Tag Archives: White Shoe Boys

U.S. Probes Treasuries Niche That Investors Claim Is Rigged by Big Banks

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“Traders at global banks colluded to artificially inflate the price of instruments that allow them to sell U.S. debt before they own it, and then bought the debt at auctions for an artificially suppressed price, unfairly profiting at investors’ expense, according to several lawsuits filed against the banks. The banks haven’t responded to those allegations in court. The probes and lawsuits come as many primary dealers’ bond-trading businesses have been squeezed by recent capital requirements from regulators, which have limited how much risk banks can take. This year, dealers’ purchases at Treasury note and bond auctions for their own trading books represent the smallest share on record.”

http://www.bloomberg.com/news/articles/2015-11-09/u-s-probes-treasuries-niche-that-some-investors-claim-is-rigged

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Goldman’s BRIC Era Ends as Fund Folds After Years of Losses

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“The bank’s asset-management unit folded its money-losing BRIC fund, which invests in Brazil, Russia, India and China, and merged it last month with a broader emerging-market fund. Goldman Sachs pulled the plug on the nine-year-old product because it doesn’t expect ‘significant asset growth in the foreseeable future,’ according to a filing to the U.S. Securities and Exchange Commission.  The downfall of the BRIC fund, which had lost 88 percent of its assets since a 2010 peak, also underscores how the strategy of bundling disparate countries into a single investment theme is losing its appeal among investors.”

http://www.bloomberg.com/news/articles/2015-11-08/goldman-s-bric-era-ends-as-fund-closes-after-years-of-losses

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Stone Lion Capital Partners Suspends Redemptions in Credit Hedge Funds

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“Stone Lion, founded in 2008 by Bear Stearns & Co. Inc. veterans Gregory Hanley and Alan Mintz, is in a similar malaise, facing heavy losses on so-called distressed investments including junk bonds, post reorganization equities and other special situations, people familiar with the matter said.  Its oldest set of credit funds, which manage $400 million altogether, received ‘substantial redemption requests,’ precipitating the decision, the firm said in a statement. The firm didn’t give a time frame for when the money would be returned.  The firm continues to operate several other funds, including one that bets on Puerto Rico’s economic recovery.”

http://www.wsj.com/articles/stone-lion-capital-partners-suspends-redemptions-in-its-oldest-fund-1449870782

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Who’s the Bear Driving Up the Price of U.S. Stock Options? Banks

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“If you want to buy a put to protect against losses in the Standard & Poor’s 500 Index, often you’ll pay twice as much as you would for a bullish call betting on gains.  New research suggests the divergence is a consequence of financial institutions hoarding insurance against declines in stocks. Deutsche Bank AG says in a Dec. 6 research report that the likeliest explanation may be that demand is being created for downside protection among banks that are subject to stress test evaluations by federal regulators. In short, financial institutions are either hoarding puts or leaving places for them in their models should markets turn turbulent.”

http://www.bloomberg.com/news/articles/2015-12-09/who-s-the-bear-driving-up-the-price-of-u-s-stock-options-banks

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Morgan Stanley begins layoffs in credit division

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“Morgan Stanley this week cut staff covering short-term credit and regional broker-dealers, after a quarter in which the bank posted a 42 percent drop in bond trading, several sources told Reuters.  The sources blamed the shakeup at the No. 6 U.S. bank by assets on tougher capital rules, mounting competition from faster and cheaper trading on electronic systems and expectations that the Federal Reserve will raise U.S. interest rates next week for the first time in nearly a decade.  The decision to downsize followed one of Morgan Stanley’s slowest quarters for bond trading since the global credit crunch.”

http://finance.yahoo.com/news/morgan-stanley-begins-layoffs-credit-173249440.html

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The $10 Hedge Fund Supercomputer That’s Sweeping Wall Street

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“What’s remarkable about their efforts isn’t that AI science fiction is suddenly becoming AI science fact (sorry, Steven Spielberg). It’s something more mundane: thanks to cloud computing, mind-blowing data analysis is getting so cheap that many businesses can easily afford it.  Sophisticated hedge funds like Renaissance Technologies and tech giants like Google Inc. have been deploying AI and its subset, machine learning, for years. Now data shops like Ufora, which McKee founded in 2011, are leveraging cloud power to help hedge funds and other financial players run complex, big-data computer models. The results are startling.”

http://www.bloomberg.com/news/articles/2015-05-20/the-10-hedge-fund-supercomputer-that-s-sweeping-wall-street

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Hedge Fund Borrows $10M in Stock Via the Bitcoin Blockchain

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“Through a new operation it calls TØ.com, online retailer Overstock.com and its freethinking CEO, Patrick Byrne, have built a system for issuing, buying, selling, and even borrowing stocks and bonds on the blockchain.  Previously, TØ.com, an Overstock subsidiary, had used the system to issue a private bond to Byrne himself. TØ has been facilitating stock loans for the past two weeks, with five different customers borrowing stock, including Clique Fund. Tuesday’s transaction is the largest to date.  Overstock and TØ are also aiming to remake the public stock market as a whole. Their system provides a way for companies to issue stock, and it’s seeking SEC approval to do so publicly.”

http://www.wired.com/2015/10/hedge-fund-borrows-10m-in-stock-via-the-bitcoin-blockchain/

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Want to play the market? Count the Fed leak weeks

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“U.S. central bankers not only regularly leak secret information about monetary policy, but the leaks are so predictably timed that a savvy investor without access to the leaked information could make money just by buying stocks in certain weeks.  The weeks that have excess stock-market returns are generally the same in which there are closed Fed Board meetings, and increased volatility in short-term interest-rate futures contracts suggests that it is information on monetary policy from those meetings that is driving the pattern.”

http://in.reuters.com/article/2015/11/22/usa-stocks-fed-leaks-idINKCN0TB01120151122

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Stan Druckenmiller’s Massive Bet on Gold

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“Druckenmiller is one of the world’s most successful and respected traders. As a hedge fund manager from 1986 to 2010, he generated an incredible average annual return of 30%.  Druckenmiller was also George Soros’s right-hand man at Quantum, Soros’s famed hedge fund. Quantum’s now legendary 1992 trade shorting the British pound was Druckenmiller’s idea. It made Quantum about $1 billion. People say the trade ‘broke the Bank of England.’  Druckenmiller’s fund recently bought $300 million worth of SPDR Gold Trust (GLD), an ETF that tracks the price of gold. It’s a huge bet, even for a big-time trader like Druckenmiller. He put 20% of his fund’s money into this trade; it’s his largest position.”

http://www.caseyresearch.com/articles/this-pig-just-made-a-massive-bet-on-gold

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Hacking ring made $100M trading by stealing corporate press releases

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“An international web of hackers and traders made $100 million on Wall Street by stealing a look at corporate press releases before they went out and then trading on that information ahead of the pack, federal authorities charged Tuesday.  Authorities said it was the biggest scheme of its kind ever prosecuted, and one that demonstrated another alarming vulnerability in the financial system in this age of increasingly sophisticated cybercrime.  In a 21st-century twist on insider trading, the hackers broke into the computers of some of the biggest business newswire services, which put out earnings announcements and other press releases for a multitude of corporations.”

http://www.usnews.com/news/business/articles/2015/08/11/feds-group-made-30m-with-hacked-press-release-info

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