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Mike Steinhardt: "No One Is Long-Term Bullish"

Tyler Durden's picture





 

Hedge fund icon Mike Steinhardt voices on what the smartest money on Wall Street is thinking and it is nothing good - fast forward to 3 minutes 25 seconds. Steinhardt is completely correct in saying "You can not talk about valuations readily" in this market.

In a nutshell - "Everyone is focusing on the next tick" and the follow up question: "What's going to drive growth" eventually?

 

 


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Mon, 08/10/2009 - 15:23 | Link to Comment texpat
texpat's picture

Crap. Getting out of this market will be worse than getting out of a burning Chinese nightclub.

Mon, 08/10/2009 - 15:34 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:53 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:31 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

“As I have often argued:  Even the Almighty cannot determine a single correct value for the market as a whole.”  

– Burton Malkiel; “How much Higher Can the Market Go?”; The Wall Street Journal; 9/22/99

Mon, 08/10/2009 - 15:32 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:33 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:33 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:09 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:26 | Link to Comment Anonymous
Tue, 08/11/2009 - 08:34 | Link to Comment ivant
ivant's picture

Some say square-root here :P I wonder what that likes. We shoot to 17 billion on DOW and then stop. Markets all freeze and stay there for a few years. Of course there could be a secret meaning: square root of the current price. Ouch.

Mon, 08/10/2009 - 15:35 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:35 | Link to Comment Jacks Complete ...
Jacks Complete Lack of Surprise's picture

Sup, Tyler.

So what you are saying is Mike hit the mark on mark to market?

I think it's cute you realized I wasn't pulling your leg about the legality of front running, I mean shit man, they were even charging fees on their public books. You could get a fucking rate card to see just how much you wanted to front run like it was dim sum capitalism.

Now that has run its course, it's time to blow the lid of GSEs.

I hope you are clever enough to know what I mean, if not I'll drop another dime later this week.

After I have cashed in on it, of course. Till then keep pulling levers and pushing buttons.

 

Mon, 08/10/2009 - 16:07 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:20 | Link to Comment Assetman
Assetman's picture

I think I just sharted! :)

Mon, 08/10/2009 - 18:12 | Link to Comment Jacks Complete ...
Jacks Complete Lack of Surprise's picture

More the lone ranger on the cyber frontier, but whatever fantasy lets you sleep at night, go with that.

And the pull the finger trick works because most people are gullible as hell and easy marks, such as yourself.

Mon, 08/10/2009 - 20:44 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:38 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:50 | Link to Comment cougar_w
cougar_w's picture

"can't imagine how" is a phrase that here means they haven't decide how and when to blow the next bubble, how to steer the market profits into the most deserving hands, and which industry regulations need to be "adjusted" to permit all this.

They should just jump the broom and form a cartel, figure out their bubble-ology by committee, and issue market targets for the next 5 years like it was Soviet era central planning.

We need to know what to mindlessly pursue! Show us da route to da money! Come on guys, work that mojo!

cougar

 

Mon, 08/10/2009 - 15:39 | Link to Comment simonsays
simonsays's picture

Which producer let this segment air? Off with their heads!

Mon, 08/10/2009 - 15:41 | Link to Comment D.O.D.
D.O.D.'s picture

WOW, was that an actuall conversation on CNBC?

Mon, 08/10/2009 - 17:44 | Link to Comment Anonymous
Tue, 08/11/2009 - 08:41 | Link to Comment ivant
ivant's picture

LMAO!! HAhahahahahahahahaha. E.G. have you guys noticed when Hendry speaks of everything getting killed some dude constantly says you are wrong.

Mon, 08/10/2009 - 15:42 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

http://www.bloomberg.com/apps/news?pid=20601109&sid=aRF5bSZyUr3s

 

Corp's (ses) are hoarding money. SO much for that inventory stocking and recovery BS.

Mon, 08/10/2009 - 15:43 | Link to Comment JohnKing
JohnKing's picture

This Mike Steinhardt?

creepy town.

Mon, 08/10/2009 - 17:17 | Link to Comment Anonymous
Mon, 08/10/2009 - 15:45 | Link to Comment stedanrac
stedanrac's picture

 If we fast forwarded to 3:25, we'd miss Becky's pride and drawing a square root symbol....

Mon, 08/10/2009 - 15:46 | Link to Comment Tyler Durden
Tyler Durden's picture

For the old-timers out there, does anyone have a recollection of the robert rubin desk layout (personnel wise) from the mid/late 70s?

Mon, 08/10/2009 - 16:22 | Link to Comment Milton
Milton's picture

Charlie Haas started as a stockbroker at Goldman, but he's not that old to have been with Rubin.

Now he's running the "Haas of Pain" which isn't too far off from the House of Goldman.

http://www.haasofpain.com/

 

 

Mon, 08/10/2009 - 22:01 | Link to Comment nogeithner (not verified)
Mon, 08/10/2009 - 16:23 | Link to Comment . . .
. . .'s picture

Why don't you use a layout like Michael Price?  He had everyone in one room, with a large T-shaped rading desk.  Price at the head of the T, and his traders along the sides.  All analysts sat at individual desks facing Price.

Why imitate Rubin in any way?

Mon, 08/10/2009 - 16:26 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:53 | Link to Comment Anonymous
Tue, 08/11/2009 - 12:54 | Link to Comment michigan independant
michigan independant's picture

Rubin began his career as an attorney at the firm of Cleary, Gottlieb, Steen & Hamilton in New York City. He joined Goldman Sachs
Goldman Sachs

The Goldman Sachs Group, Inc., or simply Goldman Sachs , is a bank holding company that engages in investment banking, Security services, and investment management....

 in 1966 as an associate in the risk arbitrage
Risk arbitrage

Risk arbitrage, or merger arbitrage, is an investment or trading strategy often associated with hedge funds.Two principal types of mergers and acquisitions are possible:...

 department . Rubin proved his skills at the intricate art of investing his firm's capital in high-reward arbitrage
Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices....

 opportunities and became a general partner in 1971. He joined the management committee in 1980 along with fellow Democrat Jon Corzine
Jon Corzine

Jon Stevens Corzine is the Governor of New Jersey and a former United States Senator. He was sworn into office on January 17, 2006, for a four-year term ending in 2010, and has said that he intends to run for re-election in 2009....

, later a U.S. senator and governor of New Jersey
New Jersey

New Jersey is a state in the Mid-Atlantic States and Northeastern United States regions of the United States. It is bordered on the north by New York, on the east by the Hudson River and the Atlantic Ocean, on the southwest by Delaware, and on the west by Pennsylvania....

. Rubin was Vice Chairman and Co-Chief Operating Officer from 1987 to 1990. From the end of 1990 to 1992, Rubin served as Co-Chairman and Co-Senior Partner along with Stephen Friedman
Stephen Friedman (PFIAB)

Stephen Friedman is the current Chairman of the United States President's Foreign Intelligence Advisory Board. He was nominated on October 27, 2005 to replace Brent Scowcroft in the position....
http://www.absoluteastronomy.com/topics/Robert_Rubin#encyclopedia

Mon, 08/10/2009 - 15:50 | Link to Comment Dixie Normous
Dixie Normous's picture

Steinhardt points to an interesting "phenomenon:"  He speaks to no real bulls he says, but ink they must not be angry enough bears either.  Therefore, the market will continue to float higher, IMHO.

I also got the impression that he thought a depression or near death experience would result in great changes in America and that hasn't happened.h

This conversation was too thought provoking, is there a CNBC sister station we don't know about?

Mon, 08/10/2009 - 15:58 | Link to Comment Handle with care
Handle with care's picture

There have been great changes in America, we were all just looking in the wrong direction

 

When Obama was elected he was criticised for one of his team saying, "We shouldn't let a crisis go to waste", well that is exactly the philosophy that Wall Street has followed.

 

Their greed and insane risk taking created the greatest crisis in global capitalism since the Great Depression and their punishment has been to have managed to plug directly into the money printing facilities that are rightfully the perogative of the People alone.

 

They have held the economy hostage by claiming that if they get hurt they'll take everything down with them unless a ransom is paid.  That ransom has been paid.  The greatest ransom in history.  Trillions of dollars.

 

But the greatest change is that the same people who caused the crisis were loaned the taxpayers money at very low rates to buy the debt the government had to issue to pay them the money and they will receive their returns on this debt, paid for from the pockets of productive taxpayers, for generations to come.

 

The change is that now EVERYONE in America works to enrich Goldman Sachs and the tiny elite at the top and will do forever.

 

Mon, 08/10/2009 - 22:00 | Link to Comment milkum bilkum pc
milkum bilkum pc's picture

We were all given a break because the panel tossed questions at each other... Beck's ear didn't tell her to say something "brilliant".

Mon, 08/10/2009 - 15:47 | Link to Comment Milton
Milton's picture

Probability of S&P testing the 666 lows?

Gerstenhaber: "1 in 3"

Cooperman: "1 in 4"

Steinhardt: "more than that"

 

Mon, 08/10/2009 - 16:23 | Link to Comment cougar_w
cougar_w's picture

Well. Given that they would be loath to guess too high a probablity for fear of breaking the markets (or being labled lunatics) the number actually in their heads must be closer to 1 in 2, or 2 in 3, then.

I get the feeling that TPTB are furiously trying to keep us on the level part of the square-root sign (once we hit it and we may have arrived already) to avoid a double-dip. As was mentioned in the clip, nobody is talking about this any more because of all the money pumped into the system, but that money hasn't gone anywhere that it will do any good. Thus I hear commentors saying that if there is a second dip then it's a LONG way down from here. The markets are dysfunctional and lacking any of the past resiliencies, program trading is much of the volume and tends to drive volatility, consumers are hiding deep in their shells, the government has run out of bullets and mobs are begining to form, Treasury auctions are teetering, and everyone is waiting to sell into the trough. Nobody wants to be the last one out, but they want to lose as little as possible on investments in the market from before 2007.

If that really is the mindset -- if everyone is just waiting to determine how best to exit the burning building -- then we are poised on the threashold of a very dangerous, very chaotic scene.

cougar

Mon, 08/10/2009 - 16:55 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:02 | Link to Comment Milton
Milton's picture

My bad. Steinhardt actually said "less than that", in answering Quintanilla's comment of going back to 666.

Mon, 08/10/2009 - 15:59 | Link to Comment Gilgamesh
Gilgamesh's picture

How's the SOX working as a leading indicator/index this month?

Mon, 08/10/2009 - 16:07 | Link to Comment Dixie Normous
Dixie Normous's picture

Actually it's probably working great in today's fucked up world. 

It topped out last week and has been off now for a few days, right.  Now, when the TRANS or XBD or some other sector starts to roll over we can pump the SOX and hold that in while the others sell off, then rotate elsewhere, rinse and repeat.

It's a perfect market, 22 days running 140 + S&P points and no sell offs of more than 20 points from a high to a low.

Utopia Trading at its best.

Mon, 08/10/2009 - 17:06 | Link to Comment Gilgamesh
Gilgamesh's picture

Ala Tour De France, with every index loaded on EPO.

Mon, 08/10/2009 - 16:01 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:01 | Link to Comment mule65
mule65's picture

What is long-term?

Mon, 08/10/2009 - 16:04 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:26 | Link to Comment cougar_w
cougar_w's picture

I heard that as "less than the last bottom at 666"

Mon, 08/10/2009 - 16:35 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:04 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:29 | Link to Comment cougar_w
cougar_w's picture

Really? They sounded quite alarmed to me. "Where will the growth come from?" was not a bullish sentiment. That was basically saying that the party is over UNLESS someone is going to propose another asset bubble. Really, the party was over around 1995 and there is no long-term plan for growth even from that far back.

Without a means to target GDP growth outside of financial voodoo, it's so over.

cougar

Mon, 08/10/2009 - 16:05 | Link to Comment Ags Nightmare
Ags Nightmare's picture

There is no long term...we trade in dog years now.

Mon, 08/10/2009 - 16:07 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:10 | Link to Comment Handle with care
Handle with care's picture

We're now in a world where the American government borrowing from the Chinese government to subsidise the purchase of Japanese cars is considered one of the most successful government programs.

 

So the real question is, how long can we live in Bizzaro land before people start waking up and falling off the ceiling

Mon, 08/10/2009 - 16:35 | Link to Comment cougar_w
cougar_w's picture

Who says they ever wake up?

Start imagining a world where everyone is asleep, walking. As soon as you do you recognize that those sleep walkers are just wage slaves and Panglosses, eating the media pablum they are given and thanking the gods for their crappy job. It would work forever, save for one thing:

It is a regression to the womb, and someone else with less to lose will come by, find us easy prey, and eat us whole.

cougar

Mon, 08/10/2009 - 16:48 | Link to Comment Anonymous
Mon, 08/10/2009 - 18:09 | Link to Comment SWRichmond
SWRichmond's picture

"how long can we live in Bizzaro land before people start waking up and falling off the ceiling"

This is the major remaining question to be pondered.  No one knows for sure, but people fall off the ceilig when their faith in one of the following abandons them: 1. the monetary system / central banking; 2. the government; 3. the markets. 

As I sit here from my vantage point I can see people making this plunge right now.  It happenes when they lose their job, or their 401(k)s evaporate, or they see their lifestyles falling, or they see their government aggressively grabbing more power to itself and stifling dissent, regardless of which party is in charge.

See you all in DC on 9/12.

Mon, 08/10/2009 - 20:52 | Link to Comment chindit13
chindit13's picture

"American government borrowing from the Chinese government to subsidize the purchase of Japanese cars"

 

Finally a working definition of "globalization", with Walt Disney and It's a Small World After All playing in the background.  Thanks HwC.

Mon, 08/10/2009 - 21:42 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:17 | Link to Comment Anonymous
Mon, 08/10/2009 - 22:02 | Link to Comment nogeithner (not verified)
Mon, 08/10/2009 - 16:08 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:06 | Link to Comment Milton
Milton's picture

I was wrong about that quote. You are correct. Steinhardt said "less than that" when answering the question of does anyone think we'll be going back to 666?

Mon, 08/10/2009 - 17:10 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:13 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:14 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:18 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

I think you are right, but when is that going to happen?  Never?

Mon, 08/10/2009 - 16:50 | Link to Comment cougar_w
cougar_w's picture

It will not happen, in the sense of something that is deliberate, because there are too many opposing interests. But it *will* emerge on the other side of a societal singularity, an event of such cataclysmic proportions that mere mortals cannot fully encompass the scope of the failure.

Good stuff. After the last singularity we ended up with the industrial revolution, the scientific method, global exploration, and the birth of modern banking. OK, but 3 ouf 4 is still pretty cool.

cougar

Tue, 08/11/2009 - 04:51 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:22 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:22 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:27 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:30 | Link to Comment Tyler Durden
Tyler Durden's picture

the commenter you refer to has had his privileges exclusively revoked for reasons he is well aware of.

Mon, 08/10/2009 - 16:34 | Link to Comment Anonymous
Mon, 08/10/2009 - 21:06 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:35 | Link to Comment Anonymous
Mon, 08/10/2009 - 21:08 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:38 | Link to Comment buzzsaw99
buzzsaw99's picture

Vee hahv gazolene all over zee place.

Mon, 08/10/2009 - 20:11 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:40 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:48 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:01 | Link to Comment cougar_w
cougar_w's picture

"When pressed to give a broad range, oftentimes they cannot, and usually decline to opine." That, from people that think they rule the f*cking world. "Sorry, but I'm just not going to hazard a guess if my company is worth more than the loose change in the lobby sofa."

If I was getting that kind of response every day during dealings, I'd be sitting back on my cash and waiting for TSTHTF.

You don't buy into that kind of spooky market. You don't sell into it either. You fold your hand and walk away from the table until the cards start to look normal and less like a Tarot deck full of evil portents.

cougar

Mon, 08/10/2009 - 18:11 | Link to Comment SWRichmond
SWRichmond's picture

cougar, that is preceisely what I have done.

Mon, 08/10/2009 - 23:41 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:50 | Link to Comment Anonymous
Mon, 08/10/2009 - 16:57 | Link to Comment speculator
speculator's picture

Steinhardt has a very interesting background. His dad, Red Steinhardt, was one of the country's biggest jewelry fences for Meyer Lansky's enterprise. Some say the apple didn't fall far from the tree.

I always find it amusing when he's held up as a great investor. Operator is more like it.

Mon, 08/10/2009 - 17:49 | Link to Comment Milton
Milton's picture

In December 1928 GS started Goldman Sachs Trading Corp. which many characterize as a Ponzi scheme that ultimately failed. And where did that apple fall?

Mon, 08/10/2009 - 17:53 | Link to Comment Anonymous
Mon, 08/10/2009 - 18:44 | Link to Comment speculator
speculator's picture

Convicted and imprisoned. Google Sol Steinhardt.

BTW, I'm a huge bear and agree with Steinhardt -- he's a shady character, but a very sharp one.

Tue, 08/11/2009 - 02:24 | Link to Comment Milton
Milton's picture

Sol went to jail for buying and selling stolen jewelry. Hardly death-row material. Not a secret either. Too bad he didn't learn how to pump and dump, or frontrun, then maybe he could have gotten a so-called legit job on the Street.

As for your shady character Michael Steinhardt, he has given away hundreds of millions to legit charities, including hospitals, museums, and Israel.

Mon, 08/10/2009 - 19:57 | Link to Comment PrDtR
PrDtR's picture

You can call me an "Operator" ANY DAY.. |\-)

Mon, 08/10/2009 - 17:03 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

There is no future growth.  We don't make anything anyone needs to buy, outside of military hardware, and maybe some other knick knacks that are certainly not "consumer goods." That's not a negative, it's just a fact. Even if Ben et al. whups the dollar to a pulp, there's no products manufacture base ready to kick into high gear and generate wealth via exports that would be supercharged by a cheap dollar.  I men, how many mattresses can Sleepy's sell to Mexico? That is the fallacy of this theory floating around that seems to be saying China etc. are supposed to pick up the ball and lift the world economy - problem is the average American will not benefit from this.  We have walked into a trap of our own making, by pinning off into the empire the tools of wealth creation, while imagining that wealth, or a portion of it, could be extracted back into the imperial orbit to fuel consumption indefinitely. Trouble is, extraction as the basis of a national economy does not create middle class jobs. It creates the very rich, and cause the rest to enter debtors' hell as they frantically borrow to keep up their living standard. 

Mon, 08/10/2009 - 17:15 | Link to Comment tahoebumsmith
tahoebumsmith's picture

Stop banging your heads against the wall and just look at the facts? Its is only a mirage brought forth by an injection of 13.5 TRILLION dollars. Simple that's it! We could of had kids at their lemonade stands just hand out bags of cash to THE CRONY BANKSTERS and had the same effect. Nobody has done anything except beat "better then expected" numbers. We are not going to re-invent the wheel so just come to grips with reality? You only got a few months left at best to get your house in order so I would pull your head out of the sand and get with a program. If you haven't killed the prize pig yet the time is now! Enjoy some nice meals and spend time with the family before things get completely out of control. They really blew it this time because their deception has caused a lack of trust with the American Public.

Mon, 08/10/2009 - 17:22 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:25 | Link to Comment Anonymous
Mon, 08/10/2009 - 17:26 | Link to Comment Screwball
Screwball's picture

I read the story on DNDN.  I went back to make sure it was the same guy.  Not sure what to believe, but one thing I am sure of - there has been many a criminal bless the set at our favorite dickweed station.

Mon, 08/10/2009 - 18:03 | Link to Comment vf4 (not verified)
Mon, 08/10/2009 - 18:02 | Link to Comment Anonymous
Mon, 08/10/2009 - 19:34 | Link to Comment Crude Oil Trader
Crude Oil Trader's picture

Notice how they pretty much just blow him off as always being the most bearish. Typical cheerleader activity from CNBC.

Mon, 08/10/2009 - 23:14 | Link to Comment jm
jm's picture

My take is they were a little afraid of him.  He was too direct and razor sharp... an equal balance of menace and thoughtful charm.

Precisely the type you want running a hedge fund.

Mon, 08/10/2009 - 21:15 | Link to Comment Anonymous
Mon, 08/10/2009 - 23:01 | Link to Comment Assetman
Assetman's picture

Agreed.  Except that this fake velocity really isn't doing anything except buying things of little or no value.

Tue, 08/11/2009 - 04:26 | Link to Comment Anonymous
Tue, 08/11/2009 - 15:06 | Link to Comment 1-2
1-2's picture

From Today's Bianco Research note:

Yesterday there was an interesting exchange between Michael Steinhardt, Leon Cooperman and David Gerstenhaber.  As the blog Zero Hedge said:
Hedge fund icon Mike Steinhardt voices on what the smartest money on Wall Street is thinking and it is nothing good - fast forward to 3 minutes 25 seconds. Steinhardt is completely correct in saying “You can not talk about valuations readily” in this market.

In a nutshell - “Everyone is focusing on the next tick” and the follow up question: “What’s going to drive growth” eventually?

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