Presenting The Main Holdings Of The Libyan Investment Authority, And Why UniCredit Is Sweating

Tyler Durden's picture

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Bearster's picture

What on earth makes anyone believe that loot, forcibly extracted from the people, and invested on their behalf by expert central planners is superior to keeping your own money and investing it yourself (or finding an investment advisor / money manager to work with voluntarily based on rate of return)?  Sovereign wealth funds are not part of the solution; they are part of the problem.

CPL's picture

Personally I'm interested to see what Dubai looks like in one month when most of it's donors are on the run from their own population.

Harlequin001's picture

I need to get me a small country so I can create my own money and go buy myself a few US Treasuries...

Any ideas...

Harlequin001's picture

There is nothing commercial about a sovereign wealth fund. Governments fund sovereign wealth funds with treasuries derived in part from their foreign exchange reserves.

For a fast look the destructive nature of these beasts, let’s assume that China conjures up a brand new truck load of new renmimbi from fresh air and uses this money to buy a US T bill. China now ‘invests’ this T bill as capital into its sovereign fund CIC which subsequently pledges it as collateral to a US Bank. The US Bank can now lend against it in magical paper dollars which CIC now uses to buy very real foreclosed properties in the US Market. These are real houses foreclosed on real people being bought by a foreign sovereign fund with collateral that started as nothing more than fresh air. This is the reality of fiat money. There should be riots.

Even if the value of US T Bills was marked down by 50% in a US default, China could simply conjure up another truck load of magical Renmimbi and buy another T Bill to make good on its collateral with the US bank. It is not a commercial transaction, it is not an economic recovery and it can last either until China’s financing costs become greater than its economy or we move back to a gold standard and then it ends staggeringly badly.

We now have a situation where a foreign government through its sovereign fund and even a domestic government through its banks can create an unlimited quantity of nothing and use it to buy up any amount of real domestic assets. That includes short positions in all commodities to suppress prices. We are moving to an economic system where prices are set not by market demand but by governments through banks and sovereign funds using derivatives and ETF’s. Only a gold standard can prevent this because only a gold standard can prevent ANY CENTRAL BANK from simply printing money in the first place. Who says that central banks have no incentive to suppress the gold price?

What do you think your chances are of competing with this? Zero perhaps or less?

Harlequin001's picture

Would UniCredit be worried about this? I don't think so. It's not possible for these funds to lose money because it's not a commercial transaction. Libya needs only print more money to weaken its currency and re capitalise its fund, nothing more.

If you can get a SWF to hold your stock, you're in easy street mate...

Harlequin001's picture

I need to get me a small country so I can create my own money and go buy myself a few US Treasuries...

Any ideas...

Are we still wondering why stock markets aren't falling?

RobotTrader's picture

Maybe after the carnage is over, ProShares or somebody will launch a 3x leveraged Libyan ETF.

Seems like the street always manages to capitalize on a crisis to satisfy the thirst for yet another volatile gambling chip so other fund managers can pile on and "make their year".

trendybull459's picture

you right,they foll us allways,left and right,look at sperma bull ETFs small cap triple and bear3x TZA,its just massacre

camoes's picture

Shorting italian government bonds, next EU club med country to go down, lived there in northern italy, love the people but young smart italians are just leaving the country to get meritocracy jobs in other EU countries and all is left is grumpy old retired italians, mafia and north african refugees street vendors selling fake gucci purses

Legalized nepotism:

Caviar Emptor's picture

Yes, its a shame but true. 

streetman's picture

Don't forget crazy Italian judges who manufacture evidence to convict American teenagers of murder to avoid official censure.

Monkey Craig's picture

funny that Juventus isn't having a great year either

Buck Johnson's picture

You must be a fan of Mike Rivero and his whatreallyhappened site and radio show, nice pic of him. 

Cleanclog's picture

Just exchange a "t" for a "b" and Italy can be Libya, so maybe in a new world order, UniCredit will be the country that spans the Mediterranean.  After all, the Banks Rule!!!!  

So said the Bernank as he bestows more and more powers upon them.  And the Supreme Ruler shall be the FED.  As it was foretold more than 100 years ago.

Oh regional Indian's picture

The bank ownership is not so surprising. Those oil dollars flowed nicely into Europe, especially from North Africa, long their playground.

We shall see stranger bedfellows emerge from this mess yet. Mark my words.


plongka10's picture

Unicredit are really in the merde, with huge exposure to Eastern European sovereigns. They could be the next shoe to drop.

artinlight's picture

So does Italy own part of Libya or does Italy own part of Libya?

Oh yea - it's all just banks shuffling the world around.  They want you to buy the dip now.

Stay away from value. 

Mr Lennon Hendrix's picture


Juventus futbol stars will be paid in gold and Libian oil, I presume.

Caviar Emptor's picture

Left off the list: Scottish Judges' Retirement Fund (which benefited mightily prior to release of Lockerbie bomber). 

The Axe's picture

I think they own the New York Mets to???lol

Zero Govt's picture

Ok, ok, TD, got the data but now what??? ...BTFD? ...short Juventas? ..go long UniCredit? ...what's THE PLAN ?!!!!!!

Answers on a Postcard to:  Slow & Retarded Investors, Libyan Opportunity Dept, Venezuela. 

heorot's picture

an update..."technical" reasons force Italian Market to stay in lock down. What a coincidence...


ps: you forgot to mention Chiellini within the Juventus finest!!

Bahamas's picture

Unicredit might be in the "merde" but ex ceo Alessandro Profumo just walked away with 40 million euros in the pocket as liquidation money.

That's a lot of money for 1 single man.

Cesare Geronzi, former n. of Banca di Roma (now merged in Unicredit) received 20mln a few years earlier.