Hedge Funds

World’s largest hedge fund puts down $13 billion to profit from trouble in Europe.

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– Bridgewater Bets Big against Largest Banks in Spain & Italy:

World’s largest hedge fund puts down $13 billion to profit from trouble in Europe. 

A lot of people have lost a lot of money in the recent financial market convulsions, but there’s still plenty of money to be made by betting against the companies, as the world’s largest hedge fund, Bridgewater Associates, showed this week. It bet heavily against four of Spain’s biggest corporate hitters. The fund took up short positions worth €1.2 billion, or 0.5% of total shares at Banco Santander, BBVA, Telefónica and Iberdrola.

The gamble has already reaped dividends. Shares of Iberdrola, Spain’s biggest utilities company, Telefonica, Spain’s struggling telecoms giant, and Santander, Spain’s biggest bank ended the week around 5% lower, while BBVA tumbled 4%. Bridgewater placed its best against the two large Spanish banks last week, just as they presented annual results that largely disappointed the market. Since then, both banks have lost close to 10% of their market cap.

Read moreWorld’s largest hedge fund puts down $13 billion to profit from trouble in Europe.

Hedge Fund Behind Mystery “Bitcoin To $50,000” Bet Revealed

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– Hedge Fund Behind Mystery “Bitcoin To $50,000” Bet Revealed:

The crypto space was thrown into chaos today as the price of bitcoin and its peers plunged overnight, cementing the pioneering digital currency’s worst week since December 2013, only to rebound dramatically into the close, wiping out virtually all losses. Also today, just as the rout was nearing its trough, we shared a story from the Wall Street Journal about a mystery trader who placed a $1 million bet that bitcoin will climb above $50,000 by December 28, 2018.

That trade was a call option purchased on the LedgerX platform, which received permission from the CFTC over the summer to launch the first swap execution facility for the clearing of bitcoin-linked derivatives, and began trading in the fall, before CME and CBOE launched their own bitcoin futures. As the WSJ detailed previously, if bitcoin is below $50,000 on Dec. 28, 2018, the options will expire worthless, and the $1 million will be lost. But if bitcoin rises above that level, the options give the owner the right to buy 275 bitcoins for $50,000 apiece—a transaction that would cost $13.8 million.

Some more details on the trade mechanics from Privateer’s Aaron Brown:

Read moreHedge Fund Behind Mystery “Bitcoin To $50,000” Bet Revealed

Is Bridgewater (The World’s Biggest Hedge Fund) A Fraud? Here Are The Troubling Questions Posed By Jim Grant

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– Is Bridgewater A Fraud? Here Are The Troubling Questions Posed By Jim Grant: 

Jim Grant, author of Grant’s Interest Rate Observer, first hinted last week that not all is well when it comes to the world’s biggest hedge fund, Ray Dalio’s $160 billion Bridgewater (of which one half is the world’s biggest risk-parity juggernaut). Speaking to Bloomberg last week, Grant said he was “bearish” on Bridgewater because founder Dalio has become “less focused on investing, while the firm lacks transparency and has produced lackluster returns.”

Grant slammed Dalio’s transition from investor to marketer, and in a five-page critique of the world’s largest hedge fund, said Dalio has been preoccupied with his new book, sitting for media interviews and sending Tweets.

“Such activities have one thing in common: They are not investing,” Grant writes in the Oct. 6 issue of his newsletter. “Yet here he is, laying it all out to the world again, Tweeting, promoting his book, attacking the press — necessarily doing less of his day job than he would otherwise do.”

Grant continued his scathing critique, accusing Bridgewater of “lately performed no better than the typical hedge fund.” Grant is right: since the start of 2012, Bridgewater’s Pure Alpha II Fund has posted an annualized return of 2.5% vs its historic average of 12%, and is down 2.8% this year through July.

Read moreIs Bridgewater (The World’s Biggest Hedge Fund) A Fraud? Here Are The Troubling Questions Posed By Jim Grant

“This Market Is Crazy”: Hedge Fund Returns Hundreds Of Millions To Clients Citing Imminent “Calamity”

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– “This Market Is Crazy”: Hedge Fund Returns Hundreds Of Millions To Clients Citing Imminent “Calamity”:

“We think that there is too much risk in this market at the moment, we think it’s crazy,” Altair CIO Philip Parker said: “valuations are stretched, property is massively overstretched… Let me tell you I’ve never been more certain of anything in my life.”

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One Of The World’s Biggest Hedge Funds Has Lost $1.8 Billion In 2016

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Aaaand it’s gone.

– One Of The World’s Biggest Hedge Funds Has Lost $1.8 Billion In 2016:

The latest monthly drop brings its YTD losses to 14.7% this year. According to the WSJ, the fund has now lost $1.8 billion YTD which places it among the worst-performing funds this year. The firm now runs about $20 billion.…

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Hedge Fund Manager Charged In Insider Trading Case Commits Suicide

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– Hedge Fund Manager Charged In Insider Trading Case Commits Suicide:

Last week, we reported on the historic insider trading bust that took place at the soon to be sold Visium Capital, in which, among other accusations, U.S. Attorney Preet Bharara in Manhattan charged Sanjay Valvani of fraudulently making $25 million by gaining advance word about U.S. Food and Drug Administration approvals of generic drug applications. Moments ago, Dow Jones reported that the same Sanjay Valvani, charged in the Visiuam insider trading case, was found dead this morning in an apparent suicide.…

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Welcome to Crony America: Hedge Fund with $146 Billion in Assets Gets $22 Million Government Subsidy

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– Welcome to Crony America: Hedge Fund with $146 Billion in Assets Gets $22 Million Government Subsidy:

The world’s biggest hedge fund has secured $22 million of financial assistance from the government of Connecticut, reports FT. The hedge fund, Ray Dalio’s Bridgewater Associates,has $146bn of assets under management.

A meeting of Connecticut’s bond commission on Friday approved $5 million in grants for Bridgewater and a $17 million  loan that will be forgiven if fund creates 750 jobs in the state.

Read moreWelcome to Crony America: Hedge Fund with $146 Billion in Assets Gets $22 Million Government Subsidy

Is Citadel Unwinding A $50 Billion Portfolio In The Aftermath Of The Surveyor Debacle – World’s Largest Hedge Fund In Trouble? Bridgewater Pure Alpha Loses Over 10% In Two Weeks

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– Is Citadel Unwinding A $50 Billion Portfolio In The Aftermath Of The Surveyor Debacle

– World’s Largest Hedge Fund In Trouble? Bridgewater Pure Alpha Loses Over 10% In Two Weeks

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First $1.5 Billion Hedge Fund Casualty Of 2016 Blames HFTs For Making A Mockery Of Investing

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– First $1.5 Billion Hedge Fund Casualty Of 2016 Blames HFTs For Making A Mockery Of Investing:

“We have come regretfully to the conclusion that the current algorithmically driven market environment is one which is increasingly incompatible with our fundamental, research orientated, investment process.  The bear market in emerging market equities, which began in 2011, may eventually engulf developed markets too.”

 

Hedge Funds Dropping Like Flies: Doug Hirsch’s Seneca Capital Closing After 20 Years

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checkmate

– Hedge Funds Dropping Like Flies: Doug Hirsch’s Seneca Capital Closing After 20 Years:

Three weeks ago when news of the dramatic gating and liquidation of Third Avenue’s high yield debt focused fund first hit, we said that “now that the dreaded gates are back, investors in all other junk bond-focused hedge funds, fearing they too will be gated, will rush to pull what funds they can and submit redemption requests, in the process potentially unleashing a liquidity – and liquidation – scramble within the hedge fund community, which will first impact bonds and then, if the liquidity demands continue, equities as well.”

Sure enough, promptly thereafter several other junk-debt focused hedge funds shut down, culminating with yesterday’s liquidation of Whitebox’s various multistrategy mutual funds.

And now, moments ago we learned, another hedge fund has decided to call it quits, this time chess-afficionado Doug Hirsch’s event-driven $500 million Seneca Capital, which according to Bloomberg is returning most outside capital by today.

Read moreHedge Funds Dropping Like Flies: Doug Hirsch’s Seneca Capital Closing After 20 Years

BlackRock Liquidates Its Macro Hedge Fund Following Worst Loss Since Inception, Surge In Redemptions

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– BlackRock Liquidates Its Macro Hedge Fund Following Worst Loss Since Inception, Surge In Redemptions:

BlackRock Inc., the world’s largest asset manager, is winding down a global macro hedge fund after losses and investor redemptions eroded assets. The reason for the liquidation: losses of 9.4% this year, cited by Bloomberg according to an October investor document, leading to the worst year for the asset manager since inception in 2003. The fund, which had $4.6 billion in assets just two years ago, has shrunk to less than $1 billion as of Nov. 1.

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The Liquidations Begin: Three Hedge Funds Shut Down After Summer Rout

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– The Liquidations Begin: Three Hedge Funds Shut Down After Summer Rout:

“As you know, the environment for global macro fundamentals-based trading continues to be challenging. That factor, combined with the lack of certainty over when a recovery will take hold, led us to conclude that the time was right to return capital to you.”

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Ben Bernanke To Join World’s Most Levered Hedge Fund: HFT Powerhouse Citadel

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– Ben Bernanke To Join World’s Most Levered Hedge Fund: HFT Powerhouse Citadel (ZeroHedge, April 16, 2015):

Several years ago, Zero Hedge first, and to our knowledge only, reported that when it comes to unofficially executing trades in the equity market the NY Fed – through a slightly more than arms-length arrangement – does so using Chicago HFT powerhouse Citadel. In other words, while Citadel was instrumental in preserving the smooth, diagonal ramp in stocks since 2009 and igniting upward momentum just as everyone else stared to sell when the Markets Group of the NY Fed called, it was also paid handsomely: after all, nobody checks the Fed’s broker commission statement. In fact according to some, indirect Fed compensation to what is the world’s most leveraged hedge fund has been in the billions over the past decade.

Well, now it’s payback time, and as the NYT reported overnight, the Brookings Institution’s favorite blogger, former Fed Chairman Ben Bernanke, has joined none other than Citadel as an advisor.

Read moreBen Bernanke To Join World’s Most Levered Hedge Fund: HFT Powerhouse Citadel

The Worst Performing Strategy In 2014 Is …

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– And The Worst Performing Strategy In 2014 Is… (ZeroHedge, May 25, 2014):

Hedge fund performance continues to be weak so far in 2014 and this week was no different as long/short funds found to their dismay that trading on rational thought and fundamental analysis was for losers. However, global macro strategies are doing the worst of all as carry trades unwind, sanctions create inflows, and geopolitical chaos creates nonsense from sense. The best performing hedge fund strategy… buying-the-most-shorted is beaten only by Bonds.. and in first place of all assets – Gold.

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As Goldman explains…

Read moreThe Worst Performing Strategy In 2014 Is …

Making $400,000 PER HOUR, The Best Paid Hedge Fund Manager In 2013 Was …

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David-Tepper

– Making $400,000 Per Hour, The Best Paid Hedge Fund Manager In 2013 Was… (ZeroHedge, May 6, 2014):

When it comes to returns, 2013 will be best remembered as the fifth consecutive year in which the S&P 500, lead by Chief Risk Officer and Portfolio Manager Ben Bernanke (replaced by Janet Yellen in 2014 following a bumper 30%+ year), outperformed over 90% of all hedge funds, which as the recent beta blow up has shown, have virtually no original “alpha” ideas, and all merely piggyback on the same high beta “greater fool”, hedge fund hotel trades and/or lever on beta as much as their Prime Broker will allow them (in many cases quite a lot).

And yet, hedge fund investors were perfectly happy to keep handing over 20% of their upside and paying a 2% management fee when they could have generated the same returns for free by simply buying the SPY ETF.

How happy?

According to a just released ranking by Institutional Investor magazine, The 25 top earners of 2013 raked in a total of $21.15 billion. That’s roughly 50 percent more than the 25 best-paid managers reaped in each of the previous two years. Four managers earned more than $1 billion, while a fifth just missed that distinction. To qualify for the list, a manager needed to have earned at least $300 million in 2013, or 50 percent more than the 2013 cutoff.

Read moreMaking $400,000 PER HOUR, The Best Paid Hedge Fund Manager In 2013 Was …

White House Former Chief Of Staff Joins Hedge Fund Launched By Former JPM Prop Traders

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– White House Former Chief Of Staff Joins Hedge Fund Launched By Former JPM Prop Traders (ZeroHedge, April 24, 2014):

“The amount of experience he has is ridiculous,” says former JPM prop trader Galuti, adding “- in a positive way,” as he explains why former Clinton Commerce secretary (and Obama chief of staff) Bill Daley has joined the small Swiss-based hedge fund. The revolving door of favors continues as Daley, who The FT reports will be based in Chicago and oversee US expansion (as well as provide macroeconomic and political advice), joins an ever-growing number of former Obama administration officials to have taken jobs in the financial sector.

As The FT reports, Bill Daley, the former White House chief of staff, is to join the hedge fund Argentière Capital, which was founded last year by leaders of JPMorgan’s disbanded proprietary trading division.

Mr Daley, who was also Commerce Secretary under President Bill Clinton, joins a number of former Obama administration officials to have taken jobs in the financial sector.

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He will be based in Chicago and help spearhead the fund’s US expansion, as well as provide macroeconomic and political advice.

Read moreWhite House Former Chief Of Staff Joins Hedge Fund Launched By Former JPM Prop Traders

Matt Taibbi: 16 Major Firms May Have Received Early Data From Thomson Reuters

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The Thomson Reuters headquarters building in New York City.

– 16 Major Firms May Have Received Early Data From Thomson Reuters (Rolling Stone, Sep 5, 2013):

Readers may recall an ugly story that broke earlier this summer, when New York State Attorney General Eric Schneiderman rebuked the news/business information firm Thomson Reuters for selling access to key economic survey data two seconds early to high-frequency algorithmic traders. The story strongly suggested that some Thomson Reuters customers were using their two-second head start (an eternity in the modern world of computerized trading) to front-run the markets.

“The early release of market-moving survey data undermines fair play in the markets,” Schneiderman said, back in the second week of July. Thomson Reuters suspended the practice of selling two-second head starts after Schneiderman insisted upon a change. Still, the firm defiantly refused to declare the change permanent and insisted that it had the right to “legally distribute non-governmental data” to “fee-paying subscribers.”

It turns out that there’s more to the story.

Read moreMatt Taibbi: 16 Major Firms May Have Received Early Data From Thomson Reuters

Hong Kong Hedge Fund Manager William Kaye On The Massive Gold And Silver Plunge: ‘It’s The End Game Of A Fantastic Manipulation Of The Markets’

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More here:

– Stunning Volume On Gold & Silver Smash In Suspect Trading (King Wolrd News, June 20, 2013):

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“And if you need to sell, why are you selling at the worst time of day?  Why are you selling in Asian time, which is always the thinnest section of trading?  Why don’t you wait for London and Chicago to take over?

And the answer is very obvious:  These markets are clearly and blatantly being manipulated.  The people doing it have clear price objectives.  My guess is they want to see a print below $1,300 (on gold) before they are done.  That will allow people (trading for the bullion banks) to make profits on their shorts.

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John Paulson Loses Over $300 MILLION On Friday’s Gold Tumble

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– John Paulson Loses Over $300 Million On Friday’s Gold Tumble (ZeroHedge, April 13, 2013):

There were many casualties following Friday’s 4% gold rout, but none were hurt more than one-time hedge fund idol John Paulson, who according to estimates, lost more than $300 million of his own money in one day.

Per Bloomberg: “Paulson has roughly $9.5 billion invested across his hedge funds, of which about 85 percent is invested in gold share classes. Gold dropped 4.1 percent today, shaving about $328 million from his net worth on this bet alone.” This is merely the latest insult to what has otherwise been a 3 year-long injury for Paulson and his few remaining investors, whose very inappropriately named Advantage Plus is among the bottom 10 hedge funds for the third year in a row. Yet despite being a one-hit wonder thanks to one lucrative idea (long ABX CDS) generated by one of his former employees (Pelegrini), Paulson still has been lucky enough to somehow amass a $10 billion personal fortune which can have a $300 million downswing in one day, even if it is in an asset class which eventually will go only one way – up. Unless, of course, like so many other fly by night billionaires, Paulson too hasn’t somehow managed to lever up all his equity into numerous other downstream ventures, and where a $300 million blow up leads to margin calls and other terminal liquidity outcomes.

More:

“The recent decline in gold prices has not changed our long-term thesis,” John Reade, a partner and gold strategist at Paulson & Co., said in an e-mailed statement. “We started investing in gold at $900 in April 2009 and while it’s down from its peak to $1500, it’s up considerably from our cost.”

Read moreJohn Paulson Loses Over $300 MILLION On Friday’s Gold Tumble

Hedge Fund Manager Kyle Bass: Senior Obama Administration Official Said: ‘We’re Just Going To Kill The Dollar’ (Video)

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YouTube

Description:

In this interview with investor Kyle Bass from Day 1 at AmeriCatalyst 6th of November 2011, in Austin, Texas, Bass discloses his discussion about the economic crisis with a senior from the Obama Administration. According to Kyle Bass the basic solution coming from this senior was: “We’re Just Going to Kill the Dollar”.

Killing the US Dollar in this context means keep printing more US Dollars in order to weaken the dollar to make exports cheaper through inflation. Massive inflation might be the answer for the Obama Administration, but in the process your purchasing power will be destroyed. And because the US Dollar is the world’s reserve currency the eventual impact of inflation would have an impact that would reach far beyond those holding US Dollar assets.

Thousands of paper currencies has come and gone over the years and there is no question if the dollar, or the euro for that sake, will have its value go to zero; the question is when?