicly disclosed confidential information about donors.
Sunday, June 2, 2013
Faber says financial assets doomed, moving his physical gold to Asia
As Barron's notes in this recent interview, Marc Faber view the world with a skeptical eye, and never hesitates to speak his mind when things don't look quite right. In other words, he would be the first in a crowd to tell you the emperor has no clothes, and has done so early, often, and aptly in the case of numerous investment bubbles. With even the world's bankers now concerned at 'unsustainable bubbles', it is therefore unsurprising that in the discussion below, Faber explains, among other things, the fallacy of the Fed's help "the problem is the money doesn't flow into the system evenly, how with money-printing "the majority loses, and the minority wins," and how, thanks to the further misallocation of capital, "people with assets are all doomed, because prices are grossly inflated globally for stocks and bonds." Faber says he buys gold every month, adding that "I want to have some assets that aren't in the banking system. When the asset bubble bursts, financial assets will be particularly vulnerable."
http://www.zerohedge.com/news/2013-06-01/marc-faber-people-financial-assets-are-all-doomed
http://www.zerohedge.com/news/2013-06-01/marc-faber-people-financial-assets-are-all-doomed
On Gold:
Gold is down 30% from its 2011 peak of $1,921, but has far outperformed financial assets since 1999. A correction was overdue. I have about a 25% allocation to gold and buy some every month. I want to have some assets that aren't in the banking system. When the asset bubble bursts, financial assets will be particularly vulnerable.Gold is easier to carry than a Lamborghini.Most of my gold is in a safe-deposit box in Switzerland, but I am shifting it to Asia.
Saturday, June 1, 2013
HSBC appoints ex-MI5 chief Sir Jonathan Evans
The former director-general of MI5 is to join HSBC's board as a non-executive director in August.
Sir Jonathan Evans, who spent three decades at the intelligence service, will be paid £125,000 to work 40 days a year at the bank.
He will also become a member of a special committee HSBC created to help combat financial crime.
The unit was set up after the bank was fined $2bn (£1.3bn) in the US over money laundering and sanction breaches.
The bank has already appointed Dave Hartnett, the former head of HM Revenue and Customs, and Jim Comey, a former US deputy attorney general, as advisers to the Financial System Vulnerabilities Committee.
Bill Hughes, a former head of the UK's Serious Organised Crime Agency was also recruited when the committee was set up in January. BBC News - HSBC appoints ex-MI5 chief Sir Jonathan Evans to board
Subscribe to:
Posts (Atom)