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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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Wed, 09/07/2011 - 16:41 | 1643539 Id fight Gandhi
Id fight Gandhi's picture

Bullish! /sarc

Wed, 09/07/2011 - 16:43 | 1643558 BaBaBouy
BaBaBouy's picture

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

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


Wed, 09/07/2011 - 16:50 | 1643584 MsCreant
MsCreant's picture

Up to her tits in trash.

Wed, 09/07/2011 - 16:57 | 1643604 Arius
Arius's picture to be the trash man....

Wed, 09/07/2011 - 18:16 | 1643830 Henry Chinaski
Henry Chinaski's picture

Pure genius! <3
Cash is trash.

Wed, 09/07/2011 - 18:19 | 1643840 SwingForce
SwingForce's picture


Wed, 09/07/2011 - 19:30 | 1644026 Thomas
Thomas's picture

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

Wed, 09/07/2011 - 16:53 | 1643591 MachoMan
MachoMan's picture

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

Wed, 09/07/2011 - 16:54 | 1643596 Id fight Gandhi
Id fight Gandhi's picture

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

Thu, 09/08/2011 - 03:39 | 1645241 Popo
Popo's picture

hmm... learn somthin every day

Wed, 09/07/2011 - 17:14 | 1643643 Hugh_Jorgan
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'

Wed, 09/07/2011 - 17:30 | 1643681 Fuh Querada
Fuh Querada's picture

Hugh Januts?

Wed, 09/07/2011 - 17:44 | 1643711 risk-reward
risk-reward's picture

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

Wed, 09/07/2011 - 18:19 | 1643842 Optimusprime
Optimusprime's picture

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

Wed, 09/07/2011 - 18:33 | 1643878 HungrySeagull
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.

Wed, 09/07/2011 - 16:41 | 1643543 BaBaBouy
BaBaBouy's picture


Wed, 09/07/2011 - 19:36 | 1644037 westboundnup
westboundnup's picture

F Timmy

Wed, 09/07/2011 - 16:42 | 1643556 101 years and c...
101 years and counting's picture

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

Wed, 09/07/2011 - 19:32 | 1644033 Thomas
Thomas's picture

"pink mist"

Wed, 09/07/2011 - 16:43 | 1643557 JW n FL
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.



Wed, 09/07/2011 - 16:48 | 1643579 Racer
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

Wed, 09/07/2011 - 17:05 | 1643622 MachoMan
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.

Wed, 09/07/2011 - 17:31 | 1643682 Use of Weapons
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.

Wed, 09/07/2011 - 17:55 | 1643738 Landrew
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?

Wed, 09/07/2011 - 18:43 | 1643909 Syrin
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?

Wed, 09/07/2011 - 18:46 | 1643922 JW n FL
JW n FL's picture

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

Wed, 09/07/2011 - 18:45 | 1643918 JW n FL
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.

Thu, 09/08/2011 - 01:38 | 1645067 StychoKiller
StychoKiller's picture

Alleviate some suffering, then:

Wed, 09/07/2011 - 16:47 | 1643572 JW n FL
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!!

Wed, 09/07/2011 - 17:18 | 1643653 ToNYC
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.....

Wed, 09/07/2011 - 16:48 | 1643573 buzzsaw99
buzzsaw99's picture

spam is better than cash imo.

Wed, 09/07/2011 - 16:52 | 1643588 kito
kito's picture

how does europe get "worked out"?

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



Wed, 09/07/2011 - 18:44 | 1643911 Syrin
Syrin's picture


Wed, 09/07/2011 - 16:54 | 1643595 bob_dabolina
bob_dabolina's picture

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

Wed, 09/07/2011 - 16:55 | 1643597 Trimmed Hedge
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....

Wed, 09/07/2011 - 16:56 | 1643601 Comay Mierda
Comay Mierda's picture

he might miss out on the market levitations

Wed, 09/07/2011 - 16:57 | 1643602 El Gato
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?

Wed, 09/07/2011 - 16:59 | 1643608 centerline
centerline's picture

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

Wed, 09/07/2011 - 17:20 | 1643659 Trimmed Hedge
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....

Wed, 09/07/2011 - 17:09 | 1643626 razorthin
razorthin's picture

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

Wed, 09/07/2011 - 17:08 | 1643628 Withdrawn Sanction
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.

Wed, 09/07/2011 - 17:15 | 1643644 El Gato
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.

Wed, 09/07/2011 - 17:50 | 1643725 NotApplicable
NotApplicable's picture

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

Wed, 09/07/2011 - 17:54 | 1643733 El Gato
El Gato's picture

I think you have pica.

Wed, 09/07/2011 - 20:01 | 1644090 centerline
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.

Wed, 09/07/2011 - 16:57 | 1643605 centerline
centerline's picture

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

Wed, 09/07/2011 - 17:00 | 1643614 Comay Mierda
Comay Mierda's picture

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

Wed, 09/07/2011 - 17:02 | 1643617 zerohandle
zerohandle's picture

How's the stuttering bull Barton Biggs doing?

Wed, 09/07/2011 - 17:04 | 1643621 gkm
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.

Wed, 09/07/2011 - 17:10 | 1643633 Logans_Run
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!


Wed, 09/07/2011 - 17:29 | 1643678 RobotTrader
RobotTrader's picture



Funny how most of these guys bailed out at the lows and are now too scared to jump back in.

They will probably end up chasing the market once it is much higher.

Wed, 09/07/2011 - 18:14 | 1643816 Scalaris
Scalaris's picture

If they have indeed bailed out at the lows, it's only because fundamentals are pointing to a lower horizon, being held at current levels via manipulative artificiality.

Wed, 09/07/2011 - 19:57 | 1644080 rocker
rocker's picture

Funny, I recall him bailing out on BAC at 9.  Where is it now ???

By the way Robo, How is your Pump on CMA working out. I recall your pump @35.00  Alert: Now @23.54   LOL

Who the hell pays you to make dumb shit stock pumps anyway. How's NFLX working out too.  Hmmmm.


Wed, 09/07/2011 - 20:33 | 1644148 WonderDawg
WonderDawg's picture

Bailed at the lows? We haven't seen the lows yet. We have a loooooooong way to go before the low is in.

Wed, 09/07/2011 - 17:31 | 1643684 Yamaha
Yamaha's picture

Scratch and sniff panties?

Wed, 09/07/2011 - 17:32 | 1643689 ZeroPoint
ZeroPoint's picture

Cash? Why not PMs? At least he'd break even instead of losing value in Bernanke's inflation game.

Wed, 09/07/2011 - 17:53 | 1643729 NotApplicable
NotApplicable's picture

Because he's not planning on holding it very long. Think medium of exchange, not store of value. Besides, if he held PMs they would cut him out of the insiders club.

Wed, 09/07/2011 - 18:46 | 1643925 Syrin
Syrin's picture

So you're saying he's banking on a transient spike of the value of the dollar?

Wed, 09/07/2011 - 17:33 | 1643690 Belarus
Belarus's picture

ZH nails it IMO: e 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?

While I think its best not to play any of the games on any exchanges at this point, I get saddened every time I hear short interest at highs. Means I know I'm gonna have to wait for the black Monday moment. It'll happen. But as the old saying goes, the market always does what it is supposed to do....just never when it supposed to do it. That couldn't be any truer with this centrally planned market. 

Throw logic out the window and stash your money out of the system. It's the only logical thing to do at this point.

Thu, 09/08/2011 - 01:44 | 1645076 StychoKiller
StychoKiller's picture



Throw logic out the window and stash your money out of the system. It's the only logical thing to do at this point.

Copy that!  Au/Ag is on the upswing again (folks in Hong Kong are buying!) -- the whipsaw continues...

Wed, 09/07/2011 - 17:38 | 1643696 trainrobbery
trainrobbery's picture

I think a rally will continue until the end of Sept due to Technical Support from the One Year SMA and QE Hope, but watch the F out for October.  That's when the 1 year SMA return dives from 10% to 5%.

Wed, 09/07/2011 - 17:57 | 1643743 Belarus
Belarus's picture

Of course this rally is going to continue. That's what bear traps do. They move up violently, make everyone nervous they're going to miss the big rally as they cling to their year 2000 DOW 11,300 hats. The market will not bottom until people are no longer worried about missing a rally. Some people seriously never learn.

Wed, 09/07/2011 - 20:37 | 1644160 WonderDawg
WonderDawg's picture

That's a bull trap, not a bear trap. The bears are shorting these rallies, not buying them. The trend changed in May, we're now in a protracted bear market that will feature vigorous rallies.


Wed, 09/07/2011 - 17:39 | 1643699 SemperFord
SemperFord'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."

So Tepper is refusing to buy figuring these are not the lows meaning he too is not expecting QE3 because obviously that would mean these are the lows. Since he is not buying I expect he is waiting on a big correction but I could be wrong.


Wed, 09/07/2011 - 17:50 | 1643723 Belarus
Belarus's picture

At least we can say aTepper isn't exactly like the other sheep who talk about Europe like it's a bad hair day/good hair day  event. I swear I wan't to slit my wrists when I hear jackass money managers say this:

"The markets declined on news that Europe's debt issues resurfaced and the banks liabilities are suffering for it. This too shall pass. Remember, Greece has been in the news for over a year without much ado and we treat any of this headline non-sense as a wonderful opportunity to buy the dips.

And that is what we've been doing in the face of uncertainty with U.S. debt downgrades and debt celing debacles and banks starting to roll over again. We admit we were early on Bank of America over fifty-percent ago. No matter. These issues amount no more than a bad hair day for us and the world. We see these events as aggressive buying opportunties. That's what you pay us for. To buy when everyone else is selling."

Isn't that how it goes? WHat a fucking game. Major news being treated like a bad hair day. Jesus, you just can't make this stuff up.

Wed, 09/07/2011 - 18:37 | 1643884 HungrySeagull
HungrySeagull's picture

I don't care if the Man is all dooley in cash. If I was him I would have some in PM's, Some in ammunition, some in food and other resources to provide for self.


Then you will see the security and freedom necessary to be agile enough to take on any challenge life may throw at you. I would be the last person to stand in the way of the Gullitone coming down to slice pallets of minted paper cash so that they can be re-minted with extra zeros.


Still paper in the form of money or in large dusty books from the shop are cheaper than a bucket of coal in a London winter night to stay warm.


People who have given themselves over to obseity, self indulgence and cash to feast on crap that will kill them someday in any number of ways made possible by a body that was destroyed by gravity of the situation.

Far better to be fit, able and strong to flee the coming Inferno that will engulf the fat rich americans who find themselves too tired to run more than a few steps.

Wed, 09/07/2011 - 18:47 | 1643931 Syrin
Syrin's picture

Amen bro.   Been preparing for years myself.

Wed, 09/07/2011 - 20:45 | 1644188 WonderDawg
WonderDawg's picture

I've been thinking about a potential business idea since I realized the shit was going to hit the fan and that very few people will be ready for it: providing security for fat rich Americans, if there are any left after the crash. I think the ones who still have money will be the ones who see it coming and won't need security, having prepared themselves. But you never know. It's certainly worth thinking about.

I've also thought there might be an opportunity to do some pre-crash preparation consulting. I've noticed some people finally starting to open their eyes to the situation, and they have no idea where to start with regards to preparation. Only problem is, it's a very small market right now and by the time it might be profitable to pursue this line of business, it might be too late to prepare.

Just brainstorming, you know. Always thinking.


Wed, 09/07/2011 - 20:15 | 1644113 blindman
blindman's picture

@"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."
poetry .

Wed, 09/07/2011 - 20:28 | 1644138 chump666
chump666's picture

Tepper makes a call like that, best to listen.  Market will NOT make new's done.  Brazil cuts rates, emerging economies are now showing bearish signals.  100% USD may rebound, as hedge funds begin to short the BRICs economies and the like.  EZ is done and dusted.  They are gone.  So yeah a cash play, 3mths or so as markets go further into the red.

Sept/Now/Dec are going to be brutal.

Wed, 09/07/2011 - 22:46 | 1644647 Anarchyteez
Anarchyteez's picture

I think is available.

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