State Street

Tyler Durden's picture

1 To 3 Years Of Securities Recalls Aka Forced Squeeze To Go





After numerous posts on this blog discussing speculation of assorted forced buy ins, it seems that this phenomenon is quite factual and quite pervasive among the asset management community. As Zero Hedge has noted previously, forced buy-ins are a critical issue as it leaves shorts at the mercy of their securities lenders and repo desks (most of which are TARP recipients and thus beneficiaries of higher stock prices) which generically have the option of recalling lent out shares at a moment's notice, and thus creating artificial purchasing pressure: i.e. a forced short squeeze. According to Securities Industry News, in a recent survey by Callan Associates, over half of the respondents said they are undergoing a "controlled unwind" with their securities lending desks (aka State Street, BoNY, and Northern Trust).

 


Tyler Durden's picture

State Street On Electronic Trading And The Liquidity Hazard





Continuing the series of State Street presentations on relevant market topics, the latest piece "What are the Implications of the Growing Use of Electronic Trading" focuses on the nuanced difference between "real liquidity" and "liquidity hazard", depending on whether one is a price taker or market maker. Yet based on limited available public disclosure, non-premium clients of the NYSE and other PT-espousing exchanges have no visibility of who and under what conditions any given broker/dealer and quant become one or the other. And while merely a few years ago HFT was less than half of traded stock volume, recent data indicates high frequency trading now accounts for over 70% of US volume, and thus it is important to reasses what is the relevant set of data disclosure by dominating broker/dealers. The risk is palpable - as State Street itself notes, there is "equity capital at risk."

 


Tyler Durden's picture

The Dangers Of High Frequency Trading... As Predicted By Lawrence H. Summers





When discussing high-frequency trading, Zero Hedge recently asked
"As Goldman is becoming the primary conduit of trading
(whether principal or agency) in virtually all markets, the risk of a
massive liquidity drain becomes exponentially larger, and the risk of
an exogenous event approaches LTCM and Lehman levels. It is this key risk driver that regulators should be focusing on,
instead of chasing and attempting to punish the perpetrators of the
most recent market crash (we are not saying they should not, but they
should prioritize and now should focus on what is
most critical to maintaining a functioning market topology). " It seems we were wrong about authoritarian figures never predicting the implicit risk of this subset of program
trading - ironically, it was well over 20 years ago and none other than
the future Chairman of the Federal Reserve Larry Summers who had some
prophetic words of caution. In a paper titled "Commentary on 'Policies to Curb Stock Market Volatility" in which Larry was discussing the cause and effect of Black Monday (about which he is quite wrong that nobody had seen coming), he lays out some oddly forward looking observations about program trading, or positive-feedback trading as high frequency trading was yet to become a staple market diet.

 


Tyler Durden's picture

State Street On Liquidity Black Holes





Liquidity, as frequent readers know, is a fascinating topic to Zero Hedge. Liquidity black holes, as one would imagine, is doulby so. However, when a firm like State Street, which is at the heart of the multi-trillion dollar stock lending endoskeleton of the market discusses both of these concepts, one must pay attention. The below report is a State Street presentation from 2003 discussing what happens in those episodes when liquidity disappears and how that impairs all other axes of proper market function.

 


Tyler Durden's picture

H. Rodgin Cohen's (Failed?) Quest To Backstop Every Bank... Ever (And Usurp Geithner's Throne)





Over the past two weeks many banks issued press releases and opened up the PR spigot to indicate just how stable they all are now that a few have managed to pay down their TARP commitments. This of course, is nothing but a complete farce, and simply yet another chapter in the "consumer confidence" game played by the administration and its financial underlings. In order to see just how much the banking system depends on the continued unlimited wallet of taxpayers and Geithner's printing presses, and how much certain law firms continue to depend on the somewhat less limited wallet of Wall Street, I present an October 31, 2008 letter recently obtained by Zero Hedge, in which Sullivan & Cromwell, Wall Street's #2 favorite law firm (or is that #1: I am sure Wachtell Lipton would have a few choice words with regard to that particular league table rating, although it may be hard pressed to match S&C's $241,975 in donations to the Democratic National Convention), goes to town to make sure that its well-deserving clients including Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo get to not only have the taxpayers' cake (in perpetuity), but eat more and more of it each day.

 


Tyler Durden's picture

Just Whom Does Wachtell, Lipton, Rosen & Katz Represent?





It has been Zero Hedge's understanding that traditionally lobbies of any kind tend to at least make a tacit acknowledgment of their conflicts of interest. This is especially true when the "lobby" in particular is none other than Wall Street legal powerhouse Wachtell Lipton, which in a series of machine-gunned missives which Zero Hedge has recently obtained, did everything in its power to persuade the SEC to adopt every possible action that would essentially destroy short-sellers in the days after the Lehman collapse.

 


Tyler Durden's picture

Afternoon News





  • Danish officials confirm swine flu victim resisting Tamiflu
  • VIX drops to 25.65, below closing level before Lehman collapse
  • Qatar has made offer for Porsche: Qatar’s offer includes for Porsche’s VW options.
  • Germany's Vice Chancellor Steinmeier says no room for further tax cuts
  • Bank of America (BAC) 2009 estimate cut to USD 0.65 from USD 0.71 by Rochdale's Bove
  • Government to stop outright purchases of stock, State Street to stop rolling buy ins (relax, i jest)
 


Tyler Durden's picture

Frontrunning: June 29





  • State Street receives Wells Notice, may be sued by SEC over securities-law violations (Bloomberg and Reuters)
  • GE's Immelt claims crisis over, see only growth from now on, sweeps tens of billions of failed GECC "investments" under the rug (Bloomberg)
  • And another permabull talks his book, sees more procyclicality, has no factual justification (Bloomberg)
  • Central banks: the visible hand at work (Brown Brothers Harriman)
  •  


    Tyler Durden's picture

    Merrill's New REIT Teams Marks REIT Territory





    The brand spanking new team (and legacy boy Craig Schmidt) that Merrill recently acquired from some other bank (I wrote about this, but frankly don't remember where these clowns came from nor do I care), just went to town all over the REIT bathroom and marked their territory effusively. ML in fact distributed a 45 page reinitiation report, which I have no intention of ever reading.

     


    Tyler Durden's picture

    Moody's: Credit Card Charge Off Rate Highest In 20 Years





    Hi-fi quants are like pigs in a trough today, driving the market on horrible new home sales numbers just as State Street is back to its usual antics and (or as a result of which) Fidelity disclosing no IWM borrow available. In the meantime, Moody's has released its Credit Card Index update: charge off rates for May have now surpassed 10%.

     


    Tyler Durden's picture

    Frontrunning: June 24





  • State Street, which is underweight bonds, sees Treasuries at 4.5% in 6-12 months (Forbes) [State Street is also underweight shorting]
  • Swiss Franc drops on speculation SNB sold currency to curb gain (Bloomberg)
  • Fears of big bank problems return (Fortune, h/t Jonathan)
  • Green shoots lunacy is back: durable goods allegedly imply recession weakening (Bloomberg)
  • Italy economy minister says bank lending remains an "open issue" (Forbes)
  •  


    Tyler Durden's picture

    Overalottment: June 22





    • Must read: Researching corruption at the Treasury: The PPT 101 (Market Skeptics)
    • NRG suit against Exelon bid dismissed (WSJ)
    • State Street will have something to say about this: Fed in discussions on changing Repo transactions (Bloomberg)
    • Someone is buying the solar hype: GCL-Poly to buy Jiangsu Zhongneng Polysilicon (Bloomberg)
     


    Tyler Durden's picture

    Merrill's New REIT Teams Marks REIT Territory





    The brand spanking new team (and legacy boy Craig Schmidt) that Merrill recently acquired from some other bank (I wrote about this, but frankly don't remember where these clowns came from nor do I care), just went to town all over the REIT bathroom and marked their territory effusively. ML in fact distributed a 45 page reinitiation report, which I have no intention of ever reading. The summary ratings and price targets are below.

     


    Tyler Durden's picture

    Merrill's New REIT Teams Marks REIT Territory





    The brand spanking new team (and legacy boy Craig Schmidt) that Merrill recently acquired from some other bank (I wrote about this, but frankly don't remember where these clowns came from nor do I care), just went to town all over the REIT bathroom and marked their territory effusively. ML in fact distributed a 45 page reinitiation report, which I have no intention of ever reading. The summary ratings and price targets are below.

     


    Syndicate content
    Do NOT follow this link or you will be banned from the site!