Alphacution Feed

"The Adviser integrates information, computing power and human skill to attempt to systematically extract alpha." - Two Sigma Advisors, LP brochure On October 17, 2019, Bloomberg reports that "HSBC Considers Equity Pullback in London, New York, Germany." We used this as a catalyst to add to our ongoing bank-owned broker-dealer modeling. Here's a review of Alphacution's prior analysis in this space: Alphacution has begun to assemble a composite model on bank-owned broker-dealer operations. Before now, we have conducted the first phase of modeling for: Goldman Sachs & Co. Morgan Stanley & Co. Deutsche Bank Securities, Inc. UBS Securities, LLC Credit Suisse Securities (USA), LLC J. P. Morgan Securities, LLC - formerly known as Bear Stearns & Co. Among the notable players remaining, we still need to add Bank America / Merrill, Citigroup, Barclays, BNP Paribas and likely Nomura, too. In time, we could expand further from there... However, given this latest news referenced at the opening, we now add SocGen's and HSBC's broker-dealer arms, SG Americas Securities, LLC and HSBC [...]

"What is to give light must endure burning." - Viktor Frankl “The backbone of surprise is fusing speed with secrecy.” – Carl von Clausewitz 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 a balance sheet or buy a [...]

"Learn how to see. Realize that everything connects to everything else." - Leonardo da Vinci A quick shout out to Howard Kapiloff for assembling the piece on Alphacution that went out today in the latest edition of Hedge Fund Alert. Thankfully, those who operate closest to the sources of liquidity know this work well. But, those who operate at some distance from the sources of liquidity and still realize that the impacts we are quantifying and illustrating here are relevant to them speaks volumes about their eye for something new that might matter. Thanks for paying attention... Here's the article, and more can be found here: Support the Feed! Individual Subscription Options Annual Subscription : $275.00 USD - yearly Monthly Subscription : $25.00 USD - monthly Note: Business credit cards and bank accounts can be used via our PayPal payment portal. Alphacution is in the intelligence business. For those of you who are eager to derive greater value from this work and apply that intelligence to your own business interests, [...]

“Learn how to see. Realize that everything connects to everything else.” - Leonardo da Vinci "There's no such thing as a free lunch." - Milton Friedman Maybe I imagined it, but a couple weeks ago, I thought I saw an article claiming that Jack Dorsey, CEO of the world's largest kazoo - you know, the thing with the familiar harmony and enough dissonance to over-stimulate your reptilian id - was set to replicate Robinhood's free trading platform on Twitter. Sure. Why not? What could go wrong?! All businesses should aspire to thrive on the basis of frictionless impulses and whatever "dumb money" is still left on the face of the planet... Anyway, it seems that the search for that gem of strategic intelligence may have been catalyzed by recent announcements by none other than Schwab, Fidelity, E*Trade, TD Ameritrade, and Interactive Brokers - which is pretty much everyone within spitting distance of the retail brokerage universe - that they were all dropping commissions on stocks, ETFs and options to $zero. [...]

"You can't connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future." - Steve Jobs   It's truly amazing what we find deep down in the weeds... The solution to any puzzle starts with the pieces that are easiest to fit into place. Translation: Solutions can start most easily where the most granular data is readily available and easiest to interpret. In this case, and though not (yet) flowing smoothly from a firehose, that means regulatory disclosures based on long positions reported by various trading and asset management firms that correspond with the quarterly-updated 13F securities list managed by the Securities and Exchanges Commission (SEC). At Alphacution, the core mission is to solve, and keep re-solving, a very large puzzle made up of many other smaller puzzles which, themselves, may contain even smaller, more detailed puzzles... Think of this like the claim made by the Kirk Lazarus character in the movie, Tropic Thunder - [...]