Jessie on financial journalism.
Heavy handed and amateurish performance by the ‘journalists’ was the name of the game in this interview which CNBC conducted with former TARP inspector general Neil Barofsky.
I think Barofsky was taken aback and kept off balance for much of the interview, and did not present some of the alternatives to TARP that could have been discussed in a more intelligent and less adversarial venue. I would have thought a former federal prosecutor would have been tougher, but I think he came in expecting a rational discussion and not a tag team group takedown.
This performance represents the level of journalistic quality and objectivity of its parent NBC, which is one of the corporate arms of General Electric. And such a disregard for any pretense to journalistic principles is no longer the exception.
Maybe I am missing something but it seems astonishing that a major financial network can feature a stock advisor who bragged on tape about how he used reporters for planting stories favorable to his market manipulation to cheat the public when he ran a hedge fund, and apparently sees nothing wrong with it, up to and including breaking the law.
How cynical can a people get?
Simply the world’s best hedge fund manager, Mr Dalio. From the Economist.
“THE most beautiful deleveraging yet seen” is how Ray Dalio describes what is now going on in America’s economy. As America has gone through the necessary process of reducing its debt-to-income ratio since the financial crash of 2008, he reckons its policymakers have done well in mixing painful stuff like debt restructuring with injections of cash to keep demand growing. Europe’s deleveraging, by contrast, is “ugly”.
Mr Dalio’s views are taken seriously. He made a fortune betting before the crash that the world had taken on too much debt and would need to slash it. Last year alone, his Bridgewater Pure Alpha fund earned its investors $13.8 billion, taking its total gains since it opened in 1975 to $35.8 billion, more than any other hedge fund ever, including the previous record-holder, George Soros’s Quantum Endowment Fund. (Full article here).
For more on Dalio, check out the must read article by The New Yorker from last year, as well as Dalio’s priciples. Link here.
Last year we saw low volatility, high volatility, greed and fear play out. With the average hedge fund down in 2011, there were some exceptional value makers. Forbes reports;
For most hedge fund managers, 2011 was a year to forget. The average hedge fund fell by 5% even as the U.S. stock market eked out a tiny gain. Big shot investors like billionaire John Paulson were humbled and lost massive amounts of money. Yet even in a down year, arguably its worst ever, the hedge fund industry demonstrated its unmatched ability to make people rich.
No hedge fund titan made more in 2011 than Raymond Dalio. The founder of Bridgewater Associates, the world’s biggest hedge fund firm, made an estimated $3 billion in 2011 as his funds produced net returns in the 20% range. As a result, Dalio tops Forbes’ list of the 40 highest-earning hedge fund managers of 2011. Full article here.
Dalio does it again by earning 13.8 Billion USD for his clients last year. Simply, the best.
Below is a list of how much money clients have made investing in top hedge funds since inception. The data are provided by LCH Investments NV.
Hedge Fund Net Gains Year Founded Bridgewater Pure Alpha $35.8 Billion 1975 Quantum Endowment Fund $31.2 Billion 1973 Paulson & Co. $22.6 Billion 1994 Baupost $16 Billion 1983 Brevan Howard $15.7 Billion 2003 Appaloosa $13.7 Billion 1993 Caxton Global $13.1 Billion 1983 Moore Capital $12.7 Billion 1990 Farallon $12.2 Billion 1987 SAC $12.2 Billion 1992
Full Bloomberg article here.
It is no secret, the Fed is the World’s biggest hedge fund, with Bernanke calling the decisions. They don’t pay interest on their leverage, but on the other hand, they earn peanuts compared to the “real” hedge fund managers. From NYT.
The year 2011 is over, and soon we’ll be hearing again about billion-dollar paydays for select hedge fund wizards. If it makes you feel any better, not everyone is sharing in these riches. The people who operate the most successful hedge fund around are receiving a relative pittance. That hedge fund is the Federal Reserve. Last year, the central bank turned over $76.9 billion in profit to the federal government, slightly down from $79.3 billion it provided in 2010. The Fed made this money in interest on a nearly $3 trillion portfolio of securities. This enormous holding was built up largely in the wake of the financial crisis as the Fed bought these securities through two rounds of quantitative easing.
The WSJ ran a “reminder” article yesterday on what the world’s biggest hedge fund, Bridgewater, and it’s boss, Dalio think about the Economy. Nothing new from Dalio, who is still very bearish on the debt, leverage, economy etc. We would like to remind our readers of a great piece on Dalio and his fund, by The New Yorker last year.
Dalio is a “macro” investor, which means that he bets mainly on economic trends, such as changes in exchange rates, inflation, and G.D.P. growth. In search of profitable opportunities, Bridgewater buys and sells more than a hundred different financial instruments around the world—from Japanese bonds to copper futures traded in London to Brazilian currency contracts—which explains why it keeps a close eye on Greece. In 2007, Dalio predicted that the housing-and-lending boom would end badly. Later that year, he warned the Bush Administration that many of the world’s largest banks were on the verge of insolvency. In 2008, a disastrous year for many of Bridgewater’s rivals, the firm’s flagship Pure Alpha fund rose in value by nine and a half per cent after accounting for fees. Last year, the Pure Alpha fund rose forty-five per cent, the highest return of any big hedge fund. This year, it is again doing very well.
And the conclusion;
You might want to check out Dalio’s Secret Rules after reading the below. Dalio and Renaissance are the Winners this year. Link to Dalio’s Rules.
From FinAlternatives; Amidst August’s hedge fund carnage, some managers were able to produce some impressive returns. Perhaps not surprisingly, some that did are among the biggest and most successful in the industry.
This year, almost no hedge fund has been more successful than Bridgewater Associates. The $122 billion firm’s flagship Pure Alpha II fund is up 25.3% this year,Bloomberg News reports.
“Making money is a zero-sum game, so to be successful you have to be willing to stand apart from the crowd,” Bridgewater founder Ray Dalio told Bloomberg. “And you have to be right.”
Few have been righter than Dalio this year. But one of those few sits just across the Long Island Sound from Bridgewater’s Westport, Conn., headquarters. Renaissance Technologies’ Institutional Equities Fund is up 25.56% this year, edging Pure Alpha thanks in part to a 5.4% August return. RenTech’s Institutional Futures Fund did even better last month, rising 5.89%, according toDealbreaker.com, but it is only up 7.56% on the year.
MKP Capital Management’s flagship Opportunity Fund is another of August’s standouts, returning 3.51% last month. The $1.5 billion global macro vehicle is up 8.31% through the first eight months of the year, MarketWatch reports.
Tudor Investment Corp. was no slouch in August, either. Its Momentum Fund rose 2.59% on the month and its Tensor Fund 0.85%, according to Dealbreaker. For the year, however, it has been less lucky. Momentum is up just 3.32% in 2011, while Tensor is down 5.28%.