bank

On May 18, 2015, the ECB's Benoit Coeure held a closed-door speech under "Chatham House" rules in which he leaked to an audience of hedge funds in London that "the central bank would moderately front-load its purchases in its quantitative easing program because of the seasonal lack of market liquidity in the summer." The reaction was an instant 50 pips drop in EURUSD as one or more funds decided to ignore the "rules", and promptly traded on the material, market moving leak.

• Nerves dominate before U.S. retail numbers (Reuters)
• Stocks Give Up Week’s Gains as Commodities Fall; Yen, Bonds Rise (BBG)
• Apple Invests $1 Billion in Didi, Uber’s Rival in China (WSJ)
• Dollar hits two-week high, posts best fortnight since February (Reuters)
• OPEC Sees Rival Oil Production Declining as Markets Rebalance (WSJ)
• Trump on best behavior as he woos Republicans but differences remain (Reuters)
• Hedge Fund Star: We Are ‘Under Assault’ (WSJ)
• German GDP growth picks up sharply (MW)

During the months of March and April of 2016 we released a series of proprietary research reports indicating signficant weakneses that we found in the European banking system and released it for sale through the blockchain (reference The First Bank Likely to Fall in the Great European Banking Crisis).

Things are increasingly upside down in the brave new centrally planned world: thanks to negative deposit rates central banks have put an explicit cost on saving, while in various instances, such as taking out a mortgage in Denmark and the Netherlands, the bank actually pays the borrower, thus rewarding living beyond one's means. Curiously, it was just a month ago when an offer was spotted in Germany offering a negative -1% rate on small consumer loans issued by Santander Bank.

In a recent note, Eric Peters, CIO of One River Asset Management, summarizes everything that's been happening over the past few years in one tidy anecdote. Citing an unnamed CIO, he points out that the central bank was created to help its member banks, and it attempts to impact the real economy by using interest rates as a mechanism to control the attractiveness of lending money.