Fintag's Newsletter

Les bons moments sont de retour

2013-05-17T11:48:00.000+01:00

asterix parc
© fintag

News comments:
When there is madness in the air, it is time to make a killing.

We may all complain that this free liquidity environment is stoking up the mother of all crashes (fintag gets it wrong) but if you haven't joined the party it is time to load up and splurge on alpha.

Take that van for hire business, Ocado. You know my views but we are here to make money so hats off to those Goldmanites who just never gave up and have made my day (bloomberg - 50% gain). Best to follow the Goldman rule of trading - bitch and buy or smile and short. You know what I mean.

Take France. The man at the helm is a 1950's Harold Wilson without the charisma and his country is dying in a cess pool of misery. And yet it is the place to live (which is why I spend much time here too spending my bitcoins on the lonely women of Cannes [Ed: Surely not?]). You see France is a bit like Ocado was yesterday (foothillsoffrance) for tomorrow it will be a big boom country. Trust me, it will. When a hedgie says the country is on the verge of anarchy (telegraph) it's time to buy (especially if you loved Asterix as a child).

In the meantime, throw your darts at a list of tickers and take your pick (although skew away from oil if you can) and with your profits you too could snap up a castle ....

Today's shorts:
You tell me ...

Today's longs:
Anything but government debt

Gossip:
Hedge funds to abandon shorting.

Hedge funds are one trick ponies with suicide vests on

2013-05-08T15:59:00.004+01:00

One trick © fintag

News comments:
There is something not quite right at the moment. My long only throw-a-dart equity fund is up double digit percent and yet most hedge funds, trading in unprecedented bull markets, are either down or flat (hfr).

So when we read hedge funds are the new banks, lending to companies the way banks used to (these days they prefer to take free money and pretend to lend it out but never actually do so they can write off their bad debts and pay themselves bonuses for saving their banks and pushing up the stock price for the benefit of even more stock option in the money pay days) with a USD108bn pot (bloomberg) it becomes obvious your average hedge fund is so crap that they are having to buy crap bonds and build up their own sandwiches of subprime debt so they can pass the parcel and sell it to each other for mtm fantasy values.

Yes, subprime is back (reuters) and the crap burger full of horsemeat is the only long on the street.

As those gods of profit start to look like one trick ponies (inside trading anyone? Gold is the new black?), the likes of Paulson and Bill "Thinking Big" Ackman (marketwatch) have truly been shown to have lost their touch. Shame they couldn't get out at the top like Sir Alex Ferguson. Or Bill Gross.

When hedge funds start to panic and buy crap nobody wants ("I am ex goldman and I own the markets"), it starts to feel like LTCM all over. Hedge funds are leveraging off each other (directly and indirectly) and with all these regulation chains being strapped around the big banks, the hedge funds are being given free reign to lend like there is no tomorrow. Once they get into the private equity circle of life, there can only be one outcome. Crash.

In the meantime, enjoy the Bernanke / Draghi / Nippon Ginkō and tuck into those safe as houses ETFs built on sand and hedge fund hot air.

Today's shorts:
Fcku the paper I want the real stuff (zerohedge)

Today's longs:
Slumming it in London - time to move to Japan (guardian)

Gossip:
Man Utd to be relegated next season.

Apple creates the world's largest ever equity swap

2013-05-01T10:16:00.000+01:00

HK iBond © fintag

News comments:
2009...
"We fully support the legislation … on offshore tax centers, and we look forward to working with you as part of the broader effort to address international tax evasion and close the tax gap," Geithner told the House.

2013...
CEO of Apple, Tim Cook (TC): Just got another call from a hedge fund manager screaming for a dividend cos' he got his short wrong.
CFO of Apple, Peter Oppenheimer (PO): Just been sent an email from Microsoft saying they are looking to buy us out because they see us as a distressed stock.
TC: Looks like we have got to get our stock price up and pay some dividends. Any ideas?
PO: Not sure about dividends as once you pay them the investors expect them to go up every year. And anyway, our cash is stuck offshore and if we bring it to the US, our tax liability will bring us down. What we need is to flip their equity into debt.
TC: How do we do that then?
PO: We call a friendly bank with lots of free ECB, BoE and Fed cash wanting to lend it out at a few bips and then we use this to buy back truck loads of our stock. We then issue debt and pay the banks back and pay the coupons with US generated income.
TC: So we get to keep our rainy day cash in Cayman. Excellent.
PO: Its what I call the iSucker trade. We can continue to avoid paying tax, use free printed money provided by our new best investment banking friends who will do us favors and ensure their analysts pump out Buy recommendations, we keep our jobs, our stock options come into the money and everyone is a winner.
TC: Using government money to pump up our stock price... Jobs would be proud of you.

Today's shorts:
Tax avoiders win again (reuters)

Today's longs:
Goldman wins again (wsj)

Gossip:
Google to launch new Glass for people with one eye called a video camera.

Mixed Sex Accommodation - Time to party

2013-04-25T15:10:00.000+01:00

MSA and all that © fintag

News comments:
While you all jerk off to the latest Twitch, I have been mining data.

And so it is learned today there have been major breaches in UK hospitals; shock horror, men and women have been forced to sleep in the same room without permission. Of course the data we were all looking at was the non triple dip GDP numbers for the UK. The markets liked the "estimate" and so it seems the USD is Apple and GBP is Samsung. Until tomorrow.

The ONS never gets its numbers right and readjusts them. But like a fake AP tweet, we take it on the chin and move on. The sad reality is some of the numbers coming out like the number of Spanish who have no job is truly horrific. No wonder the Euro dream is coming to an end.

In the meantime, we long equities and short bonds. Until the next twitch when it will reverse and then swing back again. Despite being an Economics major I am as confused as nearly everyone else as to what is going on. So best to start mining some more, Bitcoins that is.

Today's shorts:
Rampant UK ready to hike rates (reuters)

Socialist says spend (guardian)

Today's longs:
US run out of jobs (bloomberg)

Gossip:
UK to outsource its statistical data to China.

Tobin's FTT is already here in the UK

2013-04-23T11:47:00.001+01:00

Not the serial killer © fintag

News comments:
The last time I bought some UK equity there was a tax to pay. So not sure what all this Tobin FTT tax moral panic is all about.

Stamp duty (hmrc) is payable and has been for years (since 1986 at least). It stands at a hefty 50bips and you can pay up to 150bips. Such a Tobin tax has created volatility and a market in tax avoiding securities such as CFDs so beloved of spreadbetters. So I dont know what all the Tobin FTT fuss is all about. France tried it and they raised enough revenue to fund Hollande's illegal mistress trips to Bond Street.

If an FTT is introduced there will be ways round it. I can think of a few already and I am sure ICAP (IAP.L) have some lined up to.

The whole debacle is a nasty political attack on the UK because unlike Stamp Duty which goes to the Treasury to pay for civil servants pensions, the FTT will go off to fund some non elected eurocrats lunch expense account.

Another nail in the EU coffin. Time to vote for UKIP ...

Today's shorts:
Italy says no (ea)

Today's longs:
UK lawyers look to another good year (lawyers)

Gossip:
Bitcoins to be taxed (not sure how but the EU will try)

The Gold Bubble moves towards 700

2013-04-19T12:27:00.001+01:00

Way on down © fintag

News comments:
So you are long Gold, eh?

The gold market has been rigged longer than Libor but no regulator wants to tackle that one. So in the meantime lots of smart people have been talking up that great inflation hedge, gold, when actually there hasn't been much inflation despite money supply expansion via printing presses; it seems the lack of real demand in the economy is apparently why the West is heading towards Japan like deflationary living.

Meanwhile, those with a Twitter like attention spans only have to look at the attached picture to see that Gold is just one huge bubble that has been puffed up by the likes of Paulson, Pimco and other Goldman Sachs long tooths who poo poo Bitcoins and still look at Gold as the worlds true currency.

If you were starting out to trade for the first time, would you be punting on Gold?

Complete madness but the emperor has started to peel back his new clothes and guess what? He is nearly naked and waving a 700 flag at you.

Today's shorts:
Down down down (reuters)

Paulson's one trick pony exposed (reuters)

Today's longs:
Someone explains what a bubble looks like (bloomberg)

Gossip:
Bitcoin exchange attacks are the work of Gold lovin' governments.

The Bitcoin frenzy and why gardening is the new black

2013-04-10T20:11:00.002+01:00

Champagne © fintag

News comments:
Bitcoin mania is with us and I am late to the party.

If I had bought a bag in March I would now be able to pay for Obama's 2014 budget.

You probably know what they are all about (one of 21 million emails with value kept in password protected encrypted wallets - oh and if you forget your password then the Bitcoin dies) or you don't (aren't currencies meant to have an underlying asset such as gold and act a bit like a derivative?). Even so there are lots of views. Of course in the world of trading we love bubbles as long as we enter and exit at the right time. When Goldman Sachs have pointed their computing power to mining these coins and rumors abound they are looking to set up a fund, you have to take it all seriously and mingle like crazy. Even while I type this I could have probably made 2%. East India. Tulips. Madoff.

Its a great wave to be on. Once the AML and KYC has been sorted and the Japanese custodian bank has accepted your real currency, then away you go and off to trade on a nasdaq lite exchange called mt.gox. There are no spreads so its a bit wild west and its clear 21 million will not be enough to create a true liquid currency (unless its broken down into itcoins, tcoins, coins, oins, ins, ns and s units) but long term this could be getting early google / microsoft / apple stock for the price of really coming to terms with a currency being bits and bytes instead of paper and a promise.

It is fintag's sudden realization that the worlds currencies are just bits of paper with "hope" value and printing and inflation will soon wipe out most of the indebted world (Argentina et al) and so force us all into gardening. And farming. You see, once the USD is worth paper, it won't be a good substitute for real food.

Unless of course you have a pile of Bitcoins in which case you will run the world, while the rest of you will be forking the ground, scattering seeds and praying for rain.

Today's shorts:
Bitcoins to be North Koreas new currency (businessinsider)

The Magic Tricks of Guff and Oxygen Exchange (mtgox.com)

Today's longs:
Bitcoin billionaires are the new hippies (businessinsider)

Gossip:
Goldman Sachs to launch a Goldcoin note that sits on top of a box of air (subprime 2.0).

Austerity FCA

2013-04-09T21:58:00.002+01:00

fcuka © fintag

News comments:
Maybe I was asleep or trying to avoid the death of Winston Thatcher but I came across the new FCA's website.

I thought I was on some kids school project wordpress website until I saw the news link about investigating the failings of the Royal Bank of Shite and then it made sense. The old FSA website looked a bit too flash and nobody wants a regulator flashing off its wealth. So they must have used some interns who don't know what a websafe color is (pink maroon purple?) and have done a Windows. A new layer on top of the old bloat ware.

But this is dull for austerity is everywhere. But what is interesting is the website is no longer a .gov. The FCA is a regulator that is a .org. The sec is sec.gov. It smacks of enforcement.

The FCA (and you still have to type in www) is www.fca.org.uk. Now lots of periods / full stops on my Z10 blackberry isn't easy. But that is also dull.

Here is wiki's definition:

"The domain extension was originally created for non-profits, but today it is commonly used by schools, open-source projects, communities, and for-profit entities. The number of registered .org domains have increased from less than one million in the 1990s, to ten million as of June, 2012."

And I was told today if you want to set up an FCA regulated entity it will take between 8 and 10 months.

Wow. The UK has returned back to the 1970s when you had to go on a waiting list to get a phone from British Telecom. Until Thatcher came along and sorted that mess out.

But like the cyclical markets, socialism comes and goes. Now that is more interesting. My portfolio has a long position in First Trust China AlphaDEX. A communist play with the ticker FCA.

How ironic. How random.

Today's shorts:
Death to the hybrid (bloomberg)

Fintag wrong about the new logo (fintag)

Today's longs:
Banker drops his trousers (reuters)

Accountants for hire (reuters)

Gossip:
FCA to put pictures on its website of non white people when it sorts out which skin color goes with maroon.

Blackberry in the USA

2013-03-22T11:21:00.002Z

News comments:
While the world waits to see how the Cyprus debacle turns out, the real stress weighing on the minds of most business people is Blackberry`s Z10 launch in the USA.

As you know I am a Z10 owner and the first week was hell. That was until the upgrades came and now it's my favourite gadget. Android!s jelly custard OS is a bit odd and when the device is on your life is handed over to Google who look after your data, and although my new nexus tablet has lots of whizz bang dolphin gesture apps, it doesn't feel like its finished. The BlackBerry 10 is finished and it is better than both the iPhone and Android. The Z10 device is great.

Even so it's 2 years too late and endorsements from an Apple short seller aren't going to save the company, which is a shame.

Back to Cyprus. Bad bank, Russian takeover or bond holders having to empty their pockets, this is a close call.

Today's shorts:
Cyprus trees (bbc)

Today's longs:
USA I no Cyprus bloomberg

Gossip:
Cyprus to be renamed Cyprusikstan.

Cyprus: Big banks orgasm, Markets crash

2013-03-17T11:22:00.000Z

cyprus lotto © fintag

News comments:
The stealing of bank deposits is a complete no no but the IMF and EU have done it anyway. The outcome will be very unpleasant. When Kings raid people of their money to fund wars, the outcome is always revolution.

Cyprus is a basket case (fintag Oct 2011 - Cyprus is symptomatic of the European Nightmare) (fintag Feb 2013 - Cyprus isn't worth saving) and should have been left to blow up. Of course socialists like to control everything and weighing up a few banks blowing up against a massive run on the banks was easy; taxing the depositors to pay for the recklessness of the bankers and incompetenance of the regulators. Yep, on paper a great idea but in reality the catalyst to serious banking instability. Big banks get an unexpected blow job and euro markets a nasty bit of volatility.

The upshot is next week there will be people moving money from the banks and hiding it under their mattresses (standard) or even worse moving it to the big banks. These "big banks" have enough cheap cash as it is but will take it anyway to help bolster their capital and keep the regulators happy. Big banks will get even bigger and too big to bail out. The small banks will disappear and we will all end up in an even worse position.

As much as we all love electronic money, cash will becoming even more King than Mervyn.

I can see photos of ATM lines next week in countries from Spain to Ireland. Your money is safer in your hands than in a faceless bank that allows unelected bodies to come and take your money to help bankers keep their bonuses. Meanwhile, euro markets are going to tank and lots of back peddling and vol will make the recent equities rally become a long forgotten memory.

You couldn't make this up.

Today's shorts:
Cyprus ministers face violent threats (bbc)

UK to bailout out Cypriots (telegraph)

Euro Markets to crash (washingtonpost)

Anarchy here we come (activistpost)

Russia moves cash and assassins to the UK (guardian)

Today's longs:
USD (seekingalpha)

Gossip:
Bankers to be given bodyguards by the ECB.

JP Morgan's Value Of @ Covering

2013-03-15T16:20:00.000Z

hats off© fintag

News comments:
JP Morgan has been exposed as having over 5,000 Global Heads of Globalness. I just made that up. Its probably a bit more.

Interesting to see Investment Banking politics being laid bare with JP Morgan's testimony of its internal handling of the London Whale. If things go wrong you can blame overinflated valuations and flawed models. Oops, that's what Ina Drew (net worth excess of USD15m) also said when the London Whale beached up on Dimon's desk.

Of course we all know the Value At Risk is flawed which is why bankers love using it. Its easy to fix and risky crap can be be made to look like a 99% triple AAA safe bet. As Reuters blogged, spotty 27 year olds know that tweaking V@R equals fat bonuses.

And that is the same ruse Drew and her internal hedge fund interns were relying on - a V@R that was flawed so that they could trade like bandits without red alerts flashing across a dozy RM's inbox.

Not that JP Morgan knows who runs what and who is responsible for what (sounds like the BBC) and what the meaning of life is, but she and her team were doing what every other banker is trying to right now and will in the future which is pretending they know what is going on, managing low risk with high reward and making sure risk is off loaded onto IT, Compliance or Middle Office.

Same old same old. Despite V@R being discredited and useless, the banks are still using it as their primary risk number.

Today's shorts:
JP Morgan blames door man for its losses. (bloomberg)

Useless Bank of Switzerland gives capped bonuses the finger (guardian)

Today's longs:
11 sessions of froth (huff)

Gossip:
Erin "Demi Moore" Callen to launch new book exposing Lehmans incompetence (fintag's lawyers having removed any mention of a sexual liaison) and spill the beans on CNN.

Stik-ee fingers equals profits

2013-03-13T18:03:00.000Z

stik © banksy

News comments:
As bonds become no more, equities are where its at.

No need to short just yet. Everything is a buy and that includes Apple. Yesterday, to keep warm, I snuggled into the Regent St Apple store and was abducted by the blue clad staff who forced me to buy stuff I just didn't need (bluetooth speakers?). So I swapped my iCons with the Big Issue seller outside for some Stik posters which I am ebaying for a few hundred.

After lunch my greasy fingers (Polpo dishes) were used to randomly buy equities. And yes, I am up 1.4%. The good times are back. Irrational momentum madness.

My quants are looking at the correlation of new Popes and the Chancellor putting up taxes on beer and hey presto its boom boom boom. Until May when as usual cash is all that will be held. Lots of USD of course.

Today's shorts:
Swiss cheese (bloomberg)

FSA haven't an AIF'M clue(lexology)

Today's longs:
Castrated pope to be elected (reuters)

Gossip:
Anything but Gold.

The USA is like Ronaldo

2013-03-05T17:48:00.005Z

god © offside

News comments:
Ronaldo is the greatest player ever. So says his manager. (telegraph)

The USA is a bit like Ronaldo. Talented but expensive to service. As a Brit I look out the window onto the tourists that consume Old Bond Street and the overseas investors who seem to own everything (Football clubs to Buildings) and wonder what life would be like as an American. A bit like Spanish Real Madrid having a Portuguese as its star talisman. [Ed: Another lunch at Madisons?]

Of course, like those in the know, I would have relinquished my citizenship years ago because of its anti wealth creation (yahoo) regulations and would have found ways of enjoying the wealth producing nation without living there. You know, S&P futures for starters (telegraph). And Campari and Soda which you will find me guzzling in the Mandarin on a Thursday night (bloomberg).

The UK is shot to pieces. I love the place and yet detest it at the same time. We hate bankers and yet don't defend them given its our only source of income (reuters). So the only thing to do is go long real estate assets, the USD and the S&P and short the GBP and anything else that isn't luxury (Rolls Royce, Burberry et al).

Today's shorts:
Ruddock shorts his partners (hedgeweek)

Rich scum bags (telegraph)

Today's longs:
The best night in 2013 (sky)

Z10 on the way to being best smartphone on the market thanks to fintag complaints (register)

Dowdy (zerohedge)

Gossip:
Man Utd, owned by Americans, to win again.

Attack the bankers by all means but leave us alone

2013-02-28T14:00:00.001Z

non EU banking © moodys

News comments:
Bankers who enjoy unlimited reward and limited downside (no job) are no more. It serves them right.

The EU has rightly capped bonuses. Of course shareholders should have done this years ago because banks are only there for the benefit of employees, but they are a sleepy lot. Because the EU, and here we are talking about European governments, are now the owners of all the banks (the ECB, BoE et al are lenders of last resort and guarantee all these too big to fail banks) they can control what they do. If they had let capitalism do its job, most of the banks would have gone bust and only the best run would have survived but that didn't happen. So the techno-socialists have got what they wanted. They have the banks by the short and curly's. From capital to bankers pay. It serves the banks right. Bye bye Bobby Geezer and all that was wrong with banking. Hello post office banking and retail dullness.

How many other businesses are there where you can gamble other peoples money and get paid for it so handsomely? None it now seems. (fintag)

Capitalism hates interference and the EU are the great interferes. So that is where we are. Not that smug American bankers will be immune because those in Europe will be snagged and Obama will probably enact something similar to its bankers too (although he needs to hurry). Banking will become a boring place for the non thinkers and risk adverse conservative types.

Of course hedgies and pirates are not immune to this new order and are to be caught up in the AIFM bollox which will do something similiar. And this is where I think the EU will fail. Hedgies and pirates lose everything if it goes wrong (partners as opposed to spoon fed employees who just get another job). Once this happens, hedgies will set up research offices in London and trade in Singapore or most likely Switzerland because of the time zone. Or maybe South Africa? Anywhere where AIFM cannot touch you.

The EU seems to think its an old book shop and is trying to stop Amazon in its tracks.

The winner will be Asia of course. In 20 years time people will talk about JP Morgan and Barclays as if they are old classic cars.

The short term upshot will be UK leaving Europe. Once UKIP win the Eastleigh by-election that is.

Today's shorts:
American big banks torture the small guys (bloomberg)

Today's longs:
UKIP to win (telegraph)

Bankers crying in the streets (reuters)

CityAM man to replace Boy George (with Boris as King) (telegraph)

Gossip:
City of London to be turned into a homeless shelter shanty town.

Aaaaaah to Boy George

2013-02-24T12:25:00.001Z

Aaah! © moodys

News comments:
Despite Credit Rating Agencies being about as relevant as my rants on the Z10, the UK got what it deserved.

The UK has been sick for a long time and despite its best intentions in QE and austerity cuts, it has all been rather tame. If the UK wanted to grow it would be doing things differently and faster. Boy George who is way out of his depth has been given a poor report and with an election coming in the near term, the UK is going to be in the doldrums for a while longer.

Of course if GBP moves towards USD parity (one basket case kissing another) the UK will get inflation which is what it really needs to eradicate its debts and invade Australia. Or maybe Australia will get there first and launch a hostile bid for the UK? (fintag).

Shale gas, lower and more simplified taxes (including a money launderers levy), closure of the NHS and free education for all.

Today's shorts:
Why wearing lycra doesn't pay (bloomberg)

Today's longs:
Italy votes for more partying (reuters)

Gossip:
UK to form new trading zone with Greece, Spain and Ireland.

Blackberry Z10: Good, Bad and Ugly

2013-02-22T14:43:00.002Z

zzzzzz10 © fintag

News comments:
The end of the world never happened (fintag) so I have upgraded my Blackberry to the Z10.

I know there are lots of reviews but they are from people who have played with it for a couple of hours. I have had mine for 6 days and know more about the device than I think Rim (oooer missus) does. Will this thing save Blackberry? Let's find out.

Firstly, it is clear the UK release before the USA was so it could be tested thoroughly by people like me. And it has bugs and omissions and damn right ugliness. A bit like a day one android phone but that is no excuse given Blackberry had plenty of time to copy the iPhone, Windows phone and Android devices.

The good...

I hate the metal iPhone. The nickel gives me a rash so I rejoice the plastic rubber of the Z10. It feels soft in the palm.

The back comes easily so replacing the battery is quick.

The app library is way better than Windows.

I have added a 128GB sd card. Awesome. Up yours iPhone. I even got this encrypted too. [Ed: Just checked and its 64GB. You should have gone to specsavers]

The phone clarity is superb. It actually works. Up yours iPhone.

Multi-tasking is great. I love the windows you can kill off.

The Camera is extremely good. Front and back facing too; fast and with some nice features. My old camera is now in the trash.

The bad...

You need big hands. We are all used to using two thumbs but the Z10 is not really designed that way. Its like an iPhone when you hold it.

The gesture swipes are inconsistent. Sometimes you open a web page and you can't escape from it! So out pops the battery like the old days ...

So you swipe up to logon and then type your password and then have to click enter at the top of the screen. This is way too crap.

The battery lasts about 5 hours. That is poor. I am on a plane to Hong Kong and my phone is dead on arrival.

The button at the top to turn it off is pants. Its too small and crap.

Where is the camera button? Why do I have to logon to use the camera? [Ed: Just read the manual and its the icon on the home screen - hold it down for 2 seconds.]

I don't want my calendar displayed on the logon screen.

The ugly...

Sync with gmail calendar? No chance. It takes 24 hours and then its read only. Yahoo works fine though. BES obviously as before. UPDATE The latest update as of 1 March 13 has fixed this.

Why can't I have different ring tones for different people and events?

Why can't I hide the useless icons that I will never need?

Why can't I group the email boxes like I used to be able to on my old bold?

Why can't I tuck away my spreadbetting email account from prying eyes?

Why are the icons like an iPhone? Why not something more interesting? And configurable too?

The Hub is a mess.

Conclusion ...
Well its better than the Storm. Its a bit like the first iPhone but with multitasking. It has lost lots of classic BB functionality and replaced it with copy cat stuff. It is better than an iPhone but the Samsung beats it hands down. I should have waited for the Galaxy IV.

Today's shorts:
Italy (bloomberg)

Today's longs:
Z10 (inquirer)

Gossip:
Blackberry Z10 to be last ever phone by Blackberry.

The horsemeat moral panic

2013-02-14T08:51:00.001Z

big mac © fintag

News comments:
Europe is in a real mess. And horses are to blame.

Never has the EU rejoiced in news such as the horsemeat = beef scandal. News is full of supply chain diagrams, DNA lab testers and Bute side effects. Horse meat is the main reason your average European is learning to duck and cover and recalling days of the Cuban missile crisis. Unless the EU sorts out the horsemeat debacle we are all doomed to eating grass from our gardens.

In the real world, the EU is continuing its contraction. London is being swamped with Spanish and Greek youngsters. The man who served me my horsemeat sandwich in Pret yesterday has a PhD in Economics. And he isn't alone. The young unemployment crisis is truly a nightmare. No wonder those who can are in London. Despite the UK being more debt savaged than Greece, London is a country in its own right. A bit like Barcelona it doesn't need the rest of its country. It is doing all right. It is doing more than alright (guardian).

Unlike Germany. The over valued EUR is starting to hurt this power house although it isn't stopping Spanards learning German and swamping its cities. Germany is also struggling with its own EU trading partners who are shutting up shop and buying Romanian made horse cars (Dacia) instead of velvet curtained Mercedes (bloomberg).

So what happens next? Well the EUR interest rate will be cut and the currency war will starting turning really nasty. Looks like 2013 is going to a great year for alpha. [Ed: What's alpha?]

Today's shorts:
They shoot horses don't they? (reuters)

French man sets fire himself after reading the new negative growth figures (euronews)

Today's longs:
75% of Americans have read Chekov (zerohedge)

Gossip:
FSA to rename itself the FCA (Food Conduct Authority) and cause even more confusion.

[Happy Birthday to Fintag - we are 7 years old today! Valentines kisses all round ...]

Cyprus isn't worth saving

2013-02-11T16:37:00.000Z

News comments:
Russians really freak me out. From a country that has more culture than the USA has horse burgers, business practices are not "word is my bond" but "my word means you lose your thumbs".

Russian business people don't do contracts. They are happy to execute them, and often the other counterparties if the contract works against them, but for many Russians a contract is just a one sided memo of understanding.

My rule and most of my mates is never to do business with Russians unless you have terminal cancer. Horror stories abound (hedgies gagged, lawyers slain, children kidnapped). Which is a shame because this sort of stereo typing means I too have to be careful of my thumbs. The reality is that I have benefitted hugely from the Russian rouble as have most Londoners and the owners of New Bond Street shops. They have revitalised life in debt ridden UK because we are so soft. We are happy to show our passports to ensure we can buy a loaf of bread and happy to let a VHNWI from the East spend hundreds of millions without anyone asking where the money came from (the answer being Cyprus of course).

Pre 2008 Iceland was the home of the Russian money launderer. Ex fisherman were empowered to buy up centuries old City brokers and money poured into London prime such that the small shed outside my house where I keep the trash is now worth USD5 million.

Post 2008 Cyprus began gobbling up the billions of deposits Iceland had failed to freeze to pay its fisherman. Despite Turkey's anger, Cyprus became a state of the ex USSR. Russian is the first language in Cyprus (a country once "owned" by the UK). Cyprus companies are cheap and easy to set up few dollars are used as holding companies because the corporate tax rate is only 10% (although you can negotiate this downwards if you are Russian). It is a safe haven for Russian assets.

Tiny Cyprus is officially the third largest foreign investor in the Russian economy. Wow. How is this possible?

But Cyprus is no Panama or Guatemala. It is a fully fledged EU country, unlike Iceland, and the Russians are over the moon. Middle ranking civil servants have moved their billions to this tiny island knowing that not only is the money nicely cleaned but their bank deposits are protected by the ECB! You couldn't make this up.

For those who can listen to the BBC's iPlayer, I suggest you listen to this ....(Radio 4). The premise is that London is one large laundry service. It was 2 years ago that fintag highlighted this fact (feb 2011). But for most Europeans, this is no big deal. Let's face it Luxembourg is the new Switzerland and its bang in the middle of Europe. The real crisis though is Cyprus. Unlike Luxembourg where the laundered money is from Europeans (MEP's mostly), Cyprus is full of dirty laundry from non Europeans. AIFMD technocrats can't do much about it now and its unlikely teams of techncrats will be challenging the Russians about the proceeds of their assets.

No wonder the Germans, who I am told dislike the Russians, are livid that they may soon by bailing in/out Cyprus. With Russia looking at bailing out Cyprus too, one wonders if the USA would ever bail out Cuba or Iran. You may say this aint possible but in this odd world of oddness, I wouldn't bet against it.

Today's shorts:
Cypriot comments (cm)

Today's longs:
Norway bails out the USA (bloomberg)

Gossip:
Fintagski, fintag's Russian site, closed down due to a denial of service attack.

Financial Times - RIP

2013-02-11T09:09:00.003Z

News comments:
All good things come to an end. And so we say goodbye to the FT.

It was only a few years ago when an elite band of cowboys could trade the markets. Only a few people had access to the markets and could afford to pay for market data. The rest of us had the Financial Times (and the Investors Chronicle) to read and it was this paper that got me horned up about trading when as a child I would sneak off to the end of the garden and have my jollies. Like the Wall Street Journal, it was full of stories and predictions and magic. For a few pennies it enabled the penny stock punter to feel like they were big swingers and helped many of my generation into the wild casino west where products were created and fools lost money.

Today market data is everywhere. If you are a budding trader, you need never leave your bed. Analysis, opinion, data series, rampers, pumpers, platforms, the access to tools to make decisions are as common as muck. So where does the FT fit in?

You used to see people on the Tube devouring the FT. I never see anyone reading the FT. I still subscribe to the paper copy and usually read it at breakfast when staying at some bland foreign 5 star hotel where it is handed out for free (and added to the circulation figures). But I get most fun these days from CityAM.

It is the financial news of choice on the tube because its free, bite size and actually pretty informative. The weekend FT is by far a better read but it costs the price of a Sunday Lunch. Of course one can digest the pink stuff via a cancer inducing glare screen (roll on Gorilla Glass) but its nothing special and like most newspapers just pumps out "breaking stories" with "shock horror headlines".

We all like to hang onto our childhood toys but time moves on fast.

We learn the FT is 125 this week(guardian). Happy birthday and welcome to death. You see the FT is a bit like HMV; it has a great brand franchise and hasn't moved on with the times. If I were running the FT I would launch a daily CityAm, provide headline data for free, create some funky apps with access to simple data charts and use twitter a bit more effectively. But it wont and the FT will become Punch.

Today I cancel my FT subscription. A sad day but at least I am saving a few pink trees from being felled.

Today's shorts:
Carry trade EURO ready to implode again (bloomberg)

The end of structured products? My arse ... (barclays)

Barclays tax avoidance still alive and kicking (barclayswealth)

Today's longs:
From dog food to Michelin * restaurants (reuters)

Gossip:
The FT to launch a new page 3.

The last thing the UK needs is a technocrat

2013-02-08T09:44:00.000Z

News comments:
As much as Mervyn King was Bernanke's bitch, the new man Carney is looking for a new bitch called Boy .

Mark Carney, who has more facial expression than Jim Carrey, is on a mission in his new role as Bank of England guv. Given his trader like pay package it is clear he wants to be able to trade the UK balance sheet with gimmicks and ideas and get GBP into the trenches. Unlike King who pulled the printing presses with his right hand and interest rates with his left, Carrey wants to use his feet to tweak unemployment, growth and probably taxes too.

Boy George as we have seen in the last few years is way out of his depth so maybe its a good idea succumbing to become Carney's bitch. Having listened to Carrey yesterday, Carney appears to be a technocrat of the highest order. Draghi would be proud. Unelected too.

So will Carney be nominated for an Oscar or a rotten tomato?

Time will tell (my money is on the vegetable)...

Today's shorts:
EU expense accounts maxed out (reuters)

Bank of England to start libor rigging (reuters)

Today's longs:
Carney to start the GBP currency war (zerohedge)

Gossip:
Carney to move into number 11 Downing Street.

Fun, No Fun, No Future

2013-01-25T12:07:00.002Z

News comments:
What an exciting start to 2013.

As predicted (fintag), Apple is going the way of Microsoft (fun, no fun, no future) and us shorties are having a rallying time (ft). With even the ludicrous Bank of America saying bonds are overbought (told you so), yield curves are twitching with rates poised to move on up, all this news and excitement is just what the doctor ordered.

The even more ludicrous ECB which like the FED has caused no end of printing problems (told you so) ignoring the signs that all is not well in EU (the Spanish have taken over London and the East Europeans are no longer required), human tradegy and lost futures are irrelevant when it comes to keeping bankers happy. The currency battles (reuters) are making this a great year of volatility.

Take the UK (bbc). It has no plan A. It has no plan at all. The first plan was to cut the deficit and unlike Ireland, the UK has cut in all the wrong places and debt is still rising. Taxes up and down, railways no one wants, airports in the wrong places that no one wants, an armed services that no one wants, a bloated and irrelevant NHS that only tourists seem to enjoy, and today its in a triple dip. Of course the useless ONS will probably report adjustments figures next week (fintag 2011) which is why GBP has hardly twitched. Exciting times indeed.

We have Goldman doing what it does best (says one thing and does another) with Spanish buy signals (bloomberg) and old business models at last starting to fall apart (from HMV to the FT.)

All this confusion is just what we all need to kick start some excellent alpha and pay for some decent lunches in 2013.

Today's shorts:
Davos snow (bloomberg)

Today's longs:
Hamptons (zerohedge)

Gossip:
Apple to launch new phone that isn't a phone (yawn).

Banks: Cheating to make it a level playing field

2013-01-18T13:24:00.000Z

devil © fintag

News comments:
Sometimes principles have to be thrown out with the baby's water. Whatever.

Banks. Well it is time to start looking at investing in these traffic warden realtor run government sponsored wheel greasers. The regulators (and here I include Twitter) are controlling the banks and with easy access to free money they are slowly reformatting their dinosaur systems and business processes and starting to look like equity longs.

We never recommend stocks but if we did, then there are a few banks that are looking truly undervalued. Some will perform and others will be gobbled up. Bank of America. RBS. Morgan Stanley.

The sudden interest in bank fundamentals is one of the many catalysts that are driving the equity boom. Bonds are phut and inflation and rate hikes are on their way. Whether Japan is threatened with a few nukes to put rates up to get its peanut currency up by the US car industry, or Bernanke admits he has failed in the great USD devaluation trick, the flattened yield curves are starting to twitch like a horny teenage in a nightclub. Equities are the new porn.

Banks are cheaters and they do it in numbers. Its just the way it is and it will be in the future. From the Medici bank to Goldman Sachs, they attract people who are encouraged to cheat. But if the "regulators" are overseeing the checks and balances, they guilt can be put in a drawer.

Yep, banks are the new London super prime. Up up and away.

p.s. I note the Livestrong cycles in my gym are being used again.

Today's shorts:
Citi America (marketwatch)

Today's longs:
Morgan Stanley (nyt)

Gossip:
Oprah to launch series of confessional interviews starting with the CEOs of the banks.

AA to do a GAP and abandon its seagull logo.

Biggest baddess bubble busting bond bashing blast since 2003

2013-01-14T12:04:00.001Z

News comments:
Just come out of a hairy "what are we going to do in 2013" meeting.

As you know, "one strategy" hedge funds go in and out of fashion like a handbag. 2012 was the year of the bond fund, thanks to QE and printing press techno crats. My distressed debt (i.e cheap as chips) mates don't know what a recession is but they will do this year.

Goldman says jump into equities and off we all jump. Why? Bonds are so dull and equities are so on the risk. Is 2013 the new 1982? Well something is for sure and that is most hedgies will be wearing heels this year because men, as in everything in life it seems, are useless fund managers (dealbook). Us men love risk and vol whereas the more sensible woman actually manages your money instead of throwing it all on red. But no need to have that sex change op just yet.

As you know, because we keep telling you, the next 5 years is going to be the biggest baddess bubble busting bond bashing blast since 2003 (bloomberg). Leverage is up and leverage means risk means casino means my ladyboy phase will be short lived.

When Wall Street fires Equity staff (bloomberg) you know its time to buy.

Today's shorts:
Crap debt (fa)

Today's longs:
Casino bets (hedgeweek)

Credit Crunch Porn

2013-01-03T16:15:00.001Z

News comments:
Can you feel it? Well it's coming.

The US maybe bankrupt, but we are now tolerating debt of such high levels that the upshot will be even more tolerance and even more debt. It has been impossible to get any sort of leverage from the Banks (I mean even cash rich Vodafone has been thinking about turning itself into a bank, Rolls Royce funds all its suppliers and Hector "zzzz" Sants gets a knighthood) but boredom is helping release all that hard earned quantitative easing cash back into the hands of those who need it to help kickstart the next big bubble.

Nationwide (a UK bank) is offering 95% mortgages and rumours are more banks will be offering starter kit debt packages in 2013. As you can see from my most recent junk mail, Barclays are keen to move my debts to them (although with Mr Sants the new compliance officer at Barclays he should stop this sort of mis-selling - 0% on balance transfers with a near 3% upfront hidden fee) (guardian), like a compacted turd its [Ed: Stop]

The only winners of fiscal cliff money printing are those who deserve it most ...(forbes) ...and as we have said before the next credit bubble will make a 100% debt/ratio look like a low risk product.

Not since 2006 have I felt such stirrings in my loins ...time to beg borrow and blow ...

Today's shorts:
Cancer (bloomberg)

Today's longs:
banks to lend more (reuters)

Credit porn (ft)

Credit Unions are the new wonga (dorset)

Gossip:
ECB to be renamed European Credit Bank.

2013: More of the same

2012-12-27T13:46:00.000Z

time © god

News comments:
Having avoided the end of the world, there are 2 questions for 2013:

1, When RIM goes bust, what should I use instead of a Blackberry?

2, What shall I do with my GBP (Great British Peanuts)?

The answer to the RIM problem will play itself out I am sure.

The investment answer is an altogether more perplexing issue. Here are some ideas:

The EUR. Well my great euro short is still in place and with rates likely to go up next year, Greece will exit. The France-Germany relationship is bust and the debt cloud will once more blow up. However, those techno crats are canny at keeping their jobs and printing presses are an option they will use when the ECB starts to run the show so the EU zone may just plod along causing grief. As you know I now live in France for much of the year and have a vested interested in seeing the EUR collapse.

The USD. Thanks to shale gas, that never die die American attitude, and the no issue end of the world fiscal cliff moral panic, the USD is my favourite destination. Growth eats debt and pays tax and the US has this. The people maybe in turmoil but the huge weight of money just makes this the number 1 currency.

China. Still don't get it. Trade wars will reduce China to empty cities and minimum wage peasants and trade unions and red tape making it an expensive place to exploit.

The JPY. Safe as houses built on foundations of sand. A sure bet.

Equities. Time to take the long view. Buy and hold with a 2 year horizon. Whereas you all love high frequency curve riding, the exchanges will soon be putting a stop to it. Mark my words.

Fixed Income. There is this odd belief that bonds are safe and those discredited price setting rating agencies know what they are doing. Much is junk but with low rates, default is low. Inflation is being held back by the banks who cannot lend but when they do, inflation will be the order of the decade and rates will go on up and up.

London Prime. No bubble here. London is the best city in the world and unless it floods it will continue to be the bond street of real estate. Rental yields are non existent but capital appreciation will continue if at a more modest pace.

Technology. Long Google Short Apple. Data is king. A white aluminium brick in the pocket versus a Samsung chip behind the ear. A no brainer.

Commodities. Volatile but more roulette than black jack.

And that is it. FX is the key trading strategy for 2013.

Today's shorts:
Fiscally dull (reuters)

Today's longs:
Taxing the islands (reuters)

Gold 2012 (resourcespots)

Gossip:
More celebs to die in 2013.