Barclays: Number of Hedge Funds Set to Decline, First Time Since 2009

I wonder why investors are pulling funds out of the hedgies? Don’t they enjoy their brand of underperformance and the access to financial stars who regularly frequent CNBC and who are called ‘asshole greed goblins’ at iBankCoin?

Amidst a sundry of reports of pension funds opting out of hedge funds, it should come as no surprise that the number of funds in business is scheduled to decline, rightfully so.

Research firm Hedge Fund Research (HFR), in a monthly report released on Friday, counted a total of 10,007 hedge funds worldwide in July.

“Based on recent HF (hedge fund) performance and the increased challenges to launching an HF (hedge fund), we estimate that there would be a net decrease in the number of funds by YE (year end) 2016,” the Barclays report said.

Barclays’ calculations were based on a survey this year of 340 investors who had allocated $900 billion to hedge funds, making up roughly 30 percent of the industry.

From 2010 to 2015, the number of funds grew 2 to 3 percent each year. But Barclays found that 61 percent of those surveyed felt hedge funds did not meet their expectations.

Investors overwhelmingly blamed the industry’s large size for current tepid returns, with 74 percent of those surveyed saying too many managers were chasing a limited number of ideas.

No word on whether or not Bill ‘Montauk’ Ackman will be on the list, finally moving over to a family office structure.

My urinal shadows strongly suggest that I become a more sociable person, reach out to others in an effort to lessen the rage that exists in my metaphysical being. As such, I’ve taken liberties to rewrite some of the titles of some of the stuff that I’m reading on the web this evening.

Zerohedge: Morgan Stanley says BOARD THE FUCKING ARK

Daily Reckoning: The Jobs Numbers Were Bullshit and Alan Greenspan is the Devil

Reformed Broker: Degenerate Small Cappers to Outperform

Reformed Broker’s Evil Twin: The Ark Might Sink; $DB Might Float (lolz)

Calculated Risk: The Life and Death Matter of Heavy Truck Sales

Irrelevant Investor: Hey Assholes, Quit Moving the Fucking Goalposts

Mish: Russia is About to Invade the Ukraine Again

Dollar Collapse: NEGATIVE RATES WILL BLOW UP THE EARTH, Plus U.S. Treasuries Are a Fucking Illusion

Wolf Street: Spain is So Fucked

Howard Lindzon: The Case for Donald Trump and Why Hillary Clinton is an Evil Bitch

Business Insider: Hillary Mocks Trump’s Steves; Why Aren’t Any Female Steves on Trumps Economic Advisory Panel?

Marketwatch: Citi Makes the Case for Even MOAR Gains

ReCode: Walmart Bid Against Themselves Like Stupid Fucking Morons for Jet.com

The Verge: Meaningless iPhone 7 Rumors

Good news Union Square Venture lovers: it appears the President and CEO of woefully managed, world ending disaster in the making and example of how NOT to manage a financial institution, Fannie Mae, will be added to the Lending Club board of morons. Hopefully, he will guide this company directly into the abyss.

Bear in mind, this is an easy to follow trend in tech. Find any company who was financed by a venture capital fund, like Union Square (hello Uncle Fred!) and sell it down short, until it dies. The delicious paradigm we’re in today is bereft of opportunity, because of all the private money floating around in search for the next Groupon. When I started the business in the late 90’s, this wasn’t the case. You could buy companies before they were priced out of their fucking minds. All of the really good companies are private, from Uber to Airbnb. The only way this ends is for the venture capital world of baby blood drinking, bizarre fucking vampires, to blow up in a giant cloud of thermo-nuclear ash–created by the detonation of a financial tsar bomba.

Unfortunately, I don’t see any tsar bombas on the horizon. In the meantime, you will have to endure.

• Reports Q2 (Jun) loss of $0.09 per share, $0.07 worse than the Capital IQ Consensus of ($0.02); revenues rose 6.5% year/year to $102.39 mln vs the $100.42 mln Capital IQ Consensus.
• Loan originations in the second quarter of 2016 were $1.96 billion, compared to $1.91 billion in the same period last year, an increase of 2% year-over-year. The Lending Club platform has now facilitated loans totaling nearly $21 billion since inception.
  • Quarter developments:
    • In light of lower loan volumes in the second quarter and recognizing that the full scale return of investors may take time, in June 2016, the company eliminated 179 positions in the organization
    • Lending Club ended the quarter with strong liquidity including $832 million in cash, equivalents and available for sale securities, and $120 million of undrawn credit facility
    • Jefferies successfully executed a three times oversubscribed near prime securitization in August 2016 for $134 million of unsecured Lending Club personal loans
• Co issues downside guidance for Q3, sees Q3 revs of $95-105 mln vs. $108.45 mln Capital IQ Consensus Estimate; sees Adj-EBITDA of ($30-15 mln)
• Lending Club announced that Carrie Dolan resigned from her role as CFO to pursue a new opportunity. In response, Lending Club has appointed Bradley Coleman to Principal Accounting Officer and Interim CFO. Mr. Coleman has served as Lending Club’s corporate controller since 2013 and will continue in that role while fulfilling his new duties. The company has retained a global executive search firm to manage the recruitment of a new CFO and expects to name a successor in due course.
• Timothy J. Mayopoulos, President and CEO of Fannie Mae, has been appointed to the Lending Club Board as an independent Director. In addition, the company has successfully hired a Head of Institutional Investors, which will be formally announced soon.

Lending Club, the wonderful innovator of the FINtech world, is down 65% over the past year and -5% in the after hours.

If you’ve been shorting stocks for the past 6 months, you must feel like a homeless hobo after getting beaten by a tire iron (ban all tire irons). It’s important that we recognize the point of short sellers as the evil counterbalance they are, the constant and persistent check on prosperity that promises to drag us all into the dark ages. Having time away from the professional management of money, and hating on the markets, I can tell you with supreme confidence that selling short is a job designated for trolls, men beneath the stairs who grabs your ankles at night and who steals pieces of molded bread for his breakfast treat.

Herb Greenberg, long time denizen of the crevasse under the stairs, chimes in.

Year to date, some of the most heavily shorted stocks have been the biggest winners.

The essence behind buying  stocks, which is heavily shorted, is to pressure the short sellers into bankruptcy. Once the marshall repossesses their computers and they’re unable to hold onto their shorts, a forced buy occurs, which then adds to the tinder in a market that is completely rigged (extra Trump) to trade higher–at which point you make mountains of cash and receive first rights to urinate on the headstones of the shorts you just killed.

Energy stocks have exploded to the upside today, thanks to the 2.7% leap in WTI. While markets languish, crude stocks are enjoying splendor on a grandiose scale.

Observe.

Now you might be feeling your oats today, long these idiot stocks into a melt up. However, just know, whatever gains that you expect to ‘enjoy’ in the coming weeks ahead should be extremely limited. For the better part of the past 3 months, energy stocks have been wanton losers. Guess what? That’s exactly what the seasonality Gods forecasted for them.

Have a look.

Do these trends look familiar? They should, since they repeat themselves almost every year without a hiccup.

In spite of the +10% gains over the past two weeks, energy stocks are still down over the past month.

Based on these trends, we get a respite in October and then a fucking collapse in November,  just in time for Thanksgiving. After that, we should see an investable bottom.

All of this data, for both sectors and individual stocks, is available inside Exodus.

Sotheby’s is one of my favorite long term holds for a variety of reasons, the first being the divergence of classes in this country, and the world, widening– providing an avenue for the super elite to spend their excess cash reserves. The other reason why I like BID is because it will eventually get a buyout, or someone will attempt it. It is the ultimate show piece for any billionaire.

The vast majority of growth at these auction houses emanates from the east, ripping off newly minted millionaires in China. This is the reason why the price of art, first growth wine, and other collectibles have been soaring: Chinese demand. What I didn’t realize was how closely the shares of BID tracked with the MSCI.

Fascinating.

The company just recorded a stellar quarter. Profits were way up, led by a 22% jump from Hong Kong.

The stock is up 13% today.

In other words, Sotheby’s is China and is tied to its fate. Food for thought.

What did I say in the beginning of the year? I had this fucking rage against stocks and promised to only trade the oversold signals in Exodus, long only trades. Remember when I said that?

No, I can’t stick to a plan for an entire year. Poor Fly gets bored and has to veer off the reservation. NO MORE VEERING OFF THE FUCKING RESERVATION. Each time that I do, guess what, I get whipped with a cat o’ nine tails.

I just sold out of DRIP for a two point loss, from $7.5 to $5.5. What is that 25% inside a week or less? This is the second time I’ve been flame broiled in oil shorts this year, thanks to my fervent belief in the oil man being dead. If I keep this up, I’ll be the one dead, as the oil man smashes my dead body to pieces with his barrels.

There isn’t much else to say, other than quit being a dumbass and stick to the plan. It goes without saying, the plan isn’t to get impaled by haggardly 3x ETF vehicles of doom. Those fucking bastards at Direxion will get theirs one day.

No one saw this one coming, believe me. The parent company of Sleepy’s, MFRM, has been mired in mud for the better part of the last year. The stock had been ripped to shreds, off by 50%, amidst a slowing US consumer. So, naturally, a gigantic South African furniture company, dubbed Steinhoff, stepped in and fucking destroyed the 36% of shares sold short in MFRM, acquiring the company near all time highs or 114% higher than Friday’s close.

Founded in 1986, Mattress Firm has approximately 3,500 stores across 48 states with 80 distribution centers. In February, the company solidified its position as a leader in the U.S. mattress retail market when it completed its $780 million acquisition of HMK Mattress, the holding company of Sleepy’s. Sleepy’s was the second-largest specialty mattress retailer in the U.S. with over 1,050 stores in 17 states in the Northeast, New England, the Mid-Atlantic and Illinois.

RIP MFRM shorts. You accounts just went negative equity.

Get the fuck out of here with this shit.

In response to CMG’s catastrophic decline in revenues, the poison vendors at Burger’d King have decided to launch their Whopperito, which is essentially a whopper in a flour burrito and some zesty ‘Mexican sauce.’

Super racist name to boot.

Burger King’s latest new item is taking a stab at Chipotle Mexican Grill Inc., which is still reeling from a string of foodborne illness outbreaks.

The Whopperito, which puts Whopper burger ingredients like beef, tomatoes, onions, lettuce and pickles inside a flour tortilla, will be sold nationally beginning Aug. 15. A queso sauce replaces the mayonnaise from the hamburger.

“It’s certainly one of the first times that we’ve tapped into the Tex-Mex category,” Alex Macedo, North American president at Burger King, said in an interview. “It’s one of the fastest-growing categories — consumers like the freshness of it, they like the mix of flavors.”

Americans love their burritos, especially ones stuffed with whopper chopped meat.

They’re like an evil empire spreading their tentacles towards their minions. Immediately following a coup and subsequent crackdown of civil rights in Turkey, in which school children, scores of teachers and other random people were scooped up and tossed into raping prison cells, the folks at Goldman, Credit Suisse and the European Bank for Recomstruction and Development rewarded Erdogan’s regime for a job well done, by investing $150m in TFI TAB YATIRIMLARI AS, aka Burger King Turkey.

TFI TAB Gida plans to invest $800 million in the next three years as it aims to double its restaurants to 3,000 locations, according to a report in the Dunya newspaper, citing Chairman Erhan Kurdoglu and other executives. Revenue from the Chinese business will double to $400 million this year as the company targets 30 percent annual growth overall, the newspaper said.

The company is plotting to come public soon. I am sure Goldman will provide them with the advice necessary to make their dreams a reality.