Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15
Dodd-Frank Precious Metal Trading Prohibition Could Make Hedge Fund FX Trading Illegal
Submitted by Tyler Durden on 06/18/2011 15:00 -0400Below we present some additional analysis on the implementation of Dodd-Frank's precious metal and FX OTC spot trading prohibition from law firm Morgan Lewis, as well as another potentially far more disturbing implication for non-US Hedge Funds which trade FX (and since virtually all hedge funds are located offshore due to tax implications, and since most hedge funds have now shifted to FX trading in an attempt to pursue volatility, we imagine this means absolutely everyone in the space). Basically it appears that hedge funds that have "one single US investor [who] has less than $10 million in investable assets, that fund will be classified as a retail FX fund. If an FX fund has investors that fail to meet the $10 million threshold, that fund would therefore not be considered an eligible contract participant. Gary Alan DeWaal, senior managing director and group general counsel at prime brokerage firm Newedge, said most non-US FX hedge funds seemed unaware of these obscure, burdensome requirements. “Most hedge funds would not think that they are retail funds. However, all it takes is one US client, who fits into this bracket to make them a retail FX fund. I think a lot of hedge funds could be forced to either throw out these clients from their funds or change their counterparties,” added DeWaal." Forget the liquidity freeze courtesy of Greece. Our own congressional and senatorial idiots are about to do it on their own without any country having to go into default.
posted by Admin at Jim Rogers Blog - 2 hours ago
Everybody hates rating agencies. They missed Enron (balance sheet fraud), the sub-prime crisis (using models provided by banks) and sovereign debt crisis (concealed by foreign currency swaps). They have been wrong – so what? Stock market analysts are wrong all the time, and investors still read their worthless reports. And what would you expect from a stock recommendation if you knew it was paid for by the company the report is about? (People – you really need to switch off that Consumer News and Business Channel and put on your thinking caps.) Anyway. I came across this Weekly Market Outlook from Moody’s Analytics. They do something remarkable. They compare their own ratings with the rating implied by CDS (credit default swaps). Usually the rating agencies are a little bit behind the curve, so the CDS can give more of a “real-time” view of where the rating should be. Look at Bank of America and Merrill Lynch (now, of course, owned by BoA). Their implied rating is junk! JPMorgan Chase, Well Fargo and HSBC Finance Corp are not far behind in the BBB category.
Yesterday when we observed the conventional wisdom explanation that the CBOE equity put/call ratio is the highest it has been since January 2009 and hence the market must have bottomed, we naturally took the opposite stance, warning that any comparison to past events is necessarily apples to oranges, since the "last time we checked back in January 2009 Greece and Europe were not about to go Chapter 11, nor was a $900 billion asset purchasing program about to end." Well, we are not the only ones to ridicule yet another attempt by the media to sucker in the retail investor, who however following the biggest domestic mutual fund equity outflow since August is long gone. UBS' Andy Lees does a far more convincing job, and adds that "the skew to the downside is not reflective of people being long puts but rather reflects the inability of funds to carry any significant downside business risk. Putting these two bits of information/ supposition together, clients are effectively running a binary position where they can take the downside risk to a certain point and then must get out no matter what which potentially means a gap down or accelerated fall in the market, which would coincide with what the charts are saying sub 1200. With the buyer of last resort, the Fed, no longer there, the fall could become very nasty very quickly."
Senators Graham, Paul & Lee on Social Security Reform– “If you're under 47 - bend over”
*Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The ...
Guest Post: Look At Me - I'm A Junk Rated Bank
Submitted by Tyler Durden on 06/18/2011 12:50 -0400Everybody hates rating agencies. They missed Enron (balance sheet fraud), the sub-prime crisis (using models provided by banks) and sovereign debt crisis (concealed by foreign currency swaps). They have been wrong – so what? Stock market analysts are wrong all the time, and investors still read their worthless reports. And what would you expect from a stock recommendation if you knew it was paid for by the company the report is about? (People – you really need to switch off that Consumer News and Business Channel and put on your thinking caps.) Anyway. I came across this Weekly Market Outlook from Moody’s Analytics. They do something remarkable. They compare their own ratings with the rating implied by CDS (credit default swaps). Usually the rating agencies are a little bit behind the curve, so the CDS can give more of a “real-time” view of where the rating should be. Look at Bank of America and Merrill Lynch (now, of course, owned by BoA). Their implied rating is junk! JPMorgan Chase, Well Fargo and HSBC Finance Corp are not far behind in the BBB category.
UBS' Andy Lees: No, The Surging Put/Call Ratio Does Not Imply A Market Bottom, And May Presage A Waterfall Cascade In Stocks
Submitted by Tyler Durden on 06/18/2011 12:25 -0400Yesterday when we observed the conventional wisdom explanation that the CBOE equity put/call ratio is the highest it has been since January 2009 and hence the market must have bottomed, we naturally took the opposite stance, warning that any comparison to past events is necessarily apples to oranges, since the "last time we checked back in January 2009 Greece and Europe were not about to go Chapter 11, nor was a $900 billion asset purchasing program about to end." Well, we are not the only ones to ridicule yet another attempt by the media to sucker in the retail investor, who however following the biggest domestic mutual fund equity outflow since August is long gone. UBS' Andy Lees does a far more convincing job, and adds that "the skew to the downside is not reflective of people being long puts but rather reflects the inability of funds to carry any significant downside business risk. Putting these two bits of information/ supposition together, clients are effectively running a binary position where they can take the downside risk to a certain point and then must get out no matter what which potentially means a gap down or accelerated fall in the market, which would coincide with what the charts are saying sub 1200. With the buyer of last resort, the Fed, no longer there, the fall could become very nasty very quickly."
Senators Graham, Paul & Lee on Social Security Reform– “If you're under 47 - bend over”
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