WealthCycles: High-Frequency Trading Is Old News… and Illegal

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Celebrity author Michael Lewis comes out with a new book, and suddenly the entire world is spellbound and scandalized by the intricacies of high-frequency trading—save for the elite Wall Street insiders and whistle-blowing data geeks to whom it is old news. What Lewis’ book arguably has done is bring the debate over HFT out into mainstream channels, potentially creating enough embarrassment on the part of regulators and the justice system to force them to finally step up and enforce the existing laws—which should have put the kibosh on the most egregious abuses of HFT long ago.

The book in question is Michael Lewis’ Flash Boys: A Wall Street Revolt, a narrative of some allegedly good guys who stumbled upon the fact that millisecond differences in the speed at which trades are transmitted to different exchanges opened the door for traders using super-fast computers to buy up the supply and sell it back to investors at a higher price. The price differential might be only fractions of pennies, but multiplied out over billions of trades, it means a healthy profit for high-frequency traders—profit that comes at the investors’ expenses.

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FSN: Obama’s Litmus Test to Fire Upon American Citizens If They Rise Up Against the Government

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by Martin Armstrong
Armstrong Economics

Obama’s litmus test on military officers are asked will they fire upon American citizens if they rise up against the government. If they say no, they are dismissed. This has been talked about around the internet. It is the basic question The new definition of a “terrorist” is any person who disagrees with the Federal Government as Harry Reid just called the rangers in Nevada – “Domestic Terrorists”. All the laws enacted against terrorism and support thereof can now be applied to anyone supporting the rangers in Nevada.

Continue Reading at ArmstrongEconomics.com…

FSN: America Has Conquered Its Debt Crisis with Incredible Speed

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US Congressional Budget Office expects the budget deficit to drop to 2.8pc of GDP this year, and 2.6pc next year

by Ambrose Evans-Pritchard
Telegraph.co.uk

Americans are purging their excesses one by one. Spending by the US Federal government has seen the steepest drop as share of national income since demobilisation after the Second World War.

Claims that President Barack Obama is bankrupting America with a lurch towards hard-Left statism are for tabloid consumption only. Outlays have fallen from 24.4pc to 20.6pc of GDP in five years. Spending is roughly in line with its 40-year average. This fiscal squeeze has been achieved without driving the economy into recession or a Lost Decade, a remarkable feat.

The US Congressional Budget Office expects the budget deficit to drop to 2.8pc of GDP this year, and 2.6pc next year. This is about the same as the eurozone but with a huge difference. The US economy is expanding fast enough to outgrow its debts.

Continue Reading at Telegraph.co.uk…

FSN: French Telecom Company Does Biggest Junk Bond Sale Ever; Bidding Wars for Junk; AOL Flashback

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from MISH’S Global Economic Trend Analysis

With central bankers globally suppressing interest rates, the such for yield elsewhere is on. One of the places investors have turned is speculative junk bond offerings.

Please consider French Company Does Biggest Junk Bond Sale Ever.

Numericable (NUM), which provides cable and internet service in France and other European markets, sold a record amount of high-yield bonds Wednesday with some priced in dollars and others in euros.

It’s sold $7.78 billion and €2.25 billion in notes that yield 5% or more, according to a statement from Altice, the multinational telecom group that owns Numericable. Altice issued $2.9 billion and €2.1 billion in bonds that yield more than 7%.

Continue Reading at GlobalEconomicAnalysis.Blogspot.com…

FSN: Hoisington On The End Of The Fed’s (Mythical) “Wealth Effect”

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from Zero Hedge

Authored by Lacy Hunt and Van Hoisington of Hoisington Investment Management,

Hoisington Investment Management – Quarterly Review and Outlook, First Quarter 2014

Optimism at the FOMC

The Federal Open Market Committee (FOMC) has continuously been overly optimistic regarding its expectations for economic growth in the United States since the last recession ended in 2009. If their annual forecasts had been realized over the past four years, then at the end of 2013 the U.S. economy should have been approximately $1 trillion, or 6%, larger. The preponderance of research suggests that the FOMC has been incorrect in its presumption of the effectiveness of quantitative easing (QE) on boosting economic growth. This faulty track record calls into question their latest prediction of 2.9% real GDP growth for 2014 and 3.4% for 2015.

Continue Reading at ZeroHedge.com…

FSN: So Central Bank Gold Is Being Held in Investment Bank Vaults

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by Chris Powell
GATA.org

Dear Friend of GATA and Gold:

Today’s Reuters report about changes at the gold and currency trading desks of investment banks, which was called to your attention in a dispatch a little while ago –

http://www.reuters.com/article/2014/04/22/banks-gold-forex-idUSL6N0NE3K9…

– is notable for more than its acknowledgment that central banks are surreptitiously trading gold every day, an acknowledgement made last September by the Banque de France:

http://www.gata.org/node/13373

For in reporting that “banks that serve central banking customers with large bullion reserves to manage will have a greater need to offer gold trading and storage services,” Reuters also has acknowledged that much central bank gold is now held outside central bank vaults.

Continue Reading at GATA.org…

FSN: Das: No Hard Landing for China, but Globalization Has Peaked

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by FS Staff
Financial Sense

What’s the most likely outcome for China? How will its slowdown affect the U.S., other developed nations, and emerging markets? To answer these questions and more, Satyajit Das—internationally recognized financial expert, former banker, and best-selling author—joined the Financial Sense Newshour in a recent interview to explain this unfolding process in full detail.

Do you see China suffering a hard or soft landing?

China risks having a financial and economic crisis—the so-called Minsky moment. But, to be honest, let’s look at how this crisis probably gets resolved. Because I think there is what I call the ‘doom and gloom lobby,’ which is the world will collapse and China will basically have an enormous breakdown in its financial system: banks will go bankrupt and the whole system will collapse. And then there’s the other side, which I call basically the Panglossian view, that the Chinese are basically in control of everything and they will manage to actually control this transition that they need to do. Now, I think the Middle Kingdom will follow a middle way…it’s going to take a long time and it’s going to be slow. But I think that is the most likely way, rather than the extremes…

Continue Reading at FinancialSense.com…

FSN: West Hemorrhaging Gold But Here’s Its True Achilles’ Heel

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from King World News

Today one of the most highly respected fund managers in Singapore warned King World News that the West is continuing to hemorrhage gold, but also cautioned that was not the West’s true Achilles’ heel. Grant Williams, who is portfolio manager of the Vulpes Precious Metals Fund, described the great danger for the West, and also discussed the massive demand coming out of the East from countries such as Russia and China.

Eric King: “The Chinese and the Russians understand what the end game is for Western central planners, which is why they have been buyers of physical gold, and in the case of the Chinese, prolific buyers. Do you get the feeling that the people in Asia, who have also been large buyers of physical gold, understand where this is headed as well because they’ve seen so many paper currencies in various countries come and go?”

Continue Reading at KingWorldNews.com…

FSN: An Unprecedented Plague Has Hit Oranges And Another Has Hit Bananas

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

by Michael Snyder
End of the American Dream

What is causing all of these plagues to hit our food supply? Have you heard of citrus greening disease? Probably not, but it has already gotten so bad that it is being projected that Florida’s orange harvest will be the smallest in 30 years. Have you heard of TR4? Probably not, but it has become such a nightmare that some analysts believe that it could eventually wipe out the entire global supply of the type of bananas that Americans eat. In addition, another major plague is killing millions of our pigs, and a crippling drought that never seems to end is absolutely devastating agricultural production in the state of California. Are we just having bad luck, or is there something else to all of this?

Citrus greening disease has been a steadily growing problem that has reached epidemic levels this year. Because of this disease, the U.S. Department of Agriculture is projecting that orange production in the U.S. this year will be down 18 percent compared to last year. Here is more on this horrible plague from Yahoo News

Continue Reading at EndOfTheAmericanDream.com…

ZeroHedge: Groupthink Or Black Swan Rising? Not A Single ‘Economist’ Expects An Economic Downturn

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Submitted by Pater Tenebrarum of Acting-Man blog,

A 100% Consensus

This doesn't happen very often.  Marketwatch reports that Jim Bianco points out in a recent market comment that the 67 economists taking part in a regular Bloomberg survey have a unanimous forecast regarding treasury bond yields: they will be higher 6 months from now. This is a truly striking result, and given the well-known propensity of mainstream economists to guess wrong (their forecasts largely consist of extrapolating the most recent short term trend), it may provide us with a few insights.

In fact, considering that there have been only a handful of instances since 2009 when a majority of the economists surveyed predicted a decline in yields, we can already state that their forecasts regarding treasuries are quite often (though obviously not always) wide of the mark. In fact, so far this year they are already wrong again – and so are fund managers, as they hold their lowest exposure to treasuries in seven years.

This is not the only thing there is complete unanimity about. Not a single economist taking part in a separate survey believes an economic downturn is possible.

“Economists are unwavering in their assessment of where yields are headed in the next half year.

 

Jim Bianco, of Bianco Research, points out in a market comment Tuesday that a survey of 67 economists this month shows every single one of them expects the 10-year Treasury yield to rise in the next six months.

 

The survey, which is done each month by Bloomberg, has been notably bearish for some time now, with nearly everyone expecting rising rates. In March, 97% expected rising rates. In February, 95% expected yields to climb. Read more »

via zerohedge