When even hedge funds are overwhelmingly on the same side of an investment as the broader market, you know it's a crowded trade. This is where the euro finds itself going into 2015. Traders, investment banks, asset managers and the so-called "smart money" of hedge funds are all betting…
For investors, the key to 2017 will not be Brexit, nor the French elections but rather USA bond yields. If the 10-year yield breaches 3pc we would expect major dislocations in many markets and a huge repricing of assets across the globe.
At first glance, the eurozone economy seems like it might finally be on the mend. True, according to some estimates, the eurozone economy may now be growing at an annual rate of 1.6%, up from 0.9% in the year to the fourth quarter of 2014. With the eurozone economy 2% smaller than it…
After the U.S. imposed a fine of US$9 billion on BNP Paribas as the latter had helped countries like Sudan to avoid sanctions launched by the U.S., French finance minister Michel Sapin appealed that rebalancing of currencies used in international payments is possible and necessary; BNP's punishment case should raise…
The Swiss National Bank (SNB) has set a minimum exchange rate of 1.20 francs to the euro, saying the current value of the franc is a threat to the economy. http://www.bbc.com/news/business-14801324 "The Japanese example with yen intervention teaches us that intervention can work in the very short term but changing…
On February 12, 2014, starting at 13:31 and running right up to market close, a high frequency trading (HFT) algo placed and canceled 5,000 to 30,000 orders per second in individual stocks and ETFs. Many seconds had more than 20,000 bogus orders.
There were 30 symbols affected: all beginning with the letter ‘O’, ‘P’, ‘Q’, ‘S’ or ‘T’. Not all stocks were listed on the same exchange, but as far as we can tell, these blasts of extreme quotes all had Nasdaq as the reporting exchange, which in interesting in light of the recent statement Nasdaq issued about the cause of the August 2013 blackout (more than 26,000 quotes per stock per second).
A once esoteric corner of the stock market —- “order types” —- has taken center stage the past few years in the debate about the health of the market, the role of high-speed traders in it and how stock exchanges interact with clients. A big reason for the scrutiny: Order…
Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges. Some former regulators and…
The issues that remain un-addressed are most important, as flash crashes have significantly grown and the core legality of certain HFT practices remains unquestioned in most public debate Investment management magnet Cliff Asness has a problem with a Bloomberg View piece on High Frequency Trading (HFT) with particular focus on issues brought…
The release of the latest Michael Lewis book, “Flash Boys,” and the subsequent report on “60 Minutes” has reignited the debate over the purpose and value of high-frequency trading (HFT). Like many innovations, HFT had some noble objectives when it first started (to improve both the cost and timing of…
I wonder if SAC Capital's Steve Cohen sent Michael Lewis a thank-you note. Lately, it seems like all anyone can talk about is high-frequency tradingand the new book "Flash Boys." But long before there was HFT, there was insider trading. There's a common perception (fueled by a rabid media) that insider…
This week, the U.S. Federal Reserve and the Bank of England both made welcome moves toward more simplicity. Specifically, they recast the “forward guidance” they’d previously given investors about their intentions.
It certainly could be, but the odds do not favor it. Statistically speaking, it is far more likely that a run-of-the-mill correction is now underway and working its way through each sector of the market, to varying degrees of severity. Counter-trend rallies are sharp and short (think Wednesday), which is…
The August 2013 gross domestic product report by the US Bureau of Economic Analysis drew little attention, but it contained a fairly remarkable piece of data: Inflation-adjusted GDP per capita in the United States hit a new all-time high in the second quarter of 2013, the first time a new…
För 10 år sedan verkade den globala ekonomin att vara på bättringsvägen. Räntorna gick ner till 1 %, Storbritannien var i sitt 12:e år av oavbruten tillväxt, Kina var en del av WTO och alla trodde på att marknaderna själva kunde korrigera sig. Den monetära systemkrasch som kom var oförutsedd…
(Source http://www.independent.co.uk/news/business/comment/david-blanchflower/david-blanchflower-we-should-fear-deflation--not-welcome-it-9986726.html ) The UK isn’t in deflation yet. While central bankers know what to do about stopping inflation, they don’t know what to do about halting deflation. The Swiss National Bank last week abandoned its attempt to defend a currency floor, which caused a sharp appreciation in its currency, which…
Australia’s unemployment rate climbed to the highest level in more than 10 years in January, spurring traders to pare bets on an interest-rate increase and sending the Aussie to its biggest drop in almost three weeks.
The jobless rate rose to 6 percent from 5.8 percent, the statistics bureau said in Sydney. The median estimate was an increase to 5.9 percent in a Bloomberg News survey of economists. The number of people employed fell by 3,700.
The Labor Department reports on the number of people who applied for U.S. unemployment benefits last week. The report will be released at 8:30 a.m. Eastern time Thursday. APPLICATIONS MAY STAY LOW: Economists forecast that the number of people seeking benefits will dip 1,000 to a seasonally adjusted 330,000, according…
U.S. economy added 533,000 jobs during the first three months of the year What do we need to analyse ? -To keep pace, job creation would need to accelerate in April -Watch which sectors of the economy are adding jobs. -Flirting with Full Employment -Average hourly earnings -The participation rate…
Please visit the souce :: http://econbrowser.com/archives/2014/09/interpreting-the-yield-curve-some-pictures Recently Jim highlighted the odd behavior of the various Treasury term premia. Here are some additional thoughts. First, from “Debt market goes off script” in the WSJ: Yields on short-term U.S. Treasury debt maturing in two to five years hit the highest level since…
The singling out of three debt types most at risk by the People’s Bank of China has prompted Nomura Holdings Inc. to warn that rising borrowing costs will make it even harder to avoid a default by these issuers.
The PBOC will enhance monitoring of local government financing vehicles, industries with overcapacity and property developers to prevent default risks from spreading, according to its fourth-quarter policy report issued on Feb. 8. Jinzhou Economic Technology Zone Development Group Co., an LGFV in Liaoning province, sold new seven-year bonds at 9.1 percent in January, while Guangxi Nonferrous Metal Group Co. issued nine-month bills at 8.5 percent. That’s almost twice as high as the yield on 2021 government debt.
China's banks disbursed the most loans in any month in four years in January, a surge that suggests the world's second-biggest economy may not be cooling as much as some fear. Chinese banks lent 1.32 trillion yuan ($217.6 billion) worth of new yuan loans in January, beating a 1.1 trillion…
The People’s Republic of China’s (PRC) economy has shown signs of overheating despite a sharp slowdown in economic growth, suggesting that, constrained by the supply of labor, its potential growth rate might have fallen significantly from its past level. With the priorities of the PRC’s authorities shifting from raising economic growth…
The yuan has recently been something of a safe haven among emerging-market currencies, yet market participants have learned from a bloody lesson over the past week that it is no longer an easy, one-way bet. A sharp fall of both the onshore and offshore yuan against the greenback made the…
Shanghai's over-the-counter equity market was almost deserted on a weekday morning last week. Two cleaning ladies swept the floor of a trading hall devoid of brokers or computers, while a woman at an information desk ate breakfast and talked on her mobile phone. During four visits this year to the…
The global financial crisis did not start in 2008 but in 2007 when BNP Paribas and UBS AG suspended withdrawals from some of their funds. If the world is once again buffeted by a similar crisis thanks to the enormous splurge in Chinese lending and fears about the quality of…
George Soros’ Quantum Endowment fund has been named the world’s most successful hedge fund, after it gained $5.5 billion in 2013, bringing the total gains since inception to $39.6 billion.
Quantum overtook Ray Dalio of Bridgewater Pure Alpha in a study by LCH Investments which ranked the top 20 hedge fund managers by net gains in 2013.
Last week, Forbes released its annual score card of top-earning hedge fund managers. The usual gang was there: Soros, Tepper, Cohen, Paulson, Icahn, Simons, Dalio, Griffin, et. al. That clickbait scorecard -- it worked on me -- and led to a strident column from Gawker, bizarrely titled "Fund Managers Are…
Tags: managers, fund, soros, top, billion, $, hedge, dalio, george
I try to learn from the best. Ray Dalio is one of them. He founded Bridgewater Associates, one of the biggest hedge funds in the world. Many retail investors have not heard of him, probably because his funds are open only to big institutions. It's a terrible mistake to limit…
Take a look at "How The Economic Machine Works," an introduction to the economic system by Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates. In the video, the Bridgewater Associates founder stresses three rules of thumb he'd like you to remember: 1) Don't have debt rise faster…
In 1992, George Soros brought the Bank of England to its knees. In the process, he pocketed over a billion dollars. Making a billion dollars is by all accounts pretty cool. But demolishing the monetary system of Great Britain in a single day with an elegantly constructed bet against its currency?…
This morning, the Wall Street Journal reported on funds that choose to tie their fates to the performance of companies led by women. Barclays’ Women in Leadership Total Return Index, which consists of American companies with a female CEO or whose proportion of female board members is at least 25 percent, is one…
The House could vote as early as Wednesday on legislation to raise the country’s borrowing limit, after Republicans met on Monday night in their latest effort to find elusive consensus on one of the final must-pass objectives before Washington goes into election mode.
Picking the best debt-ceiling explainer is a very subjective task. Do you like charts? Then you'll probably like to have the debt ceiling explained in one chart. Do you like movies? This one will explain the debt ceiling in 90 seconds. Do you like cheese from Denmark? Then you will probably like…
U.S. Treasury Secretary Jack Lew urged Congress Friday to increase the debt ceiling, saying he is not confident extraordinary measures will last beyond Feb. 27. In a letter addressed to House Speaker John Boehner, Lew highlighted that the Treasury must start implementing "extraordinary measures" to continue to pay the nation's…
Tags: congress, limit, borrowing, debt, ceiling, house
Not long after Alan Greenspan stepped down as Federal Reserve chairman in 2006, global financial markets began to unravel. The collapse of a few financial institutions, the near-collapse of many others, a massive bailout by multiple governments, and the worst economic downturn in three-quarters of a century ensued. Lots of…
October 22, 2014 Santiago, Chile The US government’s debt is getting close to reaching another round number—$18 trillion. It currently stands at more than $17.9 trillion. But what does that really mean? It’s such an abstract number that it’s hard to imagine it. Can you genuinely understand it beyond just…
There is no reason to further extend a European Union deadline for France to cut its budget deficit, the EU's top economic official said on Saturday, adding policy-makers should have learnt the lessons of the debt crisis and stuck to agreed rules. In June last year Paris got two more…
Some of the biggest names in Silicon Valley have been buzzing on Twitter over the last 24 hours about reinventing retail banking with better software.
“I am dying to fund a disruptive bank,” venture capitalist Marc Andreessen tweeted yesterday. Other Valley heavyweights chimed in, including Chris Dixon (a colleague at Andreessen Horowitz), Keith Rabois (Khosla Ventures), and Mo Kofyman (Spark Capital).
Greek debt tracker As the government in Athens haggles with its lenders over economic reforms,Greece is running out of money. Here is what it owes in the upcoming months. http://www.ft.com/ig/sites/2015/greek-debt-monitor/
This is a story about ARM Holdings (ARMH), the mobile technology company. But before it gets going, here are a few things you need to know: 1. ARM is a company made up mostly of chip engineers. They design parts of chips—such as graphics and communication bits—and they design entire…
Publicis CEO Maurice Levy's last-ditch offer to let Omnicom chief John Wren be CEO couldn't save the $35 billion deal to create the world's largest advertising company. http://postcards.blogs.fortune.cnn.com/
U.S. Treasury yields and other interest rates increased in the months leading up to the Federal Reserve’s December 2013 decision to cut back its large-scale bond purchases. This increase in rates probably at least partly reflected changes in what bond investors expected regarding future monetary policy. Recent research on this episode tentatively suggests that investors moved earlier the date when they believed the Fed would exit its zero interest rate policy, even though Fed policymakers made few changes in their projections of appropriate monetary policy.
Prior to the Fed's monetary stimulus at the start of financial crisis in 2008, the Fed held around $900 billion assets. Today the Fed's assets are $4.1 trillion and rising, but at a tapering pace.
Here’s what to look for when Janet Yellen testifies before the House Financial Services Committee today in her first public remarks since becoming Federal Reserve chairman on Feb. 3. Yellen’s prepared remarks will be released at 8:30 a.m., and the hearing will begin at 10 a.m. Yellen plans to speak…
This past week marked the annual gathering of bankers, financial officials, and other economic experts hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming. On Friday, Fed Chair Janet Yellen and European Central Bank head Mario Draghi both spoke; in a slow week for the markets, these…
Before the weak employent report of the 10 Jan 2014, traders expected the fed funds rate to average 0.45% in June 2015. That estimate is based on price movements in the June 2015 fed funds futures contract. Put another way, traders saw a high probability that the Fed would start…
The Feds revised their interest rate forecasts late last month hoping to normalize them faster than many market watchers would have anticipated. The new forecasts are higher, the projections having being raised for 2015-2016. This is a good move for extremely low rates can negatively affect the job hunt and…
The global financial crisis did not start in 2008 but in 2007 when BNP Paribas and UBS AG suspended withdrawals from some of their funds.
If the world is once again buffeted by a similar crisis thanks to the enormous splurge in Chinese lending and fears about the quality of lending in the giant shadow banking industry, then historians will look back at January 2014 when a fund promoted by Industrial and Commercial Bank of China ( ICBC) came close to default.
Pacific Money writer James Parker recommends the most insightful economics and finance offerings. James Parker was recently asked which English-language books he would recommend for someone seeking to understand the Chinese economy and financial system. The list and some brief summaries are included here http://thediplomat.com/2014/02/10-books-for-understanding-chinas-economy/
China's banks disbursed the most loans in any month in four years in January, a surge that suggests the world's second-biggest economy may not be cooling as much as some fear. Chinese banks lent 1.32 trillion yuan ($217.6 billion) worth of new yuan loans in January, beating a 1.1 trillion…
Tags: january, china, bank, chinese, lending, economy, asian
The People’s Republic of China’s (PRC) economy has shown signs of overheating despite a sharp slowdown in economic growth, suggesting that, constrained by the supply of labor, its potential growth rate might have fallen significantly from its past level. With the priorities of the PRC’s authorities shifting from raising economic growth…
China’s Premier Li Keqiang isn’t the sort of man to blush in public. But yesterday, when he went in front of China’s national legislature and targeted 7.5% growth in gross domestic product for 2014, he should have. The problem isn't the number -- most economists agree that 7.5% is a…
For a decade, starting in the late nineteen-eighties, Ramesh Ramanathan worked his way up the executive ladder at Citibank in the United States. Then he led its corporate-derivatives branch in London. In 1998, however, he quit and returned to India, his country of birth. He had a new goal: finding…