"The top 25 hedge fund managers made more than all the kindergarten teachers in the country," declared President Obama. One side supports him, and the other defends hedgies. Both get it partially right.
"Beijing has not yet declared a formal air defense identification zone (ADIZ) over the South China Sea, unlike the one it established over part of the East China Sea in 2013, nor could it today enforce such a zone effectively with its current fighters. However, with its reclamation activities continuing, and the Obama Administration apparently having decided to challenge China’s claims, the US and China are now potentially closer to an armed encounter than at any time in the past 20 years. Here are three ways the US and China could go to war..."
The Shanghai Composite is on the verge of 5,000 and has more than doubled in the past year but this may just be the beginning. The reason: if the Chinese stock bubble bursts, that will be the beginning of the end of the greatest con game in history.
"If, as the ECB's Coeuré said, you are concerned about the rapidity of the market moves, it seems odd, in our view, to give everyone an incentive to get longer today only to sell again tomorrow."
With HFT algos now firmly entrenched in FX markets we weren't surprised to learn that volatility is rising, bid-ask spreads are blowing out, and liquidity is vanishing. Expect things like last October's algo-driven, Fed-assisted Treasury flash crash to become par for the course in FX markets as well, with harrowing USD, EUR, JPY, [fill in the blank] ramps and flash crashs becoming the norm and leaving panicked central bankers desperately trying to figure out what happened after the fact.
No matter what investors SAY they will do, they will almost always succumb to the emotional investment mistakes caused by being human.
"The Fed has dragged out the normalization of interest rates way beyond what is prudent... At some point... the market is going to say ‘on my god, we’re so far behind the curve’ and force an adjustment that is going to be wrenching... when this “wrenching” adjustment kicks in, it would turn into a market disruption at a level “seven or eight” on a scale of 10, with 10 being the worst."
Yesterday China's richest man, Li Hejun, lost more than half his fortune when his solar company stock suddenly crashed over 50%. Overnight it happened again, and Hong Kong’s securities regulator, warned other investors to exercise "extreme caution," as Hong Kong's best-performing stocks this year are crashing in a serial, tulip-like manner. And another billionaire was promptly wiped out: Pan Sutong started the day engorged with wealth after his companies Goldin Financial and Goldin Properties had risen 300% this year. By the close he had lost 60% of his wealth!
The uncertainty surrounding the inevitability, if not the exact timing, of multiple and possibly overlapping volatility drivers is itself a source of volatility. For the average person, these signs can be scary. Taking steps to avoid the circus as much as possible, such as extracting money from the markets, securing personal assets, and waiting out the swings, can be a source of emotional comfort and future financial stability.
"... it was suggested that the tendency for bond prices to exhibit volatility may be greater than it had been in the past, in view of the increased role of high-frequency traders, decreased inventories of bonds held by broker-dealers, and elevated assets of bond funds."
Puerto Rico is racing the clock ahead of a July 1 deadline to pass a fiscal budget for 2016 and scrape together $360 million due to creditors. Without a budget, the commonwealth will face a partial government shutdown and may be unable to issue $2.9 billion in oil-tax bonds needed to pay The Government Development Bank.
Everything was going fine for Beijing Baoefung Technology and then, the unthinkable happened...
According to Fitch, nearly 40% of credit in China is outside bank loans, meaning that between forced roll-overs, the practice of carrying channel loans as "investments" and "receivables", inconsistent application of loan classification norms, and the dramatic increase in off balance sheet financing, the 'real' ratio of non-performing loans to total loans is likey far higher than the headline number.
Gen. Wesley Clark has been a busy man since retiring from public service with a plan to make $40 million. In addition to chairing notorious investment bank Rodman & Renshaw, the former NATO allied commander and one-time Presidential hopeful has thrown his face and fame behind a plethora of OTC-listed companies, Bloomberg reports. From grilled cheese sandwich trucks to hydroponic lettuce companies run by the real-life Bud Fox, Clark's name has become so synonymous with doomed penny stocks that one fund manager calls his very appearance on a company board "a red flag."
Real Estate is a highly “illiquid” asset class ‘most of the time’. It always has been and always will be. However, some times, such as now - and from 2003 to 2007 as a prime example - when liquidity is flowing like water, Real Estate’s illiquidity is masked. Speculators can do no wrong. Simply having access to short-term or mortgage capital to purchase Real Estate guaranties a double-digit return. This continues until one day, suddenly, it doesn’t; and, the snap-back to the true, historical illiquid nature of the Real Estate sector happens suddenly and is amplified at first. This creates a snowball effect from which both house supply and illiquidity surge at the same time. Price then becomes the liquidity fulcrum and will drop, relentlessly ripping speculators faces off, until capital begins to view the asset class as a relative value once again.