Capital Markets

The Keynesian House Of Denial

The Eccles Building and its Washington/Wall Street acolytes have become a House of Keynesian Denial because the assumption that capitalism is an 80 pound recessionary weakling without the constant ministrations of the state is dead wrong.

Hedge Funds Slammed: Tudor Hit With $1BN In Redemptions; NYC Pensions To Pull $1.5BN From Key Names

In a world in which the average hedge fund has failed to outperform the stock market for 8 years running, many have asked themselves what is the point of paying 2 and (not so much 20) to consistently underperform a global asset class which is now actively micromanaged by central banks themselves. And while redemptions from hedge funds have been growing in recent months, coupled with the first year since the crisis in which more hedge funds shut down than were created, it all culminated moments ago when Bloomberg reported that clients of none other than hedge fund legend Paul Tudor Jones have asked to pull more than $1 billion after three years of lackluster returns.

George Soros Warns Europe: Absorb 500k Refugees Costing $34Bn, Or Risk "Existential Threat"

The asylum policy that emerged from last month’s EU-Turkey negotiations has four fundamental flaws, according to Billionaire puppet-master George Soros, which combined pose an "existential threat to Europe." His solution is 'simple' - Accept 500,000 refugees per year costing $34 billion year (via "surge" funding through more borrowing, and a newly-created refugee crisis fund from increased VAT on member states) or else, in his words, "the European Union is in mortal danger?"

Active Managers Defeated... Globally... Again

One would think that active managers would eventually outperform somewhere after the negative press that ensued a year ago.  And now that 2015 performance data has been properly audited and tabulated, we can see what the new results are... (spoiler alert - not good).

In Bizarre Letter, Overstock CEO Announced Leave Of Absence

"I must take an indefinite medical leave of absence. The proximate cause is that for over a year I have been gutting it out through a Stage IV diagnosis of Hepatitis C, contracted (to save awkward questions) in 1984 in Xinjiang when a barefoot doctor sewed up a head wound under less-than-ideal conditions. I have finished treatment and think I have it beat but only time will tell. Your firm is doing and will do well: I believe that in 2016 we will make $40 million GAAP Net Income (pre-tax) excluding net effect of blockchain efforts and the risk of declared recession."

- Patrick Byrne

Why USDJPY Matters (Or The Carry Collapse Cometh)

The yen’s strength may be tripping up U.S. stocks as the collape of the BoJ-inspired carry trade pressures leverage and risk-taking around the world. As Bloomberg notes, in the last 10 instances the yen rallied at least 1 percent against the dollar, the Standard & Poor’s 500 Index lost 0.8 percent on average, the most since at least 2008.

The ECB Effect: European Telecom Issues Largest Ever Junk Bond After More Than 100% Upsizing

The market bond market, which is now frontrunning not just what the ECB has announced it will buy but what it may buy, just led to a record European junk bond issuance, when French cable and telecom operator Numericable "stunned the market" (as Reuters put it), when it upsized what was originally supposed to be a $2.25 deal by more than 100% to a whopping $5.2 billion bond deal on Wednesday. This was the largest single high-yield bond tranche ever issued.

Are The Saudis And Russians Deliberately Sabotaging Doha?

The actions and intentions of Saudi Arabia and Russia - the two largest oil-producing nations attending the Doha meeting on 17 April - have dashed all hopes of any fruitful outcome. The most important meeting of the last three decades, which has promised to forge new friendships and a new cartel, is turning out to be the biggest farce, even before the curtain is raised.

Active Managers Just Had Their Worst Quarter In 18 Years: Here's Why

According to BofA's Savita Subramanian, just 19% of funds outperformed the S&P 500 in the 1Q. According to the bank, this was the the lowest quarterly hit rate in our data history spanning 1998 to today. The average fund lagged by 1.9ppt, marking a record spread of underperformance. Even worse, growth funds saw only a 6% hit rate, the worst since at least 1991.  According to BofA, "the average fund lagged by the widest margin we have recorded in our quarterly data: - 3.5ppt."