Archive - Sep 2009 - Story

And what better way to kick off the short work week than the forced administration of productivity killing legislation and strong (but voluntary) dose of Radio Zero?

Let's call it 8:30 (ish) ET.  URL unveiled here with great fanfare 15 min before (or so).

Till then, requests, legislative markup, stories of a lack of productivity all welcome via AIM here: radiozh

Update: Get your French Workweek on: http://cdo.zerohedge.com:8000/listen.pls

Update 2: Radio Zero is on EFNet!  #radiozh

...At least for marketing purposes. It appears Fund of Funds are staging a come back. And investing in momentum funds. Yes, you read that right. Investors are willing to pay someone 2 and 20 to heatmap stocks for them, and there is an extra 0.5 in there somewhere if the heatmapping occurs at exactly 3:30pm each and every day. Which is why Zero Hedge dug through its archives, with the goal of reminding its readers just what a seemingly great idea activist funds were as recently as 3 years ago: so good in fact, that UBS had dedicated an entire fund for the sake of chasing Activist returns. We challenge readers to go through the roster of investees and to tell us how many of the highlighted funds are still in operations. (We would go so far as to add Barry Rosenstein's Jana to the list of "not-so-YTD-ourperformers").

Given that the open thread on the main page got out of control---impossible to navigate---there you go.

Recently, we have had a rally in the bond market, a rally in the stock market, and a rally in gold bullion with tame currency moves. What gives?

The first week of historically the worst month in stocks showed big volume come in early in the week on the sell-side in equities and big volume on the buy-side in gold the very next two days. Insiders are selling at record levels, volume is expanding as stocks contract, and gold and bonds are rallying. Green shoots?

It's been another one of those weeks.  The good news is, the next one is shorter.

Get ready.  Radio Zero is going into labor (day).

URL to emerge 6:30 (ish) ET.  Guests arrive at Studio Zero around 8:00 ET, so expect things to start getting wild then.

Meanwhile, chat up the DJ / make requests / send mp3s (to which you own the rights): here.

Update: Get your audio epidural here: http://cdo.zerohedge.com:8000/listen.pls

Our rates, reach and potential.

The long weekend is upon us. Please use this space to discuss anything that is relevant, or that may need our focused attention.

Also, a reminder that there is a forum for extended threads.

The soapbox is yours.

China is exploring the use of "regulatory tools" to pull some capital out after a record H1 of lending.

If you ever needed to see a formalized definition of what momos are and why they believe chasing momentum is actually a credible strategy instead of a self-perpetuating bubble that sucks many of their kind in, until the musical chairs game stops and then you have a mad dash for the fire exits, read the below press release by AQR, issued when Cliff Asness' fund decided to go pedal to the metal in momoism. And keep in mind Cliff is not alone - these are the same "strategies" that gun up the market every day at 9:45 am, noon and 3:30 pm, simply because "it has worked in the past." Then again, the question, just like in the RenTec case, is who is on the other side of the trade that recurs like clockwork each and every day and where just 60 minutes of trading accounts for over 70% of the entire intraday stock market movement over the past 6 months. Another key question to consider as more and more momos pile into the momentum trade is what happens when it fails and all the previously natural buyers become very unnatural sellers. Will be a sight to behold when the momentum flips. But for now, someone is very happy to keep feeding the momos, who, with Pavlovian regularity, keep coming back, until one day the Skinner box fails.

Some stunning revelations have been disclosed in the David Kotz 477 page report on SEC's colossal (and in normal societies, terminal) blunder with Madoff. Primary among them is that everyone's favorite liquidity provider RenTec was not only an indirect investor in Madoff via its Meritage Fund of Funds, not only was fully aware based on internal correspondence that Madoff was a pyramid scheme, but that it did nothing to notify the authorities, and also decided to keep half of its investment with Bernie, even after numerous internal emails certifying the illegitimacy of the fund way back in 2003.

"This situation is economically impossible; at some point, U.S. debt would reach a level so high that creditors would stop lending us money. The question, though, is how the situation will be resolved. Will politicians confront the policy choices or delay them to the point where they will be forced upon us due to a fiscal crisis? The longer we wait to take on these issues, the worse they will get and the more painful it will be to change course." - CRFB

Relllllaaateeef Vaaaalue? What dat?

Must be so profitable to have i) an infinite array of momentum chasing quant clients and ii) an overeager ETF trading desk consisting entirely of former Tetris world champions. And after all, it makes all the sense in the world to lift consistently rising offers in a volumeless, newsless market.

Adding insult to injury- it's bad enough the American worker has the crappy 9 to 5er, the shared cube with the office loud-mouth, and the ever worsening benefits package- not only all this- his/her boss brings home considerably more. At a growing ratio of well over 300 to one!