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re: Money people - what is your view of the economy?
Posted on 3/4/12 at 11:01 am to kfizzle85
Posted on 3/4/12 at 11:01 am to kfizzle85
quote:
Brah you can't argue with an internal corporate investment banker on items like this.
An investment banker whose primary responsibility is being a gold trader no less.
1
Posted on 3/4/12 at 11:32 am to ich1baN
Due to prior commitments this afternoon I clicked on only your first link. To be clear, I have PM's in the largest size safe deposit box WFC has at its local branch, but it does not dominate my portfolio, nor am I an active buyer or trader of PM's. A gold fund obviously will be investing in gold as investor dollars flow in. But this, after the year his funds had in 2011, strikes me as nothing but grasping at straws:
From another article:
LINK
With gold declining significantly in latter 2011 it would make sense that a gold oriented hedge fund would buy....more gold, but is the dollar amount impactful compared to legacy holdings? My belief that John Paulson knows that gold will be the best performing asset through the next five years is zero based upon his overall 2011 performance, thus his self proclamation is meaningless to me.
My self directed portfolio was up double digits last year with no new money added to it, plus 138% LTCG on a piece of land sold after a 14 month holding period which is excluded from the portfolio results, which leads me back to the thought that I did just fine without a portfolio dominated by gold or silver.
Maybe, maybe not, I have some quirks for sure and don't track gold prices daily or otherwise. I am not easily swayed by media and others with agendas put forth that may be detrimental to my family's and my financial well being. If I were a govt, buying paper assets with negative real yields would not be very attractive nor are they to me personally, but that doesn't mean I would make huge bets on commodities, either.
quote:
John Paulson, founder of hedge fund Paulson & Co. told investors on Friday that his $1.2 billion Gold Fund, which fell 11% last year, will outperform his other strategies over five years.
From another article:
quote:
The Paulson & Co.'s Advantage Plus fund, which has been the firm's worst performer all year, is down another 9 percent through December 16, sending yearly losses to about 52 percent, according to a person familiar with the numbers.
quote:
The Paulson Advantage fund, the firm's largest portfolio, is also hurting again this month, declining about 6 percent. The fund is down about 36 percent year-to-date. The Standard and Poor's 500 stock index has been flat so far in December.
quote:
Those losses were compounded by unfulfilled predictions by the billionaire hedge fund manager that the U.S. economy would experience a recovery this year. Instead, the economy has stagnated, and global markets have whipsawed as the European sovereign debt crisis worsened through the second half of the year. The average hedge fund was down about 4.37 percent through November, according to Hedge Fund Research's broadest industry index.quote:At the end of the third quarter, Paulson was the largest shareholder of the SPDR Gold Trust (Pacific:GLD - News) exchange-traded fund with about 20 million shares, according to quarterly regulatory filing.
Meanwhile, the gold fund that earned Paulson billions in 2010, is off about 7 percent for the year, according to an investor. The once safe-haven commodity has slumped 18 percent since September, when it hit $1,920 an ounce.
LINK
With gold declining significantly in latter 2011 it would make sense that a gold oriented hedge fund would buy....more gold, but is the dollar amount impactful compared to legacy holdings? My belief that John Paulson knows that gold will be the best performing asset through the next five years is zero based upon his overall 2011 performance, thus his self proclamation is meaningless to me.
My self directed portfolio was up double digits last year with no new money added to it, plus 138% LTCG on a piece of land sold after a 14 month holding period which is excluded from the portfolio results, which leads me back to the thought that I did just fine without a portfolio dominated by gold or silver.
quote:
You are an interesting person.
Maybe, maybe not, I have some quirks for sure and don't track gold prices daily or otherwise. I am not easily swayed by media and others with agendas put forth that may be detrimental to my family's and my financial well being. If I were a govt, buying paper assets with negative real yields would not be very attractive nor are they to me personally, but that doesn't mean I would make huge bets on commodities, either.
Posted on 3/4/12 at 12:35 pm to tirebiter
quote:Bingo!
But this, after the year his funds had in 2011, strikes me as nothing but grasping at straws
quote:An "interesting person" indeed.
With gold declining significantly in latter 2011 it would make sense that a gold oriented hedge fund would buy....more gold, but is the dollar amount impactful compared to legacy holdings? My belief that John Paulson knows that gold will be the best performing asset through the next five years is zero based upon his overall 2011 performance, thus his self proclamation is meaningless to me.
My self directed portfolio was up double digits last year with no new money added to it, plus 138% LTCG on a piece of land sold after a 14 month holding period which is excluded from the portfolio results, which leads me back to the thought that I did just fine without a portfolio dominated by gold or silver.quote:Maybe, maybe not, I have some quirks for sure and don't track gold prices daily or otherwise. I am not easily swayed by media and others with agendas put forth that may be detrimental to my family's and my financial well being. If I were a govt, buying paper assets with negative real yields would not be very attractive nor are they to me personally, but that doesn't mean I would make huge bets on commodities, either.
You are an interesting person.
Good post.
Posted on 3/4/12 at 12:48 pm to NC_Tigah
quote:
Actually I did.
Perhaps your post was confusing in that you said:
"Intragovernmental holdings do comprise what the Federal Reserve banks hold in aggregate which is around the order of $1.6 trillion."
Were you referring to Treasuries? If so, you realize that number far exceeds Chinese holdings?
Once again, you may have read my whole response, but it seems you didn't soak everything in. Yes, the Fed has 1.6 trn in treasuries. But you can't compare fed holdings to just 1 country when there are multiple countries willing to start selling treasuries and have already started to. China has 1 Trillion. Japan has .9 trillion. Taiwan is around .2 trillion. Russia adds .1 trillion. OPEC countries are around the .2-.5 trillion range. My point is foreign holdings amount to around 4.5 trillion.... dwarfing US Federal reserve holdings. When a China goes to sell, watch out. Tim Turbo Tax and the Bernank will be on TV daily.
This post was edited on 3/4/12 at 12:49 pm
Posted on 3/4/12 at 12:55 pm to tirebiter
quote:
With gold declining significantly in latter 2011 it would make sense that a gold oriented hedge fund would buy....more gold, but is the dollar amount impactful compared to legacy holdings? My belief that John Paulson knows that gold will be the best performing asset through the next five years is zero based upon his overall 2011 performance, thus his self proclamation is meaningless to me.
Your post has done nothing to refute my major premises in that hedge funds have increased their gold holdings in 2012.
quote:
My self directed portfolio was up double digits last year with no new money added to it, plus 138% LTCG on a piece of land sold after a 14 month holding period which is excluded from the portfolio results, which leads me back to the thought that I did just fine without a portfolio dominated by gold or silver.
Good for you, I hope you keep finding ways to make a return. One of my junior miners is up 889% over the past 8 months. Another is up in the magnitude of 1000%.
quote:
Maybe, maybe not, I have some quirks for sure and don't track gold prices daily or otherwise.
Pretty obvious.
quote:
I am not easily swayed by media
Doesn't sound like it.
quote:
and others with agendas put forth that may be detrimental to my family's and my financial well being.
I am doing this to help protect your family's wealth..... but you will see one day and say "I wish I listened to that annoying guy on that stupid forum"
quote:
If I were a govt, buying paper assets with negative real yields would not be very attractive nor are they to me personally
Glad that point got home to you.
,
quote:
but that doesn't mean I would make huge bets on commodities, either.
Bets? I believe you are the one placing bets in the stock market and in real estate. And btw, for people like you, I recommend allocating only 25% of your portfolio to PMs.
This post was edited on 3/4/12 at 12:56 pm
Posted on 3/4/12 at 1:02 pm to RedStickBR
quote:
An investment banker whose primary responsibility is being a gold trader no less.
Not a gold trader for my company. This is a personal investment choice. It stems from my philosophical and personal beliefs. Gold is a protector of property rights. Gold and freedom go together. When money is as good as gold, the government cannot manipulate the supply for its own purposes. Just as the rule of law puts limits on the despotic use of police power, a gold standard puts extreme limits on the government's ability to spend, borrow, and otherwise create crazy unworkable programs. It is forced to raise its revenue through taxation, not inflation, and generally keep its house in order.
Gold to Bershire Hathaway stock ratio:
LINK
Posted on 3/4/12 at 1:30 pm to ich1baN
Posted on 3/4/12 at 3:21 pm to ich1baN
quote:Perhaps.
but it seems you didn't soak everything in
I've always thought of Treasuries vs Intragovernmental Holdings as being different in that one is marketable, and the other mostly non-marketable. I hadn't seen the two intermingled in the way you seem to refer to them. Probably a misnomer on my part, but it left your post hard to follow.
The Chinese obviously have a problem were they to consider trimming US Treasury holdings. Dollar valuation is their Sword of Damocles. Japan and Taiwan are in similar situations. In terms of overall foreign holdings, Switzerland, Taiwan, the UK, Japan, and China are each fairly unique in motivations to hold Treasuries. Hard to envision them dumping Treasuries in concert. Not to say it won't happen in light of ad infinitum $1.5Trillion deficits, but I'd expect higher debt cost to come in the form of slowly diminished interest at new issuance rather than countries jettisoning positions.
This post was edited on 3/4/12 at 3:23 pm
Posted on 3/4/12 at 5:12 pm to NC_Tigah
My point is that to trigger a chaotic situation, China would have to be the only country to want to offload its debt. However, they are already offloading it, at a slower pace. They along with Russia who has been offloading treasuries for the past 12 months. As the political stranglehold proves that no coherent strategy will be put forth to reduce our long-term debt problem and reignite the productive capacities of the US or any meaningful economic plan outside of printing money, countries around the world will catch wind to what Russia and China are doing and likely follow suit, third in line are the Petro-nations.
But there are two (or three) foreseeable scenarios that would raise the pace to a level sufficient to panic the markets:
1. China desperately needs to raise dollars to bail out its real estate market and paper over the cracks of its credit bubbles, and so goes into full-on liquidation mode.
2. China retaliates to an increasingly-hostile American trade policy and — alongside other hostile foreign creditors (Russia in particular) — organise a mass bond liquidation to “teach America a lesson”
3.Both of the above.
But there are two (or three) foreseeable scenarios that would raise the pace to a level sufficient to panic the markets:
1. China desperately needs to raise dollars to bail out its real estate market and paper over the cracks of its credit bubbles, and so goes into full-on liquidation mode.
2. China retaliates to an increasingly-hostile American trade policy and — alongside other hostile foreign creditors (Russia in particular) — organise a mass bond liquidation to “teach America a lesson”
3.Both of the above.
Posted on 3/4/12 at 5:27 pm to ich1baN
quote:Gosh, as a "non-finacial" guy, I struggle to see one iota of the tiniest smidgen of a chance that China would benefit in any way whatsoever by 1, 2, or 3 at this stage.
1. China desperately needs to raise dollars to bail out its real estate market and paper over the cracks of its credit bubbles, and so goes into full-on liquidation mode.
2. China retaliates to an increasingly-hostile American trade policy and — alongside other hostile foreign creditors (Russia in particular) — organise a mass bond liquidation to “teach America a lesson”
3.Both of the above.
Could you elucidate?
Posted on 3/4/12 at 6:18 pm to NC_Tigah
Is ichiban European?
ETA: I just caught up on this thread and I think it is awesome that this guy thinks he is better than me because he is an "investment banker" when I am actually an investment banker, even though I never use that terminology.
ETA: I just caught up on this thread and I think it is awesome that this guy thinks he is better than me because he is an "investment banker" when I am actually an investment banker, even though I never use that terminology.
This post was edited on 3/4/12 at 6:31 pm
Posted on 3/4/12 at 8:15 pm to TheHiddenFlask
quote:All is can say is I have beauxcootles of money invested personally, and with upper-end, expensive resources. Yet, I still find interesting insight posted by understated sources here. You are one of those. Much appreciated THF.
when I am actually an investment banker, even though I never use that terminology.
This post was edited on 3/5/12 at 2:29 am
Posted on 3/4/12 at 11:43 pm to TheHiddenFlask
Great for you bud. I never said I was better than anyone on here. In fact I put my shoes on 1 at a time like you. I work at JP Morgan's flow desk. You?
Posted on 3/4/12 at 11:49 pm to NC_Tigah
Okay, you praise a guy for speaking in a different way? He is probably working at a boutique or in his own capacity. What would it matter? Every person in my department uses that terminology... and there are over 80 of us on our floor.
But I guess this somehow equates to esoteric information?
But I guess this somehow equates to esoteric information?
This post was edited on 3/4/12 at 11:50 pm
Posted on 3/5/12 at 6:38 am to ich1baN
I do not work for a boutique. I'm not going to flex nuts on here but my bank is just as well known as yours.
Also, if you are working on a flow desk you are a trader, not an I banker, and I can guarantee that everyone in your whole office is laughing at the fact that your department calls themselves I bankers.
Also, if you are working on a flow desk you are a trader, not an I banker, and I can guarantee that everyone in your whole office is laughing at the fact that your department calls themselves I bankers.
Posted on 3/5/12 at 6:41 am to NC_Tigah
quote:
All is can say is I have beauxcootles of money invested personally, and with upper-end, expensive resources. Yet, I still find interesting insight posted by understated sources here. You are one of those. Much appreciated THF.
Thanks man. I know I haven't posted as much macro stuff since I started my job, but I still try. My new job has a much more intense workload and I don't deal with hedge funds any more. Maybe that will change some time in the future.
Posted on 3/5/12 at 8:43 am to ich1baN
quote:It wouldn't, so why guess?
He is probably working at a boutique or in his own capacity. What would it matter?
It's a message board for goodness sakes.
For all I know, a poster on this board might work out of a large 39th Floor corner office at 270 Park Avenue in NYC. Then again he may only be a member of the housekeeping staff assigned to clean it.
Either might see reason to pose as something slightly different on a message board. As an investment banker for example. Then again they might not. It is what it is. The point is, regardless of IRL occupation, position or message board claims, content here is posted and consumed on a simple WYSIWYG basis.
No need for any of you to compare claims as to zipper length, and not much good will come of it if you do. But that's JMO.
This post was edited on 3/5/12 at 8:45 am
Posted on 3/5/12 at 11:38 am to NC_Tigah
quote:
I work at JP Morgan's flow desk.
quote:
I am an Austrian economist
quote:
I am an investment banker that makes more money in 1 year than you make in 10 years
quote:
You obviously don't know much about the investment banking world.
What do you think an internal IB team does for a company? Do you think dealers are the only IBers (which is factually wrong b/c dealers and market makers are not investment bankers and most of investment banking work is trading, the creation of securities is left up to securities dealers)?
Any major Financial company has an IB arm that invests for the firm in every distinct industry and category..... That includes commodities
DEY SEE ME TROLLIN, DEY HATIN.
Posted on 3/5/12 at 8:35 pm to TheHiddenFlask
I don't think you understand the structure of a large financial institution then. Our dept is the Investment Bank, then it breaks down into your specific area... i.e. fixed income, equities, cash, etc.... then into more granular levels such as flow, prop, management... now our IB dept is on the side of trading securities vs. the other major side which is underwriting.
Posted on 3/5/12 at 8:54 pm to ich1baN
I thought you were part of an internal IB team??? 
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