Category: Economy (Page 1 of 2)

Is Now the Time to Buy or Sell in The Market?

is now the time to buy or sell in the market
Franknez.com | Stock market news + more.

The markets seem to be nowhere near a bounce as both stocks and crypto freefall; is now the time to buy or sell in the market?

If you’re part of the small percentage that’s in profit, maybe liquidating has come through your mind.

Especially if you’re looking to protect your capital and wait for other opportunities.

But what if your portfolio has suffered significant losses?

Is it best to cut your losses and conserve whatever cash you have left?

This article is going to provide you with perspective on ways to not only protect your cash during this nasty bear market, but also how to identify opportunities to multiply your wealth.

Let’s dive right into it.

Should You Buy or Sell?

should you buy or sell in the market.
Should you buy or sell in the market.

Whether you should buy or sell in today’s market conditions will depend on how liquid you are and on your future and current investment plans.

Value investors looking to add stocks to their long-term portfolios could benefit from buying the markets lows, though it’s important to keep in mind that the markets are still susceptible to fall.

Dividend stock investors could also benefit from buying these lows.

Diversified investors who are looking for the next opportunity may want to liquidate positions to have cash ready when the time is right for the next move.

Whether that be waiting for real estate opportunities or other markets to tumble, this will highly depend on an individual’s needs.

With so much uncertainty in the markets at the moment, the best thing investors can do is create a plan to guide their investment goals in the right direction.

Identify what you’re aiming to achieve when investing in the market.

Is it long-term capital gains?

Income?

And decide what it is you need to do now in order to meet your investment needs.

Bitcoin Falls Under $16K, Crypto Down

Crypto News. Bitcoin news.
Crypto News: Bitcoin News.

Bitcoin (BTC) fell under $16K on Wednesday.

Peter Schiff warned investors in a Twitter space call to sell Bitcoin today as the cryptocurrency could be headed towards lower levels.

The economists said he does not own any Bitcoin but urges holders to buy back in after a market collapse occurs in the crypto space.

On the other hand, FTX is causing a ruckus as the token falls more than 90% in the past 7 days with nearly 60% happening in the last 24 hours.

FTX investors include:

  • BlackRock
  • Ontario Pension Fund
  • Sequoia Paradigm
  • Tiger Global
  • SoftBank
  • Circle
  • Ribbit
  • Alan Howard
  • Multicoin
  • VanEck
  • Temasek

In recent crypto news, Binance backed out from saving FTX leaving the crypto on the brink of collapse.

FTX CEO Sam Bankman-Fried said that without more capital, bankruptcy is likely.

Related: How to Buy Cryptocurrency for Beginners

Stock Market Rains Blood

Is now the time to buy in the bear market?
Is now the time to buy in the bear market?

Stocks continue to bleed as the Fed struggles to maintain economic structure and institutional investors liquidate the market.

The NASDAQ and SPY have seen improvement in the past month, but economists, CEOs, and media influencers say the market has plenty of room to drop.

Stocks fell sharply on Wednesday, a day before CPI announcements.

Poor consumer reports could cause stocks to fall sharply again.

Traders should trade with caution.

With inflation affecting millions of families and corporations such as Netflix, Facebook (META), Twitter, and Tesla laying off tens of thousands of employees, a recession looms.

Whether you decide to buy or sell in today’s markets will ultimately depend on how liquid you are and whether you’re prepared to face a highly likely recession in the coming months to year.

Creating a plan and identifying what you can and cannot do financially as turmoil hits the economy is your best bet of riding this wave.

Do you plan to buy or sell in the market today?

Leave your thoughts down below.

Related: How to Buy Stocks for Beginners

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How Can the Average American Pivot in a Recession?

Recession 2023
Want to become recession proof? Here are some steps you can take.

An economic downturn, a recession, call it what you will.

The U.S. economy is in a state of emergency and the average American is suffering financially.

From stock and crypto market crashes to the rise of gas prices and increased inflation, the middle class is in desperate need of help.

The problem is no one is teaching the middle class how to pivot.

Cutting back on expenses isn’t going to do it, you can only cut so much.

This article is going to help you identify several ways to pivot during a recession so that you can take care of your family during economic hard times.

Let’s get started.

Shifting Mindset from Defense to Offense

how to prepare for a recession.
How to prepare for a recession.

During a recession, most people tend to contract, they tend to shrink (cut expenses, coupon, etc.).

Very few, however, expand and look for high reward opportunities.

It’s these opportunities that allows the few to shift their mindsets from defense mode to offense mode.

A defense mindset is idle, waiting for the government to do something about their financial setbacks (job loss, cut hours, lost pension funds, market crashes, etc.).

An offense mindset on the other hand is identifying how to keep up and overcome the changes occurring in their environment.

While most people focus on the things that are out of their control, few focus on the things that are within their control.

If you’re reading this blog, chances are you’re being impacted by our economy today and want to make more money.

Who doesn’t want to make more money?

Money is how we ensure our family’s security and wellbeing in America.

If you want to learn how you can pivot in today’s falling economy by earning more money, keep reading below.

Learn How to Use Leverage and You’ll Never Fall Short Again

how to use leverage
How to prepare for a recession.

We all have the same 24hrs in a day, but do you want to know why successful people make more money than the average person?

It’s not because they work harder than you or because they’re smarter than you.

It’s because they use leverage.

Leverage is a multiplier of both time and money.

What would have taken you decades to accomplish, leverage gets it done at a fraction of the time.

Leverage is accessible to everyone, including you.

But we don’t grow up with mom and dad teaching us this.

So, what are some forms of leverage you can take advantage of as soon as you exit this blog article?

Let’s dive right into them.

Leverage Tools to Help You Make Big Money

#1. Building Your Dream Business

Small business recession
@easymarketingconcepts

Starting a business around your hobby, passion, or skills has the potential to create that world you desire.

How does leverage play a role in building a business?

Think about this for one second.

If you work a 9-5 or commission job, you the employee are generating income for the leader of that organization and getting paid per hour or per sale to do so.

However, if you’re the business owner of a small business or startup, all revenue goes to your business account.

The leverage here is you’re now using your time to build something that will generate positive cashflow instead of giving it away for an hourly wage or commission.

If you don’t have the capital to start a new business, you can always use leverage by taking out a business loan and incrementally paying it back as your business picks up.

Using the banks money to make money is the proper way to leverage someone else’s capital to your advantage.

#2. Day Trading

how to make money during a recession

If you’re already invested in the stock market, then you’ve more than likely heard of day trading.

Day trading uses one of the biggest leveraging tools out there, the stock market/derivatives market.

Here, traders will require intense discipline in order to execute their trades with profit.

Day trading is certainly not for everyone, but if making hundreds of dollars to thousands of dollars per day sounds appealing, you can learn more about it here.

The incredible thing about trading the market is that traders can learn how to make money whether the stock market is booming or crashing.

This means that as long as you’re able to develop the skills necessary to become a consistently profitable trader, you will be able to pivot in a recession and actually make money while most of the economy faces turmoil.

Going on the offense means learning new skills and getting out of your comfort zone to be successful at something outside your 9-5.

franknez day trading

You can follow my personal trading journey on Instagram or Twitter.

#3. Monetizing a Platform

How to prepare for a recession.

Americans are monetizing on Facebook, TikTok, Instagram, YouTube and other platforms such as blogs and podcasts.

If the idea of creating content at scale intrigues you, monetizing a platform could be a great leverage tool for you.

The bigger you grow your audience, the more income you may earn from advertising revenue, affiliate marketing, sponsored content, or other streams.

But the key here is to provide real world value that can help your audience in one form or another.

My blog for example has helped thousands of people invest in the stock and crypto markets for the first time.

Retail investors were able to profit big from investments such as Bitcoin, Shiba Inu Coin, Terra Classic, AMC, and HYMC from early ticker updates on Franknez.com.

Those who took advantage of the information came out profitable before the markets began to tank.

But not everything has to be educational – many creators are publishing content on pretty much any niche that people find interest in.

A platform will help you pivot in a recession by working 24/7 for you.

How to Prepare Personal Finances for a Recession?

In terms of your personal finances, you’ll want to allocate a good chunk of your income into a savings cash account you can build in case of an emergency.

If your income is booming during a recession, consider investing in the S&P 500 index or in rental property.

Many opportunities will present themselves in times of an economic downturn, and when they do, we better be ready.

Becoming Recession-Proof

recession proof
How to prepare for a recession.

Becoming recession-proof is really about taking action.

It’s about creating something or developing new skills that will allow you to overcome any hardships that come your way during economic adversity.

Living paycheck to paycheck is hard, learning new skills is hard, building something new and getting out of our comfort zone is hard, so choose your hard.

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Read: Stocks Retail Investors Can Buy to Build Wealth This Decade

Stocks Retail Investors Can Buy to Build Wealth This Decade

Stocks to build wealth

The market is down which means there are a variety of stocks retail investors can buy to build wealth this decade.

The problem is identifying which stocks will create the team you need to ensure your investing success.

I’ve compiled a list of stocks along with a simple strategy that’s going to allow these stocks to compound over time so that when you’re ready, they start paying you passively.

By the end of this article, you will have the knowledge you need to begin building your very own wealth through stock investments this decade.

Let’s get started!

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Welcome to Franknez.com – I’m helping novice retail investors make the best out of the market. Join my newsletter for weekly market updates and more content like this.

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Let’s dive right into it.

Compounding starts with reinvesting

Which stocks to buy?
Which stocks to buy?

The list below is made up of cash dividend paying stocks, companies with enough cash at hand which allows them to pay cash dividends to its investors every quarter.

The key here is to ensure that you opt in to ‘reinvest’ these cash dividends back into the asset so that your number of shares automatically compound every quarter.

On some occasions, the default setting is set to ‘cash’ instead of ‘reinvest’, which means your broker account will receive the cash dividend as a form of payment and settle in your funds like a deposit.

When you’ve built a strong retirement portfolio and you’re ready to claim the fruit of your labor many years from now, then you’ll want to begin taking that big cash.

But in the meantime, we’re focusing on setting ourselves up for that chapter in our lives so make sure you opt in to ‘reinvest’ that cash dividend.

Over time, you will see your number of shares grow fractionally and then eventually turn into whole numbers.

This process will continue repeating as you continue to fund your cash dividend stock portfolio.

Which Stocks Can Take Care of You Forever?

which stocks to buy?
Which stocks to buy?

Building wealth is a constant journey of increasing your income and investing in assets that can take care of you forever.

If you would like me to publish more content on how to increase your income let me know in the comments section at the end of the article.

Granted that you have the capability to invest now during this bear market, here is a list of cash dividend paying stocks that can take care of you forever.

Related: How to Invest in Stocks for Beginners

#1. VOO (S&P 500)

Dividend Yield: 1.56%

VOO has paid $5.65 per share in the past year during the bull market but is currently paying $1.43 per share in this year’s bear market.

VOO is Vanguard’s S&P 500 ETF which tracks the top 500 performing companies in the United States.

#2. GPC (Genuine Parts Co.)

Dividend Yield: 2.40%

GPC has paid $3.42 per share but is currently paying investors during this bear market $0.90 per share.

Genuine Parts Company is an American service organization engaged in the distribution of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials.

#3. VNQ (Real Estate REIT)

Dividend Yield: 3.53%

VNQ has paid $2.86 per share but is currently paying investors approximately $0.56 per share in today’s bear market.

VNQ is Vanguard’s real estate ETF which invests in stocks issued by real estate investment trusts (REITs), companies that purchase office buildings, hotels, and other real property.

#4. OMF (One Main Holdings, Inc.)

Dividend Yield: 7.96%

OMF currently pays investors $0.95 per share but has paid them as much as $6.80 per share during the bull market.

OneMain Holdings, Inc. is an American financial services holding company that provides loan products, offers credit cards, and other personal loans.

#5. T (AT&T)

Dividend Yield: 9.71%

AT&T is currently paying shareholders $0.28 per share but has paid investors $1.60 in the past.

AT&T Inc. is an American multinational telecommunications holding company offering internet and cellular services.

#6. NRZ (Real Estate REIT)

Dividend Yield: 9.85%

NRZ stock is currently paying investors $0.25 per share but has paid $1 per share before.

New Residential is a publicly traded mortgage real estate investment trust with a diversified portfolio and a strong track record of performance.

#7. EMR (Emerson Electric Co.)

Dividend Yield: 2.45%

EMR pays shareholders $0.51 per share but has paid investors $2.05 per share prior to today’s bear market.

Emerson Electric Co. is an American multinational corporation headquartered in Ferguson, Missouri.

The Fortune 500 company manufactures products and provides engineering services for industrial, commercial, and consumer markets.

#8. ESGV (ETF)

Dividend Yield: 1.26%

ESGV currently pays shareholders $0.20 but has paid investors $0.88 per share in the past.

ESGV tracks the performance of large-, mid-, and small-capitalization stocks.

The ETF specifically excludes stocks of certain companies related to the following: adult entertainment, alcohol, tobacco, cannabis, gambling, chemical and biological weapons, cluster munitions, anti-personnel landmines, nuclear weapons, conventional military weapons, civilian firearms, nuclear power, and coal, oil, or gas.

Other Stocks?

Investing in other stocks that aren’t paying cash dividends could be a great way to raise capital fast.

One example is Tesla, AMC, GameStop, etc.

Retail investors who were able to jump on these stocks early were able to capitalize on massive price fluctuations.

The key here is to get in early, otherwise you may end up holding substantially large losses.

If you’re going to invest in individual companies, make sure you’ve done your due diligence and cash out when in profit.

Send this list to someone you know!

Share this list of the best dividend stocks to buy right now with someone you know who is invested in the market.

I personally hold these stocks in my stock portfolio and figured I’d share with my readers which dividend stocks I recommend checking out.

I’d love to hear your thoughts on this list – do you hold any?

Leave a comment down below.

Here’s how you can make money trading the stock market.

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Tiger Global Hedge Fund Sinks a Massive 34% This Year

Tiger Global Hedge Fund Sings 34%
From left, Chase Coleman III, Scott Shleifer, and John Curtius. Photos by Bloomberg. Art by Mike Sullivan, Edited by Frank Nez

Tiger Global has an AUM of $95 billion, that’s $57 billion more than Citadel’s AUM of approximately $38 billion.

The monster hedge fund is managed by Chase Coleman, 46, who was up until now considered to be a hedge fund legend.

Tiger Global Management had a rough 2021 according to sources and losses are piling up in 2022.

Hedge funds seem to be in a lot of distress recently.

Let’s break it down together.

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Let’s dive right into it!

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Hedge funds face turbulence in 2022

Tiger Global

This year we’ve seen many hedge funds face massive adversity.

Hedge funds have been dealing with significant losses this year, probes from the DOJ, and scrutiny from retail investors.

Hedge fund managers once deemed leaders in their industry now have their reputation on the line.

Gabe Plotkin was named a great trader by Citadel’s Ken Griffin although the hedge fund had to bail Melvin Capital out due to the ‘meme stock’ frenzy.

Citadel pulled $2 billion from Melvin Capital in recent months.

Chase Coleman is in a sticky situation too.

Tiger Global Management is down 34% this year through March.

The speed of the reversal has shocked just about everyone, considering that Coleman is celebrated as one of his generation’s brightest stars, a standout among the elite money managers mentored by the famed Julian Robertson, Bloomberg.

Tiger Global Management treads rocky waters

The bad run has been fueled by massive bets on stocks that have been hammered, such as fast-growing tech companies in the U.S and China.

Tiger Global hedge fund lost 7% last year, its first annual drop since 2016 and its third total, according to Bloomberg.

Tiger Global told clients in a letter that it’s opening up both its hedge and long funds to a limited amount of capital from existing investors to bolster positions in stocks that underperformed

However, we see the results in the first quarter of 2022 has not been what the hedge fund anticipated.

Built by Coleman and his partner Scott Shleifer, Tiger Global has long been seen as a throwback to the industry’s glory years, when double-digit returns were the norm and ‘hotshot managers’ unerringly backed winning companies and shorted the losers.

Across the firm’s $35 billion in funds focused on public companies, this year’s losses have triggered a more than $10 billion hit to investors that include foundations, endowments and pension funds, as well as Tiger Global insiders.

Coleman’s personal wealth has dropped by $1.3 billion, according to calculations by the Bloomberg Billionaires Index. 

Coleman’s hedge fund headed towards worst year

Tiger Global hedge fund may be on track for one of its worst years yet.

Tiger Global Hedge Fund

The blue in this chart indicates the hedge fund’s losses in 2008, 2016, 2021, and 2022.

The firm’s first serious bump was during the 2008 financial crisis, when it lost 26%, followed by a 1% gain the next year.

While markets were already jittery this year due to high inflation and expectations of rate hikes, Russia’s war against Ukraine triggered a flight from risk. 

The Russia-Ukraine conflict has affected every corner of the financial sector.

Earlier we saw Citadel and other hedge funds faced default on Russian bonds from tech company Yandex.

But Tiger Global Management isn’t the only hedge fund struggling.

Investors are pulling out $250 million from Coatue Management and the hedge fund cannot meet its investors demands.

We’re beginning to see this domino effect of losses begin to catch up to even the biggest hedge funds in the world.

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Citadel Faces Potential Default on Russian Tech Company

Citadel Default on Russian bonds
Market News: Citadel faces potential default on Russian bonds

Citadel is facing potential default on convertible bonds from Russia’s Yandex NV.

Yandex NV is an internet and technology company that provides an internet search engine in Russia and other international markets.

Tigran Khudaverdyan has stepped down from his roles as Executive Director and Deputy CEO at Yandex.

Citadel could default on convertible bonds worth billions.

Here’s how Russia is affecting the hedge fund.

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(Bloomberg) Tech company suspension could lead to Citadel default in Russian bonds

Yandex Russian Bonds

The Russian tech company’s U.S. shares have been suspended for more than five days, enabling bondholders to ask for repayment in full. 

Citadel just happens to be one of those bondholders who wants their money back.

The firm said it does not have the money to redeem the $1.25 billion bonds, which are meant to be exchangeable for common stock.

Yandex is one of few Russian companies with convertible bonds issued from foreign financial institutions.

And because restrictions complicate the transfer of money out of Russia, access to capital markets to raise funds any time soon seems highly unlikely.

This significantly increases the odds of Citadel having to default on their Russian bonds.

If Citadel defaults on these bonds, the hedge fund would have accrued additional losses its first quarter of 2022.

Representatives from Citadel declined to comment on the matter, according to Bloomberg.

JP Morgan Chase & Co. turns down advisory role

JP Morgan turns down advisory role
Citadel and bondholders seek advisory – JP Morgan declines

Bondholders have the right to ask to be repaid in full if the company’s shares stop trading for over five days.

However, Yandex only has $615 million in cash with only 60% of that money located outside of Russia.

This means Yandex only has approximately $369 million in liquidity.

That’s a massive difference from the $1.25 billion they owe to Citadel and other institutions affected.

Because sanctions are preventing money from leaving Russia, it’s impossible Citadel will obtain cash from the country.

Bondholders are struggling to find advisors to navigate the process.

JPMorgan Chase & Co. turned down an advisory role on the situation after participating in initial discussions.

The bank simply does not want to get involved.

Will Citadel default on these bonds?

The chances are very likely.

Margin call tension rises

Credit Suisse has been margin calling clients exposed to Russia.

In the coal industry, Peabody received a $534 million margin call.

We’ve recently seen Citadel pull back $2 billion from Gabe Plotkin’s Melvin Capital as they too have been experiencing losses.

Even as Citadel faces default on Russian bonds, the hedge fund has sent signals of distress in the past few months.

Events include from receiving a $1.2 billion lifeline from Paradigm and Sequoia to restricting customers from cashing out.

The Russia-Ukraine conflict is creating losses even for short sellers during a time they would usually profit.

It seems it’s only a matter of time before hedge funds start receiving margin calls too.

But will big banks be able to bail everyone out?

What do you think?

Leave a comment below.

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Read: Ukraine: These famous brands have pulled out from Russia


Breaking: The Moscow Exchange Bans Short Selling

Moscow bans short selling

(Bloomberg) Moscow bans short selling, indicating officials are preparing to reopen the market.

Russia is banning short selling in some of the country’s biggest companies.

The power to ban a strategy used by hedge funds to inflict damage on a company’s stock raises curiosity.

Is this Russia’s way of raising capital?

And should more countries like the U.S. also ban short selling?

Let’s break it down together.

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Welcome to Franknez.com – if you haven’t already joined the newsletter be sure to do that below. I’m publishing daily market news to keep you informed.

Let’s dive right into it!

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Moscow bans short selling in some of Russia’s biggest companies

Moscow exchange bans short selling
Moscow exchange bans short selling

Investors won’t be allowed to bet on declines in about 30 Russian companies, according to Bloomberg sources.

Most of which are petroleum and coal companies.

The decision went into effect on Tuesday.

Russia’s stock market has been closed since February28th, the longest shutdown in Russia’s modern history.

There has not been any confirmation as to when stocks will begin to trade in the Moscow Exchange.

The head of portfolio strategy at Toronto Dominion Bank in London says the Russians might want to remove residual risk on falling prices.

Other exchanges have used short-selling bans to limit volatility during a crisis.

Back in March 2020, at the peak of the Covid pandemic-fueled selloff, Italy, France and Belgium also banned shorting selling.

In other places such as mainland China, investors have limited ability to short stocks.

In the United States investors have what seems like an unlimited ability to short company stock, which in some cases results in bankruptcy.

Let’s use Hong Kong as another example.

Only stocks specified by the lit exchange in Hong Kong may be eligible for shorting.

Investors say its near certainty that stocks will tumble when Russia’s stock market opens.

Should the U.S. ban or limit short selling?

The U.S. on the other hand has a real issue with abusive short selling practices.

A collective of institutions such as banks and hedge funds collude to drive the share price of a company’s stock down for profit.

Financial institutions will even go as far as to bankrupting a company to avoid paying taxes on the bets.

The Justice Department is currently investigating banks and hedge funds relating to market manipulation and other injustices in the market.

If Moscow can ban short selling, and other countries can too, do you feel the U.S. should as well?

Due to the capitalistic nature, banning short selling in the U.S could prove to be difficult, which raises the question; should it be limited?

I’d love to hear your thoughts below.

Is this ban temporary?

Moscow exchange short selling
Moscow exchange bans short selling

It seems like Moscow’s short selling ban may only be a temporary strategy for the country to begin stabilizing again after its economic turmoil.

Russia was removed from the SWIFT system in February when it invaded Ukraine.

This escalated tension worldwide as Russia was no longer able to access money outside the country.

The biggest companies in the world also pulled out from Russia which further crippled its economy.

What the ban on short selling in Moscow shows us is that governments have the power to remove the same predatorial short selling that we see happening in recovering companies such as AMC and GameStop.

While short selling has its use in the market to balance volatility, limiting the use of short selling on a group of companies wouldn’t be such a bad idea.

I’d love to hear what you think.

Leave your thoughts in the comment section below.

Stick around for more market news

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Chinese Tycoon Gets Bailed Out From $8 Billion Margin Call

Chinese Tycoon gets bailed out from $8 billion margin call
JP Morgan bails out Chinese tycoon Xiang Guangda after receiving an $8 billion margin call for sorting Nickel – Long Metal Exchange halts continue

Chinese tycoon Xiang Guangda has been bailed out by JP Morgan after receiving a whopping $8 billion margin call.

The margin call came about as he was shorting Nickel.

The commodity short squeezed leaving the Chinese tycoon with an $8 billion margin call.

Xiang told banks he wanted to keep shorting Nickel and shrugged off suggestions to reduce his short positions, Bloomberg.

Should this even be allowed?

Let’s discuss it.

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Chinese tycoon gets away with $8 billion margin call

London Metal Exchange
London Metal Exchange

The tycoon whose big short bet on nickel helped trigger one of the most dramatic price spikes in history has told his banks and brokers that he doesn’t intend to reduce his position, according to Bloomberg.

The London Metal Exchange halted trading in nickel after prices spiked as much as 250% in two days.

 Xiang has told the roughly 10 banks that he still believes prices will fall and that he would like to keep his short position.

The LME acknowledged that short sellers weren’t going to voluntarily reduce their short positions.

It said there were “considerable differences in view on the appropriate price.”

Apparently big net worth short sellers make the rules.

They Chinese Tycoon secured a deal with JP Morgan and China Construction Bank that would allow it to avoid defaulting on its $8 billion margin call.

LME halts Nickel trades

The LME cancelled $4 billion in transactions as Nickel prices began to surge.

The exchange said: “Nickel will be deemed a disrupted session and all agreed trades during this session will be null and void.”

In other words, they took away the ‘buy’ button and are allowing short sellers to either close their positions or profit on the way down.

Dave Lauer says the exchange is ruining their credibility by protecting very wealthy and powerful people/firms.

“You can’t run a market like this, busting trades at someone’s whim.”

The halts are similar to those that occurred last year during the ‘meme stock’ frenzy when Robinhood froze the purchasing of GameStop, AMC, and other heavily shorted stock.

At some point, the people will cause an uproar.

What are your thoughts on the matter?

Big banks are beginning to bail out wealthy people and firms.

What can be done about it and what should be done about it?

The Chinese tycoon is only one example, but what will happen when heavily shorted stock begin to squeeze again?

Leave your thoughts in the comment section below and share this article to raise awareness to the injustices in the markets.

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Data Shows Liquidity in The Markets Is Deteriorating

Liquidity in markets
Goldman Sachs Investment Research

New data shows there is less liquidity in the markets due to high volatility, especially in the bonds market.

Earlier we saw Citadel could default on Russian bonds due to both sanctions and not enough liquidity in the markets to meet bondholder demands.

The market for Treasury securities is the most liquid in the world, however, liquidity in the markets has rapidly deteriorated to 2020 levels.

Will this cause short sellers to throw in the towel?

Let’s discuss it.

franknez.com

Welcome to Franknez.com – today I’m going over a piece of information that ties up liquidity in the markets with hedge funds such as Citadel. Could this start the liquidation process?

Let’s dive right into it!

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Deteriorating Liquidity in the markets ignites sell-offs

Liquidity chart
Liquidity in the markets

According to the chart above, the current treasury market is under serious stress.

This means the likelihood of Citadel defaulting on its Russian bonds is relatively high.

While it may not bring the entire hedge fund down to its knees, it will certainly create significant losses.

Without liquidity, Citadel will either need to take private funding again or begin to liquidate certain assets.

Could this be the catalyst to force a short squeeze in AMC Entertainment?

It certainly can be if the hedge fund decides to close their position in the movie theatre chain company.

After all, AMC Entertainment has now proven to be a growing company.

The theater chain has progressed every quarter since 2020 and now has a positive EBITDA.

Shorting AMC no longer makes any fundamental sense if short sellers are still betting on the company to file bankruptcy.

And with the company now invested in silver and gold, it could be a great company for Citadel to close their positions in before prices begin to surge again.

BofA says there’s been a ‘record outflow’ from hedge fund clients

bank of America

Bank of America said there has been a record outflow in the past weeks from stocks from its hedge fund clients.

In other words, hedge funds have been selling the entire market (shocker).

According to BofA, retail investors are actually balancing the markets due to above average buying pressure.

Citadel happens to be one of the bank’s clients; the bank manages the hedge fund’s assets through its clearing house ‘BAML‘.

If liquidity in the markets is running dry, we could see a surge in short covering to meet margin requirements and customer demands.

“Retail clients have been more aggressive buyers of this dip than other 10% corrections post-crisis, potentially on fear of missing out on what has generally been a successful strategy post-crisis,” Bank of America said.

According to the industry, most market participants don’t like the idea of “dumb money” buying while “smart money” is selling.

Could this idea of hedge funds selling trigger clients to take their money out?

What do you think?

Leave your thoughts below.

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Peabody Receives a $534 Million Margin Call: Goldman Steps In

Peabody Margin Call
Peabody Margin Call – Global margin calls will happen in every corner of the financial sector

Leading global pure-play and Fortune 500 company Peabody received a $534 million margin call.

The Australian benchmark coal price is up more than 400% in the past 12 months, hitting $425.

Peabody was not prepared and got slammed with a $534 million margin call.

The sum is more than half the cash the company had at the end of December 2021.

Margin calls are beginning to happen left and right and we’re going to discuss it.

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Margin calls in the coming weeks

The Russian-Ukraine conflict is affecting global markets sparking margin calls in every corner of the finance sector.

Russia’s war in Ukraine has further fueled a rally in coal driven by a squeeze on global energy supplies.

Chinese tycoon Xiang Guangda is currently facing an $8 billion margin call after Nickel prices skyrocketed to $100,000 per ton.

Nickel surges to $100,000 per ton

Xiang Guangda tells banks he has no intention in reducing his positions.

The short seller is requiring a coordinated bank bailout including the participation of JP Morgan.

The London Metal Exchange halted trading in nickel on Tuesday morning after prices spiked as much as 250% in two days, driven by brokers rushing to close out short positions after holders of bearish bets struggled to make margin calls.

Credit Suisse News: Margin call tension rises

Credit Suisse margin call

The Swiss bank Credit Suisse is also imposing margin calls on investors exposed to Russia.

The invasion of Ukraine has left wealthy individuals invested in Russian assets with frozen accounts and demands for more collateral.

Tension really began to pick up when Russia was removed from SWIFT.

Banks in the United States are losing cash quick.

Citigroup disclosed in its annual report that it has nearly $10 billion in exposures to Russian counterparties, including loans, reverse repo agreements and cash deposits. 

Morgan Stanley’s next gen emerging markets fund (MFMIX) has also been exposed to Russia with nearly $16.6 million frozen due to Russian sanctions.

Schwab’s fundamental emerging markets large company index ETF (FNDE) has also been affected with 12.7% being exposed to the Russian stock market.

Peabody receives a 10% loan from Goldman

Peabody receives a 10% loan from Goldman Sachs
Goldman Sachs steps in with 10% loan – Peabody Margin Call

Peabody shares plunged 17% after announcing the margin call, taking a chunk out of the gains they had made in recent months as the coal market boomed.

Margin calls could increase if the coal market moves higher.

Senior VP for coal markets at Rystad Energy Steve Hulton says prices could reach $500 per ton.

Peabody arranged a $150 million credit line with Goldman Sachs although the bank announced in 2019 that it would phase out financing for coal.

Peabody’s margin call is only a glimpse of what’s coming to various institutions in the markets worldwide.

And in the states, retail investors are waiting for hedge funds’ number to be called.

Will banks be able to inject liquidity into hedge funds?

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As banks and hedge funds’ assets continue to lose their value, will banks be able to inject liquidity into hedge funds when they need it?

Leave a comment below with your thoughts.

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Russia Exposure Leaves BlackRock with $17bn in Losses

BlackRock Losses in Russia $17bn
BlackRock Losses in Russia amount to $17bn

BlackRock, the largest asset manager in the world has taken a $17 billion loss due to its exposure with Russia.

The Russia-Ukraine conflict is affecting global markets and BlackRock is no exception.

Clients held more than $18.2bn in Russian assets at the end of January.

Following worldwide sanctions imposed after Russia invaded Ukraine have made the vast securities unsaleable.

How is BlackRock managing?

Let’s discuss it.

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Welcome to Franknez.com – if you haven’t already joined the newsletter be sure to do that below. I’m publishing daily market news to keep you informed.

Let’s dive right into it!

Join the newsletter to become part of an activist group fighting for market transparency!

Receive weekly market news to stay up to date.

BlackRock suspends purchase of Russian assets

BlackRock losses in Russia
BlackRock losses in Russia

While BlackRock never opened an office in Russia, it invested in Russian stocks for its clients that wanted exposure to the market.

The world’s largest asset manager suspended the purchase of Russian assets on February 28th.

BlackRock disclosed losses in Russia had only fallen to less than 0.01 percent of their total AUM.

A spokesperson said the total value was about $1 billion on February 28th, when the markets were effectively frozen.

However, BlackRock’s losses in Russia depicts just how large the asset manager is.

They hold roughly $10 trillion in assets globally.

A $17 billion loss could wreak havoc for majority of asset managers but for BlackRock it’s only a scratch on the surface.

Related: Ukraine: These famous brands have pulled out from Russia

What assets did BlackRock lose in Russia?

BlackRock Russia Stock Market

According to sources, BlackRock declined to give a breakdown of its Russian securities or details about which funds had losses.

However, the asset manager did mark down the value of its largest Russian exchange traded fund.

ERUS has gone from about $600 million at the end of last year to a total value of less than $1 million.

BlackRock has suspended trading and waived the management fees on all of its Russian ETFs as well as an emerging Europe fund that was heavily exposed to Russia.

BlackRock chief executive and chairman Larry Fink has praised sanctions and condemned Russia’s invasion.

“Capital is being pulled by investors and companies that have long done business in Russia,” he wrote in a LinkedIn post.

“We stand with the Ukrainian people and condemn the brutal aggression of the Russian government,” Fink added.

Other financial institutions who have been exposed to Russia include Citigroup ($10 billion in losses) and Morgan Stanley ($16.6 million in losses)

Related: Ukraine: These famous brands have pulled out from Russia

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