• Tim Knight from...
    01/26/2015 - 21:16
    "Oh, he's there to make sure high school kids don't jump in front of a train to kill themselves", I would reply. And you, assuming you come from a place that isn't insane, would be puzzled and...

Institutional Investors

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The Visual Story Of The Biggest Fraud In Gold Mining History





This infographic documents the rise and fall of Bre-X.

From initial private offerings at 30 cents a share, Bre-X stock climbed to more than $250 on the open market. Near the peak of Bre-X share prices, major banks and media were on board:

 
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Frontrunning: January 20





  • Obama to focus on middle class in State of Union address (Reuters) - all 4 of them?
  • European Stocks Buoyed by ECB Hopes (WSJ)
  • China's 2014 economic growth misses target, hits 24-year low (Reuters)
  • Federer on Swiss Franc Shock: "Does It Mean I've Got to Win Now?" (BBG)
  • First-time buyers help Christie’s reach record sales (FT)
  • So it was the NSA? U.S. Spies Tapped North Korean Computers Prior to Sony Hack (BBG)
  • Why Chinese Developer Kaisa's Default Risk Has Money Managers Spooked (BBG)
  • Morgan Stanley Misses Estimates on Drop in Bond-Trading Revenue (BBG)
 
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About That "Strong" Dollar





At the moment, the US dollar is choice. This isn’t necessarily a vote of confidence for the dollar. It’s more like a vote against all the others. If big institutional investors must choose between bankrupt America and bankrupt Europe, right now they choose America. But this is a decision that can and will be changed in an instant. Just look at the Swiss franc...

 
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Blast From The (Recent) Past: Jim Grant Nails The SNB Decision





"we venture that the SNB will sooner or later be forced to permit the franc to appreciate and thus to enrich the holders of low-priced, three-year call options on the Swiss/euro exchange rate. It's a long shot, to be sure--the options are cheap for a reason--but we judge that the prospective reward is worth the obvious risk." - Jim Grant, Sept 14th, 2014

 
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Wednesday Humor: Maxine Waters Takes On HFT Rigging And Broken Markets





Yesterday was a bad day for the HFT lobby, after not one but two incidents which exposed the high frequency parasites doing what they do best, and perhaps only: rigging markets.  And since it would be laughable if its wan't tragic, we decided to make it even more laughable, by noting that none other than intellectual titan in the House of Representatives, Maxine Waters, had a few choice words to say about the latest HFT rigging busts. That's right: Maxine Waters now opines on market microstructure issues.

 

 
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When Even Bloomberg Makes Fun Of China's Stock Bubble





"I'm not sure how long this rally will last," warns one Chinese securities analyst, but adds, Chinese investors "tend to ignore important fundamentals" anyway. When even mainstream media is reporting on the epic farce that is the explosion of retail interest in Chinese stocks (and the concomittant surge in stock prices), perhaps it is time for the 'greater fool' to pull back a little. Perhaps the 'exuberance' is best summed up by the following from a security guard for Beijing's subway system, "low-priced stocks are less risky - big drops won’t result in huge losses for me - I don’t know much about investing, but the stocks my friends recommended have been soaring." Trade accordingly...

 
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Do You Pay Rent To Blackstone: This Is Where Wall Street Is America's Landlord





The short answer is in parts of Seattle, Charlotte, Phoenix, Atlanta, Tampa, Cincinnati, Raleigh, N.C., Houston, Denver, Columbus, Ohio, Sarasota-Bradenton, Fla., Raleigh, N.C., Chicago, and Winston-Salem, N.C. Among the 2,490 zip codes nationwide with at least one single family purchase by the top four institutional investors between January 2012 and October 2014, the top 50 zip codes with the highest percentage of purchases by the four largest institutional investors were in those metro areas. “The institutional investors kick-started the housing recovery by buying homes in bulk at the lowest point and holding them as rentals,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market. Los Angeles County was among the top 10 for most purchases by institutional investors over the past three years, with 6,152. “As the market continues to climb, we expect these investors to start to sell off their inventory to capture the gains made in the past couple of years.”

 
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10 Key Events That Preceded The Last Financial Crisis Are Happening Again





History literally appears to be repeating. The mainstream media and our politicians are promising Americans that everything is going to be okay somehow, and that seems to be good enough for most people. But the signs that another massive financial crisis is on the horizon are everywhere.

 
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As We Enter 2015, Charts "Bulls" Should Consider





While the media continues to pound the table with all of the bullish arguments that should continue to drive the current advance in the markets, it is only prudent to at least attempt an understanding of the counter arguments. The "risk" to investors is not a continued rise in the financial markets, but the eventual reversion that will occur. Like Wyle E. Coyote, since most individuals only consider the "bull case," as it creates a confirmation bias to support their "greed factor", they never see the "cliff" until it is far to late. Hopefully, these charts will give you some food for thought.  Remember, every professional poker player knows how to spot a "pigeon at the table."  Make sure it isn't you.

 
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How To Invest When The Pursuit Of Certainty Is Absurd





The practice of sensible investment becomes difficult when our secondary information sources (“fundamentals”) are inherently subjective. We are coming to appreciate the counsel of a friend who suggested that the merit of gold lies not in its price so much as in its ownership. What matters is that you own it.

 
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Futures Up In Light Volume On Renewed ECB QE Hopes As Crude Slides Again





While the last trading day of 2014 will be important if only to see if Dow 18,000 can be recaptured on what is sure to be the lowest volume in years, don't expect much help from Brent which continues to slide and was down nearly 3% at $56.20 or WTI which is also flirting with the $53 level, down almost 2% overnight both set to cap the worst year for the commodity since 2008. Not much should be expected from Treasuries either, set to return over 6% in 2014 - the best performance since 2011 - crushing the latest hoard of bond shorts all of which got the Treasury move in 2014 epically wrong, which will close early at 2 pm. Which means that the HFT algos will once again be driven off the illiquid USDJPY correlation, where low volume will mean 5-10 pip moves today should be the norm, as well as European stocks, whose Stoxx Europe 600 Index rose 0.3% earlier on the latest round of jawboning by an ECB member, this time Dutchman Peter Praet, who said in an interview with German newspaper Boersen-Zeitung that lower oil prices increasingly risk de-anchoring inflation expectations, indicating that quantitative easing is becoming more likely.

 
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25 Years After The "Top" In Japan, Have We Learned Anything?





The Japanese stock market reached its all-time-high on December 29th 1998, and as The Wall Street Journal reports, analysts were still looking forward to another strong year for shares in 1990, despite some signs of danger. Reading through the headline on that day suggests, 25 years later, investors and talking-heads have learned absolutely nothing...

 
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Massive 1,500 Ton Gold Vault For Sale In The Heart Of London, One Previous Owner, Asking £4,500,000 O.B.O.





As a result of Deutsche Bank's gold-rigging problems, the German bank's practically brand spanking new Singapore gold vault, just over a year old, is about to go on sale. But while one can debate when the brand new storage facility will see a "for sale" sign attached to the main vault door, one thing is clear: Deutsche Bank's massive, and even newer, gold vault in London is already looking for offers. According to Reuters, Deutsche Bank is "open to offers for its London-based gold vault following the closure of its physical precious metals business."

 
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Could An Energy Bust Trigger QE4, Peter Schiff Asks





Despite the widely held belief that 2015 will be the year in which a patient Fed finally begins to normalize rate policy, we believe the Fed has no possibility of withdrawing the stimulus to which it has addicted us. QE4 was always much more probable than anyone in government or on Wall Street cares to admit. A recession and a financial panic caused by sub $60 oil will significantly quicken the timetable by which the Fed cranks up the presses. When it does, oil could once again increase in price, along with all the other things we need on a daily basis. That should finally dispel any remaining illusions that the Fed could successfully land the metaphorical plane. More QE may minimize the damage in the short-term, but we believe it will keep us trapped in our current cocoon of endless stimulus, where we will slowly suffocate to death.

 
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The Curse Of Keynesian Dogma: Japan’s Lemmings March Toward The Cliff Chanting “Abenomics”





One thing is certain about the ensuing “race to the bottom”. Japan’s retirement colony will end up with the hindmost. And they will surely burn professors Krugman and Summers in effigy—-even if driftwood is the only fuel they have left.

 
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