The Holy Grail Of Trading Has Been Found: HFT Firm Reveals 1 Losing Trading Day In 1238 Days Of TradingSubmitted by Tyler Durden on 03/10/2014 21:50 -0400
Think JPM's 0 trading day losses in 2013 was impressive? Prepare to have your mind blown. The chart below shows the chart of daily net trading income by High Frequency Trading titan Virtu, taken from its just filed IPO prospectus. The punchline: in 4 years of trading Virtu has had one, one, day in which it lost money. Let that sink in: one trading loss day and 1237 days of profits. And that, ladies and gentlemen, is the Holy Grail of the New Normal broken, manipulated markets.
If the U.S. economy is getting better, then why are major retail chains closing thousands of stores? If we truly are in an "economic recovery", then why do sales figures continue to go down for large retailers all over the country? Without a doubt, the rise of Internet retailing giants such as Amazon.com have had a huge impact. Today, there are millions of Americans that actually prefer to shop online. But Internet shopping alone does not account for the great retail apocalypse that we are witnessing. In fact, some retail experts estimate that the Internet has accounted for only about 20 percent of the decline that we are seeing. Most of the rest of it can be accounted for by the slow, steady death of the middle class U.S. consumer. Median household income has declined for five years in a row, but all of our bills just keep going up. That means that the amount of disposable income that average Americans have continues to shrink, and that is really bad news for retailers.
In investing you have opportunities that open up because dogmatic investors say “I don’t do ... ”
Tesla has just announced it intends to issue a $1.6 billion convertible note offering "for the development of a "Gigafactory" and a "Gen III" vehicle." While not that unusual - and of course, why not take advantage of low cost financing and a surging momentum in your stock - what we did find at least intriguing was the underwriters included Morgan Stanley. This is the same firm (though we would be very sure that Chinese walls ensured total lack of knowledge) that doubled their price target (from $153 to $320) for TSLA yesterday (following the analyst's now almost clairvoyant questions during the earnings conference call). Paging Henry Blodgett?
"There is no money in Ukraine's Treasury account," exclaimed 'Interim President' Oleksandr Turchynov to the Ukrainian parliament; adding that the Ukraine economy is in a "catastrophic state."
*THERE ARE PROBLEMS WITH BANKING SYSTEM AND HRYVNIA: TURCHYNOV
*PROBLEMS WITH PENSION FUND ARE "COLOSSAL": TURCHYNOV
*UKRAINE'S ECONOMY IS IN A 'PRE-DEFAULT' SITUATION: TURCHYNOV
Hardly surprising given the months of protest; but with Russia 'conditionally' postponing its EUR2bn 'loan', the Europeans are riding to the nation's aid with promises of EUR20bn (if Ukrainian authorities meet certain conditions). But, as the map below shows, a great deal of the nation's wealth lies in the eastern (pro-Russia) region.
Existing home sales plunged 5.1% (considerably worse than the 4.1% drop expected) to its lowest level in 18 months. This extends the string of missed expectations to 5 months as even the ever-credible NAR chief economist said it was not the weather but "we can’t ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates." First-time homebuyers plunged to a mere 26% of the total - the lowest share on record as all-cash (and spec) investors rose to a record 53% share of sales.
- RBS plans dramatic scaling back, to fire 30,000 of its 120,000 workers (FT)
- Zuckerberg’s Data Stance Faces Privacy Backlash in Europe (BBG)
- WhatsApp Shows How Phone Carriers Lost Out on $33 Billion (BBG)
- Markets flooded with cash, should Fed prep to stamp out risk? (Reuters)
- Venezuela threatens to expel CNN over protest coverage (BBC)
- Firm Stops Giving High-Speed Traders Direct Access to Releases (WSJ)
- Obama Budget to Delete Proposal to Limit Social Security (BBG)
- Energy Holdings Prepares for a Breakup (WSJ)
- EU Struggles to Streamline Bank-Failure Plan for Weekends (BBG)
- Madoff said JPMorgan executives knew of his fraud (Reuters), and JPM admitted as much when it settled with the DOJ
While loathed to admit it, US auto makers have done it again. As we have vociferously explained month after month (and has been vocally denied until now by the car makers themselves), much of the recovery in auto sales has been a massive channel-stuffing make-work program (mal-investment once again triggered by 'false' signals created by Fed intervention). Now, as the WSJ reports, Detroit's big 3 are trying to sweeten discounts to clear a massive inventory of unsold vehicles from dealer lots (desparate not to start a profit-killing price war). "We believe we can sell our way out," said GM, but as Morgan Stanley warns, "the best of the U.S. auto replacement cycle is over." Good luck...
While the stock market ramp on the disappointing ECB press conference can be, somewhat, explained and was to be expected by the central bank-addicted market's renewed focus that since the ECB did nothing, it is now the BOJ's turn to ramp up Quantitative Easing - a thesis which has been floating since November, and at one point resulted in 700 pips of "priced in" USDJPY upside - one group of investors is having a bad day: all those short Green Mountain Coffee shares, which as we pointed out last night exploded to 52 week highs in the aftermath of the Coke minority investment announcement. This is today's maximum pain trade.
What better way to assure your company has an earnings bomb? Have Jim Cramer tout it before earnings of course. Sure enough from January 28: "GM sales are going to be superb", and "Europe's coming back." Fast forward to today when GM reports Q4 revenues of $40.5 billion which missed expectations of $40.9 billion, and EPS of $0.67 vs the $0.87 expected. Additionally, GM's global market share just dropped to 11.4% - matching the lowest in the past year. So much for the superb sales. As for Europe? Well, as the chart below shows, Europe just posted its weakest quarter in the past year. And don't count on much growth either: CapEx was down to $7.5 billion in 2013, from $8.1 billion in 2012, even as the company's total free cash flow declined from $4.3 billion last year to just $3.7 billion.
- Emerging-Market Rout Seen Enduring on Low Real Rates (BBG)
- After rocky January, markets eye data and central banks (Reuters)
- Europe will feel the pain of emerging markets (FT)
- Lloyds delays dividend prospect after mis-selling charge (Reuters)
- Snow Set to Snarl New York Commute as U.S. Flights Halted (BBG)
- Rate Decision to Drive Yellen's Early Agenda (Hilsenrath)
- Thai protesters move to downtown Bangkok in bid to topple PM (Reuters)
- China says Japan's 'hype' on air defence zone spreads tension (Reuters)
- Hedge funds seek 1.8 billion euros damages from members of Porsche's owning family (Reuters)
- Only time will define Bernanke's crisis-era legacy at Fed (Reuters)
- Record Cash Leaves Emerging Market ETFs (BBG)
- Investors Look Toward Safer Options as Ground Shifts (WSJ)
- Fed Policy Makers Rally Behind Tapering QE as Yellen Era Begins (BBG)
- Rating agencies criticise China’s bailout of failed $500m trust (FT)
- Russia to await new Ukraine government before fully implementing rescue (Reuters)
- U.S. readies financial sanctions against Ukraine: congressional aides (Reuters)
- Companies resist president’s call for minimum wage rise (FT)
- Secret Swiss Funds at Risk as Italy’s Saccomanni Visits Bern (BBG)
- Top Democrat puts Obama trade deals in doubt (FT)
- Erdogan to Give Rate Increase Time Before Trying Other Plans (BBG)
- Emerging market sell-off raises specter of contagion (Reuters)
- China Bank Regulator Said to Issue Alert on Coal Mine Loans (BBG)
- Argentina to Ease FX Controls After Peso Devaluation (BBG)
- Pimco's Gross problem: who can succeed the 'Bond King'? (Reuters)
- Ukraine protesters seize building, put up more barricades (Reuters)
- Mideast Turmoil Dominates Gathering of Business Elite (WSJ)
- Central Banks Withdraw Dollar Funding (WSJ) - oh really?
- Samsung warns of weak earnings growth this quarter (FT)
- Three explosions rock Cairo, killing 5 (USA Today)
Despite his own admission that he is not a 'product guy', Carl Icahn extends his 'pitch' for investors to buy buy buy Apple stock from one of using their offshore capital (or borrowing against it) to buyback inglorious amounts of shares to how great the "wearables" business could be...
- *ICAHN: ULTRA HD REPRESENTS 'PROMISING MOMENT' FOR APPLE
- *ICAHN: APPLE HAS 'COMPELLING OPPORTUNITY' IN WEARABLE DEVICES
- *ICAHN: INVESTING IN APPLE IS HOW GOOD INVESTORS MAKE MONEY
So buy you dummy... oh and don;t worry because Icahn has your back, even if he knows that AAPL does not...
- *ICAHN SAYS TIM COOK IS NOT A 'FINANCE GUY'
- *ICAHN: NO 'IN DEPTH' KNOWLEDGE OF FINANCE ON APPLE BOARD
Apple is - according to Icahn - the most over-capitalized company in corporate history...
When it comes to the opinions of financial pundits and "experts", most can be chucked into the garbage heap of groupthink and consensus. However, one person whose opinion stands out is Elliott Management's Paul Singer. One of the most successful hedge fund managers has consistently stood against the grain of conventional wisdom over the past three decades and been handsomely reward, which is why his opinion is certainly one worth noting. Singer, together with Martin Wolf and several other panelists will be speaking at 45 minutes past the hour on a panel discussing one of the most pressing topics nearly 6 years after the Bear Stearns collapse: "Are Markets Safer Now." Watch their thoughts on the matter in the session live below.