The S&P 500 has outperformed hedge funds every year since 2008 – and investors are deserting them in droves.
I was excited to get news on Friday that the U.S. Department of Justice was breathing down the neck of ratings agency Moody’s Corp. The two parties are “negotiating” over allegations of fraud relating to mortgage bonds that Moody’s rated AAA from 2004 to 2007. As we all know, the bonds (and their sterling ratings) turned out to be beer-battered, deep-fried garbage in most cases.
Moody’s shares had been coasting along near a 52-week high of $110, but they gapped down to $102.60 on the news and haven’t come back since.
They’re not likely to, either.
I’m thinking Moody’s has a ways to go before it gets out of these woods, meaning its stock could sink a lot lower.
We’ll all get the chance to make some money on this lemon, but first let me answer some burning questions about this company that I don’t see anyone else asking, like why Loretta Lynch and the Justice Department picked now, of all times, to turn up at Moody’s front door.
Hedge funds’ massive underperformance isn’t just because funds are no longer hedging against market moves.
Financials pulled a world-class fakeout last week, and that’s important for what’s coming next.
America’s big banks just reported Q3 earnings.
Central banks have deluded markets into believing they can generate economic prosperity, but not one of their policies has stimulated growth.
The Libyan sovereign wealth fund’s case against Goldman Sachs will be settled this month.
Officials and analysts rejected Donald Trump’s accusation that the Fed is overly political, but politics is in the central bank’s DNA.
When these new SEC rules kick in next month, they won’t just affect institutional investors – they could end up killing the markets.
Management wants us to believe “just 5,300 bad apples can spoil the bunch” at America’s favorite bank…