Here Is Who Is Getting Creamed On Today's Hewlett Packard Bloodbath... And Why It Just Is Not Paulson's Year

Tyler Durden's picture

A quick look at the top 40 holders of HPQ stock, which has tumbled 20% today (as ZH predicted yesterday), shows that i) it will be a very unpleasant weekend for a lot of people but ii) none more so than Paulson & Co, which was already down 33% or something YTD in Advantage Plus and which is eating another $141 million loss today alone. If there was any doubt that the once legendary hedge fund has become the punching bag of 2011, this should eliminate it all. Which is not to say we feel bad for JP: with billions in his checking account, we doubt he will lose much sleep over what is increasingly appearing like an inevitable unwind of the fund. We do feel bad however for holders of paper gold, as the day of the gold share class unwind draws nearer by the day. And with 31.5 million GLD shares for a total of $5.5 billion, the unwind will be, for lack of a better word, epic. The only question is when.

PS. Adding insult to injury, Moody's just revised its outlook on HPW to negative.

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Mongo's picture

Let them have it!

Herd Redirection Committee's picture

Check out the latest from the Capital Research Institute "Debt Crisis? Or Currency Crisis?":

"The realization that developed economies are not recovering has in turn been compounded with the fear that governments will rein in their spending, further accelerating the economic decline.  Add Options Expiration Week, High Frequency Trading, and tremendous leverage to the mix and equities markets experience extreme volatility like yesterday (August 18th, 2011).

But fundamentally the same game is still being played.  Japan, Europe and the US all plan to continue devaluing their currencies.  The beauty is this.  Their exchange rates relative to each other will stay fairly close to what they currently are, which facilitates trade, and keeps the average person oblivious to what is happening.  Until the cost of groceries and utilities go up, any way!  Purchasing power will decrease for all who have stagnant wages (almost everyone).  And to top it all off, the respective countries can all blame each other for devaluing their currency.  “You did it first.  We had no choice!”

Ultimately, more stimulus will be announced, but not until new names for it have been propagandized.

Gold will probably take a breather and could even correct 10% over the coming weeks, but gold mining stocks have barely moved as the barbarous relic surged..."

BaBaBouy's picture



""We do feel bad however for holders of paper gold, as the day of the gold share class unwind draws nearer by the day. And with 31.5 million GLD shares for a total of $5.5 billion, the unwind will be, for lack of a better word, epic. The only question is when.""


You do mean the unwind of GLD Etf, as in they don't actually have the GOLD Bars in the Safe, Right ???

{READ: Chavez "Knows Stuff" and wants his physical Now}


AND Not actual physical Goldey, which IMO is probably going well north of $10K (Conservative est) ...

Spitzer's picture

Funny how gold was supposed to fall when QE ended, then it was supposed to fall when the DOW crashed, now its supposed to fall when Pauson starts dumping.

Good buy signal for gold.

Oh yeah, and it was supposed to fall when the IMF sold to India.

BaBaBouy's picture


Yeah LOL ...


Aren't Guys like Gaartman are prodding for reasons to save their Buttocks ???

Libertarians for Prosperity's picture

According to regulatory filings in May, J Paulson purchased 25M shares of HPQ for ~$1B, or ~$40/share.

Today, it closed at $23.60.  That's almost a 500M loss in just a few months.

This guy needs to get back to what he's good at: conspiring with Goldman Sachs to totally fuck over pensions and municipalities with CDO's that are designed to blow up.



Sophist Economicus's picture

A little OT:   IB just sent out notice that it will be raising margins on GOLD derivatives and said exchnges will be raising margin requirements soon....

BaBaBouy's picture


It's unbelievable, this is the LAST BULLET the Cabal has to try stopping the Gold rocket...


Every time GOLD makes a big overnight move, its all they can resort to to save the SHORT's Asses.


I  was fully expecting though, Butt we are moving fast to a physical market, free of the PAPER GOLD

NYC Bullshit Game ...

He_Who Carried The Sun's picture

... and then they will introduce QE3 and the physical will go to 1200 again in just two days... LoL

SheepDog-One's picture

Hell Spitzer, I remember when gold was declared a massive ridiculous bubble at $500!

BaBaBouy's picture


RE GOLD Move ...


SILVER nicely confirming the GOLD action. Was waiting for this...


Crapex Commi shorts must be very worried right now.

Whatta's picture

I just bought some at-the-money GLD Sept puts....that means one thing...

Gold is got no where to go but UP UP UP...

imsaul0968's picture

Everybody, GLD has the gold in vaults and its not leant out, stop with the conspiracy theories, thats soooo yesterday...BUT, I think CEF which is 50% gold bullion and 50% silver are better ways to go than GLD and better performing over last few years.  There will be a time when institutions demand physical and thats the time when we get to see who leant it out and cant get it back and who's sitting pretty.  Why wouldnt a bunch of hegde funds all demand physical at same time, CME is at very low inventory now, wouldnt take much to create a supply panic and GLD,SLV and everyone will all go up on the news and then at some point the selling will happen in those that dont actually hold the metal...Ill take the miners who everyone has left for dead, they will have some serious catch up to do soon enough

cowdiddly's picture


narapoiddyslexia's picture

It would be nice to see some proof supporting the allegations that GLD has no gold in the vaults.

Just posting allegations like this detracts the ZH site's credibility.

Links, anyone?

SheepDog-One's picture

Can you provide some links to any evidence they do have the gold?

NotApplicable's picture

The proof is in the prospectus. That there may be some physical there today, does not mean there will be tomorrow. (see my post below)

If it can be stuffed full of paper, you can bet it will be, otherwise they wouldn't have bothered.

narapoiddyslexia's picture

This argument ["otherwise they wouldn't have bothered"] is the only one that has made some sense to me, in this whole thread. I accept that it is a good point. btw, whatever happened to journalism?


narapoiddyslexia's picture

Another delayed realization. ZH is the new journalism. 

Missiondweller's picture

Let's be clear: GLD does not have gold in its own vault. It has gold with JPM who reportedly has enough gold to return to Chavez but maybe not any more.

Its a game of musical shares with the gold in vaults and the music may be stopping. So who gets the actual gold?

narapoiddyslexia's picture

I'm not sure that's true. HSBC holds the gold. Not JPM. Morningstar analysts who have investigated the matter report as follows [source behind a paywall]:

"Despite rumors from conspiracy theorists, this fund actually holds physical gold in vaults to back up its shares. As the time of this writing, [5/27/2011] more than 40.2 million ounces of gold that are verifiably allocated to this fund's shareholders are stored securely under the streets of London. No additional shares of this fund can be produced by cash or derivatives contracts. Authorized Participants are issued shares in exchange for physical quantities of gold. The only violation to this process is a three-day waiting period from the time of share creation until the physical gold is delivered."

Any contrary evidence out there? Anyone? Is this wrong? Dated? Propaganda? Why would Morningstar lie? Has something changed since May 27th? What? What?

Talk to me.

[edit: The Morningstar analyst is named Abraham Bailin, and the quote above is from his report on GLD, easily found on Morningstar's website if you register.]

Common_Cents22's picture

well, just buy some GLD and try to redeem.   LOL, you can't.  Read the fine print.

Hephasteus's picture

Well they are certain they can get the gold if the need to redeem. Which is only liquidation by the stock market and delisting which is part of the fraud. So of course the analyst that's part of the consipiracy sounds really convincing.

narapoiddyslexia's picture

I believe you can redeem if you buy sufficient shares, but the whole point of the ETF is to provide exposure to gold for shareholders who do not want to own physical gold. 

That's exactly the purpose. I'll repeat it. Not to own physical gold.

You need to poke some holes in your tin hats, let some light in.

Hephasteus's picture

It's not a question of tin foil hats. It's a question of china raiding gld of every ounce it can get it's hands on every time it get's it's hands on any. It's not about tin foil hats. It's about being a bag holder in a redeemer world.

Harlequin001's picture

Specifically no you can't. The prospectus is very specific; only Authorised Participants can buy or redeem baskets. You can accumulate all the shares you want but you can't redeem a basket's worth even if you chose to. This gold is for the banks, and you'll be spat out when it suits their purpose.

Young Buckethead's picture

Harvey keeps track of this better than anyone, probably as close as anyone is going to get:

We know that the GLD prospectus is designed to fuck the investor the minute the SHTF.

SheepDog-One's picture

Im not buying for a second any of them have vaults stuffed full of TONS of gold...totaly ridiculous and all part of the Ponzi. 'I'll happily sell you some gold and give you this paper for now...but dont worry we have the actual gold locked safely away, and plenty of it, trust us!'...YEA no thanks, I'll take my gold purchases now and you bankers can sell your paper to the suckers.

narapoiddyslexia's picture

That's your perogative. But the idea that State Street and HSBC, togther with the SPDR GLD, and in effect the World Gold Council, are in cahoots to perpetrate a massive fraud is, without evidence, somewhat tiresome.

You ask for evidence the gold is there, but in truth the burden of proof lies with you.

Buckaroo Banzai's picture

No, actually, you are precisely 100% wrong. The burden of proof is on those who represent that they hold the gold, to prove that they actually HAVE it. That is how investing works. As an outsider or bystander, I don't have to "prove" anything in order to choose NOT to invest with those people.

Morningstar may or may not be a reliable source of that proof. Assuming the guy isn't lying about seeing a basement full of bars, how did he know they weren't just lead ingots spray painted with Krylon? Did he assay the bars? Did he weigh any of the bars?

I don't give a shit what anybody says-- I don't trust those guys for a minute, and simply don't believe anything they, or anyone else, says about what they hold.

Unless you have personal, first-hand experience, anything else is just guesswork.

Libertarians for Prosperity's picture

I agree. 

Not only am I a libertarian, I'm a Christian fundamentalist.  I don't care how many fossils you show me, I simply refuse to believe the Earth is greater than 6,000 years old. I don't give a shit what anybody says, I don't trust those scientists for a minute, and simply don't believe anything they, or anyone else, says about cosmology and astrophysics. 

Unless you have personal, first-hand experience (talked to God),     anything else is just guesswork.

Same goes for SLV.  It's all a lie.  There is NO silver in those vaults, and I don't care what anyone says...  I will never, ever, ever change my opinion. 

The opposite is true for PSLV.  Not only do they have ALL the silver they claim, they actually have MORE.  This is just my personal belief, and I don't need to justify it to anyone.        

StychoKiller's picture

Good, my horse was in the market for some straw(man!)

narapoiddyslexia's picture

God obviously put those fossils there to test our faith.

narapoiddyslexia's picture

Moreover, you need to look at the other names on that list, in the diary above. Based on that alone, the probability that GLD is going to crash, or "unwind", is acceptably small. If it happens, I'll pay the tuition for the lesson but I'm not losing any sleep.

Young Buckethead's picture

All these newbs just don't get it. From ZeroHedge 4/7/2010:

And, from

The first item was Morgan Stanley's bullion-fraud: where it only pretended to buy-and-store bullion for its own clients. Regular readers will already be familiar with this news, as I covered it in July of 2009 (see “Morgan Stanley pay damages for Precious Metals Fraud”). The other blockbuster news that ties in to this issue was the careless revelation by Jeffrey Christian of the CPM Group – yet another Goldman Sachs Stooge actively involved in the banksters' nefarious deeds in the precious metals market.

During the recent CFTC hearings, Christian blurted out that “the gold market was a hundred times the size” of the actual amount of “physical” bullion held by the (so-called) “bullion banks”. While I have long alleged that the banksters didn't have sufficient bullion to cover their gigantic “short” positions and their equally gigantic “custodian agreements” with the fraudulent, “bullion-ETF's” (most notably, GLD and SLV), the revelation that the banksters had leveraged their real bullion by (at least) 100:1 was a shock to everyone.

This sets the stage for the “King” interview with Harvey and Lenny Organ (father and son) along with Adrian Douglas – one of GATA's valiant directors. As a last detail, the Bank of Nova Scotia operates the primary bullion-storage vault for all of Canada and is the Canadian bank which is most active in the infamous “gold-trading” of the anti-gold banking cabal, which is rapidly losing its “grip” on this market, after a quarter century of ruthless price-fixing.

Lenny Organ had been repeatedly requesting access to the Bank of Nova Scotia's bullion vault, in order to verify his own, personal holdings – which he had chosen to buy and store through that bank. He finally obtained his invitation in September 2008, just before the most-massive spike in bullion-buying in decades (after the Wall Street-induced “crash” of 2008).

What he saw inside that vault was that (especially for silver) the “cupboards were bare”. The entire “working supply” of silver for the BNS was sixty 1,000 oz bars, with each of those bars equaling roughly $15,000 of silver apiece (at 2008 prices). In other words, the total amount of bullion held by the Bank of Nova Scotia (including what it was willing/able to sell) was worth less than $1 million.

Upon seeing that the bank didn't even hold their own bullion (which they paying “storage fees” for), the Organs demanded that BNS produce (and then store) the bullion which it already claimed to hold for the Organs. Incredibly, the BNS demanded additional storage fees and still required more than six weeks to make good on their contractual obligations.

Apart from the enormous time-lag for one of the world's largest bullion-banks to produce the bullion it was already contractually obligated to store, it appears that the banksters have two sets of storage rates for its “bullion customers”. There is the “regular” rate it charges for chumps – i.e. those clients for whom (like Morgan Stanley) the Bank of Nova Scotia only pretended to buy and hold bullion, and a second fee structure for those clients who insisted that the bank buy-and-hold real bullion on their behalf.

This is a close parallel to the bullion-ETF market, where investors can invest in the fraud-funds: GLD and SLV, and pay near-zero fees to have these funds store paper on behalf of its unit-holders; or, you can pay much higher management fees to funds like the “Central Funds” group of Canadian bullion-ETF's, or the new, physical gold “trust” from Sprott Asset Management – and know that you're holding real bullion. However, I plan on saying much more about that market in an upcoming commentary.

The gold-holdings of the BNS were not quite as sparse. There was roughly 100,000 ounces of gold storage, with a market value (at that time) of less than $100 million. However, as Adrian Douglas quickly pointed out in the interview, the Royal Canadian Mint had (by itself) sold more than a billion dollars of gold, in 2008 alone. Thus, when Canada's largest “bullion bank” has a cumulative total of bullion (acquired over years and decades) that amounts to much less than 10% of Canadian demand for one year, you don't have to be Sherlock Holmes to conclude we are witnessing yet more bankster bullion-fraud.

The obvious advice to any and all Canadians who think that the BNS is storing bullion on their behalf is to immediately demand to see your bullion, to immediately convert your BNS gold (and silver) “certificates” into real bullion, and then to personally make arrangements to store your own bullion – where your own banker can't sell it to someone else.

One has to wonder if we are about to witness our own “class action suit” on bullion-fraud, similar to when Morgan Stanley was sued in 2005, or perhaps a wave of class-action suits. In the 100:1 world of bullion-leverage in which the banksters dwell, those bank clients (all over the world) who think they own bullion are most likely only holding paper. Indeed, the most-hilarious moment in the “King” interview was Adrian Douglas' observation that the “gold certificates” of the BNS state they are “backed by the assets” of the BNS – but make no claim to actually “back” those certificates with any bullion, at all.

However, while the certificates themselves make no reference to representing actual bullion, the storage contracts from the BNS explicitly discuss fees relating to the buying/selling (and holding) of “metal”. Thus, assuming that the BNS “bullion dealers” understand the distinction between “metal” and “paper”, and assuming that any/every judge is also capable of making that distinction, the case of fraud against the BNS is “open and shut”.

NotApplicable's picture

How much of GLD's "gold in the vaults" are Comex futures? And how many Comex futures are settled for delivery with GLD shares?

Even if those numbers aren't scary today, I'll bet that the "Authorized Participants" can replace any physical with paper quicker than the books can show it.

Herd Redirection Committee's picture

double post.  server went bizarro on me.

disfiguredskating's picture

Yeah, I would love to see the unwind.  I imagine everyone wondering where their gold is would be like this:



CapedCrusader's picture

Why the fascination with Paulson?  Jealousy?  

Pladizow's picture

Its the joy in seeing a global elitist criminal get a taste of what he really deserves.

Thorlyx's picture

nice tits by the way....

Spastica Rex's picture

Schadenfreude does not always stem from jealousy. The music of the cosmos is sometimes beautiful.

Hephasteus's picture

Jealousy is an emotional distortion of projection bias. Shadenfreude precludes the possible existance of jealousy. Why would you get so much joy from something terrible happening to someone when you want to be in their shoes.

Jealousy is a just a cop out to try to get out from under the crushing shadenfreude which is pure punitive retribution.

Id fight Gandhi's picture

Fire the nut CEO. Seriously wtf?

Azannoth's picture

Paper Wealth in your face, paper wealth is just that paper

Yardstick of Civilization's picture

Yes, bad for paper gold.  How will it effect futures and the spot of physical though, as GLD sells into the liquid market?

Could Paulson cause the top in gold by selling his stake in GLD?  I've been wondering about this for a while.

Spitzer's picture

QE ending, the DOW crashing and the IMF selling was supposed to be bad for paper gold too.

How did that work out ?