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KCG Holdings, Inc. Message Board

cash.mccall 384 posts  |  Last Activity: Sep 19, 2014 2:33 PM Member since: May 18, 2011
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  • Reply to

    Its the options market

    by cash.mccall Sep 19, 2014 12:20 PM
    cash.mccall cash.mccall Sep 19, 2014 2:33 PM Flag

    Blackoutbuzz, you are exactly on it today. Those Sept contracts were huge and they have been working them over for the whole week. That's why everything not just VALE has been selling down. But these quads usually mark significant bottoms. It still will be interesting to see if big buyers push in at the end of the day and push VALE over 12. I am seeing some large lot buyers now so they are forming a wall very close to 12.

    These sell downs have nothing to do with fundamentals but it sure shows with hedge funds can do in low volume settings. While it may look like selling, hedges are actually buying the bottom in Materials Energy, Shipping.

    Sentiment: Strong Buy

  • Reply to

    Yield Not Feasible

    by ali_slob Sep 19, 2014 11:48 AM
    cash.mccall cash.mccall Sep 19, 2014 12:24 PM Flag

    You're a bloody fool. VALE has been a big dividend payer for years and years. Their margins are a healthy 35% and it makes plenty of money off its 50 billion in annual revenues.

    Sentiment: Strong Buy

  • cash.mccall by cash.mccall Sep 19, 2014 12:20 PM Flag

    This is not confined to materials though they are getting hit today in this relatively low buyers environment which September is noted for. Energy is getting slammed, Gold, shippers, drillers. The strange thing here is that these big value plays are getting hit across the board. VALE is hardly being singled out. It is really an energy materials shipping sell down.

    Also the much awaited Alibaba was met with a slight sell down from the open. It is not living up to its hype.

    The market looks like a Mutual fund window dressing sell off in which the large value stocks. Some traders had suggested the irrational sell off would occur before the Alibaba IPO since it was expected to be such a large event it would draw money out of other stocks in favor of Alibaba. I would suggest that those calling for a massive correction have already gotten it as the list of new lows has grown to look like a whos who of energy and big material and shipping companies. Irrational sell downs are generally short lived.

    Sentiment: Strong Buy

  • cash.mccall cash.mccall Sep 18, 2014 1:40 PM Flag

    you only smell yourself

  • Joyce left his mark and it was a black mark. Unfortunately GETCO had to tolerate this dissension publicly while Joyce took to the microphone badmouthing GETCO after the merger. But let's remember that under Joyce, KCG went bust. Others in the business that were left over had the mistaken impression that it would be business as usual with KCG under GETCO. In other words, commissions would be fat for traders acting as market makers. But GETCO is a software company. They make and sell algorithms that act as market makers. The objective is to make volume trading efficient. Like it or not the old spoiled traders are obsolete. You won't stay in business in this world using old school traders. Remember the old school traders were making the bust trades that destroyed KCG.

    KCG wants Schwab's trading business. Schwab wants efficiency that it would never get from layer after layer of old school trader. The sale of the futures portion of the business was opposed by many of the old KCG employees, not because it was good for shareholders but as a self-centered gesture. The environment has changed. Margins are thinner and this is a computer driven business. Coleman has a big stake in the company unlike Joyce.

    Only the new Knight has trading robots that can be marshaled on any given trading day; they are flatly more efficient than human counterparts. It stands to reason that much of the labor intensive model has to give way. So you get disgruntled employees. I am however reminded that robots don't complain. Automation has never been greeted warmly by the old school but that has never stopped the wheels of progress rolling over them. The new KCG is all about automation and trading robots that make trading much more efficient and don't have human weakness and fatigue or focus issues to contend with. The ideal trading company would be mathematical; and you don't need daycare for that. Give it a little time. KCG has reduced debt and continued to build out its robotics.

    Sentiment: Strong Buy

  • This is a typical bottom behavior. Even Morgan Stanley is changing their opinion of ore and VALE in particular. A lot of positive press. As I note... the press is propaganda but this propaganda is good for the stock. The press has really gone after the iron ore companies and poisoned the well so that is how the smart money buys in and did such a thorough job there are still seller. The weak hands must let go.

    The every day we have the confused FED yammering about interest rates. Silly talk. If the interest rates were to rise, the Treasury would not sell any bonds and the USA would go into default or print more money so that focus on the FED is absurd. Yellen is flaky. VALE dividend is big, upside potential is big. Look at the volumes days end, just after the markets close, huge upside volume spikes occur. Expect VALE to bobble as it goes up. The weak hands have to let go.

    VALE is cutting costs and doing well in this tight environment. Remember VALE is the lowest cost producer with the highest ore content. So they will always be the last man standing.

    Sentiment: Strong Buy

  • Reply to

    VALE sell Heron stake and Cosco agreement

    by cash.mccall Sep 12, 2014 10:15 AM
    cash.mccall cash.mccall Sep 18, 2014 12:40 AM Flag

    Interesting reasoning. Makes sense. I see China also moving away from Australia and toward Brazil as well. 67% ore will reduce Chinese pollution. Australian ore is barely 62%.

    Sentiment: Strong Buy

  • Reply to

    VALE trading opposite to the market

    by ttworocks Sep 12, 2014 11:32 AM
    cash.mccall cash.mccall Sep 12, 2014 1:00 PM Flag

    VALE is part of some energy indexes and when oil gets it, most materials get clanged. Europe is flat. Oil, oil services, rigs all of it is down today. Its low volume Friday. Also they had that nitwit judge in Louisianan that hit BP for punitive damages. RIG is down even though this silly ruling more or less relieves them of liability. The indexes are not selective. Good goes down with less good.

    Sentiment: Strong Buy

  • Reply to

    So what happened today to justify a 2% drop

    by zzzdoc Sep 12, 2014 10:26 AM
    cash.mccall cash.mccall Sep 12, 2014 12:34 PM Flag

    I would suggest that Lula set the seeds for poverty in Brazil. When will people of Brazil get it in their heads that Banana Republic style Chavez styled Socialism always leads to an elite class and a proletariat? Brazil is presently friends with all the other nuts, like Argentina and Cuba. About time they shifted gears and got out of the way of business.

    Sentiment: Strong Buy

  • Reply to

    So what happened today to justify a 2% drop

    by zzzdoc Sep 12, 2014 10:26 AM
    cash.mccall cash.mccall Sep 12, 2014 10:52 AM Flag

    Don't know. I was watching the pre-markets and the only stories that broke were Heron and the VALEMAX cooperation agreement. Both would normally be bullish. But I am sure that ETFs were reacting to oil and materials and the Goldman reworded article that Iron ore causes cancer. I think it is ETF action from the looks of all the ore companies collectively and incorporates them into Brazil funds etc. Oil is shorted and VALE is in some energy ETFs because of its coal and BHP has oil so it is what it is.

    This is a very political time of the year though even Brazil looks to straighten out with Ms. Silva. I like what the Chinese are doing. They intended to slow the shadow banking and now using selective stimulus. The company is cutting costs, selling off non core business aggressively. There are over 120 million shorts and they can't bee feeling too good longer term. Yesterday at the close there was a 500,000 buy order on the deck at 3.59pm.

    Sentiment: Strong Buy

  • Reply to

    Vale.p paying 7.75 yield not 11 percent

    by mikedunn1999 Sep 12, 2014 9:43 AM
    cash.mccall cash.mccall Sep 12, 2014 10:21 AM Flag

    Market Cap 21.1 B
    Shares Outstanding 2.0 B
    Beta
    --
    Dividend Yield 11.51%
    Semi-Annual Dividend
    0.4075
    Ex-Dividend Date 10/17/14
    Dividend Payable Date 11/7/14

    Etrade data

    Sentiment: Strong Buy

  • Vale sold its stake in Heron following in the footsteps of BHP that sold their stake earlier this year. This is just the continued move to sell off non-core assets. Meanwhile the company announced an agreement with COSCO the Chinese Bulk Shipping company that had previously been blocking VALEMAX ships for transfer of the four ships to COSCO for charter by VALE. This is a political solution to getting VALEMAX ships into China ports. Some have stated that VALEMAX ships may be allowed into China ports by the end of the month or next month. I had mentioned the reoutfitting of the VALEMAX and intent to fly under a Chinese flag. This also squares with Xi's recent Brazil visit where VALE was given a 7.5 billion credit line for shipping.

    Shorts were already hitting the commodities in the morning and VALE was hit in the pre-market which shows possibly that shorts were afraid of a spike. VALE is tied in with a bunch of ETFs for materials so it is difficult to see what was going on in the premarket where over 1.3 million shares were moved. My guess is that shorts will want to clear out of VALE in an orderly fashion and the stock will drift higher.

    There is also some near term options trade in Nov. 1.3 million shares in the premarket is highly unusual.

    Sentiment: Strong Buy

  • Reply to

    Lack of economic growth

    by typea1949 Sep 11, 2014 7:14 AM
    cash.mccall cash.mccall Sep 11, 2014 9:32 PM Flag

    That's true but at some point Chinese gov will have to deal with the shadow banking. They have to unwind it. Bank of China started but the Chinese like to see others do the dirty work and the Australians will gladly accommodate them. Actually this is a showdown. Aussies are taking China to the woodshed.

    Meanwhile, Xi Jinping went to Brazil last month with 2.5 billion ore credit and 7.5 billion in shipping credits and will build railroads from raw materials to the ports in Brazil. Xi Jinping did not go to Australia.

    Asians for some reason do a lot of that propping up of zombie businesses especially Japan but China is a bit smarter and recognizes that the shadow banking is destructive to their economy. So China has no fear of Brazil and VALE has low pollution green ore.

    Sentiment: Strong Buy

  • Reply to

    Lack of economic growth

    by typea1949 Sep 11, 2014 7:14 AM
    cash.mccall cash.mccall Sep 11, 2014 9:21 PM Flag

    Be a little cautious on those calls. The day China announces mortgage stimulus, VALE moves up big because of shot covering. I am always very skeptical when the bad news of something gets the pile on treatment. Goldman may very well know in advance that a Chinese stimulus is on the table.

    A couple of months ago calls were betting on the inevitability of an Alibaba windfall in Yahoo. Yahoo as a company stinks. The CEO is useless. Two years of reduced earnings. She even sleeps through an important meeting in Paris. Just a fool. So I am looking at the put call spreads in July and sell my calls instantly. The following monday, they took Yahoo from 37 to 33. Friday was the triple witch. They wiped out 76,000 calls in minutes!

    After that the badmouthing of Yahoo Continued and there was a story about a huge writer of 40 calls for January 15. August is flat then Yahoo jumps up over 41. So the game is on.

    The trouble with the Alibaba deal is that Yahoo windfall is tied up for over a year. Marissa can't waste it which is good. But it could become even more valuable but is it valuable in her hands with Yahoo, a stinkpile of a company?

    My point is there is way too much news and attention at the lower prices of iron ore right now. So it looks to me like a setup.

    Historically and that means nothing, VALE and iron ore have always done better in the second half of the year from August through April. But I assure you that means exactly nothing but watch China.

    Sentiment: Strong Buy

  • Reply to

    VALE opportunity is stunning

    by cash.mccall Sep 11, 2014 11:54 AM
    cash.mccall cash.mccall Sep 11, 2014 8:55 PM Flag

    Absolutely. Show me any company this large selling below book. It doesn't exist. And ore can shift in nanoseconds. VALE present value should be $22 a share. It has been mercilessly beaten down for years, even when ore was running higher, they were driving the stock price down. This cheap ploy by Goldman. This isn't just in ore. Copper is under attack. But copper is even more amusing.

    They keep talking about a copper glut and China demand falling, and they have been saying that for years. Trace back to Bloomberg. The all time high for copper was 2010... China of course and shadow banking. The price was 4.5 per pound. The long term price of Copper since 89 has been about 1.5 dollars a pound. At present... the so called glut has copper price today which has been steady most of the year is 3.13 per pound. And the producers sell every pound they mine and refine.

    Her is a quote from a Goldman article in May 2014 entitled " Goldman Says Chinese Commodity Financing May Unwind in 24 Months"

    As much as 1 million metric tons of copper and 30 million tons of iron ore could be released if the deals unwind, the bank said in a report today. The unwinding would be bearish “given relatively limited physical liquidity to absorb the shock,” analysts led by Jeffrey Currie wrote.

    So get this... Goldman has been talking about 24 months and 30 lousy tons of iron ore! Its astonishingly stupid. So this is the same old thesis applied to every commodity China buys. Where was Goldman when the shadow banking bubbles were forming? Losers.

    My take is that Iron ore is an oligopoly in the making and the Aussies are sending China down the elevator shaft and will consolidate. This has been hard and fast and China is going to have to let that 30 metric tons of ore go into the market. So that is roughly 3% of a 900 metric ton market. I've got news for Goldman, Bank of China has already cracked down. They play the ore card but VALE is immune. They will be the last one standing.

    Sentiment: Strong Buy

  • Reply to

    Lack of economic growth

    by typea1949 Sep 11, 2014 7:14 AM
    cash.mccall cash.mccall Sep 11, 2014 1:26 PM Flag

    Just consider this for a second. With all the problems of the world, why is Goldman suddenly so interested in iron ore a traditionally very sleepy value unsexy business? Where here and now? If people think that Goldman is doing God's work as some kind of public service why did they choose iron ore the world's most necessary substance and largest imported commodity? Because when they got Aluminum wrong, they were sneakily holding up Aluminum deliveries at their Detroit warehouse. They got sued for this. But this was criminal. Goldman has a history of this and no criminal charges. They have lots of politicians on the payroll at the very highest level. Rest assured, Goldman's motive is misinformation. They see in their long plan, a way to take down china by commodities after they have been instrumental in driving them up. Goldman and JP Morgan are the largest buyers of oil futures contracts on earth. Larger even than Saudi and All global oil producers combined. To get Tarp funds they claimed they were a bank. Show me their ATM machines and drive through tellers. TARP was more disgusting than any Chinese deception.

    Sentiment: Strong Buy

  • Reply to

    Lack of economic growth

    by typea1949 Sep 11, 2014 7:14 AM
    cash.mccall cash.mccall Sep 11, 2014 12:35 PM Flag

    I think of its this way... Goldman gave it its best shot to take down the miners and largely failed. They have been at it all year. Now is not the time to panic. Study the problem. Goldman is wrong just at they were wrong with Aluminum. Goldman said China would never shut down their inefficient smelters and shadow banking in aluminum. But they did. The price of aluminum came up to sane levels and now Goldman is predicting a deficit in Aluminum capacity.

    Chinese aren't stupid. They know their ore mines and shadow banking have caused this. They are terrified of the Australians who have yet to consolidate Australian ore. Brazil ore is consolidated under one flag VALE. This is why Li visited Brazil last month with shipping credits and ore credits in hand. Good VALE cop and Wild Bad Australian Cop. Australians will stop at nothing. They will clean up their own porch at the same time they clean up China. But AUSSIE capacity is maxed out. It takes a long time to build iron ore capacity. So they will consolidate. VALE meanwhile smartly slow to the dance has 90 tons of new capacity that will come on in 2016 and they set the throttle.... the best of all worlds.

    VALE is the global low cost producer for delivered ore. They will always be the last standing.
    Chart on this is available just google
    RBA Statement on Monetary policy August 2014 page 18

    Sentiment: Strong Buy

  • Reply to

    ? the diff between Vale and Vale.P

    by mikedunn1999 Sep 11, 2014 10:10 AM
    cash.mccall cash.mccall Sep 11, 2014 12:14 PM Flag

    Preferred stock. Pays 11%, pays before common. Guaranteed payments. Safe, less volatile shares.

    Sentiment: Strong Buy

  • cash.mccall cash.mccall Sep 11, 2014 12:10 PM Flag

    Actually this is all part of the Goldman grand thesis based on 1997 stock market collapse. The thesis was that emerging Asian countries at that time like Korea and Indonesia had high growth of 8.5% before the collapse and then had an extended period of slow growth for ten year at average 4.5% [hardly slow if you ask me] They are trying to translate that into China. But China is a bit different. They are self funded. They have massive exports supporting their production. They have a robotic stoic culture of workers that don't really seem to care much about freedom. As long as the Gov keeps building the people seem content.

    The big cities are robust with a very good consumer market and good real estate markets, out west they have some ghost towns but eventually they will populate these as well. Most Chinese will live in cities eventually.

    My take on the End of iron is that this is the beginning of stable Iron. The Australians are tough as nails. They are the ones that are patterning this push to reduce ore in order to consolidate Australian ore and clean out the Chinese miners forever. VALE was late to the dance but picked up on this right away. One only needs to study the blueprint of this move as it occurred in the Aluminum business a few years back.

    China has been tightening credit and Goldman should have been delighted by this but instead, they continue to claim China will be in a protracted slowdown. They have predicted this for the last five years. China voluntarily drops growth from 12.5% to 7.5% which is rather close to the Goldman thesis of 1997. But you can't please everyone. China will get back in line. I suspect they will reduce interest rates on mortgages selectively and will sacrifice their inefficient mining industry to the wolves. They are very determined to eliminate the shadow banking issues and I think they are on the right path.

    Goldman claims that Chinese mines will not be closed just as they said with aluminum. WRONG.

    Sentiment: Strong Buy

  • cash.mccall by cash.mccall Sep 11, 2014 11:54 AM Flag

    After the typical Goldman article based on similar assumptions to their Wrong call on Aluminum played out a year ago with almost exactly the same claims of Chinese over capacity and under utilization, Aluminum is now up and even goldman has now projected a global deficit in Aluminum.

    This board does not allow me to post charts so I have to seen you googling...
    Google: RBA statement on monetary policy August 2014 page 18

    There is a chart showing cost of ore delivered. Brazil is the highest quality ore at 67% and the lowest cost producers in Blue. The Australian majors are next in line in fashionable peach, and the Chinese with their 55% garbage ore are red.

    To understand the problem, it has been China and the shadow banking system. Stockpiled ore at docks can't be moved. Nobody knows which "banks" own it since it was funded by as many as three banks all who have claims on it. That is about 80 metric tons, about 10% of China ore demand.

    The Australians are cleaver. They precisely have followed the Aluminum industry by lowering prices to squeeze out capacity. Goldman as usual predicted a long fall in Aluminum but once the Chinese smelters and other marginals shut down, the price of Aluminum went up robustly and even today, Goldman is now prediction an global shortage of Aluminum.

    VALE owns the sweet spot on the chart. They have been criticized for not increasing capacity sooner but in the end their delay looks smart. VALE already consolidate Brazilian ore ten years ago so they have no competition in Brazil. Second, The Australians are driving down costs and have now reached their capacity. Now they will need Australian consolidation and that consolidation will be shared. Not so with VALE. VALE's big capacity will come online in 2016 if they chose to bring it online.

    I write lots of blogs on ore and wrote one on Zero hedge "end of iron age" and some long remarks elsewhere. I don't like bashers here. I am here to support VALE a great company.

    Sentiment: Strong Buy

KCG
10.48-0.11(-1.04%)Sep 19 4:05 PMEDT

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