Bond

The Top 100 Hedge Funds Of 2016 According To Barron's

Here is the table of the Top 100 best performing hedge funds of 2016 ranked by their 3-year compound return, with an average return of 16.98% (ranging from 30% to 12%), outperforming the S&P's 3 year return of 15.13%.

Hedge Fund Manager Charged In Insider Trading Case Commits Suicide

Last week, we reported on the historic insider trading bust that took place at the soon to be sold Visium Capital, in which, among other accusations, U.S. Attorney Preet Bharara in Manhattan charged Sanjay Valvani of fraudulently making $25 million by gaining advance word about U.S. Food and Drug Administration approvals of generic drug applications. Moments ago, Dow Jones reported that the same Sanjay Valvani, charged in the Visiuam insider trading case, was found dead this morning in an apparent suicide.

German Top Court "Reluctantly" Rejects Challenges To ECB's OMT Program, Lists 6 Conditions

With traders already on edge in illiquid markets ahead of the Breferendum, one potential risk to sentiment today was the long-awaited decision by Germany’s powerful constitutional court whether Mario Draghi's OMT, or Outright Monetary Transactions, was constitutional. However, any lingering concerns were swept away when the Kardinals of Karlsruhe "reluctantly" ruled in favor of the one of the European Central Bank’s most important tools to fight financial crises, which however was caveated with six specific conditions.

"Whatever It Takes" Wasn't Enough

Bond manager Jeffrey Gundlach made headlines this week with the comments “central banks are losing control.” I would suggest that central bankers actually lost control back in 2012. Mario Draghi’s “whatever it takes” pledge actually amounted to concerted central bank intervention to shield global markets and economies from the intensifying forces of the downside of a historic Credit Cycle. The global Credit boom persevered for a few more years, right along with historic market distortions and economic maladjustment. Downside risks have grown significantly.

Anxiety Builds As Money Managers Near Record Long Gold Position

"There’s still a lot of fear out there," warns one investor as the combination of event risks (e.g. Brexit, Spain, US Election) and the contagious collapse of central bank credibility has asset managers around the world piling into bonds and bullion. With negative rates now de rigeur, global developed market bond yields are pushing record lows as demand for protection from fiat debacles in precious metals (and alternative currencies) has sent money managers long position near Aug 2011's record highs.

Fed Congressional Testimony Preview: Janet Yellen's Shot At Redemption

Google "The Fed" and the search engine will offer to autofill your query with "surrenders," reflecting market concerns that The Fed has abandoned its recently more upbeat take on the domestic economy. During this week's semiannual monetary policy report to Congress, the success/failure of this appearance will hinge on the tone she chooses to strike and the conviction investors hear in her testimony and in Q&A. With so much chatter about the Fed “Losing credibility” with markets, this will be an important chance for Chair Yellen to set the record straight.

The Problem With Corporate Debt

There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour.

The Economy Is Not What It Seems

The last two-quarters of economic growth have been less than exciting, to say the least. However, these rather dismal quarters of growth come at a time when oil prices and gasoline prices have plummeted AND amidst one of the warmest winters in 65-plus years. Why is that important? Because falling oil and gas prices and warm weather are effective “tax credits” to consumers as they spend less on gasoline, heating oil and electricity. Combined, these “savings” account for more than $200 billion in additional spending power for the consumer. So, personal consumption expenditures should be rising, right?

Is Another Financial Crisis Coming: This Chart May Have The Answer

There is one chart that shows that underneath the placid surface of the S&P not all is well. The chart is the following, and demonstrates the substantial recent selloff in US bank stocks, which have been a near-flawless 'canary in the coalmine' ahead of major market inflection points, and which have successfully predicted most major crashes inthe past several decades. 

"Renormalization" Is Dead: The Market Is Pricing Just One Rate Hike Over Next 3 Years

Rates shock: market now pricing only one Fed hike over next 3 years. As bond yields in Europe and Japan hit new historical lows this week, the US 10y yield fell to a 4-year low, just 20bps above its 2012 historical lows. This followed a weak payrolls report, Brexit uncertainty, the beginning of the ECB’s corporate bond buying program and a very dovish June FOMC meeting which significantly cut rate forecasts in the out years. 

This Is What The Coming "Bond Shock" Will Look Like

The only thing that can halt the tsunami of bond buying, would be a Bond Shock, an event that is certain to take place, the only question is when. As BofA points out, the relentless chasing after government paper will change "if Quantitative Failure spreads from Europe & Japan to the US."  Here's how to time it and what it would look like.

Head Of India Central Bank Unexpectedly Announces Intention To Leave

The worst case outcome for many Indian investors came true this morning when head of the RBI said he would return to academia when his term ends on Sept. 4.  Rajan was generous in his parting words, saying government reforms, together with steps by regulators will lead to greater job growth, prosperity for our people. Rajan said that “I will, of course, always be available to serve my country when needed" and added that “I am confident my successor will take us to new heights with your help."