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It's Not 2008, It Is 2007: Goldman Global Alpha Just Blew Up All Over Again

Tyler Durden's picture


Those who have been around for more than one trading generation (which in the old days was 3-4 years, but in the current centrally-planned, vacuum tube-traded times, is more like 3-4 months), will distinctly recall that the first rumbling of the financial crisis started not with the bankruptcy of Lehman, or even the handoff of Bear (and its massive silver legacy short) to Jamie Dimon, but in August 2007, when days after the market hit its all time high, something went massively wrong in the quant market segment (nobody still knows what it was but many speculate that is was simply every algo being on the same side of the trade and trading out all at the same time following the blow up of the Bear Stearns hedge funds). What the first week of August 2007 was notable for, in addition to massive losses for such legendary quants as RenTec (very well described in Scott Patterson's book titled appropriately enough "The Quants"), was that for the first time ever, the infallible Goldman Sachs... fell. Specifically, its heretofore mythical Global Alpha quant fund, which had the mythical allure of a 33rd degree Freemason dinner, imploded, and crashed, forcing the end of a quant generation, and the beginning of the end of Goldman's aura of invincibility. As Bloomberg recalls those August 2007 days: "Goldman Sachs Group Inc.'s $8 billion Global Alpha hedge fund has fallen 26 percent so far this year, a decline that may prompt more investors to withdraw their money, according to people familiar with the fund...On June 26, Goldman said Eric Schwartz, co-head of asset management since 2003, would step down in the next few months and leave Peter Kraus in charge of the fund unit. Global Alpha decreased 8 percent during the last full week of July and was down 16 percent from the beginning of January through Aug. 3. There is an Aug. 15 deadline for Global Alpha investors who want to redeem money on Sept. 30." Well, the reason we bring all of this up, is because unlike what everyone claims, it is not 2008.... it is 2007 all over again. To wit: Goldman Global Alpha just blew up, for the second and probably last time.

From Reuters:

Katinka Domotorffy, the head of Goldman Sachs Group Inc's (GS.N) quantitative investment strategies group, will leave the bank at the end of the year, according to an internal memo, as one of its biggest hedge funds continues to suffer from weak performance.


Domotorffy is a Goldman veteran who joined the bank in 1998 as a portfolio manager and researcher.


She took on her most recent title as chief investment officer and head of QIS within the asset management division in 2009 when Mark Carhart and Raymond Iwanowski, co-founders of Goldman's prominent Global Alpha Fund hedge fund, retired.


The Global Alpha Fund is down 12 percent this year, according to sources familiar with the matter.

If 2007 was any indication, and it was, every terminal event for Global Alpha is a harbinger of many, many bad things coming. What is just as ominous is that if Goldman's quant fund has now blown up, then there are tens if not hundreds of other quant funds, and otherwise, that are completely defunct and liquidating, but simply choose to keep quiet.

As we predicted a month ago, the rot will very soon stink up the place, but little did we expect that it would start at the head.

Look for many more such stunner announcements in the days to come, and also, since it is now 2007 all over again, it may just be the case that Goldman's dramatic S&P 500 target cut, just discussed, will actually come true much faster than anyone expects.


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Wed, 09/14/2011 - 20:29 | 1671205 Spirit Of Truth
Spirit Of Truth's picture

right on time.

Wed, 09/14/2011 - 20:33 | 1671220 DeadFred
DeadFred's picture

On time for what? They could have announced this days ago or days from now, so why did they chose today afterhours. It may be random but I doubt it.

Wed, 09/14/2011 - 20:44 | 1671269 IQ 145
IQ 145's picture

You know something; I doubt it too. A "little" paranoia is a good thing nowadays. I didn't consider it as spin until you mentioned it; it does make pretty good spin.

Wed, 09/14/2011 - 20:56 | 1671319 Thomas
Thomas's picture

Maybe today's march upward was a forced liquidation (of a short position). The other, seemigly innocuous, oddity was that Central Fund of Canada marched up with the market instead of down with GLD/SLV. It was a large 3+% differential.

Who would voluntarily invest in these markets. Oh, that's right: anybody who has to somehow protect their falling cash positions. It is time for this turtle to come home.

Wed, 09/14/2011 - 21:10 | 1671367 TheLooza
TheLooza's picture

Agree. Let me know when it does, thanks.

Thu, 09/15/2011 - 10:54 | 1673348 mkkby
mkkby's picture

How is being down 12% blowing up?

Wed, 09/14/2011 - 21:15 | 1671384 jbc77
jbc77's picture

Great post thomas. My thoughts exactly.

Wed, 09/14/2011 - 20:47 | 1671284 WestVillageIdiot
WestVillageIdiot's picture

This is a very mysterious event.  Usually these announcements are timed to royally fuck over some option position I have taken.  Currently I have no option position so this doesn't make sense at all.  There must be some other way this is going to screw me.  There is no other explanation. 

Wed, 09/14/2011 - 21:13 | 1671375 chinaguy
chinaguy's picture

Thanks, best laugh I've had in a few days......

Wed, 09/14/2011 - 21:16 | 1671389 Axenolith
Axenolith's picture

Check the closet and under the bed before you retire for the evening... ;-)

Wed, 09/14/2011 - 22:38 | 1671617 Blano
Blano's picture

I have the same problem.  They're trying to lure us back in, that's what it is.

Thu, 09/15/2011 - 00:13 | 1671890 LongBallsShortBrains
LongBallsShortBrains's picture

You either left an open order or forgot about a position/ got a partial fill exit.

Thu, 09/15/2011 - 00:53 | 1671991 Melin
Melin's picture

Thanx for least we're going down laughing

Wed, 09/14/2011 - 21:17 | 1671392 AmCockerSpaniel
AmCockerSpaniel's picture

Nothing just happens on WallStreet

Wed, 09/14/2011 - 21:41 | 1671458 Tijuana Donkey Show
Tijuana Donkey Show's picture

Management LBO.... Why pay more? 

Wed, 09/14/2011 - 20:41 | 1671259 DormRoom
DormRoom's picture

you run for the doors when Reconnaissance Technologies starts to report a loss.  That hedgefund is MASSIVELY leveraged, and has HFT bots embedded in every market.

They are LTCM^666

When they start to deleverage, the financial world blows up.

Wed, 09/14/2011 - 20:48 | 1671283 jballz
jballz's picture

do you mean

renaissance technologies?


Wed, 09/14/2011 - 20:50 | 1671294 WestVillageIdiot
WestVillageIdiot's picture

I thought Reconnaissance sounded cooler. 

Wed, 09/14/2011 - 20:53 | 1671309 X.inf.capt
X.inf.capt's picture

it kinda does,

good night, west

Wed, 09/14/2011 - 20:48 | 1671288 IQ 145
IQ 145's picture

Reconnaissance Technologies; eh? Thanks, I'll try to look that up. I just love LTCM; what a great name; they long term managed their clients money to what 8 cents on the dollar; something like that. Couple of professors with a big computer that didn't know shit about real markets. Hilarious.

Wed, 09/14/2011 - 20:52 | 1671304 WestVillageIdiot
WestVillageIdiot's picture

The world's best oxymorons:

-  Military intelligence

-  Jumbo shrimp

-  Paper gold

-  Long term capital management

Wed, 09/14/2011 - 21:05 | 1671349 Rodent Freikorps
Rodent Freikorps's picture

Young intellectual.

Wed, 09/14/2011 - 21:04 | 1671347 rosiescenario
rosiescenario's picture

..uh, they were actual Nobel prize winners....and it was then that Lehman's fate was sealed...When Genius Failed...a good read.

Wed, 09/14/2011 - 21:41 | 1671456 Imminent Crucible
Imminent Crucible's picture

"they were actual Nobel prize winners" Obama, the prince of whirled peas?

Thu, 09/15/2011 - 00:20 | 1671912 Freddie
Freddie's picture

"Eat your damn peas!"

Krugman is another one who "won" a Nobel.    I never read the LTCM book but read some excerpts.  One of the best bits was when the head of the fund John Meriwether (Ex Salomon and U of Chicago MBA) was panicking.  He brought up some Italian guy with a high school education who dressed like a mobster but he knew trading. Meriwether is saying he could go to Buffett or Soros etc etc.   The guy was street smart and told Meriwether that it was over. He had looked at the portofolio and told Meriwether that everyone else would pounce on them.  The same pile on Lehman and Bear to kill them off. 

Hilarious that a high school educated guy with street smarts knew 10X more than a bunch of Nobel prize winning PhDs.  Supposedly they all became golf bugs in Greenwich and Myron Scholes was trying to work out the mechanics of the golf swing.  The idiots used a small sample of data for their models with no tails/black swans.  The house was on fire while they were out playing golf.

Wed, 09/14/2011 - 21:23 | 1671412 jdelano
jdelano's picture

If madoff's perennial 12% returns were labeled extremely suspicious after the fact...why has nobody realized that Simon's private fund is some kind of massive fraud? All the MIT wizards work in the public fund--the closed fund is just Simons and his relatives/buddies at work--my guess is that they use the open fund to boost positions already held in the private fund--then the private fund immediately exits. Can't wait until somebody blows the lid off renaissance...

Wed, 09/14/2011 - 20:29 | 1671206 Henry Chinaski
Henry Chinaski's picture

I gotta figure that most ZH readers are already ducking and covering. But, thank you for letting us know!

Wed, 09/14/2011 - 20:53 | 1671307 WestVillageIdiot
WestVillageIdiot's picture

By now most ZHers are working feverishly to secure the steel plate to cover up their anal opening. 

Thu, 09/15/2011 - 00:47 | 1671981 Think for yourself
Think for yourself's picture

Made me laugh, big time.
I guess I'm a good exemple of this as I am a chronic procrastinator and always wait for overconfirmation before heading one way or another.
I exiled myself from the system pretty penniless in 2010 (didn't think it through, no PMs at all) and have been saving while travelling SA and working in bars, hostels, teaching english and what have you. Still saved enough to buy 12oz Ag in the last year and just made my first buy of Au monday, a very modest 1/4oz. Price still seems good, don't care if it dips further considering the fundamentals, at least I got rid of those darned FRNs and now have some 24k sheet Au to cover my ass with.

Wed, 09/14/2011 - 20:32 | 1671207 Long-John-Silver
Long-John-Silver's picture

and so the second dip begins.


and it's gone......

Wed, 09/14/2011 - 20:34 | 1671224 Cistercian
Cistercian's picture

The new deeper and wider crater is just ahead!
This time with even more thieve-o-matic enhanced systemic FAIL!

Wed, 09/14/2011 - 20:38 | 1671249 Mactheknife
Mactheknife's picture

It's amazing what 30x leverage will do for you. LMAO

Wed, 09/14/2011 - 20:46 | 1671276 lolmao500
lolmao500's picture

And since Europeans banks are at 70X+ ratio, shall be even more amazing.

Thu, 09/15/2011 - 03:31 | 1672214 UGrev
UGrev's picture

I think "Abyss" is the word you're looking for...

Wed, 09/14/2011 - 20:30 | 1671210 DeadFred
DeadFred's picture


Wed, 09/14/2011 - 20:31 | 1671212 Robslob
Robslob's picture

BUT BUT just said that meant 200 S&P points up before 400 down?!?!?!



Wed, 09/14/2011 - 20:34 | 1671231 wombats
wombats's picture

Who cares about S&P?  NOBODY.  Just PLEASE tell me that the Goldman bonuses won't be hurt!!

Wed, 09/14/2011 - 20:59 | 1671325 Thomas
Thomas's picture

Not to worry. The last time it looked like the bonus pool might be small and their last, they took really, really big ones. Looting the accounts is a predictable response for all banana republic dictators.

Wed, 09/14/2011 - 20:32 | 1671216 MFL8240
MFL8240's picture

Couldnt happen to a nicer group! FU Goldman.

Wed, 09/14/2011 - 20:43 | 1671265 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The world is a vampire................

Wed, 09/14/2011 - 20:33 | 1671219 sunny
sunny's picture

Aaaah shit....2007???   We gotta wait another whole year for the 2008 echo? 


Wed, 09/14/2011 - 20:35 | 1671235 DeadFred
DeadFred's picture

History doesn't repeat, it only rhymes.

Wed, 09/14/2011 - 20:34 | 1671229 AmazingLarry
AmazingLarry's picture

Thought I read Reggie Middleton saying something to the effect that they cannot trade. Shame, they're such a bastion of market health and happienss. 

Oh, and fuck you Lloyd.

Wed, 09/14/2011 - 20:34 | 1671230 Id fight Gandhi
Id fight Gandhi's picture

Hey how do you add your twitter name on this so we can all chat during the day? I see a thing for it... Im "FightGandhi"

Wed, 09/14/2011 - 20:35 | 1671236 steelhead23
steelhead23's picture

Anyone here have the balls to short GS on this news? .....I thought not.

Wed, 09/14/2011 - 20:41 | 1671256 Henry Chinaski
Henry Chinaski's picture

No. I have not the balls to trade anything in this market and am standing pat in GLD, SLV and cash, along with mostly diversified real unleveraged unencumbered physical assets.

Wed, 09/14/2011 - 20:56 | 1671317 Id fight Gandhi
Id fight Gandhi's picture

Being a eunuck has it's advantages.

Long or short this mkt and you're bound to get kicked in the nuts.

Wed, 09/14/2011 - 20:51 | 1671300 IQ 145
IQ 145's picture

Fuck no; I think the anouncement is spin to suck some more retail shorts in.

Wed, 09/14/2011 - 20:57 | 1671322 Id fight Gandhi
Id fight Gandhi's picture

There's no measureble retail in this mkt.

Wed, 09/14/2011 - 21:01 | 1671339 WestVillageIdiot
WestVillageIdiot's picture

GS is down 40%.  Anybody shorting here has balls of steel and a brain to match. 

Wed, 09/14/2011 - 22:37 | 1671615 DCFusor
DCFusor's picture

Uh oh....short GS now.  If I admit my mistakes (if indeed they are) does that mean I have more credibility?  Than what?

Wed, 09/14/2011 - 23:09 | 1671712 rocker
rocker's picture

Robert Prechter's Elliott Wave International has pointed a down arrow on GS in one of the forecast just recently.

So, one must ask, Will poor Booby be wrong again or will the sane people of the world realize after sucking the blood out of everybody they can. Nobody wants to deal with the Squid anymore.  

On that note, does anybody want to invest in any bank who has a trading desk anymore ???  Think JPM, WFC  and Shitty bank.

Let's be old style just for a moment. How did GS get bank status and why are any banks who have a trading desk allowed to be a bank.

Are they not hedge funds and that's how we got into this Fucking Mess anyway.

Thu, 09/15/2011 - 02:06 | 1672096 Freddie
Freddie's picture

Somebody correct me if I am wrong but during TARP - Goldman and I think others, maybe Morgan Stanley, bought a smaller bank or bank charter to get bailout money.  I am pretty sure that was the case.  Total BS.  You gamble with 40 to 1 leverage - lose then ask for a bailout.  They are evil MF'ers.

Thu, 09/15/2011 - 00:19 | 1671909 LongBallsShortBrains
LongBallsShortBrains's picture

You got that right. So it's probably the best trade.

Wed, 09/14/2011 - 21:12 | 1671356 Jasper M
Jasper M's picture

Trout, please!

The Only reason I am Not shorting Goldman on this, or any other news, is that I am already out in front of it: I've been holding LEAP puts on Goldman for awhile now, and they are in the green. 

While I am not expecting a SPLAT! for this company, I Am expecting ruinous amounts of regulatory attention. Look though their company hisotry, happens all the time. 

Wed, 09/14/2011 - 20:36 | 1671238 rajat_bhatia
rajat_bhatia's picture

i'll say it again! Fucking Western Bankers!!!


Wed, 09/14/2011 - 20:36 | 1671240 rajat_bhatia
rajat_bhatia's picture

i'll say it again! Fucking Western Bankers!!!


Wed, 09/14/2011 - 20:51 | 1671301 Mactheknife
Mactheknife's picture

That's exactly what's happening as several Euro banks have now been completely shut out of the overnight markets and have had to bid up by 100bps for dollars from the ECB to settle overnight transactions. The end is near.

Wed, 09/14/2011 - 21:07 | 1671355 chump666
chump666's picture

Prior to the meltup, Austria dropped the 'f*ck this Euro bond crap.'  Germany under Merkel does another attempt at selling a German underwritten Eurobond...she is finished same with that French idoit.  EZ meltdown contiues.

Wed, 09/14/2011 - 20:59 | 1671330 caerus
caerus's picture

he did say he'd say it again

Wed, 09/14/2011 - 21:09 | 1671365 chump666
chump666's picture


Wed, 09/14/2011 - 20:37 | 1671245 buzzsaw99
buzzsaw99's picture


Wed, 09/14/2011 - 20:37 | 1671246 Prairie Fire
Prairie Fire's picture

It's funny how truth works in these broken markets--all the metrics I've read here and elsewhere seem to point to an absolute end point; a mathematical certainty--so why, after reading and researching all these numbers that do not lie, do we see the opposite of what should occur?

I'm guessing all the bad news is bullish? Does that make sense?

Wed, 09/14/2011 - 21:06 | 1671352 rosiescenario
rosiescenario's picture

Of course it does ...bad news = QE3

Wed, 09/14/2011 - 20:38 | 1671250 High Plains Drifter
High Plains Drifter's picture

what?  no gld or slv?

Wed, 09/14/2011 - 20:39 | 1671254 chump666
chump666's picture

Very good post!

Wed, 09/14/2011 - 20:43 | 1671257 bob_dabolina
bob_dabolina's picture

This was a daily read for me back during that time. It's been pretty inactive lately.

Wed, 09/14/2011 - 20:55 | 1671311 IQ 145
IQ 145's picture

Oh yeah, I remember that; it was entertaining.

Wed, 09/14/2011 - 22:04 | 1671523 Cliff Claven Cheers
Cliff Claven Cheers's picture

Hey Bob how are you doing tonight?  I looked your blog over, looks impressive.  Sorry to call you a troll.

Wed, 09/14/2011 - 20:45 | 1671266 virgilcaine
virgilcaine's picture

MS looks like it screwed a duck also..  

Wed, 09/14/2011 - 20:44 | 1671267 oobrien
oobrien's picture

Good citizens of Metropolis!

There is no hope.

Sell your children and shave your heads.

The magic spaceship will pick us up at noon on Saturday.

The others will be crushed like bugs.

Wed, 09/14/2011 - 21:01 | 1671337 chump666
chump666's picture

Celente has that kick ass NYC Bronx accent...


Wed, 09/14/2011 - 22:00 | 1671507 chump666
chump666's picture

Oh you don't like NY you butnuts...

Wed, 09/14/2011 - 20:44 | 1671268 mikmid
mikmid's picture

I get the idea of quant trading and see where big dollars can be made but the problem with most of these people is that they are academics that have no idea who I am or who all of you are. They are number without feelings, reality, votes, emotion and they trust computers to output all of those things which will work for a time but the markets move on people not machines, hense today.

Wed, 09/14/2011 - 20:46 | 1671275 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I was thinking the other day how many hedgies are in hot water and failing to tell their (suckers) investors.

Wed, 09/14/2011 - 20:52 | 1671278 SwingForce
SwingForce's picture

GUTTED! Thanks for spilling the beans, Tyler, I will connect the dotz. BEAUTY!

Its a WhipSaw market, they got cut in half and there's no circus magician to fix.

So what to do? Stock's at 100 +/- pretty shitty, Suckit Trabeck! Ah, Turd Ferguson? 

Wed, 09/14/2011 - 20:51 | 1671287 Zero Govt
Zero Govt's picture

"Goldman Global Alpha just blew up, for the second and probably last time."

God must be telling Lloyd 'The Annointed One on Earth' Blankfien something about the work he does down here for him yes?!!

Two busts maybe Lloyd could get the message from God his work is (Warning: technical term coming up)... crap

Wed, 09/14/2011 - 20:57 | 1671320 Robslob
Robslob's picture

Lloyd's god is SATAN...and he is missed at home...

Thu, 09/15/2011 - 06:39 | 1672377 Withdrawn Sanction
Withdrawn Sanction's picture

That's true....he never did say WHICH God he was working for for, did he? Hmmmm

Thu, 09/15/2011 - 02:10 | 1672100 Freddie
Freddie's picture

I wonder if "God" ever needed a slimneball defense lawyer that is probably EX-SEC.

Wed, 09/14/2011 - 20:56 | 1671314 Caviar Emptor
Caviar Emptor's picture

I put this into the larger context of recent veteran Hedge Funds losing big : Paulson, Ackman, TIlson to name a few. And now veteran hedgies are 'retiring'. All this spells too many dollars chasing too few viable options in a market where holding longer than intraday is simply not done. And where HFT simply obscures the fact that spreads are a mile wide and liquidity is a mirage, a perfect storm of negatives for size players who build positions. 

They said it in Europe today: risk has gone systemic. There is no way for the Euro banks to trade their way out of trouble. US is only one step behind. 

Wed, 09/14/2011 - 23:50 | 1671838 Bolweevil
Bolweevil's picture

Nothing left but addicts and cowboys. Smells like home.

Wed, 09/14/2011 - 21:08 | 1671316 Downtoolong
Downtoolong's picture

the rot will very soon stink up the place, but little did we expect that it would start at the head.

There is an old adage that goes something like, "dead fish rot from the head".  I guess it applies to squid too.

When I started investing in the markets 40 years ago, I quickly dismissed quantitative market analysis as an exercise in mathematics only. I was a math major in college at the time. I have yet to change my mind about that, and see no hard evidence anywhere to suggest that I should.

Wed, 09/14/2011 - 21:00 | 1671332 FlyPaper
FlyPaper's picture

How much bonus $ did she get to leave?  

Wed, 09/14/2011 - 21:10 | 1671368 Hephasteus
Hephasteus's picture

She got a will blow up ponzi's for beranke funbux lipstick tube.

Wed, 09/14/2011 - 21:03 | 1671345 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Off topic, but...


Tyler, you gonna cover the silver manipulation 'news' today?

Wed, 09/14/2011 - 21:43 | 1671461 JohnG
JohnG's picture

"* HSBC entered "tolling agreement""


HSBC's gonna turn rat on JPM.

Wed, 09/14/2011 - 21:04 | 1671346 vast-dom
vast-dom's picture

"Dramatic" SP cut? Tyler are you kidding? The motherfucker is WAY overpriced and QE'd up beyond the hilt! 


SP needs to be at 850 max at current funduhmentals etc etc etc.


I promise not to give these venal fucks any slack, if you promist not to, okay?

Wed, 09/14/2011 - 21:07 | 1671358 rosiescenario
rosiescenario's picture

"the rot will very soon stink up the place, but little did we expect that it would start at the head."


...You sure that it is the head?

Wed, 09/14/2011 - 21:08 | 1671360 sherryw
sherryw's picture

Someone tell the ASX200.  It's a sea of green- only 10 out of 200 stocks are slightly red so far.

Wed, 09/14/2011 - 21:10 | 1671371 SDRII
Wed, 09/14/2011 - 21:16 | 1671387 sasebo
sasebo's picture

This shit happens when all you do is fuck around with phoney baloney paper money. When you don't produce nothing.

Wed, 09/14/2011 - 21:16 | 1671388 Dingleberry
Dingleberry's picture

Is this God's doing???? Someone ask Cardinal Blankfiend. I think GS could use an exorcism.

Wed, 09/14/2011 - 21:16 | 1671390 banksouttacontrol
banksouttacontrol's picture

well, nobody said Bitch!

So I did.

2006 chevy 4wd, several if not many fire arms, back up 2003 chevy 4 wd, camper, bazooka, chickens, avoacados, tools, more fire arms, a big wall, ssb radio, back hawk, some nuts. some alcohol, (not enough) and a partridge and a pear tree.

Bring it on vampire sqid bitch.




Wed, 09/14/2011 - 21:19 | 1671397 buzzsaw99
buzzsaw99's picture

better to be in goldman global alpha quantacular than gs common. bitchez.

Wed, 09/14/2011 - 21:19 | 1671399 onlooker
onlooker's picture

This is a little off topic but still in the realm of melt down. I am going to look at a Belarus tractor tomorrow and looked up the latest news. ZH has run a couple of things in the past 30 days or so about the Belarus economy. This is from CBS News--- google 9/14/11


"Lukashenko has cheated us, and my trust in him is disappearing as my pension is losing its value," said Galina Grigorovich, a 68-year old retiree who stood outside an exchange booth in the Belarusian capital of Minsk, hoping to buy hard currency.

But there was no hard currency on sale in that and most other street exchange offices in Minsk on Wednesday, despite the ruble being allowed to float freely on the exchange.

Belarus in June asked the International Monetary Fund for a loan of up to $8 billion. The IMF said in a statement issued Wednesday after a review of Belarus' economic policies that the nation would need to demonstrate its commitment to strong policies and structural reforms to qualify for the Fund's assistance.


The Belarusian ruble weakened sharply to 8,600 rubles to the dollar compared with the official rate of 5,347 rubles. On the black market, the battered currency had been trading around 8,000 per dollar.

Wed, 09/14/2011 - 21:20 | 1671409 PulauHantu29
PulauHantu29's picture

Billions in Bonuses handed out there at 2009 and 2010 thanks to the generous American Taxpyer.

How about 2011?  Will Bankfine refurbish his Yacht this year?

Wed, 09/14/2011 - 21:35 | 1671440 dwdollar
dwdollar's picture

He might have to cut back and go with a refurbishment instead of a new one this year.

Wed, 09/14/2011 - 21:28 | 1671413 slewie the pi-rat
slewie the pi-rat's picture

alpha down? 

no problemo.  just suck in some more rubes looking for that S&P "return" and use waaay more leverage, right? 

why tf would anybody accept 4% for 30 years when (s)he/it can get the S&P "return"? w/ a "cost of equity discount rate of only 8.7%??

"hi!  i'm bill gross, and i, too have been dead wrong on everything for months, now.  i rilly, rilly like bonds @ 141+, donchew?  i'm gonna take my maturities waaay out to almost 7 and...?  ...what?  you're just not big enuf to understand how my "funds" work, that's all!" 

Thu, 09/15/2011 - 00:32 | 1671946 LongBallsShortBrains
LongBallsShortBrains's picture

The fed isn't worried about returns......yet

Wed, 09/14/2011 - 21:28 | 1671422 JohnG
JohnG's picture

Off to rehab!!

Wed, 09/14/2011 - 21:41 | 1671455 Pancho Villa
Pancho Villa's picture

The squid becomes calamari! (Which just happens to be a popular food in Greece and Italy).

Wed, 09/14/2011 - 21:56 | 1671496 Hephasteus
Hephasteus's picture

"What is just as ominous is that if Goldman's quant fund has now blown up, then there are tens if not hundreds of other quant funds, and otherwise, that are completely defunct and liquidating, but simply choose to keep quiet."

Advanced ponzi rot causes blindness and makes you mute.



Wed, 09/14/2011 - 21:57 | 1671499 Reese Bobby
Reese Bobby's picture

I worry ZH is Jumping The Shark with this post.  A $1 billion quant fund sucking wind is THE event to set off market contagion?  Come on...and I am a ZH fan/addict...

Wed, 09/14/2011 - 22:19 | 1671572 Tyler Durden
Tyler Durden's picture

Who said it will set off contagion? We said it is a benchmark of the wreckage in the current market, and like last time around, that benchmark indicated very rough waters ahead as real liquidity, not fake HFT bullshit, is being eliminated.

Don't worry: a bankrupt Europe is a far greater concern to everyone at ZH than a simple, and very mortal, quant fund going under.

Wed, 09/14/2011 - 22:24 | 1671587 Reese Bobby
Reese Bobby's picture

Like I said...I am a fan.  Thanks for the clarification...

Wed, 09/14/2011 - 23:08 | 1671711 Hephasteus
Hephasteus's picture

Well you said it yourself the other day about divergence in the credit markets towards the equity markets. Europe contagion is a credit event. But this is the beginning of the equity events. Just because one is a blade and one is a handle doesn't mean they aren't the same knife.

Someone somewhere believes HFT has the power to put equity markets in ponzi credit market proof bubble. Or at least pretend it can for longer periods in history than have ever been imaginable. A quant fund going under means every corporation that funds itself through stock IPO ponzi scheme is forced back into the credit markets. Just like all the banks who threw bad loans at the ponzi where forced back into the credit markets (US taxpayers).

So seperating them is not really possible.

Wed, 09/14/2011 - 22:03 | 1671521 Jumbotron
Jumbotron's picture

Couple this story with this recent headline.....

The Head of Fidelity's Magellan Fund  has gotten the boot.

Here's a tidbit.....

Magellan once had more than $100 billion in assets during the 1990s.  When Lange took the helm, the fund fell from $52 billion to $17 billion, Reuters reported. 

Read more:
Wed, 09/14/2011 - 22:04 | 1671524 slewie the pi-rat
slewie the pi-rat's picture

OT  NTC to Investigate Rights Group's Allegations of Abuses......amnesty int'l (AI) sez (paste):
In its report, Amnesty International said that “some (Al Qathafi loyalists) were beaten to death, that at least three were hanged, and others were shot dead after they had been captured or had surrendered.''

Amnesty acknowledged the alleged atrocities were of a ''smaller scale'' compared to those carried out by the dictatorial regime of ousted leader Muammar al Qathafi, which it said might be responsible for crimes against humanity.

In a statement, the NTC's executive committee said it ''strongly condemns any abuses perpetrated by either side''. (End paste)

NATO allies commit "smaller scale" atrocities.  allegedly. condemn.  strongly

Paul Simon- Homeless - YouTube    strongly.  strongly.  strongly.  strongly.

Thu, 09/15/2011 - 01:16 | 1672033 Hephasteus
Hephasteus's picture

Ya crimes against humanity. Didn't he open fire on rebels trying to set up a central bank in his country?

That's fucking turrible. Just turrible.

Wed, 09/14/2011 - 22:07 | 1671533 Flatchestynerdette
Flatchestynerdette's picture

Those who have been around for more than one trading generation (which in the old days was 3-4 years, but in the current centrally-planned, vacuum tube-traded times, is more like 3-4 months)...


I'm ancient and should be on life support if you're using this standard of time frame

Wed, 09/14/2011 - 22:17 | 1671568 vegas
vegas's picture

Well, given that standard of time, I've got mummy wraps on and embalming fluid leaking everywhere. Long live the mummies!

Wed, 09/14/2011 - 22:19 | 1671570 2discern
2discern's picture

Please insert the Timmy bit at this most opportune time -


well, well

Wed, 09/14/2011 - 22:20 | 1671574 warchopper
warchopper's picture

Every day I'm in the market, I feel like I'm playing chicken.

Wed, 09/14/2011 - 22:30 | 1671600 hayleecomet
hayleecomet's picture

This is a very, very stupid question, but where have all the trillions gone?  Somebody's sitting on all the fiat.  Where is it?

Thu, 09/15/2011 - 06:54 | 1672391 Withdrawn Sanction
Withdrawn Sanction's picture

"Somebody's sitting on all the fiat."

Not necessarily. Ever seen a price gap in a stock or index? XOM, for example, trades at 105 one day and then opens, gap down at 95 (on some rumor or other, say). Where'd that 10 go? No where, into oblivion, disappeared. Nobody got it, but the holders of XOM certainly took in the portfolio.

Money values can and do just vanish. That's what makes a deflation of financial assets such and article of abject fear for central bankers and why they are working so hard (but pointlessly) to stop it.

Thu, 09/15/2011 - 00:59 | 1671744 malek
malek's picture

Just 3, no sorry, 4 years ago:

“We were seeing things that were 25-standard deviation moves, several days in a row,” said David Viniar, Goldman’s chief financial officer.

And a must read from those times, on the bailout of the Global Equity Opportunities fund (please don't drink or eat while reading this, your keyboard will thank you):

Thu, 09/15/2011 - 00:52 | 1671987 Coldfire
Coldfire's picture

Just a flesh wound.

Thu, 09/15/2011 - 05:34 | 1672323 lolmaster
lolmaster's picture

GS can thank SNB for this blow up

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