Institutional Investors

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Mom And Pop "Will Probably Get Trampled": Alliance Bernstein Warns On Bond ETF Armageddon





"In theory, investors can exit an open-ended mutual fund or an ETF at will. But the growing popularity of these funds forces them to invest in an ever larger share of less liquid bonds. If everyone wants to exit at once, prices could fall very far, very fast. A lucky few may get out in time. Others will probably get trampled."

 
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Frontrunning: September 9





  • Global stocks rally as investors scent fresh stimulus (Reuters)
  • Japan's Nikkei 225 Rises 7.7% for Biggest Gain Since October 2008 (BBG)
  • China's Stocks Advance for Second Day Amid Stimulus Speculation (BBG)
  • Abe Pledges Corporate Tax Cut as Investments Slump (BBG)
  • U.S. to shift 50 staff to boost office handling Clinton emails (Reuters)
  • Chinese Premier Li Keqiang Says China Doesn't Want a Currency War (BBG)
  • One Thing China Got Right (BBG)
 
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Frontrunning: September 8





  • Sure, why not: China Rebounds as Trade Data Disappoints (BBG)
  • Oh, that's why: China's Stock-Rescue Tab Surges to $236 Billion, Goldman Says (BBG)
  • Can't make this up: German finmin says must avoid reliance on debt, cenbank stimulus (Reuters)
  • Stocks rise after contrasting China, Germany trade data (Reuters)
  • Euro zone second-quarter GDP revised up as Italy grows faster (Reuters)
  • Brent oil rises on European, Chinese data; oversupply weighs (Reuters)
  • Corporate Prosecution Deals Headed for a Legal Test (WSJ)
 
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The Letter That Stock Exchanges Should Write To Investors





Dear Investors, The last few weeks have exposed that our equity markets are not as liquid as we have long claimed mainly due to market fragmentation and the lack of diverse liquidity pools...

 
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Frontrunning: August 31





  • Hilsenrath: Fed Appears to Hold Line on Rate Plan (WSJ)
  • Europe, Asia stocks set for worst monthly drop in three years on China, Fed (Reuters)
  • Beijing abandons large-scale share purchases (FT), if only for a few hours
  • China’s Next Problem: Paying for Its Stock-Market Bailout (WSJ)
  • Crises Put First Dents in Xi Jinping’s Power (WSJ)
  • Man Group’s China Chief Said to Assist Police in Probe (BBG)
 
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How Investors Respond To A Market Crash





In the midst of turmoil among asset classes, investors tend to make irrational decisions, such as panicking and liquidating at inopportune times. Nobel Prize-winning Psychologist Daniel Kahneman helps explain ill-conceived reactions to the market with his concept of loss aversion. That’s the fear and feelings of loss surpass the joy one may receive from a similarly sized potential gain.  In order to frame this discussion of volatility, we dug up old surveys of institutional and individual investors that recorded their responses to the 1987 market crash

 
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Morning Has Broken: A Deep Dive Into The Trading Patterns Of The American Retail Invetor





Americans associate the morning with “Time to trade equities”. They hear news – in the case of the last few days, bad news from overseas – first thing in the morning. By the time the market opens, they have made their decisions and entered their orders. About half as many will check in around the close to see how things turned out, but for many the next piece of market news won’t hit their mental “Screen” until 20 hours or so later. 

 
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Corporate Debt - Road To Oblivion In A Bear Market





“The way to wealth in a bull market is debt. The way to oblivion in a bear market is also debt, and nobody rings a bell. – James Grant

 
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New Study Exposes The "Dark Side" Of ETFs





A new academic study from researchers at Stanford, UCLA, and the Arison School of Business in Israel suggests that ETFs are contributing to a lack of liquidity for the stocks they hold. Essentially, the argument is that increased ETF ownership leads to wider bid-asks, less analyst coverage, and higher correlations with broad market moves.

 
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The World's Largest Sovereign Wealth Fund Is About To Become A Seller





In "historic step," Norway may be forced to tap into its $875 billion sovereign wealth fund to help make ends meet in the face of persistently low crude prices.

 
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Sorry Bloomberg, Someone DID Notice That China Is Dumping A Record Amount Of Bonds





Earlier today, Bloomberg TV blasted an amusing snippet from an article that was based on some deep revelations about what is happening in the bond market: It says: "China sells $180 billion of US Treasuries but no one notices." Which is ironic considering the following ZH headlines:

May 18: Revealing The Identity Of The Mystery "Belgian" Buyer Of US Treasurys
June 15: China Dumps Record $120 Billion In US Treasurys In Two Month Via Belgium
July 17: China Dumps Record $143 Billion In US Treasurys In Three Months Via Belgium
and of course July 22: "China's Record Dumping Of US Treasuries Leaves Goldman Speechless"

 
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Axel Merk Comes Out... As A Bear





"Increasingly concerned about the markets, I’ve taken more aggressive action than in 2007, the last time I soured on the equity markets. Let me explain why and what I’m doing to try to profit from what may lie ahead."

 
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