White Shoe Boys

Bill Bonner: Where did the US$ 700 billion go?

"You remember TARP? It was the feds' $700 billion program to rescue the US economy from a correction. Neil Barofsky was in charge of it. So we decided to go down and ask him how it turned out: '[..] What did they do with the money? They were supposed to increase lending so as to help bring about a recovery. None of them did that. Instead, they used it to repay each other's loans. In other words, they used it to reduce the amount of credit available...not increase it. And they bought US agency bonds...just as you'd expect. And they paid out their bonuses. In other words, they looked out for themselves...just as you'd expect.'" Continue reading →

Continue ReadingBill Bonner: Where did the US$ 700 billion go?

Serious Revolving Door Move (Hedge Fund Edition)

"Hedge fund billionaire Paul Tudor Jones has hired one of the International Monetary Fund’s most senior officials, reports FT. Lorenzo Giorgianni, the deputy head of the IMF’s policy department (!!), will join Jones’s Tudor Investment Corporation in October according to FT. This is serious stuff. IMF and World Bank people have access to all kinds of insider data about money flows and where money is placed. Just in casual conversations with IMF and World Bank people, I have learned all kinds of very valuable information. I know for example that Slovenia is most likely the next country to experience a financial crisis, because a senior guy at one of these organizations told me." Continue reading →

Continue ReadingSerious Revolving Door Move (Hedge Fund Edition)

Goldman Sachs Buys Gold; Tells Public to Sell

"Gold declined sharply in early April. That’s when Goldman Sachs issued a “sell” signal Then Goldman began quietly to buy shares of GLD, the ETF for gold. It now owns 3.7 million shares. It looked like a great call. The rubes who believed the report shorted gold. They made money. Briefly. Gold continued downward, bottoming at $1192 in on June 28. Meanwhile, Goldman was buying gold all the way down. Now gold is around $1400, and Goldman is sitting on a pile of shares of GLD, bought at rock-bottom prices. Watch what they do, not what they say." Continue reading →

Continue ReadingGoldman Sachs Buys Gold; Tells Public to Sell

Morgan Stanley execs mocked value of securities before sale to Taiwan bank

"Financial services giant Morgan Stanley may be facing charges it perpetrated a massive fraud in the sale of mortgage-backed securities, but no one can accuse the firm of lacking a sense of humor about it. Last month, e-mails surfaced in a 2010 New York civil fraud case showing that the firm’s executives sold the instruments to a Taiwanese bank for hundreds of millions of dollars knowing the impending collapse of the US housing market made the securities a hazardous investment – and they laughed about it." Continue reading →

Continue ReadingMorgan Stanley execs mocked value of securities before sale to Taiwan bank

Blackstone rental bonds revive fears of mortgage-backed crisis

"The private-equity firm Blackstone and Deutsche Bank are considering selling the first bonds backed by home-rental payments. The new security shows Wall Street financial engineering, blamed for deepening the financial crisis, has become more creative. Blackstone is among the firms that have spent billions buying homes out of foreclosure, helping to bolster demand and strengthen the US housing market, the WSJ reports. The private-equity giant has spent $5.5bn buying more than 30,000 houses to rent out. It is now working with Deutsche Bank to create securities tied to about 1,500 of the properties to form a rental bond deal worth up to $275 million." Continue reading →

Continue ReadingBlackstone rental bonds revive fears of mortgage-backed crisis

The Goodfellas of Wall Street

"If you think of the economy as this vast thing where success or failure is a matter of serving customers well, then you are deceiving yourself. (I’ve written about this before, about how America’s largest companies are basically products of state privilege.) This perspective is good too because the reality of the thing shatters many illusions. Think Obamacare is a socialist redistribution scheme? Take another look. What it really amounts to is the largest corporate giveaway and pork-filled legislation in the history of the country." Continue reading →

Continue ReadingThe Goodfellas of Wall Street

U.S. Funds Score Big by Betting Against Yen

"Wagering against the yen has emerged as the hottest trade on Wall Street over the past three months. George Soros, who made a fortune shorting the British pound in the 1990s, has scored gains of almost $1 billion on the trade since November, according to people with knowledge of the firm's positions. Others reaping big trading profits by riding the yen down include David Einhorn's Greenlight Capital, Daniel Loeb's Third Point LLC and Kyle Bass's Hayman Capital Management LP, investors say. The growing trade has itself helped pressure the yen, which has slid almost 20% in about four months. That, in turn, is helping fuel what could become a world-wide currency war." Continue reading →

Continue ReadingU.S. Funds Score Big by Betting Against Yen

U.S. Funds Score Big by Betting Against Yen

"Wagering against the yen has emerged as the hottest trade on Wall Street over the past three months. George Soros, who made a fortune shorting the British pound in the 1990s, has scored gains of almost $1 billion on the trade since November, according to people with knowledge of the firm's positions. Others reaping big trading profits by riding the yen down include David Einhorn's Greenlight Capital, Daniel Loeb's Third Point LLC and Kyle Bass's Hayman Capital Management LP, investors say. The growing trade has itself helped pressure the yen, which has slid almost 20% in about four months. That, in turn, is helping fuel what could become a world-wide currency war." Continue reading →

Continue ReadingU.S. Funds Score Big by Betting Against Yen

U.S. Funds Score Big by Betting Against Yen

"Wagering against the yen has emerged as the hottest trade on Wall Street over the past three months. George Soros, who made a fortune shorting the British pound in the 1990s, has scored gains of almost $1 billion on the trade since November, according to people with knowledge of the firm's positions. Others reaping big trading profits by riding the yen down include David Einhorn's Greenlight Capital, Daniel Loeb's Third Point LLC and Kyle Bass's Hayman Capital Management LP, investors say. The growing trade has itself helped pressure the yen, which has slid almost 20% in about four months. That, in turn, is helping fuel what could become a world-wide currency war." Continue reading →

Continue ReadingU.S. Funds Score Big by Betting Against Yen

U.S. Funds Score Big by Betting Against Yen

"Wagering against the yen has emerged as the hottest trade on Wall Street over the past three months. George Soros, who made a fortune shorting the British pound in the 1990s, has scored gains of almost $1 billion on the trade since November, according to people with knowledge of the firm's positions. Others reaping big trading profits by riding the yen down include David Einhorn's Greenlight Capital, Daniel Loeb's Third Point LLC and Kyle Bass's Hayman Capital Management LP, investors say. The growing trade has itself helped pressure the yen, which has slid almost 20% in about four months. That, in turn, is helping fuel what could become a world-wide currency war." Continue reading →

Continue ReadingU.S. Funds Score Big by Betting Against Yen