Special Situations

Mario Draghi Hints Trump Will Be Responsible For The Next Financial Crisis

According to Mario Draghi, portfolio manager of the world's biggest hedge fund, it is not his gargantuan balance sheet equal to 36% of the eurozone GDP, nor the $14 trillion in global central bank liquifity that will be responsible for the next market crash, but that Donald Trump's deregulation of the banking industry has "sown the seeds of the next financial crisis."

KKR Calls The Top: PE Giant Selling Distressed Debt It Bought Earlier This Year

“We are in a very significant monetization cycle, particularly in more of the distressed investments that we made,” said Nat Zilkha, who oversees the 40-year-old firm’s credit investments, adding that “we got involved in some situations in energy and coal and other commodities earlier in the year, and those have played out quite well -- frankly faster than we thought.”

Lord Rothschild: "This Is The Greatest Experiment In Monetary Policy In The History Of The World"

"The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale."

Something Unexpected Happened When A Distressed Credit Fund Tried To Liquidate

In May 2015, Warwick's European Distressed & Special Situations Credit Fund liquidated after investors submitted redemption requests amounting to 90% of the fund’s assets. But something unexpected happened" "the problem" as HFA writes, is that "the fund’s remaining assets — encompassing debt and equity positions in Fitness First, New Gulf Resources, Oasis Holdings and Punch Taverns — are too illiquid to be sold."

"The Bankers Have Gone Through This Before. They Know How It Ends, And It’s Not Pretty"

Oil companies have sold $61.5 billion in stocks and bonds since January as oil prices have tumbled. However, the fees geneated are a tiny fraction of the bank's real exposure to the energy sector, at over $150 billion. So have the banks learned their lesson?  "The bankers have gone through this before,” says Oscar Gruss’s Meyer. “They know how it works out in the end, and it’s not pretty." Then again, perhaps banks are just sailing on an ocean of liquidity allowing them to postpone the day of Mark to Market reckoning, especially since this time, everyone is in it together....