ThxPORTAL - My OnlinE InvestmenT ProgresS

In the fine print of the 400-plus-page document — which Parliament members had a weekend to read and sign — Greece relinquished fundamental parts of its sovereignty to its foreign lenders, the European Commission, the European Central Bank and the International Monetary Fund.

“This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders,” said Louka Katseli, an independent member of Parliament who previously represented the Socialist Party, using the abbreviation for the Organization for Economic Cooperation and Development. She was one of several independents who joined 43 lawmakers from the two largest parties in voting against the loan agreement.

Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal, and that future bonds issued will be governed by English law and in Luxembourg courts, conditions more favorable to creditors.

Greece Finance Minister Evangelos Venizelos said Thursday Greece would face an absolute catastrophe if it didn't approve the terms demanded by international creditors in exchange for a second bailout, which includes a EUR107 billion debt write-down plan.

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea.

Glencore International Plc paid nothing to hire a dry-bulk ship with the vessel’s operator paying $2,000 a day of the trader’s fuel costs after freight rates plunged to all-time lows.
Glencore chartered the vessel, operated by Global Maritime Investments Ltd., a Cyprus-based company with offices in London, Steve Rodley, GMI’s U.K. managing director, said by phone today. The daily payments last the first 60 days of the charter, Rodley said. The vessel will haul a cargo of grains to Europe, putting the carrier in a better position for its next shipment, he said.

“They’re doing this because you can’t just have ships sitting. If they sit too long, then that’s hard on the ships. They have to keep them loaded and moving from port to port,” said Darin Newsom, senior commodities analyst at DTN.

Shanghai shipping volumes contracted sharply in January as Europe's debt crisis curbed demand for Asian goods, stoking fresh doubts about the strength of the Chinese economy.

As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market.
This past week I actually had to reformat my graphs as the drop off peak exceeded my bottom number for reporting off peak - a drop of ALMOST 4,000,000 BARRELS PER DAY off the peak usage in our past for this week of the year.

German industrial production fell 2.9 percent in December from the month before, according to official data released Tuesday, suggesting the country's economic slowdown could be worse than expected.

The International Monetary Fund cut its forecasts for growth in 2012 on Tuesday and warned of a possible deepening downturn in Europe.

Revising an earlier forecast, the IMF predicted that the global economy will expand 3.3%, this year, down from 3.8% last year and lower than the 4% growth it had forecast last September. “The world recovery, which was weak in the first place, is in danger of stalling,” IMF chief economist Olivier Blanchard said. “But there is an even greater danger, namely that the European crisis intensifies.

In this case, the world could be plunged into another recession,” he said. Oliver Blanchard is spot on in identifying a serious threat to the world economy. His only error is from where he sees the threat coming and how bad it is. On Monday IMF chief Christine Lagarde warned of a worst case scenario in the form of a possible Depression-era collapse in the global economy. If however Europe follows IMF recommendations, she said, the fund expects the euro zone to face a mild recession this year.

Nonetheless, it should be emphasised that this is still a “best case scenario.” Economists are increasingly concerned that Greece will default within weeks. Even worse, the larger economies of Spain and Italy are now under threat, pushing up the cost for Rome and Madrid to borrow to cover the risk of default. The IMF 2012 forecasts that the economies of both countries will contract, with Italy facing a contraction of 2.2% and Spain a fall of 1.7%.

Neither is expected to recover economically until 2014, at least. Meanwhile bigger economies such as the U.S., Japan, the U.K, France and Germany are expected to expand by only 1.5% on average next year, a growth rate too slow to curb rising unemployment levels. Moreover, the IMF forecast of slowing global economic growth is based on the assumption that the world will not see a dramatic rise in the price of oil. If that were to happen then the IMF’s most optimistic forecast would be null and void, making its worst case scenario seem optimistic. Iran’s recent rhetoric about “closing the Straits of Hormuz” seems intended to play on such concerns; with growing fears that a dramatic rise in the oil price could completely undermine prospects for global economic recovery.

Although Tehran’s ambassador to the U.N. may have only been bluffing when he spoke recently about the “option” of closing the Straits, he seems to have hit a raw nerve. Within days Western powers despatched naval vessels to the Straits of Hormuz – assuming, of course, that they had not planned this some time ago and were merely using his threats as an excuse. Either way, as the European Union voted to impose harsher sanctions on Iran’s oil – and Iran responded by suggesting it could close the waterway through which 35% of the world’s oil is shipped – French, British and American warships were all sailing toward the gulf.

In response Iran declared defiantly that sanctions would provide it with an economic stimulous and repeated threats to close the straits. Between claim and counter-claim and trading threats the West and Iran seem to be on a course for a confrontation. If it erupts into armed conflict then the world may not only face a slowdown in growth and financial meltdown.

For both Russia and China have warned that they view the prospect of conflict with Iran with grave concern. In fact Russia has repeated these warnings recently, as if to emphasise how seriously it views the situation. While China signalled a clear rejection of any new sanctions on Iranian oil. We live in dangerous times. They could be about to become even more perilous.
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Escalating tensions with Iran have pushed the cost of crude oil higher as fears mount that a 1970s-style jump in the oil price could send both Eastern and Western economies into recession. Iran's threat to cut off access to the Strait of Hormuz – through which 40pc of the world's oil is shipped – has provoked an angry rebuke from the US, which has the Fifth Fleet nearby.

Today, French foreign minister Alain Juppe supported the American hard line with Tehran, and urged European leaders to impose an embargo on Iranian oil exports and freeze Iranian central bank assets by the end of this month. Currently, Italy imports 13.3pc of its oil from Iran, Spain 9.6pc, Greece 34.7pc and France 4.4pc. International strains over Iran's nuclear ambitions were further exacerbated by the country staging three days of war games in the Hormuz area. However, Tehran said that increased sanctions could result in it closing off the strait, which it declared was "easier than drinking a glass of water".

But Iran's own oil supply is only part of the problem - the real threat is that disruption would halt the passage of oil from other Middle Eastern countries such as Saudi Arabia - the world's largest oil producer – and Kuwait. Qatar's liquified natural gas supplies would also be affected. Roy Jordan, of FACTS Global Energy, said: "If supply through the Strait of Hormuz is cut off, just about everybody in the East and West would be in trouble. It would disrupt major proportion of the world's oil and gas at a time when many of the world's economies are very fragile and would not be able to sustain a serious oil spike."

Mr Jordan said that its effect on Asian countries, which are driving world growth, would be devastating. China, Iran's number one customer, imports 10pc of its oil supply from Iran. "All it would take for Iran is a few mines put into sea, and ship owners and insurance companies would not go up there," said Mr Jordan. Brent crude rose $3.74 at $111.12 and Mr Jordan warned that if Iran's threat was fulfilled "there would be an instant escalation of price – we saw $147 in 2008 – and it could definitely reach that level and even higher." In 1974, after the Yom Kippur war and Iran's own embargo of its oil to countries supporting Israel, oil prices increased 400pc in six months.

However, Iranian officials have threatened to close the strait in the past but have not done so. But according to Mr Jordan if sanctions became such that Iran couldn't sell its oil then the country would have nothing to lose in its dealings with the West. "This is a situation we must avoid," he said. If no resolution is found, or hostilities break out, the International Energy Agency would have to force its members to try to make up the shortfall by releasing supplies from their reserves. But alternatives to Hormuz are few and far between. Iraq can already get its production into the Mediterranean through a pipeline across Turkey and a new Abu Dhabi pipeline is being built. This will come on stream early this year with 1m barrels of capacity, compared to the 18m that travel through Hormuz.

However, a recent article in Mashreq News, which is close to the Iranian military circles, pointed out that the new construction was "within range of Iran's missiles". Analysts suggested that while the closure of Hormuz remained a threat a premium was already priced into internationally traded crude that would slowly tick higher and higher. But if the strained supply days of the 1970s were to return, governments – including the UK's – would have to enforce demand restraint, with only essential services like ambulances and police getting access to petrol.

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Regular readers know that ever since 2009, well before the confidence destroying flash crash of May 2010, Zero Hedge had been advocating that regular retail investors shun the equity market in its entirety as it is anything but "fair and efficient" in which frontrunning for a select few is legal, in which insider trading is permitted for politicians and is masked as "expert networks" for others, in which the government itself leaks information to a hand-picked elite of the wealthiest investors, in which investment banks send out their "huddle" top picks to "whale" accounts before everyone else gets access, in which hedge funds form "clubs" and collude in moving the market, in which millisecond algorithms make instantaneous decisions which regular investors can never hope to beat, in which daily record volatility triggers sell limits virtually assuring daytrading losses, and where the bid/ask spreads for all but the choicest few make the prospect of breaking even, let alone winning, quite daunting. In short: a rigged casino. What is gratifying is to see that this warning is permeating an ever broader cross-section of the retail population with hundreds of billions in equity fund outflows in the past two years. And yet, some pathological gamblers still return day after day, in hope of striking it rich, despite odds which make a slot machine seem like the proverbial pot of gold at the end of the rainbow. In that regard, we are happy to present another perspective: this time from a hedge fund insider who while advocating his support for the OWS movement, explains, in no uncertain terms, and in a somewhat more detailed and lucid fashion, both how and why the market is not only broken, but rigged, and why it is nothing but a wealth extraction mechanism in which the richest slowly but surely steal the money from everyone else who still trades any public stock equity.

From Reddit:  I work in Wall Street and work in hedge fund analysis. I'm the only person in my office who supports OWS
This is a self-post, so I'm not trying to karma-whore or anything. I have a message I want to share with anyone who's interested.
I'm writing this in hopes that the OWS movement can have a better understanding of the hedge fund industry and the financial markets. With OWS being the zeitgeist of current politics, I think it's important to know how exactly the hedge funds, along with the financial markets are destroying the 99%.
Hedge funds. These guys are basically the vehicles of choice for ultra-rich people to get into the financial markets, besides family offices and private wealth managers. What are hedge funds? They are funds that have a 1-5 million deposit minimum, cater to the mega-rich, and can invest in anything without regulatory restrictions, use leverage to pump up their exposure by 15x, and pretty much eat up a vast majority of the industry's profits.
These guys invest in EVERYTHING. Instruments you've heard of - stocks, bonds, forwards, futures, currencies, and instruments that you, me, or anyone else have never even heard of, much less know anything about: commodity future swaptions, FRA/OIS swaps, CLOs, exotic future options, p-notes, index/commodity/equity exposures, and a huge array of OTC (over-the-counter) instruments that no regular investor would ever have access to.
Why I bring this up: the financial markets are rigged. 99% of the investing public has access to services such as basic brokerages, 401k/IRA's, mutual funds, pension plans, etc. Some of these services, especially pension funds, will invest into hedge funds, who take an additional 2 and 20 (meaning 2% of assets plus 20% of capital gains).
What this means is that if you go any of the traditional retail routes, you are utterly screwed facing off against the hedge funds.
First, you are paying exorbitant fees. Commissions on every stock trade. Mutual fund managers taking a cut - an annual % cut, as well as a % per profit cut. If these managers (i.e. pension plans) invest in another fund, that fund is also taking another % cut. You're down 2% the minute you invest your money.
Next, if you're doing the investing yourself, you're paying ridiculous spreads. The bid/ask spread of a stock will cause you to be down another 2-3% the minute you buy the stock. For example, if you're buying a share of company at $4.25, you can sell back at only $4.15.
Furthermore, you have absolutely no chance in terms of access to the best services. Hedge funds have a direct line to investment bank's institutional brokerage teams - these are the guys that spend day and night sucking up to hedge funds, trying to get them the best deals at the cheapest rates. This means that while you're buying stocks and bonds, hedge funds are getting special rights, warrants, sweetheart deals, private placement deals, options, bigger discounts on bonds, and much better bulk commission rates and lower spreads on stocks. If you're paying 4.25$ for a 4.15$ stock, they are paying something like 4.16$. And they are eating alive your profits because when the stock goes up to $4.30, they can activate another warrant to purchase 20m shares at $4.25, diluting the value of your shares.
Next, you lack information and exposure. You have no idea what is going on in the market besides what you see on the news - while hedge funds have analysts working around the clock and a bunch of service providers who give minute-by-minute analysis of their portfolio opportunities and weaknesses in all markets with exposures to nearly everything. Meaning, if there is an opportunity in the real estate market (i.e. legislation), it might take you weeks to get in - hedge funds will have gotten in the minute the legislation was passed. Furthermore, when IPOs come out for companies, hedge funds get top billing on the primary market shares - which means investment banks are selling directly to them. Once the secondary market becomes available, hedge funds are up 15-20% on these investments, sometimes within hours.
Finally, you have no capital compared to these hedge funds. The people who invest in these hedge funds are not just the 1%, they are the 0.1%. These are the guys with 500million dollar bank accounts and the ability to do whatever the fuck they want. Hedge funds know this, and they invest without having to care about whether their clients can pay the rent or send their kids to college. All of that is irrelevant. Their sole purpose is to earn money, not to mitigate risk.
What does this all mean? It means the hedge fund industry is making a gigantic proportion of the profits. The top .1% is earning nearly half of the profits in the industry, through not just hedge funds, but other similar vehicles.
The finance industry is a complete scam, designed to funnel money from the 99% investing public into the hands of the top .1%. Sure, some of you will make good money, but stastically, the rest of us will lose, and who is feeding off us? Hedge funds, and the .1%. You have better odds going to a casino and playing slots, the worst-paying game in the house, but still better than the stock market.
Also, the government is in bed with the financial industry. Tax loopholes give hedge funds and other top players the ability to write off losses and not pay taxes on gains for years at a time. For income they derive from the hedge fund (profits), they pay only 15%, rather than the 35% income tax charged to most people earning 80k and above. Meanwhile, you have to pay taxes for not just your own income but also capital gains.
The worst part by far is that the government "encourages" you to put your money into your 401k through 'tax exemptions', which basically puts your money with the lowest tier of the financial industry - pension funds, retail wealth managers, and retail asset managers. These guys have shit strategies like long-only or domestic equity (which means they only invest in American stocks), and have nowhere near the capability and reach of hedge funds. These guys are even more likely to lose your money than you are, and even worse is they will take a 2.35% cut while doing so. And you get penalized when you try to take your money out early. How f***ed up is that.
In other words, if you aren't in the .1%, you have no access to the derivatives markets, you have no access to the special deals that hedge funds and other wealthy investors get, and you have no access to the resources, information, strategic services, tax exemptions, and capital that the top .1% is getting.
If you have any questions about what some of the concepts above mean, ask and I will try my best to answer. I'm a first-year analyst on wall street, and based on what I see day in and day out, I support the OWS movement 100%.
tl;dr: The finance industry funnels money from the masses to the ultra rich, through vehicles like hedge funds which dominate all of the financial markets.
h/t Scott

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