Yield. The driver of markets today is yield. We were reminded of that in three different but interesting ways in the past week...  

Nick Bilton ran a piece in Vanity Fair's The Hive this week in which he discussed - as we did last week - the failure and disappearance of a slew of tech/startup companies and noted, gulp, that the tech bubble may burst in March or April of next year. There's been a noted belt tightening in recent months after a surge of cash - in part from investors looking for yield from alternative asset classes - flooded the venture capital scene and hiked up valuations. This is why you maybe heard about Fidelity and other conventional asset managers drinking Blue Bottle Coffee while managing HR with Zenefits. A reckoning is coming to Silicon Valley.

We also saw this week the historic debt issuance by Saudi Arabia. Budget challenges stemming from depressed oil prices, high government salaries and free healthcare have sparked the need to diversify the economy and, to fund this initiative, SA marketed a $17.5 billion issuance at 100-200 bps yield above US treasuries. In light of that extra juice, the issuance was 4x over-subscribed. Here is a snapshot of Saudi's budget surplus/deficit: 

And, finally, Platinum Partners Value Arbitrage Fund. Wow. Nothing exemplifies the over-exuberant grasp for yield like a fallen $1b+ AUM fund...

On 10/21/15, Bloomberg News ran a piece exposing this shady trainwreck of an operation. We're talking about rabbis scamming terminally-ill patients for life insurance proceeds. You really should watch the video in the link. It's amazing. A large holder almost immediately issued a redemption request which, naturally, the fund did not honor. The holder, therefore, filed a petition seeking liquidation of the fund. Unsurprisingly, the fund couldn't honor the request because its portfolio is comprised of a "large concentration of illiquid private equity style investments" including winner positions in recently bankrupted IMX Acquisition Corp. (Implant Sciences) and Black Elk Energy. Now, a year later, the fund is winding down in the Cayman Islands and filed a Chapter 15 to aid the process. If anyone thinks this is the last episode of fraudulent activity to come out of this historic market run-up, we have a bridge to sell you...