"Hedge
Fund Hotels" Blow Up: September Slams Billionaire Stock Pickers - (www.zerohedge.com) In
August, hedge funds blamed risk-parity funds for their dramatic
underperformance. In September, the underperformance continued however this
time, with risk-parity funds supposedly buying stocks, one can't blame them. To be sure, some such
as Ackman whose 20 million shares of Valeant are hurting badly, will blame the
Martin Shkrelis of the world for the biggest biotech tumble in years, but
others may have to bite the bullet and admit it is their own lack of ability to
come up with alpha in a centrally-planned "market" that is the
reason. That, and idea "clustering", of course, because over the past
few years the best performers have been the "hedge fund" hotels -
stocks that have dozens if not hundreds of hedge funds invested and
piggybacking on each other. The problem is that in the past two months it was
the hedge fund hotels that have led to the biggest losses. Even the mainstream
media finally discovered this little "short cut" to creating if not
alpha, then levered beta. A few days ago, Reuters reported
that "new data shows that some of the industry's biggest firms' top 10
stock picks bear striking resemblances to each other."
America's Manufacturers Got Crushed in
September - (www.bloomberg.com) Surveys
conducted by regional Federal Reserve banks signal that
U.S. manufacturers came under severe stress in September. Seven of
these surveys have been released over the course of the month, and only one,
the Dallas Fed Manufacturing Index, has exceeded economists' expectations. All
these regional surveys pointed to shrinking manufacturing sectors, with some
prints coming in at their worst levels since the Great Recession: The Empire
State manufacturing index earlier this month indicated back-to-back months of
contraction,
with the employment sub-index and six-month forward outlook hitting multiyear lows.
In part due to a market retreat in new order volumes, the Richmond Fed's
Manufacturing Survey posted its lowest reading since the start of 2013.
Australia’s
“Black Swan Moment” - (www.wolfstreet.com) Wayne
Swan, Treasurer of Australia from 2007 to 2013, Deputy Prime
Minister and the Deputy Leader of the Labor Party from 2010 to 2013, who
thought he saved the Australian economy but just delayed the inevitable, is
now blaming everyone but himself for the downward spiral: As I argued in
my book Australia: Boom to Bust, Australia will eventually see a significant
economic recession in the not too distant future. And all the data points are
clearly indicating my worst fears on where the Australian economy is headed.
But we have to ask who is responsible for this economic downturn, and which
policy makers helped line Australia up for the collapse in capital expenditure.
Well, we can all try to blame Joe Hockey, Treasurer in the now defunct Abbott
Government from September 2013 until September 2015, even though his
approach was most definitely the icing on the cake, but unfortunately he
was not Treasurer at the time Australia’s political elite truly made what could
be two of the greatest (yet laughable) economic related mistakes in
the history of Australian economics. And the blame lies with Wayne Swan,
alongside the Reserve Bank of Australia (RBA), Treasury, and Australian
Prudential Regulation Authority (APRA).
Dunkin'
Donuts is crashing - (www.businessinsider.com) Dunkin'
Brands shares tumbled by as much as 11% in trading on Thursday morning after
the company provided sales guidance below what analysts were expecting. The
company is holding its investor day. It forecast that
Dunkin' Donuts same-store sales (at locations open for at least one year) would
grow 1.1% in the third quarter. Analysts had forecast growth of 2.6%, according
to Bloomberg. For the full fiscal year, the company anticipated
same-store-sales growth of 1% to 3% at both Dunkin' Donuts and Baskin-Robbins.
Analysts' estimates were 3.32% for Dunkin' Donuts and 2.7% for Baskin-Robbins. The
company also announced that it would close 100 Dunkin' Donuts stores by the end
of 2016. And it's clear from the investor presentation that Dunkin' Brands has
not been spared from many of the challenges US companies have faced this year.
Worst
Seen Coming for Currencies Ensnared in Commodities Fallout - (www.bloomberg.com) To
foreign-exchange traders, the currencies of commodity exporters are all in the
same boat -- and it’s going down. The long suffering exchange rates for
Australia, Canada and Brazil have become increasingly correlated with each
other during the past month, and banks including BNP Paribas SA, citing an
indicator of momentum, and Barclays Plc, noting economic headwinds, say there
are more losses to come. “It’s bearish across the board -- we’re negative on
all commodity currencies,” said Atul Lele, chief investment officer of
Nassau, Bahamas-based Deltec International Group, describing the declines as a
once-in-a-generation move. “The selloff will become more persistent” when
the U.S. Federal Reserve raises interest rates, said Lele, who manages $2
billion.
Multinational China execs feel chill wind, not hot growth - (www.bloomberg.com)
China sees capital account deficit, volatile fund flows in H2 - (www.reuters.com)
China sees capital account deficit, volatile fund flows in H2 - (www.reuters.com)
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