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No More Hedge Funds

Hedge fund

      by Larry Levin   In a glaring better late than never move, CalPERS (The California Public Employees’ Retirement System–the largest pension fund in the U.S.) intends to divest all of the $4 billion it has invested in hedge funds. And in a glaring ode to the obvious, the reasons CalPERS gave are that the hedge funds are too expensive and complicated and basically more trouble than they're worth. With the stock market climbing to liquidity infused higher highs, the performance of most hedge funds have looked terrible by comparison, especially in light … [Read more...]

Bubbles

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        by Larry Levin   How often do you see just one bubble existing on its own? Not in a bath, not in a bottle of champagne, and definitely not in a frothy stock market environment. I have written about the student loan bubble and the sub-prime auto loan bubbles in this column before. Add to the list of bubbly worries, the second coming of the tech bubble. Bill Gurley, a prominent venture capitalist, believes that Silicon Valley is taking on an excessive amount of risk right now that is unprecedented since 1999. From the Wall Street Journal: WSJ: … [Read more...]

Retail Truth

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      by Larry Levin   If I was speaking in my politician voice, I would employ not only optimism, but obfuscation and call most government data “occasionally unintentionally skewed to reflect an overly positive outlook.” Thankfully, I don’t and you know that in this newsletter I repeatedly call into question any and all government reports because I believe they are manufactured, massaged and manipulated to achieve a desired end. Friday, the government produced retail sales numbers for August that were supposedly positive according to the mainstream … [Read more...]

The Peak?

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          by Larry Levin   It has often been said that a market top can be marked, in hindsight of course, by some crazy human events involving money. The "biggest skyscraper" in the world has been to at certain tops; cabbies giving stock tips topped a market; and massive homes being purchased by the unemployed were all crazy and all involved too much money in the markets. Is the following story another "peak" indicator? The NYT reports ... What will $1 million buy in New York City? A diamond-encrusted Cartier men’s watch. A small … [Read more...]

Rigging Report

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    by Larry Levin   Next Monday, September 15th, may be a very interesting day if the CME actually follows through on the new rules it has recently announced. It has, shockingly, finally decided to make bogus (read: illegal) HFT manipulative orders and market rigging against the CME rules. As you will read at the end, the new rules take effect in a few short days. Before that, however, I am reprinting a very well received missive of mine on this exact subject. I want to state that I am not against algorithmic trading or HFT in general; however, there are … [Read more...]

Mystery Financing

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        by Larry Levin   Coming as a surprise to nobody that a war-torn country will require financial help, we learned earlier this month that the Ukraine is facing a $3.5 billion funding gap and could need additional financing worth $19 billion next year. The continuing conflict between Kiev's forces and pro-Russian separatists in the eastern region of Ukraine, where the country's manufacturing is centered, is forcing the economy deeper into recession and raising rescue costs. The IMF late last week approved the latest tranche of the fund's $17 … [Read more...]

Alibaba

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      by Larry Levin   Do you know Jack ma? Well, he may be stand only slightly over five feet tall, but if all goes according to plan, Alibaba’s founder, CEO and de facto emperor Jack Ma will shortly become the most powerful man in eCommerce on earth. His net worth will balloon to somewhere around $15 billion and he’ll become bigger than Amazon’s Jeff Bezos. When the Alibaba Group goes public later this month in an offering that could value the company at about $160 billion, investors will have little doubt about who is in control of the company. … [Read more...]

Nuclear?

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        by Larry Levin   Nuclear war, whether its called “tactical” or not is certainly NOT a good idea. Territorial struggles, and life in general can get bad, but killing people won't make it better. Are the quotes that I post here coming from Russia, or the USSR, or a machine from a Terminator movie? Sadly, there is a Russian general who has the ear of Putin...and suggests a nuclear option. From the Moscow Times we read - "First and foremost, the likely enemy of Russia should be clearly identified in this strategic document, something … [Read more...]

Still Rigged

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        by Larry Levin   We often talk about how central banks rig interest rates and how that affects the market. If asked, without using such colorful language, I bet most central planners (bankers) would agree that that's their job: rigging interest rates. But going to the extreme lengths of today seems ridiculous. Now central planners have interest rates pegged at zero or less than zero (ECB) in what we call ZIRP and NIRP. In fact, many foreign central banks conduct outright currency buying and selling interventions. Additionally, the BOJ will … [Read more...]

Cry me a River

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      by Larry Levin   It isn’t easy being a big bank. You may think it’s all lax regulation, fed subsidies, and beneficial policies, but just like celebrities and professional athletes, it isn’t easy being one of the chosen few. Just ask Gwyneth Paltrow, who complained that it was harder for her to be away from her kids when she was filming a movie then it was for a “regular” working moms. Or Kobe Bryant and Lebron James constantly whining about seemingly everything, despite earning a collective $50 million a year between the two of … [Read more...]