Things I'm Hearing…

Anecdotally speaking, I come across lots of interesting stories in talking with clients and colleagues throughout the day.  Regular readers know that I’m pretty empirically-driven with most of my stuff but every once in awhile, I just can’t find/don’t have the actual data to back up some of this stuff.  Which doesn’t mean it won’t be meaningful…

I plan to do more of these Things I’m Hearing posts going forward.  Here we go:

1.  Managed futures funds are just destroying people right now – most commodity-dedicated strategies and vehicles have a perma-bullish bias, they rarely go heavy on the short side because the clients have come to them predominantly for the commodity exposure itself.  After a lousy 2011, commodity bulls thought the rising tide of equities would bleed into the hard assets trades – they were way wrong.  Guys are being carried out of this market feet first.

2.  1400 on the S&P is now being whispered about by my trader friends as the new “line in the sand”.  It’s apparently the new “rock-solid support” for the Spoos.  We’re there now so I suppose we’ll see – It looks to have closed a hair below…

3.  Everyone wants to play the Short $HEAT game but there’s not a share to be borrowed at the major brokers.  HEAT is a microcap stock that’s gone from 2 to 9 in like 48 hours.

4.  I got an email from an ex-Groupon employee.  As someone who has been a vocal critic of the company’s model and valuation since before the IPO, I guess he wanted to send it to me (disclosure: I have no position in the stock, long or short).  I have to redact most of this so he can remain anonymous and I have no way of verifying if he actually worked there or not, but here it is:

“I worked at Groupon as (redacted)…I had to sign two successive NDA’s and I was ultimately fired for saying things on my Facebook. Of course, that’s a neater version of what happened, but after I was fired I did some digging in the news and what they passed off as “bad PR” to their employees had actual facts behind it. The “subprime loan to small business” thing actually makes sense and when I learned that there could be as many as $750 million in unused Groupons out there, whoa. I am glad I am not there anymore. It’s crazy because they keep claiming that they are a young company and figuring everything out but out in the real world we all have to answer for the mistakes we make. What I said on my Facebook was pretty innocuous… It was then I learned that I was a 24-hour a day rep for Groupon…They don’t want anyone criticizing them or asking questions…even the people that work for them.”

That’s all I got for today, what are you hearing?

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