The Long/Short Strategy for the New Reality
1. Go long companies that cater to the 1%.
2. Short companies that cater to the middle class.
3. Go long companies that cater to the poor.
In a stunning rebuke of Preet Bharara's insider-trading prosecutions record, Businessweek reports a federal appeals court overturned and threw out the guilty verdicts of two hedge fund managers, Todd Newman and Anthony Chiasson, ruling jury instructions tainted their verdicts and imperiling other cases brought in his multiyear probe. In a 28-page decision that could rewrite the course of insider trading law, sharply curtailing its boundaries, the United States Court of Appeals for the Second Circuit in Manhattan tossed out the case on technicalities which could also lead to the release of SAC's Michael Steinberg - Bharara's signature prosecution - as Steinberg's lawyer remarked, "it sends a loud and clear message that the government will be rebuked when it tries to turn innocent conduct into a crime." So insider-trading is legal now... with the right lawyer and judge. We wonder how many shipments of Picassos to the three appeals court judges did the verdict cost Steve Cohen?
"... Shortly after returning from a trip in late 2009, Farmer erased electronic notes, in Microsoft Word format, that were stored on thumb drives, Zip drives and a shared drive at Citadel, agents wrote in a summary of one of the interviews with him. Farmer also threw away his handwritten notes because that was his normal practice and because they were incriminating, agents wrote. Farmer got rid of e-mails as well, according to their summary. “This,” they wrote, “wiped the slate clean."
It’s been obvious for quite some time that the so-called “war on terror” is nothing more than a fear-mongering induced power grab; a convenient excuse to strip the citizenry of its civil liberties and humanity. Many commentators, including myself, have predicted for years that the entire counter-terror juggernaut that has been constructed post-9/11 would be ultimately redirected upon the domestic population. Snowden’s heroic whistleblowing has already proven without a doubt that the government spy apparatus (along with tech company complicity) has been zeroed in on the domestic population for quite some time, but is the situation about to escalate? Are the feds so fearful of their own people, they are about to focus all their counter-terror energy on U.S. citizens? It appears so.
It seems Goldman Sachs is willing to do pretty much anything when it comes to maintaining SAC Capital (now Point72) Steve Cohen's liquidity. On the heels of last year's "stand by your man" moment in the midst of the insider-trading scandal, Goldman has kindly offered to provide Cohen another lifeline of liquidity - this time backed by his $1 billion art collection. As Bloomberg reports, Cohen pledged “certain items of fine art” under a security agreement which didn’t specify how much money was borrowed. As one art "investor" noted, this is not unusual, "hedge fund guys who manage their money wisely... look to put their art collections to work... If you can get liquidity out of your collection and pay only 250 basis points...it just makes sense." Sense, indeed!
The types of “research” SAC may acquire include, but are not limited to, the following:
- reports on or other information about particular companies or industries;
- economic surveys and analyses;
- consulting services regarding products, technologies, issuers or industries;
- non-mass-marketed financial publications (delivered in hard copy or electronically);
- computerized pricing and market data services;
- pre-trade and post-trade analytics, software and other products that generate market research, including research on optimal execution venues and trading strategies;
- advice from brokers-dealers on order execution, including advice on execution strategies, market color and the availability of buyers and sellers (and software that provides such market research);
One look at the chart below from the NYT, and a pattern emerges...
With an ever-rising number of 1%-ers in the public eye for less-than-god's-work-like behavior, Town and Country magazine knows it can be tough dressing for court when nothing in your closet is off the rack! Here are some fashion strategies for the wealthy and notorious as they approach the bar... the dock is the new red carpet and one must, must find the balance between Brioni and bankruptcy... or Couture over Kevlar...
Move Over FX And Libor, As Manipulation And "Banging The Close" Comes To Commodities And Interest Rate SwapsSubmitted by Tyler Durden on 11/06/2013 13:20 -0500
While the public's attention has been focused recently on revelations involving currency manipulation by all the same banks best known until recently for dispensing Bollinger when they got a Libor end of day print from their criminal cartel precisely where they wanted it (for an amusing take, read Matt Taibbi's latest), the truth is that manipulation of FX and Libor is old news. Time to move on to bigger and better markets, such as physical commodities, in this case crude, as well as Interest Rate swaps. And, best of all, the us of our favorite manipulation term of all: "banging the close."
There was a time when the only complaint the SEC's 4000 employees had was that some porn sites charge just too much - after all, the SEC's "enforcement" budget is limited, while the worldwide supply of pornography is virtually endless. It's time to add one more grievance to the list of all those overworked regulators who have yet to put someone, anyone, from the big banks in jail as a consequence for nearly destroying the western way of life, or do more than merely wrist slap Steve Cohen with a penalty that costs more than three or four Picasso paintings: lunch breaks.
The Steve Cohen Era Is Over: S.A.C. To Plead Guilty To Securities Fraud, Stop Managing Outside MoneySubmitted by Tyler Durden on 10/29/2013 15:41 -0500
Nearly three years ago, before anyone had heard of expert networks, before the SEC had brought any major enforcement action against any hedge fund and long before anyone had to gall to accuse SAC of insider trading, Zero Hedge started a series of posts commencing with "Is The SEC's Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?" exposing the fraudulent transactions of Steve Cohne's hedge fund despite fears of violent legal reprisals. We are delighted to inform our readers that this particular chapter is now over: the WSJ has just reported that SAC will plead guilty to securities fraud, pay a final $1.2 billion penalty (still a tiny sum compared to all the ill-gotten gains by Steve Cohen over the years), and most importantly, end the fund's management of outside money.
U.S. prosecutors and SAC Capital agree in principle on insider-trading penalty exceeding $1billion. http://t.co/hNaBnT26jX
— WSJ Breaking News (@WSJbreakingnews) October 17, 2013
Obama Meets Security Advisors Over "Most Specific, Credible Terrorist Threat In Years"; US Forces On AlertSubmitted by Tyler Durden on 08/03/2013 21:34 -0500
The time has come to remind Americans that "you can't have 100-percent security and also have 100-percent privacy and zero inconvenience" or, in other words, why only the government can provide a veil of impenetrable protection, and why such things as personal privacy in an age of murderous Al Qaeda (the non-US funded variety, supposedly) terrorists lurking behind corners, are not only unnecessary but unpatriotic. According to CBS, the "terrorist threat prompting the U.S. government to close nearly two dozen embassies and consulates Sunday is the most specific, credible threat information in years" (even more credible than the Boston marathon bombers?) Specific but lacking the actual date, or timing, of an alleged "terrorist attack." Information which, however, can not be shared with the general public for obvious reasons - just trust the government and ignore that spy drone peeking into your window to see if you are dutifully spending your daily quota of "confident consumer" fiat on Amazon.com.
With euphoria returning to equity markets, it's worth remembering that stocks are unlikely to make you really rich. We have some ideas what might though.
The US Attorney for the Southern District of New York, Preet Bharara, is about to do what so many iterations of prosecutors have dreamed of doing in the past three decades: announce criminal charges against SAC Capital, if not against its chief Steve Cohen (at least not yet). Watch him do it live at the following webcast.