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Without Much Fanfare, The HSKAX Is Back To August 2007 "Quant Implosion" Levels

Tyler Durden's picture


While everyone knows that it was two and a half decades of imbecilic monetary policy courtesy of the Monstro [sic] that caused the credit bubble, few things were as much of a direct proximal cause of the market crash as the August 2007 quant collapse. And few indices tracked the obliteration of the M/N quant landscape that followed as well as the HSKAX (below). Well, after two years of painful grinding (for the market neutrals), the HSKAX is back to the same level to which it plunged in that week in early August 2007. What does it mean? Who knows, suffice to say that the market not only stopped working when the quants were all briefly destroyed back in 2007, but it marked the all time high in the S&P. We are now back to those same levels.Only this time instead ot the Market Neutrals providing the traditional market liquidity it is the HFTs, the NYSE DMMs, and the New York Fed. What happens next is anyone's guess.



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Tue, 11/30/2010 - 23:54 | 766873 johngaltfla
johngaltfla's picture

Thanks Tyler. There appears to be a new page in the financial crisis developing and I do not think the Fed is prepared to deal with it.

Let's call it Calillinoisfloridanewyorkmichiganstan so we can just avoid listing each of them individually....

Wed, 12/01/2010 - 08:48 | 767362 DavidC
DavidC's picture



Wed, 12/01/2010 - 00:21 | 766880 squexx
squexx's picture

The sooner we start rounding these bastards up and string them up, the better!


Wed, 12/01/2010 - 00:38 | 766967 chopper read
chopper read's picture

please, keep perpetuating this meme.  

Wed, 12/01/2010 - 00:07 | 766912 ebworthen
ebworthen's picture

O.K., I had to look it up "Highbridge Statistical Mkt Neutral A (HSKAX)"

"The fund invests in the equity securities that are undervalued and sells short securities that it believes are overvalued. It takes long and short positions selected from a universe of mid- to large-capitalization stocks with characteristics similar to those of the Russell 1000 Index. It may also invest in shares of exchange-traded funds." neutral investing in ETF's and mid- to large-cap stocks.


Either they changed the formula, the fundamentals have changed, or this is the barometer hitting a storm low on the evening of a sunny sunset.

Wed, 12/01/2010 - 00:12 | 766925 Dingleberry Jones
Dingleberry Jones's picture

Yeah, this article is pretty much gibberish to me. Your research helps a little, but I'm out of my depth on this one.

Wed, 12/01/2010 - 00:31 | 766952 bob_dabolina
bob_dabolina's picture

The liquidity providers stopped providing liquidity and the market plunged.

However, now we have the FED tinkering here and there, so what proved to be a good indicator in 2007 might not mean shit now.


Wed, 12/01/2010 - 01:13 | 767044 Dingleberry Jones
Dingleberry Jones's picture

Thank you.

Wed, 12/01/2010 - 06:00 | 767309 tmftdoyle
tmftdoyle's picture

bob, you nailed the problem, but it is not just limited to a comparison to 2007; the indicators that have worked for decades mean shit right now given the level of government intervention.

Wed, 12/01/2010 - 08:43 | 767360 scatterbrains
scatterbrains's picture

FED stops tinkering if the wikileak bank data implicate the Bernank, Giethner, nutsack etc. my oh my could you imagine all this shit coming to a halt as these crooks are dragged out in handcuffs ?   I know I know I'm dreaming

Wed, 12/01/2010 - 09:58 | 767483 TrafficNotHere
TrafficNotHere's picture

I think the wiki leaks bank release has the potential to be very damning. Planning on going into FAZ prior to the release.

Wed, 12/01/2010 - 01:58 | 767128 bluebare
bluebare's picture


Wed, 12/01/2010 - 00:25 | 766948 Tyler Durden
Tyler Durden's picture

Read the first hyperlink for a detailed explanation of HSKAX. The sad truth is we need to reference prior material constantly (and often rely on our readers' googling skills) or there would be no forward progress.

Wed, 12/01/2010 - 00:40 | 766972 chopper read
chopper read's picture

note: i did not junk you.


i very much appreciate the "when in doubt, post it" policy.  as always, we can work together to connect the dots.  thank you.

Wed, 12/01/2010 - 00:55 | 766995 dnarby
dnarby's picture

Those too lazy to read the whole thing, check the second paragraph of the conclusion (PDF).

Wed, 12/01/2010 - 01:19 | 767052 Dingleberry Jones
Dingleberry Jones's picture

Thanks for the heads up. Just too much info out there and not enough time for me to figure all of this stuff out. 

This is where "trusting your sources" wins out :)

Wed, 12/01/2010 - 03:30 | 767226 cossack55
cossack55's picture

Ah, the good ole days where you invested in an honest company that you believed held ethics similar to your own and either won or lost.  Some say even the market was relatively honest and above board.  Please, refresh my memory. When did that world die? I'm guessing 1971.

Wed, 12/01/2010 - 09:53 | 767474 Lux Fiat
Lux Fiat's picture

Please tell me that you haven't read LeFebrve's "Reminisceces of a Stock Market Operator" or Loeb's "The Battle for Investment Survival".  Same stuff, more or less, different century.  Honest markets are those where the operators know how to be subtle.

Wed, 12/01/2010 - 05:50 | 767306 TheWord
TheWord's picture


I thought this was also relevant:

"Finally, we conjecture that liquidations of a number of strategies and asset classes may
have started earlier. For example, other liquid investment categories such as global macro, managed futures, and currency strategies seem to have experienced similar unwinds earlier in 2007 as problems in the subprime mortgage markets became more prominent in the minds of managers and investors. The so-called “carry trade” among currencies was supposedly unwound to some extent in July and August 2007, generating losses for a number of global macro and currency-trading funds."

Wed, 12/01/2010 - 09:26 | 767405 I am a Man I am...
I am a Man I am Forty's picture

"What does it mean" - absolutely nothing

Wed, 12/01/2010 - 01:11 | 767006 ebworthen
ebworthen's picture

This link should work if the above one doesn't:

The fund manager has a BS in Computer Science and Applied Math from Cornell University in 1993.

The fund has an annual holdings turnover (as of Oct 6, 2010) of 638%.

What this means to me is that they are having a hard time finding anything worth chasing as far as return or profit.

Or, as Tyler noted, they may be engaging in the HFT game (and perhaps not doing so well).

Or, they know the gig is up for the time being, and have shorted their own stock and sold their own positions (1.95% expense ratio for investors so...).


Wed, 12/01/2010 - 03:32 | 767229 cossack55
cossack55's picture

Great. Folks with a background in finance or just good street smarts have been replaced by geeks and math freaks.  This should end well.

Wed, 12/01/2010 - 00:11 | 766922 monopoly
monopoly's picture

How does he do this? Tyler, you and staff are beyond amazing. It would be difficult if not impossible to find another site such as this, that while possibly not always right, is always truthful. I gladly give ZeroHedge my financial support as often as I can.


thank you.

Wed, 12/01/2010 - 00:14 | 766929 TheGreatPonzi
TheGreatPonzi's picture

Same here. ZH, first on financial news, far before CNBS and Bloomberk.

Wed, 12/01/2010 - 00:35 | 766964 JLee2027
JLee2027's picture


Wed, 12/01/2010 - 03:33 | 767232 cossack55
cossack55's picture

CNBS and Bloombunk provide financial news.  When did that start?

Wed, 12/01/2010 - 00:27 | 766950 alpds
alpds's picture


Could someone pls further elaborate on the significance of HSKAX and also provide a  bit of a background for the rookies. Thanks in advanced.


Wed, 12/01/2010 - 00:59 | 767007 alpds
alpds's picture

thnx, i did check the links after i posted my comment...

Wed, 12/01/2010 - 00:34 | 766961 Hephasteus
Hephasteus's picture

I would think the short term moving averages would have to be flipped a lot harder than these show to mark any significant quant meltdown. Think of it like a lake. Roting vegetable matter builds up on the bottom of it and then the lake "turns" or releases massive amounts of CO2. The 15 day moving averages don't look flippy to me.

Wed, 12/01/2010 - 00:34 | 766960 mcguire
mcguire's picture

so.  the quant fund strategy is losing.  i suppose this goes along with record high correlations among stocks.. and it is a set up for black swan events because of the same reason..

here is my question.  suppose just like any arb, the quant fund strategy was making money, and would continue to make money until the arb was closed, and what that would look like is a universe with high stock correlations..

combine this with robot traders, you get the recipe for an across the board flash crash???



Wed, 12/01/2010 - 00:39 | 766969 Hedge Jobs
Hedge Jobs's picture

has HarryWanker's latest stupid comment been removed?

i hope ZH bar that dipshit permanently. everyweek i am amazed at how stupid someone can be. this week it was the black monday sales pushing the market higher but market goes down. Last week it was the market over reating to the EY debt crisis and the market would "close in the green" 2 weeks ago it was  market over reating to the CSCO result and the market would go higher but market goes down.

he refuses to learn and contributes nothing but nonsense in the comments section of this site and even worse he uses the american flag as his avatar which is just another insult!

im starting a petition to have him removed permanently. Junks will be interpreted as support for this motion.

Wed, 12/01/2010 - 00:51 | 766990 qussl3
qussl3's picture

Just because you disagree with him doesnt give you the right to try to shut him up.

The ZH comment section is fast becoming a venue for self reinforcing biases, willing only to listen to what it wants to hear.

There is value in what Robotrader and HarryWanger posts, sure it may be jarring and dissonant to your reality, but to stick your head in the sand is even sillier.

ZH prides itself on cutting through the BS that the MSM spews, it will be a sad day when it cant smell its own shit.

Wed, 12/01/2010 - 01:04 | 767013 Spalding_Smailes
Spalding_Smailes's picture

I bet if you go back over robo's post over the last 16 weeks took all 40 stocks you would be up 50%.


He called 8-10 stocks in early august they all blew upward.... He bust on gold sure but his picks have been on 3 month bull run.

Wed, 12/01/2010 - 01:08 | 767031 Hedge Jobs
Hedge Jobs's picture

qussl3 its not that i disagree with him it is that what he posts is consistenly just plain wrong. im more than happy to hear opposing veiws, its what makes a market and i actively seek them out and agree with you about the self reinforcing biases here on ZH. but i dont think its to much to ask that if you are going to post an opinion as a bear minimum requirement it must at least be based on a slither of reality.


i like robo, Leo and a heap of others here that i dont always agree with but harry has absolutely nothing to offer.

Wed, 12/01/2010 - 01:21 | 767058 qussl3
qussl3's picture

Perhaps, he is good for laugh tho.

At the very least his rose tinted lenses reminds me to trade what I see not what think.

Wed, 12/01/2010 - 02:12 | 767150 HarryWanger
HarryWanger's picture

Nothing to offer? Really? I'm out here in real life, owning a real business that sell consumer discretionary. It would seem what I'm seeing and those I'm meeting with would have an insight that others don't get to see on the front lines.  I see it daily.

What I'm posting is the reality of my world of retail and my suppliers and retailers. We're seeing strength. Why you would want to censor a real life small business but post bunker guys like Martenson et. al who have no real connection with Joe and Jane America but theorize about the economy is beyond me.

I see sales and strength in those sales growing, and growing steadily. If that doesn't fit your anecdotal opinions, that's just plain denial and that's not good for any discussion.

Wed, 12/01/2010 - 02:16 | 767157 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Harry you were starting a journal:  "What I say I did today in MPLS".  Nobody cares!

Wed, 12/01/2010 - 02:21 | 767165 ebworthen
ebworthen's picture


Income of your customers?


U.S., North America, International?

If you are selling Rolexes to Wall Street and Chinese PLA members that is a lot different than denim and coffee to WalMart.

Wed, 12/01/2010 - 02:25 | 767171 HarryWanger
HarryWanger's picture

Industry? Consumer discretionary home decor.

Region? Right now nationally.

International? Licensing agreement tomorrow is aimed at international growth.

Customers range from blue collar to high income execs. 

Ok. that's really all. Can't keep my eyes open.

Wed, 12/01/2010 - 02:42 | 767191 ebworthen
ebworthen's picture

O.K., thanks.

Cautionary note:  home decor tends to be Upper Class high income.  The blue collars that go deep into it are often blowing the college fund on trying to save the marriage/mid-life crisis for Wifey.

People trying to make mortgage and health insurance and tax payments don't tend to blow money on home decor unless they are shooting the moon (Queen of Spades and all the Hearts in the deck). 

Often, this kind of spending is foolish spending, more foolish than home entertainment or cars even.

Best of luck.

Wed, 12/01/2010 - 08:19 | 767348 razorthin
razorthin's picture

Good for you, Harry.  I don't doubt what you think you are seeing.  I just say enjoy it now while there is still such a thing as credit and a discretionary consumer.

Wed, 12/01/2010 - 08:29 | 767352 gulf breeze
gulf breeze's picture

Home decor is terrible Harry.  I have imported from China and Korea for 13 years.  This year alone  I have had 4 stores with a avgerage life of 65 years liquidate and 2 owned their buildings.  All home decor shows are in the toliet from High Point, Atlanta, Dallas and poor Las Vegas.

Wed, 12/01/2010 - 02:33 | 767179 Cursive
Cursive's picture


You are a well known troll.  The veterans here know it.  The remnants from TBP and MarketWatch know it.  If you weren't a troll, why do you have that ridiculously British pejorative for a userid?  Possibly the only userid I could take less seriously would be "Harry Faggot."  So, anyway, why don't you enlighten all of your fans here with some basics like what small business segment you are serving and some y/o/y and m/o/m comps?  Who knows, you might actually find some whale on here who would love to partner with you or just buy you out like Google gobbling up Groupon.  What say, old boy?  You could even submit it as a story for TD and company.  I'd say it's about high time we had a guest post from the retail front lines from our very own Harry Wanger. Have yourself a pint and spill the beans, as it were!  Don't be a wanker old boy!

Wed, 12/01/2010 - 03:05 | 767208 chopper read
chopper read's picture


HW is a monkey trading trinkets.  no value added. 

Wed, 12/01/2010 - 03:12 | 767212 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Remember Harry back after the April 21st turn around?  He capitulated all his calls and began to panic.  It stunned the audience here, Cog Dis did a psycho analysis of him.  Harry merely goes with the flow.  He is the perfect indicator of dumb monie.

Wed, 12/01/2010 - 09:05 | 767375 Ese Pinche
Ese Pinche's picture

I think you are a personification of this entire post.  The strong are continuing to get much stronger (via Fed help of course..) and the weak are continuing to get much much weaker.  So the HSKAX model is getting crushed.  There are no inflections.  Harry and his business seem to embody a portion this dichotomy.  I dont know what biz Harry is in but going by what he says, it's a strong business with potential to grow.  Probably, one of the "strong getting stronger".  Then you have the flailing, drowning, and otherwise dying housing markets, traditional banking, etc; businesses that are going away/should go away if the govt would stay the hell out.  So where does that leave us?  Somewhere in the middle, IMO.  We are not headed to ABSOLUTE destruction... but we are not growing enough to sustain/create any real wealth right now either.  We are caught between a tug-o-war of the strong and the weak sectors of the economy.  But this is now... Where are in a couple years depends on who wins the tug-o-war.

Wed, 12/01/2010 - 01:22 | 767033 alpds
alpds's picture

"even worse he uses the american flag as his avatar which is just another insult!"

Care to expound? American flag was inspired by the flag of East India Company. The country is one of the biggest lies/hypocrisies this earth has known. 


Wed, 12/01/2010 - 01:49 | 767115 Hedge Jobs
Hedge Jobs's picture

i disagree, under the american flag, americans have died for and given the world far more great things than any other country ever has. At one time it represented everything that was good in western european culture.

"the country is one of the biggest hypocrisies this earth has known" In recent times, yes it has been. but its been hijacked and needs to be taken back. thats what places like ZH are all about.

"Luckily, the empire will soon fall apart" be careful what you wish for, i doubt very much you actually appreciate what this would entail.




Wed, 12/01/2010 - 02:04 | 767141 alpds
alpds's picture

"under the american flag, americans have died for and given the world far more great things than any other country ever has." 

When/where? are you referring to all the indians that were slaughtered, or atrocities & coupes in south america, or sales of arms during genocide in East Timor, or american corporation that supported and still support the likes of Mussolini and Hitler?

Misleading ya"

Wed, 12/01/2010 - 03:10 | 767211 chopper read
chopper read's picture

you're a stroppy teenager with your first history book.  one day, you will come full circle.  none-the-less, if you wish to vent your anger, do not punish your fellow subversive bloggers, but rather inspire some type of revolution towards an America that more closely represents your ideals which i would hope are founded in individual liberty.


Wed, 12/01/2010 - 03:40 | 767240 cossack55
cossack55's picture


Wed, 12/01/2010 - 09:13 | 767386 alpds
alpds's picture

hey wise sage, above is a list of various types of examples, which are more than plentiful throughout American history. The history you and hedge apparently do no know.

Name calling and cheap shots are very effective way to argue (works for american politicians) and it certainly ads much value to a debate.

First step of revolution is knowing the truth... 

"But the proles, if only they could somehow become conscious of their own strength, would have no need to conspire. They needed only to rise up and shake themselves like a horse shaking off flies. If they chose they could blow the Party to pieces tomorrow morning. Surely sooner or later it must occur to them to do it? And yet..." 1984, Orwell

Wed, 12/01/2010 - 11:02 | 767656 chopper read
chopper read's picture

i'm with you, bud.  i simply believe that your examples are a bit trite. 

Native American slaughter.  check.  African slavery.  check.  A rogue C.l.A.  check.  A long list of broken government promises.  check.

thanks for the info.


just remember, those old white guys also wrote a US Constitution that gave us the First and Second Amendments, so there is still a chance for freedom to prevail.  keep up the good fight, my man. 

Wed, 12/01/2010 - 18:42 | 769980 Quantum Nucleonics
Quantum Nucleonics's picture

Stalin would be pleased.  If they don't tow the party line, liquidate them!

Disagreement is the lifeblood of civil discourse.  If you don't like what someone has to say, ignore it or offer a compelling counter argument.

Wed, 12/01/2010 - 00:49 | 766986 sschu
sschu's picture

How does this correlate with the "follow-the-Fed" and "never-bet against the Fed" investing strategy?

It feels like we are on a precipice, but it has felt that way for a year!



Wed, 12/01/2010 - 01:04 | 767021 antidisestablis...
antidisestablishmentarianismishness's picture

A year?! This place is brimming with people who have had that feeling since popping out of their mother's womb, and they'll have it until the day they die.

Wed, 12/01/2010 - 01:00 | 767008 Cone of Uncertainty
Cone of Uncertainty's picture

Some Trichet word porn:

Speaking at a hearing of the economic and monetary affairs committee of the European parliament in Brussels, he said: "We have got a monetary federation. We need quasi-budget federation as well. Yes, we could achieve that if there is strong monitoring and supervision of what there is. Because what exists doesn't correspond with the actual situation that we are facing. It is a situation where we need quasi-federation of the budget."

Analysts saw the remarks as significant and were described by Elisabeth Afseth, fixed income researcher at Evolution Securities, as "quite astonishing".




Wed, 12/01/2010 - 01:12 | 767043 CrashisOptimistic
CrashisOptimistic's picture

One can never know what translations do, but that looks a great deal like he wants individual country budgets to be defined by the EU/ECB, without any local Parliaments having a say.

In other words, he'd like to take over Her Majesty's budget, eliminate the UK Parliament's input to the matter and tell them what they will tax and what they will spend.

Wed, 12/01/2010 - 01:38 | 767096 AUD
AUD's picture

"quite astonishing"

I'll say, I didn't understand a word of it.

Can someone tell me what a 'quant' is?

Wed, 12/01/2010 - 05:25 | 767294 Jasper M
Jasper M's picture

"Quant" = short for "quantify".

In practice, assigned to a school of belief in finance that thought thought they could precisely measure risk, and thereby eliminate it through precise hedging, often with very exotic derivative assets. This led to them thinking they didn't need no stodgey old risk management. 

Largely discredited when their scenarios they had assigned insignificant probabilities became manifest. And the Party is Just  Getting  STARTED!!

Wed, 12/01/2010 - 01:20 | 767056 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

PMs breaking out.  Asia is trading higher, and normally I would say we would test support tomorrow at $1375, but there is a whiteness of swans on the horizon blocking my view of support/resistence levels.  Turd was saying a move above $1400 would send gold skying upwards I think.  Lets take his word, it is a good one.

Wed, 12/01/2010 - 01:29 | 767074 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Well I decided to take a trip Along the Watchtower with the tfmetalsreport at his blogspot.  Like usual, Turd gives it to ya straight.

On to today/tonight's action on the Globex. As I type, the Feb11 gold is at 1390.10 with a high of 1391. March11 silver is 28.21 with a high of 28.25. Gold is particularly interesting. If it can draw away from 1389 overnight, it'll probably run up and tap 1400 before the Comex open tomorrow. At this point, Blythe and Her Monkeys have two options:
1) Bad
2) Worse
She can cling to this silly, H&S top notion and try to jam it down overnight. Absent some global "event", I don't think she'll try it. Too much genuine momentum against her at this point. More likely, she'll fall back to the area between the all-time closing high of 1412 and the all-time intraday high of 1426. She'll fight like hell to paint a "double-top" there for sure. Will it work? Who knows? Who cares? Even if it does work, it will only be temporary. Go back and look at her pathetically unsuccessful track record of painting double-tops at all the previous "all-time highs". She's worse than Prechter! Hey, wait a minute...I've never actually seen Blythe and Bob together, in the same room. Hmmm....interesting. I digress. Sorry.
Silver continues to struggle with 28.20-25. Lots of contrived "resistance" there. I've got a hunch that by late tomorrow or early Thursday, silver will smash through, hit a bunch of "buy stops" and catapult up toward 29. Let's watch and see.

Wed, 12/01/2010 - 02:14 | 767152 hugovanderbubble
hugovanderbubble's picture

Please if anyone could tell more info details about JPM Silver Derivatives Exposure,

I´ll appreciate



Wed, 12/01/2010 - 02:19 | 767161 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


He said that the total amount of gold mined “since the days of Nefertiti” was 3.5 billion ounces (to put this in prospective, JPM is short 3.3 bn. ounces of Silver at the moment)
Wed, 12/01/2010 - 09:08 | 767379 primefool
primefool's picture

Nefertiti - hmm ..that was a great Miles Davis album. Wow - so much gold mined since 1967?

Wed, 12/01/2010 - 01:31 | 767081 Dan The Man
Dan The Man's picture


this article makes me feel (more) dumb.

"...Seeing as how the VP is such a VIP, shouldn't we keep the PC on the QT? 'Cause if it leaks to the VC he could end up MIA, and then we'd all be put on KP."

Wed, 12/01/2010 - 01:33 | 767085 RobotTrader
RobotTrader's picture

Wed, 12/01/2010 - 01:42 | 767106 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Blackhawk Ben had to say he is worried about the jobless to get this action.  What a desperate shmuck.

Wed, 12/01/2010 - 01:40 | 767104 RobotTrader
RobotTrader's picture

I think Harry Wanger works for NetFlix.

Can't blame him for being optimistic.

Can't figure out why you guys constantly junk him.


Wed, 12/01/2010 - 01:46 | 767111 TheGreatPonzi
TheGreatPonzi's picture

This chart is monstruous.

PE: 77.66

Even worse.

How can someone buy this? The "pop" of the bubble will come, like everytime. Back in the 2000s too, people were saying that everything was different, that buying a company at 100x its earnings was the new normal, that the numeric revolution was going to create an endless amount of wealth.

Wed, 12/01/2010 - 18:47 | 770006 Quantum Nucleonics
Quantum Nucleonics's picture

We're gonna party like it's 1999!

One argument for buying NFLX at this valuation is the 30% short interest.  If it gets driven higher, all those shorts jumping out the window would drive it even higher into orbit.  See: Volkswagen

Wed, 12/01/2010 - 01:58 | 767126 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Tryin' to kill the movement with the new cointellpro"

Wed, 12/01/2010 - 02:16 | 767155 HarryWanger
HarryWanger's picture

No, Robo, I don't work for Netflix, just a small business I've owned for 9 years now. 

It's late and I have a major licensing deal to sign after much discussion tomorrow. This will quadruple our business and take us international. Seems the demand dictates more product. That doesn't happen when the world is collapsing.

Good night - exhausting day.

Wed, 12/01/2010 - 02:25 | 767172 ebworthen
ebworthen's picture

Hmmm...a deal that will "quadruple" his business...Harry, you are sounding like the Netflix chart above.

No caution?

Are you leveraged?  How much?

JPM and GS would love to have your assets if things turn down; and if you can't pay, it becomes part of their debts to justify another bailout, eh?

Wed, 12/01/2010 - 03:11 | 767214 chopper read
chopper read's picture

my nephew quadrupled his business in less than an hour.

...of course, it was a lemonade stand. 

Wed, 12/01/2010 - 08:41 | 767358 jm
jm's picture

Good luck with the deal.

Wed, 12/01/2010 - 08:26 | 767350 razorthin
razorthin's picture

very taser-like chart.  nice.

Wed, 12/01/2010 - 01:42 | 767107 gwar5
gwar5's picture

I checked out the hyperlink, it was good background

Indices down=bad.......Indices way down=real bad.......Indices record low down= SHTF

If the Fed is going to juggle that much shit, they're bound to drop some turds. Don't look up.

My favorite dark tracking indices is the one developed Dr. and Mrs. Ball, and a Mr. Schwetty, who track rampant insider selling. 

That's right: The "Schwetty-Balls Omen" was recently triggered when insider selling exceeded  8000:1.

We just need to find a cool name for that one... or something.




Wed, 12/01/2010 - 06:46 | 767319 VFR
VFR's picture

Not sure I read the finviz data correctly but I see the current sell/buy ratio is at least 130:1 on value as buys are limited (only 17) and sells are restricted to the first 200 on the public facing site. Yikes what is the real ratio


Schwetty balls indeed.

Wed, 12/01/2010 - 02:19 | 767160 callingnew
callingnew's picture

about a month ago it was reported on zerohedge that a fund's research arm came to the conclusion that the stock market was broken and that basically it was time to cash in one's chips.  the fund was based in new jersey and i remember a poster made a joke because it's name was similar to some paranormal research outfit.  can someone please remind me of the name of the research firm.

Wed, 12/01/2010 - 02:55 | 767203 Attitude_Check
Attitude_Check's picture

I think this is the case that the fund can't find any good long prospects, so to be market neutral they can't have many shorts either.  Therefore they have less opportunities to make money.

Wed, 12/01/2010 - 03:31 | 767228 Tense INDIAN
Tense INDIAN's picture

hasnt this index been the most correct predictor for market crashes this year...3 out of 3

Wed, 12/01/2010 - 04:33 | 767278 Die Weiße Rose
Die Weiße Rose's picture

Seems like the only investors still left in the  HSKAX Mutilation Fund

are some comatose brain-amputees who voted for euthanasia back in 2007

and are still waiting ...

The investment seeks to provide very long-term positive return.

The fund invests in the equity securities that are overvalued

and sells short securities that it believes are undervalued.

hey - wait a minute ...

Top 10 holdings     

          Security                                 Net Assets

  1. JPMorgan Prime Money Market Fund 99.59%
  2. J.C. Penney Company, Inc. (JCP) 28.46%
  3. NVIDIA Corporation (NVDA) 24.73%
  4. Kraft Foods, Inc. (KFT) 23.22%
  5. Google, Inc. (GOOG) 22.83%
  6. Alcoa Inc. (AA) 22.68%
  7. Altria Group Inc. (MO) 22.56%
  8. Philip Morris International Inc (PM) 22.54%
  9. Medco Health Solutions, Inc. (MHS) 22.06%
  10. Wal-Mart Stores, Inc. (WMT) 21.75%
Wed, 12/01/2010 - 05:44 | 767304 Rick Masters
Rick Masters's picture

Information and analysis like this is why I can't stay away from Zerohedge. It's second to none and given what my guesstimate is as to the site's budget compared to CNBC's says a lot and that channel should be ashamed. But on the flip side Tyler, Marla and those three other guys you rarely hear from should be proud. Wow. Great job. However, what's with the math questions, my five-year-old nephew could answer them; maybe some of the riff raff would go away with harder, more algerbraic questions but that also might be too elitist and scare away people at a time when this info desperately needs to be heard.

Wed, 12/01/2010 - 09:59 | 767481 anony
anony's picture

Not so.

You can find, for free, an App that will solve anything Tyler throws at you.

Polynomials, quadratics, calculus?  Piece of cake.

Waste of bandwidth, unless he's shilling for, MY ALGEBRA. com


Even a spellcheck to correct stuff like, "algerbraic"

Wed, 12/01/2010 - 07:29 | 767332 BetTheHouse
BetTheHouse's picture

Case Schiller yesterday was a shocking gut punch.  European debt contagion spreading faster than the clap in Baltimore.  This HSKAX indicator is scary. Right now? Dow futures in the green by 100.  All makes sense to me. 

Wed, 12/01/2010 - 07:38 | 767333 MiningJunkie
MiningJunkie's picture

Cash is trash. Short the FRN' s with reckless abandon and you will win.

Wed, 12/01/2010 - 07:38 | 767334 MiningJunkie
MiningJunkie's picture

Cash is trash. Short the FRN' s with reckless abandon and you will win.

Wed, 12/01/2010 - 07:46 | 767339 GoldbugVariation
GoldbugVariation's picture

Is there a proxy for shorting NFLX?  (Apart from Put options?)  My broker won't let me short it as he says there is no borrow available.

Wed, 12/01/2010 - 09:24 | 767402 TWORIVER
TWORIVER's picture

SQQQ will do better than a NFLX short.

Wed, 12/01/2010 - 08:35 | 767353 christ mark
christ mark's picture

What a utilization of tools and effects you did, It's really amazing work, I am inspired by your work and obviously this blog is perfect.

Wed, 12/01/2010 - 08:35 | 767354 Silverhog
Silverhog's picture

Home sales in my area are way down. Worse than it was a few months ago. Hope everybody has a nice Christmas, because after Jan. 1st things are going to get ugly.

Wed, 12/01/2010 - 08:41 | 767356 papaswamp
papaswamp's picture

Challenger job cuts report an increase in layoffs over last month to highest level in 8 months.....ouch.

Wed, 12/01/2010 - 08:45 | 767361 Die Weiße Rose
Die Weiße Rose's picture

If you want to short NFLX or Google or Apple or Amazon or GM...

If you short any S&P500 stocks or if you sell anything or you dare to even touch any button near the sell-button, you will be shot.

After that you will be quartered and then hung up high outside Wall-Street Stock Exchange as a deterrent to ANY TRAITOR for even whispering anything else but BUY !

These rules also apply to all Treasury monetizations QE2 - 15, QE16 - 234 and up to QE 95423 to 18948875620991.5 and for all Galaxy Coupons maturing 00:00 GMT Dec 24 in the year of 4010 on the US colonial planet Uranus future bond-market, and no later than 2000 years after the final Recovery from March 2009 on previous host Planet Earth GMT. (place of origination)

(Registered owner of Uranus)

POMO Chairman Ben

Wed, 12/01/2010 - 09:06 | 767378 primefool
primefool's picture

Tricky Trickster sez something along the lines of " people are always underestimating me" ( Maybe he's a fan of Don Rickles). So Euro rallies and all is well.

I do hope most sincerely that Tricky realizes that he has raised expectations with his rhetoric. That markets now expect him to deliver - Something. If he fails to deliver, if he thinks he can bluster and bravado is all it takes - he will soon have a rude shock as things will spriral down even faster.

Wed, 12/01/2010 - 09:08 | 767381 cbaba
cbaba's picture

Thanks Tyler.This is great stuff.

As i understand from the references and the pdf file link it all boils down to domino effect.

few guys pulling out their money and the result is collateral damage/loss for other hedge funds.

I am guessing the CDS market linked all big banks and corporate America, that's why they couldn't allow more banks to fail and bought by others to stop the contagion effect.

But sometime in the near future we will see a financial meltdown, it will start with failure of one of the financial companies and will create a black-hole to suck all others.


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