Asia Update
Like our session the bank earnings do not have that much of an effect on equity prices.
Can't let the normies see that the banks that they trust cannot hack it even with the entire system doing them favors.
JPM's earnings release was dismal and they cannot even make revs in fixed income.
Wells Fartgo is not any better. See screen shots from earlier this morning.
We also had yet another 'rogue trader' this time at BNP Paribas. This has been a common tactic amongst the bigger banks as they cannot be held responsible. They claim this trader have acces to be able to lay on massive trades and then just disappear for the CHristmas break. Bullshit. He is just another scapegoat. Look up Jerome Kerviel and Societe General for the last time this was pushed out on this scale.
Earnings estimates were slashed in many company's starting this week. Goodyear being a major one today.
The narrative wall street like to push is create rally's so the focus is taken off of the actual performance of the guts of the markets.
This was mentioned today prior to the open and it's a story they push so that they can point to a rally and nothing moar.
There is alot of information to digest and it's coming thick and fast. Difficult to keep up with it even having many years experience.
Buckle up is an under-statement at this point.
;) Solar Flash baby!
Mystery Trader Causes Stir With Giant Bet: Will Lose $558 Million If Market Crashes
A mystery trader made a massive bullish bet on the S&P 500 on Monday, putting at risk hundreds of millions of dollars of capital. The bet is reminiscent of, and has drawn comparisons to, Warren Buffett’s giant bet on global stocks more than 10 years ago.
On Monday, a trader sold 19,000 S&P 500 put options that would obligate him or her to buy the index at 2100 on expiration in December 2020, according to Reuters. The index would need to drop no more than 22% from Monday’s closing level of 2582 and the bettor stands to rake in $175 million in premiums.
The move is reminiscent of Berkshire Hathaway selling billions of dollars in index options premium between 2004 and 2008, before ultiamtely being bailed out by the Treasury and the Fed. It was a broad bet that the global market would rise over the next 15 to 20 years and, although initially the trade was made anonymously, it was eventually revealed to be Buffett's Berkshire Hathaway.
Berkshire has netted over $4 billion in premium from the sale of these options, the final chunk of which is set to expire in 2026. And even though Monday's bet was not nearly as big as Buffett's, it still could wind up costing the trader hundreds of millions if the market moves lower than the trader expects: should the market drop by 34%, the trader stands to lose about $558 million.
A second lot of about 3600 of the same puts traded on Monday, putting the total volume for the contract at about 24,000 on the day. On Friday, 5500 of these contracts also changed hands.
One trader guessed that the option write was a hedge against another position by a large bank.
Benn Eifert, chief investment officer at QVR Advisors in San Francisco stated: “The natural sellers of long-term downside puts are structured products desks at banks, who are hedging exposure they get from retail clients who buy structured notes that have embedded short put options. That would be my default guess on this.”
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If this 'trader' gets it wrong then look for the institution it works for to trot out yet another single person to be blamed for this 'mistake'. No one person has access to this amount of capital EVER. It's just an excuse so they can blame an individual as a "rogue trader".
https://www.zerohedge.com/news/2019-01-15/mystery-trader-causes-stir-giant-bet-stands-lose-558-million-if-market-crashes
Yuan Extends Slide After Massive PBOC Liquidity Injection
Having risen almost non-stop since the start of the year - despite dismal economic data, a still-tightening Fed, and an increasingly 'easing' PBOC - the last two days have seen offshore yuan start to fade.
Following stimulus headlines overnight ("but not a flood of liquidity" according to the PBOC), US Sen. Grassley admitted today that Sino-US trade talks had made "little progress" - both of which sent yuan notably lower.
This drop was interrupted by cable's surprise surge (squeeze) after the Brexit vote (stronger pound, weaker dollar, stronger yuan), but yuan has reverted back down again to the lows after the PBOC injected a near-record amount of liquidity into the financial system.
China’s central bank injected a near-record amount of liquidity via open-market operations amid tax payments and the looming 'annual' year-end liquidity crisis.
The PBOC injects net 350b yuan into the banking system using 7-day reverse repo contracts - the largest one-day addition of 7-day money on record, according to data compiled by Bloomberg.
The move is aimed at "keeping reasonable and sufficient liquidity in banking system as liquidity falls relatively fast during peak season for tax payments," according to a statement from the PBOC.
With the Lunar New Year falling on Feb 5th this year (two weeks earlier than last year), we suspect liquidity provisions will be a daily occurrence from here (the last 3 days have seen 340 billion yuan for a 28-day term injected - to cross the new year liquidity threshold).
Do not mistake this for 'stimulus' as it will be withdrawn or rolled and merely plugs a hole - that we suspect will grow larger as trade data suggested capital outflows are re-accelerating.
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this is real shit the bed stuff now.
Do not look to global equity prices to see effects of this for now. Guaranteed it shows up by end of the week or even earlier.
https://www.zerohedge.com/news/2019-01-15/yuan-extends-slide-after-massive-pboc-liquidity-injection
just download it. anything here is free to take. kind of the theme here. It's big though
o7
I don't need help….looks like you do