Latest news with #stockbrokers
Daily Mail
4 days ago
- Business
- Daily Mail
The four-letter Trump code that Wall Street brokers are using to make millions
Wall Street traders have coined a new acronym mocking President Trump as they game his wild tariff policies to make millions. Stockbrokers have taken to telling each other to TACO when hedging their bets on Trump's market-altering trade policies - stood for 'Trump Always Chickens Out.' The term has reportedly gained traction among investors and day traders who say they have found a strategy to make huge profits off Trump's predictable tariff rollouts. The president has made a habit of threatening massive tariffs on nations and industries around the world, which send markets plunging, before he 'chickens out' days later and doesn't actually go ahead with the levies. In an example just this past weekend, Trump announced a crippling 50 percent tariff on European imports, which dropped the Nasdaq by 1.5 percent while treasury yields and the dollar plummeted. But just two days later, Trump abruptly paused the move after he said he received a 'very nice call' from European Union President Ursula von der Leyen, quickly repairing the market's losses. Trump also dropped his 145 percent tariff on China down to 30 percent earlier this month, which again sent stocks surging after his 'Liberation Day' market meltdown. The seeming reliability of Trump walking back his tariffs has allowed the TACO strategy to reportedly become openly embraced on Wall Street. Financial advisory firm Exit Stage Left Advisors told the New York Post that they have seen traders make huge profits off the dips in Trump's tariff rollouts. 'Once he delivers bad news, investors are buying those stocks when they are beaten down waiting for him to chicken out and watching those stocks rebound in value,' the firm's president Ted Jenkin told the outlet. University of Michigan economist Justin Wolfers added to Barron that this emerging strategy is unprecedented in the way the financial markets work with the White House. Wolfers noted that 'there was no BACO trade' under President Joe Biden and 'no CACO trade' when Bill Clinton was in office, for example. 'It was always taken as a given that when the president spoke on Monday, he would likely still mean it on Tuesday,' he said. 'That's no longer true. But what's really hard is that it's not even obvious when it'll be true, and when it won't be. Madness.' Trump's latest moves on his tariffs saw a continuation of his announce-then-backdown strategy as he admitted a 'very nice call' was enough to halt his levies on the European Union. The president said a call from von der Leyen earlier this week led him to agree to extend his deadline for trade talks until July 9, because they needed more time to 'reach a good deal.' 'I received a call today from Ursula von der Leyen, President of the European Commission, requesting an extension on the June 1st deadline on the 50% Tariff with respect to Trade and the European Union,' Trump revealed on Truth Social. 'I agreed to the extension — July 9, 2025. 'It was my privilege to do so. The Commission President said that talks will begin rapidly. Thank you for your attention to this matter.' Trump threatened on Friday to intensify his trade war after expressing frustrations that trade talks were not moving quickly enough, saying he wanted steep new import taxes to start on June 1. The threat sent global stock markets plunging. The president took to Truth Social on Friday morning to accuse the EU of being 'very difficult to deal with' and 'taking advantage' of the US. But European Commission President Ursula von der Leyen urged him to delay the tariffs until July, which was the deadline he had originally set when he announced new tariffs in April.
Zawya
6 days ago
- Business
- Zawya
Kenya's financial regulators seek to boost issuers' victim compensation
Kenya's financial sector regulators are discussing a proposal to require fund managers, investment banks and stockbrokers to make full disclosures of their clients whose funds are invested in corporate bonds. This is in an attempt to improve the value of compensation to victims of distressed bond issuers and save the corporate bond market from further crisis of confidence. The customer disclosures, the regulators say, will help to ensure bondholders of collapsed or defaulting issuers receive maximum compensation. Currently, fund managers pool together resources from several clients and make investments in corporate bonds as single investments and usually in their name, without disclosing the identities of the investors. This means that in the event an issuer falls into distress, the investment will be treated as a being from a single investor—the fund manager. Therefore, in the case of the Capital Markets Authority (CMA), the fund manager's compensation will be limited to a maximum of Ksh200,000 ($1,550.38), and this has to be shared among the many investors whose resources had been pooled to invest in the bond. Assuming the fund manager collected hundreds of millions from investors and bought a corporate bond, the investors would lose heavily. The financial regulators believe if the identities of the investors in the pooled investment are disclosed, each of them can be treated as an independent bondholder and thus minimise losses.'I think this has been a very good discussion largely and a lot of progress has been made. So, I need to confirm where we are, but I think these discussions have been very helpful. They have involved, of course, all the parties under the joint financial sector regulators and I think they made very good progress,' CMA Chief Executive Wycliffe Shamiah told The EastAfrican in an interview.'The issues of disclosures are the ones we are trying to see how we can make it easier for those who are making these investments, and it has sort of been agreed,' he added. He indicated that discussion among all financial sector regulators—CMA, Central bank of Kenya, Insurance Regulatory Authority, Retirement Benefits Authority and Sacco Societies Regulatory Authority—are centered on full disclosure of the investors whose money is invested by fund managers, investment banks and brokers in bond issues.'We have learnt from experience. For instance, if you find fund manager A has put Ksh100 million ($775,193.79) in a corporate bond. This fund manager is not using money from one person. There are many people who have given him money, so when the Ksh100 million goes bust there are many people who have burnt their fingers because the money was for many investors,' said Mr Shamiah.'So what we were discussing is how we can make it so that when people are being compensated you don't just look at the fund manager alone. You have a way of the fund manager sharing with the rest of the people who are the specific investors so that each of them can be seen as a separate investor,' he added. These discussions follow public outcry over the loss of investor funds in several companies that collapsed or defaulted on their debt repayments after issuing bonds. For instance, in 2015, Chase and Imperial banks were given the go-ahead to issue Ksh4.8 billion ($37.2 million) and Ksh2 billion ($15.5 million) bonds, respectively, only for the two lenders to be pushed into receivership in quick succession by the Central Bank as a result of financial and corporate governance issues. Other companies that have in the past defaulted on their obligations in the corporate debt market include Nakumatt (collapsed), ARM Cement (in liquidation), Real People Kenya Ltd and Consolidated Bank of Kenya, which was later bailed out by the National Treasury. Attempts by the CMA to amend the deposit protection law - separating fund managers' bond investments from customer deposits and other bank liabilities to protect bondholders in case of a bank collapse -have been unsuccessful. The absence of a compensation scheme for bondholders in collapsed companies has instilled fear of investing in corporate bonds. Treasury bonds remain dominant in the Kenyan bond market, accounting for about 99.93 per cent of the debt market. As of December 31, 2024, there were five active listed corporate bond issuers on the Nairobi Securities Exchange, with the total outstanding amount of bond issues at Ksh19.5 billion ($151.16 million). These are East African Breweries Ltd (Ksh11 billion or $85.27 million), Real People Kenya Ltd (Ksh390.93 million or $3.03 million), Family Bank Ltd (Ksh4 billion or $31 million), Kenya Mortgage Refinance Company (Ksh1.1 billion or $8.52 million) and Linzi Sukuk (Ksh3 billion or $23.25 million). © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
