Man Down As Hedge Fund Redemptions Arrive: 25% Of Hedge Funds Industry To Follow Into That Good Night

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Wed, 09/28/2011 - 12:19 | 1718683 Robslob
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I RECOMMEND YOU PANIC!

Wed, 09/28/2011 - 12:24 | 1718703 GeneMarchbanks
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Hugh Hendry did say that this would happen. Slowly, that dude is looking smarter everyday. Now if he would only bring Soros down...

Wed, 09/28/2011 - 13:07 | 1718793 TruthInSunshine
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25% losses, in the aggregate + apply 'traditional' amount of leverage = SHTF

 

-An interview on CNBSc or Bloomturd, sometime in the near future-

 

CNBSc or Bloomberg Bubble Head of choice:    "Who could have seen this coming, right?"

 

Barton Biggs:                                               [Is elbowed awake by the anchor] "Right. It's just one of those things. I just wish I had done the opposite of whatever I did, which I don't recall doing."

 

Jamie Dimon:                                              "My daughter asked me what's a financial crisis. I told her it's something that happens every 28 to 36 months. I know that I said 6 or 8 years before, but that no longer fits, and I lie all the time."

 

Lloyd Blankfein:                                           "What, me worry?"

 

Warren Buffett:                                            "Do you have a bathtub anywhere in the studio? I like bubble baths]."

 

Charlie Munger:                                           "Well, get ready to suck it up and prepare for another massive bailout of the banks and financials, or at least those owned by Berkshire, taxpayers."

 

Jim Cramer:                                                "Ben Bernanke has NO IDEA. HE HAS NO IDEA!"

 

Joe Kiernan:                                                "I am going to talk about something completely irrelevant and look smug while doing it, like how a certain someone might have some liquor in their coffee this morning. But I'm aware of financial matters."

 

Bernard Madoff:                                           "And people think I'm a criminal? Have you looked at the Bernank's handiwork laterly?"

 

Silvio Berlusconi:                                           "I can't go-a back-a to Italy right-a now, because Europe is in-a flames, as you all-a know-a, and the mob wants me sleeping with-a the - how do you say-a pesce? - but I will buy that Amanda Drury. How-a much-a?

Wed, 09/28/2011 - 13:08 | 1718854 GeneMarchbanks
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Not to mention GS Global Alpha fund which blew up. Soon the bodies will wash ashore.

Wed, 09/28/2011 - 13:11 | 1718858 Deadpool
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you have a lot of free time.

Wed, 09/28/2011 - 13:13 | 1718868 SheepDog-One
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The Hindu cow fund holders have 48 hours before being shipped off to the slaughterhouse? Well may as well chew some more green cud then, plenty of time before butchering time.

Wed, 09/28/2011 - 13:18 | 1718880 TruthInSunshine
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Ever since I shorted just about everything in 2007, I definitely do have a lot more free time [true story]. But who could've seen that coming (?).

Wed, 09/28/2011 - 13:56 | 1719029 CharlieSDT
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Glad to see the rich big client guys are losing too, and not just me on my crappy Schwab IRA.

http://www.singledudetravel.com/2011/09/charlies-first-ira/

Wed, 09/28/2011 - 14:11 | 1719090 TruthInSunshine
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Deadpool = 4 week member troll bot sent over from BAC on a mission to keep BAC from = $0

Wed, 09/28/2011 - 13:18 | 1718870 sqz
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At least Soros has demonstrated long-term competence. He's no longer really in the game anyway without private investors.

TruthInSunshine you forgot Roubini :)

Nouriel Roubini: "Don't say I didn't tell you!", "But you didn't, you just keep summarizing everything.", "Well, look harder, it was in there somewhere!"

To be fair, when he isn't massaging the egos of his unfortunately corrupt academic circle (*looks at* Larry Summers), the guy does have a brain and seems to struggle between saying his most extreme thoughts and not risking his reputation ...

Wed, 09/28/2011 - 13:49 | 1718972 Zero Govt
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So 25% of Hedgies pack-up and what? Where are these dice rolling gambling artists employable?? My greatest economic concern is not the zero loss to the economy but what it'll do to Porsche Cayanne sales in New York... they've seen a 30% YoY rise in the deepest darkest Index collapse between the twin peaks of Hedgies mountanous delusions in 2008 and 2011.

And with 25% of Hedgies gone there's a fat chance the Indexes can do anything but tank ...er, isn't there?

Unless Benny goes completely LaLa and prints $Trillions of counterfeit wealth pumping them into the last remaining vestiges of high finance (gambling joints). That'll be Goldman Sucks and JP Morgueticians then neither of whom according to sharp cookies like Reggie Middleton can make money trading, only stiffing clients and rigging markets.

So nothing productive then about hi-finance! Just destroying (consuming) others wealth with hi-fi con-tricks. Funny that's exactly what most critiques of Sucks and Morgue claim they are (ie. criminals)

Now it all adds up. It's why despite Bennys previous printing of $Trillions in counterfeit wealth to 'stimulate the economy' back to life he's not got a fuking Cent back in productive output from the economy from giving it to the wealth destroying US Govt and WS Gangsterland thugs. Benny is a relentless fuk-up in ever decreasing circles, and now we know why, all of his partners are fuking worthless 

Wed, 09/28/2011 - 14:09 | 1719012 TruthInSunshine
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When I wrote 25% "losses" above, I had meant to write "redemptions," which, for all practical terms today, and given what's happening to hedge fund performance, probably correlates pretty well to losses.

 

Zero Govt - We've read about all the 20 to 30 year veterans of hedge funds and other asset management shops, many of whom were actually some of the most credible managers, packing it in and returning all capital to partners/investors over the last couple of years (and especially the last year). They knew what was coming.

Wed, 09/28/2011 - 14:08 | 1719076 r101958
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"So 25% of Hedgies pack-up and what?"

Answer: Enter the unemployment line.

Wed, 09/28/2011 - 14:36 | 1719191 Things that go bump
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They call it funemployment these days.

Wed, 09/28/2011 - 15:41 | 1719439 DeadFred
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To me the question is about the mechanics of this thing. Suppose the hedge funds get that surge of redeptions on Friday, I assume they have to liquidate assets to get the cash, how much will that be and how long does it take. This may represent a substantial amount of stock and commodities hitting an already unsteady market all at once. If it comes as a rush on Monday it may be that last straw (or bale of straw) landing on the camels back. Bottom line is does anyone have a good feel for how much downward pressure this will put on the market?

Wed, 09/28/2011 - 19:07 | 1720160 Duffminster
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I think we are looking at multiple weighting inputs.  One is that the marco picture in China and Europe is making even those who believe that Ben Light Year will move to full on QE in short order and that TARP II is in the works, will still want to move to cash and so whether it is with hedge funds or just selling throught their own trading accounts, the impact of redemptions will be multiplied.

I'm just having a gut level feeling, all analysis aside, that we are about to enter a major liquidation phase across all asset classes and that the macro picture, the fear factor and the x factor are all going to act as a multiplying factor on the redemption problem and in short order.  When the S&P crosses 1000 Ben will have the necessary political cover to make big pronouncements and maybe Germany will get their people to help create a new constitution so that Germany can bail out the rest of Europe.  

I don't know.  It looks really frightening to me.  I expect the US exchange stabilization fund to be on over drive the next few weeks but given who the derivatives operatives are who place the buy orders and what their limitations are, I don't know how effective they will be given the very very stark global macro situation.

Thoughts?

Duffminster

 

Wed, 09/28/2011 - 19:07 | 1720161 Duffminster
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I think we are looking at multiple weighting inputs.  One is that the marco picture in China and Europe is making even those who believe that Ben Light Year will move to full on QE in short order and that TARP II is in the works, will still want to move to cash and so whether it is with hedge funds or just selling throught their own trading accounts, the impact of redemptions will be multiplied.

I'm just having a gut level feeling, all analysis aside, that we are about to enter a major liquidation phase across all asset classes and that the macro picture, the fear factor and the x factor are all going to act as a multiplying factor on the redemption problem and in short order.  When the S&P crosses 1000 Ben will have the necessary political cover to make big pronouncements and maybe Germany will get their people to help create a new constitution so that Germany can bail out the rest of Europe.  

I don't know.  It looks really frightening to me.  I expect the US exchange stabilization fund to be on over drive the next few weeks but given who the derivatives operatives are who place the buy orders and what their limitations are, I don't know how effective they will be given the very very stark global macro situation.

Thoughts?

Duffminster

 

Wed, 09/28/2011 - 13:57 | 1719032 RSloane
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Haha!

Wed, 09/28/2011 - 16:04 | 1719513 Ripped Chunk
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Can't stop what's coming.  Pound sand indefinitly. Fucked.

 

Wed, 09/28/2011 - 21:36 | 1720553 RobertMugabe
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The Barton B.I.G.G.S. quote made my night. Why is anyone still asking for his opnion on the market? The guy seems more confused about the what the market is doing than your average man on the street. Old people with a confused/terrified look constantly on their face give me the jeebies

Wed, 09/28/2011 - 14:42 | 1719221 Zeilschip
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Hugh Hendry is all about total armageddon. He looked liked a fool though the 10 years before 2007. Once in a while everyone gets something right.

Wed, 09/28/2011 - 12:30 | 1718733 Mike2756
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Just don't sell amzn at 104 P/E, that would be a tragic mistake.

Wed, 09/28/2011 - 13:08 | 1718853 kaiserhoff
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Bezos, like solar power, is always two years away from great profits;)

Wed, 09/28/2011 - 14:33 | 1719180 junkyardjack
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They are two months from buying Netflix

Wed, 09/28/2011 - 12:30 | 1718735 Falcon15
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But...but...but...my Hitchhikers Guide To the Galaxy says DON'T PANIC in large, friendly letters on it's cover!

http://www.youtube.com/watch?v=WB8XDk3sQBc

Wed, 09/28/2011 - 12:55 | 1718819 papaswamp
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The Infinite Improbability Drive is your friend....

Wed, 09/28/2011 - 12:33 | 1718746 Long-John-Silver
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I manage my PANIC attacks with a dose of BTFD.

Wed, 09/28/2011 - 13:02 | 1718839 Silver Me Timbers
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Ditto!

Wed, 09/28/2011 - 13:00 | 1718832 MarketTruth
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Fuck em!

Let The Bodies Hit The Floor

www.youtube.com/watch?v=sO_QntXc-c4

Wed, 09/28/2011 - 17:05 | 1719753 Strider52
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From Money.CNN:

Several traders and industry watchers say gold's sharp correction was largely due to hedge fund and other money managers amping up their cash holdings in anticipation that investors may start asking for cash back, raising the threat of a flood of redemption requests.

"Whenever you have a market correct as quickly as gold just did, you can assume people are getting margin calls," said Wayne Atwell, managing director at Rodman & Renshaw, who covers the precious metals market.

Wed, 09/28/2011 - 19:10 | 1720168 Duffminster
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It didn't help that COMEX and Shanghai hit the silver market with joint margin calls.  Silver is a powerful lever on gold prices.  Of course COMEX hit the market with a really big margin hike on gold.

I'm a bit suprised that in an envirionment like this one, Ben Light Year isn't buying gold to halt the perception of deflation which is about to crash ashore in the new few weeks. 

QE to Infinity and Beyond!

Wed, 09/28/2011 - 12:19 | 1718685 LongSoupLine
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Can you say "liquidation sale"?  Get ready for cascading, multiple day breaker tripping followed by "bank holidays".

Wed, 09/28/2011 - 12:29 | 1718690 Iriestx
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That or we'll just print anther trillion or two, give it away free to the hedge funds and continue to melt up every day on the rumor that Greece has been saved again, for the 50th time this month.

Wed, 09/28/2011 - 12:36 | 1718761 buzzsaw99
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That or we'll just print anther trillion or two, give it away free to the hedge funds...

 

That.

Wed, 09/28/2011 - 13:01 | 1718837 Smiddywesson
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That or we'll just print anther trillion or two, give it away free to the hedge funds...

Dont' be a cheapskate, let's do both.

Wed, 09/28/2011 - 13:15 | 1718862 Oh regional Indian
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Very true. They are the true weapons of mass distruction. 

Hedge Funds distort price. Massively. Of course, it's just a matter of order. It's all coming down soon enough.

ORI

Pertinent thoughts

Wed, 09/28/2011 - 12:25 | 1718708 DormRoom
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behaviour economics show investors sell their winners first.  gold is about to tank.

Wed, 09/28/2011 - 12:27 | 1718721 Deadpool
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don't confuse COMEX paper (subject to mutiple margin hikes +55%) to physical holders. Holders don't sell EVER.

Wed, 09/28/2011 - 12:31 | 1718736 Mike2756
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Except at Cash for Gold.

Wed, 09/28/2011 - 12:32 | 1718740 DormRoom
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the gold bubble will be like the real estate bubble.  you can hold the asset, but you'll be underwater for a while, if you got in late.

Wed, 09/28/2011 - 12:43 | 1718786 hack3434
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Yes...my gold AR loan is about to reset. What should I do?!?

 

/sarc 

Wed, 09/28/2011 - 14:04 | 1719058 CharlieSDT
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Don't know why everybody junks this assertion.  Metal spot will definitely go down in a crash, look at 2008.  This is good news for us physical collectors, and a grat buying opportunity.

 

Wed, 09/28/2011 - 14:36 | 1719190 junkyardjack
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PM's are "cheap" and getting cheaper by the day.

Wed, 09/28/2011 - 14:47 | 1719246 DrunkenMonkey
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Seems that might just be the case with all asset classes since the worldwide printing presses started and the hangover was rolled over for another day.

Wed, 09/28/2011 - 12:54 | 1718817 Going Loco
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I am a physical holder, and I do, and I did. Now that I am mostly in cash I will be buying back when I judge the time is right.

"growing investor desire to move money into cash"

This is a Liquidity crisis. For the moment, crap though it is, cash is King.

Wed, 09/28/2011 - 13:17 | 1718882 mayhem_korner
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Why pay the premiums on the round trip?  You're not really a 'holder'.

Wed, 09/28/2011 - 14:10 | 1719084 jomama
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holding cash, especially the US dollar, isn't an investment.

Wed, 09/28/2011 - 12:54 | 1718816 Vergeltung
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"dormRoom" is the perfect name for you, it really it. sums it all up nicely.

(Better, even, that a "mommy's basement" reference).

 

Wed, 09/28/2011 - 13:59 | 1719037 LikeClockwork
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Some of us are a still too young and unworldly to get the scale of the situation. My grandparents never could impart the reality of their formative years and it only just dawned on me properly yesterday. Dorm Room stop speculating and accumulate.

Wed, 09/28/2011 - 12:31 | 1718737 scatterbrains
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oh boy..  they better hurry and open those fed swap lines to the hedgies.. god forbid they start selling some of those mall properties.

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