CORRUPTION is worse than COVIT-19
ON:
The Hedge Fund Myth..
At:
by Tyler
Durden Sun, 03/29/2020
Perhaps the
time has come to rename "hedge funds"
to
"bailed out funds"?
In effect, the Fed was bailing out not one but dozens of
LTCM-like funds which had all ended up on the wrong side of an extremely
popular basis trade, but a handful of funds were exposed the most. To
wit, as we explained last
December, "hedge funds such as Millennium, Citadel and Point 72
are not only active in the repo market, they are also the most heavily
leveraged multi-strat funds in the world, taking
something like $20-$30 billion in net AUM and levering it up to $200 billion. They achieve said leverage using repo." See chart
And then came the Fed's bailout of everything,
including billionaire hedge fund managers, as it
unleashed an unprecedented series of actions to inject liquidity into markets
coupled with Congress’s promise of a $2 trillion economic stimulus package.
That combination boosted markets this week - at least temporarily. U.S. stocks had their best three-day run since the 1930s
before falling again on Friday.
This existential shock was the
greatest fiscal and monetary bazooka. Fund
manager Paul Tudor Jones said in an interview on
Thursday with CNBC. “It’s
not even a bazooka -- it’s more like a nuclear bomb." [This is corruption top level ]
In the meantime, as part of its
nationalization of capital markets, by Friday the Fed
had bought $1 trillion worth of
Treasuries and mortgage-backed securities since the launch of "QE-Unlimited", the same amount they bought over eight months during the
global financial crisis. See
Chart:
The biggest beneficiary of all
this?
Not the
economy or the middle class, but
the trio of hedge funds which has shown in the chart above. They have
regulatory assets of roughly half a trillion dollars among them, and
which managed to quietly offload position that could have otherwise forced
their liquidation, a la LTCM.
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