Hint to investors: hedge and or be prepared to grab a barf bag.
Comments »ING to Pay $619 Million to Settle Violations of Sanctions With Cuba and Iran
“NEW YORK (Reuters) – ING Bank NV agreed to pay $619 million to settle U.S. government allegations that it violated U.S. sanctions against Cuba, Iran and other countries. It was the biggest ever fine against a bank for sanctions violations.
U.S. authorities said ING moved $1.6 billion illegally through banks in the United States from the early 1990s through 2007 by concealing the nature of the transactions.”
Comments »Bank Holiday Under Discussion for EU Nations
“BRUSSELS (AP) — The European Commission has been providing legal advice to others who are considering possible scenarios should Greece leave the euro, a European Union spokesman said.
Olivier Bailly said Tuesday that, legally, limits could be imposed on movement of people and money across national borders within the EU if it’s necessary to protect public order or public security — but not on economic grounds.
“Some people are working on scenarios,” he said, but refused to confirm or identify which organizations and people were working on them.”
Comments »JP MORGAN: QE3 IS NOT A BULLISH CATALYST
“JP Morgan has some good comments on the markets and the effect of potential future government actions. For now, they’re saying the markets will likely have trouble finding their footing without a robust policy response or stabilization in the macro data. Interestingly, they do NOT believe QE3 will be a positive catalyst going forward:
Comments »“For a sustainable rally we would need the following: either a stabilisation in macro momentum or, more importantly, a robust policy response. Restart of the SMP programme,short selling bans nor the IMF rescue of Spain fit the bill. Markets tended to quickly rollover post these types of actions historically. Eurobonds remain as distant as ever.”
GOLDMAN: 75% CHANCE FED EASES AT NEXT MEETING
“Goldman’s latest research suggests that the Fed is likely to ease at the next meeting this month. This assesment is primarily based on their proprietary indicator called the GSFinancials
Conditions Index (GSFCI). As a backdrop, they point out that the US economy has slowed, as shown in the chart below. Both the nonfarm payroll growth and the CAI index (Goldman’s index of broad economic activity) have declined sharply.”
Wall Street Shuffles Out Short Term Risk for Longer Term Risk in Europe
While U.S. banks have been trying to unload debt exposure to Greece, Ireland, and Protugal they have been increasing risk to Italy, France, and other EU countries.
What impact will this have on risk exposure ?
Comments »Oddity: ALL EUROPEAN YIELDS ARE CLIMBING
Pimco’s Gross Boosts Treasurys for First Time in Four Months as QE3 Looms
“Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., increased its holdings of Treasurys to 35 percent in May as yields on U.S. government securities approached record lows.
Gross raised the proportion of U.S. government and Treasury debt in the $260 billion Total Return Fund, bringing it up from 31 percent of its record asset holdings in April, Newport Beach, California-based Pimco said on its website. Holdings of mortgages dropped to 52 percent from 53 percent.
Investors should focus on debt of nations such as the U.S. and Brazil and avoid Europe until credit begins flowing again from the private sector as government solutions aren’t enough to stem the region’s debt crisis, Gross said two weeks ago. The yield on the benchmark 10-year note fell to a record low of 1.44 percent on June 1.
“We would suggest at Pimco avoiding the entire eurozone until they can come up with some type of solution which involves the private sector,” Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene on June 1. ”
Comments »UBS: We Are In The Eye Of The Foreign Exchange Hurricane
“Demand for safe haven currencies surged in May when investors were panicked about the Greek elections and weak economic data coming from the US, UK, eurozone, China and India.
Then stronger-than-expected Australian and UK economic data, increased hope of Spanish bank bailouts, China’s first interest rate cut since 2008, and expectations of QE3 gave foreign exchange markets some relief.
But UBS analyst Syed Mansoor Mohi-uddin says that the current calm in the forex markets will be short-lived. ”
Comments »Italy is the next Big Worry, But Cyprus is on Deck Too
Johnson & Johnson to Pay $2.2 Billion to Settle Risperdal Probe
“Johnson & Johnson (NYSE: JNJ) will reportedly pay $2.2 billion to end a probe into sales of its antipsychotic drug Risperdal and other medications. A settlement could be announced as early as this week.
Johnson & Johnson on June 8 announced it would set aside $600 million to settle civil claims related to its marketing of Risperdal, a heart failure drug, Natrecor, and an antipsychotic medication, Invega. The Risperdal probe goes back to 2004.”
Comments »Ireland May Seek to Gain on Spain’s Debt Deal
“Spain’s difficulty may be Ireland’s opportunity.
Spanish Prime Minister Mariano Rajoy is seeking as much as 100 billion euros ($125 billion) to recapitalize his nation’s banks. Ireland, locked out of the bond market since 2010, says it may use any leeway won by Spain to seek partial restitution for the 63 billion euros it spent shoring up its financial system during the past three years.”
Comments »Bond Trading Indicates Italy is the Next Country to Worry Over in a Never Ending Debt Nightmare
“The 100 billion-euro ($126 billion) rescue for Spain’s banks moved Italy to the frontline of Europe’s debt crisis as an initial rally in the country’s bonds fizzled on concern it may be the next to succumb.
Italy’s 10-year bonds reversed early gains today in the first trading after the Spanish bailout and declined for a fourth day, sending the yield up 7 basis points to 5.84 percent.”
Comments »Epic: Ally Bank (GMAC) Torn A New Asshole
Thomas Marano, chief executive officer of Residential Capital, wrote me a letter.
“Dear Homeowner,” it begins. (That’s me, homeowner.)
“As you may have read or heard, Residential Capital LLC recently announced that it and its subsidiaries, including GMAC Mortgage, are restructuring under Chapter 11. The restructuring does not change your obligations as a mortgage borrower. You must continue to make your scheduled mortgage payments on time and in full.”
I can only guess why he sent me this letter. Maybe he’s afraid I’m going to do what he’s doing.
ResCap is a subsidiary of Ally Financial, which was founded in Detroit as General Motors Acceptance Corp., or GMAC, in 1919. It nearly collapsed in the 2008 financial crisis after it had made a bold expansion into “liar loans” and other subprime mortgage products.
Additionally, the U.S. auto industry it serviced was near death.
To keep GMAC alive, the Federal Reserve allowed it to become a bank holding company — giving it the ability to borrow from the Fed at nearly 0%. The U.S. government, beginning with the Bush administration, also gave it a $17.2 billion bailout, of which it still owes nearly $12 billion.
Read more here.
Comments »GDP to Bailout Ratio: Spanish Bailout is Twice That of TARP, Spain is Greece, and Italy is Next
Too much to read in this article to get out all the ideas presented in a quick note; so get to reading about the cluster fuck that is Europe.
Comments »Detroit To Be Bankrupt This Week If Lawsuit Not Dropped
With Detroit teetering over a monetary abyss, Mayor Dave Bing and the city’s new chief financial officer issued a clarion call Friday, warning bluntly that the city will run out of cash next week if a lawsuit challenging the financial agreement the city made with the state to avoid insolvency isn’t dropped.
Calling his frustration level “off the charts” and saying the lawsuit is creating an even worse financial situation than the city was already in, Bing said he has urged Detroit’s top lawyer, Krystal Crittendon, to drop the suit so the city can avoid losing a portion of $80 million the state is threatening to withhold if the lawsuit doesn’t go away.
But, Bing said, by law he cannot force Crittendon to drop the suit.
“I didn’t want to get into a lawsuit — it makes no sense to me, and nobody wins, as far as I’m concerned,” Bing said at a news media briefing Friday. “We’ve spent way too much time on this issue that keeps us from doing the things that we need to do to fix the city.”
The urgency of the financial situation and growing impatience in Lansing resulted in Bing’s push to get together with the council for a closed-door meeting Monday to try to come to some type of consensus.
“If our city runs out of money, there is no bigger crisis that we would have,” Bing said.
But City Council President Charles Pugh said he and many of his colleagues want Crittendon to stand her ground on her challenge of the consent deal. Pugh insisted Friday that it’s not out of brinkmanship, but concern that the city’s consent agreement with the state must be reviewed in court to determine whether it violates Detroit’s own laws governing the conduct of elected city officials.
Pugh said of CFO Jack Martin’s warning that the city will be broke by Friday: “We feel like that may be a bit of an exaggeration.”
Peter Letzmann, a former city lawyer for Detroit, Pontiac and Troy who teaches public administration law at Grand Valley State University, said he doubts Crittendon has the legal standing to pursue the case, which he predicted a judge will toss out.
“I’ve never seen this kind of chutzpah by a city attorney acting without the authority of the mayor or City Council,” Letzmann said.
“They’re turning out the streetlights in Detroit, but we’re spending city dollars chasing what is pretty clearly a frivolous lawsuit,” he said. “They’ve got to stop politicking here. They’re just pushing the city to bankruptcy.”
The battle ultimately could lead to an emergency manager if state officials deem the city to be in violation of the consent agreement. The deal gives the state significant control over Detroit’s finances but prevents, for now, the appointment of an emergency manager who could strip virtually all authority from Bing and the council.
Read more here:
Comments »Hedge Fund Performance in 2012 by Strategy
See the results of 2012 hedge fund performance by strategy, here.
Comments »Documentary: Deliberate Implosion of the U.S. Economy
Cheers on your weekend !
[youtube://http://www.youtube.com/watch?v=IHTs6NqhHHg 450 300]Former Assistant Secretary of Housing under George H.W. Bush Catherine Austin Fitts blows the whistle on how the financial terrorists have deliberately imploded the US economy and transferred gargantuan amounts of wealth offshore as a means of sacrificing the American middle class.
Fitts documents how trillions of dollars went missing from government coffers in the 90′s and how she was personally targeted for exposing the fraud.
Fitts explains how every dollar of debt issued to service every war, building project, and government program since the American Revolution up to around 2 years ago — around $12 trillion — has been doubled again in just the last 18 months alone with the bank bailouts.
“We’re literally witnessing the leveraged buyout of a country and that’s why I call it a financial coup d’état, and that’s what the bailout is for,” states Fitts.
Comments »CHART: Markets Are Now Pricing In The Longest Fed Easing Policy Yet
“Bank of America’s Rates and Currencies Research team has a note out this morning taking a look at Fed policy.
This chart shows that until now, futures contracts have expected the Federal Reserve to hike rates sooner than they officially project. Now, they’re right in line with Fed forward guidance, expecting no rise in rates until late 2014. ”
Comments »EU Leaders to Discuss More Bailout for Spain’s Ailing Banks
A conference call will be held tomorrow to discuss the euro zone banking crisis. The biggest topic of discussion will be how to deal with Spain. It is expected according to sources tht Sapin will ask for more funds.
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