3 quick bullets

* The PBOC dropped the hammer with a 100 bp RRR cut, predictably sending the AUD into raptures (well, relatively speaking) as of the time of writing.   Chinese reserve requirements have historically been a lousy explanatory variable for AUD and other FX on any but the most micro of time frames, and this case should be no different.   It's important to recognize the sea change that's occurred in China's FX reserve holdings- they're not going up any more.   To be sure, some of the decline has represented a fall in the value of non-USD currencies in the basket (cough, euro, cough), but the sheer scale of the recent falls is highly suggestive of actual sales due to speculative capital flight.  That, in turn, sucks RMB out of the system, and a nice RRR cut is an easy way of putting some liquidity back into the money market by loosening up dead cash on bank balance sheets.  The chart below from Reuters illustrates the volte-face in China's FX reserves quite nicely.



* So glamour boy Yanis Varoufakis has warned of possible contagion if Greece exist the euro.   Well, duh...one would hope that the Troika (or whatever they're called now) has at least some idea of what the impact would be and how they might react.   Indeed, given 5 year BTPs last traded hands at a princely yield of 71 bps, once could easily argue that the ECB QE has proacted against a Grexit, mitigating the need for a reaction.  File this one under "man who desperately needs lots of money warns that bad things will happen to people who currently have lots of money if he doesn't get some."

* Is it just Macro Man, or has the SPX turned into the equity index version of pre-January 15 EUR/CHF: flat-lining and utterly uninteresting with all the action elsewhere?  It's a big week for earnings coming up, but it's hard to say if they will even matter; Friday's SPX close was more or less identical to the opening price on the last trading day of last year.   Zzzzzz.   While there is of course a saying that you should "never short a quiet market", there's an even more interesting one suggesting to sell in May, a month which is just around the corner.   Lazy longs in EUR/CHF got their comeuppance....will the same happen to the Spooz?









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washedup
admin
April 20, 2015 at 1:56 PM ×

thx MM - for all the focus on the RR, which as you pointed out is about as predictive as a fengshui chart, the real news is the mulling of the new LTRO like facility for local govts to swap/collateralize their debt. Cue the next step in China's great transition - the nationalization of all provincial debt.
As for the RR, it is basically just beginning its long march to high single digits where it used to be pre 2008 - there is of course a long history of CB's ineffectually easing into an unfolding disaster.
You think Draghi has a difficult job? Imagine urself as the PBoC chief - basically make a concorde land in a rural farm in kansas at night without waking up a soul!

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Anonymous
admin
April 20, 2015 at 2:54 PM ×

"man who desperately needs lots of money warns that bad things will happen to people who currently have lots of money if he doesn't get some."

I already posted that I thought this guy was insane and was highly criticized. Happy to see a more insightful comment. If he would just shut his mouth...but he cannot control himself. What a punk.

.

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washedup
admin
April 20, 2015 at 3:25 PM ×

hey anon 2:54

this guy = macro man???

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Anonymous
admin
April 20, 2015 at 3:31 PM ×

washedup...

Varoufakis

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Anonymous
admin
April 20, 2015 at 3:32 PM ×

Steen goes all in...

"...we’re set for a rate hike in either in June or in September. I think this will be the biggest margin call in history"

http://www.peakprosperity.com/podcast/92386/steen-jakobsen-get-ready-biggest-margin-call-history

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Error403
admin
April 20, 2015 at 4:26 PM ×

"Indeed, given 5 year BTPs last traded hands at a princely yield of 71 bps, once could easily argue that the ECB QE has proacted against a Grexit, mitigating the need for a reaction."

So just how much of his farm would MM be prepared to bet on Grexit being a snoozefest???

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Anonymous
admin
April 20, 2015 at 5:24 PM ×

"Economic data, with the exception of jobs, which is a lagging indicator, indicate the US economy is peaking. To me it looks like the US and China might go into recession at the same time."

http://www.zerohedge.com/news/2015-04-20/multibillion-hedge-fund-manager-ultimately-qe-will-fail-us-and-china-might-enter-rec

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Leftback
admin
April 20, 2015 at 7:01 PM ×

So just how much of his farm would MM be prepared to bet on Grexit being a snoozefest???

LB has about 1% of the portfolio long Greek equities. That seems like a reasonable measure of risk for now.

NO direct exposure to China now, although we are long EM equities in general. It would appear that PBOC has decided to replace the faltering property bubble with a bubble in domestic equities via easy monetary policy. Chinese corporates will soon be issuing debt at low rates and using it to buyback stocks. Where did they learn that, one wonders? Communist central bankers appear to be aping the Crony Capitalism of their Western counterparts...

"Four legs good, two legs better" - George Orwell.

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washedup
admin
April 20, 2015 at 7:37 PM ×

and - since we are invoking george orwell, here is how global, especially US equity bears have felt in the last 3 years:

"..imagine a boot stamping on a human face - forever"

I suppose bernanke's first move at citadel will be to spend $15 BN and buy upside spy calls.
Wait - did u say crony capitalism????

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hipper
admin
April 20, 2015 at 7:56 PM ×

Yes washedup, isn't the current really exciting thing about China that they still have enough room below to do a HALO-jump with their refi rates and reserve requirement unlike their brethrens *cough* Europe and US *cough*. Not to mention Switzerland, Denmark, Sweden etc.

Isn't it all about the momentum which the market loves, with things just starting to heat up and rates could continue come crashing down with intensity all along. By momentum I mean that when cuts start getting more frequent the market starts to adjust expectations for more, meaning front-running and parabolic, over-shooting gains. And go far enough and the expectations for QE start increasing. Of course some of it is already priced but it would seem to be plausible to expect that there still is much more to come. And just think what that cheap finance and buyback scenario could do.

Anyone remember this brilliant presentation from a couple of years ago of the central banker world? Could now be even more timely than back then.

http://projects.wsj.com/games/thefederator/?mg=inert-wsj

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Anonymous
admin
April 20, 2015 at 8:06 PM ×

Money not flowing out of China...it's gushing:

"Yuan positions on the central bank's balance sheet, a gauge of capital flows, declined a record 251.1 billion yuan in the first quarter"

Macquarie Group Chief China economist Larry Hu...

“China should cut the RRR 20 times in the next five years as the pattern of capital flows has changed significantly”

Got your YINN or CHAU?


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CV
admin
April 20, 2015 at 8:37 PM ×

Thanks for those bullets. I am beginning to lean towards the ol' tested and tried "Sell in May, and go away" mantra, but I still think that the S&P 500 could largely remain a side show for what will be a continuing nice ride in EM (Brazil) and EUR energy stocks until, say July ... I am not ready to abandon these just yet.

I also struggle to see how the Fed is going to hike sooner rather than later, if the Spoos is about to trip up in a 10-15% banana skin.

As for China, well ... teenagers with margin, what can you say. It is fun to watch ... from afar!!

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Anonymous
admin
April 20, 2015 at 10:09 PM ×

Trader bought 22,525 May 21 calls for 50 cents. They never stop.

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Mr. T
admin
April 21, 2015 at 7:01 AM ×

Seems like everyone is down on spoos. Surely there are other choices than 'sell in may' or 'vol explosion coming with 40% downside'. The landscape as I see it is multiple expansion across the world is not pricing in higher growth but longer durations - the cost of very low rates being lower returns and all that. If you need to find some reason for stocks to sell off you can start by looking for reasons why investors should not price in 2020 earnings today. I'm not sure you will find an acceptable answer. And if you want more upside, why not price in 2025 today? I'm sure most have done some variant of this already but your average SPX constituent with its 8% earnings yield in say 2017 looks stupid cheap compared with 0 or neg rfr you would get in similar durations in FI. The idea that CB's are going to fold on asset-inflation is not a tradeable catalyst. Maybe CHFEUR instead of EURCHF?

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Anonymous
admin
April 21, 2015 at 9:31 AM ×

Reuters: "Hamada says additional monetary easing likely to be required by BOJ...". USD/JPY currently pushing up to 120, equities bid.

When will people on this board finally realize that the BOJ/PBoC etc are never going to stop easing? It's QE forever.

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Skippy
admin
April 21, 2015 at 9:49 AM ×

With apologies to Hall & Oats

You're out of cash (cash)
You're out of time
I'm out of my position
if the euro's not around

Shake it up is all that Syriza know
Using the IMF loans as they go
Waking up to a fantasy
That debt's not all around
Ain't the growth that it used to be
Broken promises still melts the GGBs
Can often be one again
We're insolvent
And solvency matters to me
Take a look around

You're out of cash (cash)
You're out of time
I'm out of my position
if the euro's not around

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Anonymous
admin
April 21, 2015 at 2:06 PM ×

MM - what's your view on the EUR with the skies overcast with greek clouds?

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Gnome of Zurich
admin
April 21, 2015 at 2:15 PM ×

Yes, Greece is done. By dragging their feet for too long, they have destroyed their banks - again. The banks are now illiquid and insolvent.

Global credit seems the be deteriorating despite the dead cat bounce in the oil space. European debt and equity markets just going crazy - and this is from a long term Euro bull and PIGS farmer.

Time to crawl back into my cave and cling to my gold, a stash of Euros and maybe some Aussie gold miners.

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washedup
admin
April 21, 2015 at 3:05 PM ×

Gnome - I get the gold angle - but greece is dead = stash euros??

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abee crombie
admin
April 21, 2015 at 3:11 PM ×

Pivoting to everyone's new fav micro trade, (no not oil, thats for PE apparently) Biotech.

For those with a bloomy, check out BIOSC, the wells fargo small tech bio index (which is more mid cap now). Its been outperforming the larger cap weighted IBB index and probably is where the most froth is, as the large caps (BIMATUSD, the Celegens, Gildeads etc) trade at 15x 2016 earnings and have 40% ROE's vs the small and mid which are drug discovery stocks and have pretty much no earnings (yet).

Grant's also made an interesting argument recently, the biotech is a competitive industry, one drug wins and another loses, yet the industry trades very well as a group, due to the current MA bid.

Was that all we get in Stoxx? I didnt even get a chance to add...

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Anonymous
admin
April 21, 2015 at 3:59 PM ×

European Money Markets Institute...

Euro interbank offered rate has dropped to minus 0.001 percent.

Pay me to watch your money. Works for me. Very normal. It's all good.

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abee crombie
admin
April 21, 2015 at 5:17 PM ×

Anon, good point about the negative deposit rates. But remember the basel rules penalize almost any type of deposits. If you read Diamonds annual letter he talks about the shortage of collateral and how JPM will likely turn down deposits in the next crisis.

Lots of ppl pay a monthly fee for a checking account. Same logic here as you cant easily become a big bank anymore.

but it sure would be a good business. give me 10B and I promise to give you 9.999B back ;-) Any takers?

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Anonymous
admin
April 21, 2015 at 5:19 PM ×

Farmer,

Great bullets and comments.

My takes on these bullets:

(1)Political risk is the paramount risk in China now. Beyond that, PBOC still has much room to ease before it gets to the QE land, where DM CBs are trapped now.

(2)I am no EU expert and all the noises seemed to suggest that Greece is going to default, but it also seemed that nobody wants to be the first to rush out yet because we had so many false alarms before and nobody wants to miss the big short-squeeze rallies we had seen so many times in the past few years.

(3) I still expect some good data in the summer which renew the expectation on fed raising rate this year. But right now I am not comfortable to add positions on either directions.

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washedup
admin
April 21, 2015 at 5:44 PM ×

anon 5:19 - you are absolutely correct - the mkt is longer risk into this particular iteration of the greek saga than it has ever been - even more interestingly, it is actually long the very asset classes (european cyclicals) that it was shorting as a hedge in the last few times this problem flared up, owing to QE.
I hasten to add I am not suggesting this as a contrarian indicator - just pointing out something interesting.
I do think buying a teeny amount of greek equities directly is a marginally better bet than loading the boat on rest of europe.

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Polemic
admin
April 21, 2015 at 7:03 PM ×

The big question is why do you actually sell EUR if GR defaults? Apart from the belief ..'because everyone else is likely to' there seems little reason to mass abort. Even if GR leaves EU it makes the remaining Euro components net more credit worthy. If all peripheries left the euro it would become a deutchmark. And on that basis one would hoover it up.

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washedup
admin
April 21, 2015 at 7:12 PM ×

Pol - the only honest answer to your question (why sell euro on grexit etc etc) is that NOBODY knows the right answer - your theory that the remaining countries are more viable is plausible - the scenario of a sentiment change on peripheral assets enough to counteract qe buying is also plausible - as someone much smarter than me put it, this is your classic binary, schrodingers cat setup, and bell curve conditioned mkts do not deal well with these situations. Expect the unexpected - on average!

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Anonymous
admin
April 21, 2015 at 7:22 PM ×

Maybe the Fed should just keep a massive balance sheet forever...
Ben S. Bernanke April 15, 2015

http://www.brookings.edu/blogs/ben-bernanke/posts/2015/04/15-monetary-policy-in-the-future#.VS694sKeroA.twitter

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Leftback
admin
April 21, 2015 at 7:23 PM ×

Pol is right. € would likely rise if GR defaults or exits, as a result of liquidation of risk assets, so people would buy €. The weakness of € suggests that this probably isn't going to happen.

Let's stop talking about Greece, can we? The abuse of the Greeks in the media and lower-class blogs is completely insane. The fact is, this is is no longer their crisis, especially not the workers and the new government that wasn't involved in the hollowing out of Greece over two decades.

It's a Brussels and Berlin crisis, after they decided to kick the can and load the previous Greek government with absurd debt levels and austerity rules. One thing about this iteration of the Greek panto that is hard for many to understand is why it has dragged on so long since the Greek election (and long beyond Panto season). Well, what it has done is it has weakened the €, in tandem with the ECB QE. All this, as MM pointed out a while back, is really tremendously good for German exports. So there hasn't been much incentive to firm up the €, with German inflation also being very low.

The risk of Grexit now lies not with the direct hit of Greece leaving the €, but with the credit market's perception of the govies of the rest of the PIIGS. It would be a spectacular German own goal if they were to roil the bond markets at this time and in so doing eviscerate everyone who went long on the Draghi bazooka. It won't happen.

Btw, is the US market boring or what? Even the high frequency trading bots are bored out of their tiny silicon minds.

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washedup
admin
April 21, 2015 at 7:35 PM ×

" It would be a spectacular German own goal if they were to roil the bond markets at this time and in so doing eviscerate everyone who went long on the Draghi bazooka. It won't happen."

Left - I am saving this comment for posterity.

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Anonymous
admin
April 21, 2015 at 7:36 PM ×

YANIS VAROUFAKIS: Europe is not going to expel us from the euro.

Watch the interview and see if you agree that this man, according to Prospect magazine, is the number two world’s leading thinker...

http://www.democracynow.org/2015/4/21/greeces_yanis_varoufakis_the_medicine_of

There is something very odd about this guy. I can't put my finger on it.

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Leftback
admin
April 21, 2015 at 8:02 PM ×

Oh this is good, well done, sir. "Marc to Market", on Greece, Europe and "moral hazard":

Moral Hazard in Europe

By the way:

Q. Why is Wolfgang Schäuble like the Daleks?

A. Daleks

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River
admin
April 21, 2015 at 8:22 PM ×

Most ridicouls news of the day!
One lone trader could cause flash crash? Maybe he was making too much money :-).

" The US Department of Justice and the US Commodity Futures Trading Commission (CFTC) have charged Navinder Singh Sarao with manipulating the financial markets, alleging he made more than $40m (£26.7m) from his activities.

Mr Sarao, 37, who ran his own financial trading company, was arrested earlier today, April 21, at his home in Hounslow, west London".

http://www.telegraph.co.uk/finance/financial-crime/11553433/British-trader-Nav-Sarao-charged-with-triggering-global-markets-flash-crash-in-2010.html

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Mr. T
admin
April 21, 2015 at 8:33 PM ×

I don't think the news is all that crazy.

During this two-hour period, Defendants traded 62,077 E-mini S&P contracts with a notional value of$3.5 billion.

Combine that with being 30% of the sell side of the book for a substantial part of the day.

And thats one guy. I would be willing to bet that on any given day 90%+ of the market is strategies of one form or another playing HF book games, with an inherently unstable result - book imbalances beget more imbalances etc.

Whats amazing to me is that after all this scrutiny its taken this long to find someone so blatantly spoofing.

Also, strip away the bots and what are we left with? I'm not sure there is really all that more volume than when there was a dude in a cheap suit with a pile of tickets on the floor at the end of the day.

Oh and if you want the real details, try here

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washedup
admin
April 21, 2015 at 8:39 PM ×

T/River:
The larger point here (and something I have harped on for a while) is that there is currently a witch hunt underway for high frequency traders, bots. algos, R2D2, chewbacca, u get the idea - in my personal opinion we are likely to see more news of curtailments and bans on that kind of stuff - what does it mean for market behavior and pricing? No idea - probably nothing as T suggested - there are multiple ways in which outlier high sharpe ratios for certain asset classes get decimated over time - regulation happens to be one of them.

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Macro Man
admin
April 21, 2015 at 9:33 PM ×

Wait a minute....the likes of GETCO and Virtu make money every single day for 6-7 years, and the computers decided to do stupid things like selling Accenture at a penny. But "significant responsibility" for the flash crash comes from a bloke who leaves $3m orders and who made less than a million bucks on the day trading out of his spare room? The guy sounds like a piece of work, but c'mon...that's like getting flattened by a Mack truck and getting treated for a hangnail in the ambulance.

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Anonymous
admin
April 21, 2015 at 11:09 PM ×

Moral Hazard?

"Not only will the policy be reformed, but the costs have to be shared. Italy and Malta and Greece cannot bear the financial burdens alone."

Europe’s border security agency, Frontex, says that between 500,000 and one million migrants are massed in Libya waiting to set forth for Europe, compared to the 170,000 who arrived in Europe by sea last year.

The 2013 population of the African continent in 2013 was 1,111,000,000 so there are many more to come.

Should Europe take them all? Is there a limit? A million per year...a million per month...a million per day? How much can the taxpayers bear?

Australia's response is much more humane

“The message is simple, if you come to Australia illegally by boat, there is no way you will ever make Australia home,” he says.

http://www.theguardian.com/world/2014/apr/11/angus-campbell-stars-in-videos-warning-asylum-seekers-not-to-travel-by-boat

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abee crombie
admin
April 21, 2015 at 11:12 PM ×

This might be the first time in my life I feel sorry for a freakin spoofer.

"His profit on the day of the Flash Crash was £588,000, it is claimed."

Ok so he caused a 40 point or so flash crash in the spoos and he didnt even make $1M USD.

If you consider reports at the time suggested Waddell & Reed's 4.1B order (which was a whopping 75,000 emini contracts) which was "in the hole" caused the big water fall, this guys 500/ 1000 lot spoofing wasnt signficant.

As for spoofing, welcome to electronic trading regulators. I know some floor guys who wish you were here about 10 years ago.

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FunnyMoney
admin
April 21, 2015 at 11:22 PM ×

MacroMan is entirely correct. Major HFT firms are involved in illegal practices every day and are ignored by the regulators. Check out nanex (@nanexllc) for details.

There have also been multiple serious allegations of leaks from Central Banks, that are again ignored by regulators and the like.

Charging a lone day-trader in a 3-bed semi in West London shows what a farce market regulation has become.

Next they'll tell us the 2015 post-FOMC dollar crash was due to my 18-yr old cousin trading EURUSD to the tune of £1/pip on his spreadbet account. F*ckwits.

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Anonymous
admin
April 22, 2015 at 1:24 AM ×

One small fry can sink this market?..Where is Putin?

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Anonymous
admin
April 22, 2015 at 2:09 AM ×

Fabrice Tourre, the "Fabulous Fab"..
the London Whale,Libor scandal,MF Global,SAC to name a few..any senior executives in jail? Pay a seemingly huge fine with the loot!

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Anonymous
admin
April 22, 2015 at 7:22 AM ×

Am I the only one thinking it's 1999 all over again ?

Retail traders wield social media for investing fame

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Anonymous
admin
April 22, 2015 at 8:05 AM ×

What actually caused the flash crash? Here's your answer:

What really caused Flash Crash:
Someone LEAKED that a mutual fund was selling 75K eMini's via participation algo. Wall St pounced

(Source: https://twitter.com/nanexllc/status/590705684607565825)

So not some guy in his mom's house in London... what a surprise...

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Anonymous
admin
April 22, 2015 at 8:18 AM ×

@anon 7:22 - Surely one key difference is that in 1999 Central Banks still had some credibility, and we only had a bubble in Nasdaq. Now Central Banks have no credibility and there are bubbles in everything.

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theta
admin
April 22, 2015 at 9:51 AM ×

@anon 7.46pm re: varoufakis, reading that transcript I find myself in agreement with most of what he says actually. In essence he advocates agreeing an end to depression inducing austerity. The question then is how do u go about it, and what will each side's (mostly Greece's) actions be to help facilitate such move. Raiding the pension funds and local governments cash reserves doesn't help for example. But again, what he says in this interview makes sense to me.

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theta
admin
April 22, 2015 at 9:59 AM ×

@MM,
it was $3bn, not $3m orders of course, but yes, I completely agree with you.

Also, I find this odd:
(from the FACTS section of the complaint):
33. Many market participants, relying on the information contained in the Order Book, consider the total relative number of bid and ask offers in the Order Book when making trading decisions. For instance, if the total number of sell orders significantly outweighs the total number of buy orders, market participants may believe a price drop is imminent and trade accordingly. Similarly, if the balance of buy and sell orders changes abruptly, market participants may believe the new orders represent legitimate changes to supply and demand and therefore trade accordingly. Further, many market participants utilize automated trading systems that analyze the market for these types of order imbalances and use that information to determine trading strategies. Consequently, actions in the Order Book can, and do, affect the price of theE-mini S&P.

So this takes reflexivity one step further and presents it as a FACT. People will react to intentions of other people therefore you are not allowed to lie about your intentions. IANAL but I think this is the very basis of the complaint and it doesn't seem very solid to me.

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Anonymous
admin
April 22, 2015 at 10:58 AM ×

http://www.bloombergview.com/articles/2015-04-21/guy-trading-at-home-caused-the-flash-crash

So, the day-trader guy had his spoofing algo SWITCHED OFF when the flash crash happened, and now the regulators are going to arrest him for causing the crash!? LOL

Oh, and they knew he was spoofing, and they let him spoof EVERY DAY FOR 5 YEARS, until just now when they needed a scapegoat.

You couldn't make this stuff up.

PS The day-traders broker was MF Global. Remember them?

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Anonymous
admin
April 22, 2015 at 12:18 PM ×

I hope it goes to court because it's indeed a joke, but I'm afraid he is going to be bullied into settling.

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Polemic
admin
April 22, 2015 at 12:24 PM ×

Ok, so he posted orders that were pulled and people traded on the order book they saw. How about nailing every individual that traded with respect to the look of that order book because as any spot FX participant now sorely knows, trading against information in an order book is illegal

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theta
admin
April 22, 2015 at 1:04 PM ×

spot on Polemic,
spoofing if a criminal offence but frontrunning is perfectly fine (so common practice indeed that is part of the facts of how this market operates)

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Macro Man
admin
April 22, 2015 at 1:06 PM ×

@theta- the article suggested his typical order size was GBP 2m, which given pricing at the time corresponds to an order size of 50 minis.

So some bloke spamming 50 lot orders of minis from his spare room (conveniently located in a foreign country) caused the flash crash, while the Matrix of single stock order spammers co-located with the exchange servers receive no opprobrium from the regulators? Somehow it reminds me of the trial of the Deltas in Animal House....

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CV
admin
April 22, 2015 at 1:42 PM ×

"So some bloke spamming 50 lot orders of minis from his spare room (conveniently located in a foreign country) caused the flash crash, while the Matrix of single stock order spammers co-located with the exchange servers receive no opprobrium from the regulators? Somehow it reminds me of the trial of the Deltas in Animal House...."

Oh, this is good! Very good! Conclusion: This doesn't pass the smell test!

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theta
admin
April 22, 2015 at 1:52 PM ×

Typical order size of his actual trades yes, but his spoofing orders were larger size.
"SARAO's use of the dynamic layering technique was particularly intense in the hours leading up to the Flash Crash. SARAO used the technique continuously from 11:17 a.m. until 1:40 p.m. SARAO began this cycle by placing the following five sell orders nearly simultaneously at approximately 11:17:38.782 a.m.: (1) 600 lots at $1,156.50; (2) 600 lots at $1,156.75; (3) 600 lots at $1,157.00; (4) 600 lots at $1,157.25; and (5) 600 lots at $1,157.50. At approximately 1:13 p.m., SARAO added a sixth sell order for 600 lots, bringing the total to 3,600 lots."
So more like $200m of orders. And the $3bn figure that was quoted in the article represents the total notional of all his trades that day (buys and sells together).

Regardless, this does not invalidate your point one bit.

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Macro Man
admin
April 22, 2015 at 2:01 PM ×

Ah, OK, didn't see that, gotcha. OK, still...are we really supposed to believe that $200m of phony sell orders spooked the world into taking the SPX down 10% in a minute or two?

Preposterous.

(And to reiterate, while putting phony orders into futures markets is bad and should rightfully be stopped, it pales in comparison with what goes on in cash equity markets.)

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Polemic
admin
April 22, 2015 at 2:09 PM ×

the SEC blaming the Flash Crash on this guy is like the Captain of the Titanic blaming its sinking on the man in cabin 53 for spilling a glass of water.

The system the SEC oversaw was not fit for purpose. they should take the wrap. Unfortunately this all looks so totalitarian it's almost Stalinist.

Go long Financial Gulags.

Of course there is a small chance there is all part of some darker sub-plot with this all they can nail a guy they want for other things with at the moment.

But jeezuz, with the spoofing going on in UK supermarkets quite openly

http://www.theguardian.com/business/2015/apr/21/what-does-which-supermarket-pricing-complaint-mean-for-you

perhaps we should extradite the boards of every UK retailer.

Tesco even pulling off the ultimate spoof with the value of their property portfolio over the past couple of years. £4.3billion off true mark to market? Of course that's just fine ..

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Anonymous
admin
April 22, 2015 at 2:13 PM ×

Completely unrelated but have a question:

Once the bonds the ECB are buying matures, what do they do with all the principal they get back?

Apologies for dumbing this down to that level.

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Anonymous
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April 22, 2015 at 2:42 PM ×

Debt to GDP

Asia (ex Japan)

2015: 205%
2007: 144%
1996: 139%

Data Frm @TomWrightAsia

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Anonymous
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April 22, 2015 at 2:45 PM ×

Used to think ZeroHedge was over-the-top with the conspiracy theory stuff... after reading all this about the London day-trader being extradited by the FBI/SEC etc it makes you realise ZH is right.

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washedup
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April 22, 2015 at 3:27 PM ×

anon 2:13 - they actually haven't clarified it, but my assumption is that as long as their balance sheet is below QE targets they would re-invest it - if the program itself is over then it just gets repatriated back to respective Govt treasuries obv - if someone else has a different understanding do let us know.

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Anonymous
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April 22, 2015 at 3:49 PM ×

http://www.telegraph.co.uk/finance/financial-crime/11555228/Flash-Crash-trader-Navinder-Singh-Sarao-pictured-for-first-time.html

"Sarao faces a maximum sentence of 380(!) years in an American jail as a result of the allegations which emerged late on Tuesday night."

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Anonymous
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April 22, 2015 at 5:15 PM ×

It's interesting to note that Sarao was spoofing sell orders to move the SP500 DOWN - so that's why the Plunge Protection Team etc want this guy removed.

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Anonymous
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April 22, 2015 at 7:30 PM ×

JK says,

Now bbg is reporting sarao is involved with numerous complex offshore tax avoidance structures. Spoofing/layering is one thing, but where'd the guy get that kind of knowledge? I haven't seen any mention of a history in finance and his parents seem like normal folks. What kind of capital would he have been working with to trade the kind of size mentioned, and where would he have got it from given he was about 30 or so when he started kicking off, assuming he's not a trust fund baby given pics of the folks house??

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Anonymous
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April 22, 2015 at 7:39 PM ×

"Dear CFTC: This Is The Market Manipulating "Spoofing" Taking Place In The E-Mini Just Today".

http://www.zerohedge.com/news/2015-04-22/dear-cftc-market-manipulating-spoofing-taking-place-e-mini-just-today

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Mr. T
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April 22, 2015 at 8:08 PM ×

I'm throwing in the towel on trying to squeeze a short out of biotech index. Too many animal spirits out there - frankly given how markets are trading I'm surprised NDX in particular is not much stronger.

Somewhat interesting to see NDX/SPX basically at ytd parity with DAX/SX5E on a constant currency basis.

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Anonymous
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April 23, 2015 at 12:38 AM ×

"Did Spoofing Cause the Flash Crash? Not So Fast!".

http://cpirrong.tumblr.com/post/117106193128/did-spoofing-cause-the-flash-crash-not-so-fast

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