Archive - Oct 13, 2009
How To Launch A Massive Hedge Fund Fraud?
Submitted by Marla Singer on 10/13/2009 22:00 -0500Two environments seem to boost the efforts of small investors either to trade full time, or to launch their own hedge funds:
1. Bear markets (no one has a job anyhow).
2. Bull markets (anyone can do it!)
Fortunately, Clusterstock has put together a handy guide on "How To Launch A Hedge Fund."
Fortunately, or unfortunately, slide number six "Build the team" and bearing the advice "For example, Turn Key would recommend two accounting firms, Kaplan & Company in Chicago and Acquavella, Chiarelli, Shuster, Berkower & Co. in New York and New Jersey, and the Caymans" appears to depict an attorney (or recently victorious prosecutor) talking to a convict, complete with last-name-printed-on-the-breast bright orange shirt, handcuffs, choppy prison haircut and downcast eyes.
What, exactly, is Clusterstock trying to tell us?
Deporting Alpha?
Submitted by Leo Kolivakis on 10/13/2009 21:13 -0500While portable alpha is theoretically appealing - beta is cheap so swap into equity and bond indexes and use the cash to invest in hedge funds that produce alpha - in practice it can turn out to be a nightmare, especially during a liquidity crisis.
Guest Post: Will California Be A Test Case For Legalizing Marijuana?
Submitted by Tyler Durden on 10/13/2009 19:08 -0500California made the news again this week with an effort by marijuana advocates to put three measures on the ballot that legalize small quantities of marijuana for personal use. Currently, thirteen states allow medicinal marijuana use, including California. This recent effort represents the first step toward full legalization and a stance that States are serious about asserting jurisdiction over the issue.
China's Market Share Soars During Global Downturn
Submitted by George Washington on 10/13/2009 19:00 -0500China's export situation isn't as dire as you might assume ...
Running Your Portfolio Like A Football Team
Submitted by Tyler Durden on 10/13/2009 18:02 -0500Expert "whose picks move markets" Louis Navellier "does a screen" for such tried and true criteria as sales growth, margin growth, return on equity and cash flow and picks the "best" companies available. Strangely absent from this screen are any valuation criteria (Amazon at 45x forward P/E is so 2005 fundamentals) but when you have a bubble to substantiate any rubbish one wants to spin based on conflicts of interest too numerous to even highlight in passing, why care? For those whose heads are about to explode, Louis provides a formidable analogy: he "runs his portfolio like as a football team, mmmk? So, you know, as long as you got all the stats we run with ya." Brilliant.
NYSE Short Interest Drops 3.5%, 42.5% Below Peak
Submitted by Tyler Durden on 10/13/2009 17:39 -0500
On October 9, the NYSE provided its latest Short Interest update. The total number of shorted shares on the New York Stock Exchange at September 30 was 13.06 billion, a 3.5% decline from the 13.52 billion on September 15, a 42.5% decline from the all time high short position of 18.61 billion on July 15, 2008, and a 23.8% decline from the 2009 high of 16.17 billion in mid-March. The latest short interest represented a mere 3.42% of the total share outstanding as more and more bearish bets are closed, either voluntarily or forecefully. The current SI is equal to the short interest at the end of 2007.
Debunking the "Too Big To Fail" Myth
Submitted by George Washington on 10/13/2009 17:24 -0500The government is STILL defending too big to fail on several ridiculous grounds.
Daily Credit Summary: October 13 - In Advance Of i7 Sales
Submitted by Tyler Durden on 10/13/2009 16:57 -0500Spreads were tighter in the US as all the indices improved albeit marginally as intraday ranges remained very low (but equity is still the dramatic outperformer of the last two weeks or so as IG experiences its longest period of low volatility since August of 2008). IG trades 1.5bps tight (rich) to its 50d moving average, which is a Z-Score of -0.2s.d.. At 100.5bps, IG has closed tighter on only 19 days so far this year (204 trading days). The last five days have seen IG flat to its 50d moving average.
The Man Who Risked The World
Submitted by Tyler Durden on 10/13/2009 16:22 -0500Zero Hedge is starting to run a series of profiles of one of the most influential living people in the world. The man in question is former Secretary of the Treasury, and the man who made Goldman Sachs into the hedge fund quasar and uber-prop trading desk (rhymes with Hedge Fund Tsar, a position Barack Obama may or may not be contemplating) that it is now, Robert Rubin. Rubin redefined the term risk arbitrage (or as some would say, riskless arbitrage, thanks to the helpful nudge here and there of whoever may have been in a position of "puppet" power at any given moment) by being among the first to discover (and definitely the first to repeatedly bet the farm, making boatloads when successful, and somehow not losing when not) the amazing synergies provided by Goldman Sachs' numerous relationships as they may pertain to the firm acting in proprietary trading capacity.
Recycling Old Girlfriends
Submitted by RobotTrader on 10/13/2009 15:34 -0500Amazing how these fund managers love to chase these 1999 hookers like INTC, all hoping to catch the next 300% gain in the SOX as so many remember from the old days. No different than calling that old girlfriend 10 years later, expecting her to look and act the same when she was younger.
It's Options Week Again
Submitted by Tyler Durden on 10/13/2009 15:02 -0500The most interesting chart out there is the Nikkei. The Nikkei has drawn a H&S on the highs, and we came back last night to retest the neckline around 10,130. Should the market open down (or even better GAP down) tonight, we have a perfect set-up to go retest the support line joining the lows around 9,700. A break there would be quite bearish. Anybody looking at selling equities here should absolutely look at the Nikkei as it offers by far the best risk/reward and the best set-up technically. If the market bridges the gap at 10,228 on the upside then give-up the trade.
This Is Not The Full Listing Of The Fed's Treasury Monetization Actions You Are Looking For
Submitted by Tyler Durden on 10/13/2009 14:09 -0500Due to popular demand by current and former Federal Reserve employees who lost track of their actions after the $100 billionth CUSIP, below we present a full detail of all the $297 billion in monetiz... pardon, perfectly normal Quantitative Easing actions performed so far by the Federal Reserve.
Gasparino Patiently Explains To Caruso-Cabrera What Breaking The Law Means
Submitted by Tyler Durden on 10/13/2009 13:50 -0500In a brilliant moment of sobriety and lucidity, Charlie does a phenomenal job of explaining to the cynical Caruso Cabrera(s) why the AG's attempt to prosecute Ken Lewis is more than just posturing and why "running for governor" has little to do with trying to get to the bottom of criminal abuse of fiduciary powers and shareholder fraud. Hopefully MCC(s) can finally comprehend logic (it is excusable if that is not the case: Gallium-Arsenide has been proven so much more efficient than Silicon at being a truly efficient AND/OR/NOT gate). And Charlie's masterful reporting is capped by pointing the obvious: if Ken goes down, he very well should bring down Hank with him. If nothing else, having Hank and Ben as present witnesses should incite whatever court this drama unwinds in to charge front-row Yankee ticket prices for attendance. If the "Dynamic Dollar Depreciation Duo" can for once help a city/state with their insurmountable budget problems, so much the better.
Was Bernanke Just Punk'd?
Submitted by Tyler Durden on 10/13/2009 13:12 -0500
Odd move in the DXY and the EUR/JPY. It appears that someone just bought a boatload of USD against the EUR/JPY. Yes, it is intraday, and yes, it doesn't mean jack unless at least someone else jumps on board. We will keep monitoring.
AIG's Compensation Troubles Set To Continue
Submitted by Tyler Durden on 10/13/2009 13:01 -0500Tsy Pay Czar Wants $198M In AIG Retention Pay Reduced -Report
Tsy Pay Czar Wants $45M In Pledged AIG Repayments
Tsy Didn't Take Broad Look AIG Pay Packages
AIG Execs Only Returned $19M Of $45M In Pledged Repayments -Report






