David Tepper Is Balls To The Wall In Cash

Tyler Durden's picture

For those wondering why David Tepper will be strangely missing from CNBC for his annual pre-QE cheerleading appearance, we now have the answer. As Institutional Investor reports, the Appalloosa head man, who was long everything but mostly financials in the form of BofA and Citi last year, and managed to get out just in time before the wipe out which left his colleagues at Paulson and Co. dazed following a 34% YTD loss, has decided to invest in a strange asset: cash. "Sources say he has gone 30 percent to 40 percent in cash, which is very high for him. Some of his cash is invested in U.S. Treasuries, which have in turn risen in value in recent weeks." II clarifies: "Keep in mind that Tepper had about 30 percent in cash entering 2009, shortly before he started buying up banks such as Bank of America before anyone else had the guts to do the same and racked up triple-digit gains by the end of the year." And in a very odd development for the man known to take aggressive risks ahead of everyone else, we learn that "he will remain cautious until there is improvement in the European bank crisis. Of course, if the markets tank, you can be sure he’ll be aggressively scouring for bargains." Alas, the markets refuse to tank on generic expectations that the second they start to tank, dip buying materializes on vapor volume and expectations that the Fed will once again kick the middle class in the gonads only to make stock chasers whole. Yet if even Tepper is staying on the sidelines, just what informational advantage does the HFT momentum pursuing crowd have?

Per II:

Sources say he is not preparing to aggressively start spending this cash any time soon, except to pick up some shares of stocks he already owns on the dips.


When this year started his portfolio was primed for a blow-up, given the subsequent collapse in financials. His three largest holdings were Wells Fargo — including a big position in preferred stock — Citigroup and Bank of America. However, he began selling those stakes aggressively in the first quarter and continued to do so in the second quarter. By the end of June, his Citi stake was a small fraction of what it was at the start of the year, although it was still his third largest holding. However, in the first quarter he sold his Wells preferreds and by the end of the second quarter his common stock stake was less than half. His Bank of America position was down 60 percent.


Sources say Tepper is not eager to take an outsized risk and wind up down 25 percent even though when this happened on two previous occasions, he followed those big losses with a triple-digit gain the following year.

Tepper is not buying... Yet E-Trade babies are all over the S&P heatmap.

Remember Tepper has historically been the one who has had the most guts to buy when absolutely no one else has the stomach to tolerate it.


Tepper is not the only high profile manager to bring down risk. A well known-long short manager several weeks ago confirmed he was “de-risking,” bringing down his net exposure.


Adds an investment advisor with a large portfolio of hedge funds: “We can’t have a bottom until Europe gets worked out.”

In the meantime Europe is not only not getting 'worked out', it is getting worse daily (daily ECB deposit facility usage just hit a fresh year high at €170 billion), which according to the above explains why none of the smart money is getting in. Which begs the question: are all major intraday no volume rallies like today's (which saw ES volume at 30% below the 20 DMA), nothing but short covering sprees without any actual buying? All signs point to yes. It also means that sooner or later the shorts will stop freaking out that good news will come out of left field (it won't) and instead of the daily EOD cover they will finally grow enough confidence to keep shorts overnight. At that point, goodbye uber-hilarious CNBC line that "market wants to go higher"... because it no longer will.

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BaBaBouy's picture

Tyler, how would you say that if it were a Chick...

... Pussy To The Wall In Cash ???


MsCreant's picture

Up to her tits in trash.

Arius's picture

hahaha....love to be the trash man....

Henry Chinaski's picture

Pure genius! <3
Cash is trash.

Thomas's picture

If he was a cash-rich she then you would say "up to her snatch in scratch"

MachoMan's picture

that's going to be difficult given flying vehicles are gender neutral...

Id fight Gandhi's picture

Balls to the walls is an aviation term, full throttle. Has no phallic connotations

Popo's picture

hmm... learn somthin every day

Hugh_Jorgan's picture

"Balls To The Wall" is actually a reference to the throttle knobs (a pair) in an F-14. The pilot landing on an aircraft carrier was required to slam both "balls to the wall" of the cockpit in front of the throttle levers upon touchdown. This was the only way to guarantee that if they missed the wire they could have sufficient power to take off again and not put the bird in the drink.

Jus' sayin'

risk-reward's picture

"Balls to the wall"  was an aviation term WAY before the F-14 was even thought of, young feller'

Optimusprime's picture

I wouldn't be surprised if the phrase went all the way back to the governors on steam engines.

HungrySeagull's picture

There were times the engineer will have the throttle on the ceiling holding with both hands with feet on the forward cab wall waiting for the wheels to slip under extreme pulling situations. The power of steam is such elementry. You either get it or fail.

The Governors on the old Case Farm tractors were like a pair of balls until they are running at the top. Even the old Dynamos at the steam house for power or steam power had to be kept in balance.


Today it's all computerized. A computer has to tell you if your balls are fucked or not.

101 years and counting's picture

setting up the mother of all crashes.  make black monday look like pink monday.

JW n FL's picture



“We can’t have a bottom until Europe gets worked out.”

how much over time will the algo's have to put in to keep the market from dropping to 6,000 now that the smart money is parked along with all the other non-compliant types?

on too more upbeat news!

A former vice president for Citigroup pleaded guilty Tuesday to embezzling more than $22 million from the company and funneling the money to his personal bank account.





Racer's picture

And I bet he got a LOT of money as a salary and then wanted to steal even more?

Yes once a bankster always a bankster, greed personified

MachoMan's picture

LOL...  he probably made enough to keep his nose to the grindstone for ~10 years (I'm being generous) and retire...  fucking idiot. 

I guess one's perspective changes when one simply expects to have everything handed to him...  if you're going to steal, then you'd better be incredibly sophisticated (think mortgage securitization) or incredibly connected (think the people sitting in the room when the last decision was made to push through TARP)...  this dolt appears to be neither.

Whatever, playing golf in the polo prison might be the safest place to be during the coming collapse.  Maybe the sorority boys will make him bob for bananas in the toilet or something...  one can hope.

Use of Weapons's picture

U.S. Attorney Loretta Lynch said in a statement, "The defendant violated his employer's trust and stole a stunning amount of money over an extended period of time to finance his personal lifestyle."




Who guards the guardians? Why, their lawyers.

Landrew's picture

You're the guy who thinks we should not repay the social security trust fund debt of 2.6 trillion? Do you work for the Cock Brothers?

Syrin's picture

Exactly how do you propose we do that?


Perhaps you fail to grasp that we are bankrupt as a nation?


Why do you support elderly welfare anyway?   You loves your Ponzi schemes don't you, douche bagger?

JW n FL's picture

maybe if everyone paid thier taxes.. instead of the middle paying everyone elses taxes??

JW n FL's picture

??? me?

are you saying that you think I am in favor of screwing over old people in favor of the bankers?

are you one of those people that just can NOT! Grasp Sarcasm?

here is me in a nut shell..

I wanna see the Lobby Whores, The Lobbists and their owners ALL Swinging from the end of a rope.. or thier heads in a basket.. or whatever makes my fellow Americans Happy!

I am going to collect taxes from everyone.. not just the middle! so I will be able to up Social Security.. so that it keeps up with the REAL cost of living!

thats what I am all about!

and feeding hungry children.

JW n FL's picture



Tepper is in cash protecction mode.. income protection, wealth protection and or what it really is! Vulture in Waiting Mode! LOL!!

ToNYC's picture


So I'll bet Vultures eat fresher dead meat than your longer dead meat diet? Creative destruction magnets, a thing of beauty.

One 'L' in Appaloosa; or hold the Appall.....

buzzsaw99's picture

spam is better than cash imo.

kito's picture

how does europe get "worked out"?

and why is it that tepper doesnt mention the united states getting "worked out"?



bob_dabolina's picture

If the euro thing gets worked out is he buying more PFE?

Trimmed Hedge's picture

E*Trade babies have all pooped their diapers and went home a long time ago, Taylor.

But, you knew that, already....

Comay Mierda's picture

he might miss out on the market levitations

El Gato's picture

I don't understand why oft-repeated maxim about the transfer of wealth from the middle class to the upper class. The middle class has no cash -- 50% of Americans can't come up with $2K in a pinch. What exactly is being transferred from them?

centerline's picture

Purchasing power - been shopping for food lately? How about the trend in healthcare costs, fuel, insurance, etc.?

Trimmed Hedge's picture

My personal chef does all the grocery shopping.

And my accountant handles all the bills.


No idea what you're speaking of....

razorthin's picture

negative wealth keeps getting more negative (debt).  that's how they elites steal.

Withdrawn Sanction's picture

Youre confusing wealth and cash.  The MC's wealth is being siphoned off in numerous ways including house price depreciation, deflation of pension, annuity, and savings principals, and cratering of 401-K values to name a few.  This occurs at the same time ordinary cost of living expenses rise.  The middle class (or what's left of it) is in a vice and it's starting to bind...hard.

El Gato's picture

Cratering of 401Ks is the opposite of what's happening, savings are virtually non-existent, and house price depreciation is a moot point for all those homeowners who will not pay anyway. And who has a pension these days?

I know food prices are going up, but it's somewhat substition to cheaper foods can help offset it.

NotApplicable's picture

So, you're saying that eating dog food instead of steak isn't a transfer of wealth?

centerline's picture

Good point on the distinction between wealth and cash.  Both ends of the candle that burn towards the center under the curreny scheme.  Its what keeps the hamsters on the wheel right up to the last minute.

centerline's picture

Any word yet on whether any EU banks picked up the big red batphone for overnight funds?

Comay Mierda's picture

why doesnt this clown just buy a shit load of puts on the banks?

zerohandle's picture

How's the stuttering bull Barton Biggs doing?

gkm's picture

Just as I said after his appearance - he was selling.  Now there is no way to know what he's really doing.  I would say he might be putting out some shorts based on the fact that "sources" say he's not doing much except buying some already held.  The guy doesn't make money by telling the truth so why would he.

Logans_Run's picture

"Alas, the markets refuse to tank on generic expectations that the second market start to tank, dip buying materializes on vapor volume and expectations that the Fed will once again kick the middle class in the gonads only to make stock chasers whole."

I was wondering why I was so sore when I awakened each morning. Thanks for clarifying TD!