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Crude Carnage Goes Contagious As Brevan Howard Liquidates Underperforming Commodity Fund

Tyler Durden's picture




 

The entire commodity complex is seeing major contagion-like price declines in early trading. WTI Crude is back below $65 for the first time since May 2010 - now down 16% since the initial leaks of OPEC's decision last Wednesday. Gold and Silver are getting whacked and copper has plunged below 300 - back at its lowest since June 2010. The news over the weekend that Brevan Howard is liquidating its $630 million commodity hedge fund following recent poor performance is also likely not helping as what looked like late-Friday margin call liquidations are extending notably this evening.

 

WTI is down 16% since the initial OPEC decision leaks last week by Venezuela...

 

And volume is heavier than normal for a Sunday night

 

As The Wall Street Journal reports,

Brevan Howard Asset Management LLP plans to close its commodity hedge fund following recent poor performance, according to two people familiar with the matter.

 

The fund, managed by Stephane Nicolas, has $630 million in assets. It lost 4.2% last year and is down 4.3% this year to the end of October, according to performance data reviewed by The Wall Street Journal.

 

It is not clear what Mr. Nicolas’s role might be following the commodity fund’s closure, a person familiar with the matter said. Attempts to reach Mr. Nicolas were unsuccessful.

 

Brevan Howard is among Europe’s largest hedge fund managers with about $37 billion in assets.

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Mon, 12/01/2014 - 04:55 | 5503847 Kina
Kina's picture

http://2.bp.blogspot.com/-XkYaPGF8BHY/VHqxSn9SVjI/AAAAAAAA7ZM/TxzQe2MA1N...

 

there is a gap that needs to be closed one way or other.

They can never stop the gold supression now...else see how fast the cork pops up from these depths to M2.

But low prices mean real gold dissappearing even faster....until fuck all physical gold around except for small retail. 

Will be funny if somebody is willing to sell 10 tons of their gold at $1,140...would have to be entirely fucked in the head, or have a Fed gun to their head.

Mon, 12/01/2014 - 05:04 | 5503854 Kina
Kina's picture

If they want real inflation they will have to let money escape into the real economy.

But then real price discovery will occur.

Mon, 12/01/2014 - 05:24 | 5503863 Kina
Kina's picture

so it begins....

Mon, 12/01/2014 - 06:05 | 5503899 Amerikan Patriot
Amerikan Patriot's picture

 

Russian ruble takes a nosedive on low oil prices

 

MOSCOW (AP) — Russia's ruble hit a new all-time low on Moscow, dropping more than 3 percent as declining oil prices and the conflict in eastern Ukraine are weighing in on the Russian economy.

The Russian currency traded 52 rubles against the dollar at the opening on Monday after shedding 15 percent in the previous week. The ruble was also down 2 percent against the euro.

Battered by low oil prices and the conflict in eastern Ukraine, the ruble has been declining throughout the year, losing about 42 percent of this value since January.

The Kremlin, which in the past supported the exchange rate by buying up the rubles, remarked that 'the jig is up', stating that president Vladimir Putin had been put on suicide watch.

Putin has stated on numerous occasions that he'll hang by his own rope before relinquishing power.

Oil prices, the backbone of the Russian economy, dropped roughly 25 percent since the summer. Brent crude, an international benchmark, fell 3 percent to $70.15 a barrel on Friday. 

The latest slide follows OPEC's decision to leave its production target at 30 million barrels a day. Member nations of the cartel are worried they'll lose market share if they lower production, which could have helped to push up the price.

"In the short term, the Russian market is a victim of OPEC's apparent decision to reduce the volume of high-cost production through lower prices," Moscow-based investment bank Sberbank CIB said in a morning note. "The market and the ruble will not stabilize until oil does."

Mon, 12/01/2014 - 06:58 | 5503928 viedoklis_lv
viedoklis_lv's picture

Ou! :) You got first :)

Mon, 12/01/2014 - 06:55 | 5503925 Amerikan Patriot
Amerikan Patriot's picture

I hope you Zero Hedgers emigrating to Russia haven't already changed your dollars to rubles, because the ruble is officially in the toilet.

Can another official devaluation be far off?

Mon, 12/01/2014 - 06:57 | 5503927 viedoklis_lv
viedoklis_lv's picture

Simply take popcorn and watch how Putin regime burns down to the ground :)

 

MOSCOW (AP) — Russia's ruble hit a new all-time low on Monday, dropping more than 4 percent as declining oil prices and the conflict in eastern Ukraine weigh on the country's economy.

The Russian currency traded at 52.41 rubles against the dollar in morning trading Monday after shedding 15 percent in the previous week. The ruble was also down 4 percent against the euro.

Battered by low oil prices and the conflict in eastern Ukraine, the ruble has been declining throughout the year, losing about 42 percent of this value since January.

The Kremlin, which in the past supported the exchange rate by buying up the rubles, says it considers the pressure on the currency to be speculative and is happy for it to remain freely floated in markets.

Oil prices, the backbone of the Russian economy, dropped roughly 25 percent since the summer. Brent crude, an international benchmark, fell 3 percent on Friday and was down another 1 percent on Monday to $69.47 a barrel.

 

http://news.yahoo.com/russian-ruble-takes-nosedive-low-oil-prices-080027...

 

Remeber the time...just year ago... http://www.exchangerates.org.uk/USD-RUB-01_12_2013-exchange-rate-history... :)

Mon, 12/01/2014 - 08:05 | 5503971 RisingSun
RisingSun's picture

I find it hilarious how wrong all these Putinozoids on Zerohege are :D They were telling to load up on Russian stocks like 30% higher than they are now, said time to buy ruble, dollar is going to collapse........oh did I mention that thing about Gold and stock market crash around corner(x10000 posts about that)? Everyone according to peepz on here are buying gold(read: conspiracy nuts on here), but somehow price is going down(smart money selling to nutters).

Cheers bro, lets see Russia crash again like 1996-1997 :)

 

Mon, 12/01/2014 - 15:20 | 5505517 TeethVillage88s
TeethVillage88s's picture

I heard Jim Rogers say (video) he was interested in Russia this year and maybe buying Rubles even though we have these sanctions and a Dust-up in Ukraine.

http://www.exchangerates.org.uk/USD-RUB-01_12_2009-exchange-rate-history... ($1 USD = $29 RUB)

Mon, 12/01/2014 - 07:32 | 5503946 jubber
jubber's picture

Ruble crashing down >6% against both US$ and Euro

Mon, 12/01/2014 - 07:49 | 5503960 viedoklis_lv
viedoklis_lv's picture

-> You google "ruble" everyday to find with pleasure that it's crashing :)

-> I am supportin Putin oligarch regime and it's crimes, will support even if it's crashing

Mon, 12/01/2014 - 07:57 | 5503965 Amerikan Patriot
Amerikan Patriot's picture

Vlad is looking for a few good men to sacrifice and serve.

Are YOU man enough?

Mon, 12/01/2014 - 07:59 | 5503967 viedoklis_lv
viedoklis_lv's picture

So... while I was preparing this comment Putin regime ruble crashed even more.. now it's 53.60 for USD, so who knows how far after hour it will be crashed.

I predict that at one point russians will run to banks to change their money and when that panic starts, Putin regime will roll-out some kind of comunist law that will ban holding USD :D

Ruskie trolls now have emergency meeting to recieve new instructions in what way to say that there is no problem or to try change subjects about other countries, etc.

Popcorn :)

Putin regime with it's ruble - Crash & burn ... crash & burn :)

 

Mon, 12/01/2014 - 08:03 | 5503969 jubber
jubber's picture

and now a MASSIVE US futures ramp total fucking scam

Mon, 12/01/2014 - 08:07 | 5503973 Kina
Kina's picture

bullshit ... nobody has suggested ruble or russian stocks...making shit up

Mon, 12/01/2014 - 08:12 | 5503976 RisingSun
RisingSun's picture

O really? There was this Winston Churchil guy bashing me and viedoklis for calling Putler out and saying that Russia will go down...oh that Jack Burton also posting on every post here how great and mighty Russia is :)

Mon, 12/01/2014 - 08:12 | 5503977 pachanguero
pachanguero's picture

The decline of ruble will reverbarate all through Asia.

Mon, 12/01/2014 - 08:33 | 5504016 NoWayJose
NoWayJose's picture

The ruble is collapsing because the US and Saudis and big banks are playing their paper FX games using freely printed US fiat and various financial derivatives. But is it really hurting Russia? Well only a little, because...

Russia exports oil and gets paid in US Petrodollars or Euros -- or yuan. Russia exports gas to Europe (at contract prices) and gets paid in Euros. Russia is selling top grade military equipment to China, Syria, North Korea, and Iran - and not getting paid in rubles. Russia is holding well over $100 billion in US Treasuries. And don't worry about the oligarchs, they have investments and bank accounts all over the globe.

And now, as has been shown by real numbers - Russia is turning those export dollars not into rubles -- but into CHEAP gold -- a gift from the US and Saudis and big banks.

So what is the 'pain' in Russia? Obviously total oil revenues are down - but to the Russian on the street this is irrelevent as they don't see any oil revenues anyway - the oligarchs keep that - so the oil oligarchs are hurt a bit. The natty gas oligarchs have already negotiated price contracts - so no effect - and maybe even a positive effect for them. Stores selling luxury EU goods within Russia are hurting, but how many of those stores are there? Other EU products might be more expensive, but sanctions have already cut those off from the Russian people. So no price increase in the Big Mac index! There will be a little bit of pain for the Russian people as some things they do need are imported and will now cost more - so is this really about trying to make the Russian people unhappy with Putin??? That does NOT seem to be the case in the popularity polls!

Mon, 12/01/2014 - 10:30 | 5504280 viedoklis_lv
viedoklis_lv's picture

Russian goverment is not in debt, but it's main companies is in huge debt and in USD. So they got to recieve USD somewhere. If not earning from oil than how will they pay them off?

Look how small % of all export Russia has to China VS EU.

Russia export to EU is 50%

Russia export to China is 7%

Russia import from China is 17%

Russia import from EU is 42%

So can Russia change their main partner EU to China? :)

Case closed.

 

http://youtu.be/Ia6quj9K2OQ?t=24m23s

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