domingo, 29 de marzo de 2020

CORRUPTION is worse than COVIT-19



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 effectthe 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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