http://www.zerohedge.com/news/2013-06-02/redemption-deluge-arrives-sac-bracing-massive-35-billion-withdrawals
( And with leverage at more than 3 times net assets , this is going to have an impact ! )
Submitted by Tyler Durden on 06/02/2013 15:42 -0400
http://www.globalhfa.com/blackstone-notifies-cohens-sac-it-intends-to-pull-funds/
http://bullmarketthinking.com/gold-trader-stock-market-may-crash-10-20-in-next-5-10-days-will-create-setup-for-bubble-phase-in-gold/
( Don't expect anything major before Bilderberg meeting wraps up though June 9th .... )
( And with leverage at more than 3 times net assets , this is going to have an impact ! )
The Redemption Deluge Arrives: SAC Bracing For Massive $3.5 Billion In Withdrawals
There is little that has not been said about SAC on these pages in the past 4 years (most recently here). So let's proceed straight to the incremental news:
From the WSJ:
Executives of SAC Capital Advisors LP are bracing for what they have estimated could be $3.5 billion in withdrawals as a quarterly deadline approaches for clients of the hedge-fund giant to ask for their money back, according to people briefed on the matter.The anticipated withdrawals, which the people described as preliminary estimates that were still in flux going into the weekend, would follow requested withdrawals of $1.7 billion by SAC clients in the first quarter.If the estimates hold, the outflows would represent more than half of the firm's remaining outside capital and would bring the total amount SAC investors have sought back this year to more than $5 billion. As of mid-May, the firm managed about $5.6 billion in outside money, out of a total of $14 billion in assets, according to details of its operations as described by SAC representatives to clients and others outside the firm.
In other words, the "information arbitrage" powerhouse that was SAC for over two decades, collecting 3 and 50 or so from outside clients, is finished. Going forward it will at best remain as a "family office", managing its own friends and employees' money, however as everyone knows, hedge fund managers make their money not on capital upside (because there is always downside no matter how good PM Ben Bernanke is at offsetting all systemic risk) but on the fees charged from outside clients.
In the meantime, with SAC's regulatory gross leverage of over 3.0x, transforming SAC's net assets of $13 billion into $44 billion in regulatory assets, this means that major unwinds are a-coming.
And as we highlighted last week, assuming pro rata liquidation, here are the stocks that will get his the first, and the most: SAC's top public equity holdings.
And here, once again purely for entertainment purposes, is cartoonish PR-magnet extraordinaire, Anthony Scaramucci from December 2012:
I think the entire thing is overblown, that's number one. Two, he's an exceptional investor, he's got a great reputation in the industry. He's a philanthropist and great guy. Number three, since 2008 through 2012 they have the tightest insider trading protocol in the industry. I am an enemy of witch hunts and political witch hunts, it's very unfair and i think the story is overblown and people our country are innocent until proven guilty. He's also let out a statement saying he's in full cooperation with the government.... Skybridge likes to think about things carefully and sometimes be a contrarian.
... Such as "contrarianly" going with those who are about to be shut down. Well, Fund-of-Funds managers may provide absolutely zero value (aside from throwing great Vegas "conferences", of course) but at least their comedy content is unmatched.
Fast forward to 3'40" into the clip:
http://www.globalhfa.com/blackstone-notifies-cohens-sac-it-intends-to-pull-funds/
Blackstone Notifies Cohen’s SAC It Intends to Pull Funds
(Reuters) – Billionaire hedge fund manager Steven A. Cohen is losing the financial support of Blackstone Group Inc , the largest outside investor in his embattled SAC Capital Advisors, which is yanking much of its client money, according to a letter reviewed by Reuters.
A pension consultant, in a May 21 letter to clients, said Blackstone has notified Cohen that it intends to “fully redeem” a significant portion of the roughly $550 million the investment firm has invested with the $15 billion hedge fund. The letter from pension consulting firm Russell Investments said Blackstone submitted its redemption notice to SAC Capital sometime before May 15 because of ongoing concerns about the insider trading investigation that continues to engulf Cohen’s fund.
Blackstone’s investment with SAC Capital is through several investment funds known as hedge fund of funds and also through separately managed accounts it maintains for clients. The decision to redeem from SAC Capital impacts only client money invested in its hedge fund of funds, according to the letter. It’s not clear how much of the $550 million is in those hedge fund of funds and it is not clear what Blackstone is advising clients who have money in separately managed accounts that is invested with SAC Capital.
Russell did say in the address to its pension clients that Blackstone “expects to receive 100 percent of investors’ capital by year-end.” Russell, which manages $173 billion in assets and oversees a number of index funds, also provides advice to pensions and institutional investors on where to invest their dollars in hedge funds.
The timing of Blackstone’s request to withdraw money from SAC Capital is critical because it came before the hedge fund told investors on May 17 that its cooperation with federal authorities was no longer unconditional. Soon after, news broke that federal prosecutors had issued grand jury subpoenas earlier this month to Cohen and several of his top executives, seeking their testimony about insider trading at the hedge fund.
Jennifer Bichara
Assistant Editor for GlobalHFA.com
Assistant Editor for GlobalHFA.com
( Don't expect anything major before Bilderberg meeting wraps up though June 9th .... )
Gold Trader: “Stock Market May Crash 10-20% In Next 5-10 Days, Will Create Setup For Bubble Phase In Gold”
June 2, 2013 | By Tekoa Da Silva
**This interview was recorded Friday evening, 5/31/2013**
I had the chance on Friday to reconnect with technical gold trader Gary Savage, publisher of the “Smart Money Tracker” daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.
It was a powerful conversation as Gary indicated the S&P 500 is at its most overbought level in nearly 40 years, and may crash 10%-20% within a few trading days as a result. Following this crash, Gary expects a massive central bank monetary intervention to create the “launch pad” for an explosive move higher in gold and gold equities, ushering in the final bubble stage of the bull market.
“We’re at a very important crossroads here,” Gary explained at the beginning of the interview. “The S&P 500 [broke] through 1640…and I expect we’re going to have some kind of crash, or semi-crash over the next 5-10 days…The selling is probably going to get huge…and it [may] take everything [down] with it.”
When asked why he’s expecting a crash of such magnitude to occur, Gary replied, “If you look at [a] long-term market chart…you can see that at the recent peak, [it] was stretched further above the 200 day moving average then it’s ever been in the last 30 or 40 years. So the forces of regression are going to be extremely powerful…We’re probably going to [cut] right through the 200 day moving average and [it] may make the 2011 correction look small [in comparison].”
This fragile equities market plays a key role in determining gold’s next move according to Gary, in that, “When it breaks, the Fed is going to freak out, [and] they’re going to double, triple, and quadruple down on QE to try and pump stocks back up, [and] that liquidity…[is] going to find something else…I don’t believe it’s going to pump up a double parabola in stocks…[It's] going to look for something that’s undervalued…and that right now is commodities in general, more specifically—gold.”
As to the consequences of gold being driven down so far when compared to this blow-off in equities, Gary stated that, “Regression to the mean not only works on the upside, but also on the downside, and gold is in the mirror position of the stock market—it’s stretched extremely far below the 200 day moving average. So when [the] regression occurs, it’s going to be an extremely violent move back towards the 200 day moving average, and like I said, I think what will trigger this [move in gold], will be the stock market crash, the Fed, and the central banks’ response to [the] unraveling…[it's] what I imagine would happen before the bubble phase begins.“
When asked about the small signals investors should look for in gold and gold equities to identify an early start to the bubble move, Gary said, “At some point the selling exhausts…and [when] the liquidity starts to flow into that area…value investors [start] coming in, and then you start to get these 5%-6% days, and [the] next thing you know you’ve got an 11% week, and then the momentum starts to shift and then you get a buying panic into the area where people are making money…So I think we have a [perfect] setup for the bubble phase in gold.”
As a final comment Gary advised further patience in holding gold equities, saying, “They may temporarily follow [the market] down, but they’re going to rebound out of that extremely violently, and leave the stock market in the dust.“
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This was another powerful interview with one of the world’s most successful gold traders, and is required listening for investors looking to profitably trade this gold bull market.
To listen to the interview, click the following link and/or save to to your desktop:
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