20Mar2015 Market Close: Markets Close Higher, DOW Up Double Digits, SP500 Within Rock Throwing Distance Of Historical High

Quad-Witching Thriller: Oil, S&P, Nasdaq Soar As Bond Yields, Dollar Tumble On Economic Gloom

The only asset class that made any sense in today’s quad-witching was the 10 Year, whose yield did precisely what it should do in a world in which the Fed slashed the economic outlook 2 days ago: it tumbled.

Everything else was just algorithmic momentum ignition, stop hunts, and the other usual quad witching thriller which we said would happen first thing this morning.

It started with a tremendous move higher in oil, where momentum ignition was tripped in an attempt to slam the stops to the upside:

This means that in the week in which both the API and EIA reported gargantuan oil builds, and the topic of the US running out of oil storage is becoming a very urgent one, oil is closing the week… higher.

The catalyst for today’s massive move which also sent the Nasdaq well over 5,000 and just why of its all time closing high record last in the year 2000…

Tesco and British Land Agree to Swap $1 Billion in Properties

The retailer will regain sole ownership of 21 stores, and the real estate investor will acquire Tesco’s interest in a portfolio of shopping centers.

Guardian Names Katharine Viner as Editor

Ms. Viner replaces Alan Rusbridger, who oversaw the paper for 20 years.

AIG investors’ $970.5 million settlement wins U.S. court approval

NEW YORK (Reuters) – American International Group Inc shareholders won approval on Friday of a $970.5 million settlement resolving claims they were misled about its subprime mortgage exposure, leading to a liquidity crisis and $182.3 billion in federal bailouts.

Exclusive: Cyber IPO pipeline grows as data breaches boost security spending

NEW YORK/BOSTON (Reuters) – Rapid7, LogRhythm and Mimecast are joining a growing list of cybersecurity firms planning to go public in 2015 to capitalize on investor interest following a spate of hacker attacks, according to people familiar with the matter.

Fed’s Evans says ‘perfectly fine’ with removing patient vow

(Reuters) – One the Federal Reserve’s top advocates for restraint in raising U.S. interest rates on Friday said he was comfortable with the decision earlier this week to remove a vow to be patient on rate hikes from the central bank’s formal policy statement.

Merkel sets strict terms for Greek aid, Juncker flags EU cash

BRUSSELS (Reuters) – European Union leaders welcomed a pledge on Friday from Greece to meet creditors’ demands for a broad package of economic reform proposals within days to unlock the cash Athens needs to avoid stumbling out of the euro zone.

Which European National Central Bank Is Most Likley To Become Insolvent, And What Happens Then?

In the aftermath of the ECB’s QE announcement one topic has received far less attention than it should: the unexpected collapse of risk-sharing across the Eurosystem as a precursor to QE. This is what prompted “gold-expert” Willem Buiter of Citigroup to pen an analysis titled “The Euro Area: Monetary Union or System of Currency Boards”, in which he answers two simple yet suddenly very critical for the Eurozone questions: which “currency boards”, aka national central banks, are suddenly most at risk of going insolvent, and should the worst case scenario take place, and one or more NCBs go insolvent what happens then?

First, this is how Buiter calcualtes the loss absorption capacity of individual National Central Banks. In other words, the country whose central bank has the smallest OBLAC number is the one which go under first once the ECB looses control.

The most generous measure of the total conventional loss absorption capacity, or on-balance-sheet loss absorption capacity (OBLAC) of the Eurosystem NCBs is shown in the fourth column of Figure 7. It is the sum of Capital & Reserves, the Revaluation Accounts and Provisions. Note that the Revaluation Accounts are questionable as unconditionally loss absorbing resources. “Revaluation accounts includes unrealised gains related to price movements, foreign exchange rate movements and market valuation differences related to interest rate risk derivatives. Also includes the unrealised gains of euro area NCBs that have arisen due to the change from national accounting rules to harmonised accounting rules for the Eurosystem.” This suggests that the securities whose unrealized gains are recognized i …

Fed’s Lockhart sees interest rate ‘lift-off’ by September

ATHENS, Ga. (Reuters) – Atlanta Federal Reserve President Dennis Lockhart said on Friday he expects the U.S. central bank to raise interest rates at either its June, July or September policy meetings, barring a significant downturn in the U.S. economy.

Wall St. Is Higher, Buoyed by Rising Oil and Solid Earnings

Shares of Nike and Darden Restaurants were up after their quarterly results beat analysts’ expectations.

Retiring: Finding Success, Well Past the Age of Wunderkind

Through the arts, education and other pursuits, more people are experiencing late-life rebirths that are rewarding creatively, emotionally and spiritually.

100,000 Layoffs And Counting: Is This The New Normal?

Submitted by Andrew Topf of Oilprice.com

This time a year ago, the oil industry’s biggest problem was finding a way to deal with the “retirement tsunami” about to crash down on it as older oilfield workers hung up their cork boots to enjoy freedom-55. Now, with oil prices still in the doldrums, many of those same workers are lucky to be hanging onto their jobs, while others have been booted from the payroll as an ugly wave of layoffs takes hold.

One of the worst-affected areas is the Canadian oil sands, where a higher per-barrel cost of production than conventional sources has oil companies scrambling to cut capital expenditures and in several cases, put long-term projects on ice.

On Thursday one of the region’s big players, Husky Energy, announced that about 1,000 construction workers employed by a contractor at its Sunrise oilsands project, would be issued pink slips. The bad news for the workers came a day after Husky said that it had started to produce from the $3.2 billion, steam-assisted gravity drainage (SAGD) Sunrise operation, which it co-owns with BP.

The layoffs by Husky followed Suncor’s decision in January to cut 1,000 employees and Royal Dutch’s Shell’s announcement that it will shed close to 10 percent of the workforce at its Albian sands project — around 300 workers.

The Canadian Association of Oilwell Drilling Contractors, which closely tracks drilling activity, s …

Simon Property Raises Offer for Mall Rival

Simon Property says offer of $95.50 a share in cash and stock is its “best and final offer” for Macerich.

Justice Department Rolls Out An Early Form Of Capital Controls In America

Something stunning took place earlier this week, and it quietly snuck by, unnoticed by anyone as the “all important” FOMC meeting was looming. That something could have been taken straight out of the playbook of either Cyprus, or Greece, or the USSR “evil empire”, or all three.

This is how the WSJ explained it:

The U.S. Justice Department’s criminal head said banks may need to go beyond filing suspicious activity reports when they encounter a risky customer.

“The vast majority of financial institutions file suspicious activity reports when they suspect that an account is connected to nefarious activity,” said assistant attorney general Leslie Caldwell in a Monday speech, according to prepared remarks. “But, in appropriate cases, we encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem.”

The remarks indicate that banks may be expected to do more than just file SARs, a responsibility that itself can be expensive and time-consuming.

Some banks already have close relationships with law enforcement, said Kevin Rosenberg, chair of Goldberg Lowenstein & Weatherwax LLP’s government investigation and white collar litigation group. Ms. Caldwell’s remarks “speak to moving forward in a more collaborative way,” said Mr. Rosenberg.

US Taxpayers To Fund Ukraine Bailout With Bond Guarantee

Last week we reported that as part of the latest “check kiting” bailout scheme, Greek pensioners (and now utility companies) are being raided by the Greek government so that it can repay its debts to the IMF, which in turn would go ahead and fund a part of the recently approved $17.5 billion bailout of Ukraine, which then would have the money to pay its debts to Russia… and the IMF. And, as we also noted, “The only question is how long will it take the current puppet government to syphon off enough funds into various illegal ventures and offshore accounts before the IMF has to step back in a la Greece with bailout #2.”

Turns out the answer is about a week, because as Reuters reported earlier today, CCC-rated Ukraine is preparing to issue more debt, debt with a Aa+/AAA rating because it will come with the explicit guarantee of the United States of America.

From Reuters:

The Republic of Ukraine has sent out a request for proposals (RFP) to banks for a new US government-guaranteed bond, according to three sources.

This is the second time the US government has thrown its financial backing behind a Ukrainian international bond issue.

In May 2014, the US guaranteed a US$1bn Ukrainian bond maturing in 2019 through the US Agency for International development.

That bond was given a credit rating in line with the US sovereign at Aaa by Moody’s, AA+ by Standard & Poor’s and AAA by Fitch. This is …

Obama Administration Unveils Federal Fracking Regulations

The Interior Department began drafting the rules during President Obama’s first term after breakthroughs in hydraulic fracturing technology led to a surge in the production of oil and gas.

Monte Paschi key shareholders back Profumo as chairman

SIENA/ROME (Reuters) – Three key investors in Monte dei Paschi di Siena have proposed confirming Alessandro Profumo as the bank chairman for the next three years, two sources with knowledge of the matter said.

Merkel Warns That Greece Will Receive Aid Only if Reforms Are Met

The statement, at a European Union leaders’ summit, came as Greece scraped together enough money to pay around $2.17 billion in debts.

When The World’s Reserve Currency Flash Crashed: “I Haven’t Seen Anything Like It Since The Financial Crisis’

On Wednesday afternoon, just after the close of the market, the US Dollar, the world’s reserve currency flash crashed. This is how the WSJ described the move:

In the latest episode Wednesday, a message from the U.S. Federal Reserve that it is in no hurry to raise interest rates caused a big slump in the dollar, which has run up a huge rally so far this year. The euro surged more than 4% against the buck, its biggest jump in a single day in 15 years, according to Deutsche Bank. Early on Thursday, the European currency resumed its slide.

The sheer speed of the round trip in the euro-dollar exchange rate—the world’s most heavily traded currency pair—left traders and investors reeling.

We profiled the staggering move in real-time as it was happening:

Your Money: A Scary Movie: Filling Your 401(k) With Company Stock

Employer stock in 401(k) plans is less common than it used to be, but it’s still in plenty of them, including the plan at RadioShack, which filed for bankruptcy protection last month.

Wall Street rises on Nike, lower dollar; set to snap three weeks of losses

(Reuters) – U.S. stocks rose on Friday, putting the S&P 500 on track to snap a three-week streak of losses, following upbeat results from Nike, further gains in biotechs and a pullback in the dollar.

Income, Education and Inequality in the “Recovery”: Prepare to be Surprised

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Note to the higher education industry: issuing diplomas doesn’t magically create new jobs in the real world.

By virtually any standard, wealth inequality has soared to historic levels in the six years of “recovery” since the Great Recession of 2008-09. Economist Emmanuel Saez, who has long collaborated with Thomas Piketty, described the recent extremes of wealth inequality in a recent paper Striking it Richer: The Evolution of Top Incomes in the United States, which provides an in-depth look at the widening gulf between the top 1% and the bottom 90% from 2009 to 2012.

Here is a chart of the top 10% share of income, based on their research (the note in red marking the beginning of financialization in 1982 is my own):

As author David Cay Johnston noted in an insightful review of Piketty’s book Capital in the Twenty-First Century, Trickle-Up economics: “The top 1 percent of Americans raked in 95 cents out of every dollar of increased income from 2009, when the Great Recession officially ended, through 2012. Almost a third of the entire nati …

“Market Is Hyper Overpriced” Warns Retiring Fed President; “Significiant Correction” Coming

Fresh from a well-publicized dollar dispute with Goldman’s Gary Cohn, recently retired Dallas Fed chief Richard Fisher made an appearance on CNBC Friday and spoke with Rick Santelli. There were quite a number of notable exchanges including the following zingers..

Santelli: “If you had to rate the US economy 0-10 where would you peg it?”

Fisher: “We’re #1., we’re a 10. We’re the epicenter of growth and in the sweet spot.”

Santelli: “Do you think any part of the stock market being high has anything to do with the committee you just left and if you didn’t grade the economy on a curve would you still give it a 10?”

Fisher: “Well, what worries me is how totally lazy investors have gotten, totally dependent on the Federal Reserve and I find this to be a precarious situation.”

Fisher: “Are we vulnerable in my personal opinion to a significant equity market correction? I believe we are.”

Then Santelli pulls out a Pavlov reference suggesting that the Fed has in fact conditioned retail investors to be lazy prompting Fisher to point out the irony in the fact that global financial markets are depending on a “diminutive woman” (Yellen) to play Atlas. “What worries me is that the people that watch this show are completely dependent on the Fed — look at the volatility. I could see a correction taking place of substantial magnitude.”

Of course this is all the market’s fault and not the Fed’s for ballooning their balance sheet into the …