Deep Thoughts From Howard Marks
Submitted by Tyler Durden on 07/11/2009 - 16:46Third "must read" in a row. Now if only Howard could practice just as phenomenally as he preaches...
Predators Sensing Your Orders: Trading “Battlebots” Earn Est. $15-25 Billion Annually
Submitted by Tyler Durden on 07/11/2009 - 16:08Must read presentation on electronic trading in this PT-focused Saturday.
Liquidity Quality In A Changing Market
Submitted by Tyler Durden on 07/11/2009 - 15:33
My focus on various topics in the realm of program trading and market liquidity has engendered quite a few vitriolic responses, some of which have argued bitterly that Zero Hedge is on the wrong path in describing the somewhat vampiric qualities of liquidity extraction by recent artificial constructs, most notably those undertaken by the NYSE. I present to our readers an original paper by two BNY ConvergEx managing directors from 2007 which should provide some additional datapoints in the great debate on whether or not liquidity benefits at all from the recent domination of computers in the "open" market, and touches on other such highly contested issues as dark pool and dark liquidity value and execution.
The Federal Reserve Under Increasing Fire
Submitted by Tyler Durden on 07/11/2009 - 13:39A must watch introductory clip by the American News Project which summarizes well the current push to unmask the inner workings of the Federal Reserve, the urgency of increasing transparency and the groundbreaking nature of Ron Paul's HR 1207 bill.
CIT Prepares To File Bankruptcy
Submitted by Tyler Durden on 07/11/2009 - 13:15The WSJ reporting that the lender to over 1 million small sized businesses has hired Skadden Arps in preparation of a bankruptcy filing. The formerly largest competitor to GE Capital for any and every semi- and fully-toxic loan imaginable, has been so far outright denied a bailout by an administration that has rarely professed a non-socialist approach to corporate demise. Unfortunately for the company, whose new HQ office lobby on 42nd street looks more like a club out of meatpacking flashing either a blue or deep purple colored decor, may be Obama's first Guinea pig in financial failure since Lehman.
Rating Agencies Finally Get The NRUC Wake Up Call
Submitted by Tyler Durden on 07/11/2009 - 10:57When Zero Hedge first discussed the plethora of problems at National Rural Utilities Cooperative Finance Corporation (aka NRUC) over 4 months ago, two things happened very quickly: the company's CDS blew up from 100 bps to over 250 bps overnight, and the company promptly issued a derogatory press release ridiculing everyone and everything associated with Zero Hedge (they were the first but certainly not the last). Immediately thereafter, likely under the advice of counsel, NRUC promptly retracted the press release but not before The Business Insider managed to keep a record for posterity.
In retrospect this may have been a smart move after Fitch just put the company on downgrade review for very much the same reasons I was concerned about in March.
Guest Post: China Panic
Submitted by Tyler Durden on 07/11/2009 - 06:44Looks like Marla made her way to the Paper Street stamina bar last night... Must have been quite a show. For those who never went to bed, here are some early morning observations compliments of Black Swan Capital.
Radio Zero: Tired of Goldman
Submitted by Marla Singer on 07/10/2009 - 19:20Goldman was without a doubt the story of the week. None of those guys can dance anyhow. Here, I'll prove it.
Radio Zero. Again. Live starting at 9pm eastern. Get your slots now.
Requests: AIM - marla@zerohedge.com
Whitney Tilson: "Why There Is More Pain To Come"
Submitted by Tyler Durden on 07/10/2009 - 14:49An Overview Of The Housing Crisis And Why There Is More Pain To Come
Ben Bernanke Back Into The Populist Spotlight
Submitted by Tyler Durden on 07/10/2009 - 14:41It seems just yesterday that Ben Bernanke was rehearsing for the role of the Alzheimer's patient antagonist in Joel Schumacher's latest mad scientist-becomes-insane global dictator B-grade movie, before the House Committee on Oversight and Government Reform, after firing back with a catatonic "I don't recall" after catatonic "I don't recall" when asked to remember even one of the events in what historians will likely one day consider among the most critical 24 hours for modern capitalism. Many thought that this spectacle was merely a way for politicians to score populist points in a McCarthesque witch hunt sequel of the villain de jour play. It seems they were wrong.
Rogue Algorithms And Other Mutually Assured Destruction Program Trading Alternatives
Submitted by Tyler Durden on 07/10/2009 - 12:03It is now generally understood that high frequency traders (HFTs) are dominating the equity market, generating as much as 70% of the volume.
HFTs are computerized trading programs that make money two ways, in general. They offer bids in such a way so as to make tiny amounts of money from per share liquidity rebates provided by the exchanges. Or they make tiny per share long or short profits. While this might sound like small change, HFTs collectively execute billions of shares a day, making it an extremely profitable business.
Why should institutional or retail investors care? After all, aren’t HFTs adding liquidity? That’s what they and the exchanges, who court their business, say.
There’s a lot to worry about.
Quick look at US federal receipts
Submitted by Cornelius on 07/10/2009 - 08:09Individuals and companies went from paying roughly the same amount in income tax to a roughly 4:1 ratio estimated in 2014
Goldman Sachs Principal Transactions Update: 60% Decline
Submitted by Tyler Durden on 07/10/2009 - 07:32
The most recent, presumably correct, data has been released by the NYSE: Goldman total principal program trading has declined by 60% from 1,336 million shares in the prior week to 571 million in the current.
Bloomberg's Jonathan Weil On GoldmanGate
Submitted by Tyler Durden on 07/10/2009 - 05:03Jonathan Weil takes on Goldman's doomsday machine.
Marathon And SIFMA All Over Heads I Win, Tails You Lose
Submitted by Tyler Durden on 07/10/2009 - 04:30SIFMA's Tim Ryan runs like the plague from answering the question of whether he would invest in PPIP's garbage assets without the government's backstop. However, both he and Marathon's Bruce Richards are dying to use 14x riskless leverage in a wishful effort to restart securitization. David Faber: "Win win for you, no real downside, but you are ultimately going to be paying inflated prices for assets instead of true price discovery, what do you say to that." To which Bruce has a meandering explanation which concludes with: "Taxpayers do benefit, because we believe the returns on these assets are incredibly attractive."
