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How Ben Bernanke Became A Hedge Fund's Worst Enemy

Tyler Durden's picture





 

Whether it is hope, greed, fear, repression, systemic correlation, volatility suppression, or sheer unadulterated idiocy; the smart money has been desperately underperforming the 'index' in US equity markets since Ben Bernanke unwrapped a can of QE2 on us all. Are the smart-money 'realists' playing the long-term game and the dumb-money index-trackers herding into whatever worked yesterday? Who knows? One thing is for sure, Bernanke is no friend of the hedge fund community - anymore.

 

 

Chart: Barclays

 


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Fri, 10/19/2012 - 17:05 | Link to Comment max2205
max2205's picture

How fucking stupid are these guys. Buy the spy at least. And then hedge that. Idiots

Fri, 10/19/2012 - 17:13 | Link to Comment malikai
malikai's picture

Isn't it so cute that Romney doesn't like QE? He certainly likes to let us know how much damage debt monetization does to the economy. There is just one problem. As the police like to say: "Follow the money".

Romney's personal finances:

http://www.opensecrets.org/pfds/CIDsummary.php?year=2011&CID=N00000286

Federal Farm Credit Bank securities: $2,000,002 to $6,000,001 

Federal Home Loan Bank securities: $1,000,001 to $5,000,000 

Federal Home Loan Bank securities: $25,750,033 to $92,508,004 

Federated US Treasury Cash Reserve Fund: $250,001 to $500,000 

Goldman Sachs Bank Deposit: $7,015,004 to $31,050,001 

Goldman Sachs Global Opportunities Fund: $1,000,001 

Goldman Sachs Hedge Fund Partners II LL: $1,000,001 

Goldman Sachs Hedge Fund Partners LLC: $1,000,001 

Goldman Sachs Linked to DHA: $500,001 to $1,000,000 

Goldman Sachs Linked to Russell 2000: $250,001 to $500,000 

Goldman Sachs Linked to S&P 500: $1,000,001 to $5,000,000 

Goldman Sachs Linked to SP GSCI Agric: $500,001 to $1,000,000 

Goldman Sachs Small Cap Value Fund: $500,001 to $1,000,000 

GS Inflation Protected Securities Fund: $2,250,003 to $6,500,001

Prospect Harbor Credit Partners: $1,250,002 to $5,500,000 

Tennessee Valley Authority Bond: $500,001 to $1,000,000

Fri, 10/19/2012 - 17:39 | Link to Comment duncecap rack
duncecap rack's picture

That's a lot of dough. He could almost do a QE on his own.

Fri, 10/19/2012 - 18:08 | Link to Comment saturn
saturn's picture

Can hedge funds seek the same protection as big banks aka TBTF?

Fri, 10/19/2012 - 18:17 | Link to Comment Doode
Doode's picture

What happened to QE1? I can make up a random chart that works for a while and then does not too - this is fairly meaningless from a statistical point of view.

Fri, 10/19/2012 - 17:43 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Betting on the same Fed the he rails against- "shocker"

Stupid sheep.

Fri, 10/19/2012 - 17:51 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Frankly I don't give a crap where Romney has his money what I care about is what he wants to do with mine. I would also care about Fraud being prosecuted you know people like Corzine well NO ONE has ever been a better friend to Wall St then Obama ZERO criminal prosecutions.

CONVICTED: Bush 1300+, Clinton 1000+, Obama 0.0 (+/-)

Five Senior Goldman Sachs Execs Gave $130K To 'Obama Victory Fund' WHILE Eric Holder Was Deciding Whether To File Criminal Charges

Here's the (pdf) report from GAI:

Justice Inaction - Department Of Justice’s Unprecedented Failure To Prosecute Big Finance

It's relatively short, and pretty easy reading.  Discussion of MF Global and Jon Corzine begins on page 10 and runs only about 5-6 paragraphs. Here's an embedded version:

Justice Inaction Report

http://dailybail.com/home/special-report-inside-the-department-of-justices-unprecedent.html

CORZINE CRONYISM BOMBSHELL - High Ranking DOJ Lawyers And AG Eric Holder Were Partners In Firm That Represented MF Global

Barack’s Wall Street Problem is Now America’s

http://www.noquarterusa.net/blog/4939/baracks-wall-street-problem-is-now-americas/

 

Sat, 10/20/2012 - 06:11 | Link to Comment jeff montanye
jeff montanye's picture

obama is very bad as a law enforcement officer.  however the gw bush administration had a poor trajectory as well:  http://trac.syr.edu/tracreports/crim/267/

i haven't found any chart longer than twenty years but it looks like ghw bush increased prosecutions, clinton roughly maintained them at a high (?) level, gw bush decreased them and obama further decreased them.  in so many ways he looks like gw bush only worse.

Fri, 10/19/2012 - 18:41 | Link to Comment walküre
walküre's picture

Who are the 6 (and counting) fucktards who junked the posted list?

Romney declared investment income of 14 million for 2011. That list opensecrets.org is showing has to be incomplete. If you take the best case, his holdings amount to roughly 159 million. His worst case is 45 million. So anywhere in between has not generated 14 million which is 10% or better in 2011.

Even with his best case he's looking at almost 9%. Hard to believe anybody in that league made personally 9% in 2011 (!!!).

He's not invested in stocks. His money is cash or cash equivalent.

 

Fri, 10/19/2012 - 22:53 | Link to Comment earnyermoney
earnyermoney's picture

BB and the FOMC doves?

Fri, 10/19/2012 - 17:20 | Link to Comment Daily Bail
Fri, 10/19/2012 - 18:09 | Link to Comment Coach McGuirk
Coach McGuirk's picture

Blocked in 47 minutes? Wow.

Fri, 10/19/2012 - 18:09 | Link to Comment Overfed
Overfed's picture

Blocked on copyright grounds. So much for Fair Use.

Fri, 10/19/2012 - 20:27 | Link to Comment helping_friendl...
helping_friendly_book's picture

That's my favorite. To bad they yanked it.

Sat, 10/20/2012 - 11:57 | Link to Comment Birdmandaddy
Birdmandaddy's picture

I've been asking myself that same question for about 4 years (when I started working as an auditor in the hedge fund arena).  Over the past few years, the majority of funds lose to the S&P.  On the rare occasion where they do outperform, it's usually not by enough to justify the 2/20.  I constantly wonder about the ability of these funds to survive....

Fri, 10/19/2012 - 17:07 | Link to Comment vast-dom
vast-dom's picture

GOOGLUCK with that QE ponzi front-running full-fucktard market disconnect. 

Fri, 10/19/2012 - 17:19 | Link to Comment Daily Bail
Fri, 10/19/2012 - 17:08 | Link to Comment The big unzip
The big unzip's picture

He wont ever be friend

Fri, 10/19/2012 - 17:10 | Link to Comment hustler etiquette
hustler etiquette's picture

the Bernank is the supreme hustler

Fri, 10/19/2012 - 17:17 | Link to Comment falak pema
falak pema's picture

robotrader beats all these super HFs!

Fri, 10/19/2012 - 17:10 | Link to Comment Bumbrella
Bumbrella's picture

Will they converge coz of hedge fund performance or s&p collapse ? A bit of both i guess

Fri, 10/19/2012 - 17:12 | Link to Comment falak pema
falak pema's picture

Capitalism is about the risky and irrational beating the safe and rational; there is no greater capitalist than a central banker. 

He knows no risk, only hi return, they be  all on his side provided you believe he can print to infinity and that his money be as good as his word.

After all, its all a question of FAITH, and when it doubt, when faith finds it difficult to raise a high five, just print the legend not the truth

That is in essence the true message of capitalism as epitomised by the fourth estate

Sat, 10/20/2012 - 11:48 | Link to Comment TWSceptic
TWSceptic's picture

First learn what capitalism truly means.

Fri, 10/19/2012 - 17:15 | Link to Comment bagehot99
bagehot99's picture

Romney's investments look like pretty standard diversification, nothing weird there.

Job one, on Day One, should be to get Ben Bernanke out of the Fed.

Fri, 10/19/2012 - 17:25 | Link to Comment babylon15
babylon15's picture

I too, used to think this was part of the solution.  The reality is that every country, every central bank in the world, is out-Bernanke'ing Bernanke himself.  Every central bank is easing.  Every central bank has 0% rates.  Every central bank is buying their own worthless junk-rated zero-collateral bonds.

 

Bernanke will just be replaced with someone who will do everything he did.

Fri, 10/19/2012 - 17:48 | Link to Comment john39
john39's picture

>>>Bernanke will just be replaced with someone who will do everything he did.

just like the office of the President of the U.S...

 

Fri, 10/19/2012 - 17:30 | Link to Comment Haager
Haager's picture

Job two: Insert another Goldmanite.

Job three: Pamper the banks

 

Fri, 10/19/2012 - 17:52 | Link to Comment onebir
onebir's picture

Job four: establish expectations management (aka 'expert') network to help out the bonus-starved hedgies - all in the name of trickledown, of course... 

Fri, 10/19/2012 - 17:15 | Link to Comment icanhasbailout
icanhasbailout's picture

when the only thing left to hedge against are the actions of central bankers, this is a pretty straightforward consequence

Fri, 10/19/2012 - 17:17 | Link to Comment FishHockers
FishHockers's picture

Then buy Gold and Silver and overrun the shorts

Fri, 10/19/2012 - 17:22 | Link to Comment kito
kito's picture

How Ben Bernanke Became A Hedge Fund's Worst Enemy...........

 

i thought the ny fed was bernankes bff? im confused?...............

Fri, 10/19/2012 - 17:30 | Link to Comment NewWorldOrange
NewWorldOrange's picture

Nice! LMAO

The partial audit of the Fed released last year shows they bailed out a lot of foreign institutions, as well as some of their wealthy butt buddy's ventures to the tune of a few million here and a few million there -- hardly "too big to fail."

But surely they'd never bail out a multi-billion dollar hedge fund;)

TPTB are going to prop this ponzi planet up and kick the can for as long as they can with any and every tool they can find, until it collapses. They're just biding time, creating a police state and hoping that Skynet if fully operational before the collapse.

Fri, 10/19/2012 - 18:02 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

They already did in 1998

What Was the Long-Term Capital Management Hedge Fund and the LTCM Crisis?

snip


Question: What Was the Long-Term Capital Management Hedge Fund and the LTCM Crisis? Answer: Long-Term Capital Management (LTCM) was a very largehedge fund ($126 billion in assets) that nearly collapsed in late 1998. It reached that size thanks to the stellar reputation of its owners. The founder was a Salomon Brothers trader, John Meriwether, and the principal shareholders were Nobel prize-winning economists Myron Scholes and Robert Merton. These were all experts in investing in derivatives to make above-average returns and outperform the market.

 

Investors paid $10 million to get into the fund. They were not allowed to take the money out for three years, or even ask about the types of investments LTCM used. Despite these restrictions, investors clamored to get in, thanks to LTCM's spectacular annual returns of 42.8% in 1995 and 40.8% in 1996. This was after management took 27% off the top in fees. LTCM successfully hedged most of the risk from the 1997 Asian currency crisis, giving its investors a 17.1% return that year.

However, by September 1998, the company's risky trades brought it close to bankruptcy. Its size meant it was too big to fail, and so the Federal Reserve took steps to bail it out. (Source: Le Monde, LTCM, a Hedge Fund Above Suspicion, November 1998)

Fri, 10/19/2012 - 20:16 | Link to Comment RiverRoad
RiverRoad's picture

LMAOLORI:

And even Buffet tried to bail them out and got "rebuffed".

Fri, 10/19/2012 - 18:56 | Link to Comment kito
kito's picture

i wonder which 2 ny fed trolls on this site were offended by my comment???

Fri, 10/19/2012 - 17:24 | Link to Comment q99x2
q99x2's picture

Palance was on the AJ show yesterday and he said that Singer and Singer's fellow hedge funds are at odds with the Wall St. banksters at this time. Don't know if that has anything to do with it or not.

In my opinion the Bush family and their CIA connections might be backing Romney. They could be crashing the markets ahead of the election.

If we are moving into a world takeover by the NWO then a militant with connections like Romney would better serve the heathen scumbag eleech.

Fri, 10/19/2012 - 17:40 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Hedgies are actually renegade bankers. The Fed backs the banks first. All others can go to hell

Fri, 10/19/2012 - 17:53 | Link to Comment MiddleageThinni...
MiddleageThinninghair's picture

Does this model incorporate lost profit due to interest cost on leverage?

I'm an outsider from the financial world but I keep wondering how the interest costs are eatting up these leveraged companies given the reported massive amount of borrowed money.

Fri, 10/19/2012 - 18:16 | Link to Comment Sheeple Shepard
Sheeple Shepard's picture

Interest! What Interest? The time value of money, my good man, has left the building.

Fri, 10/19/2012 - 17:53 | Link to Comment buzzsaw99
buzzsaw99's picture

A. Cashin just told pissonme "...people are starting to think if Romney gets elected does that mean Greenspan is out...". Man, that dude is losing it!

Fri, 10/19/2012 - 21:46 | Link to Comment stocktivity
stocktivity's picture

Give him a break...he just hit a Friday "Happy Hour" early.

Fri, 10/19/2012 - 18:10 | Link to Comment Yen Cross
Yen Cross's picture

With friends like "Chair Satan" who needs enemies?

Fri, 10/19/2012 - 18:26 | Link to Comment Obnoxio
Obnoxio's picture

You would think the Federal Reserve is owned by large banks and is assisting them in scalping Hedge Funds plus Pension Funds along with other private investors.

Fri, 10/19/2012 - 21:21 | Link to Comment Kina
Kina's picture

Goldman sachs...is that like goldman-staph?

Sat, 10/20/2012 - 00:50 | Link to Comment helping_friendl...
helping_friendly_book's picture

We are ALL niggers to the 1%!

Saw it on PBS.

Word!

Sat, 10/20/2012 - 02:42 | Link to Comment goldenbuddha454
goldenbuddha454's picture

How's that community organizing fund working out?

Sat, 10/20/2012 - 02:59 | Link to Comment suckerfishzilla
suckerfishzilla's picture

You can't eat a hedge fund.  Well maybe I can. 

Sat, 10/20/2012 - 12:40 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

'Tis the season for monetary treason!

 

http://sirratatap.com/?s=liens

Sun, 10/21/2012 - 02:04 | Link to Comment Venerability
Venerability's picture

That's the most honest headline you've ever printed, Tyler, Dear.

But you didn't add: Whoever is the Hedgies' Enemy Is the World's Friend

Especially in thinned-out Markets, with no Sheeple left to shear.

Or When Hedgies Go For Other Hedgies' Jugulars, it may be time for Stealthy Muppets to triumph.

So THAT'S what those silly Big Bird attacks were all about!

(OK, he's not strictly a Muppet, but clearly a Muppet relative.)

Sun, 10/21/2012 - 21:21 | Link to Comment Tim Brasco
Tim Brasco's picture

Volatility Is Entering The Lower Level Stocks, Here Is a Stock That Was Just Approved For Training International Pilots At There Flight School. They Are Going From No Revs To $980,000 In revs within the next 30 days. With a current float of less than 5 million shares this is going to really be a mover.  Right now sitting at the 52 week low around a penny the new valuation will place them undervalued by roughly 4,000% +.  Last time on just news of them applying the stock ran close to 600%. Monday and Tuesday trading day there should be upwards of those gains and potentially even more.  Here is a great Ceo interview and research report that came out just today! The community is buzzing over this stock! Opportunity is all over the market, you just need to know where to look! This group provides full transparent and is up 2,033% for the year. Watch Tomorrow  http://www.stocklegends.com/quasar-qasp/

Mon, 10/22/2012 - 11:28 | Link to Comment resurger
resurger's picture

Am with the dark blue line

Do NOT follow this link or you will be banned from the site!