• Gold Money
    05/03/2016 - 11:35
    Crude oil time-spreads have completely dislocated from inventories. Historically, such dislocations have proved to be short lived. We expect that either spot prices will sell-off again or the back...

Morningstar

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"This Is The Most Crowded Trade in History"





"Instead of looking for manager’s and investment opportunities to beat the market, investors are opting to be the market and are likely creating the most crowded trade in historyStagnant monetary policy fosters a groupthink outlook.  The Fed Put prompts the same positioning.  Computerized programs trade correlations and relationships established during an extended period of abnormal policy.  Active managers continue to retrench as the market diverges from the fundamentals, but the blind buyers continue to participate - it does not matter if the market is 10x, 15x, or 20x earnings, they buy for one reason, it is the market."

 
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"It Been Horrendous" - Investor Tries To Pull Cash From Valeant-Heavy Fund, Gets Shares Instead





When Tom Bentley tried to pull his money from a mutual fund troubled by its large stake in Valeant Pharmaceuticals International Inc., he instead received shares in a Springfield, Mo. auto-parts retailer. Sequoia Fund Inc. sent the retired computer hardware engineer about 5% of his money in cash and the rest was stock in one company–O’Reilly Automotive Inc. Mr. Bentley said he sold the shares as soon as they appeared in his account on April 7, but they had already dropped in value. "It has been pretty horrendous," Mr. Bentley said.

 
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Crushed By The Record Oil Squeeze, This Is How Energy Bears Are Shorting Crude Now





The result of the recent mega short squeeze in oil, has been a significant revulsion to shorting oil directly or indirectly, either by way of the underlying commodity or energy stocks, many of which have soared in tandem. And yet the shorts remain, and continue to press their bets on the troubled energy sector. However, instead of directly shorting crude and various first-derivative oil and gas companies, short sellers - burned by the recent squeeze - have changed their strategy and shifted their sights to secondary exposure, namely those regional banks that do business with the industry.

 
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Here Are The Four Reasons Why Investors Never Believed This Rally





The "smart money" have been net sellers of US stocks for the ninth consecutive week.
Investors are positioning for a market reversal based on leveraged positions in volatility funds.
Oil bulls never jumped on board the latest rally. 
The CS Fear Barometer remains elevated

 
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In "Very Unusual" Move, Avenue Capital's Junk Bond Fund Stops Reporting Asset Levels





A month after we first noted the major redemptions at Avenue Capital Group's credit fund (note this is a different fund from Third Avenue), and just one trading day after CEO Marc Lasry strolled arrogantly on to CNBC and told the public that "I don't think it's a time to panic, I think it's actually a time where you've got opportunities out there," Morningstar reports the Avenue Credit Strategies Fund has failed to report asset levels since about mid-December.

 
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Unmanageable Money: Hedge Funds Keep Losing (And Closing) - Why It Matters





Main Street is vulnerable to leveraged trading algorithms and Brazilian bonds because it’s not just exotica that is overleveraged. Risk-off, in short, is no longer just a temporary swing of the pendulum, guaranteed to reverse in a year or two. As amazing as this sounds, we’ve borrowed so much money that as hedge funds go, so goes the world.

 
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From $500,000 To $170 Million In A Few Months: The Next "Subprime Trade" Emerges





Ever since it started making complicated bets against some leveraged ETFs, Miller’s Catalyst Macro Strategies Funds has since grown from $500,000 in assets at the start of the year to about $170 million. It achieved a more than 50 percent return this year, placing it far ahead of its competitors.

 
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2015 Year In Review: "Terminal Phase" Excess & Peak Cognitive Dissonance





Important pillars of the bull case evaporated throughout 2015. Global price pressures weakened, the global Credit backdrop deteriorated and the global economy decelerated. The huge bets on central bank policies left markets at high risk for abrupt reversals and trade unwinds – 2015 The Year of the Erratic Crowded Trade. Indeed, a global bear market commenced yet most remain bullish. Serious and objective analysts would view this ominously.

 
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A "Witch's Brew" Bubbling In Bond ETFs





We believe the Credit Cycle has turned and with it will come some massive unexpected shocks. One of these will be the fall out in the Bond Market, centered around the dramatic growth explosion in Bond ETFs coupled with the post financial crisis regulatory changes that effectively removed banks from making markets in corporate bonds.  It is a ‘Witch’s Brew’ with a flattening yield curve bringing it to a boil.

 
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Unicorn Mauling: Fidelity Slashes Valuation Of Startup Superstar Uber By 7.5%





In a move that will surely raise even more eyebrows if not launch a shockwave across Palo Alto just yet, Fidelity Investments said in its monthly holdings report that it has slashed the valuations of even more unicorns, starting with the biggest one of all, Uber, when it lowered the value of its stake in the company's Series D shares by 7.5% from Oct. 30-Nov. 30, while adding more pain to Dropbox investors when it lowered its value of the cloud service company by another -2.2%.

 
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As Wall Street Vultures Circle The Next Junk Bond Fund Casualty, A Familiar Name Emerges





And so Wall Street has set its sights on the next junk bond fund casualty, a name which is well-known to most equity market participants: none other than Waddell and Reed (WDR), the fund which rose to infamy in the aftermath of the May 2010 Flash Crash, after it was initially blamed by the SEC as the culprit behind the Dow's 1000 point crash...

 
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And Another: Junk Bond Fund Run By Clintons' Close Personal Friend Slammed With Heavy Redemptions





News that billionaire Marc Lasry's Avenue Credit Strategies Fund open-ended mutual fund has been slammed with redemptions in recent weeks will hardly ease fears about a capital outflow from the junk bond which has sent junk ETFs down 12% for the year and has become the main topic of discussion over the past week following a flurry of reports about panic among holders of below-investment grade bonds.

 
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Goldman Takes Aim At This "Superstar" Bond Manager, Hinting He Could Be The Next "Third Avenue"





"Templeton Global Bond ($100bn in total; $59bn in mutual funds) – BEN’s largest fixed income fund – has seen meaningful outflows YTD (-$7.6bn from retail; -13% annualized rate) and could persist given the deterioration in excess performance (-460bps vs. benchmark YTD)."

 
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Which "Junk" Fund Liquidates Next? After Third Avenue, Here Are The Unusual Suspects





Now that the first casualty in the junk bond space has spilled its blood in the water, the hungry sharks are circling. And perhaps the best place to look for the chum is where Third Avenue itself was discovered: dead last in the morningstar list of worst (and best) performing High Yield funds of 2015...

 
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