Posts Tagged ‘Paolo Pellegrini’

Breaking Stuff

Breaking Stuff

Courtesy Adam Warner at Daily Options Review 

Breaking news on CNBC! This, from Clusterstock.

According to CNBC’s Steve Liesman, the SEC has evidence that contradicts its own argument that ACA was mislead on the nature of John Paulson’s intent.

Specifically, in interviewing Paulson lieutenant Paolo Pellegrini, ACA was informed that Paulson intended to go short the CDO.

Not surprisingly, this was left out of the SEC complaint.

The SEC really needs to answer for this.

Remember always, this is a PR fight. Certainly at this juncture. And in any PR fight, you want to get your story out as if it’s not from you, but channeled through some independent "news" source. CNBC could not provide a better venue. They’re naturally sympathetic to your side to begin with, and they’ll funnel any "news" you want through their mouth’s. And Clusterstock….well, judge on your own, all I’ll say is they rarely meet an attack on Goldman that they don’t seek to diminish.

Look, this might be an accurate account, the SEC is certainly not above reproach, to say the least. But it just reads like a calculated PR offensive. Paulson’s lietenent saying ACA knew? Is he exactly unimpeachable? Doesn’t he have every incentive in the world to just say this? He can easily couch that as his understanding, that ACA was informed. Perhaps Fall Guy Fab forgot to tell ACA, we don’t know, neither does Paulo.

Here’s another way to look at it. The SEC has this info, it it becomes demonstrable fact that ACA knew Paulson was shorting it, it clearly destroys their case. Whatever SEC’s motivations are here, they’re not bringing a case out that will get shot down that simply. So I suspect the "ACA Knew" defense is a "he said, she said" thing. You can’t prove a negative, i.e., you can’t prove ACA didn’t know. But you can prove they did know if there’s some evidence that shows they were informed. Perhaps that evidence is out there, but I don’t believe "Paolo Says So" is that evidence. 

*****

Adam’s follow-up
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Goldman Sachs (GS) VP Email Jan 2007: “The whole building is about to collapse anytime now.”

Goldman Sachs (GS) VP Email Jan 2007: "The whole building is about to collapse anytime now."

Courtesy of Trader Mark at Fund My Mutual Fund

I have no idea the implication but for those of you around a decade ago you know what this parallels… Eliot Spitzer made his career on almost the same exact thing a decade ago.  Investment banks bringing product (IPOs) public, their analysts cheerleading the stocks to the public while writing internal emails about how the companies were complete trash.

Well this London based VP looks like the sacrificial lamb.

  • The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment

As usual the snake oil never really changes… but in the past the snake oil salesmen would be run out of town.  Now they are protected by government, backstopepd by our Federal reserve, and glorified.  We’ve really evolved as a society :)

  • According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst.
  • Goldman let Mr. Paulson select mortgage bonds that he wanted to bet against — the ones he believed were most likely to lose value — and packaged those bonds into Abacus 2007-AC1, according to the S.E.C. complaint. Goldman then sold the Abacus deal to investors like foreign banks, pension funds, insurance companies and other hedge funds.
  • But the deck was stacked against the Abacus investors, the complaint contends, because the investment was filled with bonds chosen by Mr. Paulson as likely to defaultGoldman told investors in Abacus marketing materials reviewed by The Times that the bonds would be chosen by an independent manager.

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Fascinating to see John Paulson’s firm involved as well – I don’t see any wrong doing on his part but apparently one of his former lieutenants, Paolo Pellegrini was the ‘snitch’. [Oct 2, 2009: Paolo Pellegrini, Formely of John Paulson's Hedge Fund, on Bloomberg]

Full pdf file of SEC complaint here.

p.s. bought some SPY puts to get some hedging going on.


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GURU OUTLOOK: PAOLO PELLEGRINI

GURU OUTLOOK: PAOLO PELLEGRINI

Courtesy of The Pragmatic Capitalist 

This week’s Guru Outlook brings you Paolo Pellegrini.  Although he is not the most well known of investment gurus Pellegrini has built quite a name for himself in recent years.  Before founding his own hedge fund PSQR (a play on PP Squared) Pellegrini was John Paulson’s right hand man at Paulson and Co (see Paulson’s guru outlook here & most recent strategy comments here).  Of course, Paulson and Co. made waves during the sub-prime crisis when they made billions shorting the market during the crisis.  Pellegrini was instrumental in devising the strategy.  Like Paulson, however, Pellegrini wasn’t a one trick, short the market, pony.  In 2009 he crushed the market with a 61.6% return in his fund after he made big bets on a rising oil market and a tanking treasury market.

So where does Pellegrini see the market going now?  In a recent letter to shareholders he said:

“the structural problems that precipitated the Great Recession around the globe remain unresolved”

He says we are essentially papering over the problems with more debt.  We are simply adding more debt to a debt-laden world while China adds more exports to a saturated market.  He says the problems in Europe are a harbinger of these continuing issues.   Thus far the massive stimulus has been successful in jumpstarting the global economy, but is nothing more than a temporary respite from the longer-term structural problems that remain.

Pellegrini’s favorite trades in 2010 are the following four:

  • Short US fixed income
  • Short US equities
  • Short US dollar
  • Long commodities

The short trade on fixed income is a reflection of the likelihood for higher yields as investors grow increasingly fearful of the U.S. as a steward of its debt.  Pellegrini believes demand for treasuries will decrease in the coming years.

In terms of equities Pellegrini says valuations are becoming stretched as organic growth fails to match expectations. He also believes higher taxes could ultimately be a net negative for equities.

Pellegrini is short the dollar based on the expectation of more stimulus.  He predicts that policymakers will come back to the taxpayer asking for another handout as they explain their first stimulus plan was not a failure, but simply too small.  He says the dollar will “plunge” if this occurs.

The one sector of the market Pellegrini likes is commodities.  He says they…
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ANEMIC REAL RETURNS ON STOCKS AHEAD

ANEMIC REAL RETURNS ON STOCKS AHEAD

Courtesy of The Pragmatic Capitalist

Excellent interview with Paolo Pellegrini here from  Bloomberg:

 

 


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Zero Hedge

Philly Fed Unexpectedly Soars To Second Highest Since Financial Crisis

Courtesy of ZeroHedge View original post here.

Anyone expecting the coronavirus pandemic to hit regional Fed surveys following the recent plunge in the Chicago PMI was in for a disappointment this week, when first the NY Fed's Empire State mfg survey unexpectedly printed at the highest since mid-2018, and then moments ago the Philly Fed blew it out of the ballpark with a massive surge in its business outlook survey, where the current general activity rose nearly 20 points this month to 36.7, smashing expectations of a drop from 17.0 to 11.0, and the highest index reading since February 2017. More importantly, this was the se...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...



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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

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Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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