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Here Is "Gate" #2: $1.3 Billion Hedge Fund Founded By Ex-Bear Stearns Traders, Just Suspended Redemptions
Yesterday, in the aftermath of the shocking news that the Third Avenue Focused Credit Fund was liquidating and had gated investors due to its "illiquid" portfolio, we had one simple prediction:
"What this means is that now that the dreaded "gates" are back, investors in all other junk bond-focused hedge funds, fearing they too will be gated, will rush to pull what funds they can and submit redemption requests, in the process potentially unleashing a liquidity - and liquidation - scramble within the hedge fund community, which will first impact bonds and then, if the liquidity demands continue, equities as well."
We had to wait just over 24 hours to be proven correct, because moments ago Dow Jones reported that the $1.3 billion Manhattan-based Stone Lion Capital, a distress-focused hedge fund, has just suspended redemptions after "substantial requests."
The WSJ adds:
It is the latest example of the sudden crunch facing traders across Wall Street looking to sell beaten-down positions.
Stone Lion manages around $1.3 billion and specializes in distressed debt and other risky investments that have plunged in value lately.
It received “substantial redemption requests” in its oldest hedge fund, the $400 million Stone Lion Portfolio LP, precipitating the decision, the firm said.
At least the had a pretty logo:
The management team via CapIQ:
And here is the punchline:
- Alan Jay Mintz, CPA, a co-founder of Stone Lion Capital was Co-Head of the Distressed Debt and High Yield trading group at Bear Stearns
- Gregory Augustine Hanley, a co-founder of Stone Lion Capital was Co-Head of the Distressed Debt and High Yield trading group at Bear Stearns
One really couldn't make this up.
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I'll say it again: negative feedback loops are a bitch.
Buckle up.
Hedging funds are now become like disengruntled host radio program: "No, do not take requests!"
Dammit! I was hoping to see one of my old buds listed on the personnel roster.
How do I hedge my investment in this type of Hedge-Fund
I just want to have a nice safe conservative portfolio
Could these assholes at least have waited until AFTER the fed picked up the smoking gun?
NEW YORK, June 10, 2008 /PRNewswire/ -- Tudor Investment Corporation today announced that Gregory Hanley and Alan Mintz will join Tudor to establish a new investment management business focused on credit-related strategies. Hanley and Mintz join Tudor from Bear, Stearns & Co., where they served as Senior Managing Directors and co-heads of the Distressed Debt Group and Mr. Hanley served as co-head of the High Yield Trading Group.
Also joining as senior members of the new credit-related team will be Mitchell Sussman, Eric Friel and Howard Norowitz.
Coming to a Money Market Fund near you. Along with “break the buck” then NIRP.
Great time to put some Silver in your portfolio.
And represented by the law offices of Dewey, Cheatem & Howe.
Bear market signals flashing red!
http://www.planbeconomics.com/2015/12/6-signals-for-impending-bear-marke...
"Vaporized".
WAIT A MINUTE!
What do you mean "coming to a money market near you"
Seriously question gentlemen, how exactly does this trickle into a general money market. Say a 401k or Ira, T Rowe with no brick and Mortor....
Poof! Wheres the money market?
Good catch. So it's not their first rodeo.
The Amish don't miss nufin!
Mattress?
NB: News of fund problems and Wall Street bankruptcies will not be read on HuffPo or heard on NPR.
It's positive feedback that is a bitch. A process loop where small perturbations result in ever greater responses is an example of Positive Feedback.
Absolutely correct; I transposed.
Thanks.
negative feed back loop
a self balancing system that relies on feed back to balance it's self is getting noise instead of needed feedback, noise leads to even more noise and less signal
Props, positive feedback loop with negative impulse input --> unbounded output :)
Funny they never seem to see the end coming as it looms so large?
Escalator up, elevator down.
Stone Lion!(?) !
Isn't that a ganja strain??
For you bud enthusiast - think of Stone Lion for your next bag of kush. Smoking that Stone Lion prospectus - that sh@#t be chronic.
For *cough cough* research purposes only *cough cough cough*
https://www.leafly.com/
No, you're thinking of Pineapple Express Capital Partners whom specialize in buying distressed debt
Who shouted fire?
That's pretty much what I was thinking too. A relatively small fund, but, still probably smart connected types. That the fund is getting "substantial redemption requests", screams to me that somebody got a heads-up to bolt for the exits. Next week could get really interesting.
Retired guy goes into broker, asks for safe interest income investment and comes out with bond fund papers. Happens all the time. Nobody explains small exit problem with bonds. Later, like now, grandpa sees the fund's share price is way down. He calls the broker to sell. A crime has been committed in slow motion. No banksters go to jail. Very sad. Grandpa stops buying steak, investigates dog food as alternative.
1) I hope you aren't referring to yourself when it comes to dietary matters.
2) Why oh why do people think it's a good idea to trust their wallet to some smarmy 20-something that they just met?
I'd be cautious around the 60- and 70-somethings, as they've had time to fine-tune their techniques and prepare strategies for offloading blame onto subordinates who don't keep paper trails.
"Aaaand.. It's gone."
I think you mean positive feedback loop which leads to oscilation and chaotic states.
Correct; I transposed.
Thanks.
When you name your HedgeFund after a Library Doorstop your Trading acumen is already brought into question.
It's not that we don't like you, it's that starting your post with an italic prevents an up/downvote.
I did not know that. Thanks.
"Now yous can't leave'" - Sonny LoSpecchio
Announced after the close on a Friday, so they are hoping it gets buried by Monday morning. Let's see if something else blows up this weekend. There have to be others out there that took a beating this week.
I know, when Monday comes around look out it will be bad really bad.
I think you mean, positive feedback loops. Negative feedback loops are stabilizing.
Positive feedback is worse. And what we'll soon be seeing is a classic example of it in the form of a market panic.
It's kind of late on a Friday for something like that.
<wipes keyboard>
^^^ haha! Ya, a Mortimer moment. Turn them back on!
The Federal Reserve's sole role is enriching Wall Street Banking Gangsters by stealing from the American People while the political parasites look the other way—because they are bribed to do so—and pretend not to notice.
...until it's not
Perfect analysis, kudos.
Jump you fuckers!
Icahn looks smart. Again.
WHY O' WHY HAVE I ONLY ACCUMULATED GOLD AND SILVER OUTSIDE OF THE FRAUDULENT FINANCIAL AND DEBT BASED CURRENCY SYSTEM????
PLEASE TELL ME - WHY!!!!!!!!!!!!!!!!!!!!
Because you hate America???
"Because you hate what Ameridumb has become???"
there u go...if ur gonna represent - represent proper like...
Ehhhhh, because you hate us for our freedom?
'Cause you live next to Paul Krugman ?
I just called them to wish them a good weekend.
Not exactly heavyweights in the industry. They suspended in a $400MM fund. They manage $1.3B. 400MM is like peasant money. Chances are they have like two guys running that whole fund.
Realize that Wall Street nearly imploded when LTCM lost "only" a couple billion bernanke bux also.
There has been a lot of asset inflation since LTCM.
If you noticed, it's accelerating
Until now................................
LTCM borrowed something like a 100B and had a trillion dollars of derivative exposure. Nobody lends like that anymore.
LTCM also shorted tons of gold, then Soviet bonds collapsed. Nothing like having Nobel Prize winners on your staff.
Perhaps Deutsche Bank still does......
http://notquant.com/is-deutsche-bank-the-next-lehman/
http://www.zerohedge.com/news/2013-06-15/deutsche-bank-horribly-undercap...
http://www.zerohedge.com/news/2014-07-22/ny-fed-slams-deutsche-bank-and-...
One may look at this situation differently when it's one's turn to have one's redemption "privilege" suspended.
One might pick up a pitchfork
A riot is an ungly thing... undt, I tink, that it is chust about time ve had vun.
Easy Rhino this is Varible, the target is lit..... Coming Down.... Circular error of probability zero, high order of detonation....HAVE A NICE DAY
Great movie.
those assholes from the "LET US LOSE YOUR MONEY FAST" segment on CNBS r freaking the fuck out...
hilarious...............
They will be euhanized on the New Year's Eve broadcast by clowns dressed in purple rags. CNBC will cease broadcasting to it's 127 loyal viewers.
The end of an era
I would be willing to go to Times Sq to see that!
Watching them, too.
Santelli is the only voice of reason. All the others are just a disgrace.
I just can't wait to see what they say when this sucker goes down.
http://investment-advisors.credio.com/l/38855/Stone-Lion-Capital-Partner...
Stoned Lie'n
Aaaaaaanndddd....IT'S GONE!!
Exactly what I was thinking...
Escalator up - elevator down.
There is never just one cockroach... Or 2, or 20... You get the picture.
Is dis du big un maw?
Another one bites the dust......another one......
It's like extracting money from a stone Lion.
How does this compare to that moment in the movie Margin Call,
when that guy asks "What time is it?", and after hearing the time, then says:
"Fuck Me."
Sum Ting Wi Lee Wong
Wei Tu Lo
I kinda started to wonder if we'll make it to Christmas before impact
It's a 3 day bank holiday
I can't explain the feeling I have but I really want to see some of these fuckers get their asses so badly fucked they're as wide as the Brooklyn Bridge is long. Fuck em!
usa equities will eventually be gated too ala china.
The way is shut. It was made by those who are dead. And the dead keep it. [/King of the Dead, Lord of the Rings]
BTFD'rs better get some ZZZZquil for sunday night
Alan Mintz? I don't see Jack Campbell and Peter Lassiter on that list.
Quick, do it now!!!! Use credit cards and direct pay to load up on the three Bs. Some more PMs would be a good idea to...let's just don't all go to the bank and withdraw cash at the same timber they'll know we're on to them.
Bitches, Bullion and bullets?
1 of 3 same as the three Bs I was talking about but I thought about your three and I have updated my list.
Investors are so stupid. Biggest ponzy scheme in the history of finance and who could have seen it coming?
I went to grammar school with Greg Hanley. He pissed on my leg in the playground. I told him I would get revenge. However we parted ways and I always held a grudge. Now I feel vindicated.
OH HAPPY DAY...WHAT A FUCKING HAPPY DAY!!!
You're broke now Greggie boy. Stick that in your sneaker, fucker...HA HA HA HA HA
J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Pre-2008 Curve leads economy.
Post-2008 Economy leads curve. Down.
Well, Cramer says , fuck , I have CNBC on?, ok, Im drunk wayyyy to early, even for friday nite
reminds me of the stratton oakmont logo... so trustworthy!
See? That was nothing. But that's how it always begins. Very small.
Egg Shen - Big Trouble in Little China
Soon we will find out that the managers of SL loaded up the fund with securities that were shorted by a crony.
Have no fear. Santa Claus rally on the way (thank you PPT!).
You mean Cramer lied to me about buy and hold?......Wait till those market circuit breakers kick in and force you to catch that falling knife......
Guess I`ll be watching the crook who stole my money on an episode of American Greed......
Nahh, but he won't do it.
"Do what I say! 'Cause I ain't gonna buy and hold."
Shouldn't they be in prison?
Distressed bond investors in distress.
Anyway to follow how these folks are doing?
Don’t Give Your Money to Clinton Son-in-Law Marc MezvinskyThe Wall Street Journal reports that Mezvinsky’s boutique hedge fund, Eaglevale Partners LP, reported significant losses last year, and has struggled to turn a profit for investors since its inception in 2012.
[...]
Prominent investors include Lloyd Blankfein, chairman and CEO of Goldman Sachs, where Mezvinsky used to work. Blankfein has contributed generously to Democrats over the years, and has hosted fundraisers for Hillary Clinton.
Marc Lasry, the billionaire hedge fund manager who co-owns the Milwaukee Bucks, is also an investor. Lasry, who used to employ Chelsea Clinton at his $13.3 billion hedge fund, Avenue Capital Group, is a longtime Democratic donor and figures to be one of Hillary Clinton’s top fundraisers in 2016. Lasry had been President Obama’s choice to serve as U.S. ambassador to France, but was forced to withdraw his name over his ties to an alleged poker ring run by the Russian mob.
http://freebeacon.com/blog/dont-give-your-money-to-clinton-son-in-law-ma...
Very inbred. Next? Crackers for the Frackers.
One year ago (minus 5 days) Stone Lion saw a great opportunity to invest in PR...
Junque is Junque, no matter how you spill it.
http://www.caribbeanbusiness.pr/prnt_ed/hedge-fund-raises-$500-million-to-invest-in-puerto-rico-10736.html
Buy SJB(proShares Short High Yield) before the rest of the flood gates open.
<dup comment>
This algo stuff is getting out of hand. This hedge fund has a Borg on salary.
Excellent!
"We used to work at Bear Stearns, you can trust us with your money..."
We have the Jim Cramer seal of approval
So, when this whole 1.3 billion fund takes a steaming dump that it is brewing up, they're all going to .... start another hedge fund, no? Who gives these crooks their money?
That's simple! The muppets will again entrust crook Corzine (didn't I hear he has another fund to lead?) Bottom Line: When will the Sheeple ever ever learn??
You nasty little man writing this. It's nearly Christmas and we don't need THESE news. In fact, ain't news at all, we know what to expect of these. Must be something in the water or air there. The only thing we wonder about is how long the 1% can sustain the losses, and then where would we be. We're waiting for the trickle!!!
Abandon hope, all ye who entered here.
Sitting in the morning sun
I'll be sitting when the evening comes
Watching the ships roll in
And I watch 'em roll away again
Sitting on the dock of the bay
Watching the tide roll away
I'm just sitting on the dock of the bay
Wasting time
Thank you Otis
LOL, Ships won't even be rolling in with the bulk freight rates collapsing.
Monday, December 14, 2015
Associated Press News Bulletin
People were waking up to get ready for work, turning on their TV sets, and watching in horror as world markets were in meltdown mode.
A literal Sea Of Red was witnessed on screens in all 57 states as images of trading floors, screaming brokers and bond funds all were wringing their hands and staring in disbelief at the carnage in stocks, bonds, 401ks, pensions and hedge funds.
Cigarette smoke clouded the darkened rooms, computer screens illuminating the men who were seen speaking in hushed tones while others jumped to their deaths after witnessing everything they owned disintegrate into a pile of worthless sand.
AP Reporter Pajama Boy
(Pajama boy wrote for HUFFPO and WAPO and edited 'BETA' magazine)
With a nail gun you can checkout anytime you like but can never leave.
Mother Hen to chicks, Mother Hen to chicks - weapons are free. I repeat, weapons are free. Splash some banksters and hedge scum managers. Last one back on the deck buys the first round.
The small red fox jumped over the chicken mosque.
Repeat: The Eagle has landed. Falcon, this is Snowman Go Go Go
Green light, red light, red light, yellow light, red light, green light
Because strait is the gate, and narrow is the way, which leadeth unto life, and few there be that find it.