Jerome Powell

This Fed Put is Out of the Money

Don Dale, Chief Risk Strategist for Equity Risk Control Group, is a guest contributor to the Alphacution Feed.   I am not a funny guy. (Ask my wife...) And yet, occasionally - when I say the quiet part out loud - I manage to get a laugh. My latest bit is an idea about how to "fight the Fed." So, while you may enjoy a chuckle at the thought, here's why I think things might be different this time: The “Fed Put” is a common reference in capital market circles – particularly since the GFC – given their increasingly likely position to backstop some asset classes. Of late, the Fed’s actions were the driving force behind the stabilization of the bond market since the March gyrations; by extension, the equity markets. However, the primary driver for equity market performance within US indices has been the mega cap FAANGM names, given the thematic benefit of social distancing on factors like home delivery, video bingeing and all manner of online interactions. This [...]

By | 2020-05-19T13:55:30+00:00 May 16th, 2020|Alphacution Feed|

Citadel Punks Blackstone – Part 2

"What is to give light must endure burning." - Viktor Frankl “The backbone of surprise is fusing speed with secrecy.” – Carl von Clausewitz   UPDATE 11/21/2019 (bottom of post) Why is it coming out now, apparently months after the talks took place, that Blackstone inquired about buying a stake in Citadel? There are a few reasons we can think of for monetizing coveted equity - or, at least showing enough leg to solicit an updated "mark" on the assets - but, the most likely one has been the same for years: Ken wants to become an investment bank. Ok, so what does Citadel need to become an investment bank that it doesn't already have? Well, given leadership - and, occasional dominance - in listed equity-linked markets by Citadel, the next beachhead for investment banks-in-training is fixed income. And, Citadel-like prowess in fixed income may require lots of technology and smart folk, but the one thing it definitely needs is balance sheet. The next question, then, is: Do you build [...]

By | 2020-03-02T17:01:26+00:00 November 21st, 2019|Alphacution Feed|