Investing Legend Louis Bacon Has Had Enough Of Algos And Central Planners, Calls It Quits

Tyler Durden's picture

Markets are toast as Louis Bacon plans to give back 25% of his fund to investors as "liqudity and opportunities have become more constrained." As Bloomberg notes, Bacon is struggling to make money in his typically macroeconomic trend exploiting fund as "the risk on / risk off environment appears to be an abiding presence that has keep engagement low." Macro funds lost an average of 1.3 percent in the first six months of the year. Bacon, pointed out that "Markets are increasingly distorted by central banks’ attempts to squeeze drops of growth from an over-indebted private sector across much of the developed world." The U.S. markets are hindered by "a caustic political environment and an anti-business administration," he said.

U.S. banks have retreated from making markets in many securities because of the Dodd-Frank legislation, which limits them from trading for their own accounts. Bacon added that 'in some Kafkaesque absurdity,' the rule is "named after the two high protectors from regulatory oversight of perhaps the most egregious of U.S. financial miscreants, Fannie Mae and Freddie Mac."

Bacon pulls no punches as he goes after inept regulators in Europe and the US, and describes the state of affairs as "Disaster Economics, where assets are valued based on their ability to withstand a lurking disaster as opposed to what they may yield or earn, is now the prism through which investors are pricing markets." And perhaps most 'distorted' is the credit market where trading in individual corporate credits has also been 'decimated' he said. "I shudder to think of the stress that is going to occur during the new credit liquidation cycle."

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Pladizow's picture

Anybody have a list of fund managers who have quit in the last 3-4yrs?

veyron's picture

Anybody have a list of fund managers who have NOT quit in the past few years?

realtick's picture

Anybody have a light?

nope-1004's picture

Market has been broken since 2007.  And there really is no "market".  We've got gov't printed data called DOW, S&P, and NASDAQ.  Total and complete fascism.  I can't, for the life of me, believe that anyone would even continue to think this market has some reality to it, let alone put money in it expecting a positive return.

Now all the rear-view mirror traders are going to chime in with their perfectly timed trades.  LOL. 

 

Stoploss's picture

Getting out at the top, at least he can see it.

Yahoo charts for dummies. Check out the volume, technicians love that shit, it's usually the only thing they're right about.

http://finance.yahoo.com/echarts?s=^gspc+interactive#symbol=^gspc;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Sequitur's picture

Moore Hedge Funds fined $25 million for illegally manipulating platinum and palladium markets.  http://www.cftc.gov/PressRoom/PressReleases/pr5815-10

Moore's and Bacon's little boy Pia also fined and barred.  http://www.cftc.gov/PressRoom/PressReleases/pr6079-11

Guess who Moore's broker was executing the trades? MF Globalhttp://www.cftc.gov/PressRoom/PressReleases/pr6210-12

Nobody For President's picture

Why? Looking for an honest man?

Mongo's picture

Meat for the grinder

Precious's picture

Did he say he fears "what's going to occur" ?

What hasn't occurred already ?   Global thermo nuclear war ?

chrisd's picture

Druckenmiller, Bacon, Pellegrini (probably the most relevant as he was relatively young and just getting started, especially since he was probably most responsible for the "trade of the century")

geewhiz190's picture

as an aside ZH's beloved Ray Dalio is down 2% through July on his Pure alpha fund. if he can't make a buck, who can? 

bhakta's picture

Obviously he is speaking from both experience and practicality. The "markets" really have little to no meaning to anyone now, as they are made of a bunch of HFT computers playong hot-potatoe with each other. It seems completely insane to me.

SemperFord's picture

Which is why I am surprised nobody talented enough has been able to hack into them, infect them with a virus and crash the whole thing...oh well

Cardinal Fang's picture

If you can hack it, why crash it when you can siphon off $1 Trillion in .05 of a second?

Seems a bit more fun that way.

SHEEPFUKKER's picture

The game is to quit while you ahead Mr. Bacon, not whine on the way out when your business model has fallen apart. I guess he didn't get the memo. /sarc

otto skorzeny's picture

i hate these whiny fatcats as much as the next guy but this market is extremely distorted.

crawldaddy's picture

yeah, and has been for some time.  This hedge fund dickhead just cant keep out in fromt of it anymore, so he is whining like a little school girl

Tortfeasor's picture

I guess a real man would stick it out and keep losing other people's money?

DavidC's picture

I don't suppose ANY of the regulators have the wit or wisdom to question why so many fund managers are quitting.

DavidC

Jason T's picture

he's the guy who had enough and decided to go work for himself and persue his own self interests without having others feed off the profits of his energy.  

By the sweat of his brow, he'll eat and not others who only eat but don't sweat.

XitSam's picture

Oh, come on, someone else made that happen. He should be glad for the chance to give back when he has taken so much from the community. Working for your own self-interest is a narrow, short-sighted, selfish vision. This community built him a big house, yet he doesn't want to share it with the 99%. 

/s btw

Observer's picture

someone else? Are you kidding?

toncuz's picture

Who is John Galt? He's America's worst traitor.

He's the guy who bribed your Congressmen, outsourced your job, set-up offshore accounts to evade taxes, takes billions in corporate welfare while young men and women die defending his filthy hidden wealth that contributes nothing to our economy nor its war effort.

Who is John Galt?

He's the guy that should be dragged from his mansion or yacht and HUNG from the nearest tree.

phalfa5's picture

I SMELL BACON 

TrumpXVI's picture

I LOVE the smell of bacon in the morning.

Smells like, vvvvv.......Sunday Breakfast!

SHEEPFUKKER's picture

Bacon bits in this case. 

Dr. Engali's picture

A billion pulled out here a billion pulled out there..pretty soon we are talking about real money.  Maybe he should do his clients a favor and put that money to work in gold.

francis_sawyer's picture

mmmmmmmmmmmmmmmmmm... BACON!

Seasmoke's picture

i think things are about to FREEZE up ............Good Luck everyone

DavidC's picture

And it'll be their own fucking fault - forgive my swearing but it makes my blood boil.

DavidC

crawldaddy's picture

This little douchebags con game is no longer working, so he is taking his marbles and running home, where he'll blame the black guy.

 

what a joke.

Neethgie's picture

Spain is not uganda

but bacon is toast.

apberusdisvet's picture

Ann Barnhard was very prescient; not unlike Meridith.  Go! women of finance.  (Now if only the bimbos on financial TV <Lauren Lyster excepted> would get the message).

SheepDog-One's picture

The empty casino keeps getting smaller.

JustObserving's picture

There is a saying in Hollywood - "No one has ever lost money underestimating the intelligence of the American public."   The casino should have been empty by now.

LawsofPhysics's picture

Just in case you missed it idiot; 401k holders are forced to play!

Totally fucking stupid, possession rapidly becoming 100% of the law.

Nevermore Peabody's picture

10% early withdrawl penalty is a lot less than a 100% penalty these folks'll have if they keep letting it ride on Red. No one is holding a gut to anyone's head *forcing* them to play.

DosZap's picture

10% early withdrawl penalty is a lot less than a 100% penalty these folks'll have if they keep letting it ride on Red. No one is holding a gut to anyone's head *forcing* them to play.

Your talking IRA's.

401k plans, (unless you have been with the company MANY years) are untouchable except in DIRE cases.

Otherwise you cannot withdraw crap, one way to end around it is to take as large a loan out as possible,and limit your input IF the emps are matching it.

Dr. Kenneth Noisewater's picture

Incorrect, I've withdrawn 401ks with the 10% penalty plus taxes a couple of times.  They make it somewhat cumbersome to do, with paper signatures and stuff, but it's doable, and usually a week or two from initiation to paper check.

terryfuckwit's picture

no fun in a rigged game...

dcb's picture

there is no mention opf algo's in the article. as someone who is working to get vanguard to be against the algos, these articles must be accurate. vanguard is of the position they add liquidity. I am of the position they are causing people to leave the market and actually decreasing liquidity. very poor job tyler and a distortion. As someone who is working to try and fix the system and work with institutional investors on the problem this is of no use as far as I can tell.

busted by the bailout's picture

"Markets are increasingly distorted by central banks’ attempts to squeeze drops of growth from an over-indebted private sector across much of the developed world."

As the old-timer's used to say, It's difficult to squeeze blood out of a turnip.

We have been becoming poorer for decades.  It has just been hidden by our ability to live beyond our means through increasing debt.

Greece is poor and, increasingly, so are we.  Austerity is not something that is imposed on Greece (and soon us) by "outsiders" it is the natural consequence of being poor!  I.e., reality bites!

But reality is inevitable.

DosZap's picture

  Austerity is not something that is imposed on Greece (and soon us) by "outsiders" it is the natural consequence of being poor!  I.e., reality bites!

But reality is inevitable.

True, its being caused by INSIDERS.

When is the vast majority going to figure out this entire debacle is a planned event?.

The Globalist plan, cannot go forward with a strong,prosperous America.

So, they are dismantling it,under the guise of false pretenses, and outright lies, theft, and obfuscation.

Silly Rabbit

Neethgie's picture

I just find it all a little disingenous for him to quit now claiming to have had enough of central planning and algo's.

You cant take your 2/20 through 2 rounds of QE and a flash crash and then claim you are against central planners and algo's.

Bansters-in-my- feces's picture

Bacon don't want to get burnt to a crisp.

Ps...

I see the PigDog Manipulators have bashed silver down over 2%.

Manipulation running rampant.