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Just Another Manic Monday?
On
Monday, I hooked up for lunch with someone who works at a successful
Montreal hedge fund. He complimented me on my blog and then we started
talking about alpha talent in Quebec.
There are some exceptional hedge fund managers in this province that
are being totally ignored by Quebec's large institutions (for God knows
what reason!).
I would like all the global funds that read my
blog to contact me (LKolivakis@gmail.com) and I'll be glad to share more
information on our alpha talent in Quebec. Many managers have worked in
London, New York, Chicago and decided to move back to Montreal for
personal reasons. I want to support them as much as possible because
Montreal's hedge fund community is small but offers tremendous
potential. I want Montreal to become the fastest growing hedge fund
center and will do everything I can to support our talented alpha
managers.
The person who I had lunch with today introduced me to
another person who is in the process of starting a relative value
commodity fund. I spoke with this manager late this afternoon and was
blown away by how sharp this guy is. Unlike most commodity fund managers
who mostly trade front end oil futures, this manager and his small team
have years of experience trading all commodities, including energy,
metals, corn, sugar, and other soft commodities.
We had a great
discussion on the financial crisis. Like me, he was extremely bearish
back in 2006. I told him I was researching all these complex CDO-squared
and CDO-cubed structures and was petrified. He told me he wanted to buy
out-of-the-money put options when the S&P reached 1400 but his
manager didn't like the idea. "People do not want to hear bad news".
I laughed because it's so true. Just like permabears on Zero Hedge
do not want to hear good news. My brother called me tonight to tell me
to tone it down on Zero Hedge. I told him that I try hard to ignore the
idiots who keep insulting me but once in a while I'll vent and tell them
to "F off". But my brother is right, once you're in the public eye, any
cyber idiot can insult you so it's best to strictly ignore these
cowards.
Back to that commodity manager. He impressed me because
he uses liquidity flows, technical and fundamental analysis to take
positions in various commodities and understands the term structure of
the commodities he trades, linking it to his fundamental analysis. He
uses derivatives wisely and isn't looking to hit home runs every time.
One thing he told me is that a lot of "superstar" commodity managers are
one hit wonders (one fund was up 200% last year and lost 40% last
month). That's why I tell all institutional managers to focus on process over performance.
We
also talked about how crazy things got back in 2008. I told him to
ignore hot money investors like Swiss fund of funds and find patient
capital like large global pension funds. Interestingly, he explained to
me what happened in 2008. Redemption notices were coming in hard at fund
of funds and they first pulled money away from liquid strategies like
commodity trading advisors (CTAs), global macros and L/S Equity funds.
They also redeemed from illiquid strategies but those funds took longer
to liquidate their positions. I remember, it was one redemption after
another, forcing hedge funds to close the gates of hedge hell.
He
told me some of that is happening now. Big moves in commodity funds,
many of which are liquidating positions to shore up liquidity. He
shorted silver and made a bundle last week. Lots of managers, especially
CTAs, are getting whipsawed in these volatile markets. But he didn't
tell me he was bearish on commodities. Quite the opposite, he sees the
secular uptrend continuing but there will be plenty of volatility along
the way (which he will play using derivatives).
When the time is right, I will reveal this manager by updating my blog post on Quebec absolute return funds.
Just by talking to this guy, I know his fund will be very successful.
Again, I urge global pension funds investing in hedge funds to visit
beautiful Montreal. We need more patient capital willing to support our
talented alpha managers, some of which have years of experience working
at large financial centers and at the large Canadian pension funds on
internal alpha strategies.
It was another manic Monday. If you visit Zero Hedge and read the commentaries, you'll want to slice your wrists. SocGen is now forecasting a Chinese slowdown and warns commodities will sell off hard.
I say keep buying these dips because we're heading much, much higher
(many solar stocks are way oversold as the big hedgies keep manipulating
them to death!).
In another comment, Zero Hedge says bond king Bill Gross IS shorting Treasurys:
And
while we wish we had an updated TRF holding (the last one is as of
December 31, 2010), even using even stale data, we find that at the end of 2010 TRF had $608.3 billion in Net Futures held SHORT (link), and $588 billion in Eurodollar positions, which is precisely where his marginal synthetic rate bias/exposure is contained. Yes. This is a short equivalent position.
Bill Gross denied these allegations on CNBC, and says that Greece is the world’s biggest candidate for default (hmm, either those Norwegians are stupid for buying up Greek bonds or Bill is trying to pull a fast one on us again, snapping up Greek debt at default prices).
I
asked the smartest fixed income analyst in Montreal to make sense of
all this noise. Actually, this person is one of the smartest analysts I
ever met and had the pleasure of working with and he's a great guy to
boot. Here is what he wrote me:
"Debt tends to slow economic growth," Gross said in a live interview.
More accurately, slow growth leads to higher government debt.
The
below matched my previous comments: Zero Hedge really didn’t pick up
on the fact they are still long duration; they just have a spread
position.
He blamed a
"blogger" who created a "misconception" that Pimco had shorted
Treasurys. The comment was an apparent reference to the zerohedge blog,
whose author posted on Twitter that Pimco holds a negative duration
weighted exposure to Treasurys.
Gross
said only that Pimco is "very underweight" on Treasurys and that the
firm is making money even though it has been on the wrong side of that
trade in recent weeks.
"Pimco
is doing just fine," he said. "We're outperforming 77 percent of the
bond market universe because we're holding other bonds that are doing
better than Treasurys."
Did you all get that? Pimco is still long duration but they have a spread position. He further explained this to me a couple of weeks ago:
They
still have a positive duration, I believe, so the net Treasury short
can be a viewed as a short Treasury-long spread product trade. But they
are certainly playing up to the Zero Hedge crowd….
The
fact that they have cash represents a curve position (or the residual
of a curve position), so “charging a management fee for holding cash”
is a bit unfair.
So I laugh when
Bill Gross and others warn of a looming US debt crisis. They got the
causation all wrong. Importantly, slow growth leads to higher government
debt, not the other way around.
Finally, the Globe and Mail reprinted a Reuters article stating that U.S. taps pension funds as it hits debt ceiling:
U.S.
Treasury Secretary Timothy Geithner told Congress he would start
tapping into federal pension funds on Monday to free up borrowing
capacity as the nation hits the $14.294-trillion legal limit on its
debt.
The U.S. Treasury will issue
$72-billion in bonds and notes on Monday, pushing the nation right up
against its borrowing cap at some point during the day, according to a
Treasury official.
Mr.
Geithner said he would suspend investments in two government
retirement funds, which will give the U.S. Treasury $147-billion in
additional borrowing capacity.
“I will be
unable to invest fully” in the civil service retirement and disability
fund and the government securities investment fund, he said in a
letter to congressional leaders.
The
Treasury has said the suspension of the investments and other measures
it could take would give the government until about Aug. 2 before it
will start defaulting on obligations, such as paying bond investors.
Congress is in charge of increasing the debt ceiling, but Republicans
are demanding deep cuts to federal spending for the price of their
support in raising it.
Mr.
Geithner reiterated previous pleas for action. “I again urge Congress
to act to increase the statutory debt limit as soon as possible,” he
said.
Previous administrations have also
tapped the retirement funds at times to avoid breaching the debt limit.
Over the past two decades, Treasury has suspended investments five
times, with the most recent suspension in 2006.
“Federal retirees and employees will be unaffected by these actions,”
Mr. Geithner said, since Treasury must make the funds whole once the
debt limit is raised.
But the measures still disrupt Treasury’s operations, as it must run two sets of books among other things.
What do I make of all this? Just more noise. Go back and listen to ABC's This Week's roundtable discussion on the economy.
Krugman is right, this is more fear mongering by Republicans who claim
spending is out of control, ignoring how fragile the recovery is. Again,
debt rose because economic growth slowed in the last couple of years.
Once the economy recovers, government revenues will recover and debt
will not be growing as fast.
This is all
noise, noise NOISE! I do not believe we are heading into the abyss or
that a looming US debt crisis is upon us. These pullbacks offer global
pension funds excellent opportunities to snap up shares in energy,
commodities, financials, and technology. You'll see, this is just
another manic Monday. And please don't forget to support me by kindly
donating any amount on the PayPal link under the pig at the top of my blog. Just because it's free doesn't mean you can't show your appreciation.
»
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Golf clap! :)
Pres Club . Look @ the trade!
Best Prince written song - the rest was crap. The Bangles were decent but LA (in the video) is a toilet.
Leo: the best economic truism ever written is Ken Rogoff's observation, backed up by actual, real, true, undeniable facts that every $ spent by the governement in any form of artificial stimulus (isn't it all artificial) decreases GDP by at least $1.25, especially telling since government spending is a significant part of calculated GDP. Gee; with no government and their stooges like Krugman, the US economy might even grow. Fancy that.
Rogoff's book has been widely criticized. He doesn't have a monopoly of wisdom on the subject,
Wow! Amazing, leo, how you just managed to utterly refute and discredit a scholarly treatise with scalpel-like precision in only 16 words --- and by presenting zero facts, too!
not if the government says otherwise. this is known as the "it's good to be King rule."
Quote:
"
What do I make of all this? Just more noise. Go back and listen to ABC's This Week's roundtable discussion on the economy. Krugman is right, this is more fear mongering by Republicans who claim spending is out of control, ignoring how fragile the recovery is. Again, debt rose because economic growth slowed in the last couple of years. Once the economy recovers, government revenues will recover and debt will not be growing as fast.
This is all noise, noise NOISE! I do not believe we are heading into the abyss or that a looming US debt crisis is upon us. These pullbacks offer global pension funds excellent opportunities to snap up shares in energy, commodities, financials, and technology. You'll see, this is just another manic Monday. And please don't forget to support me by kindly donating any amount on the PayPal link under the pig at the top of my blog. Just because it's free doesn't mean you can't show your appreciation."
This is a new low Leo you should be ashamed to print this.
Cheap shot with the junk Leo. Truth hurts eh'.
LOL! I have not bothered junking anyone...couldn't care less!
Is this Leo clown for real. This bozo should be wearing a pair of baggy pants, big floppy red shoes, wig, rubber nose and be juggling bowling pins for a living. Noone gives a shit about your blog or a bunch of worthless canadian hedge fund managers that you meet at applebees for your circle jerks. Anyone who thinks Krugman is right about anything is a god damn joke.
Including the clowns on the Nobel committee who also saw fit to award the Peace prize to a man who now directs three wars.
+1
Best to read this comment on my blog:
http://pensionpulse.blogspot.com/2011/05/just-another-manic-monday.html
I have no time to edit it here and fix it up on Wordpress.
http://trololololololololololo.com/
Wow. You know, Leo, I have defended you against the attacks of others in the past. Mainly because it seemed you were being attacked personally by radical anarchists and survivalists.
Not anymore. You need to check your head, brother, and think about the things you are supporting, about the false hope in corrupt constructs you are peddling for reasons no deeper than what I now see clearly as personal ambition. I wonder, now, whether you think being idiots is good for us, as long as we let your favorite alpha canadians playing with futures lead us by the nose.
Listen up brother, I am at the top of my game now. BRING IT ON! I couldn't care less!!
the fact that you replied does mean you care.
you chage your story everyday, whatever you are peddling.
I feel sorry for you.
Feel sorry for yourself. You still got time to learn...read my comments carefully
But I do not in the least feel sorry for you, leo.
I am glad you are dying. I celebrate your pain.
Too bad it will not even begin to match the pain and suffering inflicted on the world by statist Keynesian sociopaths and their cowardly Quislings such as you.
Human filth like you does not deserve to live.
MS, or divine justice?
PS: To those readers who may think that what I have just written here was excessively harsh or over the line, Leo has shamelessly and narcissistically played the "pity me" hand by parading his MS illness in this forum so many times that I feel it is only fair that I throw those cards back in his lap.
Totally uncalled for, Akak. You have been here long enough to not sink so low as to celebrate the pain of anyone. He has not ever paraded his illness in the pity me category. He has talked about treatments that were up and coming but never bitched about the illness as something that keeps him from living his life.
Personal attacks on physical illness are uncalled for...it's really bad form. Leo does what he does. I never agree with him but I respect the fact that he puts up with the shit he gets from the new and older members of this blog. And again--he has never asked for sympathy and if anything has proven that he is a fighter--from his health to his opinions on the market. He'll lose it all financially in the not too distant future but I bet you he has the courage to come out and admit he was wrong when it happens.
So, Akak, if you don't like his posts, then don't read them. I only read one out of ten because it mostly doesn't interest me. I found one part of the post to be absolute nonsense since Gross (not ZH) stated he was out of TSY's. ZH brought out the short statement. I could care less either way but tend to not believe everything written on this blog from the Tylers as rock solid. They stretch the facts and get the gang riled up on occasion. In fact, they are dead wrong once in a while because they are human.
Ego trips galore for many of the contributors here... That includes the Tylers. Somewhere in the middle is the truth. For the longest time, all of our contributions sat in Paypal for 6 months or longer and were not used for funding them. Gee, we all thought they needed the money to stay afloat--wasn't true. Marle told an old timer they had a backer. When I questioned on why my funds were not cleared, Sac said they were collecting interest. Ha! What a load of shit.
A moderator (which has been promised for well over a year) has never materialized. Marla is gone. The new format still has not been rolled out but has been in beta for 3 months. Hell, Sacrilege told me almost a year ago they were going to a HuffPo format. Lots of talk, little action. Sound familiar? Like Leo, maybe?
Chill out, Akak. I often find you amusing but know you are better than your comment. And I refuse to junk you because that is the stupidest part of the entire blog. Thumbs up and down--only way to go. And troll monitoring and policing would be a real treat.
Ok..stepping down off my soapbox but felt it was an appropriate place to make some noise.
Howard, please ignore akak, he is irrelevant and will always be irrelevant. My illness has made me stronger in ways he couldn't possibly comprehend.
Yes, leo, it has certainly made your shrill denials of reality that much stronger, at the very least.
I despise you.
Yawn.
OK Howard, points taken, and I appreciate your level and civil tone, even if it was in response to less than that on my own part.
Admittedly, I was engaging in at least a small bit of hyperbole in what I stated above, as unproud of it as I was and am, but I simply lack the words anymore to express my contempt and utter loathing for the sellouts, collaborators and shills such as Leo. His smug, vicious statist lies, his contempt for ALL of us here by refusing to engage in open and honest debate (being unable to logically defend the absurd pro-establishment tripe that he loves to drop in shitbomb posts from which he then runs and hides), and worst of all, his frequent and shameless calls to literally surrender to a criminal and sociopathic power elite, just make my blood boil like NOTHING else I have ever read in this forum or on this site --- it is that vile and evil.
Yes, Leo is evil, unabashedly so, as politically incorrect as it is nowadays to make such judgments, and so I truly feel no pity for him, MS or no. Many of us here have our own medical problems and personal crosses to bear, myself included, but I do not arrogantly and egotistically parade mine here for others to read and to thereby elicit pity.
And the reason why I condemn Leo so harshly, if you really want to know, is because he is most certainly NOT just another clueless lemming who naively believes all the propaganda and lies emanating from the government and power elites. Leo knows that the system is massively corrupt, and has acknowledged as much, he knows that the power elite are criminals and depraved sociopaths, he knows that our financial and monetary systems are unsustainable and due to eventually collapse --- but he venally and cowardly refuses to challenge those systems and those elites, as long as he can continue to fill his pockets by bowing low and licking their boots in the meantime.
More than that, he has criticized and condemned those of us willing to challenge and fight the status-quo, and repeatedly and baldly admonished surrender to it, while mocking all suggested challenges or attempts at reform or restructuring as "hopeless dreams" and "futile fantasies", and while simultaneously always boldly proclaiming the omnipotence and supposedly eternal nature of that corrupt power structure (in opposition to and in ignorance of all of human history, one might add). He is not just a collaborator with evil, but an active promoter, defender and solicitor of obedience and abject acquiescence to a power elite that he knows to be corrupt and evil --- and that, in my estimation, is by far his worst crime. And while there may be many such individuals in our society at large, upon any and all of whom I would equally vent my outrage and disgust, there are vanishingly few here on ZeroHedge, Leo being by far the most notable if not almost the only one.
But again, you have given me food for thought, Howard, and I will take it as such. I also appreciate your perspective as a member who apparently goes back to the very beginnings of ZeroHedge (I only faintly remember any postings by Marla, for example). Also, like you, I can not blindly endorse the veracity nor the implications of every headline post here --- I have had to take issue with some of the more sensationalistic ones, no doubt, and it is obvious that more and more have been geared more toward garnering hits than fostering meaningful discussion. And a moderator --- God yes, please!
Excellent and thought provoking response, Akak. Got my blood near boiling in the way you said it. Take care.
You couldn't think less either.
My thinking is crystal clear, bought the solar dip @ the close today.
After taking the time to write all that, all you have is that you bought the solar dip.
I have been buying the uranium dip. There, everyone can know my opinion and don't need to wade through that Keynsian BS you call a submission.
Allow me to anticipate Leo's response:
http://trololololololololololo.com/
Can we quote you on this, Leo?
Yes, it is an amazing thing to watch...just like a car crash ;-)
What's truly pathetic is how the usual suspects can't ignore me. If I'm so irrelevant, it should be easy. :)
I do in fact ignore your financial advice, which is your purpose of posting.
But just like a car crash, I already know what I'm going to see.
I slowly make my way up to the point of someone elses bad decisions, just like everyone else on the roadway, I'm pretty pissed, I get up to the point where I find the people responsible for this disruption in my life and I just can't avert my eyes.
Invariably they will be someone with Mardi Gras beads hanging from the rear view mirror and they will be standing on the side of the road yakking on the same cell phone they were yakking on when they blew through the red light and T-Boned somebody else just driviing down the road minding their own business.
You're just like a car crash Leo...and those like you, are at fault by their reckless behavior as it has consequences on us all ;-)
My summation of this submission
"Yadda Yadda this guys says this, and I heard some one say that. Yadda yadda.
Everyone on Zeohedge is wrong and too scared because I say so. Yadda Yadda.
Oh yes, I'll say it twice high government debt does not constrain growth. Hear me. I'll say it twice so you know its true. Yadda Yadda.
Bill Gross is manipulating market perception to make money because I say so. Yadda Yadda.
Krugman's right because I say so. Yadda Yadda.
Please contribute for these truisms that I so generously bestow on you. Yadda Yadda"
"I LOVE the smell of roasted Leo in the morning!"
zerohedge amateurs bitchez