Tuesday, January 5, 2016

Why $1.5 Billion Nevsky Capital Is Shutting Down: The Full Letter

"It is time to accept that what we have done has worked brilliantly for twenty years but does not work anymore and move on. We are confident our process will eventually work again – for the laws of economics will never be repealed – but for now they are suspended and may be for some time; an indefinite period involving indeterminate levels of risk during which we think it would be wrong for us to be the stewards of your money."

First $1.5 Billion Hedge Fund Casualty Of 2016 Blames HFTs For Making A Mockery Of Investing

We have come regretfully to the conclusion that the current algorithmically driven market environment is one which is increasingly incompatible with our fundamental, research orientated, investment processThe bear market in emerging market equities, which began in 2011, may eventually engulf developed markets too."

As Mideast Tensions Soared, Traders Bet On Another Plunge In Oil Prices: Here's Why

That wasn't supposed to happen. In the not so distant past, a dramatic escalation in tensions between OPEC nations (in this case Iran and Saudi Arabia) would have led to a spike in crude oil prices. However, as futures opened Sunday night, the brief rally in oil prices was met with selling pressure and instead of buying calls, traders loaded up on $30 puts. The oil market's different this time - here's why...

The Drain Continues: U.S. Exports More Gold To Hong Kong Than It Produces

As the Federal Reserve continues to prop up the highly leveraged debt based financial industry, the flow of U.S. gold heading East picked up significantly. According to the USGS most recently released survey, Hong Kong received 56% of total U.S. gold bullion exports in September.

This Is The 'New' Most Important Number For The S&P 500

Weakness in Breadth, volume, sentiment, and momentum all lead BofAML to warn "sell rallies" in stocks. Starting 2016 under pressure, the S&P 500 has big support at 1994-1990 but 1965 is the level at which things become perilous. Simply put, holding 1965 is required if a 'bounce' like late 2011 is expected.

Stock Markets All Over The World Crash As We Begin 2016

by Michael Snyder, The Economic Collapse Blog:
The first trading day of 2016 was full of chaos and panic.  It started in Asia where the Nikkei was down 582 points, Hong Kong was down 587 points, and Chinese markets experienced an emergency shutdown after the CSI 300 tumbled 7 percent.  When European markets opened, the nightmare continued.  The DAX was down 459 points, and European stocks overall had their worst start to a year ever.  In the U.S., it looked like we were on course for a truly historic day as well.  The Dow Jones Industrial Average was down 467 points at one stage, but some very mysterious late day buying activity helped trim the loss to just 276 points at the close of the market.  The sudden market turmoil caught many by surprise, but it shouldn’t have.  The truth is that a whole host of leading indicators have been telling us that this is exactly what should be happening.  The global financial crisis that began in 2015 is now accelerating, and my regular readers already know precisely what is coming next.
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"It's Time For You To Leave": Oregon Sheriff Demands Militiamen "Peacefully" Depart

"You said you were here to help the citizens of Harney County. It is time for you to leave our community, go home to your families, and end this peacefully,”


from TruthandAction:

Oath Keepers of Josephine County received documented evidence on Monday from whistleblowers within the Bureau of Land Management regarding the destruction of records as well as mine property by the BLM during the dispute over the Sugar Pine mine in Oregon.
The whistleblowers have not only come forward with information, they have gone so far as to sign affidavits detailing the BLM’s corruption.
The Oath Keepers also received information on a lawsuit regarding the Bundy Ranch.
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Stocks Resume Rout After Massive Chinese Intervention Fails To Lift Shanghai, Calm Traders

After yesterday's historic -6.9% rout in the Shanghai Composite, which saw the first new marketwide circuit breaker trading halt applied to Chinese stocks (on its first day of operation), many were wondering if the Chinese government would intervene in both the once again imploding stock market, as well as China's plunging and rapidly devaluing currency. And, after the SHCOMP opened down -3%, the government did not disappoint and promptly intervened in both the Yuan as well as the stock market, however with very mixed results which global stocks took a sign that the "national team" is no longer focused solely on stocks, and have resumed selling for a second consecutive day.

For Kyle Bass This Is "The Greatest Investment Opportunity Right Now"

"Given our views on credit contraction in Asia, and in China in particular, let's say they are going to go through a banking loss cycle like we went through during the Great Financial Crisis, there's one thing that is going to happen: China is going to have to dramatically devalue its currency."

Playing The Government’s Game: When It Comes To Violence, We All Lose

It doesn’t matter what the issue is - whether it’s a rancher standing his ground over grazing rights, a minister jailed for holding a Bible study in his own home, or a community outraged over police shootings of unarmed citizens - these are the building blocks of a political powder keg. Much like the heated protests that arose after the police shootings in Ferguson and Baltimore, there’s a subtext to the Oregon incident that must not be ignored, and it is simply this: America is a pressure cooker with no steam valve, and things are about to blow. Now all that remains is a spark, and it need not be a very big one, to set the whole powder keg aflame.

"It's Coming To A Head In 2016" - Why Bank of America Thinks The Probability Of A Chinese Crisis Is 100%

"It seems to us that the government’s policy options are rapidly narrowing – one only needs to look at how difficult it has been for the government to hold up GDP growth since mid-2014. A slow-down in economic growth is typically a prelude to financial sector instability. Putting it all together, it seems to us that many of these conflicts may come to a head in 2016."

The Tragicomedy Of Self-Defeating Monetary Policy

Bill Dudley and the Federal Reserve (Fed), in their efforts to influence economic growth may have created a speculative and consumption driven environment that is crushing productivity growth. Ingenuity, not debt, made America an economic powerhouse. If we are to resume down that path we need the Fed to end their “self-defeating” policies and in its place we must demand ingenuity from them. The Fed, along with government, needs to properly incent productivity. The Fed should start this arduous task by removing excessive stimulus which will take the speculative fervor out of markets and allow asset bubbles to deflate.

Some Canadians May Eat Themselves To Death Unless Oil Prices Rise, Doctor Warns

In the heart of Canada's oil patch, suicide rates are on the rise, property crime is soaring, and food bank usage is at all time highs. In case Albertans didn't have enough to worry about as their economy collapses under the weight of lower for longer crude, one doctor now warns that a protracted recession could cause an obesity epidemic.

After Tumbling At Open, Chinese Stocks Erase All Losses

Update: It's a miracle..."Someone" stepped in and bid the entire Chinese market higher off its huge opening gap down...
Despite the biggest liquidity injection (CNY130bn) in 4 months, it appears Kyle Bass' top trade remains well on target as Offshore Yuan plunges, underperforming Onshore Yuan despite the largest Fix devaluation in two months. In a word - it's chaos in Chinese markets. The Shanghai Composite looks to be opening down 3% - extending yesterday's losses (beyond the US session's ADR's move). What a mess.

It Starts: Tech Trouble Mucks up Silicon Valley Real Estate Party

from Wolf Street:

Yahoo tries to “quietly” dump its Holy Grail property.
Yahoo has enough problems already. Hardly anything has gone right since its last big successful move, the strategic partnership in 2005 with Chinese e-commerce site Alibaba. Even as it blew billions of dollars on dozens of acquisitions over the last few years, its annual revenues shrank from $7.21 billion in 2008 to $4.62 billion in 2014, down 36% in six years, with not much hope in sight.
Management departures have been termed “Exodus” by re/code. Now that its efforts to spin off Alibaba have collapsed under the tax implications (didn’t they think about this before?), Yahoo said that it would try to spin off instead its core Internet business. Whatever.
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