Friday, June 29, 2012

Hutchin Hill Quits 'London Whale' Trades

From FinAlt:
Another hedge fund is laying down the harpoon with which it speared JPMorgan Chase.

Hutchin Hill Capital has exited its credit-default swap trades betting against JPMorgan Chase's huge CDS index bets, trades that cost the bank at least $2 billion—although recent reports indicate the loss could be as much as $9 billion. Hutchin Hill is the second hedge fund that jumped on the opportunity offered by JPMorgan's so-called "London Whale," trader Bruno Iksil, known to have closed its positions.

Saba Capital Management was reported to have done so earlier this week.

Another of the hedge funds that profited from JPMorgan's predicament, BlueMountain Capital Management, has been engaged by the bank to help it unwind the disastrous derivatives trades.

Doubleline is still Defensive

Luz Padilla, Fund Manager at DoubleLine says she turned defensive in April after realizing that the EU debt crisis wasn't going to change for the better.

David Zervos is ecstatic

The ECB's balance sheet has been opened up via the ESM to directly recapitalize the European banking system. And that my friends is a game changer!! Oh yes, they finally figured it out - separating bank financing from state financing is the key to lifting the systemic risk cloud that has been hanging over the entire GLOBAL financial system. Having an effective backstop, and resolution structure, for bad European banks is all we wanted. Was it really that much to ask for? No one wanted to see the entire Irish state saddled with the cancer that had infected the Irish banks. That was insanity! And here in the US we don't care if Europe has structural growth problems or labor market inefficiencies. If everyone Frenchman wants a 35 hour work week so be it! And we don't need European growth for global growth. But what we can't have is a European banking run with systemic global ramifications. When the top 6 banks in the US have 300 TRILLION in OTC derivatives, much of which is linked to the European banks, we will have serious problems if the European banking and monetary system breaks. That card however has just been taken off the table. The ESM, with access to the ECB balance for leverage, is a fiscal backstop (with a printing press) for the resolution of bad European banks. Hallelujah!!!! This is a huge step in the right direction for the global reflation trade.

Risk on, here we go:
Germany lost a much bigger battle yesterday - the one for ECB balance integrity and mutual fiscal burden sharing for European bank losses. That loss I suspect will send risk assets MUCH MUCH higher than Balotelli's gaming clenching goal.

El-Erian: Few Places Safe for Investors

Mohamed El-Erian, Pimco CEO & co-CIO, says it is increasingly inevitable that Greece will exit the euro zone, adding that Spain shows investors are losing confidence in policymakers.

Wolf: Debt Crisis Won't Pass for Another 20 Years

Guy Wolf, Marex Spectron, says the EU never gained a democratic mandate, and adds that the debt crisis will not pass for another 20 years.

John Burbank is still bearish

Expect weak Q2 earnings and a market decline

Thursday, June 28, 2012

Jim Chanos on His Big China Short

[From Maneet Ahuja's Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds]

His Positioning:
Kynikos is short the property developers in China through the H-shares in Hong Kong as well as most of the larger Chinese banks, which the firm believes are going to need ongoing injections of capital, much of which will come from Western investors. The fund has been short an oddball collection of one-off Chinese companies, such as Chinese Media Express, that have floated issues in the United States. Chanos has dubbed casinos "long corruption, short property." But his overall short in China stands as one of the highest exposures he has had to a single theme. China is one thing he's betting against in a big way -- it currently stands as the highest exposure he's ever had to a single theme in the portfolio.

Chinese equity markets:
"So I think it's very problematic for Western investors to make money in the share market in China. Not only because I think the macro's bad, I think the micro's bad, too. You're basically being fleeced as the Western investor in many of these companies."

Chinese Debt:
"We estimated that China's total debt reached about 180 percent of GDP in late 2011. If we assume that China will grow total credit this year between 30 percent to 40 percent of GDP, and half of that debt will go bad, that is 15 percent to 20 percent. Say the recoveries on that are 50 percent. That means that China, on an after write-off basis, may not be growing at all. It may have to simply write off some of this stuff in the future so its 9% growth may be zero."

John Paulson: The big loser

Businessweek has an epic smack down of Paulson in it's latest issue, including the cover shot below with the title "The Big Loser." AUM at Paulson Capital has dropped to $22B from a peak of $38B and the Advantage Plus fund is down 10% YTD through May. However, Paulson is still sticking with gold miners (AngloGold Ashanti and Goldfields) believing them to be underpriced vs. the gold that they mine.

From the article:
We view gold as a currency, not a commodity. Its importance as a currency will continue to increase as the major central banks around the world continue to print money.” He adds that as the market keeps shuddering, demand for gold will stay high, and soon enough all of his depressed gold holdings should shoot up. He also thinks that anyone in Greece, Italy, and France should pull all their money out of the banking system and purchase gold bars before the Continent collapses.

Some people like playing chess, some like backgammon. This is like a game, and playing games is fun. It’s more fun when you win.”

Richard Duncan: How Credit Expansion Led to the Global Crisis

Richard Duncan, Chief Economist, Blackhorse Asset Management and Author of "The New Depression: The Breakdown of The Paper Money Economy" explains how credit growth has led to the current global economic crisis. He sees more government life support for economies, but says this approach is not sustainable.

Yen Is the 'Mother Of All Bubbles': Pro

Brad Mcfadden, Founder, Daily Trading Report said the yen and JGB markets are incredibly risky and unstable.

AIMCo CEO: May Work With Sovereign Funds

Leo de Bever, chief executive officer of Alberta Investment Management Corp. in Calgary, talks about his company's relationships with sovereign-wealth funds

Morgan Stanley's James Gorman on Wall Street, Europe

David Malpass: Germany Must Be Specific on Austerity

David Malpass, president and founder of Encima Global, talks about Europe's debt crisis. He speaks with Tom Keene, Sara Eisen and Ken Prewitt on Bloomberg Television's "Surveillance." Stephen Roach, a professor at Yale University and former non-executive chairman for Morgan Stanley Asia, also speaks.

David Kotok: Overweight Banks, Underweight Europe

Charles Nenner: Stocks to Bottom This Week

Nenner sees a cyclical low coming in the next few days. He's a buyer anywhere from 1,280 to 1,230 on the S&P 500 but cautions those who are looking for a chance to buy and hold profitably.

"People looking for major moves are going to be disappointed. Timing and trading are key as stocks are going to be locked into a 5-10% range for an extended period.

Nenner's downside target for gold is $1375 to $1325 but he's a buyer in size there; his long-term target remains $2,500.

"First people lost their shirts on the stock market then the gold market. I'm afraid that now they're going to lose a lot of money on their bond positions."

Tuesday, June 26, 2012

Danny Yong (Dymon): Asia's rising hedge fund titan

Danny Yong is a widely respected veteran of Asian macro markets. His firm, Dymon Asia, one of the largest hedge funds in Asia, is a Singapore-based Asian Global Macro hedge fund funded by Tudor. The fund has had solid returns in 2009, 2010, and 2011.

(This interview is from 2011) 

Interview with Cavenagh Capital (Asian RV Macro)

Cavenagh Capital believe that alpha is achieved though understanding that “fat tails” have become common. Cavenagh focuses on being right about the direction of probability, rather than the direction of the market per se. Trades are structured with an asymmetrical profit and loss outcome from the assessed universe opotential outcomes.

In this Opalesque interview Cavenagh Capital's CIO Lee Ka Shao explains how statistical concepts help macro traders deal with a changed world:
- Markets have become heteroskedastic, meaning that standard deviation of random errors not constant
- The move from unimodal to bimodal world (“risk on – risk off”) deeply affects global macro

Interview with Kerrisdale Capital on Chinese scams

Sahm Adrangi is the founder and CIO of Kerrisdale Capital, a value-oriented and special situations fund based in New York. Mr. Adrangi is a leading expert on Chinese stock scams and has shared in-depth research with the investment community on fraudulent U.S.-listed Chinese companies.

Learn from Sahm in this fascinating Opalesque interview how fraudsters recklessly set up phony firms and produce false reports. However, such stock scams can also occur in non-Chinese companies, particularly in sectors that lend themselves to “stories”, such as tech, biotech, metals & mining, oil & gas, etc.

Interview with Guan Ong (Blue Rice)

Blue Rice Investment Management was set up by Guan Ong, previously the CIO of Korea's sovereign wealth fund, Korea Investment Corp (KIC). The firm is based in Singapore and invests into Asian dollar-denominated corporate credit.

Risk Takers: Meredith Whitney

George Soros interview on Bloomberg

Soros created ripples yesterday by saying that European leaders had only 3 days to act before the crisis in Europe spiraled out of their control

Long David Rosenberg interview on Bloomberg

Rosie is one of the best there is, and he here he spends 16 minutes going over the US economy and housing market, and (of course) Europe. He thinks the US may be headed back into recession.

Barry Ritholtz likes Dividend-Paying Stocks

When Barry and David talk, we listen!

Market Volatility Here to Stay

Tom Yorke, Managing Director, Oceanic Capital Management says that U.S. equity markets are "leaking oil" and 10-year U.S. Treasurys could creep down to the 1.25 to 1.50 level.

Play the US Housing Sector Through ETFs

Tom Yorke, Managing Director, Oceanic Capital Management recommends investing in the U.S. real estate sector via ETFs, instead of individual stocks.

Golden Age in Indonesia?

Michael Riady, CEO, Shopping Malls Division, Lippo Karawaci says nearly 99% of property buyers in Indonesia are locals. Despite the property market's under-performance, he believes Indonesia's economy will be worth $8 trillion in 30 years.

Remain Cautious on EM

"As long as we don't move out of this risk off environment, this sense that we can go to another Lehman moment, it is going to be tough to get investors too excited about bringing too much risk to play," says Pablo Goldberg, global head of emerging markets research at HSBC.

Skidelsky: Money...How Much is Enough?

"Keynes thought that the richer people were the less they'd have to work, why did he get it wrong? He underestimated people's insatiability, the richer they are the more they seem to want"

Monday, June 25, 2012

Michael Burry: "Brutal Hangover Is Inevitable"

Michael Burry, of course, is the man Michael Lewis made famous in his book The Big Short. Burry was one of the few people in the world who actually read CDO documentation and capitalized on the subprime debacle well ahead of the market.

(Audio) Robert Skidelsky Discusses Keynesian Solution to Euro Crisis

Robert Skidelsky is an emeritus professor of political economy at the University of Warwick and the author of a three- volume biography of John Maynard Keynes.
[Download MP3]

(Audio) Jonathan Carmel Discusses Spain, Germany

Jonathan Carmel, portfolio manager at Carmel Asset Management., discusses the housing market in Spain, Germany's economy, and the European Union.
[Download Here]

Gerard Minack: No Global Coordinated Action Anytime Soon

Gerard Minack: Developed World Bond Markets Are Turning 'Japanese'

Gerard Minack, Global Developed Market Strategist, Morgan Stanley, says10-year Treasury yields will fall to 1%, reflecting how developed world bond markets are turning '"Japanese".

Investment Opportunities for Volatility Specialists

Jim McCaughan of Principal Global Investors talks about the impact of volatility on investment managers.

Zuckerman on Commercial Real Estate, Daily News

Mort Zuckerman, chairman of Boston Properties, talks about the firm's operations and the Manhattan commercial real estate market. Zuckerman, publisher of the New York Daily News and U.S. News and World Report, also discusses marketing and advertising strategies for those publications.

Jim O'Neill on European Debt Crisis, BRICs Outlook

Saturday, June 23, 2012

Michael Hasenstab: Euro Debt Crisis a 'Blessing'

Michael Hasenstab, Templeton Global Bond Fund, says the European debt crisis is a blessing in disguise. "Politicians only act when there is a gun to their head"

Entrepreneur Panel: Best Advice

- Get a mentor
- Differentiate Yourself
- Be a risk taker, Never give up
- Trials and blessings are the same thing
- Pursue Freedom

Forget Cash? Time To Buy?

Debating whether it's time for investors to buy stocks or hold onto their cash, with Daryl Jones, Hedgeye Risk Management, and Michael Yoshikami, Destination Wealth Management.

Entrepreneur Panel: Future of Entrepreneurship

Looking to younger entrepreneurs, and where the future of small business is headed, with Kevin O'Leary, venture capitalist; Steve Case, AOL co-founder; Sara Blakely, Spanx founder; and Tristan Walker, Andreessen Horowitz.

Entrepreneur Panel: Finding Cash to Grow Your Business

The quest for money to invest in your business, with Kevin O'Leary, venture capitalist; Tristan Walker, Andreessen Horowitz; and Steve Case, AOL co-founder. The key, says O'Leary, is telling the investor how he will get his money back. Also, a look at crowd funding sites, like

Entrepreneur Panel: How to Leverage Technology & Social Media

Using technology and social media to compete in today's environment, featuring Marc Ostrofsky, consultant. With Mark O'Leary, venture capitalist; Tristan Walker, Andreessen Horowitz; Sara Blakely, Spanx founder; and Steve Case, AOL co-founder.

Entrepreneur Panel: Obstacles & Rewards of Small Business

The challenges facing today's entrepreneurs, featuring Kelvin Thompson, owner of Perry's Auto Auction. With Kevin O'Leary, venture capitalist; Sara Blakely, Spanx founder; Steve Case, AOL co-founder; and Karen Mills, SBA.

Mark Hibbs: Incredible Value in Japan Right Now

Mark Hibbs, MD & Portfolio Manager, Gen2 Partners sees a good investment opportunity in Japan right now. He favors certain financial companies, some real estate and high-yield stocks there.

Fundamentals for Dry Bulk Carriers Not Encouraging

Johnson Leung, Head of Asia Transport Equity Research at Jefferies says the outlook for dry bulk shippers is grim given China's slowing construction activity.

Allen Sinai: 'QE 3 is Inevitable'

Allen Sinai, Decision Economics chief global economist & strategist, discusses the future of Europe's economy and whether the Fed should implement another round of economic easing.

China's Mutual Fund Market to Hit $1 Trillion by 2015

"China is a relatively small mutual fund market right now, 350 billion in some context sounds big but it is smaller than Australia for example. It is very much an underpenetrated market, and we have these regulatory changes coming," David Russell, head of securities and fund services for Citi Asia Pacific, told CNBC.

Bob Janjuah: Growth Funded by Debt Is Nonsensica

"The best case view that we have for European growth over the next three years is flat in aggregate. Growth measures funded with more debt doesn't really make a lot of sense, the key problem is that the European project is not viable as it stands"

Steven Romick likes Microsoft, CVS

Steven Romick, First Pacific Advisors portfolio manager, discusses his goal to beat the market while reducing risk, and reveals his top stock picks, including CVS and Microsoft

Dino Kos on the Twists and Turns of the Fed

Dino Kos, Hamiltonian Associates managing director, provides unique insight into "Operation Twist 2.0" and the likely fallout from the Fed's policy on low interest rates and its impact on investments and the housing markets, with Edward Lazear, Stanford University economics professor.

Ajay Royan seeks disruptors

Ajay Royan, Mithril Capital Management general partner, explains how his fund is evaluating new ventures and where he sees growth opportunities.

Russian Market 'Ironically' Cheap

Russia has been the strongest performing big market in the world over the past 10 years but "ironically it's still the cheapest market in the world," Stephen Jennings, CEO, Renaissance Group, told CNBC at the Saint Petersburg International Economic Forum (SPIEF)

Bond Manager Sees Strong Credit Fundamentals

Steve Walsh, Western Asset Management, says credit could outperform equities in the long-term.

Five-Star Corporate Bond Plays

Mark Kiesal, Pimco Corporate Bond Portfolio Management, discusses the top corporate bond bets to make, with CNBC's Tyler Mathisen.

Don Yacktman's Top Stock Picks

Don Yacktman, Yacktman Focused Fund, says he sees big drops in the market as buying opportunities. "We like stocks that are profitable and dull," he tells CNBC's Tyler Mathisen.

Matt McLennan: Money Has Been 'Corrupted'

Matthew McLennan, First Eagle Global Fund, says that in an environment where money has been "corrupted," you have to look for opportunities to generate real returns outside of traditional places.

John Coates: Biology Behind Risk-Taking?

John Coates, University of Cambridge research fellow, discusses the evolution of traders and investors over the last few years, and whether traders are becoming more fearful and less daring.

Jacob Kirkegaard: Need for Full Spain Bailout Overblown

Jacob Kirkegaard, Research Fellow, Peterson Institute for International Economics (PIIE) says that worries that Spain could need a complete bailout are overblown.

Mark Yusko: Four Ways to Increase Pension Returns

You can take credit risk; you can take equity risk; you can take illiquidity risk; or you can use leverage, explains Mark Yusko, Morgan Creek Capital Management CEO & CIO, discussing several ways to maximize returns for retirement accounts.

Michelle Meyer: Hard to See Sustained Housing Recovery

Housing hottie Michelle Meyer of BAML is not very optimistic.

John Taylor on Greece, Euro, Debt Crisis

Guloien on Manulife Outlook, John Hancock Financial

Manulife Financial Corp. Chief Executive Officer Donald Guloien talks with Bloomberg's Sean B. Pasternak in Toronto about plans for the company's U.S. business. Manulife, the owner of Boston-based John Hancock Financial, was celebrating its 125th anniversary at the Toronto Stock Exchange.

Allen Sinai:Germany, France to Fall Into Recession

Allen Sinai, chief executive officer of Decision Economics, talks about the European debt crisis, the U.S. economy and Federal Reserve policy

Zervos: US banks have massive derivatives exposure

Wednesday, June 20, 2012

David Merkel interviews Howard Marks

David Merkel of the Aleph Blog interviews Howard Marks, CEO of Oaktree and author of "The Most Important Thing"

Larry McMillan discusses options strategies on CNBC

The VIX continues its decline and has now dropped 17% over the past week, with the Fast Money traders; and Larry McMillan, McMillan Analysis Corporation president, explains how he is using options to find strong buys in the S&P 500.

Woody Brock: No Way For Fed to Fix the Economy

"Gridlock is a term that describes the state of American politics, it is just a deafening dialogue of the deaf between left and right wing, almost a joke except the problems are not being solved in Washington," says Woody Brock, president of Strategic Economic Decisions and author of 'American Gridlock.'

Keith McCullough is at 100% cash

"We've moved our position to 100% cash," says Keith McCullough, CEO of Hedgeye Risk Management. "Without more QE, the commodity bubble will continue to pop."

Ed Leamer: Only Halfway Through Housing Recovery

CNBC's Jane Wells breaks down the data on the outlook on housing and the economy from the UCLA Anderson Forecast, with Edward Leamer, UCLA Anderson Forecast director.

Ex-Soros Adviser Says Japan May Default Within 5 Years

Takeshi Fujimaki, a former adviser to billionaire investor George Soros and president of Fujimaki Japan, an investment advising company in Tokyo, talks about the nation's economy, fiscal condition, and financial markets.

Julian Robertson Favors Scandinavian Currencies, Stocks

Julian Robertson, founder of Tiger Management LLC, talks about investment strategy, the hedge-fund industry and the European debt crisis.
[Download MP3]

Tuesday, June 19, 2012

Whitney Tilson on AIG

In this interview with the Manual of Ideas on May 7, 2012, Whitney Tilson explains why he believes AIG common stock represents an excellent investment opportunity.

Satyajit Das: Greek outcome irrelevant

Satyajit Das, risk consultant and author, talks about the prospects for resolving Europe's sovereign debt problems.

BlackRock's Hambro Urges Gold Producers to Raise Payout

Evy Hambro, portfolio manager of BlackRock Inc.’s World Mining Fund, talks about the outlook for investing in commodities and the dividends paid by gold producers.

Monday, June 18, 2012

Great quote from John Hussman

Howard Marks likes equities and credit

Investors should not run to safety in yield, but look for something a little more creative, says Howard Marks, Oaktree Capital Management chairman. "It might be equities; it might be bonds where there is some credit risk," he says.

Tobias Levkovich sees "compelling" equity valuations

Tobias Levkovich, Citi chief U.S. equity strategist, discusses Spain's high bond yields, Europe's crisis and more.

Niall Ferguson Sees European Financial `Cuban Missile Crisis'

Joe Dear: Calpers Maintains Diversified Portfolio

Joe Dear, chief investment officer of California Public Employees' Retirement System, talks about investment strategy and the need for compromise by lawmakers to aid economic growth and financial security.

(Video) Jack Schwager interview

Matthias Knab meets Jack Schwager who unveils his fourth Market Wizards book: "Hedge Fund Market Wizards" with fascinating insights into 15 hedge fund traders

Michael "Novo" Novogratz: Public equities are the place to be

Novo's at it again.

Tuesday, June 12, 2012

Josh Brown (ReformedBroker) examines the junior miners

Brent Cook of Exploration Insights, geologist and legendary gold investor/newsletter author is like my counterpart from the Canadian gold mining space - he's been very cynical and critical of a lot of the miner hype and nonsense while simultaneously investing in the companies that he believes can succeed.I got to sit with him and ask a few questions that I think are important for outsiders like us who have an interest in the sector:

Hersh Cohen (ClearBridge) on controlling volatility

Hersh Cohen, ClearBridge Advisors CIO & portfolio manager, explains how investors can protect their portfolio from partisan politics and profit from market uncertainty.

Stay Away From Indian Sovereign Debt

Ng Kheng Siang, Head of Fixed Income, Asia Pacific, State Street Global Advisors says he is being very careful about Indian sovereign debt now and advocates moving away from the issues.

Boone Pickens: Natural Gas has bottomed

Billionaire energy investor Boone Pickens shares his best play in the energy sector now, adding that oil supply remains tight, and prices will hold or go up in the coming months.

Making Money in Munis

Hector Negroni, Fundamental Credit Opportunities co-CEO, explains why now is the time to take advantage of inefficiencies in the municipal credit market and how to profit from it.

Michael Dell: Main Growth Area is the Enterprise

What happens when businesses go from Dell laptops to Apple iPads? Michael Dell, Dell chairman & CEO, answers that question and more about enterprise at Dell

Jim Rogers: Let Spain, Greece Go Bankrupt

Rogers has been all over the press lately. In this interview, he adds his usual common sense take on what should happen (but sadly will not happen).

Sean Egan: India GDP to be Less Than Expected

Sean Egan, Founder of Egan-Jones Ratings says that India's growth will be less than expected for the rest of the year.

Jonathan Carmel: Why Germany Is Riskier Than You Realize

Jonathan Carmel, founder and money manager at Carmel Asset Management, talks about Germany's European risk

Achtung Baby- Germany is Riskier Than You Think

Charles De Vaulx on Outlook for US Stocks, Strategy

Charles de Vaulx, chief investment officer at International Value Advisers LLC, talks about the reaction of the U.S. stock market to the Spain bank bailout agreement and the outlook for gold prices and U.S. equities.

Monday, June 11, 2012

Andrew Lo on Consuelo Mack WealthTrack

Das Says Larger Firewall Is Needed in European Crisis

Arnab Das, managing director of market research and strategy at Roubini Global Economics, talks about solvency issues in Portugal, Ireland, Italy, Greece and Spain.

Jim Rickards Recommends Investing in China Service Industry

John Williams (ShadowStats) interview

---The United States is insolvent
---The Government will print money until it fails
---Loss of confidence in the dollar is prerequisite to hyper inflation

---Politicians lose when life isn't getting better
---Hyperinflation strikes like lighting
---Individual solutions trump government solutions

Ambrose Evans-Pritchard: Recovery Not Real, Crises Dead Ahead

- Energy costs above 9% of global GDP = recession
- Financial crisis has transitioned to social and political crisis
- Global growth will peak by May, then watch out below

Interview with Robert Higgs (Crisis and Leviathan)

-U.S. Govt can and will continue to grow
-Exponential Govt growth requires exponential economic growth
-Govt growth hits critical mass when it's people can no longer afford it

Russell Napier interview

- Chinese rebalancing hurts U.S. Treasury purchases
- Governments will fund themselves by force
- Stocks & Bonds both overvalued (like in 1968)