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Money Is Becoming Unmanageable
Submitted by John Rubino via DollarCollapse.com,
Some of the money managers who made names (and billions of dollars) for themselves in the past decade are suddenly failing:
Hedge Funds Brace for Redemptions
(Bloomberg) – When BlueCrest Capital Management told investors Tuesday it would no longer oversee money for outsiders, one thing founder Michael Platt didn’t mention was that clients had already pulled billions of dollars this year.
Platt, who cited client demands and pressure on fees as a reason for his decision, isn’t alone in feeling the heat from investors. Firms including Och-Ziff Capital Management Group LLC and Mason Capital Management have seen cash flee this year, and others such as Fortress Investment Group LLC’s macro funds business shut down after redemptions and losses.
Hedge fund investors are losing patience even with marquee firms as many of them struggle this year, especially those that offer macro strategies or stock funds heavily weighted to rising shares. Some managers have lost money for two years running, while others such as David Einhorn’s Greenlight Capital are suffering declines that rival their worst year. After the weakest third-quarter inflows in six years, the industry could see outflows in the fourth quarter, said investors and bankers who watch the ebb and flow of hedge fund assets.
“The fourth quarter will be flat and possibly negative,” said Peter Laurelli, head of research at Evestment Alliance, which tracks hedge fund investments.
Among the most prominent losers in the second half is Bill Ackman, whose Pershing Square Capital Management is down more than 17 percent in 2015 through November. The firm has been hurt by its investment in Valeant Pharmaceuticals International Inc., whose shares have slumped 31 percent this year amid scrutiny over drug prices.
Einhorn’s Greenlight Capital has declined 21 percent this year, as positions such as SunEdison Inc., Consol Energy Inc. and Micron Technology Inc soured. Einhorn’s worst annual loss was in 2008, when his fund fell 23 percent.
Others firms have been losing money for more than a year. Mason Capital, an event-driven fund based in New York, was down about 20 percent from the start of 2014 through this year’s third quarter, according to investors. Assets fell to about $5.6 billion from about $9 billion at the end of last year.
Fortress Investment Group LLC said in October it was closing its $2.3 billion macro business run by Michael Novogratz after posting losses for almost two years. Earlier that month, Bain Capital decided to shutter its Absolute Return Capital fund after more than three years of declines.
At BlueCrest, assets have shrunk by more than 40 percent this year to $7.9 billion, mostly from withdrawals after years of lackluster returns in what was once its biggest fund. New Jersey’s public pension plan decided to pull $284 million from one international fund as of June 30, citing “disappointing” returns just over a year after adding to its investment.
Why are the worlds’ most successful investors having so much trouble lately? The short answer is that the markets they used to understand have been replaced by something very different. Consider:
Starting in the late 1990s, every crisis with even a hint of systemic import - which would have provided information for market participants about what not to do - has been short-circuited with easy money, lower interest rates and directed bail-outs. Where a properly-functioning financial market would have signaled banks and leveraged speculators to ease up on the risk taking, the “Greenspan put” said “do whatever you want, we’ll fix it if you fail.” The result was a massive increase in leverage across the board, to the point where virtually every government and many corporations and individuals now carry unprecedented amounts of debt.
While the world was leveraging itself to the hilt, governments and big banks were manipulating virtually every major market for, respectively, political gain and trading profits. The list of indexes and instruments that are or have been messed with include LIBOR, long and short-term sovereign interest rates, blue chip equities, gold, developed world currencies, emerging market currencies, mortgage backed bonds and various kinds of swap contracts. In each of these (and many other) sectors, fundamentals no longer matter, leaving investors with no tea leaves worth reading.
Last but not least, financial crises lead to geopolitical turmoil. With the Middle East engulfed in end-to-end war, the US butting heads with Russia and China in, respectively, Syria and the South China Sea, and Europe being swamped by millions of Middle Eastern refugees and the rise of anti-euro political parties, market price signals, to the extent they exist at all, are being drowned out by geopolitical noise, which is another way of saying that political risk now trumps economic/financial fundamentals.
In this new, post-market world, money managers can’t separate signal from noise and end up on the wrong end of wild swings in commodities, currencies and interest rates. And now their clients are figuring this out.
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“Just the tip” off topic…
Today, Japan’s parliament has voted for the change in Japan’s Constitution allowing Japan’s Army to be used outside of the country. All they need now is a “FALSE white rectangular FLAG with a large red disc in the center”.
How do you say “Pearl Harbor” in Chinese? ;-)
Looney
Fuk u.
Money is THE PROBLEM >> https://goo.gl/IoiSjv
<< YES. Want to see those money "managing" scum in the line for food stamps.
>> NO. Go to hell with them
http://goo.gl/3G3r6i
Yo...Mister 12 weeks....MANY "money managers" are honest, capable and smart.
Clarify your general smear. MANY are unscrupulous cunts, but many are not.
Ting Tou Wing Wang Wow lol........................
Whack Off WHAT??? ;-) ;-)
Looney
You have a link to something besides Japan's wiki page?
Any money manager who didn't say 'gold in the ground until the world gets sane' doesn't understand much.
https://thinkpatriot.wordpress.com/2015/10/02/warning-ideas-are-dangerous/
https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...
9/11 was a False Flag operation by the Israeli-Neocons in the US Government
Way to stay on topic!
I triple-second that! ;-)
Looney
Who needs "clients" when you have HFT, Dark Pools and the like?
why are the world's most successful investors having trouble lately?
cuz Insider traders are flipping, going to jail, or jumping from windows. thats why
Wtf are these idiots up to? The S&P has gone from 666 to 2100 in 6 years
The only ones losing money have been the shorts
It was free money for these cunts
Must be blow hookers & Bermuda
Don't worry about Platt, Einhorn, or Ackman. They got plenty.
You guys are ruthless... I bought some paper gold last night. My "trailing stop" is set @ $1.00 above B/E.
The spread on the position is roughly 40 cents. I did this to show people what the IDIOCY in the paper XAU trade is.
My position is just under $1055.00. I'm well in the money, and could have easily covered earlier.
I want to expose the paper traders...
There is no signal anymore, Bernanke and Yellen have not played that game, but until this year the rising tide kept all their boats afloat. Tide can't rise much more now without flooding Miami Beach. Poor, poor hedge fund managers, time to cash out that carried interest.
Bernanke, Yellen and Draghi don't have to worry about working either - everyone the central economic planners robbed is expected to work until they die to pay each of the crooks six figures.
This article is 6 years late. I had to shut off my trading models in 2009 when distortions began to appear in "markets." At the time, I couldn't figure out what was going on. But it was the thumb of the fed on the scale, and I was too far from being "in the know" to account for the new normal.
So fuck you, Bernanke, Yellen, and all the letcherous despots at the Fed. You ruined more than my livelihood, you ruined the United States.
Though you’re correct on the 2009 date, along with the obvious equity bubble being a central Fed strategy, I respectfully disagree that central bankers are the primary villain in messing with shorter term trading results.
The article author’s notion that hedgies are failing due to central bank manipulation crushing their “fundamental” indicators is ludicrous – medium-term markets haven’t traded on fundamentals for over a decade, as newer quantitative techniques have arbitraged away nearly all profits from earnings-based models, as well as ‘traditional’ technical analysis (trend lines, chart patterns, etc.).
It’s now a fully quant-controlled market (has been since 2009), with various ‘mean-reversion’ techniques the primary driver, the weird spikes and reversals purely intentional, the last two days, attributed to Yellen & Draghi, were as much a product of topping out on the Daily volatility envelopes, signaling algos to head for lower placed DMAs, overdue after low-volume holiday melt-ups, which inevitably occur through the absence of larger players (e.g., pension funds), who are always net holders, allowing work-a-day algos to easily goose Thanksgiving week higher each year, knowing that no sell big programs will be forthcoming.
Though quants feed off naiveté medium-term, they generally snake around within the larger secular trends, which our fearless leaders can control for long periods, but not forever. I prefer to try for a piece of each day's trend (and/or reversal) and end each day in cash, as holding overnight now requres such large stops. Smaller traders are certainly scarce, but not giving up ... er, at least not yet ...
Who gives a shit?
You should if you ever hope to retire...
The hedge fund guys have plenty, its the rest of the country that needs to save and invest somewhere (arguably NOT with someone who charges 2/20, but somewhere)
Central economic planners have f#cked up yet another economy, this time it was the criminals from Princeton and MIT (Bernanke, Yellen, Draghi, etc).
And by the way, while YOU suffer and work till you die-- the central economic planners will each enjoy pensions guaranteed and paid for by your work (you get paid second, if at all).
That is why you should care.
Well the MF's who are making the money aint doing nothing for it besides sending out bills to the working people.
They never built anything, never drove a nail, never dug a hole.
They are all baby hand flower smelling like lazy people who contribute nothing but take everything.
Their time is short lived. As oon as everyone sits down and thinks for a minute or two about how raped in the asshole they are getting by people who do nothing at all.
It continues to be relatively too superficial to think that the exponential growth of systems of legalized lies, backed by legalized violence, somehow basically changed after the central banks stepped in to make more of the public "money" supply out of nothing, when that was previously more able to be done by other banking institutions, before the financial crises of 2008.
The content on Zero Hedge routinely tends to only superficially engage in the analysis of the problems with the political economy due to there being bankster controlled governments, which situations have become worse at an exponential rate, and more and more blatantly obvious since the financial crises of 2008, after which the central banks had to up their game by taking over more and more of the roles of creating the public money supply out of nothing as debts, from the previously more distributed ways that lesser banking institutions were doing that. Many of the articles published on Zero Hedge focus upon the problems due to more and more central bank intervention. However, there generally fails to be any deeper historical and evolutionary analysis regarding how and why the original situation developed in the first place, that the international bankers could become the supreme gangsters, that were able to issue the public money supplies, which theoretically should have been under public control.
Statements made by famous North American leaders, such as previous American Presidents and Canadian Prime Ministers, would currently be mostly unintelligible to the majority of Americans and Canadians, (while, of course, the same is most true about most of the rest of world's population.)
For instance, such as from President Lincoln:
"The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of the government but it is the government's greatest creative opportunity. By adoption of the these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity."
Or from the longest serving Prime Minister of Canada, Mackenzie King:
"Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile."
Creating the money supply, as a public utility, should be government's supreme prerogative, and greatest creative opportunity, and its most conspicuous and sacred responsibility. Instead, giving away the power to make "money" out of nothing to private banks was the most insane domestic policy that a government could ever adopt! However, it is easy to explain the history of how that actually happened. It was simply the history of the application of the methods of organized crime to take control over governments, in a runaway spiral of the success of fraud enabling those who did that to constantly be able to get away with even more frauds. That started more slowly and secretly. However, it was on an exponential growth curve, so that it now is becoming blatantly obvious to even mainstream morons that the banksters have become the new royalty, who are above the law, because they effectively control the political processes.
Pretty well every significant political project for Centuries has been the implementation of the international bankers agenda, which was outlined by historian Carroll Quigley as being:
"powers of financial capitalism
had another far-reaching goal,
nothing less than to create a
world system of financial
control in private hands
able to dominate the
political system of
each country and
the economy of
the world as
a whole ..."
However, I regard it as a mistaken label to refer to that as being "financial capitalism." Rather, it is actually the triumph of organized crime, because being able to make the public "money" supply out of nothing as debts is NOT "capitalism." Rather making "money" out of nothing is actually NEGATIVE CAPITAL, which effectively destroys "capitalism," and makes more and more of a mockery out of "free markets." It was always delusional to believe that there ever was any genuine "free market capitalism." The only thing that actually happened was that the existing systems operating according to the principles and methods of organized crime grew at an exponential rate, with the most recent doubling times making that more blatantly obvious!
THIS ARTICLE GROSSLY UNDERESTIMATES THE DEGREE TO WHICH:
The so-called "world's most successful investors" were able to play in a game whose rules they thought they understood, while they never actually did. They were able to solve intellectual puzzles, and make intuitive decisions, within a frame of reference which was ALWAYS too superficial. However, that did not previously matter too much, until the anomalies grew at an exponential rate, to the point where the underlying essence of the political economy became more and more blatantly obvious.
The same basic problems apply to everyone else, including those who superficially think that the flesh and blood individual "taxpayers" still matter anymore. BANKING 101 should be money is measurement backed by murder, that developed through POLITICAL FUNDING ENFORCING FRAUDS. However, the actual ways that those frauds have become electronic, while they are backed by weapons of mass destruction, like atomic bombs, have resulted in pretty well the total population of "taxpayers" no longer being significant factors. Rather, it is barely possible to imagine the degree to which the development of inanimate energy sources, ENFORCING FRAUDS, have left the world of flesh and blood "taxpayers" behind in the dust, in ways whereby they have become relatively too trivial for the bankers' systems to care about anymore, especially since those bankers can count upon enough of those individual "taxpayers" continuing to act like incompetent political idiots, particularly because even when a few do understand somewhat better, they still have no practical ways to participate effectively within the established systems of POLITICAL FUNDING ENFORCING FRAUDS, which have also already become orders of magnitude BIGGER than the budgets of those flesh and blood "taxpayers."
All of the "money" that flesh and blood "taxpayers" use to pay for food or fuel, etc., has become insignificant inside the virtual world of electronic "money" made out of nothing, which the banksters can use to gamble with. Overall, the flesh and blood "taxpayers" no longer count in any significant way. Once upon a time, those people provided the backing to enable the systems of the public "money" made out of nothing as debts to be developed, and to grow at an overall about exponential rate. ONCE UPON A TIME, WHEN THE CURRENTLY EXISTING SYSTEMS FIRST STARTED TO GROW, IT WAS THEN MORE NECESSARY FOR THE FLESH AND BLOOD "TAXPAYERS" TO BACK THE MONETARY SYSTEMS UP BY BEING FORCED TO PAY TAXES USING THAT FORM OF "MONEY" MADE OUT OF NOTHING AS DEBTS BY PRIVATELY CONTROLLED BANKS. However, after that exponential growth of those integrated systems of legalized lies, backed by legalized violence, or of FRAUDS ENFORCED, developed for decade after decade, for more than a Century, the final results are now too mind boggling to be able to fully comprehend.
Indeed, not even the banksters, that originally made and maintained those systems, are now able to fully understand, nor continue to control, their globalized systems. Moreover, most of the "taxpayers" do not even bother to attempt to understand that, while the few that partially do then mostly continue to still collapse back to old-fashioned bullshit "solutions," rather than go forward to attempt to think through what it means to have globalized systems of electronic frauds, backed by atomic bombs. The "best" we tend to get being publicly presented are bogus "solutions" based upon people misunderstanding the world as if it was still like the old-fashioned paper frauds, backed by gunpowder weapons.
The basic and important social fact is that after "We the People" lose control over the public money supplies (while instead the public money supplies are being created out of nothing as debts, by privately controlled banks, in ways whereby those FRAUDS ARE ENFORCED by governments), that means "democracy" was already killed by those events, and along with that the "rule of law" became less and less effective, but rather, eventually the banksters became the new royalty, which were above the rule of law, due to the degree to which they had almost completely corrupted their political puppet politicians, who would be voted for by enough of the masses of muppets, in order to keep the vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS, automatically getting worse, faster ...
AFTER the MAD Money As Debt systems have been established, so that governments ENFORCE FRAUDS by privately controlled banks, personal success is achieved by taking as much advantage as possible from those systems which make that public "money" supply out of nothing as debts. I.e., "some of the money managers who made names (and billions of dollars) for themselves." That degree of personal successfulness then goes through vicious spiral feedback loops of POLITICAL FUNDING ENFORCING FRAUDS! Everything that the government does is "paid" for with "money" made out of nothing as debts. Everyone who proportionately benefits from participating inside of that runaway MADNESS then is even more able to fund the political processes, in order that the government will become even more corrupt & crazy.
PROFESSIONAL MONEY MANAGERS WERE ALWAYS OPERATING INSIDE OF SYSTEMS OF ORGANIZED LIES, OPERATING ROBBERIES. However, they used to be more able to believe in the absurdly backward bullshit social stories regarding what they used to understand about what they were doing. They were actually operating as the best available professional hypocrites, whose apparent public successes were being achieved inside systems whose actual realities they deliberately ignored and/or misunderstood as much as they possibly could.
What actually exists has more and more become the degree to which the public government of the USA is controlled by a Deep State Shadow Government, which has become dominated by the most psychotic psychopaths, because everything was based upon the (mostly covert) history of the death control systems, with the human murder systems as the most extreme forms of those, as the central core of the ways that the principles and methods of organized crime were applied through the political processes, in order to make and maintain the MAD Money As Debt systems, whereby the public "money" supplies are based upon governments ENFORCING FRAUDS by privately controlled banks, which AGAIN AND AGAIN, enable the vicious spirals of POLITICAL FUNDING to spin through and through everything that the government does, so that the excessive successfulness of controlling civilization through applying the methods of organized crime has resulted in civilization becoming runaway criminal insanities.
Everything that everybody does, including governments, operates through fundamentally fraudulent financial accounting systems. PROFESSIONAL MONEY MANAGERS USED TO BE ABLE TO MUCH MORE EASILY GET AWAY WITH DELIBERATELY IGNORING AND MISUNDERSTANDING THAT. HOWEVER, ANOMALIES HAVE BEEN ACCUMULATING FASTER AND FASTER, IN BIGGER AND BIGGER WAYS, WHICH MORE AND MORE DEMONSTRATE THE DEGREE TO WHICH PROFESSIONAL MONEY MANAGERS NEVER FULLY UNDERSTOOD WHAT WAS HAPPENING! They were racking up apparent scores inside of a rigged game, whose rigging was always there, but which became more blatantly obvious at an exponential rate. Those who benefited the most for those systems were then most able to continue to dominate the funding of the political processes, in ways which made it be politically impossible to get out of those vicious spirals, which are automatically getting worse, faster, at an exponential rate ... Not only is the social polarization increasing, driven by governments ENFORCING FRAUDS, which are symbolic robberies, but also, more importantly, that "money" made out of nothing as debts has been "paying" to strip-mine the planet's natural resources.
Not only DOES civilization operate according to the principles and methods of organized crime, but it must NECESSARILY do so! Meanwhile, by and large, the typical content on Zero Hedge tends to underestimate the degree to which THAT is so, and even more understates the degree to which any realistic resolutions to the real problems would have to admit and address the degree to which THAT is so ...
Civilization controlled by ENFORCING FRAUDS develops in ways which, as much as possible, deliberately ignore the principle of the conservation of energy, and deliberately misunderstand the concept of entropy in the most absurdly backward ways!
THE UNDERLYING PROBLEMS ARE SEVERAL ORDERS OF MAGNITUDE WORSE THAN MERELY THAT PROFESSIONAL MONEY MANAGERS ARE LESS AND LESS ABLE TO UNDERSTAND THE APPARENT ANOMALIES ACCUMULATING DUE TO POLITICAL ECONOMY ACTUALLY HAVING BEEN BASED ON THE PRINCIPLES AND METHODS OF ORGANIZED CRIME, WHICH ACTUAL FUNDAMENTALS ARE BECOMING MORE BLATANTLY OBVIOUS EVERY DAY!
I appreciate why most people like to continue to operate within their frame of reference of superficial analysis of political problems, followed by proposing superficial sets of solutions to those problems. To do deeper analysis demonstrates that not only are governments the biggest forms of organized crime, controlled by best organized gangs of criminals, but also that they must be.
MONEY AS MEASUREMENT,
BACKED UP WITH MURDER,
BECAME ELECTRONIC FRAUDS,
BACKED UP BY ATOMIC BOMBS.
Realistic resolutions to those real problems
would require admitting and addressing that
THOSE ARE THE EXISTING REAL PROBLEMS.