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Meet "The Most Bearish Investment Manager You Will Find Today"
"Maybe there's someone hiding in their basement who's more bearish than I am," says Mark Spitznagel, but I'm "the most bearish investment manager that you will find today."
The billionaire founder of Universa Investments exclaims, "stocks are the side show of the world. They shouldn't matter that much. They matter too much. They're the realm of punters, the realm of hair-trigger traders, flashing, colorful lights, blips and bleeps of Bloomberg terminals... What does matter is investment in capital, investment in the the tools of greater productivity, of really the progress of civilization."
Predicting the end of this bubble is impossible "because it's entirely Fed-driven.. and you're relying on liquidity," what we don't understand about markets is there's a buyer for every seller, there's a seller for every buyer, "the market doesn't owe you liquidity."
Some key exceprts...
"The beautiful thing about the business is when the markets get really rich, really overvalued, really distorted like today, the cost of insurance goes way down. There's incredible complacency. People are selling (tail insurance). This is another one of those carry trades that are so popular today. We're back to this Great Moderation. There's a religious belief that the Fed is our savior. And it's priced into the market."
"We're at an extreme point today. We're as extreme as we've been n the last hundred years except for 2000. You can read into that what you want. (The year) 2000 was one of the great bubbles in human history. So here we are today just shy of that."
"(Predicting when this bubble will end) would be impossible, because it's entirely being driven by the Fed and we don't know what they're willing to do next. I don't know what lever they're going to pull next."
"Giant liquidity holes are a part of market dynamics. If you think you're going to lean on these buy orders (in order to get out) is the height of naivete."
"Stocks are the side show of the world. They shouldn't matter that much. They matter too much. They're the realm of punters, the realm of hair-trigger traders, flashing, colorful lights, blips and bleeps of Bloomberg termnals...(awkward silence).
What does matter is investment in capital, investment in the the tools of greater productivity, of really the progress of civilization."
And finally to FOMO, and the consensus, Bloomberg asks "If the ECB is buying, and trying to inflate the prices of risk assets, OWN THOSE RISK SSETS."
Spitznagel: "Right, this is what the entire world is doing, what you're describing. Don't fight the Fed, go with the Fed. But, of course, the problem there is we're relying on our ability to change our mind, change our position. Is there an exit to this idea for us?
You're relying on liquidity, of course. What we don't understand about markets is there's a buyer for every seller, there's a seller for every buyer. The market doesn't owe you liquidity."
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Bearish? Good luck fighting the QE and the rigged markets ...
Sooo, you're bullish on BS, eh? hehehe
No, I'm a permabear but that does not change anything and every bear should be careful fighting these scumbags
Economy will continue collapsing and yet select "market" values will rise until futher notice...today's "doomers" are yesterdays realists.
http://econimica.blogspot.com/2015/05/the-truth-of-great-financial-crisisand.html
In Dec '08, when President Bush explained he'd "abandoned free-market principles to save the free market system"...red lights and sirens should have been going off. In March '09, when President Obama said "...buying stocks is a potentially good deal..." the governments involvement in markets to "save the system" via TALF, TARP, QE, and so many other acknowledged acronyms and unacknowledged means was set. The Rubicon had been crossed and free-markets would not be allowed to return so long as the illusion of normalcy was to be maintained. National and global economic mismanagement was one the costs of this illusion alongside inequality of asset bubbles minus the wage hikes to buy those assets
Honestly - I have no issues with asset managers investing folks money so long as they are honest with them. The truth is all markets are manipulated either pro or con...and money must go somewhere. And though gold / silver may have it's ultimate day...it's not now and gold kicks off no cash flow. So be honest with your clients that its all a central bank mirage and if clients don't care about the morals of colluding with the criminal central bank element and acknowledge that their money could disappear in a flash...then dance til the music stops.
http://econimica.blogspot.com/2015/04/fed-rigs-market-investors-face-moral.html
<<So be honest with your clients that its all a central bank mirage and if clients don't care about the morals of colluding with the criminal central bank element and acknowledge that their money could disappear in a flash...then dance til the music stops.>>
Good linked article. It's the same dilemma under any fascist government. The structure in itself is doomed, but 'they' make it very profitable to play by their rules, and propagate the misery, and severely punish those who do not. So you get short-term profit for long-term punishment; or you have to survive the short-term punishment, and maybe come out alive (let alone ahead) on the other side.
And we wonder why the sheep crowd so easily onto the boxcars...
Charles Prince was actually kind enough to tell us the truth when he said as long as the music plays you have to keep dancing...as a so-called 'investment' manager. Another commenter on here recently had to decide between professional lying, or losing his job. This is the heart & soul of the Nuremberg Defense. This dilemma will keep getting more and more common until the system tips over entirely.
Anti-speculation, followed by pump (raising interest rates) & dump (the fall out of the markets)....
It's going to be a blood bath folks..... LOOK OUT BELOW!
Ham: +1
Dn't worry about the present population imbalance tilting towards boomers. This can be fixed relatively quickly via death panels.
O My Children! Listen Ye Up unto ME: Buy My Shit and BE HAPPY! YesSirEE
My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... www.jobs-review.com
Cleaning sewers out with your tongue guess it's a nice Niche business
Everyone keeps saying this market is about to crash, what a load of crap.
Did anyone see CARL ICAHN today.
Have a look at this guy CARL ICAHN, famous US BILLIONAIRE in the US, his calls on the market have been killer and ridiculously accurate. See here. ==> http://bit.ly/1B4K0wk
He is saying we are about to ROCKET higher on APPL, and he knows a few secrets there!
And to think I listened to those dummies from CNBC say the EARNINGS season was gunna be HORRIFIC!!! those buggers….I have been had yet again!! Pack of liars….pissed me off
He's probably broke & living in a cardboard box under the bridge at the interstate...
"Billionaire founder of Universa Investments" may change your mind. If he lives in a cardboard box under a bridge it's a spectacular 15,000 square foot box in Monaco.
Sometimes, as in "What no buyers?" a la the Great "Portfolio Insurance" Fuck-Up
Yea but back in 87 .gov was not outright buying futures at every dip to stop the plunge like they are today.
The new highs will continue till morale improves.
not just PPT (Pippa Malmgren is by the way the sexiest woman alive). Multiple CBs are outright buying equities, sovereign wealth funds, and of course the corps themselves to return capital in a world where capital is no longer needed. Price insensitive buyers all with nearly unlimited funds. Valuations higher than even the peak of the greatest bubbles since the South Sea? NP. Weve got a printing press for that.
Thanks, Tyler, for excerpting this. Looking forward to the video later tonight.
<<Spitznagel: "Right, this is what the entire world is doing, what you're describing. Don't fight the Fed, go with the Fed. But, of course, the problem there is we're relying on our ability to change our mind, change our position. Is there an exit to this idea for us? You're relying on liquidity, of course. What we don't understand about markets is there's a buyer for every seller, there's a seller for every buyer. The market doesn't owe you liquidity.">>
In other words, any money you have in their system is THEIRS, by virtue of the possession law. I like that, "the market doesn't owe you liquidity."
In that spirit, I have a question for the financial geniuses here at the Hedge.
Recently I enquired at ICBC about opening an account there, which is probably a lot safer than any insolvent Canadian bank. (I live in Canada.) I specifically asked about bail-ins (the bank doesn't owe me liquidity either), and was told they would follow Canadian rules. However, the Bank of China is not precarious in and of itself and would not itself require bail-ins. (Also, their short-term deposit interest rates are not too bad -- over 2% -- and you'd have the benefit of yuan appreciation if you think a currency reset is imminent, which I do.)
I've been trying to research bail-in rules and specifically the Cyprus template, to try to find out my 'liquidity' risks on an ICBC account held at a Canadian branch. I can't find out much about foreign branches in Cyprus except that they were subject to "temporary restrictions on cash withdrawals and money transfers that are expected to remain in place for six months". Does anyone know if anyone at these foreign banks actually lost money? Or, did they just have a 'liquidity' issue for a little while, and then were OK afterward? I tried to follow the Cypriot bail-in at the time but there was such a flood of hysterical stories that it was difficult to pick out some of the details, such as this.
Does anyone here know whether, if you opened an account at a foreign bank in a 'western' economy, if that foreign bank were solvent itself, whether you would be likely to actually lose money? Does anyone know how that happened in Cyprus? I could survive a 'liquidity' issue if it were relatively temporary but if all bets are off, and somehow national bail-in rules also affect foreign banks, then I think it might be a mistake to hold any money in any bank at all (save one minimum account for expenses at an insolvent national) -- let alone being fool enough to rely on 'liquidity' from the stock market.
(I have recently been asked by someone desperate, where to put some very restricted funds. Since gold is out of the question for her due to her statist believer husband, and so are any sensible options such as stockpiling real assets and survival needs, I'm trying to think whether a Chinese bank account might be the best of a lot of bad options to suggest. Short of just saying "You're doomed", which could be a tad depressing.)
Not asking for advice from a bunch of anonymous strangers on the internet; just whether anyone happens to remember the Cypriot case, or whether anyone happens to have an idea of how far-reaching are bail-in 'liquidity' risks, as to whether they include actual capital at foreign bank branches.
stay low, get simple & STACK... Hope that helps
I may have misunderstood your concern ... and I don't know the complications for Candadians ... but you might want to look at "Treasury Direct" from the US Government Department of Treasury.
I know - shoot me on sight.
However, if you can establish an account (CN) that TD accepts, you can wire them money and your cash sits in what is called a CoI (that is See Oh Eye - Certificate of Indebtedness). This is a no-interest account OUSTIDE the banking system. If the US Government goes tits up, your fucked, but well, figure out what your problems look like under that scenario and it is probably a round error.
If your balance is small, you can auto-rotate into short term debts, 1mo, 3mo, 1yr, etc at auction rates. You can look at your cash flow schedules and manage your in/out. HOWEVER, if you have to cash out a debt instrument, it will have to be transfered to a broker for clearing, so mind your terms.
I hold hard cash, gold, guns, grub, and pretty much all that shit. TD is my next investment, but only after I am out of debt.
No one talks about this option, but I have emailed many blogs suggesting they should.
If anyone can bust up the logic, get after it!
Regards,
Cooter
Cooter, you make me glad I came back to check what I thought was a dead thread. Thank you for the tip.
I do NOT believe in keeping $ inside the banking system.
Having said that, realistically, there are a few reasons those of us not yet completely off-grid still must use them:
1) certain bills;
2) clients, especially the international kind;
3) moving bigger sums of money (see #2 above), even if that money resides in an account only long enough to be withdrawn gradually respecting all capital controls, OR awaiting the proper time to be moved into another investment; and
4) people like the lady I referred to, whose husband is a true government truster and a moron, and essentially will not let her do anything sensible with their money on pain of divorce despite small children. (I know, I know.) And I do mean, anything. I want to try to give her a suggestion that mitigates at least a little of their risk.
All four scenarios are why I was asking.
Ideally, we should all be off-grid and self-sufficient, with our wealth entirely in real and tradeable assets, and participating as part of a local and reliable trading community. But, this is an end in itself. Realistically, this takes a lot of time and effort, and frankly some luck, to achieve. Until then, we need to figure out how best to navigate the dangerous and criminal-infested system that we have. All the worse b/c the government allows these large criminals to continue in operation, settling for fines and "Guilty" pleas, even 'negotiating' with them for chrissake, simply b/c without these big criminals their system will fail completely. "Fraught with danger" barely begins to describe it.
I will look into the option you suggested. My goal for myself is to keep my money safe until I can withdraw it to spend on something sensible. Having said that, certain sums are too big to move quickly for that purpose and would be better off in a short-term vehicle until I can shift them into a different investment at the best time. Personally, I think ICBC might be a good idea for that but I am not sure about the risk of a foreign bank branch in a 'western' system.
So your idea might be one to consider. This had not occurred to me. It is of course quite possible that the collapse could take place in the next couple of weeks... months... tomorrow... but in the meantime we still need to figure out how to navigate from where we are.
This was not what I was asking but I did not think of anything else. Many thanx for the suggestion.
<<I hold hard cash, gold, guns, grub, and pretty much all that shit. TD is my next investment, but only after I am out of debt.>>
Well, good luck with that. As I said, sometimes one needs other options than these basics, and I hope that one works out for you (and for me or my friend if it turns out to suit this situation). I am happy to say that I am mostly in a 'liquid' situation as well -- and have paid a certain price for that -- but there are still some points of connexion with this system.
<<No one talks about this option, but I have emailed many blogs suggesting they should.>>
I find that 'transitional' advice is kind of lacking on the blogs that are very helpful otherwise. Most of them just carry the message "Get out now, while you still can," and while this is true, it is NOT quick or easy to do this. And I'm not talking about only the psychology. Over-simplification is a real problem, just like those people who advise, "Stop paying taxes!" as if that were easy and without considerable risk, and did not require heaps of research and expert advice and sometimes years to achieve.
I hope that as time goes on, some of these "basics" blogs (as I think of them) will expand more this way. The right thing may be simple, ultimately, but it is almost never easy, and often carries much risk, especially in times like these. How to mitigate that risk is a complex problem.
Anyways, I will also continue to research the ICBC idea and if it does come to anything, if this comes up as a question on a future thread, I will let you know in a comment how it turned out. (While preserving my privacy as best I can.)
The digbat chick should be dancing on a pole. Shut the F up and get back into the kitchen baby. Mark you made more sense in a few minutes than Bloomberg News has made in a decade.
No money 2 b made in the kitchen...
"TWIN PEAKS" bars are hiring if u have the right look & can take the crossfire... (& they don't require a bachelorette degree in WOMENS STUDIES 4 u to be hired ~ IMAGINE THAT)
Hanging out on ZH for a long enough time, will turn anyone into a Bear and Doomer.
But, for many, the tide can also turn, when some Doomers have doom-fatigue, and call BS on the permanently falling skies.
There are ALWAYS places to build, plant or invest -- just as there are always places to plow, seed, plant or harvest. The secret is not to run into or stay in the shelter, whenever we see storm clouds and or hear thunder, but to have a shelter while we keep working and investing in the future.
Hanging out on ZH has taught me 2 things:
1. Which, long term posters, are PAID PRETENDERS (CH1 is the undisputed 'poster boy')
2. Which, long term thread authors are PAID PRETENDERS (I have my own list, but I'd be interested in viewing an ad hoc list to follow up this post)
Well, I think Leo Kolivaticus (or whatever his name was) passed the baton to Marc to Market, for starters... plus there's at least one Tyler who sounds like a Schauble mouthpiece, and quotes MSM opinion at length, on pretty much every Greek fiasco thread.
What I win?
Sure thing!
When it comes right down 2 it ~ I'm all about 6th place trophies & [especially] BOOBY PRIZES!
until frances sawyer and fonz are reinstated I am in protest of commenting on articles until that work from home bot is destroyed.
OMG, Leo and his solar!
I totally forgot about that shit.
Regards,
Cooter
WHAT A BUNCH OF FUCKING BULLSHIT.
tail hedge.
the only reason short hedges got paid out on insolvent counterparties------------WAS BAILOUTS.
when credit implodes there are no hedges. there is gold, guns, family, and stockpiles.
what happens when wall street doesn't get bailouts?
Be a bull when the Fed controls everything and be a bear when it all ends.
It may be a long time until there are free markets again.
I was saying that in 2010, now I'm dumpster diving for food and sleeping in a cardboard box...
forget the derivatives... who is going to pony up for all those stop / losses when the music stops playing. Maybe Obama can make the companies that have been doing all these stock by backs... dollar cost averaging... it's the fair thing to do.
So should we or shouldn't we go into tulip farming in California? I'm not quite sure what he really said in that interview.
They're robbin' people with a big big gun
I fought the Fed and the Fed won
I fought the Fed and the Fed won.
Fighting central banks is like France v. Germany in WWII. Not only do you have the Fed to contend with, you have PBOC, BOJ, ECB, BOC, RBA, RBNZ, SNB, etc.
If the banking syndicate lets the global equity markets fall there will be a run on guillotenes.
So they won't do that.