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Business News

SCOTUS Decision Regarding Distressed Assets, Safe Harbors & Clawbacks

Mar 13th, 2018 | Filed under: Newly Added, Insolvency, Business News, Finance & Economics

The U.S. Supreme Court decision in Merit Management v. FTI Consulting may prove important to distressed asset managers, who need to know when defendants can assert the protection of the “safe harbor” provision of federal bankruptcy law, thus avoiding clawbacks. Section 546(e) of the statute says that a debtor mayRead More


Top 5 Alpha Stories of 2017

Dec 31st, 2017 | Filed under: Newly Added, Insolvency, oil, Business News, Commodities: Examples, The A.I. Industry, Commodities, Finance & Economics

In surveying this year for dramatic alpha-related stories, we have much whence to choose. This was the year in which the Murdoch family announced its intention to sell some of their highest value holdings to Disney. Also, in 2017 the EQT Rice merger (contested, unsuccessfully, by one prominent hedge fundRead More


Artificial Intelligence and Productivity: NBER Takes a Look

Nov 21st, 2017 | Filed under: Newly Added, The Global Economy & Currencies, Business News, Macroeconomics, Finance & Economics

A new working paper from the National Bureau of Economic Research, in Cambridge, Mass., discusses what its authors see as a paradox: although artificial intelligence has made astonishing advances in the last 20 years, taking along with it related technologies and stock prices, real income has stagnated, and productivity seemsRead More


Amato on the Late-Cycle Dilemma

Nov 16th, 2017 | Filed under: Newly Added, Business News, Personalities in AI, Other Topics in A.I.

Joseph V. Amato, president of Neuberger Berman Group LLC and Chief Investment Officer – Equities at Neuberger Berman, has written a thoughtful discussion of late about where the markets, and the business cycle, stands. This, the end of 2017, is a “late cycle” moment. Equities continue to rise, but theRead More


4 Lessons from the EQT Proxy Context

Nov 14th, 2017 | Filed under: Equity Hedge Funds, Newly Added, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

D.E. Shaw & Co., a hedge fund manager with an activist strategy and with about 4% of the equity in EQT Corp., said on September 14 that it thought the then-pending acquisition of Rice Energy Inc (RICE) by EQT should be contingent on two commitments: first, that EQT would mergeRead More


Algorithmic Traders: Proprietary, Agency, Liquidity

Nov 9th, 2017 | Filed under: Algorithmic and high-frequency trading, Newly Added, Business News, Finance & Economics

Two scholars affiliated with the Indian Institute of Management, in Calcutta, have posted a paper about the effects of algorithmic trading on liquidity. This paper, by Samarpan Nawn and Ashok Banerjee, based on the first chapter of Nawn’s Ph.D. dissertation, distinguishes sharply between proprietary algorithmic traders and agency algorithmic traders,Read More


Federal Reserve on Counterparties to the next Lehman Brothers

Nov 2nd, 2017 | Filed under: Service Providers, Newly Added, Insolvency, Operations, Business News, Risk Management & Operations

The Federal Reserve has issued a final rule relating to the qualified financial contracts (QFCs) of global systemically important U.S. banking institutions (GSIBs). Derivatives & Repo Report, a blog maintained by the international law firm Perkins Coie, has done a thorough write-up on the subject, to which the material belowRead More


Are Clearinghouses Systemically Risky? Gary Cohn is Heard From

Oct 31st, 2017 | Filed under: Newly Added, Insolvency, Business News, Hedge Funds, Structure of the Hedge Funds Industry

Economists sometimes cite a “law of unintended consequences.” This is what it sounds like, the principle that actions of people, inclusive of and perhaps (depending on who is writing) especially the actions of a government, have unanticipated and (as far as third party observers can judge intentions) unintended consequences. InRead More


International Debt Enforcement: Nautical Twists and Turns

Oct 17th, 2017 | Filed under: Newly Added, Insolvency, Business News, Finance & Economics

Since sovereign debts and collection issues we shall always have with us, it is not amiss to look back four years to a decision by the Supreme Court of Ghana issued in June 2013, on NML Capital’s effort to enforce its judgment against the Republic of Argentina through the seizureRead More


AIMA and SGPS on Managed Futures and CTAs

Sep 28th, 2017 | Filed under: Algorithmic and high-frequency trading, CTA, Investing in Commodities, Newly Added, Business News, The A.I. Industry, Institutional Asset Management, Macro and Managed Futures Funds, Commodities, Allocating to A.I.

The Alternative Investment Management Association and Societe Generale Prime Services have together put out a white paper about managed futures funds and the commodity trading advisers who manage them. A key themes of the paper is that managed futures strategies aren’t as risky as are typical investments in equity markets.Read More


High-Frequency Trading and Spoofing   

Aug 31st, 2017 | Filed under: Algorithmic and high-frequency trading, Investing in Commodities, Newly Added, Business News, Commodities, Risk Management & Operations

Six years ago Michael Coscia placed orders through the CME Group’s Globex platform via a trading algorithm that amounted to “spoofing.” He placed both large and small orders in the copper market, for example, with the large orders (cancelled within milliseconds) designed to create the illusion of market movement inRead More


BIS Numbers and the Market for Forex NDFs

Jun 1st, 2017 | Filed under: Algorithmic and high-frequency trading, Newly Added, Forex, The Global Economy & Currencies, Business News, Finance & Economics

A little over a year ago, the Bank for International Settlements announced its 11th Triennial Central Bank Survey of Foreign Exchange and Over the Counter Derivatives Market Activity. In recent days, Pragma Securities has referenced those BIS numbers in explaining the market for its latest service, an expansion of PragmaRead More


Why They Call it an Absolute Priority Rule

Apr 9th, 2017 | Filed under: Newly Added, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

The U.S. Supreme Court’s recent opinion in Czyzewski v. Jevic Holding Corp. matters to hedge funds pursuing a distressed assets strategy, because the Justices have now made it more clear than they had before that the absolute priority rule under the U.S. bankruptcy code’s chapter 11 is … absolute. ItRead More


Moszoro and Bykhovsky on Political Cognitive Biases

Feb 12th, 2017 | Filed under: Newly Added, Business News, Finance & Economics

In the politically charged atmosphere of our day, especially in the United States since the most recent presidential inauguration, it would be unwise to presume that hedge fund managers are exempt from political cognitive biases, or that these biases leave their portfolio decisions unaffected. Marian Moszoro and Michael Bykhovsky co-wroteRead More


Big Data is Old Hat: Machine Learning is Hot

Jan 26th, 2017 | Filed under: Algorithmic and high-frequency trading, Newly Added, Benchmarking & Performance Attribution, Business News, Allocating to A.I., Finance & Economics

A year ago, in a report on Big Data and investment management, Citi Business Advisory Services predicted that “with the improved volume, velocity and variety of data inherent in the big data approach, the innovation seen in systematic trading models over the past decade could accelerate.” One of the platformsRead More


On the Bitcoin Blockchain: Looking Under the Hood

Jan 19th, 2017 | Filed under: Algorithmic and high-frequency trading, Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Business News, Emerging Alternative Investments, Finance & Economics

More than a year ago, the Capco Institute Journal of Financial Transformation (Journal) ran a “critical assessment,” by Robert Sams, of bitcoin blockchains as a means of distributed clearing. With both bitcoins and blockchains newly in the news, Sams’ informed assessment is worth another look. Two years ago, Nasdaq announcedRead More


Dealmakers: Trump, Hillary, and Mergers

Nov 3rd, 2016 | Filed under: Newly Added, Event-Driven Hedge Funds, Business News, Hedge Funds

Intralinks, a firm created 20 years ago to enable “high-stakes transactions and business collaborations,” has surveyed global dealmakers on the upcoming U.S. presidential election and on how it may affect the economic and regulatory environment for mergers and acquisitions. The gist of it is: in a database of 1,600 M&ARead More


Academics:  No, Navinder Sarao Did Not Cause the Flash Crash 

Oct 25th, 2016 | Filed under: Hedge Fund Operations and Risk Management, Algorithmic and high-frequency trading, Newly Added, Risk management, Technology, Operations, Business News, Personalities in AI, Risk Management & Operations, Finance & Economics

Mid-October news reports tell us that Navinder Sarao has lost his effort to avoid extradition from Britain to the United States. So he will face charges in the U.S. in connection with the “flash crash” of May 2010, the incident in which the DJIA fell 998.5 points in less thanRead More


Fraudulent Transfer: No ‘Safety’ for Lyondell Shareholders   

Oct 20th, 2016 | Filed under: Equity Hedge Funds, Newly Added, Insolvency, Business News, Hedge Funds, Finance & Economics

In two decisions this year, in July and against in a re-affirmance in October, the U.S. District Court for the Southern District of New York has reinstated a claim brought by Trustee of the creditors of the bankrupt  chemical company Lyondell, looking to recover distributions made to the company’s shareholdersRead More


It’s On: Bondholder Groups Square Off over Puerto Rico Financing

Oct 16th, 2016 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds

On Oct. 7, a group of hedge funds that hold the general obligation bonds of Puerto Rico amended an existing complaint (initially filed in July) in a significant respect: by adding a new defendant. The new defendant is the issuer of the “COFINA” bonds, the Puerto Rico Sales Tax FinancingRead More


Fine Art as Joy and Investment: A Reflection

Oct 12th, 2016 | Filed under: Newly Added, Business News, Real Assets

Why do people own great paintings? As something pleasing to hang on the wall? As a way to impress the neighbors? Presumably many buyers of privately circulating 17th century Dutch masterpieces are speculators, alpha seekers. But aren’t they speculating, in the end, upon what some end user will pay? WhatRead More


Tick Pilot Program: A Progress Report

Oct 4th, 2016 | Filed under: Algorithmic and high-frequency trading, Newly Added, Regulatory Environment, Business News, The A.I. Industry, Finance & Economics

The long-awaited nickel-tick pilot program, an effort to test an alternative to the penny-or-less tick sizes that now prevail, , officially gets underway on October 3, and is scheduled to continue for two years. Securities have been selected and the phase-in schedule is set. The pilot is of significance, becauseRead More


Papaconstantinou on ‘Selling the Family Silver’  

Oct 2nd, 2016 | Filed under: Currencies, Newly Added, Insolvency, The Global Economy & Currencies, Business News

A former finance minister of the Republic of Greece has published a book, Game Over, on what it is like to be in the midst of a continent-wide political and financial crisis. This is a volume that might be read with attention by those who seek alpha from distressed sovereignRead More


On Aluminum and Other Metals: A Thought on Physicality 

Sep 13th, 2016 | Filed under: Hard metals, Investing in Commodities, Newly Added, Business News, Commodities: Examples, Commodities, Finance & Economics

Hong Kong Exchanges and Clearing (HKEx), the company that bought the London Metal Exchange four years ago, has further expansion plans. At a recent event on the commodity markets of East Asia, Charles Li, the CEO of HKEx, spoke on this point. Li wants to create a physical metals tradingRead More


ESMA’s Greybeards Ponder Blockchains

Sep 11th, 2016 | Filed under: Algorithmic and high-frequency trading, Currencies, Newly Added, The Global Economy & Currencies, Digital currencies, Business News, Emerging Alternative Investments, Finance & Economics, Other Topics in A.I.

There has been a flurry in recent days of activity about blockchains among the graybeards of the financial world, those who ponder the Really Big Picture and who have the ear of important regulators. Let us start from the beginning. What is a blockchain? It is a chronological, virtual, andRead More


UC Berkeley: Stale Prices Not a Threat to Liquidity Takers

Sep 7th, 2016 | Filed under: Algorithmic and high-frequency trading, Equity Hedge Funds, Newly Added, Alpha Strategies, Business News, Hedge Funds, Finance & Economics

Two scholars associated with the University of California, Berkeley, have argued in a recent paper that there is less to latency arbitrage, or at least to a certain paradigmatic sort of latency arb, than meets the eye. Robert P. Bartlett III and Justin McCrary used data from the Securities InformationRead More


Sovereign Debt: A Cryonic Solution to the Holdout Problem

Sep 1st, 2016 | Filed under: Industry Size & Managers, Insolvency, Business News, Finance & Economics

Where does the world stand on the restructuring problem after NML v Argentina?  One professor and one practicing attorney recently coauthored a fascinating proposal that might answer that question, part of which they call the “cryonic solution,” after the hoped-for science of freezing people to await the development of aRead More


Lewis’ Heroes Get an Exchange for Their Speed Bump

Jun 26th, 2016 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Strategies, Equity Hedge Funds, Newly Added, Business News, Hedge Funds

On Friday, June 17, the Securities and Exchange Commission approved the promotion of IEX from an ATS to a proper exchange. Thereby it gave a new ending of sorts to Michael Lewis’ book, Flash Boys. One of the big issues for both proponents and opponents of IEX’ application to becomeRead More


Puerto Rico: The New Argentina?

Jun 21st, 2016 | Filed under: Newly Added, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

Puerto Rico and various instrumentalities thereof may default on debt within days. If they do so, this will happen without the benefit of an applicable bankruptcy system or other legislated means of restructuring, without a referee if you will, unless Congress acts decisively within a matter of days, something thatRead More


Giving the Baron King of Lothbury his Due

Jun 7th, 2016 | Filed under: Newly Added, Insolvency, The Global Economy & Currencies, Business News, Finance & Economics

The Bank of England is not only the central bank of the United Kingdom, in continuous operation since 1694; it is the model upon which central banking worldwide has been created. The Mother Central Bank is what it is. Mervyn King, the chief economist of the Bank of England throughRead More


Consequences of the Paris Climate Agreement

Jun 1st, 2016 | Filed under: Equity Hedge Funds, Newly Added, Insolvency, Business News, Hedge Funds, Finance & Economics

In early December 2015, representatives of 196 parties met in Paris, France, to discuss climate change, and the necessary reduction of greenhouse gas emissions on a global basis.  The result, the “Paris Climate Agreement,” seeks to limit warming to just 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels, through aRead More


Puerto Rico and Bankruptcy

May 30th, 2016 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

The bankruptcies of public bond-issuing entities, such as Orange County, Calif.; Jefferson County, Ala.; and the City of Detroit, Mich. are still rare events, but they exert a lot of influence, in part because they demonstrate the possibility of that which isn’t supposed to be possible. The sort of entityRead More


Thoughts on the Valuation of Secured Assets of a Bankrupt Debtor

Apr 26th, 2016 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

How should one value the assets of a bankrupt entity, especially those that secure its debt instruments? That is obviously a key question in the world of distressed-debt investing.  A 2014 report from a commission of the American Bankruptcy Institute, and the continued controversy over that commission’s proposals, offers usRead More


Greek Debt: Back in the Headlines

Apr 4th, 2016 | Filed under: Newly Added, Insolvency, The Global Economy & Currencies, Business News, Finance & Economics

The issue of Greece’s insolvency had receded a bit from the headlines since the stormy days of last summer. Alpha-savvy readers will surely recall, though, that in July 2015, the Greek government and its European creditors reached a bailout agreement that required actions by the former, especially on pensions andRead More


The Puerto Rican Debt Crisis: Some Highlights Thus Far

Mar 31st, 2016 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

It has happened before. An insolvent public entity, whether a sovereign nation, state, county, or other, can’t pay its bills and blames the crisis on the ‘vulture’ hedge funds taking its instruments from their first buyers for pennies on the dollar. The leaders of the insolvent entity thereby deflect blameRead More


Cross-Border Insolvencies: Defection Isn’t the Only Problem

Mar 17th, 2016 | Filed under: Newly Added, Business News, Economics, Finance & Economics

A recent paper by Andrew Dawson, a law professor of the University of Miami, looks at the current cross-border insolvency framework from the point of view of the cultural differences that may be expressing themselves through the distinct systems on the opposite sides of many an international border.  His discussionRead More


Latest News on Argentina and the Pari Passu Clause

Feb 25th, 2016 | Filed under: Newly Added, Insolvency, The Global Economy & Currencies, Emerging markets, Business News, Finance & Economics

The Hon. Thomas Griesa, of the U.S. District Court for the Southern District of New York, has issued an “indicative ruling” in response to a motion by the Republic of Argentina.Read More


Antonin Scalia: Three Decisions on Distressed Assets

Feb 16th, 2016 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds, Finance & Economics

From the point of view of fund managers who seek alpha in bankruptcy courts, the late Justice Antonin Scalia was an ally. His decisions in bankruptcy and insolvency matters tended to offer such litigants exactly what they need: clear and predictable rules of law. Further, although Scalia’s popular reputation hasRead More


The Bonds of War: Ukraine, Russia, the IMF

Feb 11th, 2016 | Filed under: Newly Added, Insolvency, The Global Economy & Currencies, Business News, Frontier markets, Finance & Economics

Argentines take heart. Yes, you have implacable holdout bondholder NML Capital to contend with, and NML has been beating you in court battles arising from your 2001 bond defaults. But … Paul Singer isn’t Vladimir Putin, and NML isn’t Mother Russia. Your courtroom battles aren’t actual battlefield battles. The defaultRead More


Bollerman Addresses IEX’s Critics

Feb 9th, 2016 | Filed under: Algorithmic and high-frequency trading, Newly Added, Business News

IEX, the institution created by Michael Lewis’ “flash boys,” began life as an ATS. But as its name, a shortening of “Investors’ Exchange,” suggests, it has always aspired to be an exchange. One of its core principles is its “speed bump,” a system of delaying the availability of market pricingRead More


Saudi Arabia: Opening to Distressed Debt Arb?

Dec 22nd, 2015 | Filed under: Newly Added, Insolvency, Event-Driven Hedge Funds, Business News, Hedge Funds

A recent article in The National Law Review says that the Kingdom of Saudi Arabia is about to change its restructuring law in a way that will likely make restructurings more common in that influential country. One implication is that the change will provide alpha-seeking opportunities for investors and tradersRead More


Millionaires’ Outlook: Still in Positive Numbers

Nov 12th, 2015 | Filed under: Alternative Investments in Context, Business News

Two indexes of confidence, one for millionaires, the other for not-quite millionaires, have returned to the level at which they stood in June of this year, after a summer rise and autumnal fall. A discussion of the arc. Read More


The Elusiveness of the Natural Block Trade

Nov 1st, 2015 | Filed under: Technology, Operations, Business News

Trading on natural blocks is a very desirable goal. So why aren't more traders doing it? How hard are they trying? Some questions from a TABB paper, and from an intriguing commenter at TabbForum. Read More


Looking a ‘Gift’ Horse in the Mouth: The Latest on Section 363

Oct 22nd, 2015 | Filed under: Regulatory, Insolvency, Regulatory Environment, Business News

Something that may look a bit like a "gift plan" in the prohibited sense may turn out to be permissible under section 363 after all, according to a recent ICL decision written by Judge Thomas Ambro, in a precedent that will matter to anyone pursuing a distressed-assets strategy. Read More


The End of the Oil Major?

Oct 21st, 2015 | Filed under: oil, Business News, Commodities: Examples

The latest industry reports indicate that oil majors’ spending on exploration and development projects will drop by at least half, casting doubt over near-term future discoveries.Read More


Is the FTC loosening its choke-hold on the mergers?

Oct 8th, 2015 | Filed under: Regulatory, Regulatory Environment, Business News

After a hard look at the evidence, Judge Polster couldn't say that the FTC was likely to prevail after a full hearing on its objection to the merger of two medical-equipment sterilizers, so he denied the preliminary injunction. Why this matters. Read More


Corporate Governance: The Chairman/CEO Thing at Bank of America

Oct 1st, 2015 | Filed under: Business News

For years, actually for decades, the facts that corporations often combine the posts of chief executive and chairman of the board in the hands of a single powerful individual and that this is a U.S. based proclivity in particular have been the targets for high-minded complaint and pontification. So: how much do activist hedge funds care?Read More


The Big Short: The Trailer

Sep 30th, 2015 | Filed under: Business News

A reflection on the newly released trailer for the forthcoming Paramount movie The Big Short, with Christian Bale front and center as Michael Burry. Brad Pitt shows up, too. Read More


API: An Emerging Multi-Trillion-Dollar Market

Sep 29th, 2015 | Filed under: Operationally Intensive Real Assets, Business News

IBM has now purchased Strongloop, and this has gotten Faille thinking about APIs, a potential multi-trillion dollar market. Where technology's imperatives press again the law: how to bet? Read More


New Mutual-Fund Industry Whistle Blower Case

Sep 28th, 2015 | Filed under: Regulatory Environment, Business News

We will certainly hear more of this whistle blower case, because it isn’t at all clear whether there is majority support on the U.S. Supreme Court for the interpretation of Lawson in which the district court is engaged in Anthony. Read More