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The Rumors Were True: Paulson Liquidates A Third Of His GLD Gold Share Class; Buys More Bank Of America And Capital One

Tyler Durden's picture


Well, he may not be liquidating, and he may be telling others he has experienced barely any redemptions, but Paulson's gold share class, represented entirely by the fund's GLD holdings would beg to differ: as of September 30, Paulson's total holdings of GLD were down by a third from 31.5 million shares or $4.6 billion at the end of Q2, to 20.2 million or $3.2 billion. And as is well known, GLD is not an actual investment for Paulson, but merely a representative asset class for those who opt to have their fund holdings represented in gold (the smart ones) instead of in dollars. Indicatively the only Paulson & co investors who made any money, or at least did not lose much, were those who opted for a gold share class. Either way, it is now safe to assume that at least a third of the fund has been permanently redeemed, further confirmed by the drop in the AUM from $29 billion to $20.7 billion as per the actual filing. But wait, there's more: while Paulson was busy selling across the board, in the process liquidating all of his JPM holdings as well as his positions in Comcast (no CNBC for you), Savvis, NYSE Euronext and State Street, and following in Tepper's footsteps in selling across the board, the former Bear trader did what all other allegedly doomed institutions do and added to, you guessed it, the biggest loser Bank of America, increasing his position by almost 4 million shares... even as the total value of his 64 million BAC stake, which closed Q3 at the same price it is today, dropped by $269 million! And that's why he is a billionaire and you are not. At least we know who Tepper was selling to. But that's not all: Paulson also added 1.1 million share to his CapitalOne position, bringing the total to 22.2 million shares, even as the total value of his revised position dropped by $210 million to $880 million. And so forth. Some other names in which he took brand new stakes in (picture that: he did not spend all of Q3 selling) in Motorola Mobility, Nalco, Cephalon, AMC and a bunch of irrelevant others. So to all those who are now in the same place they were in 2008: tough, but at least your fees made JP into a multi-billionaire. Congratulations.


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Mon, 11/14/2011 - 19:08 | 1877315 slaughterer
slaughterer's picture

Whale watching the misled gold dumper


Mon, 11/14/2011 - 19:08 | 1877319 monkeyboy
monkeyboy's picture

But Why?

Mon, 11/14/2011 - 19:13 | 1877332 gmrpeabody
gmrpeabody's picture

Why what?

Mon, 11/14/2011 - 19:14 | 1877334 Richard Chesler
Richard Chesler's picture

The Dick Bovine school of trading.


Mon, 11/14/2011 - 20:08 | 1877498 Pladizow
Pladizow's picture

US Gov to Paulsen: Buy BAC or we'll "revisit" that Abacus/Goldman shit!

Mon, 11/14/2011 - 21:25 | 1877779 LongBalls
LongBalls's picture

For all we know he could be taking his GLD money and buying real gold.

Mon, 11/14/2011 - 22:03 | 1877868 Ura Bonehead
Ura Bonehead's picture

No.  Can you say margin calls?  When you're a leveraged hedgie you sell what you can, not what you want when the margin clerk comes callin'.  Selling GLD, at least you get to book SOME profits for the qtr.

Tue, 11/15/2011 - 09:47 | 1878782 bernorange
bernorange's picture

My guess: anticipation of Dilution Day

Tue, 11/15/2011 - 00:18 | 1878197 tiger7905
tiger7905's picture

Some comments by a US trader on gold.

Says paper to physical is now 110 to 1.

Tue, 11/15/2011 - 00:59 | 1878264 The Big Ching-aso
The Big Ching-aso's picture



Shit, does he and Celente take the same hallucinogens?

Mon, 11/14/2011 - 19:08 | 1877318 monkeyboy
monkeyboy's picture

But why?

Mon, 11/14/2011 - 19:10 | 1877323 slaughterer
slaughterer's picture

Because he can... and BAC represent a better ROI /LOL /sarc

Mon, 11/14/2011 - 19:16 | 1877336 gmrpeabody
gmrpeabody's picture

Maybe it's a George Costanza thing..., you know, just do the opposite!

Mon, 11/14/2011 - 19:10 | 1877321 SirIssacNewton
SirIssacNewton's picture

JP is laughing all the way to the bank....just not the ones he's invested in......

Mon, 11/14/2011 - 19:10 | 1877322 oldman
oldman's picture

do nothing

Mon, 11/14/2011 - 19:11 | 1877325 monopoly
monopoly's picture

BAC and Capitol One. I cannot believe that. This is a really smart guy. He now owns Countrywide and Merrill. Oh my. I think I will stay with my simple thinking and not go there.

Mon, 11/14/2011 - 19:19 | 1877347 JohnG
JohnG's picture

What's in yerrrrr wallet?

Mines filled with 2/3 gold, 1/3 silver (bullion and miners.....) 


Mon, 11/14/2011 - 20:23 | 1877569 monopoly
monopoly's picture

I am right next to you JohnG. And a few miners to sweeten the pot..

Mon, 11/14/2011 - 20:08 | 1877506 LibertyIn2010
LibertyIn2010's picture

I smell another taxpayer government bailout of the TBTF banks coming soon

Mon, 11/14/2011 - 19:11 | 1877326 YesWeKahn
YesWeKahn's picture

Throwing bad money after good?

Tue, 11/29/2011 - 16:05 | 1927047 dizzyfingers
dizzyfingers's picture

...isn't it by now bad money after bad?

Mon, 11/14/2011 - 19:12 | 1877329 vegas
vegas's picture

Not sure this was the smartest move I've ever seen. But hey, that's why we have markets. I'm sure he thinks BAC is TBTF so WTF. The Bernank put in all its glory is on display for the world to see. When this turd gets liquidated at 0.02 I think I'll be snickering and wondering again: WTF - why?

Tue, 11/15/2011 - 01:21 | 1878299 Number 156
Number 156's picture

Paulson is TBTF, the taxpayer will essentially be bailing out his positions.


Mon, 11/14/2011 - 19:12 | 1877330 slaughterer
slaughterer's picture

So, the lesson from this quarter's whale watching: Buy BAC and HFC.    WTF???

Mon, 11/14/2011 - 19:14 | 1877333 ItsDanger
ItsDanger's picture

Looks like a classic case of doubling down. Sell the winners and pile onto the losers.  This will end badly for them. Redeem everything now.  


Mon, 11/14/2011 - 19:55 | 1877460 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I believe the correct term would be double-up and throw up. But I suppose anyone who's stayed with Paulson this year will get what's coming to them.

Mon, 11/14/2011 - 19:15 | 1877335 Johnny Yuma
Johnny Yuma's picture

Wow, what a rookie move, averaging his losers. It'd be very interesting to see his entire position statements as this is his long only positions. 

Mon, 11/14/2011 - 19:16 | 1877338 Silverhog
Silverhog's picture

Is it April 1st?

Mon, 11/14/2011 - 19:17 | 1877340 Darth..Putter
Darth..Putter's picture

He was directed to do so by the Empire

Mon, 11/14/2011 - 19:18 | 1877343 jcaz
jcaz's picture

How Corzine-like.....

Mon, 11/14/2011 - 19:19 | 1877345 The Deleuzian
The Deleuzian's picture

Paper gold...Who cares!!

Mon, 11/14/2011 - 19:22 | 1877348 bank guy in Brussels
bank guy in Brussels's picture

Capital One ... astonishing to me they have that quite insidiously double-meaning advertising slogan:

'What's in YOUR Wallet?'

Always suggested to me that the bank wanted to TAKE what was in your wallet.

Commercials seen in the UK as well as the US, whole bunch of them on YouTube. One of them even with pirates, Bluebeard-style, 'Aaargh, what's in your wallet?'

Fits some banks well.

Mon, 11/14/2011 - 19:22 | 1877349 jmcadg
jmcadg's picture

Transfer from one tool to another by another. Paulson is no god, he's just another fuckshite.

Would have been better changing GLD in Cobra!

Mon, 11/14/2011 - 19:23 | 1877350 DosZap
DosZap's picture

No one as smart as he is, does this without a backstop.No one.

Mon, 11/14/2011 - 19:38 | 1877395 A Man without Q...
A Man without Qualities's picture

Maybe the backstop is they promise not to bring charges against him for the ABACUS deal?  


Mon, 11/14/2011 - 22:43 | 1877955 CPL
CPL's picture

Maybe he just bought some of the real deal.  Doesn't make sense holding a piece of paper that can't deliver and he knows it.


Fuck paper

Fuck equities

Fuck bonds

Fuck tbills.


Expensive wallpaper, gold however makes an expensive paper weight.

Mon, 11/14/2011 - 19:26 | 1877354 css1971
css1971's picture

Has he looked at the 30 year chart of BAC? It hit a wall in 08 at high speed and is just bouncing down the road to zero. "It's dead Jim." The FED keeping it alive?

I know. Contrarian. Billions etc.

Mon, 11/14/2011 - 19:31 | 1877365 chump666
chump666's picture

Trade war about to go hot on Obama "China gaming the system".  USD bid, stocks down and Paulson should not underestimate China's liquidity issues. China goes, should take out the idea of a QE3 stock bull run.

Obama "gaming" quote

ZH, check wires Brazil is also tag teaming with US on a China trade war beatdown.  Tasty.

Mon, 11/14/2011 - 19:30 | 1877368 eddiebe
eddiebe's picture

One for the banksters and the ink jets

Mon, 11/14/2011 - 19:31 | 1877371 Missiondweller
Missiondweller's picture

I just don't see how BAC survives in its present form.


I'd love to hear how much their deposits have decreased in the last 60 days.

Mon, 11/14/2011 - 22:45 | 1877963 CPL
CPL's picture

Too bad earnings aren't due.  Should be able to ferret out something from that unless they start double counting accounts.


Would not surprise me in the least if they did.

Mon, 11/14/2011 - 19:31 | 1877374 eddiebe
eddiebe's picture

Paulson sez: If you can't beat them join them.

Mon, 11/14/2011 - 19:31 | 1877375 Seasmoke
Seasmoke's picture

selling the winners to make up for the losers........eventually leads to the walls are closing in on paulson

Mon, 11/14/2011 - 20:37 | 1877619 SHEEPFUKKER

How about selling your losers and doubling up on your winners? 

Mon, 11/14/2011 - 22:46 | 1877967 CPL
CPL's picture

Hey don't say that...far too much sense.  Paulson might read it and then things start moving again.

Mon, 11/14/2011 - 19:32 | 1877377 Steroid
Steroid's picture

How to make a millionaire ...from a billionaire!

Mon, 11/14/2011 - 19:33 | 1877381 GtownSLV
GtownSLV's picture

Reeks of desperation!

Mon, 11/14/2011 - 19:36 | 1877391 DaBernank
DaBernank's picture

I'm reminded of the Mr. Show sketch, "more money means better" -- So, because he's a billionaire, Paulson's better than you!

But seriously, paper gold is better than the paper nothingness of BAC... He's gone full retard.

Mon, 11/14/2011 - 19:36 | 1877393 Long-John-Silver
Long-John-Silver's picture

BWAhahahahahahahahaha! AaaaRrrrrgggggg mates! He's made a fools move, prepare to cut down his rigging and board that bastard.

Mon, 11/14/2011 - 22:47 | 1877969 CPL
CPL's picture

Yarrr, it's drivin me nuts!


Best.  Punchline.  Ever.

Mon, 11/14/2011 - 19:40 | 1877405 Darth Silver
Darth Silver's picture

Nuttier than a 6 balled tomcat.

That's all I got to say about that

Mon, 11/14/2011 - 19:41 | 1877412 navy62802
navy62802's picture

Nuttier than a 6 balled tomcat.

Well played, sirrah, well played indeed.

Mon, 11/14/2011 - 19:42 | 1877406 navy62802
navy62802's picture

Well, shit, why didn't he just buy up some Netflix shares? They're probably going to last longer than BAC and COF.

On a side note, this is scary shit. Who else out there is doing this sort of thing? And when these institutions come crashing down, what will be the effect? I can't believe that sane people are still dumping money into these zombie institutions. It's deranged is what it is ... and very frightening. I mean sell gold to buy BAC??? WTF is that?

Mon, 11/14/2011 - 20:03 | 1877486 Phil Free
Phil Free's picture

Yeah, it makes absolutely 0% sense.  Unless he plans to profit on expectations.  Say, a bunch of whale watchers think he knows something they don't, and decide to pile on and buy into BAC.  Price goes up.  He promptly sells.  PROFIT!!!


.. or am I just being obtuse?

Mon, 11/14/2011 - 20:31 | 1877597 navy62802
navy62802's picture

I can understand that line of thinking, and it makes sense to me. So by simply taking a big position in a certain stock, he causes the stock to go up in value and thereby profits. I have to say, though, that I come at this whole thing from a fundamentals perspective (as an engineer by education). That's why I don't consider motives like this. And that's why I'm not a professional trader in this market. This market is not trading on fundamentals of capitalism. It is, instead, trading on the whims of human emotion and sentiment, neither of which is predictable. Perhaps a degree in psychology is more valuable to today's traders than anything else.

Mon, 11/14/2011 - 21:04 | 1877715 Phil Free
Phil Free's picture

Yes, that is very much the case.  We have entered a rather rarified space, "..where no man has gone before".  Quantum Trading!  I am reminded of how the laws of physics break down and have basically no revelance when one reaches the quantum state.  That's kind of like where the Market is now.  All normal operative laws have gone straight out the window.  Anything goes!  Anything can happen!  Expect the unexpected!  So, yes.  Normalcy has broken down.  The ID, the unconcious now rules.  Perhaps like a herd beast.  Hmmm... perhaps I should stop now while I'm ahead..

Mon, 11/14/2011 - 22:33 | 1877935 Iam_Silverman
Iam_Silverman's picture

"Who else out there is doing this sort of thing? "

Buying BAC?  Warren Buffet?

"I mean sell gold to buy BAC???"

Please, do not mistake GLD (paper shares where someone promises to have gold for you) with the bullion you can store yourself.  Not the same stuff.  He sold paper to buy more paper, but with a different name on it.

Mon, 11/14/2011 - 22:39 | 1877948 navy62802
navy62802's picture

Please, do not mistake GLD (paper shares where someone promises to have gold for you) with the bullion you can store yourself.  Not the same stuff.  He sold paper to buy more paper, but with a different name on it.

Oh certainly. I would never mistake GLD for physical. And yes, GLD is really nothing more than paper. But in principle, it represents an asset that will undoubtedly only appreciate in value as various forms of "quantitative easing" continue. Unless, of course, Paulson knows something we don't. Perhaps he knows that the paper market is about to go up in flames and skyrocket the price of physical. But I doubt that. Probably just following the herd, the conventional wisdom. He'll get burned again, my stash will gain value.

Tue, 11/15/2011 - 09:25 | 1878722 Iam_Silverman
Iam_Silverman's picture

"Unless, of course, Paulson knows something we don't."

This is what I'd bet on.  Remember, only the largest investors (such as Paulson) were able to receive physical in exchange for their shares.  Could be that a little birdie told him that the time for holding paper that is rumored to outnumber actual physical quantities has come to an end, and best to convert it to a more protected investment.  Although BAC appears to be in flames, they are still the largest bank (by deposits) in the U.S.  Being the first to fail also protects their depositors as they would probably drain the FDIC instantly, and all others that hold counter party risk will go up in smoke - and their depositors are screwed.  So, while it looks strange to hitch your future to s stumbling giant, there may be method to his madness.

Mon, 11/14/2011 - 19:43 | 1877419 XtraBullish
XtraBullish's picture

I think it was a credit to JP that he was able to retain 2/3 of his GLD, given that it was the only winning position...and the fact that his (smarter than he) customers probably forced him to keep it and gas the others.

Mon, 11/14/2011 - 19:45 | 1877424 mynhair
mynhair's picture

So Pelousy gave him some inside info; so what, peons?

Mon, 11/14/2011 - 19:50 | 1877434 gina distrusts gov
gina distrusts gov's picture

"Reeks of desperation!" 

 It might or he is in the loop  and the London metals exchange and comdex  are about to explode then paper gold will be wortless,and benny and the ink jets are going into high gear to rescue tho banksters again

Mon, 11/14/2011 - 20:06 | 1877444 lolmao500
lolmao500's picture

So... he's getting word from congress that they gonna start another TARP or what?

Mon, 11/14/2011 - 19:51 | 1877451 pleseus
pleseus's picture

I got a feeling the hedge herd doesn't know what it's doing.  Sell something good to buy something bad.  QE3 or no QE3.  Buy gold/Sell gold.  Where's leader Ben to point everybody in the right direction.  Once we get past Jan. 1, 2012 I think we are going to get QE3.  High unemployment and deflationary fart vapors will be the reason.

Mon, 11/14/2011 - 19:58 | 1877467 kito
kito's picture

johnnie boy sees the ss deflation heading to shore

Mon, 11/14/2011 - 20:07 | 1877499 fonzanoon
fonzanoon's picture

Kyle Bass is buying homebuilders or whatever and Paulson added to BAC.  Something stinks.

Mon, 11/14/2011 - 20:28 | 1877587 Cabreado
Cabreado's picture

Chaos does have a distinct odor, doesn't it?

Mon, 11/14/2011 - 20:42 | 1877639 monopoly
monopoly's picture

Good point fonzanoon, did not think of that....QE3 known just to the ones that care??

Mon, 11/14/2011 - 20:46 | 1877653 monopoly
monopoly's picture

Of course, then gold would go ballistic as the dollar headed closer to the abyss, so why sell your gold? We will know soon enough and am sure Zero Hedge knows how to turn most of the filthy rocks and follow the stench for the answer for us. And we send Zero Hedge donations. Like it.

Mon, 11/14/2011 - 20:59 | 1877698 rawsienna
rawsienna's picture

bunch of ex bear people at BOA - Paulson ex Bear person - Got to be a idiot to buy the stock unless one of his buddies tipped him off.  

Mon, 11/14/2011 - 21:08 | 1877731 txsilverbug
txsilverbug's picture

A guy I know bought a shitload of BAC, his reasoning?  "Its undervalued and cheap man"  My retort was "its cheap for a reason you effin dumbass"

Mon, 11/14/2011 - 21:22 | 1877768 High Plains Drifter
High Plains Drifter's picture

yeh and a lot of people bought enron when it was going down thinking it would come back......

Mon, 11/14/2011 - 22:53 | 1877979 CPL
CPL's picture

Only after their divestment of their WorldCom stock but lucky thing is most of those people enjoyed the spoils of BreX first by capitalizing on their Savings and Loans bonds issued during the 80's...


Do people ever learn?  No.  No they don't.  Amazes me how dense the MSM is about the whole thing.

Mon, 11/14/2011 - 22:57 | 1877989 Savyindallas
Savyindallas's picture

Buy it if it gets down to a buck and a quarter. I lost my ass on MCI, Global Crossing, AtHome, K-mart - I'm due to get lucky betting on a penny stock.

Mon, 11/14/2011 - 21:13 | 1877743 fonzanoon
fonzanoon's picture

Even if they did QE3 and threw money out the window the last place I would invest it is in BAC.  It makes absolutely no sense. Did Paulson go full retard? I think it's possible. Some people just get so full of themselves they are convinced they will be right.

Mon, 11/14/2011 - 21:21 | 1877766 High Plains Drifter
High Plains Drifter's picture

selling gld and buying boa and cof ?  is this prudent?  

Mon, 11/14/2011 - 21:31 | 1877794 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Double down baby! OPM, it's a wonder to behold.

It's a call option at this point.

Mon, 11/14/2011 - 22:01 | 1877866 Tater Salad
Tater Salad's picture

So funny that this should be such a mystery to so many.  I get a kick out of the fact that so many on this site were running for the hills for the last two years with all of the liquidity of QE behind the markets.  Now that the banks are absolutely decimated and offer some valuations of less than book value in most cases, why should it be a shocker that a hedgie such as JP would be willing to play that leverage with huge margins of safety priced in? 

It was safer to fly on September 12th, same goes for the banks...

Mon, 11/14/2011 - 22:46 | 1877890 Mercury
Mercury's picture

And as is well known, GLD is not an actual investment for Paulson, but merely a representative asset class for those who opt to have their fund holdings represented in gold (the smart ones) instead of in dollars.

I don't know...sounds like that's just a final, 100% of NAV leveraged bet on gold on top of whatever else the fund is positioned in (and levered up to).  If Paulson is buying say, gold miner stocks with dollars and then hedging that dollar share price exposure with gold - that seems like a lot of friction genrating tail chasing.

  But BAC....still....yikes.  Pricing in gold won't make shit shine.

Mon, 11/14/2011 - 22:21 | 1877911 chump666
chump666's picture

I don't think these guys know what the f*ck they are doing.  Still can't believe they actually think a money print job will rally markets this time.   The end is very close.  And it aint Europe, although EZ will set it's China.  Defaltion/economic ice age from hell. 

Take it...

Mon, 11/14/2011 - 22:27 | 1877912 chump666
chump666's picture

and we have some CNY and CNH selling.  Nice Asian bear signal for Europe/US opens. 

Mon, 11/14/2011 - 22:29 | 1877924 chump666
chump666's picture

like clockwork:

*The PBOC cuts the one-year bill yield in Tuesday's open-market operation for the second week in a row, signaling that Beijing is allowing monetary conditions to ease further.

There goes China. 

Mon, 11/14/2011 - 22:56 | 1877984 CPL
CPL's picture

Now the official race to the bottom...

Mon, 11/14/2011 - 23:11 | 1878018 JW n FL
JW n FL's picture



this is a train coming off the tracks.. or is it? if Europes Banks Burn (along with their U.S. counterparty's) which banks would be left standing? which Banks would Bernake pump up? Is Paulson crazy? we all know better than that!

Mon, 11/14/2011 - 23:38 | 1878078 Scalaris
Scalaris's picture

Averaging d(r)own? 'Cause that's some mighty bettin' on opening ta(r)ps.

Mon, 11/14/2011 - 23:45 | 1878087 FutureShock
FutureShock's picture


US Banks should see Euros comming in

Buffett bought/invested in  BOA follwing a trip to the white house

Us banks fail - everyone fails, should see bailouts as the host country can print and is the reserve currency

Computer generated printed backstopping not real currency in the system generating high inflations. Regulation and tough lending qualifications keeps velocity eased.

but I like Tepper so WTF?  grabbing popcorn while some powder is dry and some is shiny. 



Mon, 11/14/2011 - 23:53 | 1878125 reader2010
reader2010's picture

QE Infinite is coming to Amerika.  Probability for that is at 100% confidence level.

Tue, 11/15/2011 - 06:53 | 1878489 GetZeeGold
GetZeeGold's picture




Sells paper gold..........sell the wind.

Tue, 11/15/2011 - 08:43 | 1878636 highwaytoserfdom
highwaytoserfdom's picture

As a small trader who was told in 2008 that he could not short the banks I am upset.  The propaganda machine has made a hero of Paulson. The man Paulson should be convicted of insidere tradiong. The CDO ABX scam where Goldman (TBTF) conspired  with  Treasuary and FED to protect the syntetic derivatives releated to both credit and housiong.  The TBIF levered then sold back to GSE or other insurance fraud schemes creating a massive paper gain for the few deeply currupting any pretex of a free market.   When you run fiat and the true meaning of "TRUST" is apparent.  Now in my opinion BAC was forced into the CountryWide purcahse (probally discount window funds) putting not only the highly overpriced housing (defined as more than 3 times average income) and the highly levered  derivative  issued to the TBTF's. .       Paulson  both John and Hank told America to "TRUST" to protect the paper holders which  were sovergns (both countries and state pensions) to cover up the crimes of in the know credit manuplitation of enterprise.    That is where we are at...    Now the choice  that would make the market fuction and change the (Trust Me ie f%ck you) to a Webster Trust ( a: assured reliance on the character, ability, strength, or truth of someone or something b: one in which confidence is placed) .  We don't need TBTF we need healthy sector rotation out of housing, financials, warfare and medical.  We don't need Japan solutions.  

Operative word of free market people should be "clawbacks". 

 The Rothschilds, and that class of money-lenders of whom they are the representatives and agents - men who never think of lending a shilling to their next-door neighbors, for purposes of honest industry, unless upon the most ample security, and at the highest rate of interest - stand ready, at all times, to lend money in unlimited amounts to those robbers and murderers, who call themselves governments, to be expended in shooting down those who do not submit quietly to being robbed and enslaved.   Lysnadre Spooner  from No Treason

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