Interest Rates – Page 2 – Abnormal Capitalist

Was Tom Hayes Running The Biggest Financial Conspiracy in History ?

It was an audio CD from inside Barclays. Gensler, his coterie, and members of the enforcement division gathered on scuffed-up sofas and chairs in the waiting area outside his office—the only meeting place with a working CD player—to listen. It was a telephone conversation between two Barclays middle managers that had taken place 18 months earlier, during some of the most turbulent days of the crisis. Speaking in a cut-glass English accent, one of the men told a subordinate that he needed to start lowering the bank’s Libors. When the more junior employee started to object, the first man told him the order had come from the most senior levels of the bank, who in turn were acting on instructions from the Bank of England.

Kervielesque :

“Well, that’s sort of ironic that you’re firing me, given that you were involved in it up to your eyeballs,” Hayes later recalled telling McCappin.

→ Bloomberg Businessweek

Blaming China for Black Monday is Like Blaming a Bartender For Your Hangover

Pubonomics :

What is happening? Why is China—the country that people once thought was the engine of the world economy—tottering so badly ?

To answer these questions it is necessary to recognize that China was never the engine of the world’s growth. To be such an engine you have to import more than you export. Then you would create a demand that is filled by other countries, which as a result export more than they import. Importers are the engines in the supply trains of the international markets. Exporters are the wagons, pulled by the demand created by the profligates. Think of what drives liquor markets: barmen or drinkers?

→ Quartz

Credit: Michael Lomax, Impossible Bottle

Black Monday, Kinda

Monday, August 24th brought you one of the weirdest trading day ever seen in the past several years.

So to sum up what happened today, here are a few charts, courtesy of Bloomberg, ZeroHedge and NANEX — time of the events may vary :

It all started sometimes in China, when it’s business as usual these days :

S&P Futures followed, kissing the dirt :

Which then started a major liquidity squeeze on the US market, as seen on the following charts by NANEX :

Causing buy-sell orders to never quiet match — courtesy of ZeroHedge :

Shortly after the opening bell, something like this on the Dow Jones :

And an impressive rise on the VIX :

In the meantime, major (mini) crashes :

To prevent further deterioration, just press the “HALT” button across major indices, including 3 consecutive press on the NASDAQ and 1’200 times during that day :

Then the master of markets, Tim Cook, dropped an email to Jim Cramer stating the following :

I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks.

Which caused this :

Then, all of a sudden, while unrelated from the previous event — well, who knows :

Oups…

…While European markets will stay stucked for a little longer :

There’s more to it for sure, but here are some events, mostly correlated, to show the newcomer what’s up for today on the trading side.

Finally here’s a fun tweet from Josh Brown :

@ReformedBroker: Look, it doesn’t matter what you bought or what you sold. The important thing is that you panicked.

Bill Gross Thinks The End Is Near

Sorkin: I have to know: Why do you wear your tie like that?

Gross: I came down here to Orange County in ’71 from L.A., and Pimco had this brand-new, beautiful building, but they didn’t have a gym or showers. I was an exercise nut. At noon, I’d change in the bathroom and then run for about five miles. Since there wasn’t a shower, I’d towel off as best I could, but I’d be sweating and hot for an hour or two. So in the afternoon, I began to just not tie my tie. Then a year or two later, I said: “Well, what the hell, I guess I’m not tying it in the afternoon, I’ll just not tie it in the morning either.”

→ The New York Times Magazine

Mr. Bleu

Delighted to hear Bill Gross’ point of view regarding art collecting. He and his wife seem more impressed by stamps, which they’re renowned collectors.

I’ve never been much of an art aficionado myself, having settled for framing some All American Rockwells neatly clipped from old Saturday Evening Post covers. There was a time though when a well-publicized Rockwell came to auction and Sue and I expressed some interest. Ever since, we’ve been on the art house’s mailing lists and I must admit, it’s fun to browse through the Picassos, Rothkos, and whatever else currently frenzies modern collectors. I’m no expert though, and if I begin to pretend that I am, Sue puts me in my place because she’s the artist in the family. She likes to paint replicas of some of the famous pieces, using an overhead projector to copy the outlines and then just sort of fill in the spaces. “Why spend $20 million?” she’d say – “I can paint that one for $75”, and I must admit that one fabulous Picasso with signature “Sue”, heads the fireplace mantle in our bedroom

→ Janus Capital