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The Latest Hedge Fund Casualty: Standard Pacific Capital Is Liquidating
It has been at least a week without news of a prominent hedge fund liquidating, so when moments ago Reuters reported that once prominent hedge fund Standard Pacific, which a decade ago managed over $5 billion, is the latest casualty of broken markets and has decided to shut down things once again reverted back to normal. Exclusive: Standard Pacific Capital, the stock-focused hedge fund firm led by Doug Dillard and Raj Venkatesan, is shutting down — Lawrence Delevingne (@ldelevingne) February 4, 2016 It was not immediately clear what the final AUM of the stock-focused hedge fund firm led by Doug Dillard and Raj Venkatesan, was but what we do... -
Finance 0
December 2015 Manufacturing Again Declines
US Census says manufacturing new orders declined. Our analysis says sales did decline. Unadjusted unfilled orders’ growth remains in CONTRACTION year-over-year – but this is due to deflation in this sector.. Part of the reason for the poor growth is that the data is not inflation adjusted (deflation is occuring in this sector). Civilian and defence aircraft was the major headwind – but most of the data was soft.. 3 Month Rolling Average – Unadjusted Manufacturing New Orders (blue line), Inflation Adjusted New Orders from the Unadjusted Data (red line) US Census Headline: The seasonally adjusted manufacturing new ... -
Finance 0
Let’s Get This Over With: Factory Orders More Toward Finality
Factory orders declined for the fourteenth consecutive month. At -4.3%, the year-over-year drop wasn’t huge but we are now into comparing consecutive yearly contractions. In other words, factory orders in December 2015 were 4.3% less than December 2014 which were 2.4% less than December 2013. It isn’t so much the magnitude as the time now in that consistency. In seasonally-adjusted terms, however, December was a big drop, nearly 3%, which brought the level backward to equivalent with the middle of 2011. If a recession is a prolonged period of wide scale interruption and decline, US factory activity clearly fits the definition already. Th... -
Finance 0
Gold Mining Stocks Are Breaking Out?
We are witnessing a historical move in the gold stock arena. As we speak, the HUI-index is breaking out of its downward trend. This is confirmed by the GDX, the gold mining ETF. Check this Bloomberg terminal chart. As you can see, the GDX has room to move from $15 to $17, and even $20 in the coming days. But this is just the start of a new bull market. Things could stay turbulent for the gold mining sector. But a start is a start, no matter how you look at it. And this, ladies and gentlemen, is one heck of a start! But don’t get us wrong. Did commodity producers do stupid things at the top of the cycle? Absolutely. We’ve seen value-d... -
Finance 0
Why Do Corporations Pay Dividends?
There is increasing chatter in recent years about share repurchases, dividends, corporate investment and the ideal way for firms to use capital. But one question that economists can’t really agree on the answer to is why companies pay dividends at all? As noted in a great Twitter conversation initiated by Matthew Yglesias, even great thinkers like Richard Thaler and Tyler Cowen don’t have great answers. And even the greatest minds in economics don’t have a concise answer as Fischer Black once noted in this research piece. It’s a puzzle that doesn’t have a clean answer. After all, in a perfect world you would allocate capital ... -
Finance 0
January 2016 Cash Surplus
The US Daily Cash Surplus for January 2016 came in at $52B beating January 2015’s $28B deficit by a whopping $80B. However, don’t break out the party hats just yet…There were 3 large timing events that accounted for most of the beat. Revenues: At first glance, revenues were up $18B good for a 5.7% YOY gain. Last January about $10B of refunds went out at the end of the month, and since I account for refunds as negative revenue, it reduced reported revenue by that amount. In 2016, those early tax refunds did not go out in January…if we back that benefit out, the YOY gain is $10B lower, good for a 2.5% gain. Still not too shabby cons... -
Finance 0
Brian Bagnell’s Tips For Smart Oil And Gas Investing
TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. In today’s tough price environment where most oil and gas juniors are losing money, a strong balance sheet is the key to survival, says Brian Bagnell. Access to liquidity will also help these companies hold on until prices rise again. Bagnell, a research analyst for Macquarie Capital Markets, tells The Energy Report he expects a gradual turnaround to begin late this year, and gives his tips on identifying companies that can weather the storm. The Energy Report: Brian, is there a producti... -
Finance 0
6 ETFs For February
After enduring intense volatility in January and seeing the worst start to a year, we have entered February with hopes of a ricocheting market. But the dour mood was maintained as Wall Street skid sharply on February 2 as investors took down energy and financial stocks, especially following a sub-$30 U.S. crude oil price. In any case, February has never been known for sound equity returns. The average return of the S&P 500 was negative 0.05% in February, from 1950 to 2015. There were 38 years of a green February while returns were in red in 28 years. With renewed concerns about oil price declines, its deep-rooted negative impact on the ... -
Finance 0
Great Graphic: Gold Update
Keynes and others may have referred to gold as a barbarous relic, but many investors continue to track it. In early January, we warned that gold appeared to be breaking out of a short-term bottoming pattern. It had taken out a three-month downtrend line, which we suggested was part of a triangle pattern. Gold also traced out a double bottom pattern. The triangle pattern pointed to a move toward $1110 and the double bottom projected to around $1135. The yellow metal poked through $1157 today and remains near it highs in late turnover. We did not anticipate the macro considerations that drove it; gold has surpassed these targets. In... -
Finance 0
Putting The Recent Market Volatility In Context
The increase in market volatility has been a major focus of the popular financial press during the opening weeks of 2016. Let’s examine the historical context for market volatility over the past nine-plus years, specifically since January 2007. Our preferred measure of volatility is the daily price range in the S&P 500: The percent change from the intraday low to the intraday high. To illustrate this bit of market behavior, we’ve charted the intraday range, the red dots in the accompanying chart, along with a 20-day moving average of this measure. To assist us in viewing the correlation with the market, we’ve overlaid an...
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