Category Archives: Hedge funds

Argentina Deadline Day: Punishment for Rejecting the Neoliberal Consensus Nearly Complete

Today is technically the drop-dead date for Argentina to work out an agreement to pay off vulture funds that long ago purchased their distressed debt, or else the country will go into default for the second time in thirteen years. 11th-hour negotiations with a mediator have yielded no results thus far. WSJ divines momentum from the length of the mediation session, which is pretty weak tea.

The default would actually be to the exchange bondholders who already hold agreements with Argentina for restructured debt payments going back to the 2001 default. Judge Thomas Griesa prevented the country from making a scheduled interest payment to the exchange bondholders without the vulture funds getting their $1.5 billion first (the vultures paid roughly $48 million for the distressed debt, so it’s a huge payday).

Read more...

Senate Report: Hedge Funds Used Basket Options to Save Billions in Taxes

The Senate Permanent Subcommittee on Investigations released a report today that found that hedge funds have been using basket options to save billion in taxes. And when we say “billions,” the report indicates it’s more like tens of billions, since the paper estimates that the tax reduction achieved at one hedge fund, Renaissance Technology, operated by the famed James Simons, was $6.8 billion.

Read more...

Ignacio Portes: Paul Singer v. Argentina – A Thriller Reaches Its Climax

The protracted legal saga between Argentina and NML Capital, Paul Singer’s hedge fund, owner of a fraction of Argentina’s non-restructured, pre-2001’s default debt, went through a decisive moment last week, when the Supreme Court of the United States declined to hear Argentina’s appeal. With the “stay” order lifted after the Supremes Court’s decision, Argentina faced a huge conundrum that needs solving before June 30th, when an interest payment on its restructured debt is due.

Read more...

SEC Lawyer on Goldman CDO Case Describes How the Agency Wimped Out

Susan Beck at American Lawyer (hat tip Abigail Field) has managed to get an inside view of what was going on at the SEC when it launched its case against Goldman and a Goldman vice president, Fabrice Tourre, over a Goldman CDO called Abacus that went spectacularly bad. So was the SEC corrupt or merely incompetent?

Read more...

Bill Black:The Department of Justice’s Willful Blindness to the Willful Blindness of CEOs (Steve Cohen Edition)

Yves here. I’ve been loath to write about the prosecution of SAC Capital because I’ve viewed it as a misuse of scarce SEC and DoJ resources. We had a global financial crisis and they make their top priorities two hedgie insider traders, Raj Rajaratnam and Steve Cohen?

Read more...

Who Should Young People Throw Under the Bus: Granny or Billionaire Hedgie Stan Druckenmiller?

Without attempting to wade too deeply into the goo of Friedman’s latest column, let’s limit ourselves to the the fact that Friedman is running PR for former Soros Fund Management lead investor Stan Druckenmiller. The column also serves to illustrate how Serious People like Friedman were ready to jump on the deficit cutting bandwagon once the shutdown/debt ceiling drama was put to rest for a bit.

Druckemiller’s latest cause is to foment generational warfare.

Read more...

Yanis Varoufakis: Johnny (Paulson) Got His Gun and is Aiming at Bigger Subsidies for His Greek Bank Investments

Yves here. A couple of days ago, we linked to a Financial Times story that featured hedge fund investor John Paulson talking up his investments in the two large Greek banks, Alpha Bank and Piraeus Bank. As a savvy investor buddy once remarked, “When some is talking up something they own, be on the watch that they are actually selling.” In this case, as Varoufakis describes, what Paulson is actually pushing for is for the Troika to change the pricing of warrants on his Greek bank investments because they aren’t providing the big payoff he wanted. So he is indeed “selling” in that he wants his payday now but needs to get official bodies to give him even more subsidies to get there.

Read more...