Navesink News
Macro uncertainty as predictor of market volatility
A good explanation on the relationship between market volatility and economic uncertainty from Ralph Sueppel at Macrosynergy. Stocks are priced as the discounted value of future factors. The variability of these cash-flow is insufficient to explain market volatility....
The schizophrenic behavior of Mr. Market. A bi-modal view of option-implicit asset returns
An interesting article from Vineer Bhansali and Jeremie Holdom at LongTail Alpha offers a bi-modality interpretation of return expectations. The analysis offers some an interesting analysis of asset price forecasts implicit in option prices, as well as applications in...
Europe will regret stealing London’s finance business… NOT
Bloomberg's editorial board thinks that competition, not regulation, should divert financial business from London to Europe. Here are the arguments put forward: Concentrating activities in a single location allows for economies of scale. Europe's diversity of...
Is UK Inc. just fishing? Let’s hope not, for Brexit’s sake
We are barely two weeks into Brexit, and the UK fishing industry seems in serious trouble. Let's hope the rest of the UK isn't right behind. Fishermen have overwhelmingly voted to leave, as the Common Fishery Policies gave access to UK waters to European fishing boats...
The role of the expert witness, practically speaking
This short video explains the role of the expert witness, practically speaking. A lawsuit is not as simple as a day in court. there are many steps beforehand. The expert witness brings his valuable experience all along the case, by explaining facts and language,...
SEC’s former whistleblowing chief sues the SEC for changes to the whistleblowing program
There are several whistleblowing programs in the United States, which all encourage and protect insiders to report fraud, waste and crime. The SEC's whistleblower program is probably the most famous, as it has brought numerous and sometimes very large compensations to...
What is an expert witness?
This short video explains what is an expert witness, and why Navesink International, with 25 years of industry experience, has a unique proposition for the securities industry. Expert witnesses act as reference professionals in a court of law. They explain the facts...
You can run but you can’t hide – the end of anonymous US shell companies
With the deluge of national events and political news in this beginning of 2021, this piece of legislation is going under the radar, but it deserves attention. Hidden in the defense bill initially vetoed by President Trump and overridden by Congress, is the Corporate...
Sanjay Shah is charged with stealing $1.6b from Danish tax authorities
One of the main perpetrators for the Cum/Ex fraud, the biggest white collar crime in history, has been charged by the Danish tax authorities. He had defrauded Danish tax authorities by an estimated $1.6 bn and is currently living in self-exile in Dubai. The Cum/Ex...
My grateful thanks to Gary Cohen, financier and social media extraordinaire
My grateful appreciation to a new friend/my friend Gary Cohen for his time, his efforts, as well as his top digital media skills for helping me recreate the Navesink International website and optimizing it from an old-world static site into a new world optimized site....
We wish you an happy, healthy and prosperous 2021
Please accept, without any implied or explicit obligation from you, my wishes on the occasion of the winter solstice and the first of the year, in accordance with the tradition, religion or existential values of your choice, in the respect for the tradition, religion...
The many unsolved issues of the Christmas Brexit deal
"It ain't over till it's over", said the baseball legend Yogi Berra. And Brexit is surely not over with this Christmas deal. The 27 European governments have just validated the 11th hour Brexit agreement, and the British Parliament is expected to quickly ratify the...
The CFTC goes after foreign bribery actors
Corruption has a new enforcement agency. The CFTC announced in March 2019 that it would start enforcing the FCPA, and it effectively delivered with a $95m enforcement against Vitol, the Swiss energy firm, for bribes paid in Brazil, Ecuador and Mexico. "The misuse of...
The Brexit deal brings no special treat to the UK’s financial sector
While economists and journalists pour into the 2,000+ pages of the Brexit treaty and its long-term impact, the financial services are already seen as the big missing part. The UK has one of the largest financial sectors in Europe, representing 2 million jobs, 12% of...
Fifty years of tax cuts for rich didn’t trickle down, LSE says
That will not be to everybody's taste... A study from the London School of Economics of 18 OECD countries over the last 50 years confirms that reducing taxes only impacts those directly touched by the tax, and has no benefit to anyone else. Tax cuts increase...
Britain will do a Brexit deal on Europe’s terms
In game theory, when both sides know that the hands and the payouts are not symnmetrical, one party is bound to lose. Both the EU and Britain's Prime Minsiter know that a "no Deal" Brexit would be disastrous for the country. The EU is determined not to undermined its...
A History of Daytrading: Regulators, Congress and Robinhood
More about Robinhood and its history of regulatory problems... Massachusetts' Enforcement Division filed a complaint about the firm's aggressive growth tactics, its repeated outages and disruptions, which were well known and ignored while pushing growth, its...
Robinhood’s $65m SEC penalty and the ‘gamification’ of trading
Robinhood has just been fined $65m for overcharging its customers, despite trades being free of charge - the company sells its order flow, and the net result is that traders are overcharged $35m/y. The firm also mislead its clients in its advertising. But in the back...
CFTC Fines TFS-ICAP $7m for fake FX option market
Oh, so faking up an initial spread to start a market isn't allowed? Let me put this one out, it's not rare... CFTC fines TFS-ICAP and its managers $7m for fake FX option markets. Interestingly enough, the action comes from a whistleblower (who will be entitled 10-30%...
The Sharpe Ratio Broke Investors’ Brains
Goodhart’s Law: When a measure becomes a target, it ceases to be a good measure. The Sharpe ratio has changed investor behavior. We chase the metric rather than the underlying quality it is trying to assess, and there are plenty of situations where the Sharpe is a...
Fridges are the new rocket science
Fridges are the new rocket science... IBM's target of a million-qubit requires the biggest and coolest fridge ever. The article is also a good overview of where quantum computers are, and where they will be. Quantum computers will be exponentially better at some...
Betterment and Wealthfront on the brink of major changes
If you are not in the RIA space, you may have missed a profound change in the area. Robo-advisors are taking a solid market share, and their AUMs are now in the multi-billions. The big boys (Fidelity, Vanguard...), were actually forced to create their own such...
Portfolio managers shouldn’t keep the best trades for themselves
Nope, portfolio managers shouldn't keep the best trades for themselves (at the expense of other investors). BlueCrest moved its best traders into a management-owned fund, and used AI to replicate their trades in the main fund. Unfortunately, the replication was poor,...
Chicken nuggets and fries? Boris Johnson sets himself up for a disastrous dinner date
Chicken nuggets and fries? To avoid the topic of fishing rights, maybe? This whole story looks more like Waterloo than anything else... Credit to John Crace at The Guardian
Jiuzhang, China’s new quantum computer, has leaped forward Google’s and IBM’s quantum computers.
Jiuzhang, China's new quantum computer, has leaped forward Google's and IBM's quantum computers. It is also based on a different technology (photons, rather than superconductors), which is probably easier to increase the number of qubits. Although quantum computers...
Brexit: What were we thinking?
While the chances of avoiding a hard Brexit are dwindling under our eyes, this British-written article puts the cause of the divorce on the country’s long-seated culture and its establishment - Labour in particular. Credits to Russell Brand and The New York...
The End of the Trump Administration: Investigations and Non Disclosure Agreements
We all are/have been exposed to NDAs. Their (non-) enforceability is often a tricky issue, and tricky legal issues require qualified legal advice. Independently of its initial political topic, Dennis Boyle's article highlights key issues on this type of contract, and...
Most Robinhood day traders lose money
Isn't that weird that the large execution platforms insist on easiness and low costs of trading, rather than showing stats of profitable traders? That's because "maybe 0.5% of day-traders earned more than the initial salary of a bank teller". Personal...
A terrible, horrible, no-good year for quants
Quant hedge funds have had a bad year. One of their core factor, value, a staple of investment for many years, has strongly underperformed. Quants rely on backtests to see what has performed / is performing well. In a changing universe, models naturally have short...
Coronavirus: Macron declares second national lockdown in France
No benefit in being alarmist, and there are far too many people talking about COVID than needed. But the markets remain 'truth midwives", and today's market fall is explained by these points: - The resurgence covid resurgence is much larger this Fall than it was in...
UK mathematician wins richest prize in academia
A big step ahead in stochastic PDE?A paper so good, it must have been 'written by aliens'?Congratulations Mr. Hairer. Plus you are making Mr. Zuckenberg poorer, so you really deserve our appreciation. Credits to Ian Sample, Science editor at The Guardian.
Wall Street bids a not-so-fond farewell to exchange traded notes
A good piece on the history of ETNs, who are in period of lackluster growth / demotion / regulatory pressure, unlike ETFs. ETNs’ complexity makes them interesting for professionals, but unfortunately extremely dangerous for most investors as well. No, XIV is not a...
One Trader Started The Day With $77,000 In His Account; By The End He Owed $9 Million
If you open a brokerage account, you sign the disclosure and the liabilities with your blood. 1 - The markets can go against you fast, really fast. It happens more often than people think and than math says. 2- Your broker-dealer has the legal right to recover your...
Why did the WTI futures have a negative price?
The futures for immediate delivery of WTI oil has a negative price. Why?-> If you are long, you HAVE to take delivery or roll the futures into Mays.-> The roll is similarly expensive.-> There is no storage left.Some may end-up taking delivery of those barrels...
Mind the Gap: Inequality and Diversification
Simple and interesting reading. Imagine we all started in life with the same wealth and randomly generated profits by trading with each other. The first winners benefit from diversification, and tend to increase their wealth.=> A fair economy naturally converges...
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