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David Tepper Is "Balls To The Wall" Long (But Unlevered) The Fed
Earlier today David Tepper confirmed that virtually everyone is now hypnotized by the biggest fallacy in the history of capital markets: that stocks determine the economy, and not vice versa. Incidentally, this is precisely what the Fed banks on, as confirmed previously by Alan Greenspan, who said on TV that the Fed is far more interested in keeping the stock market artificially high than actually caring about its mandate of keeping unemployment and inflation low. Of course, Tepper couldn't resist but talk his book, and providing the most childish and discredited validation for his bullishness: the Fed will do QE in perpetuity. "Either the economy is going to get better by
itself in the next three months...What assets are going to do well?
Stocks are going to do well, bonds won't do so well, gold won't do as
well. Or the economy is not going to pick up in the next
three months and the Fed is going to come in with QE. Then
what's going to do well? Everything, in the near term though not
bonds...So let's see what I got—I got two different situations: One, the
economy gets better by itself, stocks are better, bonds are worse, gold
is probably worse. The other situation is the fed comes in with money." We are too lazy to do it, because we have done it about one hundred times in the past, but we suggest Mr. Tepper pull up a chart of the Nikkei and superimpose on it all the times Japan launched ever more impotent episodes of QE and FX intervention. How did that work out? Yes, you can devalue currencies infinitely via QE, but that only destroys the real value of assets. And as we pointed out after the latest FOMC meeting, we are now in a new regime, where gold benefits more than stocks on further currency devaluation. Period.
Additionally, as to Mr. Tepper argument that mortgages can still go much lower, we ask: how much did the marginal drop in MBS from 6% to 5% to 4% do to spur mortgages? We hope Appaloosa keeps track of new mortgage applications... which for those who do not are at a 13 year low. How exactly will lack of refinancing stimulate the economy?
Then again, betting on the Fed's desire to make millionaires into billionaires is nothing new for Mr. Tepper who prudently made the call that the Fed would destroy the middle class in 2009 and literally bet the farm on Fed intervention. He is now merely doing what he did then (and the Fed obliged, allowing Tepper to not only not shut down Appaloosa, but make a billion or so in the process). And, after all, what else can he do? Fundamental analysis is now dead, and those who still play by the rules are returning investor capital. The only play left in town is to frontrun the Fed, as Bill Gross has been so proficient in doing, and which is the only trade left. Alas, the only loser from that is 99.9% of America's population. For the sake of Mr. Tepper, we hope the great unwashed don't realize the fleecing they are being covertly subject to, before such time as Tim Geithner and Ben Bernanke are able to secure one way tickets to non-extradition countries.
But yes, once we notice that Bill Gross is going "balls to the wall" on margin and buying MBS again, we will let our readers know - at that point it will be time to frontrun the Fed, aka the involuntary US taxpayer piggybank, again... and again...
Full Tepper interview for those who wish to learn how to talk their books up with the best of them.
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Thanks for posting this. I was laughing the entire time while watching this morning.
If I was one of his investors I'd take my profits and withdraw every dollar I had invested with him today.
Wow - it doesn't get much more disrespectful than that.........
Call him childish, but that child made over a billion last year
with analytical ability like his how do you suppose he made $1B last year? Little kleptocratic boys' club?
Mr Madoff also made loads of money before he went behind bars.
+100
one down, 1500 to go.
The problem with so many readers on this site is that they are so self involved and absorbed that can't see the fact they just missed out on a bull run up in stocks (secular, cyclical, or completely make believe, who cares). In my comment I never mentioned anything about the structural macro structure of the global economy, or anything of that matter.
Again, you may knock his analytical thinking, however did your superior market analysis yield near 100% returns last year. If so, good for you, if not, then stop whining and saying everyone else is wrong when clearly you have been proven wrong. The stock market is the ultimate meritocracy, zero sum, you win or lose, that's it. It doesn't matter how intellectually sound your reasoning is, as long as you have consistent risk adjusted returns, then you win.
Piece of advice, everyone has to stop whining and start seeing past their own biases.
My comment has nothing to do with your analytical abilities which I am certain are superior to mine. It has to do with whether or not a number of criminal schemes have been revealed and whether they continue in this so called free market system. Your or anyone else's ability to make money in it are irrelevant to that. I apologize for being absorbed or self absorbed with that issue. Last time I checked, a number of people share this concern
From the Fed's printing press to Tepper's pocket, you bet! Dilute a piece of every US Dollar in existence, and line the pockets of these fucks. Why not?
Klepper will be right until he is wrong at which time he will say that he can not possibly be held personally responsible for such a far reaching cumulative meltdown. He has his Billion and will keep his Billion while using OPM until the cows come home. That is why he is so bubbly happy VERKLEMPT!
+1 forgetalpha. How did your factual message get junked x2?
The name of the game is making $ not being right. Or said another way, if you are making $ you are right.
Exactly!! He didn't get bailed out. He just had the gall to go long all financials when everyone was shit scared.
Going forward from here,
you may find that stocks of companies which have large assets in the ground,
such as Suncor, Consol Energy, and Cameco,
will do as well or better than even gold mines ...
He's basically right. The stock market has just become a vehicle to further enrich the rich. It's nothing more than a mechanism to do so now.
Yep - the oligarchs buy up a couple more islands while the rest of us get shot rioting in bread lines.
All so a bunch of banksters and fraudsters (but I repeat myself) don't have to take a haircut on their bad bets.
Awesome.
yep
Haines just had a young man on who says that, "the market isn't the econonomy." He's trading the market.
Tepper is banking on Scotty to beam him and stocks up.
Who needs an economy anyway. If the Fed can print up the market we can get rich to infinity without any economy.
Indeed! Here is a picture of a billionaire in Africa, a beneficiary of the visionary Keynesian monetary leadership:
http://www.kandle.ie/wp-content/uploads/2008/10/zimbabwe_billionaire.jpg
+1000 We needed that.
LOL
At least he can smile.
He stole the sign from someone else after stabbing him in the neck with a piece of broken glass. Same thing happening here but with more subtle weapons.
Tyler is spot on: "we are now in a new regime, where gold benefits more than stocks on further currency devaluation. Period."
One caveat though: shares of gold/silver mining companies will also benefit from central bank currency raping. So you paperbugs who sneer at gold as an investment, go for gold stocks instead.
gold basically can only go up unless bernanke wants to hike interest rates and bankrupt us all over night.
raise interest rates would bankrupt the government.
Yup, and what are the chances of that? 1%.
What are the chances Benny will keep monetizing CONgress's debt? 99%.
Place your bets on the table, please....
Astute observation. +++ If the Fed holds down rates, lets dollar continue to sink, gold will continue to go up in dollars.
The Fed is between a rock and a hard place now...and we saw this coming long ago.
Will they do another large QE and totally wreck the dollar?
caught between a pyramid scheme and a hard place and we're the slaves who have to push it. Hey Moses, can you cut this cord before it crushes me?
Funny you should say that. Just got into to three gold miners yesterday and another one today.
If you'd rather not take the time to research individual stocks, Sprott Precious Mineral Fund is as good as it gets IMHO... 1 year return is 69% (typically 2 to 3 times bullion).
Way too many guys fightng the tape.
So many "pros" are short big and getting killed.
I'm just following the bouncing ball, it's not that complicated.
So far, everything has been holding above the 20-day after Investor's Business Daily noted the "follow through day" off the recent low.
You've copped some flack lately Robo, but essentially, you have been correct. Keep the girls coming though, it's been a drought from you lately in this respect.....
On this site you will always draw flack. It's infested with moronic trolls now.
Robo kills it. Thanks for your analysis and entertainment.
if you're long treasuries you might want to call the "soothsayer." god forbid if a war breaks out in the Middle East during a "peace process."
Their not fighting the tape. They are block trading out.
http://www.youtube.com/watch?v=eBAhan8ZNGI
Robo junked x 7 for having the intelligence to follow trends and profit.
He is junked for arrogance and ego self-massage, not being right. People love a winner, but they hate those who flaunt it. Lack of modesty and humility will get ya junked anywhere, and in life in general. (I did not junk him... don't care enough.)
Hey, this man is indeed in good position to take home a nice slice of QE pie. You want him not to be happy about it? You thought he had some shame?
I don't think anyone is faulting him for making money.
It's just amusing to watch such a wealthy man have a seemingly lack of fundamental understanding for the underlying monetary picture.
But as I have been saying, when you have men in their 40s-70s who only have known Keynesianism their whole lives, since that is what made them and their friends rich, it's not difficult to see why they fail to grasp the bigger picture.
Hubris can be a bitch though.
Trust me I know exactly what you mean. But that's not what I sense from this guy. "You've got to love a put, especially when it's issued by the Federal Government." In other words, when they're giving away money, he'll take it. He's not saying QE is good for anybody but himself.
09-24 07:42: US House Ways and Means chairman Levin says China's 'persistent' currency manipulation significantly distorts trade. Japan, Switzerland, and the USA, well now THAT is different.
I'm so sick of this line of reasoning. There's x amount of gold on the planet. If the US really wants the east to stop pretending it's poor all they have to do is stop pretending they are rich.
This is a complaint about how they won't lie to nth degree about thier gold holdings and print convertibility ratios that are nonsense. It's all it is. It's all it ever will be.
Everything, in the near term though not bonds.
The guy is so stupid that he doesn't even know how QE works. I turned off the television after that.
so if Tepper is "so stupid", and you're not, how come Tepper is worth $6 billion and your worth the present value of a stream of social security payments?
you should have the billionaire kleptocrats line up so you can give them all BJs.
>>...how come Tepper is worth $6 billion and your [sic] worth the present value of a stream of social security payments?<<
Dude, that is the funniest line ever!
Poor guy. Have you been stuck in a German Comedian school most of your life?
So, the more money you have the smarter you are??? Are you fu$%ing kidding me? ...when do idiots like you wake up to realize they are being fleeced left and right ... unless, maybe, you're one of the fleecers
Mark Cuban.
EARTH TO THE PEOPLE:
THE FED IS COMMITTED TO ENRICHING BANKERS AND BILLIONAIRES AT YOUR EXPENSE
AT YOUR COUNTRIES' EXPENSE
THE FED IS DESTROYING THE CURRENT WORLD ORDER
METHODICALLY
after we're all broke, will they want us alive? Will they want us alive if we require their handouts? Will they?
Those two statements are contradictory.
btw, no reason to shout.
shout away. you haven't even begun to plumb the depths of this crime. i would think twice ALWAYS about telling the US Navy to "step aside" no matter who i was and when i was living. "The ocean is so big and my navy is so small."
It's not about money; they can print as much money as they want. It is about power and control. We are currently living in a Malthusian wonderland.
A very revealing speech (an old one, but a good one) - http://www.youtube.com/watch?v=0g1k5rK7bWI
Huxley was brilliant. Thanks for the link
Futurists like Huxley can be problematic. The common person interprets the message as a warning while the elite treat it as advice and adopt it into the playbook.
One might think such strategy would be kept under wraps and not put out into the open, but it is the openness of the grift that allows TPTB to sleep at night.
"In a moment I am going to reach into your pocket, take your wallet, open it, remove the money, hand the empty wallet back to you and walk away. And you will spend your remaining days contemplating what just occurred."
So let me get this straight..., we should buy, like, Chrysler, because the Fed is going to pump an infinite amount of money into that corpse to make it sing and dance. Am I the only one who has a problem with this?
Even if the interest rate is zero, you can still lose your ass betting on bad companies. The squid and the squidletts are so busy ripping off the taxpayers, they seem to have lost sight of that. There are no suckers left in the market. We are very near a crazy coyote event. Don't look down. Oh shit! I told you not to look down!
Chrysler isn't a publicly traded company. But, whatever.
Oh, but it will be again. That's my point. None of this matters unless they can find a new set of suckers willing to buy almost anything.
i'm not the head of a business school let alone a PHd economist and major market player (it's called Wisdom Tree I believe) but I believe one of the principles called it a "bond bubble." before you "slam equities" you might want to ask why they might be the only friend the American economy has right now. We've been takin' hits for a long time now and i think i'm speakin' for the entire nation when i say "we're not good with even."
No, you should buy GM at $160.00 the Break Even part for our Tax dollahs.
The stock market is on virgra now. So all the short-sellers had better stay aside. Many people went short the subprimes back in 2005 and 2006 but they saw a bloody slaughter.
The subprimes got slaughtered until they didn't. Shorting RE for profit doesn't coincide with the bad housing numbers and high default rates. They are credit default swaps that payoff when the mortgages (and its coresponding CDO packages) are written down by the banksters.
And, viagra doesn't work when you have whiskey dick.
Market boner extending to 1200 S&P. Look at this move today off comments from Tepper on CNBC.
Line of least resistance is definitely up.
As pointed out here on ZH recently many stock funds, pension funds, etc, are not selective, but go long or short the entire S&P, DJ, etc.
It is these dumb funds, and J6P, that get hammered.
J6P never quite figures out why his pension fund is hammered when the markets are 'going up'. He never realizes that he is in a house of mirrors and is being lied to and cheated at every turn and that the fund managers/banksters in collusion with the Fed and gov have blocked almost every exit available to him.
Occasionally a J6P will take the big hit on their 401K or other retirement account and buy into PMs, foreign investments or other commodities...the huge majority never take this step...they move their deck chair and go down with the ship.
I couldnt agree more that this fcker is a complete numptee BUT the poor performance of the Nikkei has nothing to do with the debasing of the Yen - the BoJ went to a zero interest rate policy and implemented QE in one form or another since 1999 and the Yen is now about 30% stronger than the dollar - since the NKY bubble burst the Yen has gained about 40%. QE may or may not debase the USD as we go forward but the Japanese currency experience does not aid the case against QE in the US. For the record my view is that QE is pointless.
Japanese bonds were purchased by Japanese. Also, Japan had a very positive trade balance. Those things change the equation. You are comparing apples to oranges.
Yup, the Japanese actually make stuff that people want to buy.
10/4, plus the people had an avg savings rate of 20%, and were in prime earning years.
Now, they are graying out, and saving less than the U S Taxpayers.
You might want to take a look at the Japanese savings rate.
He could have lit bottle rockets out of his anus and they'd still praise him. Why the fuck is this interview all over the news today.
Because CNBS is touting it as the reason the market is going up, which I'd guess is the defacto offical cover for the start of QE2.
more like a dozen concurrent QE 1.0/100, half of which are known. The gauntlet has been thrown down... we do not get to do QE 2... our form of austerity, as crazy as it seems, involves additional printing... think nicotine patches.
The bigger question is why is balls to the wall talking to the media right now?
He is cooperating on a large print media interview to be released next week.
One wonders why this media shy hedge fund manager is chatting up his book right now?
Media shy?
He's singing for his daughter on live TV. Maybe he figures he'll do better as a talking head and book writer going forward.
+10
Dont think the buffet media drive and his week on CNBC is anything more than a Goebbals offensive
Because he is the biggest Wall St. rock-star du jour! Who wouldn't want to take an ego-stroking victory lap?
He's gotta do it now too, before it all blows up.
Some things just will not go down ...
NEW YORK (Reuters) - Former Chrysler Chief Executive Bob Nardelli is joining firearms and ammunition maker Freedom Group, the company said in a press release.
+100
The S&P is an inflation index.
I think he is totally right about the mechanics. He is right,...insane, but right.
+100
They also asked him about the pathetic volume and his answer was basically that he could care less. He knows the Fed is simply orchestrating the largest transfer of wealth to the rich financial elite in history.
More like the rich, the (at least politically favored) poor and the public sector. Everyone else...you're on your own.
Virtually everyone is now hypnotized by the biggest fallacy in the history of capital markets: that stocks determine the economy, and not vice versa.
-great point and a nice qoute
he actually said he isn't going "balls to the walls"
but "a little bit longer now."
he said he is buying.
i can't really fault his logic. stocks may do well after the QE along with gold and whatever else....for a period at least. in the end that's what QE does...it inflates assets....diminishes the currency, in this case the dollar. what is so controvertial? isn't it the same thing faber has been saying as well. now i am actually a little short stocks, but it's risky shorting anything when you got all this easy money floating around. the day will come when the music stops but until then....no?
Hedge fund titan says stocks are going up no matter what.
Everybody write that down.
But also bear in mind that for the last 100 years "titan" and "titanic" have had near opposite perceived meanings.
Folks:
Stocks will be the last asset to implode.
Investors are typically optimistic, and it takes a lot for them to lose their optimism. In a sense, the stock market represents the strength of our country.
Take that strength away, and what have you left?
Don Levit
Gold will be the last asset to implode (if it goes all that is left is food and bullets). The retail investor and retirees are drawing down their equity investments (fool me once shame on you, fool me twice shame on me). Right now they are running to bond funds to get a 1-4% yield on whatever liquid wealth they still have. Some have thought past bonds and have gone to gold. This chart shows the money flow to safety and liquidity:
http://www.silverbearcafe.com/private/05.09/images/pyramid.jpg
There is only a small segment of the US population with any liquid assets to worry about anyway. Most Americans wealth is tied to their house and 401K.
The vast majority of Americans have no wealth at all (enter the world of car title and payday loans) and live day to day on paychecks or government entitlements or some combination of both.
oh brother
http://www.businessinsider.com/david-tepper-on-cnbc-2010-9
Klepper will be right until he is wrong at which time he will say that he can not possibly be held personally responsible for such a far reaching cumulative meltdown. He has his Billion and will keep his Billion while using OPM until the cows come home. That is why he is so bubbly happy VERKLEMPT!
Klepper will be right until he is wrong at which time he will say that he can not possibly be held personally responsible for such a far reaching cumulative meltdown. He has his Billion and will keep his Billion while using OPM until the cows come home. That is why he is so bubbly happy VERKLEMPT!
Stocks don't determine the economy, but they certainly inspire confidence. If the market were to drop to 9k, I think people would start panicking a bit.
As long as people perceive that the Fed is in control (some will say manipulate) and that a simple, balding overeating joe can be a billionaire however he can legally come about his money, that's all you need to know.
Ahhh the old line "stocks can't lose" ... what a fukwit.
he is so wrong.... actually longer term stocks perform horribly, bonds do great (because the central bank buy them all), and well, we know what gold does.....
fuk there are some idiots around... so, so retarded.
And btw, what an arrogant turd! So he takes no leverage and he has, by the look of that chart they put up, that he has 20% type drawdowns?
Another beta guy in alpha clothing......
Bottom line...Tepper is making money along with all the other bulls while all the bears on zerohedge and elsewhere are left smelling their taint.
Stocks benefit from QE. Market will not crash.
just like they benefitted in japan....
dont forget to sell buddy
Considering the boom bust results of this guy's fund, I think I would avoid his advice. He swings for the fences and seems to lose as often as he wins, yet he rarely shows a much below zero return in a year. He is salesman as well. I would give odds that his hedgefund has accounting issues.
A few thoughts.
You guys are seriously underestimating this guy's ability to price risk. Hubris, people. Up 150% in 2009. He swings for the fences, and realizes you're going to make some mistakes. Over the cycle, he makes 30%-ish. The name of the game is $, not validating your brilliant discourse. He really couldn't give two shits about how policy is going to affect the future of America. And why should he? He's not a public servant. Said another way, what the hell ability does he have to influence said policy? Little to none. His job is to profit from it. Is he talking his book? Sure. He's also closed to new investment and has been returning $1 bil a year in external capital for 3 straight years. He's pretty much half of the capital at this point. You think he's going to blow himself up? You think you're all really that much smarter than him? Just because he's long now doesn't mean he's going to be married to it, or can't get out of the way. He reprices risk faster than most people here can type a blog post...
Tepper > Typical Zerohedge Perma Bear
Correct. S&P up what, 100 pts in September? ZHers acting like Tepper is getting long NOW. How much of that do you think he's caught. More than NONE. And I'm pretty confident he'll be able to get out of the way on the downside, likely even catch some of that, too.
Like the stock market is on some linear trajectory to zero because of QE. Quit patting yourself on the back because you can see obvious long term economic and demographic trends. Christ. Try positioning a portfolio on it that has to profit day in and day out. Nah, screw that - short S&P, long gold. That'll beat Tepper! Yay, we're all geniuses!!
John Taylor did a piece similar to the conclusion. QE 2 will not work. It will be less effective than QE. Only debt deflation can save this patient.
My hedge fund. Gold Bitchez!! is up 27.8 percent for the year. But it had a lot of management costs because I have to play with it everyday or else it will run away. Oh wait that was the puppies instructions. Never mind.
This guy's delivery was certainly not what I would have expected. All the "boom boom boom" and heavy Jersey slang ("that ain't a bad ting") and witty banter with "the boys" sort of seems Crameroid. Perhaps like someone said earlier, he's quasi-interviewing for a CNBC post. That said, his returns give him bully pulpit guys--ill gotten gains perhaps but nonetheless a "stat". However, he implies it is a priori true that QE1 "worked" and therefore will "work" again, forgetting it seems that in 2008 with Lehman going under and credit markets freezing and money markets breaking the buck the risk premium was off the charts. Not so true today. He made an excellent point about M2 I thought but this actually hurt his declaration of win/win/win as it diminishes the potential impact of QE2. So the question I have for him is how he sees QE2 being a major catalyst for US equities as opposed to something which just drops the yield level a little.
Once the buck is broken it can only be healed through massive fraud or it dies.
M0
M1
M2
LOL
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this is my view of this piece of crap interview on CNBS...he's a fraud and has terrible returns. I am shocked that somebody even posted that he had 30% returns - do you really believe everything you see and hear...
An example of coordinated deception...