Insider Trading

Overeducated Writer Explains Why He Defaulted On His Student Loans, Asks "If He Is A Deadbeat"

There are some valid points raised in Lee Siegel's 1100 word rant against college loans (if not so much against college education). There are some bad ones. But two things are is clear: the words "personal" and/or "responsibility" were used precisely zero times, and the op-ed writer, who described himself as "the author of five books who is writing a memoir about money", is hardly a glowing advertisement for an education attained (funded with either debt or equity) at one of the Ivy League's "best", Columbia University... that, or the return on money after wasting nearly a decade in university and taking out tens of thousands in loans to achieve a Master of Philosophy degree.

SEC Reads Zero Hedge, Launches Crack Down On Activist Hedge Fund "Idea Dinners"

Ten months after we asked whether "The SEC Is Asking These Hedge Funds Why They All Rushed Into Allergan Last Quarter?" we find that the US market regulator indeed reads this website on a regular basis. As the WSJ reports the SEC has answered our question, and yes: the  SEC is finally asking not only "these" hedge funds why they all rushed into Allergan, but into every other collusive activist take out target.

When Stock Buybacks Go Horribly Wrong

Of the $500 million KORS spent on buybacks in the past two quarters, it already has a paper loss of $200 million. Incidentally, KORS spent about $200 million on capex for all of fiscal 2014. Which, in a nutshell, is what happens when stock buybacks go horribly wrong.

Why Nav Sarao Had To Be Destroyed: He Found A Way To Beat The HFTs At Their Own Game

Today, we find precisely how and why Sarao was singled out: he not only ratted out the parasitic trading strategies of the real culprits behind the broken market, the massive HFT firms (such as Virtu which just went public just a day before the Sarao charges were filed) which gave the "regulators" no choice: one of them had to be put away for good, but found a way to capitalize on the algos' stupidity, and actually make money by beating them at their own game.  As such, regulators and exchanges such as the CFTC and CME had no choice but arrest him and prevent him from trading ever again!

Frontrunning: April 8

  • Shell Will Buy BG Group for $70 Billion in Cash and Shares (BBG)
  • IMF warns of long period of lower growth (FT)
  • Wall Street sanguine as it heads into worst earnings season in six years (Reuters)
  • Switzerland First With 10-Year Bond at Negative Yield (WSJ)
  • U.S. Dot-Com Bubble Was Nothing Compared to Today’s China Prices (BBG)
  • Rahm Emanuel Re-Elected as Mayor of Fiscally Ravaged Chicago (BBG)
  • Oil falls on U.S. stock build, record Saudi output (Reuters)
  • White South Carolina policeman charged with murdering black man (Reuters)
  • German Factory Orders Drop for Second Month (BBG)
  • A third of Republicans support Iran nuclear deal (Reuters)

Frontrunning: April 7

  • Israel, U.S. Lawmakers Press Case Against Iran Nuclear Deal  (WSJ)
  • Rand Paul tries to broaden libertarian appeal (Reuters)
  • Fewer Oil Trains Ply America’s Rails (WSJ)
  • Chicago voters go to polls in first ever mayoral runoff (Reuters)
  • FedEx to buy TNT to expand Europe deliveries (Reuters)
  • Mohamed El-Erian Has Most of His Money in Cash (BBG)
  • In Surprise Move, Australia Holds Rates (WSJ)
  • Oil falls as Iran, China discuss more supply (Reuters)

Frontrunning: April 3

  • Iranians celebrate, Obama hails 'historic' nuclear framework (Reuters)
  • Iran Nuclear Accord Hailed as Landmark After Marathon Talks (BBG)
  • Two New York City women accused of planning 'terrorist attack' (Reuters)
  • Cyprus Lifts Capital Controls Two Years After Deposits Bail-In (BBG)
  • Jury Hits Chrysler With $150 Million Penalty in Boy’s Death (WSJ)
  • Greece says ready to make IMF payment on April 9 (Reuters)
  • Germanwings Co-Pilot Set Plane to Go Faster Before Crash (BBG)
  • IBM hire advisers to deal with restless investors - sources (Reuters)

Life Insurance Error Gives Investors Bernie Madoff Style Returns

In 1987, Aviva France started offering The Fixed Price Arbitrage Life Insurance Contract for wealthy clients. The Financial Times called it "the worst contract in the world". It allows the contract holder to invest with hindsight. Did you see a stock go up this week? Now you can buy it at last week's price. Did your stock plummet? Sell it at last week's price. It is the ultimate form of insider trading: time travel.

Big Data Algos 'Are' The Singularity & They're Coming To A Stock Market Near You

There is a much larger structural risk for markets and investors than HFT and the whole Flash Boys brouhaha, it’s just totally under the radar and hasn’t surfaced yet. Investors may not know better yet, but they will soon, one way or another. Tomorrow a handful of governments will influence aggregate political behaviors by triggering small communications that Big Data tells them will be voluntarily magnified by individual citizens, snowballing into outsized, long-lasting, and untraceable “popular” actions. Tomorrow a handful of hedge funds will influence aggregate market behaviors by triggering small trades that Big Data tells them will be voluntarily magnified by individual traders, snowballing into outsized, long-lasting, and untraceable “market” actions. Tomorrow Big Data will be primarily an instrument of social control, with a powerful and ubiquitous impact on all citizens and all investors.

Frontrunning: March 12

  • As reported here first: The U.S. Has Too Much Oil and Nowhere to Put It (BBG)
  • Dollar Drops From 12-Year High as S&P Futures, Bonds Gain (BBG); Dollar Bulls Retreat From 12-Year High to Euro With Fed in View (BBG)
  • Clinton Private Email Plan Drew Concerns Early On (WSJ)
  • ECB Bond Buying Not Needed With Economy Improving, Weidmann Says (BBG)
  • China Feb new yuan loans well above forecast (Reuters)
  • U.S. probing report Secret Service agents drove car into White House barrier (Reuters)
  • Kerry tells Republicans: you cannot modify Iran-U.S. nuclear deal (Reuters)
  • PBOC Pledges to Press on With Rate Liberalization Amid Slowdown (BBG)
  • China Prepares Mergers for Big State-Owned Enterprises (WSJ)

A Day In The Life Of A Falling BRIC

It’s not that long ago, in 2001, that Jim O’Neill, then still with Goldman Sachs, coined the term BRICs, for the fast emerging markets of Brazil, Russia, India and China. O’Neill saw a global power shift from the west to these four nations happening. Fast forward to today, and we see Russia under multiple attacks, including economic ones, from the west, as India just announced the second rate cut this year and China is attempting controlled demolition of the possibly biggest financial bubble in the history of the world. And Brazil? If anything, it’s falling even faster off its pedestal than the other three nations.