Big Names Are Bailing

Tyler Durden's picture

Submitted by John Rubino via DollarCollapse.com,

The list of heavy hitters who are saying bad things about this world and its financial markets - while acting aggressively on their pessimism - is growing to alarming proportions. A few examples:

Stan Druckenmiller: The bull market is exhausted; move to gold

(MineWeb) – Legendary investor Stan Druckenmiller, founder of Duquesne Capital Management LLC, told the Sohn Investment Conference in New York last week that he is bullish on gold and bearish on the stock market. Gold, he told the conference, “is our largest currency allocation.”

 

Druckenmiller recommended that investors sell their equity holdings. “The bull market is exhausting itself,” he told the conference. A major factor has been the Federal Reserve’s easy money policy, which has resulted in “reckless” corporate behavior.

 

Growing corporate debt is increasingly used for financial engineering, rather than in R&D that could lead to productivity improvements, Druckenmiller said. According to him, from 2012 to 2015, use of debt for U.S. nonfinancial firms for stock buybacks and M&A increased from $1.25 trillion to $2 trillion, while debt for R&D and office equipment grew from $1.55 trillion to only $1.8 trillion.

 

“The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins and growing indebtedness,” Druckenmiller added.

 

The slowing Chinese economy as another reason to sell equities, according to Druckenmiller. He believes that stimulus measures by China have “aggravated the overcapacity in the economy.” While he had hope two years ago that the Chinese were willing to accept the tradeoff of a slowdown to gain reform, the Chinese “have opted for another investment-focused fiscal stimulus, which may buy them some time but will exacerbate their problem. They do not need more debt and more houses.”

 

Instead, Druckenmiller has made a move to gold. “It has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates,” he said. “Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,” he added. Among his investments are holdings in the SPDR Gold Trust.

 

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A Bearish George Soros Is Trading Again

(Fox Business) – Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors view gold as a haven during times of turmoil.

 

Mr. Soros’s recent hands-on approach reflects a gloomier outlook than many. His worldview darkened over the past six months as economic and political issues in China, Europe and elsewhere have become more intractable. While the U.S. stock market has inched back toward records after troubles early this year and Chinese markets have stabilized, Mr. Soros said he remains skeptical of the Chinese economy, which is slowing.

 

The fallout from any unwinding of Chinese investments likely will have global implications, Mr. Soros said.

 

“China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency,” Mr. Soros said in an email. “China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues.”

 

Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.

 

“If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable, ” he said. Still, Mr. Soros said recent strength in the British pound is a sign that a vote to exit the EU is less likely.

 

Mr. Soros’s bearish firm bought over 19 million shares of Barrick Gold Corp. in the first quarter, according to securities filings, making it the firm’s largest stockholding at the end of the quarter. That position has gained more than $90 million since the end of the first quarter. Soros Fund Management also bought a million shares of miner Silver Wheaton Corp. in the first quarter, a position that has increased 28% so far in the second quarter.

 

The last time Mr. Soros became closely involved in his firm’s trading: 2007, when he became worried about housing and placed bearish wagers over two years that netted more than $1 billion of gains.

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If the Markets Crash Then Carl Icahn Could Win Big

(Barrons) – If financial markets crash, one of the biggest beneficiaries could be billionaire investor Carl Icahn.

An investment fund run by the 80-year-old Icahn had a net short position of 149% at the end of the first quarter. Icahn is considerably more bearish than he was at the end of 2015, when the fund’s net short position was 25%. A year ago, the fund had a net long position of 4%. It’s rare to see a fund outside a dedicated short fund with such a large bearish stance.

 

Asked about the big bearish stance, Icahn Enterprises CEO Keith Cozza said on the conference call that “Carl has been very vocal in recent weeks in the media” about his negative views. “We’re much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that.” Icahn was not on the call.

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The Sam Zell Indicator – Time to Get Out of Real Estate?

(Value Walk) – Talk about exquisite timing.

Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities.

 

But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. “Is he cashing out too early?” asked a Bloomberg headline when the deal was announced.

We all know the answer, of course.

 

Billionaire Sam Zell deftly sidestepped the coming real estate carnage. Then, with prices at generational lows a few years later, Zell bought hundreds of apartment complexes at dirt-cheap prices.

 

And today? Well, that’s the ominous part…

 

Once again, Zell is selling his real estate holdings. Last fall, he unloaded a quarter of his portfolio, buildings totaling about 23,000 rental apartments, to Starwood Capital Group for more than $5 billion.

 

Zell next sold off apartment buildings in South Florida and Denver, with complexes in Phoenix, Boston and other metro areas expected to be sold before the year is out.

 

“No one has ever accused me of not being a realist,” Zell told CNBC’s talking heads recently.

Of course for every seller there has to be a buyer, so to the extent that these guys are bearish, an equal amount of optimistic capital disagrees with their assessment. Still, between Soros, Druckenmiller, Icahn and Zell there’s about a thousand years of successful, audacious experience, so at a minimum their sudden bearishness should be a comfort to smaller players who have reached the same conclusion.

The fact that they see gold as the antidote to crashing financial markets is also reassuring for long-suffering gold bugs.

If these and the several other big names now saying scary things (see Bill Gross’s supernova comments) are right, the short stocks/long gold trade is finally about to pay off.

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Mr.Sono's picture

Wake me up when shtf.....

Cognitive Dissonance's picture

S/he who panics first panics best.

Mr.Sono's picture

Uncle Buffett seems to be calm

Cognitive Dissonance's picture

Buffet only comes out of his coffin when the sun goes down. By then the Asian markets are open and all appears well.

johngaltfla's picture

Buffett has the full faith and credit of the American taxpayer to bail him out as long as Obama is President. But market conditions are deteriorating rapidly and the big money sees it.

 

Market Trouble Ahead as the Bellwethers Break
38BWD22's picture

 

 

 

I don't know which Asian markets are open now, but I am curious to see how Shanghai does considering the huge Bitcoin price run-up.  Maybe something's up in China that ain't good...

 

And there is plenty that ain't good here either.

Cognitive Dissonance's picture

Japan is open and down 2.2%. Buffet ain't happy and is looking for a neck to bite.

personal109's picture

Buffet, the tech guys from Google FB and Microsoft, would love to see these prices of shut get burned

knukles's picture

Uncle Buffett is fixated with whether his Depends will hold the next sneeze.

Cognitive Dissonance's picture

Holding's not the problem. Leakage under the dam is.

sessinpo's picture

Warren has never been a doomsday type person so will nevver tell you the sky is falling until after the fact.  He never predicted the other market crashes though he has avoided a lot of pain because he tends to move toward defensive stocks in bad times. It will be interesting to know if Berkshire has moved any money to defensive sectors. His investment horizon is so long recessions are expected and just blips on the timeline. None of them are investing for a depression.

 

However, I think buffet will get hit hard because the other guys are making investments that would help if the us dollar gets into trouble. Buffet's holdings will all get hit if that happens because they are all in us dollars. Stacking isn't in his mentallity because to him, that isn't wealth being preserved, it is money siting there idle not doing (earning) anything.

maskone909's picture

The motor in the fan just seized from how much shit that has hit it.

Kagemusho's picture

And that ozone smell you're picking up on is the motor burning out. And that shite is highly flammable...

johngaltfla's picture

Sono, you may get your wish on June 24th after the Brexit vote.

 

Ambrose Evans-Pritchard: Why I am voting to leave the EU
Vlad the Inhaler's picture

Wake me up when the VIX hits the 20s.

johngaltfla's picture

28 would be a nice round number. 40 would be better.

Wile-E-Coyote's picture

Set the clock to the 24-6-16 BREXIT.

. . . _ _ _ . . .'s picture

One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.

-William Feather

SgtShaftoe's picture

Except when the FED or Treasury is the buyer of last resort. 

SHEEPFUKKER's picture

8 years after the fake rally began and suddenly they don't like the state of the world and/or "markets". Nice

WhackoWarner's picture

Made money on the free ride. NOW preparing to make money on the downswing.

I DO NOT TRUST these widely published opt-ins to real money.  Do not trust at all.

Think there will be a controlled rise AKA a new bull market in gold now confirmed and endorsed.....then the SLAM like none before in magnitude.

 

We shall see.  I still keep buying and buying as life affords.  But give $1000 gold again?  May not be able to buy at that price...at that SLAM. 

Who gives a flying fuck what this guy is saying now....more prudent is to ask why he is saying it now.  Him and all the other vampires coming out for real money now.

Gotta ask why now?  Some answers may be obvious but?

As Jeff Nielson pointed out recently the manipulated markets are not following legitimate fundamentals of a true bull market.

deflator's picture

 When Stan, George, Carl and Sam get their asses handed to 'em by Grand' Mal, ole Yellen,  then it will be time to get short.

Davidduke2000's picture

If people watch the market they see that companies who are bankrupt were on the verge 5 or 6 years ago but the hype kept them alive since then.

it takes a long time for reality to set in when hype is in play especially when the media hype the economy like they have been doing for the last 10 years.

The more hype the bigger the crash will be. 

nakki's picture

Is it me or does Sam Zell look about 20 years older than Buffet, Soros and Icahn.

Restorative_Ally's picture

Sam Zell looks like a hairless chimp.

buzzsaw99's picture

...the billionaire (soros) hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

 

big bearish "investments" my ass. he is naked shorting shit he doesn't own which makes him a speculator along with all the other dead gutter rats, **NOT** an investor. fuck him. at least zell is selling shit he actually owns. i am a buyer of crap stocks bitchez, you billionaires sell that shit to me, i ain't scared.

SgtShaftoe's picture

Tick Tock, here it comes...

Nemesis, the ancient greek goddess, punisher of hubris and arrogance just checked in and she's really pissed.  Got garden? 

Billy the Poet's picture

Yes, but the garden is winning! Why do I always overdo it?

umdesch4's picture

"between Soros, Druckenmiller, Icahn and Zell there’s about a thousand years of successful, audacious experience"
They have 250 years of experience each? I always kinda thought these guys were vampires, but...

Nexus789's picture

Yes, they have well and truly mastered and perfected the art of the paracite and the destroyers of value

Mini-Me's picture

Soros is a philanthropist?  You've got to be f'ing kidding me.  This reptile oozes evil.  When will he (it?) mercifully die?

Billy the Poet's picture

Guess he's not keen on coming face to face with all his fellow Jews whom he ripped off during the Holocaust.

 

KROFT: (Voiceover) And you watched lots of people get shipped off to the death camps.

 

Mr. SOROS: Right. I was 14 years old. And I would say that that's when my character was made.


KROFT: In what way?

 

Mr. SOROS: That one should think ahead. One should understand and -- and anticipate events and when -- when one is threatened. It was a tremendous threat of evil. I mean, it was a -- a very personal experience of evil.

 

KROFT: My understanding is that you went out with this protector of yours who swore that you were his adopted godson.

 

Mr. SOROS: Yes. Yes.

 

KROFT: Went out, in fact, and helped in the confiscation of property from the Jews.


Mr. SOROS: Yes. That's right. Yes.


KROFT: I mean, that's -- that sounds like an experience that would send lots of people to the psychiatric couch for many, many years. Was it difficult?

 

Mr. SOROS: Not -- not at all. Not at all. Maybe as a child you don't -- you don't see the connection. But it was -- it created no -- no problem at all.

 

KROFT: No feeling of guilt?


Mr. SOROS: No.


KROFT: For example that, 'I'm Jewish and here I am, watching these people go. I could just as easily be there. I should be there.' None of that?

 

Mr. SOROS: Well, of course I c -- I could be on the other side or I could be the one from whom the thing is being taken away. But there was no sense that I shouldn't be there, because that was -- well, actually, in a funny way, it's just like in markets -- that if I weren't there -- of course, I wasn't doing it, but somebody else would -- would -- would be taking it away anyhow. And it was the -- whether I was there or not, I was only a spectator, the property was being taken away. So the -- I had no role in taking away that property. So I had no sense of guilt.

 

 

20 December 1998 broadcast of 60 Minutes

Nobodys Home's picture

It's ok that I gave up my friends and family to personally survive and prosper. Who could have a problem with that? Those Nazis were Nasty!

MaxThrust's picture

I am not a suffering Gold Bug. I just own the stuff for very good reasons.

Snípéir_Ag_Obair's picture

Paper gold is bullshit.

Choir preaching here sure but it needs to be said.

What these guys have in common is not trying to help Johnny Coketrader out with investment advice but to use their capital and insider info to find newer and better ways to suck wealth out of the system without the embarrassment of having to do any productive work.

CHX's picture

The old masters will again be the new masters on the ohter side. But, a few stackers will surely remove a good portion of the current 5 to 1 %

Number Two's picture

One day one of these ultra bearish outlook posts will be correct.
I truly can't wait for the collapse, but realistically it is just crystal ball stuff again, and again.......

Kat Daddy's picture

Interseting Soros has no remorse in his role as "Repo Man" for the Nazis. I have a hunch that Soros is an agent for Rothchild Private Banking. Any thoughts on that?

Kat Daddy's picture

Interesting Soros has no remorse in his role as "Repo Man" for the Nazis. I have a hunch that Soros is an agent for Rothchild Private Banking. Any thoughts on that?

Kat Daddy's picture

Interesting Soros has no remorse in his role as "Repo Man" for the Nazis. I have a hunch that Soros is an agent for Rothchild Private Banking. Any thoughts on that?

south40_dreams's picture

Arab Spring turns to Anglo Summer