Chewing Over Short-Selling Rules
Article :
November 2008
How regulators can’t be trusted to do much of anything, especially when it comes to activities that begin with the word “short” and end with the word “selling.” A treatise from those who know better.
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Strongest Equities Buy Signal EVER?
Article :
November 2008
OK, maybe not “ever,” but at least in the past six years. According to Morgan Stanley’s Teun Draaisma (whose name, we would posit, emanates all kinds of sagely vibes) traders are now experiencing a “full house” of indicators that together boast a “near-perfect” track record. But what, exactly, are they?
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Distress Signals
Article :
November/December 2008
How dire is the situation facing the financial system and the larger economy? A roundtable of distressed-securities experts share their outlook.
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New York’s Unemployed Jump 13%
Article :
October 2008
And guess which sector is leading the pack? Some reasons why you may want to ditch that shirt and tie for a plumber’s belt. After all, if Wall Street has taught us one lesson, it’s that there’s never any shortage of leaky pipes.
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Losing Lehman
Article :
November/December 2008
Whether you blame short sellers, toxic credit instruments, Hank Paulson or Dick Fuld, the loss of one of Wall Street's most prestigious firms was a painful episode few in the industry will ever forget. We take a look back at those final tragic days.
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In the Money
Article :
November/December 2008
Nauseating volatility, short-sale bans, all-out panic -- what a time
to be running an options exchange. Talking shop, and shocks,
with BOX vice chairman William Easley.
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If You Can’t Hack It, Don’t Bother
Article :
October 2008
We don’t mind pointing this out to the little pikers just getting started, but to BARCLAYS? C’mon! The latest trading travail to get a monster bank’s knickers in a knot.
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Another Doozy of a Day
Article :
October 2008
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So Much for the Monday Rally
Article :
October 2008
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Traveling Circus
Article :
October 2008
Is a one-day stand in Sin City with a bevy of automotive supermodels being unfaithful to your car? We dropped a Vegas-based trader in the saddle of 2,500 horsepower to see if more is ever enough.
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Not Over By A Long Shot
Article :
October 2008
Warren Buffett’s feral buying spree continues apace, as he now bags his second iconic company this week. And, on a totally related note, did you happen to notice how GE Capital’s credit-default swap spreads narrowed to 40 basis points yesterday after blowing out to 740 bp? Very interesting.
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Threat Assessment
Article :
September 2008
As I mentioned last week, we are in uncharted waters. Well, now, we just lost our compass. I think that the failure of the rescue plan places the global markets in a condition where there is a meaningful possibility of complete shutdown. We will know more about this tonight, when we see how the rest of the world reacts, and more importantly, when we measure to what extent market participants try to hastily reduce their counterparty exposure to zero. This means calling in any and all cash available, and while I can’t say for sure it will happen, it’s a real possibility.
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Otmar Speaks
Article :
September 2008
(And with a name like Otmar, how can you not listen?) Otmar Issing, the European Central Bank’s former chief economist, says that unlike during economic crises of recent past, the current one threatens to shake confidence in the world's financial system in a way that could go “on and on,” making it one of the most “dangerous” in history. And who does he blame? Three guesses and the first two don’t count.
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No Reprieve From 7-Day Work Week
Article :
September 2008
Woe to you if you are not glued to your BlackBerry every weekend, since clearly this is the new witching hour for earth-shattering, market-moving events. Consider the consequences of walking into work today without knowing anything about the U.S. bailout of Fannie Mae and Freddie Mac. Not only would you have been severely handicapped intellectually, but your ignorance probably would have set you back a good chunk of change. Not that markets are making any actual sense of it anyway – as can be easily pieced together here.
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The Cowboy Way
Article :
September 2008
When the markets have taken you for a ride, there's one option for the trader thrown for a loss: Pull your positions up by their bootstraps and get your assets back in the saddle. By day, these wilderness resorts will toughen you up -- and by night, they'll pamper you like the soft, indulgent man you are.
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Debt Market Tremors
Article :
August 2008
Like to play with fire? Nothing wrong with that. Probably it’s why you became a trader in the first place. But if your poison of choice happens to be the leprous corporate bonds and securities backed by consumer loans and mortgages, here’s the sectors where you might want to exercise just a smidgen of extra caution.
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Paulson: "Banks Are Sound"
Posting :
Larry Levin
:
07/24/2008
Hank Paulson has been on television, in front of Congress, and speaking to reporters with one message: banks are fine.
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Sold To You! Bagholder Meet Pain
Posting :
Larry Levin
:
07/15/2008
The government's attempt to shore up FNM and FRE haven't worked if today's market action is any indication of the eventual outcome.
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Doctor’s Orders: Going Public
Article :
June 2008
The great outdoors: a cure for the common workout?
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Fork in the Road
Article :
June 2008
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But Doth It Protest Too Much?
Article :
June 2008
There will be no change to Libor calculations, according to a statement finally issued by the British Bankers’ Association. We just want to say thanks, BBA, for letting us know that on a Friday at 1759 GMT. Really shows you grasp the enormity of the situation. Meanwhile, the Libor debate has more or less exploded, with The Wall Street Journal’s recent study getting all kinds of flak (not in the least, from its competitor, the FT) and comment boards overflowing with the usual nattering nabobs. Here, a selection of the push-and-pull.
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Hedgies: Putting The Screws On Russia (With Love)
Article :
May 2008
How a relic from Russia's debt default a decade ago threatens to throw a wrench in the works of the country's economic resurgence by forcing hundreds of companies to boost the interest paid on debt to as much as 16 percent.
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Brian Hunter, Comeback Kid?
Article :
May 2008
How the 33-year-old trader blamed for the multibillion-dollar collapse of monster energy hedge fund Amaranth came roaring back in the latest quarter on the same kind of gas bet that proved his catastrophic undoing in 2006. No word yet on whether the kid with the killer cojones made enough to defray the $30 million fine the Federal Energy Regulatory Commission is still trying to squeeze out of him (this, for allegedly manipulating gas prices around the time of Amaranth’s implosion). But we can hook you up with the story of why, this time, Lady Luck decided to give him a much-needed break.
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Another Slow Day
Posting :
Larry Levin
:
05/14/2008
Although there was a little action at the open today, the majority of the day was a real snoozer. The June S&P barely had an 11-point range; and the vast majority of today's action traded within a 4.50-point range.
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And Now, A Word From The Back Office...
Article :
May 2008
Signaling the rash of job cuts stalking the financial community is beginning to singe even the most devout workers – you know, the ones who got up early, kept their heads down, never fussed, put their backs uncomplainingly to the grind (not to mention refraining from brown-nosing, water-cooler gossip and all office-politicking, and are beginning now to think the better of it) – this open letter from one fallen Bartleby stands as an ominous warning of what happens to those who come to Wall Street with stars in their eyes.
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The Wisdom of Steinberg
Article :
June/July 2008
Aided by two industry legends, Jonathan Steinberg transformed an ailing publishing business into an ETF juggernaut.
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Going Public
Article :
June/July 2008
The great outdoors: the cure for the common workout?
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The Trade: Dead Man’s Curve
Article :
April 2008
Be it steep or inverted, traders enjoy a good yield-curve bet. But with the long bond taking on a life of its own and credit markets gone haywire, playing rate spreads can be one dangerous game. A few pointers.
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Et Tu, Myron?
Article :
April 2008
After Meriwether, it seems former LTCMers can’t catch a break. How Platinum Grove Asset Management, the $5.8 billion hedge fund group commandeered by our idol, Myron Scholes – options-pricing king, heat-diffusion physics theorist (both things not entirely unrelated) Nobel Laureate and all-around good guy – fell on hard times with the latest heave of the fixed-income market.
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Hot News, Gossip and Industry Dish
Article :
April/May 2008
The Peloton Brief
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Ask The Dream Doctor
Article :
April/May 2008
One forgetful quant neglects his dogs— AND discovers that his biological clock might be ticking.
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The Larry Levin File: A Shot Across the Bow
Posting :
Larry Levin
:
03/31/2008
Last week a news flash came and went - practically unnoticed. The world's
fifth-largest pension fund will no longer buy US Treasuries because yields
are too low. The move signals what could be a big shift by financial
institutions away from US government debt into higher-yielding assets.
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The Trade
Article :
April/May 2008
Be it steep or inverted, traders enjoy a good yield-curve bet. But with the long bond taking on a life of its own and credit markets gone haywire, playing rate spreads can be one dangerous game.
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Liquidity Alert: What Gives, Bear Stearns?
Article :
March 2008
We would be lying if we claimed Wall Street was having a great day even before the Spitzer kibitzer. Rumors were already flying that potential liquidity bottlenecks could now be plaguing Bear Stearns. While the bank denies there’s any problem, it seems that credit indices are widening sharply as the cost of protecting bank bonds against default reach record levels. Time to prepare for more shock waves?
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Bovine Spongiform Encephalopathy
Posting :
Larry Levin
:
03/10/2008
The market took another one the chin Friday, closing below 11,900, the worst close since Oct. 11th 2006. The bull market clearly suffers from bovine spongiform encephalopathy (BSE) - Mad Cow Disease. And don't get too close or you'll surely catch the human form of BSE, Creutzfeldt-Jakob disease, which "value buyers"
suffer from in spades. The transmissible disease is said to be caused by prions; however, during this mad-cow market, the disease spreads between analysts and investors via "buy & hope" as well as desperation.
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What Would John Galt Do?
Article :
March 2008
Who says we should have laissez-faire capitalism in good times and government-led bailouts in bad ones? Why anarchy – with a hefty dose of personal accountability – could be the answer.
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Something Wicked This Way Comes
Article :
March 2008
Brace yourself for some crazy markets today. Stocks are tanking. Corporate bonds are tanking. The dollar is tanking. Key interest rates will soon be tanking (again). And labor data about to be released is expected to show the jobless rate in the U.S. rising in February to a two-year high while payrolls likely climbed only at a quarter of last year's pace – which, considering last year, isn’t saying much. Want more? We’ll give you more.
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I Need More Cowbell!
Posting :
Larry Levin
:
03/06/2008
For weeks now the market has been on pins and needles, waiting for Ambac to announce a package that will (somehow) keep it’s AAA-rating. When rumors (of nothing new) went through Wall Street, it created violent reversals higher.
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‘Irrational Pessimism’?
Article :
March 2008
Is the bond market now so lowly rated as to be underrated? Just ask Jim Reid and his crack team at Deutsche Bank, which every year makes a habit of publishing this influential analysis of credit markets that puts current yields and fundamentals in historical perspective.
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The Trade: Bring The Heat
Article :
February 2008
If the weather outside is frightful, the volatility and trading opportunities in heating oil can be delightful.
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Small Cap
Article :
February/March 2008
Had a nice little Tuesday? Successfully moved a few credit default swaps? Hey, you’ve pocketed enough to buy yourself a jet.
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Bring the Heat
Article :
February/March 2008
If the weather outside is frightful, the volatility and trading
opportunities in heating oil can be delightful.
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Davos: Then And Now
Article :
January 2008
Lest you think the global economic belt-tightening extends to annual conferences at Swiss ski resorts, think again. However, the mood this year is decidedly less jubilant than what we saw in 2007. Here, CEOs and investors speak frankly about their greatest fears for 2008.
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Having Your SIVs And Eating It, Too
Article :
January 2008
Literally. Bondholders in structured-investment vehicles, caught in the slamming door of the subprime snafu, have now lost nearly 50% of the value of their assets. Guess how many have already gone out of business and how many still remain on the chopping block? Hint: more than any commercial-paper junkie can bear.
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The Dollar: What Goes Down, Must Come Up?
Article :
January 2008
So, forex has yet to go the distance in discounting weaker economic growth, says the head of currency research at Lehman Brothers in London – but just how far off is it and what does that mean for the long-suffering greenback?
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Commodity Heads Just Kept on Walking, Rising… and Rolling
Article :
January 2008
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The Great Refinancing
Article :
December 2007
Wall Street is likely on the cusp of a massive refinancing of corporate bonds – to the tune of $557 billion, according to Bank of America. As one can imagine, that won’t exactly have a nothing effect on the broader debt market.
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Performance: Hold It Now
Article :
December 2007
As the NYMEX transitions from open-outcry to the world’s biggest electronic arcade, here’s the whiz-bang gadget locals are increasingly using to execute trades.
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Awesome August: My Best/Worst Trade
Article :
December 2007
The month was four weeks to forget for much of the trading world, but this past August brought sorely missed market volatility — and one equity options trader’s best month of performance ever.
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It’s The Yen, Stupid
Article :
November 2007
Is it true there’s an unmistakable correlation between the ups and downs in the global stock market and the spreads between the yen and the euro? That is the humble opinion of one outspoken wealth manager in today’s Financial Times. Perhaps today is the perfect day to test his hypothesis: the yen is swooning against 16 of the world’s most actively traded currencies. Read on for the method behind his madness.
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