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Donations, lobbying by high-speed traders on the rise

"High-frequency trading firms increased their campaign contributions to federal lawmakers by 673 percent from the 2008 to the 2012 election cycle, according to a report that sheds light on their political connections in Washington and efforts to impact policymaking. It compiles the campaign and lobbying records for 48 different firms like Citadel Investments, Getco, Knight Capital (KCG.N), Virtu Financial LLC and Tradeworx which engage in high-speed trading, a strategy that uses lightning-fast computers to search for ways to take advantage of tiny price moves in the marketplace." Continue reading →

Continue ReadingDonations, lobbying by high-speed traders on the rise

CEO of World’s Biggest Bond Fund: Government Has Rigged the Game Against Investors

"Investors are being haircutted by at least 200 basis points judged by historical standards, which in the past offered no QE and priced Fed Funds close to the level of inflation. Large holders of U.S. government bonds, including China and Japan, will be repaid, but in the interim they will be implicitly defaulted on or haircutted via negative real interest rates. . . . Future haircuts might even include a wealth tax. Are gold and/or AA+ sovereign bonds good as money? Usually, but capital controls can clip you if you’re not careful." Continue reading →

Continue ReadingCEO of World’s Biggest Bond Fund: Government Has Rigged the Game Against Investors

Investors can’t beat the machines: Computer-dominated trading takes over

"The implication of all this for individual investors is straightforward: Don’t trade. Short-term trading has become so dominated by Wall Street’s computers that individuals—and professional managers—almost certainly will lose out to them over time. The obvious alternative, experts say, is to buy and hold diversified index funds with very low expenses. Odean says some of the poorest performances in his studies were turned in by traders who were the most confident of their abilities. This led them to trade even more often and incur even more risk." Continue reading →

Continue ReadingInvestors can’t beat the machines: Computer-dominated trading takes over

Gold Bears Pull $20.8 Billion as BlackRock Says Buy

"Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc. (BLK), the world’s biggest money manager, said it’s still bullish. Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month." Continue reading →

Continue ReadingGold Bears Pull $20.8 Billion as BlackRock Says Buy

Wall Street hires Washington

"The financial industry has long been a draw for former political operatives seeking a bigger paycheck and New York lifestyle. But with the big banks now under constant assault from reformers, regulators and some members of Congress, the flow of top talent from Washington to Wall Street has become a small flood. Goldman Sachs and Morgan Stanley will soon have top-level executives with the ear of the CEO who once occupied senior jobs in the White House and the U.S. Treasury. Other banks including Citigroup, Credit Suisse and JPMorgan Chase also have staffed up with former political and regulatory officials." Continue reading →

Continue ReadingWall Street hires Washington

Bloomberg News Used Its Private Data to Spy on Geithner and Bernanke

"CNBC has learned from a former Bloomberg employee that he accessed usage information of the company's data terminals of Federal Reserve Chairman Ben Bernanke and former U.S. Treasury Secretary Tim Geithner. The information appeared to concern general functions used by the officials and the frequency with which those functions — such as looking at a bond, equity markets or news — were accessed. The source said all Bloomberg journalists who knew of this capability of the terminal would have had access to the usage information of the officials." Continue reading →

Continue ReadingBloomberg News Used Its Private Data to Spy on Geithner and Bernanke

A Funny Thing Happened on the Way to the Next Bull Market

"A funny thing happened on the way to the next Bull market: the price-earnings (P/E) ratio has entered bubble territory--again. Note the P/E soared to bubble heights in the early 2000s, which set up the epic collapse of stock valuations in 2008-09. Thanks to Federal Reserve manipulation/goosing/QE, the SPX P/E has once again reached bubble levels. It's clear the SPX is extended far above what can be considered historical fair valuations. What's more profitable, a slow melt-up or a panic sell-off and sharp rebound? Definitely the latter, if you're heavily short, the market is teetering on record margin debt and you can kick out the critical 2X4." Continue reading →

Continue ReadingA Funny Thing Happened on the Way to the Next Bull Market

Billionaire investors take aim at Fed’s policies at Sohn event

"Wealthy money managers bashed Federal Reserve Chairman Ben Bernanke's easy money policies at a closely watched annual investment conference and charitable event on Wednesday. The Sohn Investment Conference, which raises money for pediatric cancer research, gets big name hedge fund managers to share their 'best ideas' with other wealthy investors. This year's conference was sprinkled with criticisms of the Fed's $85 billion in monthly purchases of Treasuries and mortgage securities in an attempt to stoke the economy." Continue reading →

Continue ReadingBillionaire investors take aim at Fed’s policies at Sohn event

Fed Economists: Stocks Are The Cheapest They’ve Been In 50 Years

"New York Fed economists Fernando Duarte and Carlo Rosa are out with a new article on Liberty Street Economics titled, 'Are Stocks Cheap? A Review of the Evidence.' The answer: judging by the equity risk premium (ERP), stocks are about as cheap as they've ever been. The last time the Fed said something so bold was when in 2004 when NY Fed economists wrote that there was no housing bubble." Continue reading →

Continue ReadingFed Economists: Stocks Are The Cheapest They’ve Been In 50 Years

Dow hits 15000, but percentage of Americans owning stocks hits a low

"Although the Dow Jones Industrial Average closed for the first time above 15000 Tuesday, a new poll finds that the percentage of Americans who own stocks stands at a 15-year low point. Barely half of Americans, 52 percent, now say they own stock outright or as part of a mutual fund or self-directed retirement account, the polling group Gallup reported Wednesday. The level has been falling for six straight annual surveys, even though US stocks have more than doubled in value since hitting a recession low point in 2009. The decline in stock investing has been largest among middle-aged and middle-income Americans, the poll found." Continue reading →

Continue ReadingDow hits 15000, but percentage of Americans owning stocks hits a low