Everything may not be ok at once-iconic hedge fund Och Ziff, whose assets under management plunged to $33.6 billion as of Feb. 1 from $43.7 billion a year earlier, as clients redeemed $8 billion in 2016 and an additional, and record, $4.8 billion in the month of January.
The global "risk on" melt-up continues. After a modestly hawkish Yellen warned that every meeting is live, and refused to take March off the table, sending the dollar and yield higher and the S&P to fresh record highs, world stocks rose hitting a 21-month high on Wednesday with the dollar rising for the 11th straight day, the longest positive streak since July 2015.
When BofA conducted its monthly Fund Managers' Survey, and asked what is the most likely bear market catalysts, the responses were as follows: "protectionism" = 34%, "higher rates" = 28%, "financial event" = 18%, "weaker EPS" = 15%. The "smart money" also said that the best protectionist investment is one: gold.
"Nonfinancial corporate business leverage has remained elevated by historical standards even though outstanding riskier corporate debt declined slightly last year. In addition, valuation pressures in some asset classes increased, particularly late last year."
Traders in the fixed income and money markets are losing their religion. Slowly but surely, beginning at the long-end, record short speculative positioning in US bonds is being unwound as traders lose faith in Janet and Donald's double-whammy.