Between 1990 and 2010, eventually 37 banks would become JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup. The “Big Four” retail banks in the United States collectively hold 45% of all customer bank deposits for a total of $4.6 trillion... as the biggest got biggest-er all thanks to the very visible hand of The Fed's free money.
How overoptimistic are Wall Street forecasts year in and year out? On average, forecasts were wildly bullish, even with the gains in recent years with results no better than a coin toss as to whether the S&P came in above or below the average forecast. Nonetheless, every year had one thing in common: Not once did a consensus predict a down year.
Here’s a newsflash that CNBC didn’t mention. According to the BLS, the US economy generated a miniscule 11,000 jobs in the month of December.
Derivatives like credit default swaps turned a mere bubble in the US housing market into a global financial catastrophe...
While most hedge funds will be glad to close the books on a year in which they once again dramatically underperformed a market which hugged the flatline courtesy of just a few stocks (even as most stocks posted substantial declines) and where "hedge fund hotels" such as Valeant suffered dramatic implosions, a handful of traders generated impressive returns for their investors and made billions by going against the herd.
Needless to say, these names are just the beginning: once the redemptions - and gating - genie is out of the bottle, there is no putting it back.
Because when your year-end bonus depends on you not seeing it coming, you don't.
Moments ago, a third domino fell as Lucidus Capital Partners, a high-yield credit fund founded in 2009 by former employees of Bruce Kovner’s Caxton Associates, has liquidated its entire portfolio and plans to return its $900 million in AUM.
Futures Resume Slide After Oil Tumbles Below $35, Natgas At 13 Year Low; EM, Junk Bond Turmoil AcceleratesSubmitted by Tyler Durden on 12/14/2015 06:51 -0500
With just 72 hours to go until Yellen decides to soak up to $800 billion in liquidity, suddenly we have China and the Emerging Market fracturing, commodities plunging, and junk bonds everywhere desperate to avoid being the next to liquidate.
And just like that last week's junk bond debt fund liquidation and redemption suspension, which first struck at the mutual fund giant Third Avenue and promptly spread to a hedge fund launched by the former heads of distressed and high yield trading from, get this, Bear Stearns, and was supposed to be quietly buried, went front page and nuclear following a WSJ report that the CEO of Third Avenue, David M. Barse, who had been with the company for 23 years, has been fired.
When was the last time the same index was at precisely 17.24% and rising? The answer: the weekend Lehman Brothers filed for bankruptcy
In a supreme twist of irony, Bear Stearns is back - maybe not the firm itself - but the people who were in charge of its distressed and junk bond trading group, and just like the summer of 2007, it is an ex "Bear"-run hedge fund that was the first to gate, just as the credit cycle is turning and the default cycle has begun, as we explained last week, just one day before everyone's attention finally focused on junk debt.
Here Is "Gate" #2: $1.3 Billion Hedge Fund Founded By Ex-Bear Stearns Traders, Just Suspended RedemptionsSubmitted by Tyler Durden on 12/11/2015 20:59 -0500
Moments ago Dow Jones reported that the $1.3 billion Stone Lion Capital, a distress-focused hedge fund, has just suspended redemptions after ""substantial requests."
Here is the biggest difference: back then total debt/GDP was 61%. Now, it is 104%, with the total US debt just now shy of $19 trillion.