“The few who understand the system will either be so interested in its profits or be so dependent upon its favors that there will be no opposition from that class, while the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”
Given the history of intervention and “stimulus”, and more so when it occurs and really re-occurs, any impartial observer would be forgiven if they believed that QEs were actually constant impediments to growth. The proliferation of “stimulus” after the Great Recession correlates only with this downshift in the Japanese economy that cannot be due to demographics. At best, QEs have accomplished nothing at all positive, leaving no trace of something actually being stimulated for all the sustained “stimulus”; at worst, QE is the cause of Japan’s further nightmarish descent.
One month after news that legendary investor Paul Tudor Jones' $11.6 billion hedge fund Tudor Investment had seen some $1 billion in redemptions as a result of poor performance and the exit of several money managers, some of whom spent decades at the firm, the inevitable next step has followed: Tudor is trimming the fees it charges some clients in its biggest fund amid losses this year.
While far less attention is being paid to hedge fund 13F filings, which show a stale representation of equity long stakes among the hedge fund community as of 45 days prior, than in years gone by as a result of increasingly poor performance by the 2 and 20 crowd, they still remain closely watched source of investment ideas but mostly to find out what the new cluster ideas and hedge fund hotel stocks are at any given moment. Here are the highlights from the latest round of 13F filings.
If you want to get a sense of what’s motivating Donald Trump and Bernie Sanders voters, it’s a desire to take people like Robert Shapiro, remove them from the halls of power, and toss them into a cardboard box on the street. Of course, that won’t be happening any time soon, but that’s what a lot of people want. As we detail below, confirmed recently by Congressman X, Washington is infested by the secretive world of the dark money groups representing mercenary hedge funds in their insatiable quest for more and more money. In many ways, it’s merely a microcosm of America in 2016. A culture in which ethics has become so irrelevant, it isn’t even a nuisance; it simply never factors into the equation.
For the past 50 or so years, the quickest way for a sharp young sociopath to get rich has been to join an investment bank or hedge fund. The former were riding a “regulatory capture” gravy train that became ever-more-lucrative as new government agencies morphed into subsidiaries of Wall Street. Said another way, when financial assets are being artificially inflated by excessive liquidity, it’s easy to make money by shuffling this ever-appreciating inventory back and forth, and to look very smart while doing so. But those days are ending with a bang...
Today we look back to the recent past with singleness of purpose. Context and edification for the present economy is what we’re after. We have questions... How come the recovery has been so weak? Why is it that, nearly seven years after the official end of the Great Recession, the economy’s still mired in a soft muddy quagmire? Squinting, focusing, and refocusing, there’s one particular week that rises above all others.
Moments ago we the latest confirmation that the hedge fund business model is indeed suffering through an existential battle when MetLife Inc., the largest U.S. life insurer, said was seeking to exit most of its hedge-fund portfolio after a slump in the investments. According to Bloomberg, the insurer is seeking to redeem $1.2 billion of the $1.8 billion in holdings, a process that may take a couple of years to complete.
The pain for hedge funds is only just starting: Chris Ailman, who runs investments at CALSTRS, said in a Bloomberg Television interview from the Milken conference that the hedge fund industry’s two-and-twenty fee model is “broken” and “off the table” for large institutional investors. And then the latest blow to the suddenly struggling industry came overnight from none other than the firm which started the bailout regime, AIG, which following its earnings report announced that the insurer - burned by losses on hedge funds - has submitted notices of redemption for $4.1 billion of those holdings. “As of today, we have received $1.2 billion of proceeds from those redemptions."
what until now was merely a terrible start to the year has turned absolutely brutal for Odey's European fund, which is now down nearly a third, or 31%, in the first four months of the year, wiping out almost half a decade of trading profits in his flagship hedge fund in less than four months. Is he ready to throw in the towel? Not even close: the billionaire who delights in fighting the Fed, is convinced he will have the last laugh: "The disconnect between travelling and arriving may be coming home to roost. It will make the retreat from Moscow appear painless."