Merrill Demanding More Collateral From Hedge Fund Clients Today

Tyler Durden's picture

More market rumors of forced liquidations, this this coming from your favorite bailed out bank. If we get more we will post it.

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MyFriendMises's picture

2008 Redux.  If we thougth the banks were TBTF what will happen if some of the ultra leveraged Hedge Funds start coming apart.

Cue REM:  "It's the End of the World as we know..."

fallst's picture

CDS Margin Call Victims.... Don't Pay. Let Them Sue. Daylight will Sterilize Later. If they Extort with Ratings Threats, Sue the Ratings Agency. There. See, You don't need those "White Shoe" Boys!

John Self's picture

Those positions are already mostly collateralized.  So waiting for them to sue isn't really an option -- they'll just terminate the agreement and liquidate your collateral.   To the extent they're undercollateralized, then you're right -- they're probably screwed, because it's heading toward a run on the bank scenario (which is basically what always happens when derivatives are involved in a failing company -- see Lehman and Enron as examples).

John McCloy's picture

  I  knew it was only a matter of time before the dip buyers learned a lesson that would not soon forget. Pushing in leveraged long SOLELY because you have seen a rally day after day after day with economic fundamentals that tell me we are in a modern depression was always not worth the risk of just following momentum. Zero Hedge tried to point it out numerous times that volume was the key. For me Volume is a polygraph and a reliable one at that. 

The only real buying came in July and the massive rally was predicated on a gargantuan short squeeze. Well the Wiley Coyote just looked down folks.

Fresh dilution coming big banks way.

sumo's picture

When I watch the SPY volume on down-ticks, for some reason I think of a Mike Tyson punch.


RicktheDick's picture

Let the spiral begin. With widening spreads and no buyers it becomes a self-fulfilling prophecy.

John McCloy's picture

  Yeah because post collapse Russia which has seen their borders shrink substantially because of losing the Ukraine and much of the Caucuses would see no opportunity in a Mediteranean Peninsula and warm ports for a submarine base. Make no mistake Jacob our largest threat will come from Russia in the coming decades especially as we look considerably weaker to foes who are not even real opponents. I agree ZH should perhaps have a retraction section but trying to paint them as inaccurate is well foolish. Consider them the anti-propaganda.

Meanwhile Tim if you haven't noticed you have some futures to buy so get back to your terminal.

Jacob Dreizin's picture

Step outside of your mind for a second and re-evaluate the reasoning that you just put forth.

You are saying that, because action "A" could *conceivably* benefit player "B", any random internet rumor on that matter---however unsubstantianted and unsourced---must be either believed, or at least taken seriously.

Under that logic, no rumor would ever be false, right?  I mean, maybe Lloyd Blankfein set up OJ Simpson because after all, he's a jerk and it would make him happy to screw the black man over.  Sheesh.

You know John, the Russians post their foreign currency reserves and national pension fund balances online, and they simply do not have 50 billion Euro to throw around for a submarine base in Greece.

Even if Putin had 50 billion stashed up some secret sleeve, think about it, 50 billion for what?  For 50 billion Russia could BUY Ukraine, yes, the entire country, they could buy it all back.  Lock, stock, and barrel.

So, that rumor was nuts.

nikku's picture

So, you want ZH to post, "Sorry, that rumor was false."? Man, you're just a smart-ass. Look up the definition of rumor.

overmedicatedundersexed's picture

Russia has been out of the news since the elimination of poland's government leaders..

Russia has absolutely no interest in the restructuring of Europe and would never interfere with EU countries when they are in economic and political turmoil-- never. sarc off

Jacob Dreizin's picture

Oh yeah, you just proved beyond a shadow of a doubt that Russia wanted to bail out Greece for 50 billion Euro.  <Sarc off>  Then why didn't it actually happen, huh????  As I said, some people will beleive anything written anywhere on the internet, so long as it agrees with their preexisting convictions.

John McCloy's picture

 I believe one thing I read on the Internet today. And that is that you are here for a reasonand the recent fall in the markets are not sitting well with you and are angry sites like Zero Hedge exist because they force Wall Street to operate under more day of light. 

But hey speaking of authenticity of sources whats the difference between 5,000 barrels of oil a day and 75k barrels a day over the time frame of a month? 

Give up? Definite  unavoidable depression.

Jacob Dreizin's picture

"I am here for a reason".  Wow.  What if the reason is merely that I don't work today and don't feel like going out?  Do you seriously think that I am part of the "Plunge Protection Team" conspiracy, that goes around posting on ZH because, God knows, ZH is so important and the Government doesn't have anything better to do?  Are you insane?

And just FYI, I couldn't care less about the recent fall in the stock market because I no longer invest in stocks.  Anyone who does, had fair warning and I won't be shedding any tears for them.

John McCloy's picture

   No Jacob although I believe black helipcopters do exist they are much more rare than many believe. I am simply stating that your approach and critique was one that does not appear impartial and more emotional. 

Now if you had said something along the lines of, " Hey ZH I notice perhaps you guys do not always retract articles or leaks and just wanted to inform you in light of fairness and since I enjoy reading your articles I believe this should be a consideration" 

You did Jacob appear to identify yourself as a hostile. Zero Hedge bats close enough to 1.000 for me and certainly not all journalists are perfect.

Apostate's picture

Yeah, black helicopters exist.

Like most crappy vehicles from the M-I complex, I'm confident that they require constant maintenance from a huge team of engineers to keep from crashing on a regular basis.

Much like the Russian army these days is more or less a collection of butt-sex & vodka camps scattered around the country.

Times change... I'm more nervous about the Bloods down the block than the frog-man jumping through my window. 

mtguy's picture

Hey Jacob,

The fact is this is a great site to get alternative info and ideas. It doesn't mean you can turn off your turn off your mind. If you want all the information spoon fed to you, go watch Cramer. Do your own fact-checking. If you don't like it, go somewhere else, there's no one forcing you to be on here!

DonnieD's picture

Is this the same Jacob Dreizin?

Jacob Dreizin has six years of analyst, project management, and external relations experience in the Federal bureaucracy, Congress, and the lobbying and government consulting sectors, with a focus on budgetary and economic issues. He is also an enlisted veteran of the U.S. Army.

Manbarepig's picture

Lots of rumors here lately.  Some of them are true, some of them are false, it's like flipping a coin.

They're clearly advertised as rumors in the first line... take them or leave them. Most rumors have some grain of truth or are based on some sort of realistic possibility. Tyler isn't providing any of his trademark analysis and wit to the rumors, just the substantive stuff. The rumors he passes along "as is".

mister_x's picture

WSJ had an article on this yesterday:

So there is some truth to this. Yesterday's EOD selloff was most likely due to this as I suspected based on the price action.

Cognitive Dissonance's picture

Yet like a moth attracted to the bright light, you seem to come back for more. I'm not saying you're wrong or right, just that it's interesting this isn't the first time you've "complained", yet you come back for more abuse.

You must find some value in ZH. I consider that very good, that you can find your way past the stinking corpses to the live bodies.

depression's picture

If you want certainty, then I suggest you tune into CNBC and invest in 30 Year Treasury Bonds.

Volatility is spiking in response to a collapse in liquidity. The Op Ex unwind momentum probably peaked yesterday at the close. Forced margin calls happen.

Simple fact is, if there are more magin calls this morning, then there will be more selling this morning.

mikla's picture

If you want certainty, then I suggest you tune into CNBC and invest in 30 Year Treasury Bonds.

+1 ... Ouch.  (Was that a bitch slap?)  ;-)

This is actually a serious point:  Much of the financial "analysis" is merely speculation.  Most of the "economic theory" is unsubstantiated projection (e.g., biased wishful thinking).

I know what is this thing called "rumor", and calibrate to it.  I use them like sensitivity analysis.  What if this happens?  What if I'm right?  What if I'm wrong?  It's a data point that pushes the envelope regarding possible scenarios, all of which need to be considered, most thresh-holded out, and the remaining ones utilized on a risk-analysis basis.  (For example, [low probability * high impact] may weight more than a [high probability * low impact], ala Taleb.)

Much of the financial world these days is merely stupidly annoying speculation regarding central bank manipulation, and back-room deals through political officials -- I'd ABSOLUTELY prefer to get some speculation on what's going on, and I can calibrate the source and the message to historical predictive success.

Summary:  I'm a big boy, I can process the rumors, and they don't hurt nor scare me (they make me more robust regarding possibilities, trends, and causation).

Specifically in reference to Zero Hedge, I've found a few things that are colorfully phrased (you may call them distorted or over-stated, but c'mon -- there's some awesome prose in the original posts!).  However, the *vast* majority of what we see here IMHO is pithy and relevant.  Further, remember some plans are "true" (we live in a central planning world), but the plans will change in an instant (e.g., "whipsaw" is a powerful force), and that doesn't make the original "rumor" false (it was true at the time).

Tyler Durden's picture

The source is RanSquawk and confirmation has come from two trading desk sources. Would you like their names and social security numbers?

MyFriendMises's picture

Ohhh Snap... You just got bitch slapped by Tyler.

oklaboy's picture

I would put some ice on that...

Jacob Dreizin's picture

OK, but we have no idea of their level of responsibility within their respective organizations, that is, whether they have the big picture or are just looking at their own little piece of the pie, possibly misinterpreting or exagerrating the facts.  Possibly they could be new young staff with absolutely no sense of perspective at all.

I've worked in Congressional politics, so am very well versed in rumors.  I've had "secret sources" tell me that the world was ending, they weren't getting their benefits check, etc., and they were later proven to be outright INSANE.  So your "sources" don't necessarily mean anything.

As for those who accuse me of trolling, I value this site for the long analysis pieces (Marla, Lenoir, etc.) which are unavaible elsewhere, or at least not for free.  But that doesn't mean that every critic or everyone who disagrees is a "troll".  Anyone who thinks that way is just as closed-minded and lost as the "mainstream media" hacks that we all love to hate.

Tyler Durden's picture

When the fact passes the much more sensitive CNBC filter in a few hours, and is blasted as breaking news, will that set your mind at ease?

Jacob Dreizin's picture

If so, yes.  It would then have fallen within the 50 percent of the rumors that prove true, just like tossing a coin would give 50 percent heads.  But I don't ever see ZH *retracting* the other 50 percent.

BTW, I don't watch CNBC, I don't even own a television.

John McCloy's picture

  Oh you mean breaking news such as this?

Who at CNBC conjures up these headlines? Do you think Ben faxes, texts or twitters the producers these gems.

lance_manion's picture


Jake, I think you've become a little too emotionally involved in trying to hammer on whatever point you are trying to make.  Chill out dude.  Seriously.

MyFriendMises's picture

What makes you a troll is that you can come on a site and get the use out of some of the content while at the same time criticizing the creators of the site for what you don't like.  It is akin to having your mother wash your clothes for you and then telling her she folds them wrong.  It is just obnoxious.

Jacob Dreizin's picture

Sorry you can't handle a little disagreement, bro.  Obviously this is your little safe-haven and you don't like it when someone intrudes with a slightly different perspective.  I guess by your logic, if you live in America and get "use" out of it, then you have no right to criticize the government?  What's ZH about, then?

MyFriendMises's picture

It would be one thing if your perspective was substantive.  It is another if you are just criticizing how the site is being run.  I just don't get people who criticize something they don't pay for.  As for your analogy, I pay taxes therefore I have a vested interest in how this country is run.  You do not pay anything for your use of this site therefore you should go somewhere else if you don't like how it is being run.  Your comments are akin to a homeless guy criticizing the food someone gives him.

Takingbets's picture

The first paragraph of your post sounds like speculation too me.

Now who is the one spreading rumors around here?

Eally Ucked's picture

Special teams to the rescue, a little bit here and there. Jacob where are your other buddies? I think they will show up shortly?

MyFriendMises's picture

Not more rumors than normal.  Just more trolls.  I always tell people about this site and they used to always come back and say it was way to much conspiracy theory stuff.  However most of the so called conspiracies have subsequently come true so I am glad they post the stuff that they do.  While some might turn out to be false, many will turn out to be true.  Just my two cents. 

Rebel's picture

If you wait to report until rumors are confirmed, it may be too late to be actionable. ZH posts info/news/rumors early, allowing further investigation by the reader, and early action if warranted. I would prefer it this way.

Operafaust's picture

I stand by you on this one. Zerohedge first attracted me with its in-depth, off-the-beaten-track analysis. It felt like a website by professionals, for professionals, with a heavy dose of wit and sarcasm to spice things up.

More often though, I'm seeing too many rumors. I understand zerohedge has a policy of 'take it or leave it' but credibility becomes an issue at some point. I'd rather log in here than tune into CNBC any day, but Tyler and Marla need to start fine tuning the signal to noise ratio if they want to take Zerohedge to the next level.

mmlevine's picture

I have a suggestion - get off ZH and on to  Easy.

nikku's picture

As a former senior professional of an investment bank, who now resides "in the country," please disregard this advice.  I am not on a trading floor to hear the rumors.  I want to know what they are.  I am seasoned enough to understand that

unsubstantiated rumor = rumor, and

substantiated rumor = fact.

As long as you identify something as a rumor, I will take it for what it is.  I don't need ZH to be my personal rumor filter.  I have the government and FTV working together to filter--er censor--no-- distort what comes my way regularly enough.

w's picture

A well balanced comment IMO, I don't understand why someone felt the need to mark it as junk.

I'd like to add two things:

1. Rumours presented as such are harmless and can sometimes be very valuable (if only for the fact that they are running around).

2. From my perspective ZH has already done a lot of fine tuning and the signal to noise ratio (of the posts) has been considerably enhanced over time.

3 (/2) Nobody's perfect.

chindit13's picture

I stumbled on to this site just about the first week of its existence, though I did not begin posting under a pseudo until later.  In the thousands of articles TD et al have posted, I can probably count on one hand the few I thought were over the top, based on weak logic, or clearly rushed to print before they were given a good smell test.  That's not a bad record.

I can point out most of them if you'd like.  You are welcome to list your own.

Cheeky Bastard's picture

I hope AIPAC pays you well.


Jacob Dreizin's picture

Haven't worked there in over a year.  Nonetheless, your comment says a lot about you.

Cheeky Bastard's picture

Nonetheless, your comment says a lot about you.


No; not at all. But you working for AIPAC says a lot about you.

FYI; Im a humanist, a dying breed; I am, however, a moderate anti-statist.

While you, probably, base your life on what Talmud thought you, I take a non-partial view on the things that surround me. You will do anything for your state, even die for, because with the lack of your own personal identity you took the identity of said state and that, unequivocally , leads to a conclusion that you interpret, subconsciously, every critique against institutions and representative bodies of said country, as a personal attack on yourself, and your self-preserving instincts kick in and you, ferociously, defend your view, which is basically your observation of yourself via a proxy. And naturally, the deep pit in which your intellect slumbers, keeps getting deeper, and then paranoia enters the picture. Basically your reason is firing blanks and your intellect is non-existent. 

Now go pick up a nice coloring book and start educating yourself .... boy. 


Jacob Dreizin has six years of analyst, project management, and external relations experience in the Federal bureaucracy, Congress, and the lobbying and government consulting sectors, with a focus on budgetary and economic issues. He is also an enlisted veteran of the U.S. Army.

Judging by this; you are a low level apparatchik who has every interest in keeping the system which feeds him alive and strong. You have not held any position, or worked any job which was not directly related to Federal Government. You are basically just another leech among tens of millions of similar leeches who suck the blood from the productive capacity of all the nations in the world. 

I really feel sorry for you; and I dont say that because of what you do, but because you can not see that you are a) easily replaceable and nothing more than ordinary b) indoctrinated by the teat that feeds you.


Rick64's picture

CB I admire your intellect more and more each day.