- Charting the Market: New Month, Same China (BBG)
- China jitters send stocks tumbling (Reuters)
- Oil falls on weak China factory data (Reuters)
- Euro zone factory growth eases in August despite modest price rises (Reuters)
- Euro-Area Joblessness Falls to Lowest Level Since Early 2012 (BBG)
- Clinton friend advised on U.S. politics, foreign policy (Reuters)
- Korea exports slump as Asia's woes deepen (Reuters)
JPM Storms Out In Defense Of The Sunny Hedge Fund Hotel: Initiates SunEdison With An "Overweight" And $24 TargetSubmitted by Tyler Durden on 08/31/2015 07:06 -0400
Sometimes you have to work really hard for those "soft dollars."
Yesterday, we highlighted what could well have been the catalyst for the collapse late in the session. SUNE has crashed in the last two days as the hedge fund hotel which boasts such guests as Greenlight, Third Point, Glenview, Lone Pine, Fir Tree, Steadfast, Omega, York, and Canyon, sees mass liquidations, and judging by this morning's 6% plunge in the face of a notably higher broad market, it appears the margin-call driven liquidation may be continuing if not accelerating.
With some of the biggest hedge funds - including Greenlight, Third Point, Glenview, Lone Pine, Fir Tree, Steadfast, Omega, York, and Canyon - all heavily invested in Sun Edison, we can't help but wonder if the total and utter collapse in the stock from yesterday's highs indicated forced liquidations that smashed it another 18.6% lower today with dramatically escalating volumes into the last hour (when stocks collapsed...)
While the "hedge fund" hotel strategy works on the way up, when everyone makes roughly the same profits, it is on the way down when these hedge fund hotels become "Hotel California" - hedge funds can check out, and sometimes they can even leave... with massive losses. According to a Bloomberg analysis, many of these hedge fund hotel stocks, or companies where hedge funds hold a combined stake of at least 25%, suffered declines of as much as 42 percent in the recent stock market rout.
It is unclear what catalyzed today's dump. Futures were briefly green at the open, then as if all hell broke loose and without an explicit catalyst (although the technical collapse of numerous "story stocks" which had been market leaders for months, both today and in recent weeks has not helped) the E-mini, and individual stocks, just took out level after level of bids and at last check the Dow has dropped to 6 month lows, the S&P is just barely green for the year, while the biggest pain is in the Nasdaq which has dropped as much as 2% intraday. Below we lay out the biggest losers from today's market drop.
Moments ago a far less liberal outlet than either the WaPo or the NYT, came out with its own interpretation of the ongoing FBI escalation involving Hillary, and according to the NY Post, "the FBI investigation into former Secretary of State Hillary Rodham Clinton’s unsecured e-mail account is not just a fact-finding venture — it’s a criminal probe, sources told The Post on Wednesday."
"The wealth management arm of Bank of America Merrill Lynch is liquidating its clients’ money from one of Paulson & Company’s funds and has put another fund under "heightened review,'" NY Times reports. As it turns out, this was not the year to be long Greece and Puerto Rico.
Chinese Stocks Tumble In Close Of Trading "Causing Panic", US GDP To Be Revised Higher On Seasonal AdjustmentsSubmitted by Tyler Durden on 07/30/2015 06:54 -0400
We start off the overnight wrap up with the usual place, China, where in a mirror image of Wednesday's action, stocks once again started off uneventful, then gradually rose in the afternoon session and meandered near unchanged territory until the last half hour, when out of the blue they tumbled to close near the day's low, some 2.2% below yesterday's closing level. What caused it? One possible catalyst came from Reuters which reported that that Chinese banks were investigating their exposure to the stock market via wealth management products and loans backed by stock as collateral.
The EU Commission has submitted a formal request to tap the mothballed EFSM for a bridge loan to Greece. The UK may look to block the proposal, but fortunately, Europe has a creative "soultion".
On the heels of Sunday’s referendum wherein Greeks essentially gave the greenlight for an unceremonious EMU exit should Europe decide to spurn the IMF and stick to a “no debt relief” policy for Athens, PM Alexis Tsipras and his newly-appointed finance minister Euclid Tsakalotos are making a final push to break the stalemate with creditors before the ATMs go dark and a supplier credit crunch creates widespread shortages of imported goods.
Just when you think we have finally hit "peak farce" this happens:
NO EUROGROUP AGREEMENT IN SIGHT ON GREECE: EU OFFICIAL
EUROGROUP HAS BEEN 'INDEFINITELY SUSPENDED:' EU OFFICIAL
EUROGROUP MAY RECONVENE ONCE GREECE PROPOSAL RECEIVED: OFFICIAL
Germany throws its support behind a Greek referendum on euro membership while Putin invites Athens to join BRICS Bank. Meanwhile, Yanis Varoufakis has a plan for resolving Greece's debt problem — and he imagines the ECB chief is terrified of it.
With a deal between Greece and its creditors seen as exceedingly unlikey at Monday's Eurogroup meeting, officials and analysts alike debate the logistics of default and a return to the drachma while Greeks may be called upon to choose between austerity or preparing for the possible introduction of a parallel currency and the economic malaise that will invariably follow.