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Lazard Asset Management Fund Dumps The Dollar
It was only a matter of time before asset managers said "enough" to Bernanke's plan of debasing the dollar day after day, and took appropriate measures. In a not very surprising, yet quite shocking at the same time, development, caught by Annuity IQ, Lazard's The World Trust Fund has had enough of the dollar. Lazard will "change the currency in which the Fund’s shares are traded from US dollars to Sterling." Good work Mr. Chairman and Wall Street lobby.
BusinessWire reports that as a result of the insane dollar printing press operator's actions, Lazard will:
(i) change the currency in which the Fund’s shares are traded from US dollars to Sterling;
(ii) undertake a sub-division of the Fund’s share capital on the basis of 10 new ordinary shares for each existing ordinary share;
(iii) change the benchmark of the Fund to the MSCI All Countries World Index; and
(iv) increase the NAV on which the performance fee calculation is based ("Reference NAV") to reflect the underperformance of the Fund over the previous 12 months.
The reason for the seismic shift:
In response to comments from a number of shareholders and potential investors in the Fund about the liquidity of the Fund’s shares, the Board, having consulted with the Fund’s brokers, Arbuthnot Securities, believes that having a larger number of shares in issue with a lower share price than at present and changing the currency in which the shares are traded from US dollars to Sterling, should assist in improving the marketability and liquidity of the Fund’s shares and support the attraction and retention of a diverse shareholder base.
Congratulations Beloved Chairman: thanks to your actions it is now an embarrassment for investors to move their assets in dollars. And one can bet their bottom denominated dollar that Lazard's actions will be followed suit by a plethora of other asset managers who were just waiting for the chance to break all ties with the deranged dollar debaser.
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as if we (middle class folks) needed any further confirmation that hard assets (gold, silver, oil) are essential this might be it. glad i've got a wheelbarrow full of liberty's. problem is they just sit there. guess you don't neen them until you need them.
How is sterling better? I'm no dollar bull but there is a major prisoner's dilemma here with currency.
Madness changing from dollars to sterling. Kind of like switching out of JPM into BoA because you are worried about a banking crisis.
The ultimate self interest of the rats (and their first responsibility, which is to their families) is compelling them to finally begin leaving the USA Titanic.
A cynic would ask "What took you so long" but in the face of such a strong (meaning weak dollar) headwind being cynical is no longer a luxury but a necessity and a function of self survival.
Sad. So sad.
My real fear here is that this is the sign of maximum pain in the market, when the maximum number of people are lined up on one (ultimately wrong) side of the trade. Time for the Fed to flip the switch and aggressively begin to support the dollar.
We are simply the stunned mouse being batted about by the cat as he decides if he should eat now or later. Another tube of K-Y over here please, things are getting a little bit too dry.
well said cd
Right on, except in this case they are leaving the Titanic and jumping into Lusitania.
Gekko, Your right
Whenever I see something that is as obviously, or outwardly, insane as this you can bet that there is a creature lurking somewhere in the soft underbelly of naive traders
Given the UK/US special relationship everything thayt Merv says ought to be closely watched. Sinking the GBP steadies the dxy. Manage the index while the crosses wilt. Why not set up the GBP for slaughter to window dress the dollar
Where's that list of the components of the DXY when I need it?
Ha! I find the humor refreshing. Jump from a failing state's currency to that of a failed state. Why didn't he pick Argentinian pesos, or Venezuelan Bolivars?
Thank you, thank you I am the Annuity IQ guy. I thought the same thing, why the Sterling, it is a POS, better the Euro, but even that even has problems. Anyhow, thanks for running the story guys.
huh? the sterling is as bad as the dollar. How can it be better than the Euro?
Agree, USD and Pound Sterling are the worst of the lot! Not a bright company now are they. Should have chosen Aussie, Yen or Brazil Real.
frying pan,fire etc.
Talk about jumping from frying pan into the fire. If I were an investor in Lazard, I'd be packing my bags right about now.
G_G - AMEN!
Granted, the dollar has a $#!t load of problems, but WTF are they thinking jumping into Sterling?! With greater deficits (than the U.S.), a higher debt-to-GDP ratio, greater reliance on the near-dead financial sector, fresh new 50% tax rate (for Londoners), and an upcoming political massacre in the nearby election, I think that it is safe to say that Lazard has officially been diagnosed with an irregular heart beat, and is in critical (and not too stable) condition!
Hold on!
U.K. GDP SHRINKS FOR THE 6TH STRAIGHT QUARTER
http://online.wsj.com/article/SB125628626596003463.html
These guys are getting in at bottom basement prices! The most savvy currency call in years... Oh, wait a minute. They don't expect growth for another 3 more quarters?
See above post.
Oh boy do we have a anti-dollar bubble all around or what?!?!
I can't waite untill the last herd jumps short on the dollar so than I can the the other side of the trade :)
Ah! the contrarian herd speaks...
It's possible, you know, that the ALBA countries would let us in on the Sucre pact. Stop batting Hugo around, work out an oil deal, and become a true Banana Republic. Anyway, Krugman was creaming today over the declining buck - imagine how excited he'll be about its abandonment altogether!
Over Bruce Wasserstein's dead body, they will drop the dollar. Oh, wait.....
"In response to comments from a number of shareholders" could easily mean -- two.
This sounds political to me, or globally strategic. Like when the Chinese bring home their gold.
You circle the wagons *before* the threat arrives. Not after.
cougar
Our disadvantage is that we don't see the cards before they are turned over. The Achilles heel of the Fed is that they do.
Hubris and over confidence have destroyed greater men and institutions that the Fed. This becomes clearer when we pull back a bit and view world history over millennium rather than decades.
Or when you look back only a couple years at Enron.
Trading dollars for sterling sounds crazy but what if things are way way worse for the dollar than we think?
They capitulated about 6 months too late...looks like it's time to go long on the dollar ;)
Thank these asshats for ringing the bell at the top of the anti dollar trade. And I wonder how that Sterling plunge treated them today.
I love my physical silver and gold but I do have the sense to rise above the trees to see the forest at times. My physical is no longer running a zero hedge.
So are you calling at DX bottom here?
There's a sure top for cable (GBPUSD).
Time to go long the dollar!
If they recognize currency risk, why not divest out of dollars to a mix of currencies as a hedge for the short term? We are ripe for a crisis of some sort, but exactly where, and in what currency, are open to a great deal of debate.
Unless they know something about Sterling that nobody else does.
What ever the reason, it is a very interesting strategy.
Strange to see this on the same day that the Sterling tumbles, badly, against the Dollar.
This may be a bet that the BOE will be the next to raise interest rates.
See my post above - the BOE won't be raising rates until 2016.
The forex market is so sophisticated it uses only certain bright lights as contrarian indicators - eg a supermodel or super hooker to declare she/he would not accept to be paid in USD, or for Businessweek or The Economist to declare the death of the USD on front page bold print. Before that, the UUP has no chance of rebound.