• Tim Knight from...
    09/29/2014 - 19:50
    Which brings us to Clinkle, which is a firm founded by a 22 year old with no business successes behind him (which at least Color.com's founder could claim, as he sold his firm to Apple for...

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PIMCO Liquidations Begin; And So Does The Retaliation: All Bill Gross Tweets Deleted

The last few days have been hectic for PIMCO executives. As we already noted, expectations of outflows persist and today's open in CDS markets suggested major concerns among market participants that PIMCO redemptions would force selling through an illiquid market. Sure enough, Bloomberg reports that PIMCO's Total Return Fund ETF was behind the auction of more than $170m of Fannie Mae CMBS on Friday (and more BWICs were seen today). As one trader noted, "you're going to sell your most liquid stuff first." Additionally, PIMCO has seen fit to delete all Bill Gross' tweets... so here are the last six months for the record.



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Despite Late-Day Buying Panic, Stocks Close Red

Heavy volume and volatile price action early in stocks and high-yield credit markets subsided later in the day as despite several big stocks in the red, the indices jammed higher in the last hour desparate to get positive (on terrible volume) but failed. Treasury yields fell 3-4bps early on and stuck near the lows of the day (ignoring equity's exuberance). High-yield credit rallied back off early spike wides at 380bps (with desks noting heavy demand for protection) but remains worse than stocks. VIX tested above 17 and crashed back below 15.5. The USD ended the day unchanged (AUD weakness notable) but gold and silver slipped lower with oil (back over $93) and copper up on the day. Camera-on-a-stick smashed over 11% higher to $91.50 as the 41% float short continues to get squeezed out.



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China Housing Bubble Bursts: Q3 Land Sales Crater 50%

China may be doing everything in its power to divert attention from the simple fact that its housing bubble, the largest in the world in terms of both assets comprising it as well as divergence from fair value, has burst. But while there is no clear threshold of what constitutes a bursting bubble when it comes to housing, the latest data out of Soufun, China's largest real-estate website, which said that land sales have dropped a massive 22% to 1.7 trillion Yuan in 2014 so far, is likely as clear an indication as any that Beijing is about to panic. And if that was not enough Bloomberg adds that land sales in 300 cites followed by Soufun fell almost 50% Y/Y to 415.9 billion yuan in 3Q, while residential land sales declined more than 50% to 265.3b yuan in 3Q.



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Gross To Have Final Laugh? Whopping Two-Thirds Of PIMCO's Flagship Fund May Be Withdrawn

The reason why the first article we wrote on Friday after news hit that PIMCO co-founder was shockingly leaving the firm on Friday, was listing the massive bond fund's biggest holdings, was because it was only a matter of time: it, being of course, the massive redemptions that would follow Gross' departure by people that his 30+ tenure at the bond fund made very rich, and who couldn't care less about a brief central planning-inspired flame out. After all Gross isn't the first person who has lost the plotline due to the Fed's manipulation of every market. So just how bad is it? Not for Gross of course: he has made his billions and is simply doing what he and Icahn do in their age: what they love. No, for Pimco, where the redemptions requests are already flooding in. According to the WSJ, just two days after the Gross announcement (both of which non-workdays), already some $10 billion has been withdrawn. And that is just the beginning.



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The Last Time Traders Were This Short 2Y Notes, Rates Collapsed

As rates fell last week, speculators in 2Y Treasury Notes added aggressively to their short positions. Positioning in 2Y Notes is now at its most short since mid-2007 (as 10Y Bond positioning surged to its most long in over a year), and if history is any guide to what happens next, rates are set to tumble.



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The Oil Head-Fake: The Illusion that Lower Oil Prices Are Positive

The essence of the Oil Head-Fake Dynamic is the inevitable drop in oil price resulting from a sharp decline in demand (i.e. global recession) will trigger disruption of the global oil supply chain that will eventually push prices higher than most currently think possible.



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"Hong Kong Risks Losing Its Role As A Financial Capital," Deutsche Bank Chief Economist Warns

"Hong Kong clearly has its work cut out holding on to its role as the entry way to [investing in] mainland China," warns Deutsche Bank's Chief Economist Taimur Baig as he reflects on the civil disobedience this weekend. Even before this weekend's riots, Baig believes "Hong Kong will have to shape up," and while his base case suggests the unrest will not have a major detrimental effect on the economy per se, he fears it will add to investor angst - and along with macro uncertainty - leaves Hong Kong more precariously positioned than Singapore as Asia's major financial capital.



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Spot The Total Logic Fail

It appears the leadership in Spain has reached its panic-point. Following Catalonia's President Artur Mas signing of a decree calling for an ultimately democratic referendum on independence for the region, Spanish Prime Minister Rajoy uttered this mind-numbing phrase:

CATALAN VOTE PROFOUNDLY ANTI-DEMOCRATIC, RAJOY SAYS

It appears Rajoy's perspective on democracy and the will of the people is a little different as the situation has become serious enough that he has gone full-Juncker.



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Martin Armstrong Warns The West "Sanctioning Russia Is A Big Mistake"

Judging from the plunge in stocks and the Ruble and along with proclamations that Russia is "isolated" (when it is clearly not), The West's sanctions appear to be achieving their goals (propaganda-wise). However, Martin Armstrong warns "politicians just keep making the same mistakes over and over again," as he explains, to the people of Russia, "sanctions only make Putin stronger for they allow him to point to the West as the evil empire."



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Hong Kong's Luxury Shopping Street Right Now

The protests in Hong Kong continue to spread. The following images from Causeway Bay - one of HK's most affluent neighborhoods with many higher-end stores - show calm and well-organized protesters  (carrying slogans such as "Democracy is now here", "Occupy Hong Kong", and "We Are Not Enemies") have blocked a long section of a major thoroughfare called Hennesy Road (and have created first aid posts to attend to any injured). Locals report virtually no police presence for now, but that is likely to change as night turns to early morning.



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"This Is What We Do" Warns 2nd Oklahoman ISIS-Supporter Arrested For Threatening To Behead Co-Worker

It appears the appeal of ISIS-supporting beheadings in Oklahoma is growing. In what can only be described as an uncomfortable coincidence for the state, a 2nd Oklahoma man was arrested Friday for threatening to behead a co-worker. As The Oklahoman reports, Jacob Mugambi Muriithi, 30, who was recently fired from his job at a nursing home, threatened a female christian co-worker that he "represented ISIS and that ISIS kills Christians." When she asked him why, he replied, "This is just what we do," according to the affidavit.



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Can The US Economy Handle A Meaningful Downturn In Financial Asset Prices?

The key question now is “Can the U.S./global economy handle a meaningful downturn in financial asset prices?” The short answer is that it may not have a choice. The Federal Reserve has done what it can to juice the American economy and has the balance sheet to prove it. Central banks, for all their power, do not control long term capital allocation or corporate hiring practices.  Fed Funds have been below 2% for six years.  If the U.S. economy can’t continue to grow in 2015 as the Federal Reserve inches rates higher, there are clearly larger issues at play.  And those private sector problems will need private sector solutions. 



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Stunning Drone Clip Reveals Massive Size Of Hong Kong Protest

Ferguson was for amateurs. For those curious why the Hong Kong protests over the weekend have sent shivers across the world's capital markets, pushed the Hang Seng 2% lower, and impacted both European and US futures, not to mention leading to worries that China may get involved any second and result in another Tiananmen square event, the following clip from HK's Apple Daily, taken by a drone, shows just how massive the demonstrations, which according to some estimates involved just why of 100,000 people, taking place in Hong Kong are.



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USDJPY Surge Drags Nasdaq Green, Bonds Ain't Buying It (Again)

The Nasdaq, Russell 2000, and Dow Transports have been rescued in their high-beta manner all the way back to green by an initial USDJPY ramp to ignite some momentum "off the lows". Treasuries and credit refuse to  play along and even USDJPY has decoupled as stocks surged on a VIX-slamming (from over 17 to 15.50) ramp to unch. Safe-haven buying of camera-on-a-stick continues (+8% today).



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Russian Stocks Enter Bear Market As Ruble Hits Record Low

Russia's RTS Index has dropped over 20% from its post-Sanctions 1.0 highs in June, officially entering a bear market. The Ruble continues to slide, breaking above 39.50 against the USD - record weakness. Whether it is US/EU sanctions "costs" and/or merely EM risk-off hot money outflows is unclear, but what is clear is that Russian stocks are extremely cheap...



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