• China stocks fall, led by ChiNext, on margin tightening; Hong Kong down too (Reuters)
• Bond market sell-off rumbles on, stocks feel the pinch (Reuters)
• Bond Rout Wipes Out 2015 Gains as Traders Stay Glued to Screens (BBG)
• Greek Groundhog Day Continues With Talks Failing to Break Impasse (BBG)
• Greece and Its Creditors Agree on Some Measures in Bailout Talks (WSJ)
• How OPEC Hurt Big Oil (WSJ)
• 'Bellingcat Report Doesn't Prove Anything': Expert Criticizes Allegations of Russian MH17 Manipulation (Spiegel)
• GE Said to Hire Banks to Start Sale on $20 Billion Assets (BBG)
• Alibaba Pictures plans $1.6bn share sale (FT)
• How Companies Justify Big Pay Raises for CEOs (BBG)
• Elliott Associates Criticizes Proposed Takeover of Samsung C&T (WSJ)
• Israel calls on telecom group Orange to apologise (FT)
• Buyout Firms Cash Out at the Exit (WSJ)
• Yahoo wins rights to NFL’s first free global online broadcast (FT)
• U.S. Workers Ask: Where’s My Raise? (WSJ)
• Dish Network in Merger Talks With T-Mobile US (WSJ)
• Long arm of U.S. law may struggle to reach all FIFA defendants (Reuters)

Overnight Media Digest

WSJ

* Dish Network Corp is in talks to merge with T-Mobile US Inc, people familiar with the matter said.(http://on.wsj.com/1KaQWjw)

* FIFA President Sepp Blatter is officially a lame duck, but his protracted transition out of office has sparked uncertainty over what changes the rest of his term will actually bring.(http://on.wsj.com/1H2pCmB)

* The U.S. hedge-fund manager Elliott Associates LP has bought a 7.12 percent stake in Samsung C&T Corp, saying a proposed takeover of the company by Samsung Group was not in the best interests of Samsung C&T shareholders. (http://on.wsj.com/1SXnfGn)

* The Organization of the Petroleum Exporting Countries' gathering in Vienna amounts to a counseling session of sorts between global oil companies and the cartel, but no one expects the good times to return soon. (http://on.wsj.com/1EVr5VQ)

* The Connecticut Legislature approved a $40.29 billion, two-year budget late Wednesday that raises taxes on businesses and the state's wealthiest residents, despite objections from Republicans and some of Connecticut's biggest employers. (http://on.wsj.com/1BLjdWJ)

FT

Oil company Chevron Corp's head lashed out at European oil groups, who recently wrote to the UN asking it to help them devise a plan to stop global warming. Chevron's chief said that consumers will never back this idea of global carbon pricing system.

The French government said on Wednesday that it has asked state-owned nuclear group Areva SA to merge with EDF into a joint venture controlled by the latter.

Tom Hayes, the first trader to face a jury trial over alleged Libor rate-rigging offences, told investigators said that a top executive at UBS Group AG, Carsten Kengeter, attended a meeting where Hayes talked about rigging the rate.

Deutsche Bank will launch three innovation labs this year, partnering with big development firms to speed the creation of financial technology for its own uses and will spend up to 1 billion euros ($1.11 billion) on digital development in the next 5 years. The bank will run the projects in conjunction with companies such as Microsoft, HCL and IBM .

NYT

* As Prime Minister Alexis Tsipras of Greece visited Brussels on Wednesday to discuss a bailout deal, signs emerged that the two sides might be edging closer to a compromise. (http://nyti.ms/1IeLyK0)

* Elliott Management, run by Paul Singer, has bought a 7 percent stake in Samsung C&T Corp and has criticized Cheil's takeover proposal as "significantly" undervaluing the company. (http://nyti.ms/1dNEf1Y)

* Nomad Holdings Ltd said on Wednesday that it was in "early stage" talks to acquire the Continental Europe business of Findus Group, the British frozen food and seafood supplier. (http://nyti.ms/1M6uYN4)

* Maggi noodles were found to have high levels of lead in several samples, which Nestle India Ltd said were taken from an expired batch. (http://nyti.ms/1dNEUjY)

* A British court ruled on Wednesday that the Lloyds Banking Group Plc would not be allowed to redeem a series of high-interest bonds, a move the lender hoped would save it more than $300 million a year. (http://nyti.ms/1RKZT5q)

China

CHINA SECURITIES JOURNAL

- FTSE said on Wednesday that it included three new Chinese brokerages, namely Shenwan Hongyuan Group Co Ltd, Guosen Securities Co Ltd and Shanxi Securities , into its FTSE China A 200 Index, while taking out Hua Xia Bank and Anhui Conch Cement Co.

SECURITIES TIMES

- Hainan Airlines Co Ltd plans to cooperate with a subsidiary of Bohai Leasing Co Ltd to develop its aircraft leasing business, the company said on Thursday.

SHANGHAI SECURITIES NEWS

- Net capital inflows into the stock market in May were 1.46 trillion yuan ($235.58 billion), including 923.5 billion yuan through brokerages, 297.6 billion yuan via mutual and hedge funds, and 239.7 billion yuan through margin financing, according to the paper's calculations based on data from government and trust companies.

- The long-awaited Shanghai Insurance Exchange is expected to receive approval from regulators this year, the paper reported, citing a source with direct knowledge of the matter. Shanghai Insurance Exchange would be a significant step to build the city into an international financial centre.

CHINA DAILY

- The State Administration of Taxation will sign and update more tax treaties and step up the implementation of these agreements to help Chinese companies investing in countries that form part of the "Belt and Road Initiative", according to the director-general of the international taxation department.

PEOPLE'S DAILY

- China's Anhui province has scrapped restrictions on home purchases, and encourages banks to extend mortgage lending, as the local government seeks to promote steady and healthy development of the real estate market, according to a notice published by the Anhui provincial government on Tuesday.

Britain

The Times

The chief executive of Europe's largest stock market operator could have known about Libor manipulation by UBS traders when he was a senior executive at the Swiss bank, a court was told. (http://thetim.es/1dfnlIA)

Tim Cook launched a ferocious attack on Google, Facebook and other big internet companies, accusing them of selling out their customers by profiting from their private information. (http://thetim.es/1BKUCl0)

The Guardian

George Osborne should spread the pain of tough public spending cuts beyond the next two years, according to the OECD in a critique of the chancellor's debt consolidation strategy. (http://bit.ly/1FuYGr5)

The Irish government is set to launch a formal investigation into a number of transactions at the bailed-out Anglo Irish bank. Finance minister Michael Noonan proposed a formal commission of investigation at a cabinet meeting on Wednesday to address growing public concern about the bank's dealings with certain business figures including Denis O'Brien, Ireland's second-richest man. (http://bit.ly/1AL6YP8)

The Telegraph

Bob Dudley, the chief executive of BP, has dismissed concerns that Britain will exit the European Union, as Prime Minister David Cameron steps up efforts to renegotiate the treaty. (http://bit.ly/1FUojEc)

Greece faced a showdown with its creditors on Wednesday night as the country's prime minister headed to Brussels to try and break the deadlock between the two sides and secure a financial lifeline for the economy. (http://bit.ly/1FuYZlV)

Sky News

Patrick McLoughlin, the Transport Secretary, is to hold a final round of talks with Gatwick and Heathrow airports just days before a recommendation about a new runway that could spark a protracted legal battle. (http://bit.ly/1BKyXcP)

Xio Group, which is based in Hong Kong, is among a small number of remaining bidders for Genworth Financial's lifestyle protection unit, which has operations in more than 25 countries, including Britain. (http://bit.ly/1KDmNr0)

The Independent

Thousands of small investors scored a High Court victory over Lloyds Banking Group today after a judge backed bondholders who had fought a controversial buyback attempt by the bank. (http://ind.pn/1QqJ3Gn)

Wednesday evening’s “high level” meeting between between Greek PM Alexis Tsipras, Jean-Claude Juncker and Jeroem Dijsselbloem came and went with little more than a promise to keep talking, in what has become a familiar scene for those glued to the Greek drama. 

For now at least, Tsipras appears to be sticking to his party’s so-called “red lines” around pension cuts and a higher VAT, a stance that is apparently incompatible with the prepackaged deal prepared for him by Merkel, Hollande, Junker, and Draghi on Tuesday. Greece presented its own proposal on Monday evening prior to an emergency meeting in Berlin and it now appears creditors may actually have to read that draft if they hope to stick to the idea that Tuesday’s troika offer truly did not represent an ultimatum to Athens. Here’s more via Bloomberg:

Tsipras said demands by the euro area and the IMF for cuts in the income of poor pensioners and increases in value-added tax on power are unacceptable, highlighting what have been red lines in Greece’s stance since his anti-austerity Syriza party swept to power in snap elections in January.

 

“Ideas like cutting benefits for low-income pensioners, or raising the VAT rate for electricity by 10 percentage points, can’t be a basis for discussion,” he said...

 

“There was a constructive will from the European Commission to reach a common understanding,” he said.

 

(Tsipras in Brussels on Wednesday)

 

Greece has looked to the commission for support to dilute the austerity-first formula that’s underpinned two Greek rescues totaling 240 billion euros since 2010. This has led to clashes with creditors who say such bailout conditions have worked for other countries such as Ireland now out of aid programs and Greece should get no special treatment.

 

Creditors want the targets for the primary budget surplus - - the budget balance excluding interest payments -- to be 1 percent of gross domestic product this year, 2 percent of GDP in 2016, 3 percent in 2017 and 3.5 percent in 2018, said the Greek official, who called these proposals a “good basis” for further deliberations on the matter.

 

Tsipras said both sides were “very close” to an agreement on the targets for the primary surplus.

In other words: things are going nowhere very fast. 

Barring some manner of end-around whereby Athens is able to borrow from some as yet untapped source of funds, Friday’s IMF payment will almost certainly be missed (although some reports indicate the government still claims it has the cash). This was largely expected. Given Greece’s dire financial position, it seems reasonable to assume they will take any opportunity to buy time and the bundling option (whereby Greece can bundle all of its June IMF payments into one payment) will afford the Greeks a few days of breathing room while Tsipras tries to close a deal. 

Through it all, the troika is still holding all of the cards — or all of the cash. Unless creditors abruptly decide to relinquish calls for pension reform, Tsipras will eventually be forced to accept an unpalatable deal. Even if the ECB were to decide to remain completely neutral by routinely raising ELA and keeping haircuts on pledged assets unchanged, Greek banks will eventually run out of collateral. With deposit flight running above €100 million a day, the coffers would empty in a matter of weeks (if not days). At that point, it’s either introduce a parallel currency or revert to a barter economy. 

Given this, the base case scenario still seems to be concessions by Tsipras on pensions and VAT, concessions which will not go over well with Syriza hardliners who essentially put euro membership to a vote late last month. Should Tsipras be forced to accept a deal on creditors’ terms, he will have to pitch the unpopular agreement to an unwieldy parliament — political turmoil will ensue. 

Deutsche Bank has more on the possible outcomes:

What are the components of an "agreement"? The first component is Greek government sign-off, with the Prime Minister ultimately responsible. Our continued (marginal) baseline remains that such an agreement will be achieved,but the exact timing depends on the amount of pressure placed tonight as well as ECB willingness to tolerate ongoing increases to ELA funding. [This week] a small 500mio EUR increase to the ELA cap was granted, with accelerating deposit outflows in recent days likely further reducing the liquidity buffer available to Greek banks.

The second component to an agreement requires domestic political approval, with passage through the current ruling parliamentary majority being a pre- requisite for fund disbursement. It is only once legislation has passed through the Greek parliament that funding will be released. If the Greek government signs a deal, the three possible political processes would appear possible, in order of likelihood:

Passage through parliament, with potential opposition support and change in government coalition. This political avenue now seems the most likely as it is the quickest. Parliamentary ratification of an agreement could take place within a few days, with the main source of uncertainty being whether the current ruling coalition remains intact. Out of a 12 MP ruling majority, reports suggest a range of 10-40 MPs expressing strong dissatisfaction with the current state of play. Minister Nikos Pappas, one of the PM's closest associates, last week explicitly stated that the government would impose a three-line whip on any parliamentary vote, and the Prime Minister would likely attempt to ensure that any agreement is pre-approved by the party's central committee ahead of a parliamentary vote. With the track record of the current parliamentary majority exceptionally short however, it remains very difficult to assess the odds of parliamentary success. The need for opposition support - possibly in exchange for a change in the government coalition - would seem a likely outcome.

Referendum. A successful referendum would provide the Prime Minister with stronger political backing to pass an agreement through parliament, increasing the odds of ruling party support. However, this political avenue would require at least two weeks as well as requiring the prime minister's implicit backing. Absent such “reluctant support”, it is unclear if the referendum would be a success. It is also unclear whether a referendum could materialize before the end of June, when all IMF payments would be due, and as a result whether European creditors (and the ECB) would be willing to extend the existing program (even without disbursements) under such uncertainty.

Early election. A number of senior SYRIZA party officials have over the last few days suggested that an agreement may trigger an early general election. This is likely a means of pre-emptively exerting pressure on ruling party MPs, who in the event of withdrawing support from the government would be unlikely to be included in the party's new electoral list. An early election would be possible, but the least likely: the PM will likely be able to pass an agreement through parliament with opposition support, in turn generating strong incentives for a shift to a more moderate coalition within the existing parliament rather than a new electoral campaign following a painful compromise with European creditors. This notwithstanding, financial stability under an early election could only be ensured if some disbursements have materialized ahead of time accompanied by ongoing ECB financing of Greek banks. This itself will likely be conditional on passage of an agreement through parliament before a general election is called. 

Note the last bolded passage above: "...the PM will likely be able to pass an agreement through parliament with opposition support, in turn generating strong incentives for a shift to a more moderate coalition within existing parliament rather than a new electoral campaign following a painful compromise with European creditors." That translates to this: Tsipras accepts creditors' demands and enough Syriza 'radicals' relent for the PM to pass the deal through parliament effectively transforming the party into a more moderate political position. 

Again, that outcome remains the end goal for the troika. Creditors will force Tsipras to concede on most (if not all) of Syriza's mandate and the PM will then exert similar pressure on party hardliners until the deal is sealed and Syriza is effectively no longer Syriza. 

After that, the only question will be how the Greek populace responds.

Submitted by Mark St.Cyr,

(For Those Who Say I Just Don't Get It... Get This!)

For those who’ve been with me for a while you know the FTWSIJDGIGT section came into being when things I was being criticized for “having no clue” over the years came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue in cheek as to not use the old “I told you so” analogy.

I’m say this for the benefit of those who may be new reading here for the first time (and there are a great many of you and thank you too all). I never want to seem like I was doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall, good or bad – and let readers decide the credibility of either side. Occasionally there are times however they do need to be pointed out. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.)

So with that all said I thought today I would muse about a few things I believe are terribly important, for there seems a shift showing itself in dramatic fashion unseen since the 2008 financial meltdown. Not only are some key players, or institutions beginning to notice some troubling signs; but rather; those very signs that everyone was told'won’t or shouldn’t happen', not only are, they’re starting to rear their ugly heads in much greater frequency. Just today alone served up a near bonanza of “wait…what?” statements or revelations from many of the most fervent “everything is awesome” cheerleaders over the years.

Something is amiss within the “cheer-leading” cartel. I believe they themselves are beginning to realize what people like myself and a few others have been saying: “Once the residual effects since the ending of QE are no longer present, the realization and picture of what truly is the fundamental economy will become ever and ever clearer.”

And just 6 months later, that picture is not looking pretty. Especially to those that told (and sold) the illusion to clients and media audiences. The real issue is that the image is developing far quicker than they themselves had anticipated, and seem to be scurrying around like chickens with their heads cut off trying to find an exit ramp to some form of credibility saving grace. Much like a pollster that wants to shape a narrative will or might do. e.g., Will push the issue that their guy or gal seems to be winning certain demographics whether they are or not. Only to then push the reality closer to the “truth” whether bad or horrendous in an effort to save face (and the illusion of credibility as to stay in business) once they get closer to the real election and results are returned.

A hypothetical example goes something like this: Six months ago ____________ (fill in the blank) was ahead by 60%. Then within 2 weeks of election, with no obvious mistakes, scandals, or what ever, suddenly – it’s reported (by that pollster) it’s now neck and neck. At the day of election it seems suddenly there’s been a shift (as expressed by the pollster and called out right before) there’s a possible upset brewing that a “new poll” shows (again done by the same) _________ may lose by double digits.Then you read later something like __________ wound up losing by 30%, 40% or even more percentage points.

Some will shrug and say “Oh, well. That’s the way it goes.” However, the informed (both on the sidelines as well as those that actually play the game) will garner: ____________ never had a 60% lead. It was all a show for optics. The issue or candidate may lose, but what’s more important is that the pollster look like they actually had a credible call somewhere. Otherwise – who’s going to hire them next time if the call is they’re leading by 60% and the swing is to a loss of 100%?

It’s an old trick of the trade and it’s been around for a long time, and will probably be around even longer for one reason: It works. And the big money gets paid to those that know this and use it to their advantage. But now you have an insight into something maybe you didn’t realize was taking place near daily. I also used the above specifically because in kind – I believe you are starting to see this very pretense play out within the financial media. You’ll see more of what I’m implying as I move along I’m sure.

I’m not one for links or linking unless I feel it gives context or possible clarity. So with that said I’m going to post far more links than I think I’ve ever done. However, whether you read them or not isn’t the issue. What i also want to project is just how quickly and by whom narratives, or sticking points are no longer “sticking” for them; but rather, past statements are sticking to them. And it’s quite obvious they are trying to don as much Teflon® as possible. To wit:

(The links are all to Zero Hedge™ articles because I believe they put the issues into context better than where the original story may have come from. How much further you would like to dig is of course up to you, and doing so I believe would be prudent.)

Suddenly one of the greatest “cheer-leading” houses with their very own rotation of “everything is awesome” faces seen across the financial media out of the blue makes this call: “The Fed Has Been Terribly Wrong” Deutsche Bank admits

It’s one thing for a bank. It’s quite another when what everyone considers the Fed’s “house organ” or “house favorite” reporter pens a piece in none other than the Wall Street Journal™ blaming you and I for not spending enough? “A Letter To Stingy Consumers”

I completely agree with ZH’s assessment of this tirade: If they hadn’t told me I would have thought it was satire. This reeks or sounds of desperation as to try to spin the message as: See….It’s you – not us! I’m still shaking my head on the voracity as well as condescension spewing from what should be at the least something resembling high brow reporting. To me, this alone is very telling.

Over the years one thing I’ve always stressed is: if you truly want to look for clues – Watch the forex or FX markets. Here’s an example when I explaining possible progressions to a crisis scenario:

“Then we move to crisis.

 

Just how does the Federal Reserve handle such a dilemma of this scale? I use the word “scale” for good reason. As many may know the Forex markets dwarf what the lovingly referred to as “mom and pop investor” believe it to be.

 

The saving of the “stock market” (aka the Equity Markets) in 2008 vs a Forex market crisis is the equivalent of bailing out a local bingo hall as compared to dealing with such a crisis on the scale of Las Vegas casino.

 

If the Forex market suddenly gets rocked with a clear fundamental breakdown and breakup of everything now known as the E.U. Along with all the tentacle entangled carry trades? Crisis might be an understatement.

 

Contagion across the Forex exchanges will not only wreak havoc from within it will also spread directly to the Bond markets. (which many don’t realize is also considerably larger themselves than the equity markets)

 

Such sweeping turmoil will most assuredly plunge the equity markets themselves into complete and utter chaos as money managers, market makers, margin executives and more decree: “Sell Everything, Close Everything, Now!”

 

What chaos might also be unleashed as the High Frequency Trading (HFT) algos are set loose selling anything and everything into a market where it’s suddenly revealed via news reading computers that the jig is up?”

And here is what has been transpiring within the last 24 and 48 hours or so.

“Dollar Flash-Crashes on Sudden EUR Spike Amid Carnage In Bunds”

And as if that’s not enough here’s more: “EUR USD cross up 300 pips in last 24hrs, Dollars Biggest Drop In 2 Years”

But as they say on TV “But wait! There’s more!!!

Suddenly none other than Goldman Sachs™ themselves is warning: “By Almost Every Measure Stocks Are Overvalued”

And even Robert Shiller: “Unlike 1929 This Time Everything….”

Let me remind you, In the last 24 to 48 hours or so the above suddenly began appearing. (rapidly in both volume as well as frequency) They are far from the only one’s but they show a change in the air that was near unheard of just 6 months ago – let alone the last few years. Take from it what you will however, what you shouldn’t do is ignore it .This is (in my opinion) a sea change from what has been the meme of the financial media, as well as world since the early part of the recession in 2009.

For a little more light or clarity let me expand with this:

Back in November of last year I was taken to task by some when I penned the article “Why Tony Robbins Is Asking The Wrong Questions”

This was when Tony (I’m using the personal only for ease) just released his first book in twenty years and it was aimed squarely at investing. And being in the motivation industry myself as well as enough intellectual property out on the web to back up my thoughts on the matter, I believed then as I do now, I had the standing and took some of the suppositions made to task. Many of the overarching themes were pointing to Index investing, diversification, and others. Here’s what I said in relation to these:

On Indexing:

“The true myth is that what is actually in the index as a business, its economic makeup, its validity as a true business, or anything else that we once understood as what a business “is.” Is – no longer and doesn’t mean squat.

 

The only “is” that now matters is this : Is – the index one that has a bulls-eye that the Central Banks deem important? i.e., they will buy it directly or fund its purchase via their proxies. Period.”

On Diversification:

“The idea of “diversification” is a great sounding idea in principle and theory. However, it is one of the greatest myths when it comes to protecting one’s assets in today’s financial market place aka Wall Street.

During the financial crisis of 2008 when the markets were in a free-fall and panic was ensuing “a diversified portfolio” did little if anything to help stem the tide. As a matter of fact, many found the “diversification” side of their portfolio which was to help “protect” not only fell just as far in value, but the ability of many to even remain solvent going forward was questioned.”

On – and more:

“The markets for all intents and purposes are no longer for the “average” person looking to make gains in any form today. What is needed now more than ever is a direct understanding that safety – safety above all else – is paramount. And exactly how one can achieve it. Or get as close to the proverbial “cash in the mattress” understanding of it as humanly possible.”

Since then the market which was at the time of his release on fire, and just throwing darts blindfolded to pick an index to “invest” in was yielding double-digit gains per year. And sometimes per month! It’s been a straight up rocket ship since 2010 and the implementation of QE. Unseen in tenacity as well as the sheer absence of even a mild pullback of over 5%. A stock market that has tripled and hasn’t had a correction of note once in years! Absolutely stunning. Until – (maybe you guessed it) November of last year. The same time the book came out QE ended. And guess what? I’m guessing you did, but here’s a chart for some clarity with notations I made. I think they’re crucial to the narrative.

The S&P from Nov.’14 – thru to today.

Just for some context: It took approximately only 14 days to drop that 5%, and was so discerning to the Federal Reserve, St.Louis Fed. President James Bullard took to the airwaves quelling the “panic attack” with the soothing words that QE4 wouldn’t be a bad idea.

In comparison: It has now taken a good 6 months to move only 2% higher than those November prints. And we’re faltering more routinely with drops and pops serving only to bring many 200 or 300 point swings in the Dow or the same in relativity in the S&P to end the roller-coaster days – to near unchanged.

The only difference since then? Outright QE has since been shelved. (just to be clear, they ended in that November) Before the ending of QE? We were doing comparable 2% up moves with no fall backs for nearly 4 years continuous. But now? _____________________(insert crickets here) And so is the same for those that were touting this market was rising on fundamentals. They too are now saying the same as the crickets when it comes to fundamentals.

Now all the so-called “smart crowd are hoping for is that the narrative of “bad is good, and worse is fantastic!” still applies. However, if you watch or read a lot of what they’re expressing today – even they no longer feel confident which way the Fed. will interpret the data. For the Fed. itself has muddied their supposed “clarifying” policy intentions so much – bad can go from good, to whatever faster than the blink or wink of a Fed. officials eye. Not only thoroughly confusing the financial press, but even more so – the High Frequency Trading machines. Just better hope your index (or 401K holdings) are on the right side of what the HFT vacuum tubes interprets what the FOMC thinks the meaning of “is” Is. Just saying.

But there’s no need to take my word for it. None other than Carl Icahn himself is now expressing outright warnings and concerns.

And if all the above isn’t enough to draw attention that there is some real concern to watch for I’ll leave you with this last headline and link that puts it all in prospective in my opinion…

None other than Jeremy Siegel felt the need to explain: “No Way There’s A Bubble, No Signs of Recession”

As I said earlier. All this in the last 24 to 48 hours. I believe even though many of us may see the bigger picture, it might also be prudent to not only pay even closer attention, but possibly get the binoculars and microscopes out. After all I didn’t even mention Greece, the EU, China or Russia. But the week is young…No?

The most important not yet double seasonally-adjusted economic datapoint is upon us: in 90 minutes the BLS will report the May payrolls number which consensus expects to rise by 225K, (range of 140K to 305K), barely unchanged from April's 223K. The meaningless unemployment rate is expected to remain unchanged at 5.4%, even as the number of people not in the labor force likely will rise to a new record high. The most important variable, however, will be the hourly earnings with consensus expecting a 0.2% increase for all workers (the non-supervisory workers category is a different story entirely), up from the 0.1% increase in April.

This is what Wall Street expects from the NFP print, by bank:

• UBS 205K
• Morgan Stanley 210K
• Goldman Sachs 210K
• Credit Suisse 220K
• JP Morgan 225K
• Citigroup 225K
• HSBC 230K
• Deutsche Bank 275K

Yet one wonders if Wall Street isn't overly optimistic as usual. As the following chart from @not_jim_cramer shows, based on recent regional employment surveys, the realistic print is far lower, if not negative.

Of course, correlation is not causation, but it goes without saying that a negative NFP print would send the ES promptly limit up, crushing the latest batch of 10Y treasury shorts in the process, as it would confirm what many have said, namely that the Fed is now locked into ZIRP and will be unable to raise rate into perpertuity... unless of course the only reason to hike rates is to send the US economy into a tailspin just so the Fed can then launch QE4.

Inversely, if Joe Lavorgna is right with his 275K print, and watch as the bid stack evaporates as even a June rate hike is once again back on the table.

Some more on the possible market reaction courtesy of RanSquawk:

A strong NFP reading coupled with sustained wage growth could see the US yield curve steepen if investors bring forward rate hike expectations. The USD-index may also resume its upward trend in the aftermath of a stellar jobs number, particularly given the recent weakness seen in the greenback. However, should payrolls miss on expectations, then expectations for a September rate hike could be reduced as investors push back the prospect of a Fed rate hike toward December or even next year. Of note, futures markets are currently pricing in a 62% chance of rate hike in December with a 27% chance of an earlier rate hike in September.

Fresh off a farcical ‘crack down’ on “bad actor” banks that colluded to rig the $5 trillion-a-day FX market, the DoJ is launching another faux crusade against Wall Street.

As a reminder, the Justice Department recently extracted guilty pleas from several TBTF banks in connection with forex manipulation. The entire effort was of course meaningless and ended with what amount to token fines and no jail time for any of the conspirators. Worse, the banks were able to obtain SEC waivers which ensured their ability to “efficiently” raise capital and participate in private offerings (among other important activities) would not be curtailed because after all, no one wants another “Arthur Andersen”.

If you don’t see the connection between banks rigging FX markets and a decade-old accounting scandal, that’s because there isn’t one. Here's what we said last month regarding the excuse for allowing Wall Street's to obtain SEC waivers:

The excuse for allowing Wall Street to skirt the very penalties that were put in place as a result of the very things for which the banks are now being prosecuted is two-fold: 1) there’s the so-called ‘Arthur Andersen effect’ whereby the decade-old collapse of an accounting firm and the layoffs that accompanied it are somehow supposed to represent what would happen if a Wall Street bank were not able to claim seasoned issuer status, and 2) curtailing a major bank’s ability to issue capital “speedily and efficiently”, participate in private placements, and manage mutual funds represents a systemic risk.

So, emboldened by its recent “unprecedented” prosecutorial success, the DoJ will now pursue a fresh round of MBS-related settlements with banks that knowingly packaged and sold shoddy CDOs.

Via WSJ:

Up to nine banks are in line for the next round of billion-dollar payments related to soured mortgages as federal and state officials prepare their next set of cases, people familiar with the matter said.

 

The Justice Department and state officials, which already have reaped almost $37 billion from the largest U.S. banks, are now targeting U.S. and European banks. Settlements with Goldman Sachs Group Inc. and Morgan Stanley could be finalized as early as late June, these people said.

 

The settlements relate to securities backed by residential mortgages that plunged in value during the financial crisis. Banks are expected to pay from a few hundred million dollars to $2 billion or $3 billion each, depending on their size and the level of misconduct they allegedly employed in arranging the securities, some of these people said. The deals, which are expected to come individually rather than as a group, are likely to stretch out over months as details are worked out, these people said. Negotiations with most banks are still in early stages, these people said..

 

The Justice Department could pursue settlements with large U.S. regional banks when these settlements are over, in part based on the amount of mortgage-related securities they underwrote and sold, some of these people said..

 

Other banks expected to settle in coming months include Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC,UBS AG and Wells Fargo & Co.

Most of them have disclosed that they are being investigated for mortgage matters, but the timing and size of potential fines haven’t been reported before..

 

These settlements would represent a passing of the torch to new U.S. Attorney General Loretta Lynch, since settlements with J.P. Morgan, Citigroup and Bank of America were negotiated under her predecessor, Eric Holder.

 

(Attorney General Loretta Lynch)

Ah, yes. The proverbial "passing of the torch" from one crusader for justice to another.

Or, more accurately, Loretta Lynch is now the person in charge of shaking down Wall Street for government protection money. As long as the banks pay their "taxes", no one will ever go to jail, fines will never amount to more than a fraction of the profits reaped from the activities under scrutiny, and, most important of all, the SEC will ensure that the rules designed to punish "bad actor" banks will never be enforced. 

We've said it before and we'll say it again: it's good to be TBTF.

In the summer of 2014, the biggest activist hedge fund story on anyone's lips was whether Bill Ackman had broken securities laws when he had accumulated a massive $3 bilion stake, or roughly 9.7% of the outstanding stock of Allergan (using leverage via call options), in advance of Valeant's announcement it would launch a hostile offer for Allergan. The punchline: Ackman had secretly collaborated with Valeant management in advance of the material, public announcement which sent Allergan shares soaring and was the primary reason for Ackman's blockbuster year and billions in profits for Pershing Square.

The story came and went (nowhere) because the man who had given Ackman the SEC's tacit blessing that nothing bad would happen to Bill, as well as a green light to proceed with a trade that would land anyone else in prison, was none other than the former head of enforcement at the SEC, now a $5 million a year legal advisor at Kirkland and Ellis, Robert Khuzami (formerly general counsel of serial market manipulator Deutsche Bank). As a result, the SEC's inquiry into whether Ackman had broken insider trading laws was quickly forgotten.

However, aside from Ackman's allegedly criminal trading, there was another, perhaps even more important tangent, one which only Zero Hedge picked up on last summer: the topic of idea dinners among hedge funds, in which in order to mitigate the securities violation, numerous activist hedge funds would collude with each other as a means of limiting their legal exposure, while altogether profiting when one or more of their group went "hostile" on the target du jour.

This is what we said last August, when we asked "Is The SEC Asking These Hedge Funds Why They All Rushed Into Allergan Last Quarter?"

It remains to be seen if frontrunning the general public on collusive, material, non-public information that a strategic would be about to announce a bid for Allergan is indeed "completely lawful", however we do have a question: now that the SEC is formally investigating Ackman for what may be a massive frontrunning scam, is it also looking at all the other hedge funds which reported brand new stakes (some of which also entirely in the form of calls) in Allergan in the second quarter?

 

The reason we ask is that as everyone knows, in order to diffuse the scent of criminality and dilute their culpability, what hedge fund managers, especially of the activist variety, will do nearly all the time ahead of a significant public announcement of a major stake, is to hold an "idea dinner" in which they preannounce to a select group of close friends what they are doing. As such, what ends up happening is that the benefactor of what may be an illegal tip off, or in this case collusion, is not only entity, but numerous, thus making it very difficult for the SEC to isolate just who "leaker zero" was, and who benefited from the information - certainly complicated if the beneficiaries are more than a dozen.

 

Presenting exhibit A: this is the list of hedge funds and prop trading desks that according to Bloomberg (and CapIQ) announced brand new and quite material stakes, in Allergan, after building up a position some time in the second quarter, having no holdings as of the first quarter.

 

 

It goes without saying that the list of "position initiators" is the who's who of Idea Dinner participants with names such as York, Perry, Mason, Och Ziff, Eton Park, Viking, and so on.

 

So, to recap: if the SEC is indeed serious about getting to the bottom of the Allergan insider-trading scam, is it also looking into just how these hedge funds decided to buy into Allergan in a quarter in which the stock soared on the Valeant/Ackman news?

 

Because while it is perfectly legal if these funds did their homework and rather "mysteriously" all decided to buy into the stock at the same time, or put on M&A arbs after the hostile bid announcement, one wonders just how legal it would be if one or more of these investors only bought AGN stock after getting a "sure thing" tip from Ackman that he was about to go activist on Allergan with Valeant money, something which is certainly illegal.

 

All that said, we aren't holding our breath on the SEC actually doing its job for once, and certainly not before Pershing Square goes public. After all can't hinder "capital formation" in these here unrigged markets.

And so, 10 months later, our observations are once again proven prophetic... That, or the SEC reads this "fringe" website religiously for clues how to do its job, because as the WSJ reports the SEC has answered our question, and yes: the  SEC is finally asking not only "these" hedge funds why they all rushed into Allergan (see above), but into every other collusive activist take out target.

According to the WSJ, the SEC is investigating "whether some activist investors teamed up to target companies without disclosing their alliances, potentially in violation of federal securities rules, according to people familiar with the matter."

The SEC’s enforcement division has recently opened multiple investigations and sent requests for information to a number of hedge funds, according to some of the people. Neither the names of the funds nor the companies they targeted could immediately be ascertained.

 

As part of a broader effort to promote transparency, the SEC is looking at whether certain investors coordinated their efforts without filing appropriate disclosures. Federal securities regulations require investors who jointly agree to buy, sell or vote securities to disclose those arrangements, and to designate themselves as a group if they together own at least 5% of a company’s stock or are soliciting votes from other shareholders. Such formal, disclosed alliances have included a recent effort by Barington Capital Group LP and Macellum Capital Management LLC to win board seats at retailer Children’s Place Inc. 

The WSJ says that "the issue has taken on greater importance as activist hedge funds, which accumulate stakes in companies and agitate for changes such as stepped up share buybacks and asset sales, have become a major force in corporate America in recent years. Activists sometimes tip potential hedge fund allies to their trading plans, a Wall Street Journal investigation found last year. The practice isn’t illegal as long as they don’t coordinate their trades."

Unfortunately for said activist hedge funds, it is impossible to play dumb when virtually all of them decided to take stakes in Allergan in the same quarter as Ackman was building up his massive stake. The punchline: they could and would have only done that if they knew there was a guaranteed bullish catalyst imminent. Such as Valeant announcing a hostile bid for Allergan, a Valeant which was collaborating with the biggest activist hedge fund in the US currently, Pershing Square.

Surprisingly, until recently the SEC, perpetually clueless and corrupt, likened doing its job to cooking.

Michele Anderson, who heads the SEC’s office of mergers and acquisitions, said at a conference in March that changing the regulations on activist disclosures has proved to be “like peeling an onion,” where efforts to tackle one issue simply reveal another.

So, because it is difficult, it is best to not do your job at all, eh SEC?

But then something appears to have changed.

In a sign of the SEC’s new focus on the issue, the agency in March sent a letter to activist fund Bulldog Investors LLC about its campaign for board seats at Stewart Information Services Corp. , a provider of title insurance. The SEC asked whether Bulldog had any “agreements or understandings” with Foundation Asset Management LP, another fund that had run its own proxy fight at the company.

 

Bulldog co-founder Phil Goldstein said in an interview that the funds never made any agreement about trading or voting shares. Scrutiny from the SEC could chill legal discussions between investors, he said, adding that it isn’t surprising that underperforming companies would draw interest from several activists.

This is how the Bulldog guy justified collusive activity between activists:

“If you go to a Grateful Dead concert, you’re going to find a lot of Grateful Dead fans,” he said. “They’re not a group. They just like the same music.”

What he left out is that the result of going to a Grateful Dead concert with other "fans" isn't a multi-million dollar payday for all said "fans" due to illegally collusive behavior.

Which is precisely what activist hedge fund "idea dinners" and other such collusive actions represent.

Apparently, even the most clueless SEC regulator, the one whose patronage of Wall Street means she has to recuse herself of pretty much doing her job entirely, SEC head Mary Jo White spoke up:

“Our role at the SEC is not to determine whether activist campaigns are beneficial or detrimental in any given circumstance,” Ms. White said. “Rather, the agency’s central focus is making sure that shareholders are provided with the information they need and that all play by the rules.”

Rules.

Funny. The only rule is when the activist community bribes the SEC to make sure this latest "investigation" goes away, to make sure there is no paper trail. Otherwise, the mere suggestion that the next hedge fund idea dinner may be bugged by an SEC mole will mean that in the coming years "activist" alpha, which in the past few years was the only "strategy" outperforming the market, will promptly disintegrate just like the concept of "fair and efficient" capital markets in a rigged, centrally-planned world disintegrated years ago alongside with retail interest in it.

Back in May, Deutsche Bank’s co-CEOs Anshu Jain and Jürgen Fitschen got a rude awakening. 

At the bank’s annual meeting, less than two-thirds of shareholders said they approved of top management’s performance. That was down markedly from nearly 90% the year before. 

At issue: ambiguity surrounding planned cost cuts, distant profitability targets, and investor concern about the bank’s corporate culture. 

Deutsche, perhaps more than any other firm on Wall Street, embodies the corrupt bank stereotype.

Allegations against the bank and its employees range from rate-rigging to the violation of US sanctions on Iran. Legacy litigation has cost the bank around $9 billion over the past three years alone and that figure could rise materially as reports suggest the DoJ may seek to extract a settlement of as much as $2-3 billion related to soured MBS in the coming months.

The problems go beyond the high profile cases. Last month for instance, Deutsche paid $55 million to settle an SEC investigation related to allegations the bank deliberately obscured billions in paper losses on a derivatives book tied to the 2007 collapse of the Canadian ABCP market. 

From Deutsche’s annual report:

We are currently the subject of regulatory and criminal industry-wide investigations relating to interbank offered rates, as well as civil actions. Due to a number of uncertainties, including those related to the high profile of the matters and other banks’ settlement negotiations, the eventual outcome of these matters is unpredictable, and may materially and adversely affect our results of operations, financial condition and reputation. 

 

A number of regulatory and law enforcement agencies globally are currently investigating us in connection with misconduct relating to manipulation of foreign exchange rates. The extent of our financial exposure to these matters could be material, and our reputation may suffer material harm as a result. 

 

A number of regulatory authorities are currently investigating or seeking information from us in connection with transactions with Monte dei Paschi di Siena. The extent of our financial exposure to these matters could be material, and our reputation may be harmed. 

 

Regulatory and law enforcement agencies in the United States are investigating whether our historical processing of certain U.S. dollar payment orders for parties from countries subject to U.S. embargo laws complied with U.S. federal and state laws. 

 

We have been subject to contractual claims, litigation and governmental investigations in respect of our U.S. residential mortgage loan business that may materially and adversely affect our results of operations, financial condition or reputation.

You get the idea. 

Now, shareholder frustration over the bank’s performance and the seemingly intractable nature of the firm’s legal problems have culminated in the resignation of Jain and Fitschen. WSJ has the story:

 

Anshu Jain and Jürgen Fitschen, the embattled co-chief executives ofDeutsche Bank AG, plan to announce their resignations, according to people familiar with the matter, an abrupt move that throws into question the future direction of one of the world’s largest banks.

 

Mr. Jain, a longtime trader and investment banker, plans to step down effective at the end of June, one person said. The other co-CEO, Mr. Fitschen, plans to leave after Deutsche Bank’s annual shareholder meeting next May, the person said.

 

The joint resignations, which could be announced as soon as Sunday, follow a series of financial missteps and regulatory penalties at the giant German bank, which has investment-banking and wealth-management operations all over the world. Most recently, the bank was forced to pay about $2.5 billion and to plead guilty to resolve accusations that its traders tried to rig benchmark interest rates, including the London interbank offered rate, or Libor. Some big shareholders have voiced increasing displeasure with the bank’s performance and the management team’s turnaround plans.

 

Adding to the pressure, Mr. Fitschen is on criminal trial in Germany in connection with the collapse of the Kirch media empire. Mr. Fitschen, 66 years old, has denied the charges.

 

The sudden resignations introduce the possibility of major change at Deutsche Bank. In April, Messrs. Jain and Fitschen took their latest stab at an overhaul strategy designed to streamline the at-times unwieldy bank and to boost its profitability. But to the disappointment of some shareholders, they stopped short of a radical plan to break up Deutsche Bank’s investment-banking and retail-lending operations into separate companies.

 

The catalyst for the sudden resignations is unclear.

While there were key macroeconomic data out of Asia earlier in the session, with Japan revising its Q1 GDP up from 2.4% to 3.9% (due to an upward revision to capex) making some wonder if it simply didn't snow in Japan this winter, as well as Chinese trade data that was once again disappointing with the third consecutive drop in exports coupled with an 18.1% collapse in imports hinting that nothing is going well in China's economy (which once again sent stocks soaring this time up another 2.2% on certainty another PBOC rate cut is imminent, pushing the PBOC to a fresh 7-year high of 5,132), it was actually a leaked Obama comment on the strong USD that moved markets.

Shortly before 3 am Eastern, BBG blasted the following:

• FRENCH OFFICIAL: OBAMA SAID STRONG DOLLAR IS PROBLEM

Which promptly set the USD tumbling:

... before just one hour later, the US realized leaks like this are not allowed, the Fed as an "independent" organization, and that Obama really meant the strong USD is good if anything, we got the following headline:

• U.S. OFFICIAL: OBAMA DIDN'T SAY STRONG DOLLAR WAS A PROBLEM

Which in turn strenghtened the USD... 

... but only modestly showing that the market realized the official US position had indeed been leaked and that as explained before, the Fed is cornered, on one hand unable to hike due to further USD profit-crippling strength, on the other unable to keep rates low over market stability and credibility concerns.

In other news, with Greece hanging around Europe's neck and this week seen by most as the decisive one in which a deal needs to get done ahead of a the June 30 "red line" deadline, German stocks are finally feeling it and a few hours ago the Dax entered correction territory, dropping 10% from its April highs.

Elsewhere, as previously reported, following yesterday's surprise Turkish election outcome, the Turkish Lira continued its plunge, and dropped as much as 5% in earlier trading to a record low 2.80 before correcting modestly. In related news, the MSCI's main Emerging Market index posted its longest, 11-day losing run since 1990 driven by the 6% tumble in Turkish stocks.

Emerging market stocks drop for an 11th day: That hasn't happened since 1990... pic.twitter.com/jKoybdbe7j

— Mark Barton (@markbartontv) June 8, 2015

A more in depth-look at global markets from RanSquawk notes that Asian equities struggled to find direction as participants reacted to Friday US NFP report, which saw US equities finish in the red as participants brought forward rate lift-off expectations. This further weighed on emerging market stocks which are now on course for their longest slump since 1990. Nikkei 225 (-0.02%) fell as final Q1 GDP revisions marked the best quarter for Japanese  growth in 2yrs, tempering possibility of near-term BOJ easing (Q/Q 1.0% vs. Exp. 0.7% (Prev. 0.6%). Elsewhere, the Shanghai Comp. (+2.2%) and Hang Seng (+0.21%) rose with the former extending on 7-year highs, as participants digested today’s mixed Chinese trade data. The headline reading posted the 3rd largest surplus on record (59.49bln vs. Exp. 44.80bln) while exports and imports saw a 3rd and 7th consecutive monthly decline, respectively.

European equities kick off the week in the red, with the DAX officially slipping into correction territory as the index has fallen by around 10% from highs seen in April. Today’s session has been largely dominated by a number of major M&A stories in Europe, including Shire (-1.6%), Actelion (+7.6%), Diageo (+6.5%), BT (+1.2%) and Deutsche Telekom (+0.2%).

Elsewhere, Deutsche Bank (+5.8%) are among the best-performing stocks in Europe after Co-CEO’s Jain and Fitschen stepped down, with optimism surrounding the German Bank as incoming CEO John Cryan is said to be responsible for the turnaround of UBS whilst serving as CFO.

Bunds has continued its downward trend, shrugging off reports that negotiations between Greece and its creditors have reached an impasse as relations with Greek PM Tsipras and EU Chief Juncker are said to have soured after Tsipras branded the latest EU proposals as insulting.

The USD was initially pressured in the wake of comments from a French Official at the G7 who quoted US President Obama saying that the strong USD is a problem, which saw USD/JPY falls to fresh lows and other major pairs at highs including EUR/USD and GBP/USD. However, the USD pulled off worst levels after US Officials later stated that the President had been misquoted which sent GBP/USD into the red, while EUR/USD held onto its gains, albeit off best levels. Separately, USD/TRY printed a fresh record high, while Turkish stocks were down 10% in the wake of the Turkish elections over the weekend which showed PM Erdogan's AK Party failing to secure a single-party government.

In the commodity complex, newsflow has remained light with WTI and Brent consolidating in modest negative territory after largely tracking fluctuations in the USD-index in early trade thus far. In the metals complex, a similar story can be told with spot gold trading relatively sideways amid scarce newsflow.

In summary: European shares fall with the basic resources and oil & gas sectors underperforming and food & beverage,  telco outperforming. Germany’s DAX fell as much as 10% from its April peak. Deutsche Bank shares gain most since 2013 after CEO change. Lira Slides, Turkish Stocks Plunge as Erdogan’s AK Single-Party Era Ends. The Dutch and Spanish markets are the worst-performing larger bourses, the U.K. the best. The euro is stronger against the dollar. Greek 10yr bond yields rise; German yields increase. Commodities little changed, with WTI crude, Brent crude underperforming and natural gas outperforming.

Market Wrap

• S&P 500 futures down 0.1% to 2089.8
• Stoxx 600 down 0.4% to 387.6
• US 10Yr yield down 2bps to 2.39%
• German 10Yr yield up 3bps to 0.87%
• MSCI Asia Pacific down 0.4% to 147.4
• Gold spot up 0.2% to $1174/oz
• Asian stocks fall with the Shanghai Composite outperforming and the Sensex underperforming; MSCI Asia Pacific down 0.4% to 147.4
• Nikkei 225 little changed, Hang Seng up 0.2%, Kospi down 0.1%, Shanghai Composite up 2.2%, Sensex down 0.5%
• Apollo Is in Talks to Buy Saint-Gobain Unit for $3.3b
• GE Said to Near Canada Deal as Ares Seeks Other Loan Assets
• Actelion Surges on Report of $18.9b Shire Approach
• Swedish Orphan Says Talks on Possible Takeover Offer Have Ended
• Monsanto Offers to Pay Syngenta $2b If Takeover Fails
• Euro up 0.17% to $1.1133
• Dollar Index down 0.06% to 96.25
• Italian 10Yr yield down 1bps to 2.23%
• Spanish 10Yr yield little changed at 2.22%
• French 10Yr yield up 3bps to 1.2%
• S&P GSCI Index little changed at 433.1
• Brent Futures down 0.3% to $63.1/bbl, WTI Futures down 0.5% to $58.8/bbl
• LME 3m Copper little changed at $5934.5/MT
• LME 3m Nickel down 0.3% to $13140/MT

Bulletin Headline Summary from RanSquawk and Bloomberg

• Comments from a French Official suggesting that Obama views USD strength as a problem see early USD weakness before being refuted by the White House later in the session
• The DAX has entered correction territory from its April high with a raft of M&A stories in Europe failing to help
  buoy sentiment
• Looking ahead, today sees a relatively light calendar with no tier 1 data release, however comments from BoC
  Deputy Governor Wilkins, ECB’s Mersch (Soft Hawk) and ECB Nowotny (Hawk)
• Treasuries gain, 10Y yield retreats from highest level since October; events this week include Retail Sales and PPI, 3Y/10Y/30Y auctions starting tomorrow.
• With talks between the Greek government and creditors due to resume in Brussels on Monday, PM Tsipras faced a united front from G-7 leaders calling for movement to end the impasse and avert the risk of wider economic reverberations
• Even if Tsipras clinches as much as EU7.2b ($8b) from a bailout tranche creditors are withholding, he’s going to need another cash infusion shortly thereafter
• China exports fell 2.8% in May while imports slid 18.1% leaving a trade surplus of $59.1b; U.S. demand helped prevent a deeper decline in shipments abroad
• German industrial production rose 0.9% in April, more than forecast, after falling a revised 0.4% in March, data from the Economy Ministry in Berlin showed on Monday
• Deutsche Bank named supervisory board member John Cryan, a British takeover specialist, as next CEO; will replace co-
  CEO Anshu Jain at end of this month, Juergen Fitschen next May
• After dominating Turkey for more than a dozen years, Erdogan’s grip on the country loosened after the party he founded lost control of parliament following an election campaign marred by violence
• Sovereign 10Y bond yields mostly higher. Asian stocks mostly lower, European stocks, U.S. equity-index futures decline. Crude oil lower, copper unchanged, gold higher

US Event Calendar

• 10:00am: Labor Market Conditions Index Change, May (prior -1.9)

DB's Jim Reid summarizes the key weekend and overnight events

The bond market also felt the heat last week with 10 year bunds seeing an range of 52bps but closing 15bp off the wides for the week as the sell-off baton passed to US Treasuries after a strong payroll number (280k vs 226k expected) on Friday. 10yr yields climbed to an intraday high of 2.435% before finishing the day around 3bps off those highs at 2.408% (10bps wider on the day). They closed 29bps higher on the week and now at the highest since 6th October 2014. We have a series of US Treasury auction this week starting tomorrow (3yr, 10yr and 30yr) so it'll be interesting to see how this new supply will be absorbed by the market.

US equities fared reasonably well in comparison. The S&P 500 recovered from the initial opening lows to finish the day just 0.14% lower. Lower beta sectors which are perhaps more sensitive to rates led the index lower with Telcos (-1.8%), Consumer staples (-1.3%) and Utilities (-1.3%) all lower. Energy (+0.6%) and Financials (+0.5%) were key gainers. The latter probably fuelled by hopes of a post-hike margin boost whilst the former perhaps reacted to a near 2% bounce in Brent (despite NFP driven Dollar strength on Friday). HY Energy credits failed to mirror the moves in equities with index level spreads closing the day around 14bps wider. Broader US IG credits held in better with spreads just around 1bps wider on the day.

Taking a closer look at Friday’s payrolls, Joe Lavorgna basically thinks the outsized gain in job growth along with upward revisions brings the Fed one step closer to a September lift-off. The NFP headlines rose 280k following 32k in net upward revisions. This moved the 3month moving average payrolls up 5k to 207k. We’ve now seen four out of five +200k plus payroll prints this year. Joe noted that job growth in May was broad based across sectors with a sharp fall in mining and logging (-18k) driven by pullback in energy related spending. The unemployment rate edged up to 5.5% from 5.4% in April due to a relatively large (397k) increase in labour force participation.

On the other side of the pond there is still no clear progress in Greece. Friday saw Greece’s Athex index finish around 5% lower on news of deferring the IMF payments. Greek bonds sold off further with the 10yr closing 30bps higher at 11.2%. At home PM Tsipras showed little signs of compromise on Friday after having told the Greek parliament that the creditors’ proposals are unrealistic and labelled the latest offer from creditors as “a bad negotiating trick”. EC President Juncker said that Tsipras had misrepresented aspects of the negotiations. Greece was also a key conversation point at the G7 Summit in Germany over the weekend. During a bilateral meeting with Merkel, President Obama called for Greek reforms and return to sustainable long term growth. Bloomberg noted that Greek negotiations will resume today and will likely continue on the sidelines at an EU-Latin America summit in Brussels on Wednesday.

Turning to Asia, Chinese trade data was the key release overnight. Exports fell for the third consecutive month in May (down 2.8% yoy) but was better than market consensus (-4.0% yoy). Imports fell -18.1% yoy (vs consensus of -9.6% yoy) largely driven by lower raw material prices (eg oil and iron ore). Markets are mixed overnight though but with Chinese equities continuing to outperform. The Hang Seng, the CSI 300 and Shanghai Composite are +0.3%, +0.7% and +0.9%, respectively as we head to print. Although the Shenzhen is down -1.9%. Elsewhere in Asia bourses in Japan and India are down -0.3% and -0.4% respectively. As we type, UST 10yr yield is steady at 2.40% whilst Brent is touch softer at US$62.7/bbl (-0.9%). Asian credit spreads are broadly flat to a touch weaker likely driven by the stronger NFP on Friday.

Onto this week’s calendar now. We start in Germany this morning where we are due to get the April industrial production and trade balance readings. Business sentiment for France and investor confidence for the Euro area are other data points. It’s the usual post payrolls lull in the US meanwhile with the just the labour market conditions index expected. We kick off Tuesday in Asia where get the all important CPI/PPI readings out of China as well as consumer confidence for Japan. In the European timezone we get the preliminary Q1 GDP print for the Euro area, as well as UK trade data and German labour costs. In the US we get JOLTS job openings, wholesale inventories and trade sales and the NFIB small business optimism survey. We kick off Wednesday in Japan with machine orders and PPI. Industrial and manufacturing production readings for France, Italy and the UK will be the focus of the European data. In the US on Wednesday we’ve just got the May monthly budget statement to look forward to. Thursday’s early highlight will be out of China where we get retail sales, industrial production and fixed asset investments. French CPI is the only highlight in Europe on Thursday while in the US the calendar picks up a gear with May retail sales, initial jobless claims, import price index and business inventories. We end the week on Friday in Asia with capacity utilization and industrial production for Japan. In Europe industrial production for the Euro area is due, as well as construction output for the UK. We end the week in the US on Friday with PPI and the University of Michigan consumer sentiment. Of course Greece headlines will also likely be a main focus for markets again this week.

• White House denies Obama said strong dollar a problem (Reuters)
• Lira Falls to Record Amid Stock Rout as AK Party Loses Majority (BBG)
• Bond-Market Game of Chicken With Fed Is Riskier Than Ever (BBG)
• Xetra Dax enters correction territory (FT)
• China trade shrinks amid slowing demand (FT)
• Greek government eyes compromise with lenders, rules out snap polls (Reuters)
• If You Think Greece’s Crisis Will End Soon, Think Again (BBG)
• China growth data ‘overstated’ due to data error (FT)
• Calpers to Cut External Money Managers by Half (WSJ)
• German yields rise again, stocks dip (Reuters)
• With eye on U.S. election, Republicans assail Russia's Putin (Reuters)
• DirecTV, Fox Worked With FIFA Middlemen (WSJ)
• Deutsche shares jump after management purge (Reuters)
• U.S. Is Awash in Glut of Scrap Materials (WSJ)
• South Korea MERS Outbreak Began With a Cough (BBG)
• Deutsche Bank’s Surprise CEO Pick Brings Turnaround Record (BBG)
• Hackers Are Next on Government-Spyware Company’s List of Targets (BBG)
• Banks Face Basel Push to Prepare for Interest Rate Change (BBG)
• African Journalists Go Undercover, With Official Blessing (WSJ)
• Apple expected to focus on watch, music at developer conference (Reuters)

Overnight Media Summary

WSJ

* Calpers, the largest U.S. public pension fund, intends to sever ties with roughly half of the firms handling its money, one of the most aggressive industry moves yet to reduce fees paid to Wall Street investment managers. (http://on.wsj.com/1dpHnjM)

* The decades-old argument that trade agreements boost both exports and jobs at home is losing its political punch, even in some of the United States' most export-heavy regions. (http://on.wsj.com/1JBzaFB)

* The embattled co-chief executives of Deutsche Bank have announced their resignations, an abrupt move at one of the world's largest banks. They will be replaced by a former UBS finance chief. (http://on.wsj.com/1KURNWU)

* American media companies, including DirecTV and 21st Century Fox, have had business relationships with the sports-marketing firms at the center of the corruption scandal that has rocked international soccer. (http://on.wsj.com/1HVjwAq)

* Turkey's Islamist-rooted government lost its majority in national elections after 13 years in power, dealing a blow to President Recep Tayyip Erdogan's push to consolidate power. (http://on.wsj.com/1RWh04k)

* Agribusiness giant Monsanto's pursuit of rival Syngenta is sowing fears in the U.S. Farm Belt that another round of industry consolidation will eliminate a top competitor and boost prices for seeds and pesticides. (http://on.wsj.com/1AZQT88)

* General Electric Co is nearing an agreement to sell its private-equity-lending unit to Canada's largest pension fund, marking a major step in the industrial giant's retreat from banking, in one of the biggest finance takeovers since the credit crisis. (http://on.wsj.com/1KOcgtg)

* Smartphone startup Xiaomi used social networking to take on Apple and Samsung in China, and now it is looking overseas. (http://on.wsj.com/1BTsHPK)

FT

Deutsche Bank AG's co-chiefs Anshu Jain and Jurgen Fitschen are set to step down from their roles. John Cryan, former chief financial officer of UBS Group AG , will replace Jain. Fitschen, who will leave after the bank's annual meeting next year, will not be replaced.

Chocolate company Mars has joined oil companies BP Plc and Royal Dutch Shell Plc to oppose planned new European financial market regulations, arguing that they would increase volatility and reduce liquidity in raw materials markets. (http://on.ft.com/1G4TX1L)

French carmaker Renault SA will launch a retail savings bank in UK through its financing brand RCI. The bank is set to offer interest rates to attract funding.

Online investment platforms and stockbroker provider, AJ Bell, received about 21 million stg worth investment from funds run by Neil Woodford.

NYT

* Deutsche Bank said Anshu Jain would resign at the end of the month after three years as co-chief executive and Jürgen Fitschen, the other co-chief executive, will step down before his contract would have run out in 2017. Jain will be replaced by John Cryan, 54, a former high-ranking executive of the Swiss bank UBS.

* World leaders on Sunday increased the pressure on Europe to resolve the crisis over Greek debt, hours after one of the chief European negotiators expressed exasperation with the way the Greek leader was handling the talks. (http://nyti.ms/1HgI4If)

* Poland has the highest levels in Europe of the tiny pollution particles that are strongly linked to serious health problems like heart attacks, strokes, cancer and even dementia. (http://nyti.ms/1RWKzmm)

* Without raising its bid, Monsanto renewed that bid by saying it would pay Syngenta $2 billion if Monsanto were not able to get regulatory clearance. (http://nyti.ms/1G5gJGV)

* General Electric is near a deal to sell the bulk of a division that finances leveraged buyouts to a major Canadian pension fund, people briefed on the matter said on Sunday, as the industrial giant seeks to shed most of its GE Capital finance arm. (http://nyti.ms/1BTxb9h)

* Plains All American Pipeline, a Texas company whose ruptured pipeline created the largest coastal oil spill in California in 25 years had assured the government that a break in the line, while possible, was "extremely unlikely" and that state-of-the-art monitoring could quickly detect possible leaks and alert operators, documents show. (http://nyti.ms/1cFDmak)

Canada

THE GLOBE AND MAIL

** The Canada Pension Plan Investment Board is close to buying a big chunk of General Electric Co's private-equity lending arm, a deal that would see more than $10 billion of loan assets switch hands from the industrial giant to Canada's largest pension fund. (bit.ly/1QEsF5f)

** The average price for detached homes within the city of Vancouver has rocketed to a record C$2.23 million ($1.8 million) as the provincial government faces pressure to cool off the scorching housing market. (bit.ly/1Gl6LT2)

** The federal government last year found a number of environmental issues related to the Alberta oil sands, including contaminant levels that exceed guidelines, higher-than-expected atmospheric concentrations of chemicals, and a lack of regional species such as marten and fisher. (bit.ly/1F3TvNv)

NATIONAL POST

** Toronto Mayor John Tory announced his plans to permanently cancel carding on Sunday, answering a growing demand to bring an end to the controversial police practice. Tory told a news conference that he will seek cancellation of the practice, which allowed Toronto police to routinely and randomly stop citizens and record personal information, "once and for all" at the next Toronto Police Services Board meeting, on June 18. (bit.ly/1RXDv8W)

China

CHINA SECURITIES JOURNAL

- China will soon roll out a policy to encourage overseas-listed Chinese companies with variable interest entity (VIE) structures to come back and list on the A-share market, the paper reported citing sources familiar with the issue.

CHINA DAILY

- China needs to conduct a transparent investigation into the cause of the Yangtze River ship disaster and avoid similar accidents in the future, said in an editorial in the paper.

PEOPLE'S DAILY

- State Administration of Work Safety, China's workplace watchdog, said it would conduct secret workplace checks once a week in a bid to identify and record hazards at workplaces.

Britain

The Times

The EU's top official, Jean-Claude Juncker, yesterday accused Alexis Tsipras of lying to his parliament as tempers flared over the stand-off between Greece and its international creditors. (http://thetim.es/1RWmyf5)

A leading official at FIFA has said that Russia or Qatar could be "invalidated" as World Cup hosts if investigations uncovered evidence of bribery in the bidding process. (http://thetim.es/1RWmGep)

The Guardian

Poland's secretary of state for European affairs, Rafa Trzaskowski, who met Prime Minister David Cameron 10 days ago in Warsaw, says British people must be told the brutal truth about the damaging consequences of leaving the European Union, and not be duped into believing that they can "keep all the goodies and forget about the costs." (http://bit.ly/1QBsMP5)

HSBC Holdings Plc, the biggest payer of the UK banking levy, will set out on Tuesday exactly how it plans to decide whether to keep its headquarters in Britain in remarks that will be closely watched by finance minister George Osborne as he prepares to deliver his Mansion House speech the following day to an audience of top bankers. (http://bit.ly/1KVy35y)

The Telegraph

Prime Minister David Cameron has told his ministers that they will have to resign if they want to campaign and vote for Britain to leave the European Union. (http://bit.ly/1FDqEkv)

The co-chief executives of Deutsche Bank AG, Anshu Jain and Juergen Fitschen, are resigning, ending an unorthodox double act just weeks after the bank was subject to a record-breaking penalty for manipulating the Libor benchmark. (http://bit.ly/1FDrvl9)

Sky News

U.S. President Barack Obama has said he is "looking forward" to the United Kingdom staying in the European Union as he met Prime Minister David Cameron for talks on the margins of the G7 summit in Germany. (http://bit.ly/1QglCEU)

George Osborne will this week attempt to reframe the "value-for-money" debate around the taxpayer's stake in Royal Bank of Scotland when he unveils a review of options for the shareholding ahead of its return to the private sector. (http://bit.ly/1KiOOpQ)

The Independent

Millions of pounds in British aid funding could be diverted from existing projects around the world and targeted specifically at stopping the flood of migration across the Mediterranean from Libya, under plans being considered by Downing Street. (http://ind.pn/1KOydbv)

Deutsche Bank CEOs “Shown Door” – World’s Largest Holder of Derivatives In Trouble?

- Deutsche co-CEOs announce “resignation” nine months before their contracts expire
- Only two weeks ago, CEO Anshu Jain was given more power to reorganise the bank
- Deutsche have been engaged in money laundering, tax evasion, derivative and manipulation scandals
- Deutsche is world's largest  holder of financial weapons of mass destruction (FWMD)
- Deutsche Bank's derivatives position almost 15 times as large as Germany's GDP
- Announcement follows Greek failure to pay IMF on Friday and growing financial risk

The joint CEO's of Germany's largest bank, Deutsche Bank, the twelfth largest bank globally in terms of assets,  unexpectedly announced their resignation over the weekend. Anshu Jain will resign at the end of this month, almost two years ahead of schedule while Juergan Fitschen will stay on until May of next year.

It is believed they resigned but some media reported that the CEOs heads had “rolled”, they were “shown the door” and Reuters reporting that Deutsche had “purged its leadership.”

The announcement followed what Deutsche Bank described as "an extraordinary meeting" over the weekend. It is particularly surprising given that Jain had been granted extra powers at the bank only two weeks ago to reorganise the scandal plagued lender.

In the past year Deutsche, like many international banks, have been found to have been engaged in a slew of corrupt practices from manipulation of interest rates, for which the firm was fined $2.5 billion in April, to tax evasion and money laundering to "mis-selling" of derivatives.

Deutsche Bank’s derivatives position is truly enormous. It was recently estimated to be around $54 trillion. Germany's GDP, the fourth largest in the world, was a mere $3.64 trillion in 2015. Were Deutsche Bank caught off-side in its derivatives positions there is not a government or institution on earth that could bail it out and it could lead to contagion in the German financial system and indeed in the global financial system.

The contagion from such an event would be devastating. It is for this reason that Warren Buffet described derivatives as FWMD or "financial weapons of mass destruction."

It is unnerving that the shock resignation should follow an "extraordinary meeting" over the weekend following the failure of Greece to meet its scheduled payment to the IMF on Friday.

This does not count as a Greek default but it increases the risk of a default on the amalgamated 1.5 billion euros that now must be paid by the end of June. A default and the triggering of credit default losses would cause massive volatility in financial markets and potentially destabilise an already shaky global bond market and financial system.

There have been a number of shocks to the market this year which would have been expected to have led to sharp losses in the derivatives market but slipped quietly by.

The debris caused by the massive volatility in the Swiss franc following its being unpegged from the euro - where it spiked 30% in minutes in January - seems to have been swept under the carpet. Austria's bad bank Heta failed in late February with apparently no casualties.

We do not know what provoked the dramatic reversal in attitude to Anshu Jain at Deutsche Bank but it looks very much like the bank may be getting its house in order in anticipation of another major scandal or crisis. When said crisis breaks the responsibility can be dumped on the previous leadership.

Since Warren Buffett’s initial warning in 2002 , 13 years ago, he has been remarkably quiet on the real and growing threat to global markets and the global financial system. Despite the fact that the scale of the risk today is of an order of magnitude greater now than it was then.

This is unfortunate given the global financial system itself is far more volatile and casino-like today than it was in 2002. Sucking on the teat of Wall Street can lead to self induced omerta.

The global derivatives market is highly complex, totally unregulated and frighteningly large. One of the world’s leading derivatives experts, Paul Wilmott, who holds a doctorate in applied mathematics from Oxford University, has warned that the so-called notional value of the worldwide derivatives market is over $1.4 quadrillion.

A quadrillion is an incomprehensibly massive figure: it is 1,000 times a trillion (1 with 12 zeroes). A trillion is 1,000,000,000,000 and a quadrillion has 15 zeroes - 1,000,000,000,000,000. The annual gross domestic product of the entire planet is between $50 trillion and $60 trillion. Thus, the derivatives market's notional value is more than 23 times the size of the value of all of the goods and services traded in global economy in one full year.

The crisis in Greece, the rumblings in the global bond market and indeed in Europe's fourth largest bank and the threat posed by financial weapons of mass destruction should give cause for concern. It is another reason to reduce allocations to stock and bond markets and increase allocations to gold.

The real systemic risk of today is another reason to ensure owning allocated and segregated gold in the safest vaults in the safest jurisdictions in the world.

Must-read Guide:  7 Key Gold Must Haves

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,173.40, EUR 1,053.32 and GBP 769.85 per ounce.
Friday's AM LBMA Gold Price was USD 1,175.90, EUR 1,044.25 and GBP 767.82 per ounce.

Gold and silver were both down last week - down 1.58 percent and 3.77 percent respectively.

Gold fell $6.10 or 0.52 percent Friday to $1,170.90 an ounce. Silver slipped $0.08 or 0.49 percent to $16.10 an ounce.

Gold in Singapore for immediate delivery ticked lower and then higher and was up 0.1 percent to $1,172.86 an ounce an ounce near the end of the day,  while gold in Switzerland was again flat. A stronger dollar, near a 13 year high verses the yen, may have contributed to gold’s recent weakness.

After Friday's U.S. nonfarm payrolls report showed its largest growth since December, up 280,000 from last month, gold sunk to an eleven week low at $1,162.35 an ounce. The payrolls figure was significantly higher than the 225,000 that analysts were expecting. Although some question the veracity of the Bureau of Labor Statistics jobs numbers.

The jobs number led to renewed idle speculation that the U.S. Fed may start to raise interest rates in September.

A senior U.S. official today denied a news wire report that President Barack Obama had told a Group of Seven industrial nations' summit that the strong dollar was a problem.

Bloomberg News earlier quoted a French official as saying Obama had made the comment. "The President did not state that the strong dollar was a problem," the U.S. official said. He made a point that he has made previously, a number of times: that global demand is too weak and that G7 countries need to use all policy instruments, including fiscal policy as well as structural reforms and monetary policy, to promote growth."

Sentiment in the euro zone weakened further in June as the Greek debt crisis and a slightly firmer single currency prompted investors to pare back their expectations for the economy. Sentix research group's index tracking morale among investors and analysts in the euro area slipped to 17.1 in June from 19.6 in May. That was below the Reuters consensus forecast for a reading of 18.7.

The world's largest gold back ETF, the SPDR Gold Trust, saw holdings drop 0.17 percent to 708.70 tonnes on Friday, its lowest since mid January. This shows poor sentiment in the gold market.

In South Africa, the Mineworkers and Construction Union said yesterday it would launch a strike if its rival union and gold mining companies impose a wage deal on its members.

In late European trading gold is up 0.31 percent at $1,174.81 an ounce. Silver is up 0.08 percent at $16.11 an ounce and platinum is up 0.41 percent at $16.11 an ounce.

Breaking News and Research Here

Just two days after Deutsche Bank co-CEOs Anshu Jain and Jürgen Fitschen announced their resignations, the bank's offices in Germany, France, and the UK have been searched by authorities. 

• DEUTSCHE BANK HQ SEARCHED BY AUTHORITIES THIS MORNING: CNBC
• DEUTSCHE BANK SAYS SEARCH RELATED TO SECURITY DEALS BY CLIENTS
• DEUTSCHE BANK SITES IN FRANKFURT, LONDON, PARIS SEARCHED: BILD

Deutsche says the searches are related to "security deals by clients" and apparently do not involve allegations of wrogndoing by the employees.

From Reuters:

Deutsche Bank confirmed its offices in Frankfurt had been searched on Tuesday and said investigators were looking for evidence related to client transactions, with no Deutsche Bank employees accused of wrong-doing.

 

A spokesman for Germany's largest lender said the raid had been conducted on behalf of prosecutors in the German city of Wiesbaden, who were seeking evidence of securities transactions by the bank's clients.

Statement from the bank:

Today the offices of Deutsche Bank in Frankfurt are being searched by the Public Prosecutor's Office. The search relates to an investigation into securities transactions by clients. Employees of Deutsche Bank are not accused of any wrongdoing.

From Spiegel (via Google translate):

The specific allegations, the Attorney General's Office Frankfurt declined to comment first. Introduce "in an ongoing process procedural coercion" by a judiciary spokesman said on Tuesday in Frankfurt.

 

To subject and scope of the investigation, the authority could not say anything because "operational phase" nor walk. However, the spokesman said no one associated with the procedure for VAT fraud in the trading of pollution rights (CO2 allowances).

 

According to a German bank spokesman, the raid directed against shady business of individual customers. "I can confirm that there is on behalf of the prosecutor's office in Wiesbaden today searches offices of Deutsche Bank in Frankfurt," the spokesman said. "The search aims to ensure evidence in connection with investigations against customers with respect to certain securities transactions. There are no employees of the bank accused." More details - about the shops the customer - did not want to call the speaker.

*  *  * 

Over the past several years, Deutsche Bank has paid out some $9 billion in connection with legacy litigation and may settle with the DoJ in the coming months over the bank's role in selling shoddy MBS in the pre-crisis years. Here's more on the bank's various legal troubles.

From DB annual report:

We are currently the subject of regulatory and criminal industry-wide investigations relating to interbank offered rates, as well as civil actions. Due to a number of uncertainties, including those related to the high profile of the matters and other banks’ settlement negotiations, the eventual outcome of these matters is unpredictable, and may materially and adversely affect our results of operations, financial condition and reputation. 

 

A number of regulatory and law enforcement agencies globally are currently investigating us in connection with misconduct relating to manipulation of foreign exchange rates. The extent of our financial exposure to these matters could be material, and our reputation may suffer material harm as a result. 

 

A number of regulatory authorities are currently investigating or seeking information from us in connection with transactions with Monte dei Paschi di Siena. The extent of our financial exposure to these matters could be material, and our reputation may be harmed. 

 

Regulatory and law enforcement agencies in the United States are investigating whether our historical processing of certain U.S. dollar payment orders for parties from countries subject to U.S. embargo laws complied with U.S. federal and state laws. 

 

We have been subject to contractual claims, litigation and governmental investigations in respect of our U.S. residential mortgage loan business that may materially and adversely affect our results of operations, financial condition or reputation.

After a quiet Asian session, where not even the latest Chinese CPI miss was enough to push the SHCOMP to new multi-year highs, all eyes were on Europe where a few hours ago the European Commission announced it had received not one but two new proposals from Greece according to EU Commissioner for Economic Affairs Pierre Moscovici, with the Greek government adding that it considers proposals submitted last week as remain basis for political negotiations. According to Bloomberg, the freshly submitted documents contains alternative proposals to close differences with creditors on fiscal gap with; proposals to create a debt viable sustainability plan for country. What they do not contain is an agreement to engage in pension cuts as the Troika demands so this is most likely another dead end path.

"Diverse proposals are being circulated including new suggestions which were received earlier this morning," spokesman Margaritis Schinas said, noting that Economics Commissioner Pierre Moscovici had met Greek delegates in Brussels on Monday. "The three institutions are currently assessing these suggestions with diligence and care," Schinas added.

However, barely had Europe received the Greek addenda when it nein'ed all over them, with BBG citing an international official directly involved in talks saying that the "Greek government's revised proposal to unlock bailout funds is vague rehash of earlier plans, not considered credible."

Also overnight, as reported previously, the headquarters of Deutsche Bank was raided earlier this morning and while no details were initially available, Reuters said that investigators were "looking for evidence related to client transactions" with a DB spokesperson saying the raid was in relation to "security deals made by clients." It was initially unclear what deals and what clients, but the raid may explain the sudden departure of DB's co-CEOs over the weekend.

In any case, the excitement from all the events did not stay well with European stocks or risk, and as of this moment the EuroStoxx 600 is down again, on pace for its first 6 day losing streak in 2015, down about 5%.

A closer look at Asian equities shows a drop following a negative Wall Street close, which saw the DJIA shed its YTD gains and S&P 500 close below its 100 DMA for the first time in a month. Chinese bourses led the slump weighed on by soft Chinese inflation data, helping cap recent gains across the Shanghai Comp (-0.4 %) and Hang Seng (-1.2%); Y/Y 1.2% vs. Exp. 1.3% (Prev. 1.5%). The ASX (0.5%) and Nikkei 225 (-0.7%) remain in the red, the latter weighed on by a strong JPY.

European equities are broadly weaker following on from the negative closes seen in Asia and the US in what has been a subdued session so far. The technology sector is the notable laggard in Europe in the wake of a downbeat note from JP  Morgan coupled with the selloff seen in the NASDAQ yesterday. From a stocks specific perspective, HSBC (-0.8%) stole the headlines after announcing that they were to embark on EUR 5bln cost cutting measure and will slash over 25K jobs globally. However, shares in HSBC shares trade downside was limited as their cost cutting measures may cost the bank GBP 4.5bln. The DAX index has continued to slide following an earlier technical break below 11,000, with concerns over Greece weighing on the index.

Bunds have remained unnerved and trade flat following the recent developments in Greece after the EU Commission confirmed that they have received an updated version of the troubled nation’s reforms. Thereafter, an international official later stated that Greece's revised proposal was not sufficient and is merely a vague rehash of the previous proposal.

In FX markets, GBP continues to trade weaker against the EUR with cross-buying in EUR/GBP supporting the EUR despite continued concerns over Greece. Meanwhile, the USD-index (+0.02%) has remained flat with a lack of fundamental catalysts dictating price action. AUD was unable to hold on to some of its earlier gains after AU business confidence surged to a 9-month high and slipped into negative territory. This was amid soft Chinese inflation data which saw consumer prices rise at their slowest pace in 5-months.

Tomorrows DoE crude inventories are expected to post its sixth consecutive drawdown which is supporting WTI and Brent crude as they inch higher, while precious metals markets also remain firmer following the global selloff in equities.  Separately, iron ore continued its recent rally following the decline seen in port inventories and as Chinese steel mills   undergo seasonal maintenance.

In summary: European shares fall for sixth day with the tech and financial services sectors underperforming and real estate, media outperforming. HSBC to Cut as Many as 50,000 Jobs in Gulliver Assault on Costs. Greece Said to Submit Revised Budget Plan in Bid for Funding. China Said to Weigh Margin Finance Rule Change Amid Stock Boom. The German and Spanish markets are the worst-performing larger bourses, the U.K. the best. The euro is weaker against the dollar. Japanese 10yr bond yields fall; Greek yields increase. Commodities gain, with corn , wheat underperforming and Brent crude outperforming. U.S. wholesale inventories, small business optimism, JOLT job openings due later.

Market Wrap

• S&P 500 futures down 0.4% to 2070.5
• Stoxx 600 down 1.2% to 380.7
• US 10Yr yield down 2bps to 2.37%
• German 10Yr yield up 1bps to 0.89%
• MSCI Asia Pacific down 0.8% to 146.2
• Gold spot up 0.6% to $1180.7/oz
• All 19 Stoxx 600 sectors drop; real estate, media outperform, tech, financial services underperform
• Asian stocks fall with the Kospi outperforming and the Nikkei underperforming; MSCI Asia Pacific down 0.8% to 146.2
• Nikkei 225 down 1.8%, Hang Seng down 1.2%, Kospi down 0.1%, Shanghai Composite down 0.4%, ASX down 0.5%, Sensex down 0.2%
• Bradesco Said to Be Most Likely Buyer of HSBC’s Brazil Unit
• Newmont to Buy AngloGold Mine in Colorado for $820m
• Elliott Seeks Injunction to Stop Merger Plans by Samsung’s Lees
• Euro down 0.11% to $1.1279
• Dollar Index down 0.03% to 95.27
• Italian 10Yr yield down 2bps to 2.24%
• Spanish 10Yr yield down 2bps to 2.23%
• French 10Yr yield little changed at 1.21%
• S&P GSCI Index up 0.9% to 436.1
• Brent Futures up 1.4% to $63.6/bbl, WTI Futures up 1.2% to $58.8/bbl
• LME 3m Copper up 0.6% to $5983.5/MT
• LME 3m Nickel up 0.9% to $13565/MT
• Wheat futures down 0.1% to 527.5 USd/bu

Bulletin headline summary from Bloomberg and RanSquawk

• European equities (Eurostoxx50 -0.7%) are broadly weaker following on from the negative closes seen in Asia and the US in a session shy of market moving fundamental news.
• The stalemate between Greek and its creditors continues after reports that the EU are unsatisfied with Greece’s latest reform submission.
• Looking ahead, today provides a rather light economic calendar with US Wholesale Inventories, API Crude Inventories and possible comments from ECB’s Makuch (Neutral) and ECB’s Lautenschlaeger (Hawk)
• Treasuries gain for second day as global equities plunge; auctions begin today with $24b 3Y notes, WI yield 1.095%, highest since March, vs. 1.00% in May; drew 0.865% in April.
• The Greek government submitted a three-page budget proposal to its creditors in Brussels in a bid to unlock bailout funds, two international officials with direct knowledge of the discussions said
• China’s consumer prices rose at a slower pace in May and factory-gate deflation extended a record stretch of declines, underscoring tepid demand at home and abroad
• China’s securities regulator is considering a change to its margin finance rules in a move that could quell volatility should the country’s world-beating stock-market rally falter
• China stock exchanges have created $6.5t of value in just 12 months, surpassing the headiest days of the U.S. Internet bubble
• Euro-area GDP rose 0.4% in in 1Q, the three months through March after expanding a revised 0.4 percent in the previous three months, confirming May 13 estimate
• David Cameron said comments he’d made suggesting U.K. government ministers would have to support continued EU membership were “misinterpreted,” after protests from lawmakers in his Conservative Party
• HSBC Holdings Plc will eliminate as many as 50,000 jobs through 2017 by shrinking its global reach as CEO Stuart Gulliver seeks to cut annual costs by about $5b to restore profit growth
• Deutsche Bank AG said its offices in Frankfurt were searched on Tuesday as part of an investigation into securities transactions by clients; bank employees are not accused of wrongdoing, a spokesman said
• Sovereign 10Y bond yields mostly lower. Asian and European stocks slide, U.S. equity-index futures fall. Crude oil, copper and unchanged, gold higher

US Event Calendar

• 9:00am: NFIB Small Business Optimism, May, est. 97.2 (prior 96.9)
• 10:00am: Wholesale Inventories, April, est. 0.2% (prior 0.1%)
• Wholesale Trade Sales, April, est. 0.6% (est. -0.2%)
• 10:00am: JOLTS Job Openings, April, est. 5.044m (prior 4.994m)
• 1:00pm: U.S. to sell $24b 3Y notes

DB's Jim Reid concludes the overnight event summary

Headlines continue to fly around with regards to Greece and it was amusing to read in the Economist that the crisis has now gone on longer than 10% of marriages. Although to be honest that sounds too low. It'll be interesting to see where that number is by the time it’s properly resolved!!

Before we delve into dissecting the action, it’s been an important morning for Chinese data with the latest inflation numbers out. The numbers make for slightly disappointing reading with both the CPI (+1.2% yoy vs. +1.3% expected) and PPI (-4.6% yoy vs. -4.5% expected) prints coming in below market expectations for May. The inflation reading in particular is down from +1.5% last month and now back at its lowest level since January while the deflation at factory gates marks the 39th consecutive monthly negative print, underlying the overcapacity and weak demand both domestically and abroad and furthering the case for more stimulus.

China equity markets have sold off following the data. The Shanghai Comp (-1.23%), CSI 300 (-1.20%) and Shenzen (-0.62%) are all lower as we go to print. It could be a big day for Chinese equities as MSCI Inc. opines on whether to include mainland securities in some of its widely used global indices. This could easily help propel or prick the bubble. Bourses elsewhere are showing a similar trend to China. The Hang Seng (-1.02%), Nikkei (-0.76%) and ASX (-0.06%) are all currently trading down. Treasuries are 1.4bps lower in yield while Asia credit markets are a basis point wider. The tightening in Treasuries this morning has dragged most other Asia bond yields lower.

Back to markets yesterday. As mentioned it was a reasonably dull day for the most part, with equity markets in the US declining for the third consecutive session as the S&P 500 in particular fell 0.65% and to the lowest level since April 7th. Losses were relatively broad-based, although led by a fall for higher beta sectors including Technology (-1.22%) and Industrials (-0.74%) names. The recent leg up in US Treasury yields to the highest levels since October appeared to attract some demand yesterday at the 10y benchmark ended 2.5bps lower in yield at 2.383% and recovered some of Friday’s post-payrolls sell off, while 5y (-3.5bps) yields also tightened although 30y yields remained broadly unchanged at 3.115%. The commodity complex was relatively mixed for the most part. Brent (-0.98%) and WTI (-1.67%) both declined while Gold (+0.18%) ended up a touch. There was a notable move in the Dollar yesterday meanwhile. The DXY eventually closed down 1.05% to wipe out all of Friday’s gains. Reports that US President Obama had suggested that the stronger Dollar was a problem (although later denied by the White House) appeared to play its part, although the bulk of the weakness was largely as a result of a stronger day for the Euro.

With little in the way of data or news flow, it was all eyes on Greece which once again dominated headlines. A WSJ article in particular attracted much of the attention with the article suggesting that Greece and its Creditors are in discussions over an extension of the current bailout program until the end of March 2016. The article suggested that the proposal was first presented to Greece last week at Greek PM Tsipras and the EC’s Juncker meeting on Wednesday. The article notes that the idea is to convert financing set aside for propping up Greek banks at the EFSF into usable money, with the program then aligning the existing EFSF program with the IMF which also expires in March 2016. Although this would mean no new program needs to be passed through European parliament, the sticking point would likely still be the issue of passing through Greek parliament should this be seen as the Troika staying for longer, as well as the chance that it would be unlikely that there is any debt relief up front. The article aside, there was little material news yesterday and talks continue to remain in deadlock. German Chancellor Merkel, French PM Hollande and US President Obama were among the leaders urging progress and swift action yesterday. Greek spokesman Sakellaridis, meanwhile, reiterated that ‘our proposal is the starting point’ in relation to negotiations, while Greek press Ekathimerini noted that a delegation of Greek officials is in Brussels continuing talks.

It was a quiet day data-wise in the US yesterday with just a modest rise for the May Labour Market Conditions Index (1.3 from -0.5 previously). Meanwhile there was some focus on a NY Fed survey which showed consumer expectations for inflation rebounding in May. The survey showed that the median expectation for price rises is 3% in the year through next May, which is up from 2.7% in April.

Markets in Europe were again characterized by higher bond yields. 10y Bunds ended 3.5bps higher in yield at 0.879%, just off last Wednesday’s closing highs while in the periphery Spain (+3.0bps), Portugal (+3.6bps) and Italy (+2.0bps) also rose. With 10y Greek yields also finishing +24.6bps higher, Greek concerns were likely to have played a part, while comments from the ECB’s Nowotny describing higher yields as a ‘success story’ may well have supported the move higher. Yesterday’s industrial production data out of Germany was better than expected. The April reading of +0.9% mom came in above +0.6% expected, helping to push the annualized rate up to +1.4% yoy. Trade data for the region also showed a larger than expected surplus (€22.1bn vs. €19.4 expected), driven primarily by higher exports. Our colleagues in Germany noted that based on yesterday’s IP report, along with the April retail sales and unemployment data, the model points towards +0.6% qoq GDP growth, while the composite PMI and IFO expectations survey point towards +0.4%-0.5% qoq growth. Our colleagues currently sit at the lower end of estimates at +0.4% qoq. Elsewhere, data flow was mixed in Europe. French business sentiment (99 vs. 98 expected) was a touch ahead of consensus while the Euro area Sentix investor confidence print (17.1 vs. 18.7 expected) was a miss. Equity markets in Europe closed lower yesterday. The Stoxx 600 finished -0.93% while the DAX (-1.18%) and CAC (-1.28%) both declined. Greek equities finished -2.73% for their third consecutive day of declines.

We’ve got a busier calendar to look forward to today and we start in the UK this morning where we get the April trade balance before we get the preliminary Q1 GDP release for the Euro area. Across the pond this afternoon, we’ve got the NFIB small business optimism survey for May to look forward to before we get April wholesale inventories and trade sales data and also the JOLTS job openings (one of Fed Yellen’s important dashboard indicators) expected.

One of the reasons we don't mind (and often enjoy) being labeled "conspiracy theorists" is that as consistently happens, the theory becomes fact, usually with a delay of anywhere between 6 months and 6 years.

A great example is one of our very first posts from January 2009: "This Makes No Sense: LIBOR By Bank" in which we first alleged Libor manipulation.

An even better example comes courtesy of the WSJ which reveals that one of the biggest perpetrators of Libor rigging, the same bank that was raided earlier today for reasons still unknown, namely Deutsche Bank had a quick and easy response to allegations of interest rate rigging: call it "conspiracy theory" and promptly sweep it under the rug.

From the WSJ:

A Deutsche Bank AG executive whose employees have been accused of rigging interest rates told a British trade group that such manipulation was nothing more than a “conspiracy theory,” a London court heard on Tuesday.

 

David Nicholls, who oversaw a group of employees that included some who have been fired for trying to manipulate the London interbank offered rate, or Libor, had a 2008 phone call with a British Bankers’ Association official to discuss mounting concerns about the integrity of Libor.

 

In the recorded call, which was played to a London jury on Tuesday, Mr. Nicholls repeatedly dismissed concerns that Libor could be manipulated. “Banks do not collude to try to set a Libor rating,” he told John Ewan, the BBA official in charge of running Libor.

 

“I think I am just hearing a lot of hysteria about Libor that is just misinformed,” Mr. Nicholls added.

 

When the Deutsche Bank official argued that an individual bank wouldn’t be able to improperly influence Libor, which at the time was set by a group of 16 banks, Mr. Ewan responded: “A cabal of them could.”

 

“What’s a cabal?” Mr. Nicholls asked.

 

“A group together could,” Mr. Ewan said.

 

“That’s an interesting conspiracy theory,” Mr. Nicholls responded.

It was also the truth.

David Nicholls left Deutsche Bank two and a half years ago. According to WSJ's David Enrich, he couldn’t be immediately reached for comment, even though it is quite clear what he would have said: continue denying that anything like a massive, coordinated, market0rigging cabal could ever take place.

And yet, nobody has learned anything.

Just like the first big post-crisis settlement involving Goldman Sachs was blamed entirely on one then-28 year old employee and nobody else, so in the case of the massive Libor/FX settlements, not a single senior banker was implicated.

Which is beyond ridiculous. It is also ironic: as the first man charged with Libor rigging, one who was instrumental in turning and handing the case to the prosecution on a silver platter, UBS' Tom Hayes previously told The Wall Street Journal in a text message “this goes much much higher than me.”

But if Nicholls couldn't see the open fraud taking place literally in front of him simply because he couldn't possibly imagine of such a "conspiracy theory", how are regulators and prosecutors to possibly conceive that the very people who keep the bribe machine well greased, could be guilty of the same.

So to answer our own question: why has nobody "higher" than Hayes been investigated yet? Because the mere suggestion that executives at UBS, and all the other market manipulating banks, are outright criminals themselves would be, you guessed it, just another "conspiracy theory."

• Pressing for Greek concessions, Merkel and Hollande keep Tsipras waiting (Reuters)
• Treasuries Extend Slump as Pimco Dumps Two-Thirds of Holdings (BBG)
• U.S. prepares plans for more troops, new base in Iraq: officials (Reuters)
• Texas policeman resigns after video shows him toppling teen (Reuters)
• Kuroda Says Hard to See Yen Dropping More, Spurring Surge (BBG)
• Tech Startups Woo Investors With Unconventional Financial Terms — but Do Numbers Add Up? (WSJ)
• Putin is a 'bully', U.S. needs to respond resolutely: Jeb Bush (Reuters)
• Target announces share buyback, dividend boost after disclosure snafu (Reuters)
• Gen X Was Right: Reality Really Does Bite (BBG)
• Iraqi City of Mosul Transformed a Year After Islamic State Capture (WSJ)
• U.S. Shifts Stance on Drug Pricing in Pacific Trade Pact Talks, Document Reveals (NYT)
• China military conducts drills near Taiwan, Philippines (Reuters)
• The $3 Trillion Bond Trade Citigroup Says Investors Should Fear (BBG)
• These Are Global Banking’s Winners and Losers Since the Crisis (BBG)
• Convicted killer in New York prison break on third escape attempt (Reuters)

Overnight Media Digest

WSJ

* A Food and Drug Administration advisory panel backed the cholesterol-lowering drug Praluent, but panelists said the use of the drug should be limited to certain high-risk groups, such as people with very high cholesterol for genetic reasons. (on.wsj.com/1Qn3Dws)

* The U.S. Justice Department is weighing charging General Motors Co with criminal wire fraud stemming from the auto maker's failure to recall millions of vehicles equipped with a defective ignition switch, said people familiar with the matter. (on.wsj.com/1JBOFPd)

* A move by Deutsche Lufthansa AG to charge extra for airfares purchased through travel agents or travel sites like Expedia Inc has opened a new front in the battle between airlines and their distributors over how customers buy plane tickets. (on.wsj.com/1MGXupu)

* Tesla Motors Inc Chief Financial Officer Deepak Ahuja plans to retire later this year when the electric-car maker appoints his replacement, a move disclosed on Tuesday at the company's annual shareholder meeting. (on.wsj.com/1MGXx4I)

* President Barack Obama is poised to send hundreds more American military advisers to a new base in a strategic Iraqi region to help devise a counterattack against marauding Islamic State militants, U.S. officials said Tuesday, a shift that underscores American concern over recent battlefield losses. (on.wsj.com/1MmyGlN)

FT

HSBC Holdings Plc is set to speed up a cull of unprofitable units and countries by cutting almost 50,000 jobs - half of them from selling businesses in Brazil and Turkey.

Ratings agency Standard & Poor's downgraded several UK and German banks, including Deutsche Bank AG, Barclays Plc and Royal Bank of Scotland, saying it considers government support for these banks to be uncertain.

Standard Life, which holds about 22 million shares in WPP, criticized the company's "lack of transparency" over the procedure followed to replace company founder and Chief Executive Martin Sorrell.

Britain's BT said on Tuesday it would offer Champions League soccer matches to new and existing customers of its TV service for free, and to its broadband subscribers for 5 pounds a month.

NYT

* The attorneys general of New York and Connecticut are investigating Apple Inc's negotiations with music companies in search of potential antitrust violations. Universal Music Group Inc on Tuesday confirmed it was cooperating with the industrywide investigation. (http://nyti.ms/1JIEff8)

* British Bank HSBC Holdings Plc said on Tuesday that it would shed as many as 50,000 of its about 250,000 jobs as it sells several underperforming businesses, reduces the size of its global investment banking business and tries to cut billions of dollars in costs. (http://nyti.ms/1Hp9jQW)

* A Texas federal judge handed down a $663 million judgment Tuesday against Trinity Industries Inc, the guardrail maker accused of producing a faulty product that can jam and spear through vehicles. (http://nyti.ms/1TahyVN)

* Hewlett-Packard Co's ill-fated acquisition of the software maker Autonomy will cost another $100 million, as the company prepares to settle class-action litigation tied to the 2011 deal. (http://nyti.ms/1I0Fp1w)

* General Electric said on Tuesday that it had agreed to sell the bulk of a division that finances leveraged buyouts to the Canada Pension Plan Investment Board in a $12 billion deal.(http://nyti.ms/1HpcNDc)

Hong Kong

SOUTH CHINA MORNING POST

-- All 600 tours to South Korea organised for this month by local travel agencies will be cancelled following a red alert against travel to the Mers-hit country, industry representatives agreed on Tuesday. Cathay Pacific, which operates five flights a day to Seoul, has cancelled one of the flights throughout July and August. (http://bit.ly/1KnZx2s)

-- The chances of lawmakers approving the Hong Kong government's electoral reform plan for 2017 are very slim, Chief Secretary Carrie Lam Cheng Yuet-ngor admitted as a poll showed public opposition to the blueprint had hit its highest level yet. (http://bit.ly/1F6XBnS)

-- Hong Kong's mobile app industry is suffering from a gender gap, with more than one-third of development companies employing fewer than three women, according to a survey conducted by the Hong Kong Wireless Technology Industry Association and the Hong Kong Productivity Council. (http://bit.ly/1Gq4Zjv)

THE STANDARD

-- Police are investigating if a handbook circulating online that advises protesters on how to protect themselves and resist police is in breach of any law. A police spokeswoman said the Cyber Security and Technology Crime Bureau is following up on the case. It is believed that copies of the handbook were delivered to the University of Hong Kong during the candlelight vigil on June 4. (http://bit.ly/1B4M7Gi)

-- Civil servants will get a pay rise that is 0.5 percentage points higher than recommended in a pay-trend survey, in a move seen as aiming to counter any backlash when the government's political reform package is voted down. Senior civil servants will get a 3.96 percent pay rise, while lower- and middle-ranked staff will get 4.62 percent. (http://bit.ly/1I0jsj0)

-- The proportion of Hongkongers holding positive feelings toward fellow locals has hit its lowest number since 2007, a poll by the University of Hong Kong's Public Opinion Programme found. Pollster Robert Chung said the 8-year low is an indication of social polarization. (http://bit.ly/1F6YEo2)

HONG KONG ECONOMIC JOURNAL

-- Franshion Properties (China) said it planned to sell HK$4.37 billion worth of shares to parties including New China Life Insurance, Singapore's sovereign wealth fund GIC Private Ltd, Warburg Pincus Private Equity's Earn Max Enterprises, and Dynasty Hill Holdings which is controlled by Sun Hung Kai Properties ex-chairman Walter Kwok.

Britain

The Times

* The competition regulator has agreed to "fast-track" an in-depth investigation into BT Group's proposed 12.5 billion pounds ($19.23 billion) takeover of EE in a move which could delay completion of the merger. (thetim.es/1FPx2En)

* HSBC Holdings Plc will cut 8,000 jobs in the UK out of a global reduction of up to 25,000 redundancies as it fights to improve returns. It also raised the prospect that its brand may disappear from British high streets, under plans to move its retail bank to Birmingham. (thetim.es/1KnM3no)

The Guardian

* On June 22, around 17,000 workers at Tata Steel plants across the country will bring Britain's steel industry to a halt with the first national strike for 35 years. The walkout is a response to Tata's plan to close the British Steel pension scheme. (bit.ly/1FPxum7)

* Britain's energy and climate change secretary Amber Rudd has agreed to a 1 billion pounds project which will provide power for 150,000 homes from a tidal lagoon at Swansea Bay. (bit.ly/1BWgRV7)

The Telegraph

* The government should hold a referendum on Britain's EU membership as soon as possible to end the uncertainty that the looming vote creates for businesses, according to Pacific Investment Management Company (Pimco). (bit.ly/1f1bVtl)

* Greece could be edging closer to a deal with its creditors after submitting fresh proposals which are thought to include concessions on tougher austerity targets. (bit.ly/1JDete3)

Sky News

* Two-thirds of Britons believe big companies are not paying their fair share of corporation tax based on the level of sales they generate in the UK, according to research by YouGov. (bit.ly/1MmbPqp)

The Independent

* A British corporate investigator who was working for the drugs giant GlaxoSmithKline Plc in China has been released from jail in Shanghai. (ind.pn/1KnOaaS)

* Transport for London's annual report shows the number of six-figure earners within the firm had rocketed from 326 to 413 in 12 months. There has been a 25 percent rise in the number of executives who earn a six-figure salary compared with last year.(ind.pn/1GahRci)

Here are the participants in the Bilderberg meeting over the weekend in Tirol. It is named after a Hotel Chain where the first meeting took place on May 29-31, 1954 in Austria. As the G7 summit of the Seven Dwarves closes, another opens. Thursday sees the start of the influential Bilderberg policy conference, which this year is being held in Austria where it began, just 16 miles south of the G7 summit.

The key topics for discussion this year include:

• Artificial Intelligence
• Cybersecurity
• Chemical Weapons Threats
• Current Economic Issues
• European Strategy
• Globalisation
• Greece
• Iran
• Middle East
• NATO
• Russia
• Terrorism
• United Kingdom
• USA
• US Elections

The list of attendees is as follows:

Chairman
Castries, Henri de Chairman and CEO, AXA Group FRA

Achleitner, Paul M. Chairman of the Supervisory Board, Deutsche Bank AG DEU
Agius, Marcus Non-Executive Chairman, PA Consulting Group GBR
Ahrenkiel, Thomas Director, Danish Intelligence Service (DDIS) DNK
Allen, John R. Special Presidential Envoy for the Global Coalition to Counter ISIL US Department of State, USA
Altman, Roger C. Executive Chairman, Evercore USA
Applebaum, Anne Director of Transitions Forum, Legatum Institute USA
Apunen, Matti Director, Finnish Business and Policy Forum EVA FIN
Baird, Zoë CEO and President, Markle Foundation USA
Balls, Edward M. Former Shadow Chancellor of the Exchequer GBR
Balsemão, Francisco Pinto Chairman, Impresa SGPS PRT
Barroso, José M. Durão Former President of the European Commission PRT
Baverez, Nicolas Partner, Gibson, Dunn & Crutcher LLP FRA
Benko, René Founder, SIGNA Holding GmbH AUT
Bernabè, Franco Chairman, FB Group SRL ITA
Beurden, Ben van CEO, Royal Dutch Shell plc NLD
Bigorgne, Laurent Director, Institut Montaigne FRA
Boone, Laurence Special Adviser on Financial and Economic Affairs to the President FRA
Botín, Ana P. Chairman, Banco Santander ESP
Brandtzæg, Svein Richard President and CEO, Norsk Hydro ASA NOR
Bronner, Oscar Publisher, Standard Verlagsgesellschaft AUT
Burns, William President, Carnegie Endowment for International Peace USA
Calvar, Patrick Director General, DGSI FRA
Castries, Henri de Chairman, Bilderberg Meetings; Chairman and CEO, AXA Group FRA
Cebrián, Juan Luis Executive Chairman, Grupo PRISA ESP
Clark, W. Edmund Retired Executive, TD Bank Group CAN
Coeuré, Benoît Member of the Executive Board, European Central Bank INT
Coyne, Andrew Editor, Editorials and Comment, National Post CAN
Damberg, Mikael L. Minister for Enterprise and Innovation SWE
De Gucht, Karel Former EU Trade Commissioner, State Minister BEL
Donilon, Thomas E. Former U.S. National Security Advisor; Partner and Vice Chair, O’Melveny & Myers LLP USA
Döpfner, Mathias CEO, Axel Springer SE DEU
Dowling, Ann President, Royal Academy of Engineering GBR
Dugan, Regina Vice President for Engineering, Advanced Technology and Projects, Google USA
Eilertsen, Trine Political Editor, Aftenposten NOR
Eldrup, Merete CEO, TV 2 Danmark A/S DNK
Elkann, John Chairman and CEO, EXOR; Chairman, Fiat Chrysler Automobiles ITA
Enders, Thomas CEO, Airbus Group DEU
Erdoes, Mary CEO, JP Morgan Asset Management USA
Fairhead, Rona Chairman, BBC Trust GBR
Federspiel, Ulrik Executive Vice President, Haldor Topsøe A/S DNK
Feldstein, Martin S. President Emeritus, NBER; Professor of Economics, Harvard University USA
Ferguson, Niall Professor of History, Harvard University, Gunzberg Center for European Studies USA
Fischer, Heinz Federal President AUT
Flint, Douglas J. Group Chairman, HSBC Holdings plc GBR
Franz, Christoph Chairman of the Board, F. Hoffmann-La Roche Ltd CHE
Fresco, Louise O. President and Chairman Executive Board, Wageningen University and Research Centre NLD
Griffin, Kenneth Founder and CEO, Citadel Investment Group, LLC USA
Gruber, Lilli Executive Editor and Anchor “Otto e mezzo”, La7 TV ITA
Guriev, Sergei Professor of Economics, Sciences Po RUS
Gürkaynak, Gönenç Managing Partner, ELIG Law Firm TUR
Gusenbauer, Alfred Former Chancellor of the Republic of Austria AUT
Halberstadt, Victor Professor of Economics, Leiden University NLD
Hampel, Erich Chairman, UniCredit Bank Austria AG AUT
Hassabis, Demis Vice President of Engineering, Google DeepMind GBR
Hesoun, Wolfgang CEO, Siemens Austria AUT
Hildebrand, Philipp Vice Chairman, BlackRock Inc. CHE
Hoffman, Reid Co-Founder and Executive Chairman, LinkedIn USA
Ischinger, Wolfgang Chairman, Munich Security Conference INT
Jacobs, Kenneth M. Chairman and CEO, Lazard USA
Jäkel, Julia CEO, Gruner + Jahr DEU
Johnson, James A. Chairman, Johnson Capital Partners USA
Juppé, Alain Mayor of Bordeaux, Former Prime Minister FRA
Kaeser, Joe President and CEO, Siemens AG DEU
Karp, Alex CEO, Palantir Technologies USA
Kepel, Gilles University Professor, Sciences Po FRA
Kerr, John Deputy Chairman, Scottish Power GBR
Kesici, Ilhan MP, Turkish Parliament TUR
Kissinger, Henry A. Chairman, Kissinger Associates, Inc. USA
Kleinfeld, Klaus Chairman and CEO, Alcoa USA
Knot, Klaas H.W. President, De Nederlandsche Bank NLD
Koç, Mustafa V. Chairman, Koç Holding A.S. TUR
Kravis, Henry R. Co-Chairman and Co-CEO, Kohlberg Kravis Roberts & Co. USA
Kravis, Marie-Josée Senior Fellow and Vice Chair, Hudson Institute USA
Kudelski, André Chairman and CEO, Kudelski Group CHE
Lauk, Kurt President, Globe Capital Partners DEU
Lemne, Carola CEO, The Confederation of Swedish Enterprise SWE
Levey, Stuart Chief Legal Officer, HSBC Holdings plc USA
Leyen, Ursula von der Minister of Defence DEU
Leysen, Thomas Chairman of the Board of Directors, KBC Group BEL
Maher, Shiraz Senior Research Fellow, ICSR, King’s College London GBR
Markus Lassen, Christina Head of Department, Ministry of Foreign Affairs, Security Policy and Stabilisation DNK
Mathews, Jessica T. Distinguished Fellow, Carnegie Endowment for International Peace USA
Mattis, James Distinguished Visiting Fellow, Hoover Institution, Stanford University USA
Maudet, Pierre Vice-President of the State Council, Department of Security, Police and the Economy of Geneva CHE
McKay, David I. President and CEO, Royal Bank of Canada CAN
Mert, Nuray Columnist, Professor of Political Science, Istanbul University TUR
Messina, Jim CEO, The Messina Group USA
Michel, Charles Prime Minister BEL
Micklethwait, John Editor-in-Chief, Bloomberg LP USA
Minton Beddoes, Zanny Editor-in-Chief, The Economist GBR
Monti, Mario Senator-for-life; President, Bocconi University ITA
Mörttinen, Leena Executive Director, The Finnish Family Firms Association FIN
Mundie, Craig J. Principal, Mundie & Associates USA
Munroe-Blum, Heather Chairperson, Canada Pension Plan Investment Board CAN
Netherlands, H.R.H. Princess Beatrix of the NLD
O’Leary, Michael CEO, Ryanair Plc IRL
Osborne, George First Secretary of State and Chancellor of the Exchequer GBR
Özel, Soli Columnist, Haberturk Newspaper; Senior Lecturer, Kadir Has University TUR
Papalexopoulos, Dimitri Group CEO, Titan Cement Co. GRC
Pégard, Catherine President, Public Establishment of the Palace, Museum and National Estate of Versailles FRA
Perle, Richard N. Resident Fellow, American Enterprise Institute USA
Petraeus, David H. Chairman, KKR Global Institute USA
Pikrammenos, Panagiotis Honorary President of The Hellenic Council of State GRC
Reisman, Heather M. Chair and CEO, Indigo Books & Music Inc. CAN
Rocca, Gianfelice Chairman, Techint Group ITA
Roiss, Gerhard CEO, OMV Austria AUT
Rubin, Robert E. Co Chair, Council on Foreign Relations; Former Secretary of the Treasury USA
Rutte, Mark Prime Minister NLD
Sadjadpour, Karim Senior Associate, Carnegie Endowment for International Peace USA
Sánchez Pérez-Castejón, Pedro Leader, Partido Socialista Obrero Español PSOE ESP
Sawers, John Chairman and Partner, Macro Advisory Partners GBR
Sayek Böke, Selin Vice President, Republican People’s Party TUR
Schmidt, Eric E. Executive Chairman, Google Inc. USA
Scholten, Rudolf CEO, Oesterreichische Kontrollbank AG AUT
Senard, Jean-Dominique CEO, Michelin Group FRA
Sevelda, Karl CEO, Raiffeisen Bank International AG AUT
Stoltenberg, Jens Secretary General, NATO INT
Stubb, Alexander Minister of Finance FIN
Suder, Katrin Deputy Minister of Defense DEU
Sutherland, Peter D. UN Special Representative; Chairman, Goldman Sachs International IRL
Svanberg, Carl-Henric Chairman, BP plc; Chairman, AB Volvo SWE
Svarva, Olaug CEO, The Government Pension Fund Norway NOR
Thiel, Peter A. President, Thiel Capital USA
Tsoukalis, Loukas President, Hellenic Foundation for European and Foreign Policy GRC
Üzümcü, Ahmet Director-General, Organisation for the Prohibition of Chemical Weapons INT
Vitorino, António M. Partner, Cuetrecasas, Concalves Pereira, RL PRT
Wallenberg, Jacob Chairman, Investor AB SWE
Weber, Vin Partner, Mercury LLC USA
Wolf, Martin H. Chief Economics Commentator, The Financial Times GBR
Wolfensohn, James D. Chairman and CEO, Wolfensohn and Company USA
Zoellick, Robert B. Chairman, Board of International Advisors, The Goldman Sachs Group USA

*  *  *

A conspicuous absentee is the International Monetary Fund's managing director Christine Lagarde, who attended last year.

Source: Martin Armstrong

As recently as several months ago, the financial press was surprised when a wave of Deutsche Bank employees, particularly those in the bank's legal department (such as here and here), decided to take their own lives. Now at least one Deutsche Banker, perhaps perturbed by the recent news involving the unexpected departure of his co-CEOs coupled with the even more unexpected raid of the bank's global headquarters, has decided to show the jump from sui- to homicide is a simple one.

Earlier today, Hong Kong police arrested a 48-year-old Deutsche Bank employee on "suspicion of dangerous driving and causing death." The fatal accident happened early on Tuesday at a car park near Deutsche's office at International Commerce Center, across the harbor from the city's financial district.

According to Reuters, the driver was Deutsche's head of Asia-Pacific equities trading, Robert James Ebert, 48, who was behind the wheel of a Ferrari at the time of the accident.

Below is his Linkedin profile:

Police said the arrested driver, whom it identified only as James, had said he lost control of his car. The police said a 53-year-old man, who was next to the barriers, died after suffering serious head and shoulder injuries. He was pronounced dead in the hospital early in the afternoon.

The Apple Daily newspaper also identified the driver as Ebert and said he was driving a black, HK$4.5 million ($580,502) Ferrari 458 Spider, which was in collision with a HK$2.4 million Maserati at the car park entrance before hitting a security guard.

The police said the driver was not charged.  "We are investigating whether the car was driving beyond the speed limit of 30km/h at the time," a police source said.

It is safe to say the answer is yes, as a simple check of the security cameras would confirm.

Ebert was released on bail in the early hours of Wednesday and has to report back in mid-July, the police said.

Ejiinsight adds that Ebert’s car went on to sweep across three barricades and hit the guard, who was pinned to a post at the carpark entrance.

Koo was rushed to the hospital but was pronounced dead by 2 p.m.

 

Ebert and the Maserati driver were unhurt. Police said both drivers passed a breathalyser test.

 

Skid marks stretching 10 meters were found at the entrance of the carpark.

 

Ebert told police his car had a brake failure. He was arrested on suspicion of dangerous driving causing death.

So guy drives a car which costs more than most Americans will make in a decade (pretax), crashes in what may have been an improvised drag race, kills an innocent bystander, and promptly posts bail and is allowed to roam, and drive, in freedom.

Meanwhile Nav Sarao rots in the UK's worst prison unable to pay his ridiculous $5 million bail, for the simple reason that he was a good trader and dared to expose the HFTs' rigging to regulators. He faces a maximum sentence of 380 years in jail.

It's ok though: when Stan Fischer and Mark Carney said bankers have to go to prison for "at least" 10 years when caught rigging markets they said nothing about bankers who engage in homicide. It appears the legal system will need a central bank explainer on how to proceed in that specific case.

So,Tyler just ran an interesting piece titled "Is Deutsche Bank The Next Lehman?" There is one correction that needs to be made where Tyler says "Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative". Well, I gave ample warning about Lehman (and Bear Stearns) way before that - to wit:

The warning of Lehman Brothers before anyone had a clue!!! (February through May 2008): Is Lehman really a lemming in disguise? Thursday, February 21st, 2008 | Web chatter on Lehman Brothers Sunday, March 16th, 2008 (It would appear that Lehman’s hedges are paying off for them. The have the most CMBS and RMBS as a percent of tangible equity on the street following BSC. The question is, “Can they monetize those hedges?”. I’m curious to see how the options on Lehman will be priced tomorrow. I really don’t have enough. Goes to show you how stingy I am. I bought them before Lehman was on anybody’s radar and I was still to cheap to gorge. Now, all of the alarms have sounded and I’ll have to pay up to participate or go in short. There is too much attention focused on Lehman right now.) | I just got this email on Lehman from my clearing desk Monday, March 17th, 2008 by Reggie Middleton | Lehman stock, rumors and anti-rumors that support the rumors Friday, March 28th, 2008 | It appears that I should have dug deeper into Lehman! May 2008

The concerns regarding Deustche are quite possiblywell founded, and like Lehman, I doubt very seriously if DB is in the shit can by itself. Reference my article "EU Area Residents' Step-by-Step Guide to Escaping the Upcoming Bank Bail-ins & Capital Controls":

The Impossible Trinity or "The Trilemma", in which three policy positions are possible. If a nation were to adopt positiona, for example, then it would maintain a fixed exchange rate and allow free capital flows, the consequence of which would be loss of monetary sovereignty.

Put plainly, either balance sheets get burned trying to buy and sell currencies, capital controls are implemented, or QE (sovereign monetary policy) fails. Trying all three simultaneously has NEVER, EVER worked! Of course, according to the ECB, it's different this time...

Guess what? Balance sheets are burned.

Realize why the ECB is doing this QE thing to the level that it is. Their banks are still in trouble, material trouble. Reference "Ovebanked, Underfunded, and Overly Optimistic: The New Face of Sovereign Europe" from 5 years ago and tell me if you think its gotten better (Hint: pay very close attention to the countries these banks are domiciled in, capital controls data soon to follow several paragraphs below)...

Sovereign Risk Alpha: The Banks Are Bigger Than Many of the Sovereigns

 Well, it's all relative. The banks are smaller, leverage is down - and that's after 6 years of global QE, ZIRP and now NIRP, yet each and every bank is STILL big enough to collapse the country that it's domicled in...

With this in mind, let's review the The Anatomy of a European Bank Run!

Below is a chart excerpted from our work showing the asset/liability funding mismatch of a French bank. The actual name of the bank is not at issue here. What is at issue is what situation this bank has found itself in and why it is in said situation. Both Lehman and Bear Stearns collapsed from the EXACT SAME PROBLEM! That problem is asset/Liabitlity mismatch.

What many bank depositors who believe their bank deposits are actually cash don't realize is that they are creditors to the bank - short term lenders. You bank accounts, time deposit accounts, CDs, checking and savings accounts are short term, UNSECURED loans to bank that uses said loans to engaged in significantly and materially more risky endeavors to generate profits. What sort of endeavors, you may ask? Well, as was the case with many French, Cypriot, Italian, Spanish and German banks, making real estate, corporate and government loans of a longer term to profligate nations such as Greece, for one. It's good work of you an get it. Borrow from mom and pop savers at 25 basis points and lend to Greece at 23%. Good money, dude!

That is, until it becomes apparent that the money you lent Greece isn't going to come back.

Even that, in and of itself is not a problem since the fractional reserve banking system doesn't really require you to have the money that you borrowed from mom and pop on hand to pay them all back. It works, until it doesn't. When mom and pop figure out what you've done with their money by reading and article such as this, that's when the stinky brown stuff hits the fan blades. You get a run on the bank as everyone tries to get those overnight, and 1 and 2 month deposits out - at the same time.

This is what happened to Bear Stearns and Lehman, literally overnight - although the signs were available months beforehand if you paid attention. I predicted both of these collapses at least 60 days before they occurred: The collapse of Bear Stearns in January 2008 (2 months before Bear Stearns fell, while trading in the $100s and still had buy ratings and investment grade AA or better from the ratings agencies): Is this the Breaking of the Bear?

Anyone in the EU area would be doing themselves a disfavor if they didn't read "EU Area Residents' Step-by-Step Guide to Escaping the Upcoming Bank Bail-ins & Capital Controls". Believe it!

Sprott Money first to announce state-of-the-art fully private (NON BANK) Cayman asset storage -->  http://www.321gold.com/info/053015_sprott.html

Click For Orginal - The One Bank, Revisited

Written by Jeff Nielson

Approximately two years ago, a commentary was published entitled “The One Bank”. The empirical foundation for the article (and the paradigm) was an extensive computer model, produced by a trio of academics at a university in Switzerland, and originally reviewed in an article from Forbes.

The gist of the computer modeling was that a single “super-entity”, by itself, controlled roughly 40% of the global economy. The term “super-entity” is simply a synonym for monopoly. The research further stipulated that ¾ of the 140+ (gigantic) corporate fronts which comprised this mega-monopoly were financial intermediaries (i.e. banks), hence the title, The One Bank.

The research names “names”. Goldman Sachs, JPMorgan, Bank of America, Morgan Stanley, Citigroup, Deutsche Bank, Barclays, Credit Suisse, UBS, Merrill Lynch, Bear Stearns, and Lehman Brothers are among the Big Banks listed as being tentacles of this enormous, financial crime syndicate. Note that the latter names on that list are deceased, (supposed) “casualties” of the Crash of ’08. But with all of these financial tentacles part of a single whole, this proves that the bail-outs which came after that event, and even the crash itself were pure fraud.

All of these financial losses were internal: one tentacle of the crime syndicate (supposedly) “losing money” to another tentacle of the same entity, meaning they were just phony, paper-losses which never really existed. The tentacle on the receiving end of the “losses” was enriched by that amount, meanwhile the tentacle on the losing end was indemnified via (fraudulent) taxpayer-funded “bail-outs”. Heads I win, tails you lose.

The rationale behind these fraudulent bail-outs is that they were to “protect the financial system from collapse.” However, with “the financial system” being little more than the One Bank, itself, and all of its supposed losses being internal, there was never any threat to the system. There was no financial rationale for even one cent of the fraudulent $trillions in “bail-outs” (while these same, corrupt governments radically cut funding for programs which helped/served the People).

With there being no real “losses”, and absolutely no “threat”, there was never any need or justification for the sudden, abrupt, and coordinated suspension of all credit, from these same Big Bank tentacles. It is well-documented that it was the sudden, coordinated (and total) suspension of all credit – to a global economy ‘addicted’ to such credit – which was the trigger for that painful, global contraction. All fraud. All conspiracy.

Equally, there was/is never the slightest financial justification for dubbing these Big Banks “too big to fail”. Not only is such nonsense entirely antithetical to our (supposed) “capitalist” system, it is simply more fraud: a pledge by our ultra-corrupt governments to permanently indemnify all of the tentacles of this crime syndicate against “losses” which don’t even exist.

In addition to that empirical foundation, we have the blatant/obvious evidence of the same Big Banks being caught committing the same mega-crimes (again and again) – and clearly acting in tandem rather than in competition with each other. Indeed, perpetrating conspiracies like manipulating the LIBOR rate and manipulating international currencies require that these Big Banks act in collusion.

Beyond that, previous commentaries have laid out the evidentiary foundation for a “Master Program” (computerized trading algorithm), by which this financial crime syndicate can (and does) literally manipulate all of the world’s markets. Further empirical evidence lies in the markets, themselves. The yo-yo like manner in which these markets move up and down, in synchronicity, day after day, month after month is impossible for any legitimate/functional market, let alone all markets, simultaneously.

When you eliminate the impossible, whatever remains, no matter how improbable, must be the answer. So said Sir Arthur Conan Doyle, and it is a tautology which would serve readers well. Markets diverge, it’s what they do. Therefore when, suddenly, all these markets begin to behave like herds of sheep rather than herds of cats, it can only be because some Invisible Hand is exerting direct (and absolute) control over those markets.

This “impossible” (inexplicable?) market behavior began at precisely the same time that so called “HFT trading” (i.e. trading via computer algorithms) literally took over our markets. Then we have the evidence of crime itself: evidence presented that half of all trades at the Chicago Mercantile Exchange are illegal and manipulative: 100 phony/illegal (computerized) trades per second, every hour of every day in which that crime exchange operates.

Manipulation on such a gigantic scale requires the financial clout of an entity much larger than any single, Big Bank. Further evidence has emerged of numerous ways/means by which these trading algorithms can and do manipulate our markets, along with empirical evidence that this computerized manipulation is coordinated– i.e. perpetrated by a single Invisible Hand, the hand of the One Bank.

Critics may argue that some of the rhetoric of the original article was inappropriate, and/or extreme, such as the paraphrasing of a famous verse from Tolkein’s immortal Lord of the Rings:

One Bank to rule them all,

One Bank to find them,

One Bank to bring them all,

And in the darkness bind them.

Let’s examine that rhetorical assertion, line by line.

One Bank to rule them all… Our so-called “central banks” exist solely to cater to the interests of the Big Banks (i.e. the One Bank), as reflected by their actions, and the results of those actions. This alone strongly implies that these central banks are merely more tentacle of the One Bank.

Additional evidence of this comes via the superb documentary, The Money Masters, which chronicled how several, prominent U.S. politicians were “whacked” by this crime syndicate (Mafia-style), in the early days of the Federal Reserve, when its continued existence was very much in doubt. Clearly, the One Bank was “protecting” its own property: the U.S. printing press.

“Give me control over a nation’s money supply, and I care not who makes the laws.” So said Mayer Amschel Rothschild, more than two hundred years. As noted in the original commentary (and further documented in The Money Masters), he is the most likely suspect as the original patriarch of the One Bank.

What must be further understood is that these central banks have been created above the law, meaning above our governments. These private (or, at best, quasi-public) entities dictate to our governments, not the other way around. We are “ruled”, in very literal terms, by these central banks, with the central banks themselves under the control of the puppet-master, the One Bank.

One Bank to find them… Our fascist governments no longer even attempt to hide the fact that we now live in the “Big Brother” society prophesied by Orwell. Via the computer chips which nearly all of us carry in our cellphones and/or credit cards, virtually any (or all) of us can be “found”, every minute of every day.

One Bank to bring them all… Among the many, despicable consequences of the endless (and imaginary) “War on Terror” is the shredding of constitutional (and human) rights, across practically the entire, corrupt Western bloc. All that needs to happen is for some public official to utter the magic word, “terrorist”, and any one of us can be “brought” (and held indefinitely, without evidence, without charges) within one of the (secret) gulags.

And in the darkness bind them. Back when our governments actually resembled “democracies”, when they adhered to the Rule of Law, and respected our constitutions, they operated in a relatively transparent manner. Now there is only “darkness”, all in the interests of (supposed) “national security” – i.e. the security of our corrupt governments, rather than the security of the People.

As for “binding” us, here the One Bank is unusually direct (and literal) in its modus operandi. How does the One Bank “bind” us? Via its bonds of debt. All of our governments are buried under mountains of debt, far past the point of insolvency. The vast majority of these mountains of debt are owed to (you guessed it) the Big Banks, meaning the One Bank.

Note that these bonds of debt are also (along with the central banks) how the One Bank “rules” us all. Holding all these corrupt, puppet governments in massive, choke-holds of debt, the One Bank now essentially dictates public policy, primarily via its central bank mouthpieces.

All of our so-called leaders have steadfastly and unequivocally vowed that paying the interest on the One Bank’s bonds of debt supercedes all other priorities. To demonstrate their servitude toward this financial crime syndicate, our governments have already engaged in the scorched-earth destruction of social programs built up over generations.

However, they were just getting started. Now these traitorous governments have started tearing-up pension and health-care obligations, which the People worked for decades to earn, and sometimes paid into themselves. But the bonds of debt (and the interest on them) continue to grow larger.

With our public treasuries already (fraudulently) depleted by the Crash of ’08, and all remaining financial resources dedicated to paying interest on these bonds, the banksters are still hungry. So, when this crime syndicate manufactures its next, staged “crash” (almost certainly late this year, or early next year), and its next mountain of imaginary “losses”, it will simply start stealing funds directly out of our accounts.

Known by the despicable (and utterly meaningless) euphemism “bail-in”, this is nothing but the lawless confiscation of private assets, to “cover” financial losses which (as previously explained) don’t even exist. And all this additional corruption has already been rubber-stamped by the West’s traitor governments.

According to one of the fundamental pillars of our entire system of justice, monopolies are illegal, even monopolizing one, tiny sector of our economy, even in only one nation. Indeed, even “oligopolies” – monopolizing a sector via the collusion of a group of large companies – are illegal. Yet our corrupt, servile governments have sunk so low (and failed to adhere to their/our laws) that we now have a single monopoly with a choke-hold on not just one sector of our economies (the financial sector), but 40% of all sectors, nearly half of the global economy.

Big Oil? Big Pharma? The Corporate media? The “defense industry” (i.e. the arms industry)? Big Agriculture? All of these overtly predatory and/or corrupt oligopolies would fit inside this massive empire of crime – with plenty of room to spare.

The One Bank is not simply one (financial) monopoly. It is a crime syndicate composed of a plethora of monopolies, cobbled together, and consolidated by the Old World Order (the real“world order”), over a period of centuries. It is entirely illegal, and entirely rapacious.

Click For Orginal - The One Bank, Revisited

Written by Jeff Nielson

Submitted by NotQuant.com

Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened. In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:

There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during the crisis).

In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed security was drying up.

But still — even in late 2007,  there was little public indication that Lehman was circling the drain.

Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative.  (ironically, 7 years to the day before S&P would cut DB)

The “negative outlook” indicates that another further downgrade is likely.   In this particular case, it was the understatement of all time.

A mere 3 months later, in the course of just one week,  Lehman would announce a major loss and file for bankruptcy.

And the rest is history.

Could this happen to Deutsche Bank?

First, we must state the obvious: If Deutsche Bank is the next Lehman, we will not know until events are moving at an uncontrollable and accelerating speed.   The nature of all fractional-reserve banks — who are by definition bankrupt at all times– is to project an aura of stability until that illusion has already begun to implode.

By the time we are aware of a crisis – if one is in the offing— it will already be a roaring blaze by the time it is known publicly.   It is by now well-established that truth is the first casualty of all banking crises.  There will be little in the way of early warnings.   To that end, we begin connecting the dots:

Here’s a re-cap of what’s happened at Deutsche Bank over the past 15 months:

• In April of 2014,  Deutsche Bank was forced to raise an additional 1.5 Billion of Tier 1 capital to support it’s capital structure.  Why?
• 1 month later in May of 2014, the scramble for liquidity continued as DB announced the selling of 8 billion euros worth of stock– at up to a 30% discount.   Why again? It was a move which raised eyebrows across the financial media.  The calm outward image of Deutsche Bank did not seem to reflect their rushed efforts to raise liquidity.  Something was decidedly rotten behind the curtain.
• Fast forwarding to March of this year:   Deutsche Bank fails the banking industry’s “stress tests” and is given a stern warning to shore up it’s capital structure.
• In April, Deutsche Bank confirms it’s agreement to a joint settlement with the US and UK regarding the manipulation of LIBOR.   The bank is saddled with a massive $2.1 billion payment to the DOJ.  (Still, a small fraction of their winnings from the crime). 
• In May, one of Deutsche Bank’s CEOs, Anshu Jain is given an enormous amount of new authority by the board of directors.  We guess that this is a “crisis move”.  In times of crisis the power of the executive is often increased.
• June 5:  Greece misses it’s payment to the IMF.   The risk of default across all of it’s debt is now considered acute.   This has massive implications for Deutsche Bank.
• June 6/7: (A Saturday/Sunday, and immediately following Greece’s missed payment to the IMF) Deutsche Bank’s two CEO’s announce their surprise departure from the company.  (Just one month after Jain is given his new expanded powers).   Anshu Jain will step down first at the end of June.  Jürgen Fitschen will step down next May.
• June 9: S&P lowers the rating of Deutsche Bank to BBB+  Just three notches above “junk”.  (Incidentally,  BBB+ is even lower than Lehman’s downgrade – which preceded it’s collapse by just 3 months)

And that’s where we are now.  How bad is it?  We don’t know because we won’t be permitted to know.  But these are not the moves of a healthy company.

Jürgen Fitschen will step down May 2016. Jain will step down at the end of this month.

How exposed is Deutsche Bank?

The trouble for Deutsche Bank is that it’s conventional retail banking operations are not a significant profit center.  To maintain margins, Deutsche Bank has been forced into riskier asset classes than it’s peers.

Deutsche Bank is sitting on more than $75 Trillion in derivatives bets — an amount that is twenty times greater than German GDP.    Their derivatives exposure dwarfs even JP Morgan’s exposure – by a staggering $5 trillion.

With that kind of exposure, relatively small moves can precipitate catastrophic losses.   Again, we must note that Greece just missed it’s payment to the IMF – and further defaults are most certainly not beyond the realm of possibility.

Not good.

And if the dominos were not adequately stacked already, there is one final domino which perfects the setup.

Meet Tom Humphrey.  He heads up Deutsche Bank’s Investment Banking operations on Wall Street.

He was also head of fixed income at Lehman.

Prior history.

History never repeats.   But it does rhyme.    In market terms, it tends to rhyme just about every 7 years.

* * *

For more read the Zero Hedge piece from April 2014: The Elephant In The Room: Deutsche Bank's $75 Trillion In Derivatives Is 20 Times Greater Than German GDP

Submitted by Daniel Drew of Dark Bid

How One Accounting Rule Wrecked The Middle Class

Maybe you heard your CEO say, "Our people are our greatest asset." He's probably lying. That's not how he really feels about you. Despite how much management talks about "human capital" as if it were an asset, it's not. The accounting system that the whole world uses classifies labor as an expense.

Anyone who has studied accounting even briefly can see that it's a lot of bullshit designed to appear objective. In reality, it is filled with assumptions, estimates, and sometimes, fraud. Yes, it is rule-based, but with any system, who makes the rules is often more important than the rules themselves. Accounting is the language of business, and in the mouth of a double-talking CEO, it's just another way to promote their own interests.

One of the most insidious rules in accounting is that labor must be classified as an expense on the income statement. Actually, it should be classified as an asset on the balance sheet. The accounting profession has rigged the system against the worker. The misclassification of labor as an expense has branded every employee with a negative dollar sign. The way the accounting system defines labor causes CEOs and upper management to view employees as expendable. When profits decline, the CEO says, "It must be those damned employees dragging us down! Let's fire a few thousand of them. That will get us on track again."

According to current accounting rules, inanimate objects like pencils, clothing, or any type of inventory are assets, but people are expenses. The CEOs want you to believe that a pen is an asset, but a person with knowledge, skills, and experience is an expense, something that should be avoided. This is actually what they teach business students in school all around the world, and the students just accept it as fact. Have we all gone insane? We are being held captive by dumbass accountants and shrewd CEOs who realize the whole system is rigged in their favor.

The proper way to account for labor would be to classify it as an asset on the balance sheet. The employee would be valued with mark to market accounting at every reporting period, and the value would be determined by calculating the profit per employee, the average tenure, and the net present value of this amount. This would accurately account for the true value of labor. If this rule were implemented, balance sheets would be dramatically altered. Some companies that appeared valuable before might look like complete garbage. Other companies would prove to be much more valuable than previously thought.

One company that understands the true value of employees is Costco. Their full-time employees make $43,000 per year, which is very high for the retail industry. The turnover there is only 5% for employees who have been there a year or longer. In 2004, The Wall Street Journal published an article about Costco's skeptics. Bill Dreher, retail analyst at Deutsche Bank, said, "From the perspective of investors, Costco's benefits are overly generous. Public companies need to care for shareholders first." Dreher said profit margins weren't as high as they should be.

However, Costco CEO Jim Sinegal, who owned 3.2 million shares of Costco at the time, said,

The last thing I want people to believe is that I don't care about the shareholder. But I happen to believe that in order to reward the shareholder in the long term, you have to please your customers and workers.

The CFO, Richard Galanti, agreed,

From day one, we've run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we'll be able to hire better people, they'll stay longer and be more efficient.

A study in the Harvard Business Review showed that Costco generated $21,805 in U.S. operating profit per hourly employee, compared with $11,615 at Sam's Club, a Walmart subsidiary. John Bowen, an investment manager and Costco shareholder, said, "Happy employees make for happy customers, which in the long run is ultimately reflected in the share price."

Fortunately, the Costco CEO didn't listen to the Deutsche Bank analyst who was complaining about their labor investments. In the last 5 years, Costco stock has risen by 139%. Walmart has only gained 41%.

What's interesting about the reclassification of labor as an asset is the implication for central bank policy. The federal minimum wage is only $7.25. Those in power don't see that as a problem. However, when asset prices decline, all of a sudden, they start worrying about deflation. That's why the Federal Reserve launched multiple rounds of quantitative easing, a policy which has essentially become QE Infinity.

While there is no official minimum stock market level like there is with the minimum wage, it's quite clear there is a de facto minimum level, and I guarantee you it's not $7.25. The Chicago Mercantile Exchange's "central bank incentive program" has proven that central banks buy S&P 500 futures to prop up the market. If labor is no longer misclassified as an expense, would the value of labor rise with all the other assets being inflated by quantitative easing?