• GoldCore
    07/30/2014 - 18:58
    “But long term...and economic law says, if you keep printing a lot of paper money, the value of the dollar and currency will go down, and things and most prices will go up and indeed gold always goes...

RenTec

Tyler Durden's picture

Congressional Hearing On Hedge Fund Tax Evasion Through "Fictional Derivatives" - Live Webcast





As reported yesterday, at 9:30 am this morning the permanent subcommittee on investigations will hold a hearing in which it will expose the latest tax-evasion loophole used by select high-frequency trading hedge funds which has the technical name "basket options", but which, thanks to Carl Levin's mnemonic of fictional derivatives" will be better known as such (read the full story How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"). It will be interesting to learn, although we doubt it will be discussed, how in light of collapsing trading volumes for underlying securities, how much of the record derivative and future trading volume in recent years is directly related to this kind of tax-evading trading, and perhaps just as important, whether Congress and the IRS will crack down on such practices in the future.

 
Tyler Durden's picture

How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"





From 1998 to 2013, Barclays and Deutsche Bank sold 199 basket options to hedge funds which used them to conduct more than $100 billion in trades. The subcommittee focused on options involving two of the largest basket option users, Renaissance Technology Corp. LLC (“RenTec”) and George Weiss Associates. The hedge funds often exercised the options shortly after the one-year mark and claimed the trading profits were eligible for the lower income tax rate that applies to long-term capital gains on assets held for at least a year. RenTec claimed it could treat the trading profits as long term gains, even though it executed an average of 26 to 39 million trades per year and held many positions for mere seconds. Data provided by the participants indicates that basket options produced about $34 billion in trading profits for RenTec alone, and more than $1 billion in financing and trading fees for the two banks.

 
Tyler Durden's picture

Quant Giant RenTec Has Best Month Ever In October Thanks To... Shorts





For all purists still stuck in a world in which humans are the most efficient allocators of capital, and where, under Ben Bernanke's centrally-planned New Normal, shorting stocks has become blasphemy, the following table showing the monthly return of quant giant RenTec's chief equity fund open to the outside world, the Renaissance Institutional Equities Fund (RIEF B), whose AUM has ballooned to $8.7 billion in the past few years, will come as a shock. Because the quant strategy-driven fund, which does not look at fundamentals but purely at technical relationships and quant arbs, just posted its best month in history in October returning 8.65% nearly doubling the 4.60% return of the broader market. But the truly stunning aspect of RenTec's October performance is that it was not driven by a highly levered beta position (2x leverage on the S&P would do it easily) which is how virtually everyone else does it (a strategy that works great as long as the market is going higher), but instead thanks to that nearly forgotten aspect of a "hedge" fund's exposure - shorts.

 
Tyler Durden's picture

A Simple Question For Senator Schumer





As many already know, earlier today Senator Schumer announced the cleverly named Ex-PATRIOT act, which seeks nothing short of exile for anyone who effectively declines their US citizenship for tax avoidance purposes. So far so good. We have, however, one simple question. In light of recent media reports of rampant abuse of various international tax loopholes by US corporations (recall the Double Irish with a Dutch Sandwich), but much more importantly, the glaring abuse of offshore tax shelters by hedge funds - organization such as Paulson & Co., RenTec, York Capital, etc., and financial institutions, such as Lazard, Blackstone, and Credit Suisse, can Senator Schumer please rep, warrant and guarantee that none of his corporate sponsors, i.e., his Top 100 Contributors, have ever engaged in any form of explicit or implicit tax avoidance, tax offshoring, and tax shelter. To facilitate his checklisting, we have presented his top 100 contributors below. Because if he can't, one may be left with the impression that his whole anti-tax tirade and legislation is, you know, hypocritical.

 
Tyler Durden's picture

Rentec's RIEF Collapses In 2009, Even Firm Admits It May Be Medallion Fodder





Rentech's RIEF investors can't be too happy. After underperforming the S&P by about 30%, and seeing AUM in the once fabled quant fund evaporate, they now have to contend with disclosure that there is "no assurance that trading of the Medallion Funds may will not have a negative effect on the trading of RIEF." Luckily for a now-retired Jim Simons (speaking of, what non-extradition countries has the billionaire code-breaker taken to vacationing in these days?), those same RIEF investors sure do seem to have a lot of patience.

 
Tyler Durden's picture

Jim Simons Retiring From RenTec; Is The SPARCs' Domination Ending?





 

JS to be replaced by Peter Brown and Robert Mercer

 
twinkie's picture

RenTec Will Trade Transparency for More Institutional Money





P&I's article “Renaissance to open up a bit”, discusses the firm’s quest for institutional money and reads very much like a marketing piece. Yes, RIEF performance this year is just awful and assets have “plummeted 81% to $5 billion as of June 30, down from a peak of $27 billion” but, after "massaging" these numbers, P&I was able to find something positive.

 
Tyler Durden's picture

Why Did RenTec Keep Their Madoff TRS After Uncovering His Ponziness, And Other Questions





Some stunning revelations have been disclosed in the David Kotz 477 page report on SEC's colossal (and in normal societies, terminal) blunder with Madoff. Primary among them is that everyone's favorite liquidity provider RenTec was not only an indirect investor in Madoff via its Meritage Fund of Funds, not only was fully aware based on internal correspondence that Madoff was a pyramid scheme, but that it did nothing to notify the authorities, and also decided to keep half of its investment with Bernie, even after numerous internal emails certifying the illegitimacy of the fund way back in 2003.

 
Tyler Durden's picture

Time To Revisit RenTec's Allegedly Illegal Dark Pool, Limit Order And Swap Transaction Strategies





Long before Sergey Aleynikov, in the summer of 2007, a major lawsuit between two quant titans shook the shadowy world of stat arbitrage and HFT. Alexander Belopolsky and Pavel Volfbeyn, at the time residing on the 7th floor of 666 Fifth Avenue (but not for long) and reporting to Millennium's Israel Englander, were about to get the back door treatment by their employer, who had just settled multi-year litigation with their former boss - East Setauket's original quant fund - Renaissance Technologies. But they would not go quietly into the night...

 
Tyler Durden's picture

East Setauket Update: RenTec June Letter, Medallion Not Bleeding RIEF Dry, Jimbo Happy To Explain What Is Going On... To Fields Medal Recipients





Just when people were convinced that the ongoing SEC investigation up in Stony Brook may forever end the good old cash exuberant days, where quantum physicists and voice pattern recognitionists somehow generated billions in P&L, Jim comes out and surprises everyone with a RIEF performance of up 0.88% MTD (excluding today's trading, one imagines). Oh, and he seems to enjoy patronizing all non-quant RIEF investors.

 
Tyler Durden's picture

East Setauket Update: RenTec June Letter, Medallion Not Bleeding RIEF Dry, Jimbo Happy To Explain What Is Going On... To Fields Medal Recipients





Just when people were convinced that the ongoing SEC investigation up in Stony Brook may forever end the good old cash exuberant days, where quantum physicists and voice pattern recognitionists somehow generated billions in P&L, Jim comes out and surprises everyone with a RIEF performance of up 0.88% MTD (excluding today's trading, one imagines). Oh, and he seems to enjoy patronizing all non-quant RIEF investors.

 
Tyler Durden's picture

RenTec Drops In Second Week Of June





After being up 0.22% for the month of June last week, Jim Simons 60th world largest supercomputer lost 0.13% in the second week and is now up just 0.09% MTD, whereas, thanks to such obvious market manipulation that even German fund managers are making fun of us, the S&P is now, as Bob Pisani points every second when he is not discussing how a sideways market is victory for the bulls, at 2009 highs.

 
Tyler Durden's picture

RenTec's Prime Brokers Keeping Very Busy





JP Morgan and Deutsche Bank continue dominating the trading in the most popular index hedges, SPY and IWM. Aside from these trading outliers, all is good, as consumer confidence spikes, and while retail sales continue dropping, the whisper, the promise, the hope, of at least one more sale at (or within +/-30% of) MSRP is in the air.

 
Tyler Durden's picture

RenTec's Prime Brokers Keeping Very Busy





JP Morgan and Deutsche Bank continue dominating the trading in the most popular index hedges, SPY and IWM. Aside from these trading outliers, all is good, as consumer confidence spikes, and while retail sales continue dropping, the whisper, the promise, the hope, of at least one more sale at (or within +/-30% of) MSRP is in the air.

 
Tyler Durden's picture

RenTec's RIEF/B Is Now Toe To Toe With S&P At 1.37% MTD For Both





After posting a deplorable relative performance in the first week of May, Simons' REIF is now matched with the S&P at 1.37% for both MTD. Did J.S. finally turn to the dark side and start buying SPY? If so, who is the marginal buyer left now that everyone is just a little pregnant.

 
Syndicate content
Do NOT follow this link or you will be banned from the site!