Whitehawk

Whitehawk
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  • Google (GOOG): Q2 EPS of $9.56 misses by $1.22. Revenue (ex.-TAC) of $11.1B misses by $230M. Shares -4.5% AH. CC at 4:30PM ET (webcast). (PR[View news story]
    Buy the NQ100 futures on dips (if you think there's still a floor under the market :).
    Jul 18, 2013. 04:22 PM | 1 Like Like |Link to Comment
  • Calling the financial tightening caused by rising long-term rates "unwelcome," Bernanke - in Day 2 of Humphrey Hawkins testimony - hints the purpose of his taper talk in June was to wring out some excesses from the markets. "It's probably a good thing to have happen," he says, adding it may now be easier to get hawkish leaners to go along with continued $85B/month in QE. "We've not changed policy. We are not talking about tightening monetary policy."  [View news story]
    "Excesses" (read leverage and hot money flows) have not been "wrung out." Perhaps Bernanke doesn't study markets (at all) and just reads the teleprompter.

    The real story is that the move in rates took the Fed by surprise.
    Jul 18, 2013. 04:13 PM | 5 Likes Like |Link to Comment
  • Intel: Don't Panic  [View article]
    Last time INTC had 4 consecutive qtrs of revenue declines, the US was in a recession http://bit.ly/1aTFrNE

    However, I think the trend in INTC's case is company specific.
    Jul 18, 2013. 10:28 AM | Likes Like |Link to Comment
  • IBM (IBM): Q2 EPS of $3.91 beats by $0.14. Revenue of $24.92B (-4.2% Y/Y) misses by $450M. $1B restructuring charge recorded. Expects 2013 EPS (exc. restructuring charge) of at least $16.90, above consensus of $16.64 and prior guidance of $16.70. Shares +3.6% AH. CC at 4:30PM ET (webcast). (PR[View news story]
    Could not have said it any better: IBM's Unexceptional Exceptionals A Lot of Work Goes Into Big Blue's Earnings—but Not Necessarily the Most Inspiring Kind (http://on.wsj.com/12M0rfp)
    Jul 17, 2013. 07:07 PM | 2 Likes Like |Link to Comment
  • Why Stocks Continue To Levitate In The Face Of Eroding Economic Metrics: Ask Elizabeth Warren  [View article]
    It also needs to be noted that the major reason for QE3+ is to maintain ZIRP - a Fed funds rate that is near zero nominally, providing the Treasury with the ability to fund spending at little interest cost through short-term bills.

    A secondary QE of MBS purchases was a prop to the housing/mortgage markets, the latter having become even more nationalized since the "conservatorship" of Frannie. It is a politically expedient tool, as well.

    Long-term thinking of consequences does not enter into these policy/central planning decisions. The effect of raising the AMB to maintain ZIRP has resulted in asset price inflation and hot money flows, and has ADDED systemic risks.
    Jul 16, 2013. 05:47 PM | 2 Likes Like |Link to Comment
  • Why Stocks Continue To Levitate In The Face Of Eroding Economic Metrics: Ask Elizabeth Warren  [View article]
    Leverage of collateral that loses value over time. Yes, that is a systemic risk. Yet it is typical. The repo (and swaps) markets were/are an example of that.

    However, I suggest that moving toward more regulation to address systemic risks provides a false sense that the system will have less risk.

    To wit: The Fed induces an environment that promotes easy money and high leverage, especially among the large players, e.g. primary dealers and their "infrastructure." This won't change under any new regs suggested above. Even so, the solution is to let those advantaging these conditions FAIL if they abuse the system. That will lead to greater behavioral changes than a false sense of less risk. The system deals out way too many moral hazard cards, and the proposed regs won't change this. The system crossed the line in 2008, and that sickness needs to be corrected with good old-fashioned "loser pays."
    Jul 16, 2013. 05:00 PM | 5 Likes Like |Link to Comment
  • Best Businessweek Cover Ever  [View instapost]
    Actually I saw on ZH that the Tudor fund was slightly behind the S&P in YTD returns, so PTJ still has his mojo (if he takes the 20% cut that is well above the S&P). The top fund was "only" 9% above the S&P. These are just hedge funds that report, not those that don't. Yes, surely a good number of them lose money or perform poorly compared to the Fed-induced indexes. Perhaps a good name for a hedge fund is the "Fed Opportunity Fund."
    Jul 15, 2013. 09:09 PM | Likes Like |Link to Comment
  • Don't Let China's Data Obscure Larger Story  [View article]
    How heavily managed? Do the Chinese want a strong RMB or a weak RMB? What will market forces ex-China do over time, given the strength v. dollar-peg in the last few years?

    The issue for the Chinese: they'd like to lend in a strong currency and not have their returns inflated away - so they are interested perhaps in promoting SDR-8s and perhaps even seeing a real de-peg of the RMB at some point.
    Jul 15, 2013. 08:30 PM | Likes Like |Link to Comment
  • Mortgage REIT Meltdown, I Told You So  [View article]
    The "I told you so" should be applied to people who buy SIVs at inflated values relative to the potential risks. That is what happened with mREITs. It is no different with other vehicles. If you buy at a low cost basis below what the market may discount given the risks, then there is less to worry about. These are few among the crowd, since it requires buying after there has been a significant market discount. Not sure we've reached that point yet with mREITs. eREITs are overvalued, and the risks are not identical, I can agree on that. The author has yet to take up my challenge of how eREITs deal with asset inflation risk (or perhaps I missed his analysis on this).
    Jul 15, 2013. 08:14 PM | Likes Like |Link to Comment
  • Regime Shifts = Volatility  [View article]
    Yes, and why extreme leverage in FX markets can lead to crashes and/or dramatic unwinds/margin calls elsewhere.
    Jul 15, 2013. 07:43 PM | Likes Like |Link to Comment
  • Regime Shifts = Volatility  [View article]
    It amuses me to hear people in the U.S. comment on losses from non-bank transactions "that the gov't seems unable to control." Indicator of how dependent many have become on bailouts, price fixed floors and artificial interest rates.

    If a market participant enters into a transaction and loses money, it isn't a given that they will be bailed out. The expectation that they will is the typical American entitlement mentality, a structural problem indeed.
    Jul 15, 2013. 07:38 PM | 1 Like Like |Link to Comment
  • Regime Shifts = Volatility  [View article]
    As much of the bearish hawk that I am in nature, this market can go higher. Cam's articles have been on the cautious side, and had one done the opposite of what he recommended a week or so ago ("It's the risk premium stupid"), one would be up on the indexes quite sharply, some 100+ points on the RUT and NQ100 alone. On the other hand, the analysts that are right (like the broken clock) do end up being right, and it is a matter of timing, which very few get right. That alone loses many a bear money. The moral to the story is patience, and not losing all your money in repeated drawdowns. Those who were right before the housing/credit market crash(es) took on significant losses before their positions turned green, and took plenty of heat from the broken clock critics. A week ago I said that this market would be at 1750 in two weeks. I won't be surprised if that turns out to be true. On the flip side, those who think this will continue need to look at the RUT candlestick chart and convince themselves that there will be shorting opportunities, but this move up could be met with sideways action for weeks - as it did following the May 22 topping, with the "selloff" on the June 19 Fed BS. Try to be on the right side of the trend, manipulated or not.

    One has to also mention that volatility is "managed" via VIX futures for the broad equity markets. This has consequences for those looking to sell premium in the options markets - i.e., it isn't such a great deal. Vol is less easy to manage in the futures and currency markets. If you're looking for how volatile things are, get access to currency and futures quotes and watch the action for a stretch of time, especially when U.S. markets are closed.

    On China: imho the issues are over-rated, but that doesn't mean we won't see more commodity volatility (watch copper, iron ore, platinum, etc.) to reflect adjustments from disinflationary deleveraging and losses in their credit markets.
    Jul 15, 2013. 07:06 PM | Likes Like |Link to Comment
  • Don't Let China's Data Obscure Larger Story  [View article]
    Promoting the Yuan/RMB has been a high agenda for China. The question is when they will de-peg it from the dollar, or will the market effectively do so over time. That time frame may be substantial compared to today's trading lens.
    Jul 15, 2013. 10:53 AM | Likes Like |Link to Comment
  • Thoughts On The Week Ahead  [View article]
    Commodity and currency markets relatively flat on the consensus (making sense)...but equity index futures spike. Up up and away, until the Bernank opens his mouth again and futures traders apply their next directed moves. Can we say orchestration?
    Jul 15, 2013. 01:13 AM | Likes Like |Link to Comment
  • Thoughts On The Week Ahead  [View article]
    I expect the volatility in the futures and currency markets to gear up in less than two hours on the China GDP and industrial production. Copper will be key to watch, basically another currency proxy for China growth. Until last week's short-covering and USD/dixie selloff, copper (and platinum) had been quite weak, even with significant buying/reflation in U.S. markets. If the numbers are strong indicating potential pickup in demand for base materials, then we'll probably see a rally. "Weak" numbers may mean a selloff, since China reported an uptick of inflation and further stimulus may be off the table. Weak is relative - consensus is 7.5% and 9.1%...as for the rest of the week, wouldn't we all be saved a good deal of time and money if Bernanke just didn't show up at all?
    Jul 14, 2013. 08:32 PM | Likes Like |Link to Comment
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