"We risk becoming the best informed society that has ever died of ignorance"
- Rubén Blades

"You can't make up anything anymore. The world itself is a satire. All you're doing is recording it"
- Art Buchwald

"It's getting exciting now, two and one-half. Think of everything we've accomplished, man. Out these windows, we will view the collapse of financial history. One step closer to economic equilibrium"
- Tyler Durden

"It is your corrupt we claim. It is your evil that will be sought by us. With every breath, we shall hunt them down."
- Boondock Saints

Sunday, November 23, 2014

Frogs In Boiling Water - FED Turns Up Heat, Global Central Banks Step To The Line For A Junk Shot

Let's be honest about the current state of affairs in finance.  In the days following the end of the FED insatiable monthly bond buying we have seen three, three Central Banks, come out with drastically shocking statements about their course of action.  The moment the US stopped engaging in hand over fist bond and equity futures purchases:
  • the Russian CB jacked its one-week repo-rate (9 percent to 10.5 percent), its key rate (from 8 percent to 9.5 percent), and its deposit rate (from 7 percent to 8.5 percent).  
  • the BOJ decided to triple purchases of stocks and property funds (ETFs and REITs), extend bond maturities from 4-7 years to 7-10 years, and raised the bond purchases ceiling from Y30 Trillion to Y80 Trillion, 
  • the PBOC said cut its main rate for the first time since 2012.  
The US FED carried three separate central banks (for nearly 6 years) and without the US FED, these three musketeers must figure out a way to manipulate indexes to represent real economic growth.  To make it more difficult, Draghi and ECB are out running about "doing whatever it takes" but as for any real action, that's yet to manifest.  The money-system fumblers will never pull it off and they seem to know it.  Notice the desperate lengths banks went to to manipulate LIBOR just as a means to turn profit. 

Thursday, August 28, 2014

Long Buyers Are Doing So With Credit

Brokers are lending because it's more profitable than storing cash in risk-free assets.  Brokers are getting a better return lending than they would parking cash in risk-free assets.  Margin is accessible to longs and shorts.  When you borrow long, according to FINRA Reg-T:

Saturday, July 19, 2014

The Emperor Has No Clothes

Hubris is at an all time.  The people we all see on TV and read on the interwebs, regularly, are proclaiming the housing recovery, the consumer recovery, the market recovery, and the all around economic recovery.  These people are idiots.

Sunday, June 8, 2014

Pro-HFTers Butting Into The Conversation Are A Half-Decade Late

It's no secret that for years I have written about and interacted on the telephone and in person (and even was the connection for the making of a documentary.  That's yours truly on the wall on the iPad) with people who shared the same questions and worry about the equity and option market micro-structure.  

Tuesday, May 20, 2014

Recent M&A Activity And What It Means Re: FED Taper

Jason Raznick, the CEO of Benzinga has a Tumblr account that he recently started and his most recent post on M&A activity is worth reading.  The ramp in M&A and the increase in Covenant-Lite backing leveraged loan LBO's has enticed money away from traditional markets (big money went to Alt. Investments as equity risk premium pushed historic threshold and the appeal of low-rate fixed-income lost its luster). 

Sunday, May 11, 2014

Apple's Weak Sauce

Apple is showing a weak hand with the talk about buying Beats Electronics, LLC, which has HTC Europe and Carlyle Group as their top investors.  Initial commentary focused on the headphones, a quality of which will never match Bose in my opinion.  There’s a reason Chrysler was in talks with Beats while Mercedes was in talks with Bose.  And guess who drove a Mercedes?  Steve Jobs.  

Saturday, May 3, 2014

Goldman's Global Leading Indicator

Goldman Sachs has released their Global Leading Indicator and highlighted a slight contraction, 3.5% year-on-year for April, down from 3.6% year-on-year in March.  

Friday, May 2, 2014

$150 Oil


Nordea analyst Thina Saltvedt is out with a note on the impact of the crisis in the Ukraine on oil and its potential to send the EU back into a recession.

Thursday, May 1, 2014

Margin Credit Drops For First Time In 8 Months

Since May, United States Margin Credit accounts have been increasing on a monthly basis according to NYXData.com.  As stock investors have continued to borrow to fund their purchasing of equities, Investor Net Worth as measured by the difference between Total Free Credit and Total Margin Debt as grown to historic levels.