"The May 18 minutes surprised virtually everyone by guiding strongly toward a rate hike in June or July, and Chair Yellen reinforced this message in her remarks at Harvard University on May 27. But the weak May employment report released on June 3 and increased concern about the UK referendum again triggered a sharp pivot, putting on hold the notion of further hikes. These dramatic shifts have frustrated many market participants. In our view, the Fed has been unlucky."
Last weekend, when we reported that Germany's Raiffeisenbank Gmund am Tegernsee - a community bank in southern Germany - said it would start charging retail clients a fee of 0.4% on deposits of more than €100,000 we said that "now that a German banks has finally breached the retail depositor NIRP barrier, expect many more banks to follow." Not even a week later, not one but two large banks have done just that.
In the latest paradox of the new normal recovery, this time one with distinctly morbid undertones, the Associated Press reports that US medical schools are seeing a surge in the number of people leaving their bodies to science, a trend "attributed to rising funeral costs."
In a glaring example of crony capitalism, Aetna CEO Bertolini wrote that, despite Aetna’s past support for Obamacare, "unfortunately, a challenge by the DOJ to that acquisition and/or the DOJ successfully blocking the transaction would have a negative financial impact on Aetna and would impair Aetna’s ability to continue its support, leaving Aetna with no choice but to take actions to steward its financial health."
Following the hack of the Soros Open Society Foundation hack by the DCLeaks collective, several notable revelations have emerged among the data dump of over 2,500 documents exposing the internal strategy of the organization. Here are some of the most notable.
Paul Tudor Jones dismissed about 15% of the workforce at his Tudor Investment Corp, after losses and investor withdrawals at the $11 billion hedge fund. Tudor Investment earlier Tuesday informed the affected employees, which include positions ranging from money managers to support staff.
If the cost of money is high, people think carefully about where they want to put their money. They select only the best investments. This helps everyone. When money is cheap, they throw darts against a wall. This is not the best use of societies' scarce resources. Is it any wonder productivity is down?
“We call ourselves “Generation Screwed” because governments are spending money but leaving the bills behind for the young to pay,” says Gunn. “Apathy is our biggest challenge. Many youth are so burdened with the demands of getting a start in life, they are unaware of the lousy hand they are being dealt.”
To say that hedge funds have had a tough time navigating the world of activist central banks and central-planning, would be a vast understatement. According to Barclays, in the last almost 4.5 years, HFs actually generated negative cumulative alpha starting around 2011. Here is what they blame it on.
Just as there’s a scheme to pay old investors with new investors money (aka a Ponzi.) There’s another part of the scheme that rarely gets talked about: i.e.,The narrative that fuels the scheme to begin with.Much like the original structure which involves money, this too needs an ever-growing amount of gullible, willing participants. However, the currency here is narrative.
Call it the "new normal" pyramid scheme. In the latest example of the venture capital euphoria that dominated the US in recent years, not to mention potential fraud, Bloomberg reports that vegan food startup Hampton Creek, had a novel idea of how to spend the venture funding it had raised: by buying up its own product.