Trader: “There’s Pain Coming. It’s Just Not Clear for Whom”

It was a plea for help: as we reported on Wednesday afternoon, a macro trader at one of the world’s biggest banks virtually lost it after watching yesterday’s bizarre market response to a blistering CPI report – which paradoxically sent yields and stocks soaring even as the dollar tumbled – a reaction which makes zero sense in any rational universe – and penned the following note:

So somehow we have embraced the theme that was with us through January. On a day when inflation beats in the US (incidentally retail sales missed):  stocks are up, yields are up and the USD lower does not add up. On the inflation side, that fact that Central Banks, especially the Fed, may need to be more aggressive, certainly makes some of the conditions suggested above, questionable at best.  So does US curve steepening. When the layers of the onion get peeled away, EM and commodity currencies will have a lot to think about as yields push up. I completely disagree with some of the USD moves, especially AUD and CAD. Rates in the US look ready to extend.  Wake up folks, it is not risk positive.

We commiserated with the author, because his frustration was logical and understandable: the various asset classes all responded in a way that made no sense when juxtaposed side by side.

It is this juxtaposition that also prompted the following snyde note from Bloomberg macro commentator and former Lehman trader, Mark Cudmore, who nailed it in saying that “It’s not that any individual asset class looks irrational in isolation, it’s just that the combination of narratives across assets aren’t compatible.

Below is his full note which if nothing else, should comfort traders who were caught offside by the market yesterday and – by the looks of futures this morning – today as well, and that little makes sense when the machines have taken over.

There’s Pain Coming. It’s Just Not Clear for Whom: Macro View

Financial assets are trading on dissonant themes. That won’t sustain for too long so at least one sector is due some volatility in the days ahead.

It’s not that any individual asset class looks irrational in isolation, it’s just that the combination of narratives across assets aren’t compatible.

Equities are rallying on the argument that inflation remains in the Goldilocks zone — no risk of deflation, but the climb in prices isn’t fast enough to trigger any major Fed aggression. And the ramp up in fiscal stimulus and tax reform will encourage inflows into U.S. stocks.

Rates are moving higher on the perception there are clear signs of accelerating inflation and hence the bond bull market is dead and buried. Increased supply is suddenly a major negative for Treasuries and higher real yields offer no attraction even though everyone supposedly is desperate to chase any return available in other asset classes.

In FX, the U.S.’s structural deficits are apparently undermining the nation’s prospects, leading to an acceleration of reserve-diversification away from dollar assets. Both interest rates and growth no longer drive currencies, and much higher U.S. real yields are now irrelevant, and hence so is inflation.

Emerging markets are being boosted by stronger equities and the weaker dollar, while ignoring interest rates. Credit is alarmed by higher interest rates and the weaker dollar, while doubting the equity rally.

No individual sector is necessarily being illogical, but they can’t all be correct. This confusion will lower investor conviction and that means volatility will rise in at least one of these assets.

Such environments provide wonderful opportunities to make money if you can work out which asset is telling the truth. And if you’re confident which one, any chance you’d mind telling the rest of us?!


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Yemen: Amnesty slams Houthis for ‘unfair trials’

Amnesty’s latest report today accused the Houthis of “using the judiciary to settle political scores” amid the on-going civil conflict in Yemen.

The investigative research findings reveal that three Yemenis, a woman and two men, were forcibly disappeared, ill-treated and given an unfair trial before being sentenced to the death penalty by the courts.

The defendants were attested by the Houthis on accusation that the lady’s husband is linked to Al-Qaeda.

The Houthis are operating a Specialised Criminal Court (SCC) in the capital Sana’a which decides on terrorism and state security cases. It sentenced Asmaa Al-Omeissy, Saeed Al-Ruwaished and Ahmed Bawazeer to death. A fourth defendant, Asmaa’s father Matir Al-Omeissy, was given a 15-year sentence after being convicted of an “indecent act”.

“They would bring the other two to our room blindfolded and handcuffed and beat them in front of us, making us watch. They would beat them, asking them to confess as they kept denying any wrongdoing. We would remain silent in fear of being shot. … Only God knows the torment we were subjected to,” Matir told Amnesty.

Houthis: 46 Saudi air strikes in 48 hours

Yemen’s civil war erupted in September 2014, when the Houthis, alongside forces loyal to the late President Ali Abdullah Saleh, took over the capital Sana’a. Internationally recognised President Abd Rabbuh Mansur Hadi was forced to relocate to interim capital Aden, in southern Yemen. Hadi called upon a Saudi-led coalition to military support him against the Houthis, triggering a bombing campaign in March 2015.

“As Yemen’s armed conflict rages on, the grossly unfair trial of Asmaa Al-Omeissy and the three other defendants is part of a wider pattern of the Houthis using the judiciary to settle political scores,” said Rawya Rageh, Amnesty International’s senior crisis advisor.

The trial followed a catalogue of grave violations and crimes under international law, some of which may also amount to war crimes.

“The defendants initially were subjected to enforced disappearance, cut off from the outside world, and secretly moved from one facility to the other. They were held in squalor in pre-trial detention for months, extorted for money, subjected to continuous humiliation and extreme physical abuse, and denied basic rights including legal counsel and family visits,” Rageh continued.

“Sentencing anyone to death after such deeply flawed proceedings is a clear violation of international law. These sentences must be quashed without delay.”

Activists and lawyers in Yemen believe this is the first case whereby a woman has been given a death sentence over a state security case. The charges equate to “aiding a foreign country in a state of war with Yemen”.

UN report: All parties in Yemen committed torture

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£30bn pledge to rebuild Iraq

Iraq has received pledges of $30 billion from donors and investors who wish to rebuild the war-ravaged country.

The funds fall far short of the country’s appeal for $88 billion which it says it needs to recover from its three-year war with Daesh.

The funds were raised during the three day Kuwait International Conference for Reconstruction of Iraq, held in Kuwait City which came to an end yesterday.

In a news conference yesterday, Iraqi Foreign Minister Ibrahim Al-Jaafari said: “If we compare what we got today to what we need, it is no secret, it is of course much lower than what Iraq needs…But we know that we will not get everything we want.”

Read: Coalition members must help Iraq rebuild, Tillerson says

By Tuesday, there was only around $4 billion raised, prompting fears that the conference would be a failure and an embarrassment for the Iraqi government and the region’s support for it. The next and final day, however, saw a surge of funds in the form of pledges and loans, resulting in the UN Secretary-General Antonio Guterres calling the conference “an enormous success”.

Turkey said it would provide $5 billion in credit lines, Qatar pledged $1 billion in loans and investments, the United Arab Emirates pledged $500 million with an added $5.5 billion in investments to Iraq’s private sector, and Saudi Arabia is to provide $1 billion and an extra $500 million in export credit. Kuwait itself pledged $1 billion in loans and another $1 billion in investments.

The United States extended its credit line to Iraq to $3 billion but did not provide any direct government assistance. It wants Gulf allies to take the burden and share the responsibility, proving ironic contrast to its interventionist policies that helped destroy Iraq.

Read: The reconstruction of Iraq is no longer a priority for the US

The Administrator of the United Nations Development Programme (UNDP), Achim Steiner, said that the conference could have raised more funds if Iraq didn’t have such a bad reputation amongst investors of being the world’s tenth most corrupt country.

Steiner insisted, however, that the amount pledged is still sufficient to aid urgent reconstruction of the country. “Would you be better without the pledges made today? The answer is clearly no. Would you be better off if all of it was in the form of grants funding? Absolutely.”

Daesh came to prominence in Iraq in 2014 when the group captured the northern cities of Fallujah, Mosul and Tikrit, representing almost a third of the country. A protracted effort by US air forces, Kurdish and Iraqi armed forces to expel the group finally resulted in Al-Abadi declaring a final victory over Daesh in December 2017.

The conflict left thousands dead, millions displaced and around 150,000 houses destroyed, particularly in the areas and cities in the north-west of the country.

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Syria opposition, US agree on ‘core issues’

Syria’s opposition groups’ negotiating body yesterday agreed with the United States on “core issues” without clarifying their nature.

A delegation from the Syrian opposition negotiating body led its chief Nasr Hariri met on with US Secretary of State Rex Tillerson in the Jordanian capital Amman.

Hariri stressed “the need to take a firm international position on the Syrian regime’s repeated use of chemical weapons and the need to put an end to the growing Iranian influence in Syria.”

“The Syrian people are losing faith in the negotiation process, because of the regime’s intransigence and hindering efforts to find a political solution.”

Tillerson confirmed his agreement with the committee’s assessment of the seriousness of the current situation which could lead to obstructing the political process, reports from the meeting said.

Read: US trying to create alternative to Assad in Syria, says Lavrov

“He expressed his country’s readiness to cooperate more with the body to reach real results for the political process.”

The US official noted that his country “works in cooperation with Russia in a serious manner to build confidence in accordance with international resolutions including the file of detainees, and facilitating access of humanitarian assistance to the besieged areas.”

The two sides agreed to “continue consultations and to hold more technical meetings to achieve real support for the Syrian opposition that helps find a political solution to stop the deterioration of the general situation in Syria and achieve political transition in accordance with UN resolutions.”

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3.5m Syria refugees in Turkey

More than 3.5 million Syrian refugees live in Turkey, the Anadolu Agency reported.

Data from Turkey’s Disaster and Emergency Management Authority (AFAD) revealed that 227,894 Syrian refugees live in refugee camps located in the states of Hatay, Gaziantep, Kahramanmaraş, Şanlıurfa, Kallis, Mardin and Adana.

The Turkish authorities provide Syrian refugees with health, education and housing services.

Some 612,000 Syrian students are currently enrolled in Turkish schools while Turkish hospitals and health centres have provided care to more than 31 million Syrian patients.

According to AFAD, Turkey has spent $30.2 billion over the past seven years on Syrian refugees.

Report: Hundreds of thousands of refugees being pushed to return to Syria

Turkey has been one of the main country which has been welcoming Syrian refugees - Cartoon [MiddleEastMonitor]

Turkey has been one of the main country which has been welcoming Syrian refugees –
Cartoon [MiddleEastMonitor]

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EU split over Balkan enlargement

Thu, 2018-02-15 16:32

SOFIA: Deep splits emerged in the EU Thursday over membership plans for Balkan states, with some countries warning Russia would take advantage unless the bloc sped up the accession process.
Bulgarian Prime Minister Boyko Borisov warned it was now or never for expanding the EU into the Balkans as concerns grow about Moscow’s influence in the bloc’s eastern backyard.
Last week the European Union unveiled its new strategy for the region, which aims to give membership to some states by 2025 but insists they must first resolve all border rows.
The frontrunners to join are Montenegro and Serbia, with Albania, Bosnia, Kosovo and Macedonia lagging, but all are getting impatient after the EU put expansion on hold four years ago.
“If there’s no enlargement now, there’ll be no other time for enlargement,” said Borisov, whose country currently holds the EU’s rotating presidency.
“Otherwise what China, Russia, Turkey are planning for the region, they will start today.”
EU foreign ministers are holding talks on the Western Balkan strategy in Sofia, with national leaders set to formally endorse the plan at a special summit in the Bulgarian capital in May.
Hungarian Foreign Minister Peter Szijarto said the 2025 target was “very late” for Montenegro and Serbia and echoed Borisov’s warning about outside players making their move.
“It is obvious the US has a strategy on the Western Balkans, Russia has a strategy on the Western Balkans, Turkey has a strategy on the Western Balkans — it is only the European Union which is extremely slow,” he said.
“If we take it seriously that we, the European Union, would like to be the winner regarding strategies and regarding endeavours on the Western Balkans we should be much quicker.”
But the EU is wary of admitting new members before they settle their differences, particularly in a region still bedevilled by the aftermath of the bloody break-up of Yugoslavia in the 1990s.
Serbia and Kosovo remain at odds 10 years after Pristina made a declaration of independence that Belgrade still rejects, while Macedonia and current EU member Greece have clashed over Macedonia’s name.
The EU has also been stung by taking on new members when they were arguably not yet ready. The bloc has been dragged into an increasingly bitter maritime row between Croatia, which joined in 2014, and Slovenia.
Slovenia’s Foreign Minister Karl Erjavec said it was “not realistic” to think Serbia and Montenegro would be ready for membership by 2025.
“Slovenia has had 20 years of dialogue with Croatia to find a solution regarding the border between Slovenia and Croatia and it is the same with Croatia and Serbia: 26 years,” he said.
“I think it’s not possible (to meet) this condition by 2025 and this can be a bit of a problem for EU enlargement and also for the Western Balkans.”

Main category: 

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US calls on Iran to withdraw from Syria

US Secretary of State Rex Tillerson yesterday called on Iran to withdraw its troops and allied militia from Syria.

“We are quite concerned about the recent incident involving Israel and Iranian assets inside of Syria. And I think this again illustrates why Iran’s presence in Syria is only destabilising to the region,” Tillerson said during a press conference in Amman.

He added that the United States has a sophisticated plan for peace in the Middle East, which has been under development for several months and is now in advanced stages.

Remarking on the US official’s statement, Ali Akbar Velayati, chief adviser to Iran’s spiritual leader Ali Khamenei, said: “Iran’s presence in Syria is legitimate, and it is the United States that should leave.”

While in Jordan, Tillerson yesterday met with a delegation from the Syrian negotiation commission headed by Nasr Hariri.

Read: Jordan secures $6.4bn aid package despite Trump threats

The opposition delegation included Hassan Abdul Azim, head of the Syrian National Coordination Committee, and Abdul Ilah Fahad, Abab Khalil and Fadawi Al-Ajili of the coalition of opposition forces.

The Syrian delegation met earlier with State Department officials and discussed the outcomes of the Syrian dialogue conference held in the Russian resort of Sochi, which concluded on 31 January.

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Greece says it won’t tolerate challenge to its rights after Turkish collision

Thu, 2018-02-15 14:04

ATHENS: Prime Minister Alexis Tsipras said on Thursday Greece would not tolerate any challenge to its territorial integrity, days after Turkish and Greek coast guard vessels collided close to disputed islets in the Aegean Sea.
“Our message, now, tomorrow and always, is clear… Greece will not allow, accept or tolerate any challenge to its territorial integrity and its sovereign rights.”
“Greece is not a country which plays games,” Tsipras told an audience at the cοuntry’s shipping ministry.
The collision involving the two vessels occurred on Monday evening off Imia, known as Kardak in Turkish. Each side blamed the other for the incident.
Turkey and Greece, NATO allies, have been at odds over a host of issues from ethnically split Cyprus to sovereignty over airspace and overflights.
They came to the brink of war in 1996 in a sovereignty dispute over the islets, but tensions have eased since.
Noting that Greece’s eastern border is also that of the European Union, Tsipras said: “Challenges and aggressive rhetoric against the sovereign rights of an EU member state are against the EU in its entirety.”
Tensions between the two countries have been on the rise since a Greek court blocked the extradition of eight Turkish soldiers whom Ankara accuses of involvement in a failed coup against President Tayyip Erdogan in 2016.

Main category: 

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Crypto Exchanges Launch P2P Platforms from Latvia and Bulgaria

Crypto Exchanges Launch P2P Platforms from Latvia and Bulgaria

While European institutions are issuing another series of warnings about the risks and sins of dealing with bitcoin, crypto communities on the Old Continent are trying to preserve freedoms not granted by Brussels. Two exchanges from opposite corners of New Europe have announced plans to offer peer-to-peer cryptocurrency trading. Latvia-based Hodlhodl has launched its new P2P platform in beta-mode, and Bulgarian is developing its own service that may replace the fiat medium with a token.  

Also read: Global P2P Crypto Markets Experience Record Volume Throughout December

Going Global

Intensive work to develop decentralized and unregulated crypto markets has been going on in the EU periphery, where memories of excessive regulation and centralization, political and economic, are still vivid. Two exchanges from both ends of (New) Europe have announced preparations to offer full-fledged P2P services to their users, with global aspirations in mind, as well.

Latvian exchange Hodlhodl has just launched a beta-version of its new platform designed to accommodate safe and secure peer-to-peer transactions of bitcoin and other cryptocurrencies. Users can now open accounts, fill out their profiles, set up two-factor authentication, create offers and study available functionalities. Contracts are currently disabled but developers hope to complete the order book and launch them within a week, the company shared in a blog post.

Crypto Exchanges Launch P2P Platforms in New Europe

In the first stage of the project only bitcoin (BTC) and litecoin (LTC) will be traded. The exchange will operate in beta-mode until July 2018 with 0% commission. A fee of max 0.6% per trade will be applied after that. “The P2P Bitcoin exchange that doesn’t hold funds” will introduce multisig (P2SH) contracts that will allow users to control their funds in escrow. Hodlhodl offers support of native Bech32 Segwit addresses and P2SH-P2WSH Segwit multisig escrow addresses. The exchange services will be decentralized and no KYC (Know Your Customer) or AML (Anti-Money Laundering) procedures will be applied. Passing an “absolutely voluntary verification”, however, will lower commissions to 0.5%.

Plans for the future include introducing support for Lightning Network micropayments and other cryptocurrencies. The website menus are now available in English and Russian, but other languages will be added. Hodlhodl will be working on optimizing transaction fees and increasing security for its users, while offering integration with wallet providers and a mobile version of the platform. Its team promises a “truly global” P2P cryptocurrency exchange.

Every Action Has a Reaction

In the opposite corner of Europe, in Bulgaria, a leading crypto trader has also announced that it is working on a P2P platform, after facing multiple issues with the traditional financial system. was affected by a sudden crackdown last year when Bulgarian banks blocked access to accounts used by local exchanges. It ceased operations in early December, and then restarted trading before going offline again around Christmas. In January, announced it was forced to suspend trade “indefinitely”.

This month the exchange posted on its website that it was exploring options to offer services without going through a bank. Now it is planning to trade Bitcoin on a new peer-to-peer platform that is currently under development. A new medium of exchange will be used instead of fiat currency – CryptoLev (Lev is the Euro pegged BGN). It will probably be an ERC20 token based on the Ethereum blockchain, founder and CEO Stamen Gorchev revealed in the company’s forum. He also mentioned Ethereum Classic as a cheaper alternative.

Crypto Exchanges Launch P2P Platforms in New Europe

The new system will offer the opportunity to trade through Cryptolevs backed by a certain amount of bitcoin “locked” in a public address. A foundation modelled on the Ethereum Foundation in Switzerland may provide further guarantees in the future. Other Bulgarian exchanges have been invited to join the project.,, and have also reported interruptions in their activities quoting various reasons including changing bank accounts.

Bank transfers will be made on a peer-to-peer basis and banks will not be able to tell if such transactions are bitcoin-related. Traders will actually be buying and selling Cryptolevs, used to purchase bitcoins. In addition to locally available services, payment options like Paypal and Skrill may also be added in the future, potentially opening the platform to global markets.

Relentless Euro Warnings

While both exchanges are working on their P2P platforms, European institutions have issued new warnings about bitcoin. Up to $5.5 billion of criminal money is being laundered in Europe using cryptocurrency, according to Europol. “It’s growing quite quickly and we’re quite concerned,” the agency’s director Rob Wainwright told the BBC. “The police cannot monitor those transactions. And if they do identify them as criminal, they have no way to freeze the assets unlike in the regular banking system”, Wainwright said.

This week, the European Securities and Markets Authority (ESMA) alerted European investors about the perils of obtaining cryptocurrencies in the absence of legal mechanisms of protection. The regulator charged with “safeguarding the stability of the European Union’s financial system” shared its concerns over the growing number of citizens buying cryptos while ignoring the risks. Valdis Dombrovskis, Vice-President of the European Commission responsible for the financial stability, financial services and the capital markets union, has expressed support for ESMA’s warning.

Do you think that peer-to-peer platforms will dominate cryptocurrency trade in the near future? Share your thoughts in the comments section below.

Images courtesy of Shutterstock. 

At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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Mitten in London: Eine Werbetafel zeigt einen Bitcoin-Miner

Wenn öffentliche Bildschirme einen Fehler haben, zeigen sie oft einen Blick hinter die Kulissen. So geschah es kürzlich in London, als eine Werbetafel das Betriebssystem gezeigt hat – und ein Mining-Programm, das nach Kryptowährungen sucht.

Wir hatten es kürzlich ja davon, dass Botnetze immer öfter ihre gekaperten Computer Monero minen lassen. Nun haben wir ein ähnliches Phänomen, das sich in einem Schaufenster in London offenbart hat.

Terence Eden, ein britischer Nerd und Blogger, sammelt Fotos von abgestürzten öffentlichen Bildschirmen. Kürzlich hat er zum ersten Mal gesehen, dass ein Werbebildschirm dafür benutzt wird, um Krytowährungen zu minen. Das Programm, das auf dem Rechner lief, war NiceHash Miner Legacy, eine für alte Computer entwickelte Version der beliebten Mining-Software Nice Hash. Nice Hash ist eher ein Marktplatz, auf dem man Mining-Power kaufen oder verkaufen kann. Die Software sucht dann automatisch nach den profitabelsten Kryptowährungen und bezahlt die Miner in Bitcoin aus.

Auf dem Bildschirm, den Terence Eden gefunden hat, werden die ersten Zeichen der Auszahlungsadresse gezeigt: 3Jgi6. Es sollte, theoretisch, möglich sein, die echte Adresse herauszufinden, wenn man eine Datenbank mit allen Adressen hat, aber ich weiß gerade nicht, wie. Falls einer der Leser einen Tipp hat, wäre das extrem interessant. So könnte man erfahren, wie viel der Hacker durch die Übernahme der Werbefläche verdient hat – auch wenn es wohl nicht so viel sein wird. Aber ob es so viel weniger ist, als eine elektronische Tafel durch Werbung einspielt?

Eine andere interessante Frage wäre, wie die Mining-Software auf das System kam. Hat ein Hacker sie irgendwie eingeschleust, durch einen offenen Port oder eine E-Mail an einen System-Administrator? Oder hat ein Mitarbeiter des Providers der Werbung die Chance am Schopf ergriffen, sich durch das Mining auf vielen Systemen, die in den Schaufenstern von Kunden stehen, ein Zusatzbrot zu verdienen? Oder darf man gar fragen, ob die Werbefirma das Mining gar zum Teil ihres Geschäftsmodells gemacht hat?

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