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David Einhorn Discusses Why The Endgame For The Rating Agencies May Be Close

Tyler Durden's picture





 

Perhaps the Oracle of Omaha was right in starting to get out of Dodge with his MCO position, after he sold 8 million shares in mid-July, and noting that he very well may continue selling his remaining 40 million share stake. David Einhorn clarifies why.

 

 


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Tue, 09/08/2009 - 11:09 | Link to Comment MsCreant
MsCreant's picture

Because of gems like upgrading GE because investors are "comfortably numb?"

Tue, 09/08/2009 - 11:15 | Link to Comment Hephasteus
Hephasteus's picture

Ya. It's like when a bank gives a loan to a guy because he look alright and seems nice.

Tue, 09/08/2009 - 11:11 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:13 | Link to Comment Hephasteus
Hephasteus's picture

But they need the ratings agency to strangle certain businesses or give some a little help with cheap money.

Tue, 09/08/2009 - 11:15 | Link to Comment Anonymous
Tue, 09/08/2009 - 13:19 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:20 | Link to Comment blackebitda
blackebitda's picture

hey einhorn, i always wonder why investors share their positions...such philanthropy. well i guess it helps to have more action to help buy to cover into. nice trade though. 

Tue, 09/08/2009 - 11:26 | Link to Comment chunkylover42
chunkylover42's picture

"Lehman was last year, I don't really have much to add to it."

nice.

Tue, 09/08/2009 - 11:30 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:31 | Link to Comment JohnKing
JohnKing's picture

Einhorn captures CNBC!

 

 

David Einhorn’s wife is Cheryl Strauss-Einhorn, who is, or was, an editor at Barron’s. It’s fair to say that Cheryl Strauss Einhorn’s favored sources over the years have been the short-selling friends of her boyfriend/husband. As a couple, they illustrate the intersection of money management and compliant journalism whose description is Deep Capture’s mission.

Good Catch David!

Tue, 09/08/2009 - 11:32 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:35 | Link to Comment Anonymous
Tue, 09/08/2009 - 13:05 | Link to Comment glenlloyd
glenlloyd's picture

yeah, that cavitating camera deal was making me sea sick!

Tue, 09/08/2009 - 11:46 | Link to Comment Anonymous
Tue, 09/08/2009 - 12:36 | Link to Comment Anonymous
Tue, 09/08/2009 - 13:22 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:49 | Link to Comment Cap
Cap's picture

I will try this again ...

 

I like Einhorn, but IMO he is wrong on rating agencies.

 

Buffet may simply be shrinking MCO position to get down to 15% ownership.  He had been up to 20% due to MCO stock buybacks, which continue.

 

MCO generates a lot of free cash flow.  Their business is pretty strong even in the aftermath of the financial crisis and all this new issuance is good for them.

Tue, 09/08/2009 - 11:58 | Link to Comment Anonymous
Tue, 09/08/2009 - 11:58 | Link to Comment Nathan Smith
Nathan Smith's picture

They own 40,000 puts on GE with an estimated value on 8/13/2009 of ~47 million, which values the puts at ~11.75 per contract. 

The CUSIP for the option is 369604103, so someone with higher tech capabilities could be able to share the exact contracts they own, por favor.

The maths can be checked at http://www.sec.gov/Archives/edgar/data/1079114/000092963809001361/0000929638-09-001361.txt

 

 

Tue, 09/08/2009 - 12:37 | Link to Comment Anonymous
Tue, 09/08/2009 - 16:14 | Link to Comment market folly
market folly's picture

Minor correction if you don't mind. That 40,000 figure you pulled is actually the value of the puts in thousands, so they essentially have over $40 million worth of puts if you add the two sets together.  The nominal amount of shares represented is the column over and if you total them together is 4 million shares or so.  We track hedge fund movements on our site and we covered all the moves in Greenlight's 13F filing here:  http://www.marketfolly.com/2009/08/david-einhorns-greenlight-capital-loa...

 

Keep in mind that those positions are as of June 30th, 2009 and are only show the long US equities, options, or notes.

 

Jay

@marketfolly

Wed, 09/09/2009 - 10:29 | Link to Comment Nathan Smith
Nathan Smith's picture

That's exactly what I said dumbass.

40,000 contract= 4,000,000 shares.  The value is 47 million.  I was trying to identify the strike.  You have added nothing to the discussion. I won't be checking out your site either.

Tue, 09/08/2009 - 12:45 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Looks like CNBS has already decided the case in favor of the corrupt rating agencies.

 

BTW, Einhorn is one of the few really smart money managers out there.

Tue, 09/08/2009 - 14:00 | Link to Comment percolator
percolator's picture

I thought the same thing while watching it.

Tue, 09/08/2009 - 13:54 | Link to Comment Missing_Link
Missing_Link's picture

WTF is up with the dude waving the camera around in front of the screen with Einhorn on it?  CNBC, learn how to hold a camera still, FFS.

Tue, 09/08/2009 - 15:12 | Link to Comment Anonymous
Wed, 09/09/2009 - 03:14 | Link to Comment Anonymous
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