It has been a remarkably journey and I think you are spot on. the contract between politicians and the people was changed by the politicians, to their own advantage, post GFC. the people are getting things back in balance
It's a brand new world out there. You can also be a right-wing anti-corporate nationalist who argues for laws that open the domestic economy for small business and workers at the expense of multinationals. I don't know UK details, but in the USA everything from health insurance to how digital information is handled is skewed heavily in favor of corporations. How about implementing tariffs and offsetting it with payroll tax cuts? Anti-central banking in also right-wing. The US left in the USA is berating the Fed, demanding it cut rates and increase inflation. Earlier this week, Kashkari admitted the public would rather have a recession than more inflation. Both parties in DC are also heavily pro-inflation and pro-war, another opening for outsiders.
Good to hear you are getting back in. For my 10 cents from someone who has had some v good and v bad experiences as a HF LP over last 2 decades will be quite important to have some clear differentiation in the strategy vs say a Hempton (diversified short fraud) or a James Hanbury (macro view not far from you but more bottom up guy) in order to justify the fees. I did read the bberg article about the death of short selling and heard a bell ringing….
Hedge funds really come into their own when you get bear markets…. No bear market- no point. People argue about fees , when their investment thesis is not playing out, but can’t admit they were wrong…. Anyway - i am putting it out there and see what happens
I guess I’m still a little lost why Bill is selling a 10% stake in Pershing Square. Is this so he can just raise capital? Or is this a play to become more transparent in addition he can become more activist against publicity traded companies that are going to lose politically as you mentioned?
Governments take the credit in the good times but like to have someone to blame in the bad times. Looking at the UK, the tories have run out of road and the public is laying the blame clearly at their door. When starmer gets in he’ll need a scapegoat. He’s already talking “windfall“ taxes on the energy companies. It will be interesting to see who else is there to shoulder the blame to fund his other policies.
Another very interesting piece but I would slightly push back against corporates taking on a lot of debt. In absolute terms yes but relative to profit or book value debt is not particularly high, so maybe there is still more room to leverage up corporate balance sheets. Your observation that corporate debt is implicitly backed by governments brilliant.
Russell, did you read or hear about "The Great taking" from David Webb. His premise is, that centralisation of clearing together with other changes is path to wealth confiscation of everyone who has any pledge on his assets. what do you think?
Regulators have made clearinghouses the central risk pricing party, but incentivised them to maximise volume, but with no risk of bankruptcy. If you wonder why market volatility has collapsed, clearinghouse reform is a good place to look. Essentially, bankruptcy risk that used to reside at banks, to ensure they priced risk correctly, has now been socialised and guaranteed by governments.
What is this book about? It is about the taking of collateral, all of it, the end game of this globally synchronous debt accumulation super cycle. This is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass. Included are all financial assets, all money on deposit at banks, all stocks and bonds, and hence, all underlying property of all public corporations, including all inventories, plant and equipment, land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will be similarly taken, as will the assets of privately owned businesses, which have been financed with debt. If even partially successful, this will be the greatest conquest and subjugation in world history.
I think "the west" has shown remarkably ability to change policy when needed. When the popularity of socialism/communism was threatening the west, they adopted policies to placate workers, without wholesale theft of all assets. I would suspect some sort of similar accomodation to be made - so the return of progressive taxation, regulation of tech, increased worker rights, better wages etc.. but not the extreme outcome laid out above.
HORSE HEAD CAPITAL is a terrific name.
I think so too
It has been a remarkably journey and I think you are spot on. the contract between politicians and the people was changed by the politicians, to their own advantage, post GFC. the people are getting things back in balance
If you.believe in the power of democracy to keep power balanced then short selling makes sense
agreed, but as you say, that is tough!!!
It's a brand new world out there. You can also be a right-wing anti-corporate nationalist who argues for laws that open the domestic economy for small business and workers at the expense of multinationals. I don't know UK details, but in the USA everything from health insurance to how digital information is handled is skewed heavily in favor of corporations. How about implementing tariffs and offsetting it with payroll tax cuts? Anti-central banking in also right-wing. The US left in the USA is berating the Fed, demanding it cut rates and increase inflation. Earlier this week, Kashkari admitted the public would rather have a recession than more inflation. Both parties in DC are also heavily pro-inflation and pro-war, another opening for outsiders.
Good to hear you are getting back in. For my 10 cents from someone who has had some v good and v bad experiences as a HF LP over last 2 decades will be quite important to have some clear differentiation in the strategy vs say a Hempton (diversified short fraud) or a James Hanbury (macro view not far from you but more bottom up guy) in order to justify the fees. I did read the bberg article about the death of short selling and heard a bell ringing….
Hedge funds really come into their own when you get bear markets…. No bear market- no point. People argue about fees , when their investment thesis is not playing out, but can’t admit they were wrong…. Anyway - i am putting it out there and see what happens
How do you conclude a bear market, when nominal prices are rising everywhere?
I love the irony here, launch a new hedge fund to capitalise on the demise of unhinged capitalism
I guess I’m still a little lost why Bill is selling a 10% stake in Pershing Square. Is this so he can just raise capital? Or is this a play to become more transparent in addition he can become more activist against publicity traded companies that are going to lose politically as you mentioned?
It has been a 15 year bull market, and someone offer to pay a valuation 60% of AUM for your firm... you would be a fool not to sell
Great insights!
Governments take the credit in the good times but like to have someone to blame in the bad times. Looking at the UK, the tories have run out of road and the public is laying the blame clearly at their door. When starmer gets in he’ll need a scapegoat. He’s already talking “windfall“ taxes on the energy companies. It will be interesting to see who else is there to shoulder the blame to fund his other policies.
Taxing Big Tech seems a win win to me... popular, and raises money
"Since the GFC, Western governments have slowly taken on corporate risk."
On the US side of the pond, also note the death of the interbank market post-GFC, and the transition from unsecured to secured lending (repos).
Another very interesting piece but I would slightly push back against corporates taking on a lot of debt. In absolute terms yes but relative to profit or book value debt is not particularly high, so maybe there is still more room to leverage up corporate balance sheets. Your observation that corporate debt is implicitly backed by governments brilliant.
Russell, did you read or hear about "The Great taking" from David Webb. His premise is, that centralisation of clearing together with other changes is path to wealth confiscation of everyone who has any pledge on his assets. what do you think?
Regulators have made clearinghouses the central risk pricing party, but incentivised them to maximise volume, but with no risk of bankruptcy. If you wonder why market volatility has collapsed, clearinghouse reform is a good place to look. Essentially, bankruptcy risk that used to reside at banks, to ensure they priced risk correctly, has now been socialised and guaranteed by governments.
Not sure I understand - is he saying that eventually clearinghouses just shut down and take all assets with them?
https://www.zerohedge.com/geopolitical/great-taking-exposes-financial-end-game
https://rumble.com/v3yptkd-the-great-taking-documentary.html
https://thegreattaking.com/read-online-or-download
What is this book about? It is about the taking of collateral, all of it, the end game of this globally synchronous debt accumulation super cycle. This is being executed by long-planned, intelligent design, the audacity and scope of which is difficult for the mind to encompass. Included are all financial assets, all money on deposit at banks, all stocks and bonds, and hence, all underlying property of all public corporations, including all inventories, plant and equipment, land, mineral deposits, inventions and intellectual property. Privately owned personal and real property financed with any amount of debt will be similarly taken, as will the assets of privately owned businesses, which have been financed with debt. If even partially successful, this will be the greatest conquest and subjugation in world history.
what do you think about this ?
I think "the west" has shown remarkably ability to change policy when needed. When the popularity of socialism/communism was threatening the west, they adopted policies to placate workers, without wholesale theft of all assets. I would suspect some sort of similar accomodation to be made - so the return of progressive taxation, regulation of tech, increased worker rights, better wages etc.. but not the extreme outcome laid out above.
Ray Dalio says that FDR policies basically "took away" 90% of the then accumulated capital.
And yet the stock market went up....
Horse Head Capital sounds sounds great!