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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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Wed, 08/01/2012 - 11:15 | 2668742 Pladizow
Pladizow's picture

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

Wed, 08/01/2012 - 11:17 | 2668756 veyron
veyron's picture

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

Wed, 08/01/2012 - 11:20 | 2668774 realtick
realtick's picture

Anybody have a light?

Wed, 08/01/2012 - 11:38 | 2668854 nope-1004
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. 

 

Wed, 08/01/2012 - 11:37 | 2668860 Stoploss
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;

Wed, 08/01/2012 - 12:09 | 2669045 Sequitur
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

Wed, 08/01/2012 - 12:28 | 2669121 Nobody For President
Nobody For President's picture

Why? Looking for an honest man?

Wed, 08/01/2012 - 20:48 | 2670770 StychoKiller
Wed, 08/01/2012 - 11:22 | 2668786 Mongo
Mongo's picture

Meat for the grinder

Wed, 08/01/2012 - 11:18 | 2668760 Precious
Precious's picture

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

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

Wed, 08/01/2012 - 11:33 | 2668834 chrisd
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")

Wed, 08/01/2012 - 11:34 | 2668837 Nadaclue
Nadaclue's picture

Try this, a little outdated but you'll get the gist.

 

http://americankabuki.blogspot.com/p/banker-resignations.html

Wed, 08/01/2012 - 12:17 | 2669080 geewhiz190
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? 

Wed, 08/01/2012 - 11:18 | 2668761 bhakta
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.

Wed, 08/01/2012 - 12:06 | 2669022 SemperFord
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

Wed, 08/01/2012 - 13:37 | 2669375 Cardinal Fang
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.

Wed, 08/01/2012 - 11:18 | 2668762 SHEEPFUKKER
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

Wed, 08/01/2012 - 11:23 | 2668787 otto skorzeny
otto skorzeny's picture

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

Wed, 08/01/2012 - 11:25 | 2668800 crawldaddy
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

Wed, 08/01/2012 - 12:02 | 2668999 Tortfeasor
Tortfeasor's picture

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

Wed, 08/01/2012 - 11:19 | 2668769 DavidC
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

Wed, 08/01/2012 - 11:20 | 2668776 Temporalist
Temporalist's picture

Who is John Galt?

Wed, 08/01/2012 - 11:28 | 2668809 steve brassey
steve brassey's picture

how do i send/?

Wed, 08/01/2012 - 11:31 | 2668828 Jason T
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.

Wed, 08/01/2012 - 11:43 | 2668893 XitSam
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

Wed, 08/01/2012 - 12:16 | 2669072 Observer
Observer's picture

someone else? Are you kidding?

Thu, 08/02/2012 - 01:54 | 2671227 toncuz
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.

Wed, 08/01/2012 - 11:20 | 2668772 phalfa5
phalfa5's picture

I SMELL BACON 

Wed, 08/01/2012 - 11:23 | 2668790 TrumpXVI
TrumpXVI's picture

I LOVE the smell of bacon in the morning.

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

Wed, 08/01/2012 - 11:24 | 2668798 SHEEPFUKKER
SHEEPFUKKER's picture

Bacon bits in this case. 

Wed, 08/01/2012 - 11:24 | 2668780 Dr. Engali
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.

Wed, 08/01/2012 - 11:22 | 2668783 francis_sawyer
francis_sawyer's picture

mmmmmmmmmmmmmmmmmm... BACON!

Wed, 08/01/2012 - 11:25 | 2668799 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

perv

Wed, 08/01/2012 - 11:22 | 2668784 Seasmoke
Seasmoke's picture

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

Wed, 08/01/2012 - 13:18 | 2668864 DavidC
DavidC's picture

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

DavidC

Wed, 08/01/2012 - 11:23 | 2668788 crawldaddy
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.

Wed, 08/01/2012 - 11:23 | 2668789 Neethgie
Neethgie's picture

Spain is not uganda

but bacon is toast.

Wed, 08/01/2012 - 11:23 | 2668792 apberusdisvet
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).

Wed, 08/01/2012 - 11:24 | 2668796 SheepDog-One
SheepDog-One's picture

The empty casino keeps getting smaller.

Wed, 08/01/2012 - 11:40 | 2668872 JustObserving
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.

Wed, 08/01/2012 - 12:21 | 2669100 LawsofPhysics
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.

Wed, 08/01/2012 - 12:35 | 2669153 Nevermore Peabody
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.

Wed, 08/01/2012 - 14:05 | 2669507 DosZap
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.

Wed, 08/01/2012 - 15:38 | 2669977 Dr. Kenneth Noi...
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.

Wed, 08/01/2012 - 11:26 | 2668804 terryfuckwit
terryfuckwit's picture

no fun in a rigged game...

Wed, 08/01/2012 - 11:29 | 2668813 dcb
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.

Wed, 08/01/2012 - 11:29 | 2668816 busted by the b...
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.

Wed, 08/01/2012 - 13:56 | 2669466 DosZap
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

Wed, 08/01/2012 - 11:30 | 2668818 Neethgie
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.

Wed, 08/01/2012 - 11:31 | 2668824 Bansters-in-my-...
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.

 

Wed, 08/01/2012 - 11:32 | 2668831 orangedrinkandchips
orangedrinkandchips's picture

"QUICK TO THE POINT, TO THE POINT, NO FAKING.....COOKING MCs (investors) LIKE A POUND OF BACON"

 

Ice Ice baby.....

Wed, 08/01/2012 - 11:36 | 2668852 omi
omi's picture

"My strategy doesn't really work right now, don't blame me. After all, I analyzed what's going on and settled on what I think is the most suiting strategy to make money for my clients. It's clearly the {government, economy, the FED, bad {} }"

Wed, 08/01/2012 - 11:36 | 2668856 Patriot Eke
Patriot Eke's picture

The looting is almost complete.  Beware the next step.  It won't be so peaceful.

Wed, 08/01/2012 - 11:37 | 2668857 Lost Wages
Lost Wages's picture

"If I can't make $27,000,000 an hour, it's not even worth it to get out of bed in the morning." -Louis Bacon

Wed, 08/01/2012 - 11:37 | 2668861 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Bacon sounds pretty fried.

 

Wed, 08/01/2012 - 11:43 | 2668877 dwayne elizando
dwayne elizando's picture

Well I take It this means no QE. Surely he wouldn't quit if he could front run more QE.

Wed, 08/01/2012 - 11:41 | 2668884 orangegeek
orangegeek's picture

Every possible avenue is being exhausted to close out the end of wave 2.  When the selloff of wave 3 occurs, it won't be pretty.

 

http://bullandbearmash.com/chart/dow-jones-industrial-average-daily-july...

Wed, 08/01/2012 - 20:42 | 2670758 ZeroAvatar
ZeroAvatar's picture

Personally, I can't stand EW, but one look at that chart and you can tell, that sucker's going down!

Wed, 08/01/2012 - 11:42 | 2668890 francis_sawyer
francis_sawyer's picture

This is your brain on drugs (with a side of bacon)...

~~~

http://www.youtube.com/watch?v=_lo7_HxP9y8

Wed, 08/01/2012 - 11:43 | 2668898 Atlantis Consigliore
Atlantis Consigliore's picture

Istn thete anyone left in retail to front run anymore?  

futures?  ponzi schemes like B. Gross says?

anyone , ANYONE left?   lets have a hearing. LOL

Gold

Wed, 08/01/2012 - 11:51 | 2668935 LawsofPhysics
LawsofPhysics's picture

Translation;  Another paper-pusher (who creates nothing of real value) quitting because the new "rules" won't allow his particular flavor of theft anymore.  And the "club" gets a little smaller, same as it ever was.

Good fucking riddance asshole.

Wed, 08/01/2012 - 12:17 | 2669073 phalfa5
phalfa5's picture

.... hmmm    need mayo and tomato now ....

Wed, 08/01/2012 - 12:44 | 2669185 debtor of last ...
debtor of last resort's picture

Wonder when the Terminator comes to earth to rescue Anne Barnhardt.

Wed, 08/01/2012 - 13:03 | 2669258 GOLDTEETHSILVER...
GOLDTEETHSILVERFILLINGS's picture

Follow the yellow brick road...

Wed, 08/01/2012 - 13:28 | 2669342 RSloane
RSloane's picture

As nauseating as his whimpy poor-me rhetoric is, fundamentally he's right. Valid price discovery, valid projective risk assessment, all gone. Regulators? Where?

He probably has enough to buy an island after Greece starts liquidating their assets and live in an extraordinarily comfortable manner. Pardon me while I withhold the box of tissues for him.

Where was he for the last five years?

Wed, 08/01/2012 - 13:29 | 2669346 Mad Mad Woman
Mad Mad Woman's picture

I'm getting a little tired of the "The U.S. markets are hindered by "a caustic political environment and an anti-business administration," he said." meme. This administration has given corporate America just about everything they wanted. WTF??  If he's looking to blame someone he's looking in the wrong place. He should be blaming the algo crowd. What a fucking wimp.

Wed, 08/01/2012 - 14:01 | 2669490 HedgeOn
HedgeOn's picture

If anyone has ever seen Ann Barnhardt's online posts - she's not "regular crazy"...she's definitely the "batshit kind".

Wed, 08/01/2012 - 20:45 | 2670765 ZeroAvatar
ZeroAvatar's picture

The religious references give it away.

Wed, 08/01/2012 - 23:48 | 2671112 Indrid Cold
Indrid Cold's picture

But all the other (non-religious) stuff is perfectly a-ok, eh?

Barnhardt smells like an agent provocateur.  Except...

Wed, 08/01/2012 - 14:08 | 2669518 suckerfishzilla
suckerfishzilla's picture

The article seems fine except I would change the word "inept" to either "vested" or "complicit".

Wed, 08/01/2012 - 18:01 | 2670441 Hobbleknee
Hobbleknee's picture

When does the new credit liquidation cycle begin?

Wed, 08/01/2012 - 20:46 | 2670766 ZeroAvatar
ZeroAvatar's picture

My guess, probably tomorrow.

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