Newsletter of Economic and Market Events
Year of 2016 Best Investments in 2016
2016 complete News (click)
Month of December 2016
Dow: 19,763
Dow 2015: 17425.03 to 19,763
Dow return for 2015: 13.42%
S&P 500 2015: 2043.94 to 2,239
S&P 500 return for 2015: 9.54%
NASDAQ 2015: 5007.41 to 5,383%
NASDAQ return for 2015: 7.50%
10 year Treasury: 2.44% yield up 7.5%, prices down
World Equity Market: $70 trillion up 5.7%
MSCI Europe Index down -1.7%
MSCI Asia Pacific Index down -1.2%
S&P Latin America 40 up 29%
MSCI BRIC up 8.9%
S&P Middle East & Africa up 3.7%
* U.S. Total stock market returned 8.2% in 2016, Stocks had below average gains, Bonds had below average returns and inflation was below average 1.6%.
* Of the 5 largest sectors in the U.S. Economy: Natural Resources 20.7%, Technology 10.9%, while Real Estate -2.8%, Financials -4.3% and Healthcare -5.6%. By size: Small Cap returned 24.7%, Micro Cap 19%, Mid Cap 18.7% and Large Cap 9.5% all had gains. Gold up 8.6%, oil up 45.3% with commodity prices (CRB) up 9.2%.
* Global markets rose by 5.7% of the World's largest economic regions: Latin America 29% and Emerging Markets 8.9% while Europe -1.7% and Asia -1.2%. Of the World's largest Developed non-U.S. Economies: Canada 17.5%, Britain 14.4%, Germany 6.8, France 4.8% and Japan 0.4%. In the Emerging markets Russia 51%, Brazil 39% and India 2% while China Shanghai/Shenzen down -12/-15%. Hedge funds underperformed 3% and Private Equity 4% underperformed market indexes.
* Those who diversified with MPT did best, a trend which should accelerate indicative are the returns in China and U.S sectors.
* Separate yourself and your performance from retail investors by using Modern Portfolio Theory (MPT) and Tactical Portfolio Optimization. Institutional investors have for decades spread their investments across many asset classes seeking higher returns. U.S. Small cap, Mid cap, Technology & Energy commodities with foreign Russia, Brazil and Latin America bouncing back after underperforming years.
Months 2015-16 (click)
U.S. unemployment falls to 4.6-5.0, adding 2.2 million jobs - participation rate falls to 62.6% in May and record 94,708,000 Americans were neither employed nor made an effort to find employment, 16 million jobs added since the recession of 2007-9.
FOMC raises rates 25bps (Dec 14, 2nd time in 10yrs) Fed Funds rate 0.50%-0.75% and the Discount rate of 1.25% - St. Louis Fed president James Bullard (Jun 15) departs from majority in Fed's projected "dot plot" of future interest rate's curve citing deflationary data dependency.
Donald Trump elected 45th President of U.S. - 306 electoral votes to Hilary Clinton's 232. Trump University agrees (11/18) to settle lawsuit for $25 million with the NY AG's office. Donald J. Trump Foundation's admitted (11/22) to violating "self-dealing" rules on IRS filings, by transferring income or assets to a "disqualified person".
U.S. 10yr Treasuries trade 1.318% (7/6, from 3.0516% 1/2/14) and U.S. 30yr Treasuries trade 2.0882% (7/6, from 3.9744% (1/2/14).
- Global debt exceeds $152T, 2.25x the global GDP - 2/3 of the debt is private sector and 1/3 sovereign debt.
- Global government bond's average yield at new record low below 0.65% and sovereign debt ($44T outstanding) with negative yields rising to $13T (including Japan's JGB $7.9T).
- U.S. Dollar (26 Broad Currencies) Trade Weighted Index trades 125.8727 (1/21) appreciating 28% from 93.86 (5/2/11, low 89.03 5/8/95) highest since 5/2003 (high 130.20 1/28/02).
- U.S. Dollar (7 Major Currencies, Euro, Canada, Japan, United Kingdom, Switzerland, Australia, and Sweden) Trade Weighted Index trades 95.8011 (1/20) appreciating 37% from 67.9944 low (5/2/11) highest since 4/2003 (113.0988 1/28/02, high 148.1244 2/25/85).
Obama signs PROMESA (6/30, Puerto Rico Oversight, Management and Economic Stability Act) creates an oversight board to manage the territory's fiscal affairs, enforce balanced budgets through asset sales and employee layoffs, and works with investors on restructuring Puerto Rico's $70B debt. Puerto Rico defaults (7/1) on $911M (including $780M G.O.) of $2B of principal and interest due - $13B of General Obligation bonds outstanding.
WTI oil trades $26.05 (2/11) WTI down 71% from $113.97 on 4/28/11; Brent down 72% from $127.02 on 4/11/11.
- Copper trades $1.9355 (1/19) down 57% from an all-time high of $4.6495/lb on 2/15/11.
- Platinum trades $811.40 (1/21) down 64% from an all-time high of $2308.80 on 3/4/08.
- CRB index trades 154.846 (1/20) down 56% from 370.72 on 5/2/11.
ECB extends QE (12/8) to €2.3T past March 2017 to 12/31/17, starting in April '17 monthly purchases reduced to €60B from €80B.
- ECB expands QE (3/10) cutting deposit rate cut to -0.4% (-10bps), refinancing rate to 0% (-5bps), overnight marginal lending rate to 0.25% (-5bps) and increasing monthly asset buys to €80B from €60B.
- EU's largest 51 banks stress tests (7/30): lowest Italy's Monte dei Paschi, UK's RBS, and Ireland's AIB - European banks have raised €180B since the end of 2013.
- Italian banks €350B "bad bank" (1/27, about 17% of total loans) with EU scheme allow a government guarantee to be attached to bundles of non-performing loans based on the price of credit default swaps.
- Euro depreciates to 1.0398 (12/15) down 25% from €1.399 (5/6/15) against the dollar, lowest since 12/27/02.
- German 10yr bond trades negative -0.205% (7/6) yield falling from 2.087% (9/11/13).
- Swiss's 10yr bond trades at a negative rate (7/11) -0.64%.
- Russian ruble trades ₽85.957 (1/21) depreciates 46% from ₽48.14 on 5/18/15.
- Greece's parliament approves (5/22) new taxes and austerity measures to secure EU disbursement - all 19 Eurozone countries and IMF approve (5/25) €10.3B in loans from EU rescue funds.
Britain votes (6/23) to leave the EU, British pound trades £1.3246 (6/24) one-day depreciation of 11.75% from £1.5009, PM David Cameron (since 5/11/10) to step down.
- British PM Theresa May assumes office July 13, 2016.
- British pound trades (10/7) £1.1841 down 6.14% against USD a "mini flash crash" during early Asian market hours, then trades £1.225 in European trading hours, and trades £1.2034 in U.S. futures trading - lowest since 6/20/85 depreciating 38.4% from £2.1104 on 11/8/2007.
- BOE reduces (8/4) benchmark interest rate to 0.25% from 0.50%, Term Funding Scheme to lend banks up to £100B at advantageous terms for businesses and consumers, UK's MPC plans to buy £60B of government bonds over 6mos and up to £10B of corporate bonds over 18mos, asset purchases to rise to £435B (up from £375B) and expand the central bank's balance sheet another £170B ($223B).
- UK 10yr bond trades 0.501% (8/15) yield falling from 3.092% (1/2/14).
China's PBOC cuts (3/2) Reserve requirement ratio (RRR, for commercial banks) by 50bps to 17%.
- Chinese yuan trades CN¥6.9649 (12/16, lowest since 5/23/08) depreciating 14% from CN¥6.0393 on 1/14/2014.
Japanese PM Shinzo Abe announces (7/27) ¥28T ($265 billion) of economic stimulus including ¥13.5T of fiscal spending (¥7.5T of new spending this year and ¥6T of low-cost loans). 3rd largest of 26 Japanese total stimulus packages back to 8/92 (nearly every year) the largest 4/09 and 12/08.
- Japan's BOJ increased (7/29) ETF purchases to ¥6T/yr ($58B, from ¥3.3T) maintained its purchasing of ¥80T/yr JGBs and left financial institutions interest rate on excess reserves at -0.1%.
BOJ initiates (1/28) -0.1% negative rate on new reserves deposited (Policy-Rate Balance) - following the ECB -0.3%, Switzerland -0.75%, Sweden -0.5% and Denmark -0.65%.
- Japan's 10yr bond trades at a negative rate (7/27) -0.295%.
- Japanese yen trades ¥98.72 (6/24) appreciating 21.6% from ¥125.86 (6/5/15).
Deutsche Bank to pay (12/22) $7.2B ($3.1B US Justice Dept. and $4.1B civil penalties and consumer relief) for sales of mortgage-backed securities from 2005-07. Deutsche Bank settled (in April) to pay $60M to traders and investors for U.S. antitrust violations in conspiring to manipulate gold prices from 2004-13 - Barclays, Bank of Nova Scotia, HSBC, and Societe Generale litigation outstanding. Deutsche Bank to pay (12/16) $37M for misleading traders about how it distributed trades across its dark pools, from 1/2012-2/2014.
- Goldman Sachs to pay (4/11) $5.06B for misleading residential mortgage-backed securities investors from 2005-07. Goldman Sachs to pay (12/21) $120M for rigging ISDAfix (an interest rate benchmark) used to price swaps transactions, commercial real estate mortgages and structured debt securities 2009 to 2012. Goldman Sachs to pay (12/16) $56.5 million to resolve a investors lawsuits for rigging ISDAfix. Goldman Sachs to pay (8/3) $36.3M and ban for Joseph Jiampietro's leaking confidential information from the Federal Reserve.
- Credit Suisse to pay (12/22) $5.28B (2.48B in civil penalty and $2.8B in relief for homeowners and communities) for sales of mortgage-backed securities from 2005-07. Credit Suisse fined by FINRA (12/5) $16.5M for ineffective anti-money laundering programs.
Credit Suisse to pay (10/6) $90M for misclassify client's assets in its wealth management business in 2012. Credit Suisse ($84.3M) and Barclays ($70M) to pay (1/31) for misrepresentation of information in their trading dark pools.
- Morgan Stanley to pay (2/11) $3.2B for misleading investors in securitizing residential mortgage-backed securities between 2006-07.
- J.P. Morgan to pay (1/25) $1.42B to settle for illegally siphoning billions of dollars from Lehman before its collapse - emerged from chapter 11 protection in March 2012. JPMorgan to pay (1/26) $995M to Ambac insurer for misrepresented loans underlying mortgage bonds sold by Bear Stearns in 2008. JPMorgan Chase to pay (11/17) $264M ($130M to SEC, $72M Justice Dept. and $61.9M Federal Reserve Board of Governors) for violations of the Foreign Corrupt Practices Act (FCPA) in hiring children of Chinese decision makers to win more than $100M in revenues. JPMorgan to pay (1/5) $48M for failing to meet the terms of a settlement to resolve mortgage servicing violations in U.S. robo-signing settlement.
- Barclays sued by U.S. Justice Department for falure to settle outstanding litigation in selling U.S. mortgage-backed securities from 2005-07, Barclays has currently set aside $3 billion. Barclays settles (8/8) $100M with 44 states for manipulating Libor and Euribor interest rate benchmarks from 8/2005-5/2008.
- Wells Fargo settles (4/8) $1.2B for falsely certifing home loans for FHA insurance from 2001-08. Wells Fargo to pay (9/8) $185M (plus $5M in customer remediation) for widespread illegal sales practices openning 1.5 million accounts and 565,000 credit card applications without customers' consent. Wells Fargo: Clawbacks (9/27): WF CEO John Stumpf forfeits $41+M and former retail banking WF VP Carrie Tolstedt to forfeit $19+M.
- Bank of America's Merrill Lynch to pay (6/23) $415M and admit wrongdoing for misusing customer's cash to generate profits and failing to safeguard customer securities from ML's creditors, from 2009-12. Bank of America to pay (9/26) $12.5M for its Merrill Lynch brokerage which caused erroneous trading orders ("mini-flash crashes"), the largest violation of the market access rule, on at least 15 occasions from late 2012 to mid-2014.
- HSBC to pay (6/16) $1.58B in shareholder securities (subprime lending) fraud for holders of Household International stock between 3/23/01-11/11/02. HSBC to pay (2/5) $470M for abusive mortgage servicing, foreclosures, and loan origination practices between 2008-12. HSBC $35M and Citibank $23M to pay (11/14) investors for manipulating Libor.
- Citibank to pay (5/25) $425M - $250M to CFTC for manipulating ICE Swap rate and $175M for rigging the Yen Libor and Euroyen Tibor.
- BB&T to pay (9/29) $83M for violating the False Claims Act by originating and underwriting mortgage loans insured by HUD and FHA.
- BBVA to pay (12/21) $27M for exceeding limits on BSI's securities underwriting and dealing activities.
- Apollo Global Management to pay (8/23) $52.7M for misleading fund investors about fees and a loan agreement.
NCUA (National Credit Union Administration) settles with Royal Bank of Scotland to pay (9/27) $1.1B for selling RMBS to U.S. credit unions - NCUA's recoveries exceed $4.3B: Barclays paid $325M (10/19/15), Morgan Stanley $225M (12/10/15), Bank of America $165M (4/2/13), Deutsche Bank $145M (11/14/11), UBS $69.8M (4/15/16), Wells Fargo $53M (10/19/15), Credit Suisse $50.3M (4/12/16), Citigroup $20.5M (11/14/11) and HSBC $5.25M (3/12/12).
- JPMorgan Chase (€337.2M), Credit Agricole (€114.7M) and HSBC (€33.6M) fined (12/7) by EU antitrust regulators for market manipulation of Euribor, from 9/05-5/08.
- Moody's to pay (3/9) $130M to the California Public Employees' Retirement System for inflating ratings of residential mortgages - S&P settled for $125M on 2/2/2015.
- PricewaterhouseCooper settles (8/26, $5.5B sought) for failure to discover mortgage fraud at Taylor, Bean & Whitaker Mortgage Corp (Chairman Lee Farkas, bankruptcy 8/24/09, 3rd largest direct FHA lender) and Colonial BancGroup (6th largest bank bankruptcy 8/26/09, $25B in assets, FDIC cost $3.8B).
Platinum Partners hedge fund (founder Mark Nordlicht and 6 employees) charged (12/19) with defrauding (Ponzi scheme) more than 600 investors of more than $1.3B.
- Steven Cohen's SAC Capital to pay $135M to Elan Corp. investors related to $1.8B insider-trading settlement (2014), civil and criminal penalties.
- Sam Wyly to pay (9/30) $198.1M to SEC for offshore accounts concealing trading profits from 1992-2005 - additional pending "global settlement" of more than $1B to Justice Dept, IRS and bankruptcy creditors.
- Whitaker Mortgage Corp (Chairman Lee Farkas, bankruptcy 8/24/09, 3rd largest direct FHA lender) and Colonial BancGroup (6th largest bank bankruptcy 8/26/09, $25B in assets, FDIC cost $3.8B).
- MF Global's John Corzine (COO Bradley Abelow, CFO Henri Steenkamp and others) settle (7/21) for $132M for role in the brokerage firm's 10/31/11 collapse.
Vimpelcom (Russian wireless carrier and subsidiary Unitel) to pay (2/18) $795M for bribes and corruption in Uzbekistan from 2006-12.
- Agricultural Bank of China to pay (NYDFS 11/4, assets of $9.5B at NY branch) $215M for anti-money laundering violations - between Chinese and Russian companies and from Yemen to companies in China.
- Mega Financial (Taiwanese bank) to pay (8/19) $180M for money laundering connected to Mossack Fonseca, the "Panama Papers" law firm.
Volkswagen settles (6/28) $15.3B and will buyback 475k registered (of U.S. 499k sold) diesel 2.0 liter vehicles, fix them, or cancel outstanding leases, 85% of 2.0 liter diesels must be retired (within 3yrs) or additional penalties apply, settlement does not include civil penalties under the U.S. Clean Air Act. VW to pay (12/20) $1B for 83,000 3.0 liter Audi, Porsche and VW vehicles. VW to pay (9/30) $1.21B to 652 U.S. VW dealers.
- Apple, EU Commission determines (8/30) that Ireland mis-allocated profits within Apple Sales International and Apple Operations Europe from 1991-2014, tax aid worth up to €13B. Belgium (1/11/16) found to have advantaged at least 35 multinationals, €700M in total.
- Toyota to pay (11/9) $3.4B for 1.5 million 2005-10 trucks and SUVs lacking proper rust protection causing premature corrosion of vehicle frames.
- Mylan to pay (10/7) $465M for overcharging Medicaid for EpiPens.
- Pfizer (and Flynn Pharma) fined (12/7) $107M by UK's CMA (Competition and Markets Authority) for unfair prices for Epilepsy drug phenytoin sodium.
- Herbalife to pay (7/15) $200M with FTC, forcing changes to avoid being classified as a pyramid scheme.
- DeVry University to pay (12/15) $100M for FTC violations of misleading potential students with ads promoting job and salary success for graduates.
- Ikea settles (12/21) with 3 American families to pay $50M for deaths of young children killed after Ikea's furniture fell on them.
- Princess Cruise Lines to plead guilty (12/1) to 7 felony charges and pay $40M for polluting oceans with waste and then covering it up.
"Panama Papers" (4/3, hacked law firm Mossack Fonesca) expose over 140 politicians (more than 50 countries, including 72 current or former heads of state) financial activities (corruption and tax avoidance) who hold accounts offshore (lists 15,600+ paper companies), 11.5 million documents leaked - covering 1977 to December 2015. Iceland's PM Gunnlaugsson resigns (4/5).
- "Bahamas Leaks" (9/21) 1.3M files on more than 175,000 Bahamian offshore accounts, 539 registered agents (including "Panama Papers" Mossack Fonseca's 15,915 entities) registered between 1990-2016.
U.S. Justice Dept. sues Malaysian Fund 1MDB for $1B for corruption and money laundering related to fraudulent misappropriated funds tied to Malaysian PM Najib Razak.
Medicare Fraud Strike Force arrests Philip Esformes (7/22) for more than $1B of fraudulent Medicare and Medicaid billing - corrupt doctors, hospitals and health care providers in South Florida.
- Medicare Fraud Strike Force announced (6/22) charges against 301 (61 doctors, nurses and other licensed medical professionals) for schemes involving approximately $900M in false billings.
Argentina settles (2/29) with Elliott Management over defaulted debt for $4.65B from 2001 (about $0.75). Montreux Partners and Dart Management settled (2/5) with Argentina for about $2B (of $6.5B package) and on (2/9) Argentina agreed to pay $1.35B to a group of Italian investors.
Brazil's Senate impeaches (8/31) President Dilma Rousseff for breaking budgetary laws - elected on 10/31/10 Brazil's Ibovespa index fell from 73,000 11/4/10 to 37,046 1/26/16 down 49% and the Brazilian Real depreciates 171% to USD from 1.5375 7/26/11 to 4.1638 9/24/15.
NATO approves (7/8) deployment of 4 battalions (including a brigade Spearhead Force of 5,000 troops, able to move within days) to Poland and the Baltic countries neighboring Russia, in response to Russian aggression. U.S. also approves (7/8) deployment of THAAD missile defense system to South Korea, in response to North Korean aggression.
Chicago Cubs win 112th World Series after 108 yrs (1908) rallying from 1-3, to a game 7 10th inning victory.
Rio 2016 Olympics - U.S. wins 46 Golds (121 total), Great Britan wins 27 Golds. Michael Phelps becomes most decorated Olympian with 28 (23 Golds, 3 Silvers and 2 Bronzes) winning 5 Golds and 1 Silver in Rio. Usain Bolt wins 9 Golds, 3 Golds in Rio. Katie Ledecky wins 5 Golds. Simone Biles wins 4 Golds and 1 Bronze.
Dow month: 3.34%, 6 mo: 10.22%, ytd: 13.42%
S&P 500: 2,239
S&P 500 month: 1.81%, 6 mo: 6.66%, ytd: 9.54%
NASDAQ: 5,383
NASDAQ month: 1.11%, 6 mo: 11.15%, ytd: 7.50%
FOMC raises rates 25bps (Dec 14) Fed Funds rate 0.50%-0.75% and the Discount rate of 1.25%.
ECB extends QE (12/8) to €2.3T past March 2017 to 12/31/17, starting in April '17 monthly purchases reduced to €60B from €80B; deposit rate unchanged -0.4%, refinancing rate unchanged 0% and overnight marginal lending rate unchanged 0.25%; ECB to purchase bonds with durations of 1-30yrs and can buy debt with a yield below the ECB deposit rate of -0.4%.
Chinese yuan trades CN¥6.9649 (12/16, lowest since 5/23/08) depreciating 14% from CN¥6.0393 on 1/14/2014.
- Euro depreciates to 1.0398 (12/15) down 25% from €1.399 (5/6/15) against the dollar, lowest since 12/27/02.
JPMorgan Chase (€337.2M), Credit Agricole (€114.7M) and HSBC (€33.6M) fined (12/7) by EU antitrust regulators for market manipulation of Euribor, from 9/05-5/08.
BBVA to pay (12/21) $27M for exceeding limits on BSI's securities underwriting and dealing activities.
Steven Cohen's SAC Capital to pay $135M to Elan Corp. investors related to $1.8B insider-trading settlement (2014), civil and criminal penalties.
Goldman Sachs to pay (12/21) $120M for rigging ISDAfix (an interest rate benchmark) used to price swaps transactions, commercial real estate mortgages and structured debt securities 2009 to 2012. Goldman Sachs to pay (12/16) $56.5 million to resolve a investors lawsuits for rigging ISDAfix.
Barclays sued by U.S. Justice Department for falure to settle outstanding litigation in selling U.S. mortgage-backed securities from 2005-07, Barclays has currently set aside $3 billion.
Credit Suisse to pay (12/22) $5.28B (2.48B in civil penalty and $2.8B in relief for homeowners and communities) for sales of mortgage-backed securities from 2005-07. Credit Suisse fined by FINRA (12/5) $16.5M for ineffective anti-money laundering programs.
Deutsche Bank to pay (12/22) $7.2B ($3.1B US Justice Dept. and $4.1B civil penalties and consumer relief) for sales of mortgage-backed securities from 2005-07.
- Deutsche Bank settled (in April) to pay $60M to traders and investors for U.S. antitrust violations in conspiring to manipulate gold prices from 2004-13 - Barclays, Bank of Nova Scotia, HSBC, and Societe Generale litigation outstanding.
- Deutsche Bank to pay (12/16) $37M for misleading traders about how it distributed trades across its dark pools, from 1/2012-2/2014.
Ikea settles (12/21) with 3 American families to pay $50M for deaths of young children killed after Ikea's furniture fell on them.
Princess Cruise Lines to plead guilty (12/1) to 7 felony charges and pay $40M for polluting oceans with waste and then covering it up.
Pfizer (and Flynn Pharma) fined (12/7) $107M by UK's CMA (Competition and Markets Authority) for unfair prices for Epilepsy drug phenytoin sodium.
DeVry University to pay (12/15) $100M for FTC violations of misleading potential students with ads promoting job and salary success for graduates.
VW to pay (12/20) $1B (including $225M for EPA environmental remediation and $25M additional funds for zero-emissions vehicles in California) and buyback 20,000 polluting 3.0L diesel older VW and Audi 3.0L TDIs and a software fix for 63,000 newer polluting 3.0L diesel VW Touareg, Audi (A6, A7, A8, A8L, Q5) and Porsche Cayenne vehicles.
Platinum Partners hedge fund (founder Mark Nordlicht and 6 employees) charged (12/19) with defrauding (Ponzi scheme) more than 600 investors of more than $1.3B.
Month of November 2016
Dow: 19,124
Dow month: 5.41%, 6 mo: 7.52%, ytd: 9.75%
S&P 500: 2,199
S&P 500 month: 3.43%, 6 mo: 4.86%, ytd: 7.59%
NASDAQ: 5,324
NASDAQ month: 2.60%, 6 mo: 7.60%, ytd: 6.32%
U.S. unemployment falls to 4.6%, adding 178,000 jobs.
FOMC neutral stance (Nov 2) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
Donald Trump elected 45th President of U.S. - 306 electoral votes to Hilary Clinton's 232. Trump University agrees (11/18) to settle lawsuit for $25 million with the NY AG's office. Donald J. Trump Foundation's admitted (11/22) to violating "self-dealing" rules on IRS filings, by transferring income or assets to a "disqualified person".
Toyota to pay (11/9) $3.4B for 1.5 million 2005-10 trucks and SUVs lacking proper rust protection causing premature corrosion of vehicle frames.
HSBC $35M and Citibank $23M to pay (11/14) investors for manipulating Libor.
JPMorgan Chase to pay (11/17) $264M ($130M to SEC, $72M Justice Dept. and $61.9M Federal Reserve Board of Governors) for violations of the Foreign Corrupt Practices Act (FCPA) in hiring children of Chinese decision makers to win more than $100M in revenues.
Chicago Cubs win 112th World Series after 108 yrs (1908) rallying from 1-3, to a game 7 10th inning victory.
Month of October 2016
Dow: 18,142
Dow month: -0.91%, 6 mo: 1.74%, ytd: 4.11%
S&P 500: 2,126
S&P 500 month: -1.94%, 6 mo: 2.95%, ytd: 4.01%
NASDAQ: 5,189
NASDAQ month: -2.32%, 6 mo: 9.45%, ytd: 3.63%
U.S. unemployment falls to 4.9%, adding 142,000 jobs.
British pound trades (10/7) £1.1841 down 6.14% against USD a "mini flash crash" during early Asian market hours, then trades £1.225 in European trading hours, and trades £1.2034 in U.S. futures trading.
Global debt exceeds $152T, 2.25x the global GDP - 2/3 of the debt is private sector and 1/3 sovereign debt.
Credit Suisse to pay (10/6) $90M for misclassify client's assets in its wealth management business in 2012.
Mylan to pay (10/7) $465M for overcharging Medicaid for EpiPens.
Agricultural Bank of China to pay (NYDFS 11/4, assets of $9.5B at NY branch) $215M for anti-money laundering violations - between Chinese and Russian companies and from Yemen to companies in China.
Earnings season for 3Q16 YOY growth for the S&P 500 index was 4%.
Month of September 2016
Dow: 18,308
Dow month: -0.51%, 6 mo: 3.52%, ytd: 5.07%
S&P 500: 2,168
S&P 500 month: -0.14%, 6 mo: 5.24%, ytd: 6.07%
NASDAQ: 5,312
NASDAQ month: 1.90%, 6 mo: 9.08%, ytd: 6.08%
U.S. unemployment rises to 5.0%, adding 208,000 jobs.
FOMC neutral stance (Sept 21) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
"Bahamas Leaks" (9/21) 1.3M files on more than 175,000 Bahamian offshore accounts, 539 registered agents (including "Panama Papers" Mossack Fonseca's 15,915 entities) registered between 1990-2016.
Volkswagen to pay (9/30) $1.21B to 652 U.S. VW dealers for diesel emissions injuries (an average of $1.85M per dealer) and $600M with state attorneys generals.
Wells Fargo to pay (9/8) $185M (plus $5M in customer remediation) for widespread illegal sales practices openning 1.5 million accounts and 565,000 credit card applications without customers' consent.
- Clawbacks (9/27): WF CEO John Stumpf forfeits $41+M and former retail banking WF VP Carrie Tolstedt to forfeit $19+M. William McGuire (United Health, 12/6/07) forfeited $600M for illegal stock option backdating gains from 2003-06 and Dennis Kozlowski (Tyco, 8/10/12 - sentenced 9/19/05) forfeited $505.8M for fraud of fiduciary duties.
Bank of America to pay (9/26) $12.5M for its Merrill Lynch brokerage which caused erroneous trading orders ("mini-flash crashes"), the largest
violation of the market access rule, on at least 15 occasions from late 2012 to mid-2014.
BB&T to pay (9/29) $83M for violating the False Claims Act by originating and underwriting mortgage loans insured by HUD and FHA.
NCUA (National Credit Union Administration) settles with Royal Bank of Scotland to pay (9/27) $1.1B for selling RMBS to U.S. credit unions - NCUA's recoveries exceed $4.3B: Barclays paid $325M (10/19/15), Morgan Stanley $225M (12/10/15), Bank of America $165M (4/2/13), Deutsche Bank $145M (11/14/11), UBS $69.8M (4/15/16), Wells Fargo $53M (10/19/15), Credit Suisse $50.3M (4/12/16), Citigroup $20.5M (11/14/11) and HSBC $5.25M (3/12/12).
Sam Wyly to pay (9/30) $198.1M to SEC for offshore accounts concealing trading profits from 1992-2005 - additional pending "global settlement" of more than $1B to Justice Dept, IRS and bankruptcy creditors.
Month of August 2016
Dow: 18,401
Dow month: -0.17%, 6 mo: 11.41%, ytd: 5.60%
S&P 500: 2,171
S&P 500 month: -0.14%, 6 mo: 12.37%, ytd: 6.22%
NASDAQ: 5,213
NASDAQ month: 0.99%, 6 mo: 14.37%, ytd: 4.11%
U.S. unemployment unchanged at 4.9%, adding 176,000 jobs.
BOE reduces (8/4) benchmark interest rate to 0.25% from 0.50%, Term Funding Scheme to lend banks up to £100B at advantageous terms for businesses and consumers, UK's MPC plans to buy £60B of government bonds over 6mos and up to £10B of corporate bonds over 18mos, asset purchases to rise to £435B (up from £375B) and expand the central bank's balance sheet another £170B ($223B).
- UK 10yr bond trades 0.501% (8/15) yield falling from 3.092% (1/2/14).
Brazil's Senate impeaches (8/31) President Dilma Rousseff for breaking budgetary laws - elected on 10/31/10 Brazil's Ibovespa index fell from 73,000 11/4/10 to 37,046 1/26/16 down 49% and the Brazilian Real depreciates 171% to USD from 1.5375 7/26/11 to 4.1638 9/24/15.
Goldman Sachs to pay (8/3) $36.3M and ban for Joseph Jiampietro's leaking confidential information from the Federal Reserve.
Apollo Global Management to pay (8/23) $52.7M for misleading fund investors about fees and a loan agreement.
Barclays settles (8/8) $100M with 44 states for manipulating Libor and Euribor interest rate benchmarks from 8/2005-5/2008.
Mega Financial (Taiwanese bank) to pay (8/19) $180M for money laundering connected to Mossack Fonseca, the "Panama Papers" law firm.
PricewaterhouseCooper settles (8/26, $5.5B sought) for failure to discover mortgage fraud at Taylor, Bean & Whitaker Mortgage Corp (Chairman Lee Farkas, bankruptcy 8/24/09, 3rd largest direct FHA lender) and Colonial BancGroup (6th largest bank bankruptcy 8/26/09, $25B in assets, FDIC cost $3.8B).
Apple, EU Commission determines (8/30) that Ireland mis-allocated profits within Apple Sales International and Apple Operations Europe from 1991-2014, tax aid worth up to €13B - tax rate of 1% in 2003 (first year covered, under statue of limitations) down to 0.005% in 2014. Ireland or other countries (including the US) must now recover the tax to remove the EU distortion of competition. October 21, 2015, Luxembourg and the Netherlands found to have advantaged Fiat Chrysler and Starbucks, €20-30M each respectively. January 11, 2016, Belgium found to have advantaged at least 35 multinationals, €700M in total. The EU Commission has 2 ongoing investigations in Luxembourg, as regards Amazon and McDonald's. Google is under investigation in France and other European countries.
Rio 2016 Olympics - U.S. wins 46 Golds (121 total), Great Britan wins 27 Golds. Michael Phelps becomes most decorated Olympian with 28 (23 Golds, 3 Silvers and 2 Bronzes) winning 5 Golds and 1 Silver in Rio. Usain Bolt wins 9 Golds, 3 Golds in Rio. Katie Ledecky wins 5 Golds. Simone Biles wins 4 Golds and 1 Bronze.
Month of July 2016
Dow: 18,432
Dow month: 2.80%, 6 mo: 11.94%, ytd: 5.78%
S&P 500: 2,174
S&P 500 month: 3.57%, 6 mo: 12.06%, ytd: 6.36%
NASDAQ: 5,162
NASDAQ month: 6.59%, 6 mo: 11.88%, ytd: 3.09%
U.S. unemployment unchanged at 4.9%, adding 252,000 jobs.
FOMC neutral stance (Jul 27) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
U.S. 10yr Treasuries trade 1.318% (7/6, from 3.0516% 1/2/14) and U.S. 30yr Treasuries trade 2.0882% (7/6, from 3.9744% (1/2/14).
- German 10yr bond trades negative -0.205% (7/6) yield falling from 2.087% (9/11/13).
- Japan's 10yr bond trades at a negative rate (7/27) -0.295%.
- Swiss's 10yr bond trades at a negative rate (7/11) -0.64%.
British pound trades £1.2798 (7/6, lowest since 6/20/85) depreciating 38.4% from £2.1104 on 11/8/2007.
- British PM Theresa May assumes office July 13, 2016.
- ECB on track to purchase €5-8B/month of €600B of EU corporate bonds.
- Global government bond's average yield at new record low below 0.65% and sovereign debt ($44T outstanding) with negative yields rising to $13T (including Japan's JGB $7.9T).
- Chinese yuan trades CN¥6.7047 (7/18, lowest since 9/23/10) depreciating 11% from CN¥6.0393 on 1/14/2014.
Japan's BOJ increased (7/29) ETF purchases to ¥6T/yr ($58B, from ¥3.3T) maintained its purchasing of ¥80T/yr JGBs and left financial institutions interest rate on excess reserves at -0.1%.
- Japanese PM Shinzo Abe announces (7/27) ¥28T ($265 billion) of economic stimulus including ¥13.5T of fiscal spending (¥7.5T of new spending this year and ¥6T of low-cost loans). 3rd largest of 26 Japanese total stimulus packages back to 8/92 (nearly every year) the largest 4/09 and 12/08.
EU's largest 51 banks stress tests (7/30): lowest Italy's Monte dei Paschi, UK's RBS, and Ireland's AIB - European banks have raised €180B since the end of 2013.
MF Global's John Corzine (COO Bradley Abelow, CFO Henri Steenkamp and others) settle (7/21) for $132M for role in the brokerage firm's 10/31/11 collapse.
Herbalife to pay (7/15) $200M with FTC, forcing changes to avoid being classified as a pyramid scheme.
U.S. Justice Dept. sues Malaysian Fund 1MDB for $1B for corruption and money laundering related to fraudulent misappropriated funds tied to Malaysian PM Najib Razak.
Medicare Fraud Strike Force arrests Philip Esformes (7/22) for more than $1B of fraudulent Medicare and Medicaid billing - corrupt doctors, hospitals and health care providers in South Florida.
NATO approves (7/8) deployment of 4 battalions (including a brigade Spearhead Force of 5,000 troops, able to move within days) to Poland and the Baltic countries neighboring Russia, in response to Russian aggression. U.S. also approves (7/8) deployment of THAAD missile defense system to South Korea, in response to North Korean aggression.
Earnings season for 2Q16 YOY growth for the S&P 500 index was negative -2%.
Month of June 2016
Dow: 17,930
Dow month: 0.80%, ytd: 2.90%, 6 mo: 2.90%
S&P 500: 2,099
S&P 500 month: 0.10%, ytd: 2.69%, 6 mo: 2.69%
NASDAQ: 4,843
NASDAQ month: -2.12%, ytd: -3.28%, 6 mo: -3.28%
U.S. unemployment rises to 4.9%, adding 271,000 jobs.
FOMC neutral stance (Jun 15) Fed Funds rate 0.25%-0.50% and the Discount rate of 1% - St. Louis Fed president James Bullard departs from majority in Fed's projected "dot plot" of future interest rate's curve citing deflationary data dependency.
Britain votes (6/23) to leave the EU, British pound trades £1.3246 (6/24) one-day depreciation of 11.75% from £1.5009, PM David Cameron (since 5/11/10) to step down, Britain's sovereign and EU's credit rating downgraded by ratings agencies, BOE loosens UK bank capital controls.
- Japanese yen trades ¥98.72 (6/24) appreciating 21.6% from ¥125.86 (6/5/15).
Obama signs PROMESA (6/30, Puerto Rico Oversight, Management and Economic Stability Act) creates an oversight board to manage the territory's fiscal affairs, enforce balanced budgets through asset sales and employee layoffs, and works with investors on restructuring Puerto Rico's $70B debt. Puerto Rico defaults (7/1) on $911M (including $780M G.O.) of $2B of principal and interest due - $13B of General Obligation bonds outstanding.
HSBC to pay (6/16) $1.58B in shareholder securities (subprime lending) fraud for holders of Household International stock between 3/23/01-11/11/02.
Merrill Lynch to pay (6/23) $415M and admit wrongdoing for misusing customer's cash to generate profits and failing to safeguard customer securities from ML's creditors, from 2009-12.
Volkswagen settles (6/28) $15.3B: $10.033B with Justice Dept, State of California, U.S. EPA and FTC and will buyback 475k registered (of U.S. 499k sold) diesel 2.0 liter vehicles, fix them, or cancel outstanding leases, $2.7B EPA trust fund for environmental remediation, $2B for American clean energy technology, $603M to 44 U.S. states, D.C., Puerto Rico (including $86M to California) - 85% of 2.0 liter diesels must be retired (within 3yrs) or additional penalties apply, settlement does not include civil penalties under the U.S. Clean Air Act, or address about 85,000 3.0 liter Audi, Porsche and VW vehicles.
Medicare Fraud Strike Force announced (6/22) charges against 301 (61 doctors, nurses and other licensed medical professionals) for schemes involving approximately $900M in false billings - since January 2009, more than $29.9B recovered through False Claims Act (more than $18.3B involved fraud against Federal health care programs).
Month of May 2016
Dow: 17,787
Dow month: -0.25%, ytd: 2.08%, 6 mo: 0.38%
S&P 500: 2,097
S&P 500 month: 1.55%, ytd: 2.60%, 6 mo: 0.82%
NASDAQ: 4,948
NASDAQ month: 4.37%, ytd: -1.19%, 6 mo: -3.15%
U.S. unemployment fell to 4.7%, adding 24,000 jobs, weakest since 2010 - participation rate falls to 62.6% and record 94,708,000 Americans were neither employed nor made an effort to find employment.
Greece's parliament approves (5/22) new taxes and austerity measures to secure EU disbursement - all 19 Eurozone countries and IMF approve (5/25) €10.3B in loans from EU rescue funds.
Citibank to pay (5/25) $425M - $250M to CFTC for manipulating ICE Swap rate and $175M for rigging the Yen Libor and Euroyen Tibor.
Month of April 2016
Dow: 17,831
Dow month: 0.83%, ytd: 2.33%, 6 mo: 0.95%
S&P 500: 2,065
S&P 500 month: 0.24%, ytd: 1.03%, 6 mo: -0.67%
NASDAQ: 4,741
NASDAQ month: -2.65%, ytd: -5.32%, 6 mo: -6.19%
U.S. unemployment unchanged at 5%, adding 144,000 jobs.
FOMC neutral stance (Apr 27) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
"Panama Papers" (4/3, hacked law firm Mossack Fonesca) expose over 140 politicians (more than 50 countries, including 72 current or former heads of state) financial activities (corruption and tax avoidance) who hold accounts offshore (lists 15,600+ paper companies), 11.5 million documents leaked - covering 1977 to December 2015. Iceland's PM Gunnlaugsson resigns (4/5). Ten banks requesting the most offshore accounts for their clients: Experta Corporate & Trust, Banque J. Safra Sarasin Luxembourg, Credit Suisse Channel Islands, HSBC Private Bank Monaco, HSBC Private Bank Suisse, UBS, Coutts & Co. Trustees Jersey, Societe Generale Bank & Trust Luxembourg, Landsbanki Luxembourg and Rothschild Trust Guernsey. Cayman Islands tax leak (2/2013) and Swiss HSBC leak (2/2015) exposed secret bank accounts maintained for criminals, traffickers, tax dodgers, politicians and celebrities. Panama has more than 350,000 secretive International Business Companies (IBCs) registered, largest number after Hong Kong and the British Virgin Islands.
Wells Fargo settles (4/8) $1.2B for falsely certifing home loans for FHA insurance from 2001-08.
Goldman Sachs to pay (4/11) $5.06B for misleading residential mortgage-backed securities investors from 2005-07.
Earnings season for 1Q16 YOY growth for the S&P 500 index was negative -5%.
Month of March 2016
Dow: 17,685
Dow month: 7.07%, ytd: 1.49%, 6 mo: 8.60%
S&P 500: 2,060
S&P 500 month: 6.63%, ytd: 0.79%, 6 mo: 7.29%
NASDAQ: 4,870
NASDAQ month: 6.85%, ytd: -2.74%, 6 mo: 5.41%
U.S. unemployment rose to 5%, adding 186,000 jobs.
FOMC neutral stance (Mar 16) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
ECB expands QE (3/10) cutting deposit rate cut to -0.4% (-10bps), refinancing rate to 0% (-5bps), overnight marginal lending rate to 0.25% (-5bps) and increasing monthly asset buys to €80B from €60B, including Investment grade euro-denominated bonds issued by non-bank corporations established in the euro area are now eligible for purchases - $786.8B assets purchased since October 2014.
China's PBOC cuts (3/2) Reserve requirement ratio (RRR, for commercial banks) by 50bps to 17%.
Moody's to pay (3/9) $130M to the California Public Employees' Retirement System for inflating ratings of residential mortgages - S&P settled for $125M on 2/2/2015.
Month of February 2016
Dow: 16,517
Dow month: 0.31%, ytd: -5.21%, 6 mo: -0.48%
S&P 500: 1,932
S&P 500 month: -0.41%, ytd: -5.48%, 6 mo: -2.52%
NASDAQ: 4,558
NASDAQ month: -1.21%, ytd: -8.97%, 6 mo: -4.58%
U.S. unemployment unchanged at 4.9%, adding 233,000 jobs.
WTI oil trades $26.05 (2/11) WTI down 71% from $113.97 on 4/28/11.
Argentina settles (2/29) with Elliott Management over defaulted debt for $4.65B from 2001 (about $0.75). Montreux Partners and Dart Management settled (2/5) with Argentina for about $2B (of $6.5B package) and on (2/9) Argentina agreed to pay $1.35B to a group of Italian investors.
Vimpelcom (Russian wireless carrier and subsidiary Unitel) to pay (2/18) $795M for bribes and corruption in Uzbekistan from 2006-12 - Siemens paid $800M for violatung U.S. Foreign Corrupt Practices Act and U.S. anti-corruption laws 12/15/2008.
HSBC to pay (2/5) $470M for abusive mortgage servicing, foreclosures, and loan origination practices between 2008-12.
Morgan Stanley to pay (2/11) $3.2B for misleading investors in securitizing residential mortgage-backed securities between 2006-07.
Month of January 2016
Dow: 16,466
Dow month: -5.50%, ytd: -5.50%, 6 mo: -6.92%
S&P 500: 1,940
S&P 500 month: -5.09%, ytd: -5.09%, 6 mo: -7.79%
NASDAQ: 4,614
NASDAQ month: -7.86%, ytd: -7.86%, 6 mo: -10.02%
U.S. unemployment fell to 4.9%, adding 168,000 jobs.
FOMC neutral stance (Jan 27) Fed Funds rate 0.25%-0.50% and the Discount rate of 1%.
WTI/Brent oil trades $26.19/27.10 (1/20) WTI down 71% from $113.97 on 4/28/11; Brent down 72% from $127.02 on 4/11/11.
- U.S. Dollar (26 Broad Currencies) Trade Weighted Index trades 125.8727 (1/21) appreciating 28% from 93.86 (5/2/11, low 89.03 5/8/95) highest since 5/2003 (high 130.20 1/28/02).
- U.S. Dollar (7 Major Currencies, Euro, Canada, Japan, United Kingdom, Switzerland, Australia, and Sweden) Trade Weighted Index trades 95.8011 (1/20) appreciating 37% from 67.9944 low (5/2/11) highest since 4/2003 (113.0988 1/28/02, high 148.1244 2/25/85).
- Copper trades $1.9355 (1/19) down 57% from an all-time high of $4.6495/lb on 2/15/11.
- Platinum trades $811.40 (1/21) down 64% from an all-time high of $2308.80 on 3/4/08.
- CRB index trades 154.846 (1/20) down 56% from 370.72 on 5/2/11.
- Chinese yuan trades 元6.596 (1/8) depreciates 9% from a high 元6.0393 on 1/14/2014.
- Russian ruble trades ₽85.957 (1/21) depreciates 46% from ₽48.14 on 5/18/15.
BOJ initiates (1/28) -0.1% negative rate on new reserves deposited (Policy-Rate Balance) - following the ECB -0.3%, Switzerland -0.75%, Sweden -0.5% and Denmark -0.65%.
Italian banks €350B "bad bank" (1/27, about 17% of total loans) with EU scheme allow a government guarantee to be attached to bundles of non-performing loans based on the price of credit default swaps.
Credit Suisse ($84.3M) and Barclays ($70M) to pay (1/31) for misrepresentation of information in their trading dark pools.
J.P. Morgan to pay (1/25) $1.42B to settle for illegally siphoning billions of dollars from Lehman before its collapse - emerged from chapter 11 protection in March 2012. JPMorgan to pay (1/26) $995M to Ambac insurer for misrepresented loans underlying mortgage bonds sold by Bear Stearns in 2008. JPMorgan to pay (1/5) $48M for failing to meet the terms of a settlement to resolve mortgage servicing violations in U.S. robo-signing settlement.
Earnings season for 4Q15 YOY growth for the S&P 500 index was negative -3%.
Year of 2015 Best Investments in 2015
2015 complete News (click)
Dow 2015: 17,823.07 to 17425.03
Dow return for 2015: -2.23%
S&P 500 2015: 2,058.90 to 2043.94
S&P 500 return for 2015: -0.73%
NASDAQ 2015: 4,736.05 to 5007.41
NASDAQ return for 2015: 5.73%
10 year Treasury: 2.27% yield up 4.6%, prices down
World Equity Market: $66.09 trillion down -5%
MSCI Europe Index down -1%
MSCI Asia Pacific Index down -10%
S&P Latin America 40 down -33%
MSCI BRIC down -15%
S&P Middle East & Africa down -25%
* U.S. Total stock market returned -2% in 2015, Stocks had below average gains, Bonds had below average gains and inflation was below average 1.2%.
* Of the 5 largest sectors in the U.S. Economy: Healthcare 5.4, Technology 3.6%, Real Estate 2.8%, while Financials -3.3% and Natural Resources -23%. By size: Large Cap returned -1%, Mid Cap -3.6%, Small Cap -3.3% and Micro Cap -6.3% all had losses. Gold down -12% and oil fell -29% with commodity prices (CRB) down -23%.
* Global markets fell by -5% of the World's largest economic regions: Europe -1%, while Asia -10%, Emerging Markets -15% and Latin America -33%. Of the World's largest Developed non-U.S. Economies: Germany 8%, France 8%, Japan 7%, while Britain -5% and Canada -11%. In the Emerging markets China Shanghai/Shenzen up 9/63%, while India -5%, Russia -9%, and Brazil -13%. Hedge funds underperformed -3% and Private Equity 3% outperformed market indexes.
* Those who diversified with MPT did best, a trend which should accelerate indicative are the returns in China and U.S sectors.
Months 2010-15 (click)
U.S. unemployment at 5.7% to 5.0%. 2015 gdp 2.4% with 2.5 million jobs added, 14 million jobs added since the recession of 2007-9.
- U.S. monthly job gains in 2015: 1/15 201,000, 2/15 264,000, 3/15 119,000, 4/15 187,000, 5/15 260,000, 6/15 245,000, 7/15 223,000, 8/15 153,000, 9/15 145,000, 10/15 307,000, 11/15 280,000, 12/15 271,000.
2015 GDP 2.6%, quarterly growth for 2015 1Q 2.0%, 2Q 2.6%, 3Q 2.0%, 4Q 0.9%.
- U.S. employment participation rate falls to 62.4% in September (94,610,000 Americans not in the American labor force) lowest since October 1977 (peaked 67.2% 12/1997).
FOMC raises (Dec 16) Fed Funds rate 25bps to 0.25%-0.50%, the Discount rate to 1% from 0.75%, and raises the Reverse Repo rate (deposit) to 0.25% from 0.05%. Since 12/16/08 (nearly 8yrs) Fed Funds rates has been near 0% - last tightening cycle (3yrs 3mos) began 6/30/04 with Fed Funds rate raised to 1.25% from 1% ending at 5.25% on 9/18/07.
- Federal Reserve remitted a record $97.7B in profits to the Treasury Department in 2015 ($96.9B in 2014), and on 12/28/15 sent $19.3B to the Treasury under the Federal Highway bill of 2015 from the bank's surplus capital account.
U.S. Dollar (7 Major Currencies, Euro, Canada, Japan, United Kingdom, Switzerland, Australia, and Sweden) Trade Weighted Index trades 95.2142 (12/17) appreciating 37% from 67.9944 low (5/2/11) highest since 4/2003 (113.0988 1/28/02, high 148.1244 2/25/85).
- U.S. Dollar (26 Broad Currencies) Trade Weighted Index trades 123.4997 (12/17) appreciating 27% from 93.86 (5/2/11, low 89.03 5/8/95) highest since 5/2003 (high 130.20 1/28/02).
U.S. 30yr Treasuries trade (1/30) 2.219%, U.S. 10yr Treasuries trade 1.6357% (1/30).
- DJIA falls 1,089 pts. (8/24, 6.6%) on opening on concerns of slowing global growth, Volatility index trades up 90% to 53.29 (8/24, up 390% from 10.88 on 8/5 in 13 days) from 28.03 (8/21).
U.S. merger and acquisition deals $5T breaking the 2007 record of $4.6T, 2Q15 of $631.2B exceed 2Q98 of $557.04B.
WTI/Brent oil trades $34.53/35.99 (12/14,22) WTI down 70% from $113.97 4/28/11; Brent down 71.6% from $127.02 4/11/11.
- Gold trades $1045.40 (12/3) down 46% from $1,923.70 (9/6/11). Silver trades $13.62 (12/14) down 73% from $49.82 (4/25/11). Platinum trades $825 (12/3) down 64% from $2308.80 (3/4/08). CRB index trades 170.0562 (12/17) down 54% from 370.72 (5/2/11).
ECB lowers (12/2) overnight deposit rate by 10bps to -0.3% (lending rate remains 0.05%), extends QE until March 2017, ECB will reinvest QE principal payments and include purchases of municipal bonds (local and regional).
- ECB begins (3/9) QE €1.14T ($1.2T) €60B/month ($68.8B) of bond purchases. €2.8T of EU sovereign debt yields less than zero (50% of €5.6T, 3/31). Euro depreciates to 1.0473 (3/13) down 25% (10 months) from €1.399 (5/6) against the dollar, lowest since January 2003.
- German 10yr bond trades (4/17) 0.049% yield falls 98% (19 months) from 2.087% (9/11/13), while Greek 10yr bond trades 13.93% (4/22) yield up 152% (7 months) from 5.52% (9/8/14).
Swiss National Bank drops (1/14) its minimum exchange rate of ₣1.20 (9/6/11) against the Euro. Swiss franc trades (1/15) ₣0.8517 from ₣1.2011 (29% apreciation against the Euro) and trades ₣0.7406 from ₣1.0221 against the U.S. dollar (27.5% apreciation). Swiss Market Index trades (1/16) 7,852.83 from 9,292.44 (1/13) a 15% loss.
Japan is the world's most indebted country at $8.9T (GDP ratio of 211%), Greece with $358B (173%), Italy (139%), Portugal (133%), UK (113%), Ireland (112%), and Belgium (110%).
Obama signs (11/2) Bipartisan Budget Act of 2015 a 2yr budget deal (through September 2017) which also raises the national debt limit (until mid-March 2017) by lifting sequester spending caps and boosting spending by $80B.
- Obama signs (12/18) Protecting Americans from Tax Hikes Act of 2015 a $1.15 trillion spending bill, a $680B tax package (over 10yrs) extending nearly 50 tax breaks, and removes the U.S. ban on exporting crude oil.
- Trans Pacific Partnership trade pact awaits (10/5) congressional approval - would lower tariffs and set common standards for 12 economies (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the U.S.) accounts for 40% of global economy.
Financial Stability Board to require (11/9, G-20 must endorse) 30 largest global lenders to raise $1.2T by 2022 (in debt or other securities that can be written off when winding down a failing bank): JP Morgan & HSBC (2.5% capital buffer); Barclays, BNP Paribas, Citigroup, Deutsche Bank (2.0% capital buffer); Bank of America, Credit Suisse, Goldman Sachs, Mitsubishi Bank, Morgan Stanley (1.5% capital buffer); Agricultural Bank of China, Bank of China, Bank of New York Mellon, China Construction Bank, Groupe BPCE, Groupe Credit Agricole, Industrial and Commercial Bank of China, ING Bank, Mizuho, Nordea, RBS, Santander, Societe Generale, Standard Chartered, State Street, Sumitomo Mitsui, UBS, Unicredit Group, Wells Fargo (1.0% capital buffer) - leverage ratio (capital held against its total assets) of at least 6% by 2019 rising to 6.75% by 2022.
Shanghai Composite Index declines 45% from 5,178.19 (6/12) to 2,850.71 (8/26) after rising from 1,849.65 (6/25/13) and 1,991.06 (5/21/14) up 160% in 13 months. Shenzhen Composite Index declines 47% from 3,156.96 (6/12) to 1,672.16 (8/26) after rising from 734.28 (12/12/12) and 1,007.27 (4/28/14) up 213% in in 14 months.
- China's PBOC cuts (10/24) 1yr lending rate to low 4.35% (10.98% high, 7/93-6/96) and deposit rate to 1.50% and Reserve requirement ratio (RRR, for commercial banks) cut 50bps to 17.5%.
- PBOC devaluation (8/11) of Chinese yuan from 元6.20 (8/10) to 元6.59 (8/12, depreciating 6.3% in international trade) - first Chinese devaluation since 1/1/1994 when yuan depreciated 50% from 元5.82 to 元8.72, yuan had appreciated 31% from 1/1/1994 to a high 元6.0393 on 1/14/2014.
- China Securities Regulatory Commission (CSRC) bans (7/8) major shareholders, corporate executives and directors from selling shares in listed companies for 6 months.
- China's $485B support of their currency and stock market in June and July (China's foreign exchange reserves, $3.65T as of July 31)
- IMF to add (11/30, effective late 2016) China's yuan to IMF's reserve-currency Special Drawing Right (SDR) lending basket: the U.S. dollar, Euro, Pound and Yen.
- China accelerates (1/5) 300 infrastructure projects, 元7T yuan ($1.1T) to support growth.
Japanese yen depreciates to ¥125.86 (6/5) down 65% from ¥75.31 (10/31/11). Japan 10yr bond trades 0.198% (1/20).
Greece's receives (8/20) 3rd bailout €86B ($96B, total bailout €320B), Greece's parliament passed reforms (8/14, more spending cuts, pension reforms, and market liberalizations) for 3rd bailout - ECB, EU Commission, ESM rescue fund and IMF (pending).
- Greek banks reopen (7/20) with capital controls intact after 23 days. Greek 10yr bond trades 10.95% (7/20) down 44% from 19.58% (7/8).
- Athens Stock Exchange reopens (8/3) after 5 weeks falling 22.9% from 797.52 (6/26) to 615.08 (8/3), trades 562.87 (8/24). Greek 10yr bond trades 8.954% (8/17) down 54% from 19.58% (7/8).
- Greek 10yr bond trades 19.58% (7/8) yield up 255% (10 months) from 5.52% (9/8/14).
- ECB has provided €130B of funding on €120B of Greek deposits.
- Greek capital controls imposed (6/28, €60 daily ATM withdrawal and bank transfers/payments abroad banned). Greece defaults (6/30, first developed country - 26th nation in arrears since 1980) owing the IMF €1.6B ($1.8B) - Greece's 5yr old EU rescue program expired 6/30. Greek PM Alexis Tsipras' announced public referendum (7/5) to vote on creditors' proposal - Iceland (10/27/2008) and Cyprus (3/25/2013) implemented capital controls as part of their bailout package. €323B Greek outstanding debt - €246B bailout: €56B Germany, €42B France, €37B Italy, €34B other EU nations, €32B IMF, €25B Spain, €20B ECB and €77B non-EU/ECB/IMF: private Greek bonds €48.8B, Greek banks €11B, private Greek loans €10.5B, Bank of Greece €4.3B, Foreign banks €2.4B.
Italy's PM Matteo Renzi establishes a €160B 5yr economic growth plan by funding CDP (Italy's national promotional bank, Cassa Depositi e Prestiti) - venture capital investments in private, infrastructure, real estate, and local and regional municipalities.
Russian ruble trades ₽74.35 (12/31) depreciates 46% from ₽48.14 (5/18). Russian central bank international reserves fall to $350B in April, from an all-time high $600B (8/2008).
- Russian stimulus package (1/28) ₽2.3T ($35B) of 60 measures including recapitalisation of the banking system and capital injection into Vnesheconombank (VEB), the state development bank.
Brazil (6/9) announces a $65B infrastructure package including a $40B bi-oceanic railway line connecting Brazil with the Pacific through Peru for trade with China.
Puerto Rico's governor Alejandro Garcia Padilla announced (6/29) the commonwealth (pop. 3.6 million) must restructure its $72B of debt and $37B in pension obligations - the U.S. territory is insolvent.
- Puerto Rico (PFC, Puerto Rico Government Development Bank subsidiary) defaults (8/3) on moral obligation bonds (not issued by legislature) missing $58M payment of principal and interest.
- Puerto Rico announces its partial default on (1/1/2016) paying $328.7M in GO debt and skipping $37.3M.
5 banks to pay (5/20) $5.8B and plead guilty to criminal felony charges (SEC to provide waivers to conduct business) of conspiring to manipulate LIBOR: Barclays $2.38B, Citigroup $1.27B (including a $925 million antitrust penalty), JP Morgan $892M, RBS $669M, and UBS pleads guilty to wire fraud $203M (and $342M for manipulation of forex rates). Bank of America to pay $205M for unsafe and unsound practices in the foreign exchange markets.
- 9 banks settle (8/14) $2B for conspiring in manipulating the $5.3T/day foreign exchange market: Barclays $375M, BNP $115M, Goldman Sachs 129.5M, HSBC $285M, and RBS - includes $808.5M of earlier agreements (Citigroup $394M, Bank of America $180M, UBS $135M, and JPMorgan $99.5M).
- 12 banks settle (9/11) $1.865B for investor claims of blocking competitive fair pricing in the CDS market ($58T 2007 and $16T end of 2014) - JPMorgan Chase $595M, Morgan Stanley $230M, Barclays $175M, Goldman Sachs $164M, Credit Suisse $160M, Deutsche Bank $120M, Bank of America $90M, (and $331M from:) BNP Paribas, Citigroup, HSBC, Royal Bank of Scotland and UBS.
- JPMorgan Chase settles (7/17) $388M with investors misled about $10B of sold residential mortgage-backed securities. JP Morgan Chase to pay (12/18) $307M for failing to disclose conflicts of interest with its wealth management clients. JPMorgan Chase settles (7/8) $166M for improper collection and sales of credit-card debt. JP Morgan Chase to pay (12/21) $150M to investors for hiding $6.2B in losses from London Whale trades of 2012. JPMorgan Chase pays (1/30) $99.5 million for antitrust rigging of foreign exchange market prices in $5.3T/day market.
- Morgan Stanley to pay (2/25) $2.6B to settle claims from its sale of residential mortgage-backed securities.
- Bank of New York Mellon to pay (3/19) $714M for overcharging clients on foreign currency transactions.
- Citigroup settles (7/21) $770M for illegal credit card practices ($700M consumer relief for 7 million and $70M in civil penalties).
- Goldman Sachs settles (8/13) $272M with investors about sales of $6B of residential mortgage-backed securities in 2007-08. Goldman Sachs (10/28) to pay $50M and 3yr limited ban for Rohit Bansal's leaking confidential information from the Federal Reserve Bank of New York.
- Wells Fargo to pay (11/5) $81.6M to home owners for failure to notify for increasing mortgage payments in violation of federal bankruptcy laws.
- Barclays to pay (11/18) an additional $150M penalty (total $2.5B) to N.Y. Dept. of Financial Services for order execution forex related misconduct. Barclays to pay (5/20) $115M for rigging ISDAfix (an interest rate benchmark) used to price swaps transactions, commercial real estate mortgages and structured debt securities 2007 to 2012.
- Commerzbank settles (3/12) deferred prosecution for $1.45 billion for dealings with Iran, Sudan, Cuba and Myanmar and violations of money laundering controls.
- Deutsche Bank settles (4/23) $2.5B for manipulation of LIBOR.
- Julius Baer to pay (12/30) $547M for aiding Americans evade taxes.
- Credit Suisse ordered (9/4) to pay $287.5M to Highland Capital Management for fraudulent real-estate transaction.
- Standard & Poor's settles (2/3) $1.5 billion for fraud ($687.5M Justice Dept., and $687.5M to states, and $125M with California Public Employees Retirement System) - inflated ratings of mortgage-backed securities. Standard & Poor's settles (1/21) $77 million and barred for 1 year from rating commercial mortgage-backed securities for misleading investors about the methodology it used.
BP settles (10/5) $20.8B for 2010 Gulf of Mexico Deepwater Horizon oil spill (including largest Clean Water Act fine), 3.2M barrels / 134M gallons (34M gallons recovered) - Justice, Commerce, Agriculture, Interior departments, EPA and Alabama, Florida, Louisiana, Mississippi and Texas - increasing total cost to about $62B.
- VW to recall (10/15) 8.5 million VW, Audi and Porsche diesel-engine cars in the European Union, VW admitted (9/21) to EPA fraud effecting 11 million diesel (482,000 diesel & 85,000 gasoline cars in U.S.) 2009-2016 - Justice dept. initiates criminal investigation, possible EPA fines over $18B ($37,500/per vehicle).
- GM to pay (9/17) $900M deferred-prosecution agreement for ignition-switch defect responsible for 124 deaths, recalling 2.6 million vehicles, and a victim's compensation fund of $625M.
- Fiat Chrysler fined (7/27) by NHTSA $105M, and buy back 500,000 trucks, and offer 1 million owners of Jeeps Cherokee above market repurchase for recall lapses affecting more than 11 million vehicles. Fiat Chrysler to pay (12/9) $70M that it failed to disclose to NHTSA vehicle crash death and injury reports.
- BMW to pay (12/21) $40M for not complying with minimum crash protection standards, failing to timely notify owners of recalls, and failing to provide accurate information to NHTSA.
- Takata settles (11/3) $70M with NHTSA for failing to alert regulators of defective air-bag inflaters that explode and spray shrapnel - 12 automakers recall 19 million vehicles.
- Verizon and Sprint to pay (5/12) $158M for violations in billing customers, cramming charges.
- Novartis Pharmaceuticals to pay (11/20) $390M for paying specialty pharmacies illegal kickbacks for inducing patients to refill certain medications.
- Trinity Industries to pay (6/9) $663M judgement for manufacturing faulty guardrails that jam and spear through vehicles.
- Computer Sciences Corp (6/5) settles $190 million penalty with SEC for manipulating financial results.
- Dole Food's CEO David Murdock (and COO Michael Carter) to pay (8/27) investor shareholders $148.1M for undervaluing company in 2013 $1.2 billion buyout deal.
- Jon Corzine (and other former MF Global officials) to pay (7/7) $64.5M to MF Global shareholders. Underwriters settle (12/11/14) for $74.9M (Citigroup, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, RBS and Sandler O'Neill). PricewaterhouseCoopers settles (4/17/15) for $65M. MF Global's unsecured creditors to recover $0.72/$1.
GAO estimates (3/4) Federal improper payments totalled $124.7B in 2014 (across 124 programs in 22 agencies), 3 programs accounted for over $95B of waste, fraud, abuse, and mismanagement: Medicare ($60B of $603B), Medicaid ($17.5B), and IRS EITC ($17.7B).
- Medicare fraud criminal charges (6/17) against 243 doctors, nurses, and medical professionals - $712M in false billing, FBI currently has 2,700 open investigations.
- SEC charges (8/11) 32 with fraud for profiting from stolen non-public information about corporate earnings announcements, more than $100 million in illegal profits.
Ukraine secures agreement (8/27) to restructure its $72B of government debt - bond repayments extended by 4yrs coupon payments rise to 7.75% from 7.2% cutting $3.6B.
- Ukraine secures (2/12) up to $40 billion IMF international bailout package over 4yrs.