Cohen

Why Steve Cohen Is In Davos

Those wondering if Steve Cohen is attending the most epic of "economic forum" boondoggles elsewhere known as Davos (where for some reason Derek Jeter is present and accounted for) was just to get a hot tip, or to interact with the Swiss branch of Gerson-Lehrman, the one where not every conversation is being recorded by the feds, the answer is neither. The man, whose fund as most by now have been made aware is one turned informant away from greeting the men in gray coats on its front porch at 72 Cummings Road, is in Davos to learn about... "Resilient Dynamism."

Frontrunning: January 9

  • A Bold Dissenter at the Fed, Hoping His Doubts Are Wrong (NYT)
  • China and Japan step up drone race as tension builds over disputed islands (Guardian)
  • How Mario Draghi is reshaping Europe's central bank (Reuters)
  • Merkel Economy Shows Neglect as Sick Man Concern Returns (BBG)
  • US oil imports to fall to 25-year low (FT)
  • China Loan Share at Record Low Shows Financing Risks (BBG)
  • Dimon Says Some JPMorgan Execs ‘Acted Like Children’ on Loss (BBG) - children that reveleased who 'excess reserves' are truly used
  • Fed injects new sell-off risk into Treasuries (FT) - really? So the Fed will stop monetizing the US deficit some time soon?
  • Obama aide presses Republicans to accept more tax revenues (Reuters)
  • Ex-SAC analyst named 20 alleged insider traders (FT)
  • BOJ easing bets help dollar regain ground vs yen (Reuters)
  • Goldman Sachs Said to Be Part of Fed-Led Foreclosure Settlement (BBG)
  • Venezuela postpones inauguration for cancer-stricken Chavez (Reuters)

SAC Loses Anchor Investor As Noose Tightens Some More

First it was Citi, then SocGen, now a third key investor has decided to pull their money from SAC - the once vaunted hedge fund which now everyone is now avoiding like the plague, and for which the only question now is "when" - when will Stevie close down shop, and will this happen before or after the paddywagons finally arrive  at 72 Cummings Point road. The WSJ reports: "Titan Advisors LLC recently told clients that it had decided to withdraw its entire investment from SAC, said clients who received phone calls from Titan.  "They've told us they still think SAC is a good firm but Titan doesn't need the headline risk, and we sure don't," said Tom Taneyhill, executive director of the Fire & Police Employees' Retirement System of the City of Baltimore, on Friday.  Société Générale SA, which has client money in SAC through its Lyxor asset-management arm, also decided to pull its money from SAC, The Wall Street Journal reported earlier this month. At the time, an SAC spokesman declined to comment. Titan's departure is significant given SAC's long-standing relationship with one of Titan's founders. Titan co-founder George Fox began investing in SAC in the mid-90s, several years after Mr. Cohen started what became the firm in 1992."

36 UBS Bankers To Be Implicated In Liborgate, Criminal Charges To Be Filed

As the fallout of Liborgate escalates, the next big bank to be impacted in the fallout started by Barclays civil settlement "revelation" is set to be troubled UBS, already some 10,000 bankers lighter, where as many as three dozen bankers are reported by the implicated in the fixing of the rate that until 2009 was the most important for hundreds of trillions in variable rate fixed income products. Only instead of attacking the US or even European jurisdiction, where the next big settlement is set to hit is Japan: a country whose regulators as recently as half a year ago promised there were no major issues with Libor, or Tibor as it is locally known, rate fixings. And while this most recent development will have little material impact on UBS' ongoing business model, the one difference from previous settlements is that it will likely include criminal charges lobbed against some of the 36 bankers. From the FT: "UBS is close to finalising a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5bn and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan. The pact between the bank and the US Commodity Futures Trading Commission, US Department of Justice, UK’s Financial Services Authority and UBS’s main Swiss supervisor Finma is expected to be announced on Wednesday, although last minute negotiations continue."

Frontrunning: December 17

  • New Calls for Gun Limits (WSJ)
  • Funerals begin for Newtown victims as schools confront tragedy (Reuters)
  • Introducing The Stock Trader of the Future (WSJ)
  • Feds knocking on 72 Cummings Ave door any minute now? SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (BBG)
  • China Signals Tolerance of Slower Growth After Meeting (BBG)
  • Huge mandate for Japan's LDP may be less than meets the eye (Reuters)
  • UBS Said to Face $1.6 Billion Libor Penalty This Week (BBG) - shareholders pay, and nobody goest to jail
  • Treasury Plan Would Cut Rates on Some Mortgages in Bonds (BBG)
  • Egypt opposition calls for protests against basic law (Reuters)
  • Euro Crisis Will Linger, Merkel Tells Summit (WSJ)
  • Economic slowdown throughout euro zone a worry for ECB: Liikanen (Reuters)

Frontrunning: December 6

  • MSM discovers window dressing: Fund Managers Lift Results With Timely Trading Sprees (WSJ)
  • White House Unyielding on Debt Limit (WSJ)
  • Obama, Boehner talk; Geithner prepared to go off "cliff" (Reuters)
  • Republicans urged to resist tax rises (FT)
  • China looms large over Japanese poll (FT)
  • As predicted here two months ago, Greek Bond Buyback Leads S&P to Cut to Selective Default (BBG)
  • Japan opposition LDP set to win solid election majority – polls (BBG), but...
  • Japan Opposition LDP’s Main Ally Cautions Abe on BOJ Pressure (BBG)
  • U.S. and Europe Tackle Russia Trade (WSJ)
  • King Seen Maintaining QE as Osborne Extends Fiscal Squeeze (BBG)
  • Syria pound fall suggests currency crisis (FT)
  • Irish budget seeks extra €3.5bn (FT)
  • U.K. Extends Cuts Due to Poor Outlook (WSJ)
  • ECB Seen Refraining From Rate Cuts as Yields Sink on Bond Plan (BBG)

Citi Tells Clients To Avoid Steve Cohen

If the beginning of the end started two years ago as we predicted, is this end of the end?

  • CITIGROUP PRIVATE BANK SAID TO PUT SAC CAPITAL ON `WATCH' LIST
  • CITIGROUP SAID TO ADVISE CLIENTS AGAINST ADDING MONEY TO SAC
  • CITIGROUP PRIVATE BANK ALLOCATES CLIENT MONEY TO HEDGE FUNDS

Next up: all other private wealth groups halt capital allocations to SAC? Redemptions of all non-employee funds and liquidations? FBI raids, but only after orderly winddowns? It sure gets interesting...

And without Stevie Cohen running stops 24/7 in ES and every other stock that is still widely traded, what then? Will GETCO run the entire market?

Frontrunning: November 29

  • As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
  • Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
  • Argentina debt repayment order frozen (FT)
  • Obama Is Flexible on Highest Tax Rates (WSJ)... not really
  • Geithner deployed for fiscal cliff talks (FT)
  • Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
  • Euro-Zone Budget Proposal Is Unveiled (WSJ)
  • EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
  • LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
  • SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
  • EU to launch free trade negotiations with Japan: EU officials (Reuters)

SAC Receives Wells Notice

It turns out the topic of today's much expected conference call originating at 72 Cummings Point Road Stamford, is what many already knew yesterday, namely that the SEC has warned SAC that after years and years of pursuits, the enforcer is finally getting close in for the kill, and has sent a Wells Notice, usually a first step before civil charges are filed.

  • SAC SAID TO TELL CLIENTS IT GOT WELLS NOTICE FROM SEC LAST WEEK

The notice will be filed against the holdco, implying Cohen himself will be implicated, instead of just the CR Intrinsic OpCo where Martoma worker. Usually the SEC does not file Wells Notices without sufficient backing, so this may finally get interesting. But we are not holding our breath. One needs to simply recall how the SEC bungled its CDS insider trading case vs Millennium and Deutsche to see how the endgame here could well be another epic humiliation for the soon to be Schapro-less regulator.

Steve Cohen To Host Investor Call Tomorrow

Curious why stocks suddenly took on extra water in the past few minutes? This:

  • SAC CAPITAL SAID TO PLAN INVESTOR CONFERENCE CALL TOMORROW - BBG

As a reminder, SAC is and has been for the past 10 years arguably the largest buyside market maker, and the firm which now that it has no more Expert Networks to lead to "excess alpha" is forced to slam stops in the market, primarily to the upside, and crush all shorts during times of peak shorting. Should SAC be forced to scale its operations lower, one thing is certain: the farce formerly known as the market will look very different than it does now.

Frontrunning: November 23

  • Boehner comments show tough road ahead for "fiscal cliff" talks (Reuters)
  • Argentina angry at hedge fund court win (FT)
  • EU Spars Over Budget as Chiefs See Possible Deadlock (Bloomberg)
  • Merkel doubts budget deal possible this week, more talks needed (Reuters)
  • Greek deal hopes lift market mood (FT)
  • Greek Rescue Deal Faltering Cut in Rescue-Loan Rate (Bloomberg)
  • Japan's Abe Pushes Stimulus (WSJ) - Unpossible: a Keynesian in Japan demanding stimulus? Say it isn't so. 
  • Authorities Tried to Flip Trader in Insider Case (WSJ)

Frontrunning: November 21

  • Rough start for fiscal cliff talks (Politico)
  • Europe Fails to Seal Greek Debt-Cut Deal in IMF Clash (Bloomberg)
  • Japan’s Exports Reach Three-Year Low as Recession Looms (BBG)
  • Beggars can be angry: Greek leaders round on aid delay (FT)
  • More financial blogs launching soon: Financial Times Deutschland closing (Spiegel)
  • China's backroom powerbrokers block reform candidates (Reuters)
  • BOE Voted 8-1 to Halt Bond Purchases as QE Impact Questioned (Bloomberg). In the US the vote is 1-11
  • UK heads for EU budget showdown (FT)
  • Eurodollars - another epic scam: How gaming Libor became business as usual (Reuters)
  • Clinton Shuttles in Mideast in Bid for Gaza Cease-Fire (Bloomberg)
  • Fed Still Trying to Push Down Rates (Hilsenrath)

Former SAC Trader Busted With Biggest Insider Trading Profit In History

Over two years ago, on November 5, 2010, weeks before news broke out that the SEC had caught hedge funds in a massive insider trading scheme involving expert networks, and before the phrase expert network was even mentioned in places away from hedge funds, we wrote an article, titled "Is The SEC's Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?" that predicted everything that has transpired with SAC since then: we said expert networks would be exposed as the root of virtually all "information arbitrage" alpha by Steve Cohen, more importantly, we exposed various biotech stock trading patterns, where the informational benefits from easily bribable doctors would result in immediate profits courtesy of advance knowledge of Phase 2, 3 and NDA results. Today, we discover not just how deep the SAC insider trading schemes went, but that the profit from such information abuse amounted to hundreds of millions in standalone cases. Adding these together and one can see why Steve Cohen - whose knowledge of these epic inside trading scheme is of course never implied by us: after all, that's what the DOJ, the SEC and the various DA offices are for - was generating 20% returns year after year and able to pocket 3% and 50%.

Guest Post: What's Next In The Middle East?

A ground invasion, and a reoccupation of Gaza by the IDF could be the first step toward engaging Iran. It would allow for Israel to dislodge Hamas, and create a buffer between Israel and Egypt, and the forces of the Muslim Brotherhood. The Morsi government in Egypt has pledged to support the Palestinians — but is this a bluff? Does Egypt have the capability or the desire to really oppose Israel? Does Iran really have the capability or the desire to oppose Israel in a more active way? Ultimately, Iran may have no choice, as Netanyahu is certain that they are on the nuclear threshold. The world is in motion. Israel is playing its cards. The intent? To create facts on the ground that cement Israel’s position as the dominant power in the middle east for the next century. Now, Iran’s move.