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Harbinger Is A Harbinger Of Things To Come: Goodbye Phil, You Are Just The Start
In the purest definition of nomenclature irony, Harbinger has now become a harbinger of what is in store for the whole hedge fund industry as a whole. And for those who may have missed yesterday's news, Phil Falcone's multi-billion hedge fund is now essentially finished. As William Cowan said yesterday, "you may be seeing right before your eyes the unwinding of this hedge fund" and he proceeds to compare Harbinger to the two Bear Stearns hedge funds whose unwind was the key catalyst to the end of the credit bubble. Goldman's redemption of its $120 million interest in Falcone is merely the start of the avalanche for the once perceived as flawless Falcone, and now has become the butt of jokes in the hedge fund industry. Today we read that both Blackstone and the NY Pension fund are pulling their money as well, which means the liquidation run has commenced. Yet what is happening with Harbinger is just an indication of what will happen to all hedge funds at the end of the year who are underperforming the S&P, or heaven forbid, negative for the year. After all, the news that Falcone was "misappropriating" locked up funds was public in March - Goldman's pull using that as an excuse is merely a strawman to get out of losing positions. Which is why the beta leveraged ramp is about to hit desperation levels, as not one fund can create alpha. In other words, if something happens to Apple in the next 5 weeks, the next leg of the depression is about to take off.
But back to Harbinger, where in FinAlternatives we read that Goldman's pull out was just the start:
Goldman Sachs and the Blackstone Group may redeem their investments in Harbinger Capital Partners’ flagship after the hedge fund’s founder said he borrowed more than $100 million from another fund to pay his taxes.
Both firms filed redemption notices with the New York-based hedge fund, which has about $9 billion in assets under management. The New York State Common Retirement Fund also plans to pull $41 million from the Harbinger Capital Partners Fund, which is down 15% this year.
And William Cowan's take on the imminent unwind of what as recently as 4 years ago was seen as the Paulson and Co. of that time.
Oh well, the biggest winner in all of this is Lisa Falcone, who, as she herself said previously, "Eighteen years and no prenup means family office." The question of what happens to the spoils as the office is liquidated is now a very unpleasant one for Phil.
Here are Falcone's top stocks (not that many - the fund is mostly involved in bonds and a crazy plan to take over the world via some zany wireless company scheme) which will soon be force liquidated. Position appropriately, especially since many of these are very illiquid.
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The eating of their own has commenced. Who wants a leg?
Tommy DeVito: "Hey, what do you like, the leg or the wing, Henry? Or ya still go for the old hearts and lungs?"
Yup, that looks like Phil Falcone alright. I assume they buried the head under the goal post at the new Giants (Jets) field?
Ouroboros-is an ancient alchemy symbol depicting a snake or dragon swallowing its own tail sybolizing creation out of destruction, Life out of death.
http://en.wikipedia.org/wiki/Ouroboros
Apparently widely known in secret societies.
Outerboros?
who gets the Barbie Dream House?
http://abclocal.go.com/kgo/gallery?section=news&id=6696032&photo=1
Could someone explain this to me: "In other words, if something happens to Apple in the next 5 weeks, the next leg of the depression is about to take off".
If I understand this correctly, the point of propping up the stock market isn't to make J6P feel like things are back to normal or OK... the market is being propped up so hedge funds can survive? But if that's the case, why is today different than 2008? Why didn't all of those hedge funds go under then?
If you investigate, and if you remember as well, the largest owners of Apple stock are Middle East Sovereign Funds. ONE SAUDI PRINCE ALONE OWNS about10% of Apple having paid a whopping $9 to12 per share. We are not about to piss off Saudi Arabia, or the Emirates.
Did anyone say "keep them happy" at the FED.
As for Apple and it toys...they are fast becoming commodity items. And when the Patten lawsuits start hitting Apple for technology used and not licensed (3 so far, including 'page flip') the stock might be $12 again.
Very interesting observation...may be one reason why AAPL is the target of HFT and POMO operations.
Apple has gone full retard by going after cell makers over the pinch zoom. Apple has more to lose by Nokia and Motorola over patents than market share losses by those two. Apple painted themselves into a corner and are praying for an out of court "agreement". I do not understand people that think Apple was smart for going after Nokia and Motorola over the pinch zoom. Nokia and Motorola can easily make the iPhone nothing but an iPod Touch.
"Could someone explain this to me"
Sure "eat some risk bitchez"
Signed, your buddy
Ben
I'll take a breast, thanks. :-)
Poor Phil, Don't you know you should just rent?
http://ramonthomas.com/2007/10/craigslist-gold-digger-finds-out-women-ar...
Or, as my granny would say, why buy the cow when you can get the milk for free.
Reminds me of stories of .com busts
Ahhh the nostalgia..... Looks like it is cyclical? 10 years?
I love how every major Hedge Fund "blow up" is always the end of the world. Druckenmiller quit what like 3 months ago? Wasn't that supposed to pinpoint the peak of the terrible equity bubble? LOL
More like Druckenmiller did not want to try to play in a Fed Equity Bubble as it is too hard to guess how soon the pop will occur.
It IS difficult to see what the harbinger is, if Falcone's troubles arose out of personal tax liability. That seems like a one-off issue, not representative of the whole industry.
Have to say the Name is a little ominous. And a little eerie. And on this MAsonic date to boot.
If I had timbers, they'd be shivering right about now.
Today feels like a loaded gun, dry powder and a child at the trigger.
ORI
http://aadivaahan.wordpress.com
you seem to have read the latest blog post from Ben Fulford
http://benjaminfulford.typepad.com/benjaminfulford/
my weekly fix of conspiracy news( sometimes two weeks)
I've read his stuff via Rense. Interesting, out there, plausible.
But 11/11 has a long history with Masonic types.
Will check out the link, thanks.
ORI
http://aadivaahan.wordpress.com
< once perceived as flawless Falcone >
Greenspan was once seen as flawless, but really americans as a whole were skeptical. It was only the circle-jerk of economic wannabe elites who really pushed that view. So it is with Falcone. Who saw him as flawless? Circle-jerk wannabe financial elites. For the rest of us the views of him remain unchanged from before and after the unwinding of his fund.
Falcone and his wife do appear to be a couple of narcissistic gargantuan circle-jerks...
"Douches"
...it's quicker
go to now ye rich men, weep and howl for your miseries that shall come upon you.your riches are corrupted,you have lived in pleasure and been wanton. this day a grievous sore of poverty hath been left on the doorstep of AMERICA,thou art declared to be ICHABOD.
behold a pale horse
http://www.businessinsider.com/hedge-fund-wives-2010-8#louis-moore-bacons-wife-1#ixzz14z2dEguF
I'll tell ya one thing, these guy's ideas of "hot" and mine are not the same.
Now, CNBC's Mandy... that's hot!
Generally you pick your (first) spouse when you're poorer. You then regret that choice when you're richer.
The good news? So does your spouse. Regret that is. Time to settle and move on. :>)
Name: Lisa Falcone
Age: 41
Fun facts: Many. The former model grew up in Spanish Harlem and still sleeps on an air mattress with her husband. She once bravely snatched the microphone from a presenter and caused a stir at a fancy benefit. She trained her pig to play the piano and spin in circles when he sees a Cheerio. She was sued earlier this year for allegedly sexually harassing her gay house manager. And she owns an entertainment company that is right now in the middle of launching a record label, among other entrepreneurial ventures.
Read more: http://www.businessinsider.com/hedge-fund-wives-2010-8#phil-falcones-wife-8#ixzz14zVE8fr0
Hedge funds are so 2000s...HFT is the thing now. Who the fuck actually tries to INVEST anymore? Alpha is dead
So the Commodore 64 thinks who is hot?
Poof.
If a hedge fund falls in a forest...does anyone care?
Hmm, third largest position is in GLD.
Get ready to buy some more physical.
All I can think about is Hugh Hendry's observation that "I would be shorting guys like myself, my industry." I'm not of the opinion that they're the reason the markets are not reflective of reality in any sort of way--that comes down to government malfeasance and the sheer pull of GS et al--but it seems that there will be a serious cull as investors seek to take whatever dividends they can before the real shit hits the currency fan.
Lightsquared's bird launches this weekend.
http://www.rcrwireless.com/article/20101110/CARRIERS/101119994/lightsquared-set-for-first-satellite-launch
Wall street may not be fond of this project, but to geeks [and Facebooking teens] in rural areas, data connectivity via satellite is manna from heaven.
I read the link and I don't see why this is a big deal, I get satellite internet at 1mb, naked dsl at 3mb and if I climb a palm tree I get 3g and I am literally in the middle of the effin swamp!
The hinterlands already have super-internet coverage or I would not be here.
No options chain for Spectrum, damn.
flawless falcone? I was surprised this guy got the subprime crisis right - he has been a long and wrong hyield player for a long time - 1st blew himself up on iridium the satellite phone thing in the late 90's - company had something like 200k in sales and 100million in debt with falcone owning a big chunk of it at barclays - was stunned to see he was blowing his wad on another poorly thought out wireless play last yr...good riddance
The hedge fund/HFT cannibalism has begun!!! You can only hide outright fraud for so long. There is the old saying (listen up Helicopter Ben), "If you sit long enough besides the river, all of your enemies will eventually float by."
My question to Phil and Sanjay Ahuja about how likely they thought it was they could raise enough for the capex requirements to get the LiqhtSquared satellite thing off the ground. Sanjay's response was more or less "Trust me, Phil and I wouldn't be doing this if it wasn't going to work."
Get short everything Harbinger owns...
Or short HRG. Reverse merger POS that will be worthless once Falcone completes his self-destruction, yet again.
A little perspective...Harbinger is not like other hedgies.
His illiquid bet on wireless/satellite Internet is at the core of the problem. Falcone used to run more of a classic hedge fund. But as we've seen these guys are closing their funds because stock picking...long and short...doesn't work...although Falcone does have some exotic plays on distressed debt.
Falcone is not a leveraged beta guy. He's already down from a high of over $20B down to something like $7.0B. Beyond the redemption announcements is that fact that funds cannot be pulled immediately. 25% a quarter...It will take a while for Goldman and Blackstone to get their money, Right?
Harbinger is closer to a VC/PE fund than a hedge fund now. But isn't this what's happening all over the Street? The news about Falcone is months old; maybe what we're seeing is investors like Goldman and Blackstone concluding that Falcone's bet on satellite Internet may not work and that he can't raise additional money to cover the losses on this risky direct investment.
I think your right about them trying to get out while the gettings good. Also him borrowing close to 113 million dollars to pay his taxes tells me something also. And that is over 90% if not 98% of his 2.8 billion dollar net worth is tied up in the Lightsquare company and the Hedgefund. Because if he had to borrow that for tax purposes that means he doesn't have any ready cash on hand to pay it, especially after the 817 million dollar windfall he got betting against the subprime market. He most likely dumped most of that into his companies and probably is liquid to the tune of 30 million dollars MHO. It seems like all the Hedgefunds are having trouble.
http://www.forbes.com/profile/philip-falcone
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