Tiger Global Management is down 34% this year through March.
The speed of the reversal has shocked just about everyone, considering that Coleman is celebrated as one of his generation’s brightest stars, a standout among the elite money managers mentored by the famed Julian Robertson, Bloomberg.
Tiger Global Management treads rocky waters
The bad run has been fueled by massive bets on stocks that have been hammered, such as fast-growing tech companies in the U.S and China.
Tiger Global hedge fund lost 7% last year, its first annual drop since 2016 and its third total, according to Bloomberg.
Tiger Global told clients in a letter that it’s opening up both its hedge and long funds to a limited amount of capital from existing investors to bolster positions in stocks that underperformed
However, we see the results in the first quarter of 2022 has not been what the hedge fund anticipated.
Built by Coleman and his partner Scott Shleifer, Tiger Global has long been seen as a throwback to the industry’s glory years, when double-digit returns were the norm and ‘hotshot managers’ unerringly backed winning companies and shorted the losers.
Across the firm’s $35 billion in funds focused on public companies, this year’s losses have triggered a more than $10 billion hit to investors that include foundations, endowments and pension funds, as well as Tiger Global insiders.
Coleman’s personal wealth has dropped by $1.3 billion, according to calculations by the Bloomberg Billionaires Index.
Coleman’s hedge fund headed towards worst year
Tiger Global hedge fund may be on track for one of its worst years yet.
The blue in this chart indicates the hedge fund’s losses in 2008, 2016, 2021, and 2022.
The firm’s first serious bump was during the 2008 financial crisis, when it lost 26%, followed by a 1% gain the next year.
While markets were already jittery this year due to high inflation and expectations of rate hikes, Russia’s war against Ukraine triggered a flight from risk.
The Russia-Ukraine conflict has affected every corner of the financial sector.
Market News: Citadel faces potential default on Russian bonds
Citadel is facing potential default on convertible bonds from Russia’s Yandex NV.
Yandex NV is an internet and technology company that provides an internet search engine in Russia and other international markets.
Tigran Khudaverdyan has stepped down from his roles as Executive Director and Deputy CEO at Yandex.
Citadel could default on convertible bonds worth billions.
Here’s how Russia is affecting the hedge fund.
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(Bloomberg) Moscow bans short selling, indicating officials are preparing to reopen the market.
Russia is banning short selling in some of the country’s biggest companies.
The power to ban a strategy used by hedge funds to inflict damage on a company’s stock raises curiosity.
Is this Russia’s way of raising capital?
And should more countries like the U.S. also ban short selling?
Let’s break it down together.
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What the ban on short selling in Moscow shows us is that governments have the power to remove the same predatorial short selling that we see happening in recovering companies such as AMC and GameStop.
While short selling has its use in the market to balance volatility, limiting the use of short selling on a group of companies wouldn’t be such a bad idea.
I’d love to hear what you think.
Leave your thoughts in the comment section below.
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Chinese tycoon gets away with $8 billion margin call
London Metal Exchange
The tycoon whose big short bet on nickel helped trigger one of the most dramatic price spikes in history has told his banks and brokers that he doesn’t intend to reduce his position, according to Bloomberg.
The London Metal Exchange halted trading in nickel after prices spiked as much as 250% in two days.
Xiang has told the roughly 10 banks that he still believes prices will fall and that he would like to keep his short position.
The LME acknowledged that short sellers weren’t going to voluntarily reduce their short positions.
It said there were “considerable differences in view on the appropriate price.”
Apparently big net worth short sellers make the rules.
They Chinese Tycoon secured a deal with JP Morgan and China Construction Bank that would allow it to avoid defaulting on its $8 billion margin call.
LME halts Nickel trades
The LME cancelled $4 billion in transactions as Nickel prices began to surge.
The exchange said: “Nickel will be deemed a disrupted session and all agreed trades during this session will be null and void.”
In other words, they took away the ‘buy’ button and are allowing short sellers to either close their positions or profit on the way down.
Apparently the LME has decided to bust all Nickel trades in the "second ring session" today.
This is really nuts. They are ruining their exchange's credibility to protect some very wealthy/powerful people/firms. You can't run a market like this, busting trades at someone's whim.
Dave Lauer says the exchange is ruining their credibility by protecting very wealthy and powerful people/firms.
“You can’t run a market like this, busting trades at someone’s whim.”
The halts are similar to those that occurred last year during the ‘meme stock’ frenzy when Robinhood froze the purchasing of GameStop, AMC, and other heavily shorted stock.
At some point, the people will cause an uproar.
What are your thoughts on the matter?
Big banks are beginning to bail out wealthy people and firms.
What can be done about it and what should be done about it?
The Chinese tycoon is only one example, but what will happen when heavily shorted stock begin to squeeze again?
Leave your thoughts in the comment section below and share this article to raise awareness to the injustices in the markets.
The market for Treasury securities is the most liquid in the world, however, liquidity in the markets has rapidly deteriorated to 2020 levels.
Will this cause short sellers to throw in the towel?
Let’s discuss it.
Welcome to Franknez.com – today I’m going over a piece of information that ties up liquidity in the markets with hedge funds such as Citadel. Could this start the liquidation process?
While it may not bring the entire hedge fund down to its knees, it will certainly create significant losses.
Without liquidity, Citadel will either need to take private funding again or begin to liquidate certain assets.
Could this be the catalyst to force a short squeeze in AMC Entertainment?
It certainly can be if the hedge fund decides to close their position in the movie theatre chain company.
After all, AMC Entertainment has now proven to be a growing company.
The theater chain has progressed every quarter since 2020 and now has a positive EBITDA.
Shorting AMC no longer makes any fundamental sense if short sellers are still betting on the company to file bankruptcy.
And with the company now invested in silver and gold, it could be a great company for Citadel to close their positions in before prices begin to surge again.
BofA says there’s been a ‘record outflow’ from hedge fund clients
Bank of America said there has been a record outflow in the past weeks from stocks from its hedge fund clients.
In other words, hedge funds have been selling the entire market (shocker).
According to BofA, retail investors are actually balancing the markets due to above average buying pressure.
Citadel happens to be one of the bank’s clients; the bank manages the hedge fund’s assets through its clearing house ‘BAML‘.
If liquidity in the markets is running dry, we could see a surge in short covering to meet margin requirements and customer demands.
“Retail clients have been more aggressive buyers of this dip than other 10% corrections post-crisis, potentially on fear of missing out on what has generally been a successful strategy post-crisis,” Bank of America said.
According to the industry, most market participants don’t like the idea of “dumb money” buying while “smart money” is selling.
Could this idea of hedge funds selling trigger clients to take their money out?
Peabody Margin Call – Global margin calls will happen in every corner of the financial sector
Leading global pure-play and Fortune 500 company Peabody received a $534 million margin call.
The Australian benchmark coal price is up more than 400% in the past 12 months, hitting $425.
Peabody was not prepared and got slammed with a $534 million margin call.
The sum is more than half the cash the company had at the end of December 2021.
Margin calls are beginning to happen left and right and we’re going to discuss it.
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Margin calls in the coming weeks
The Russian-Ukraine conflict is affecting global markets sparking margin calls in every corner of the finance sector.
Russia’s war in Ukraine has further fueled a rally in coal driven by a squeeze on global energy supplies.
Chinese tycoon Xiang Guangda is currently facing an $8 billion margin call after Nickel prices skyrocketed to $100,000 per ton.
Xiang Guangda tells banks he has no intention in reducing his positions.
The short seller is requiring a coordinated bank bailout including the participation of JP Morgan.
The London Metal Exchange halted trading in nickel on Tuesday morning after prices spiked as much as 250% in two days, driven by brokers rushing to close out short positions after holders of bearish bets struggled to make margin calls.
Citigroup disclosed in its annual report that it has nearly $10 billion in exposures to Russian counterparties, including loans, reverse repo agreements and cash deposits.
Morgan Stanley’s next gen emerging markets fund (MFMIX) has also been exposed to Russia with nearly $16.6 million frozen due to Russian sanctions.
Schwab’s fundamental emerging markets large company index ETF (FNDE) has also been affected with 12.7% being exposed to the Russian stock market.
Peabody receives a 10% loan from Goldman
Goldman Sachs steps in with 10% loan – Peabody Margin Call
Peabody shares plunged 17% after announcing the margin call, taking a chunk out of the gains they had made in recent months as the coal market boomed.
Margin calls could increase if the coal market moves higher.
BlackRock, the largest asset manager in the world has taken a $17 billion loss due to its exposure with Russia.
The Russia-Ukraine conflict is affecting global markets and BlackRock is no exception.
Clients held more than $18.2bn in Russian assets at the end of January.
Following worldwide sanctions imposed after Russia invaded Ukraine have made the vast securities unsaleable.
How is BlackRock managing?
Let’s discuss it.
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According to sources, BlackRock declined to give a breakdown of its Russian securities or details about which funds had losses.
However, the asset manager did mark down the value of its largest Russian exchange traded fund.
ERUS has gone from about $600 million at the end of last year to a total value of less than $1 million.
BlackRock has suspended trading and waived the management fees on all of its Russian ETFs as well as an emerging Europe fund that was heavily exposed to Russia.
BlackRock chief executive and chairman Larry Fink has praised sanctions and condemned Russia’s invasion.
“Capital is being pulled by investors and companies that have long done business in Russia,” he wrote in a LinkedIn post.
“We stand with the Ukrainian people and condemn the brutal aggression of the Russian government,” Fink added.
Other financial institutions who have been exposed to Russia include Citigroup ($10 billion in losses) and Morgan Stanley ($16.6 million in losses)
#Occupywallstreet – Organized crime in Wall Street
It’s no secret Wall Street is known for its predatorial strategies in the finance world.
Retail investors known as the ‘little guys’ have been screaming at our government to take action for decades now.
Words do not fall on deaf ears.
They know all too well what’s going on within our financial system.
See, they’re lobbied to play a role in it.
Welcome to Franknez.com – for decades activists have peacefully raised awareness of the corruption in Wall Street. But will this new generation let themselves be silenced without any change?
The SEC released a market transparency report that highlights proposals that could protect retail investors from market manipulation.
In short, the SEC would be micro-managing short selling activities.
This type of monitoring is believed to refrain hedge funds from naked short selling.
If the proposals are enforced, it will be a massive victory for the retail community.
However, retail investors are skeptical of the SEC enforcing anything at all.
Actions speak louder than words and retail investors have not seen any changes in the markets for over a year since the ‘meme stock’ frenzy.
Market makers and brokers colluded last year to remove the buy button when AMC and GameStop began to soar in January.
The manipulation sparked a movement.
And in my opinion, will start a revolution if suppression on these heavily shorted stocks isn’t lifted.
90% of retail investors now own AMC Entertainment stock according to CEO Adam Aron.
So how is the price trading so low?
Naked short selling is the issue.
The question is, will regulators take action now or when it’s too late?
Who’s responsible and how did this get out of hand?
Big banks and financial institutions with money buy influence.
They buy the influence of the media and policy/lawmakers.
The term in the United States is referred to as lobbying.
In Mexico they call the act of bribing politicians in power corruption.
There are many parties involved of which none have served jail time nor been held with accountability.
How could they when bail is so easy for these massive institutions to pay anyway?
Lobbying usually comes in the form of ‘donations’, either to a party or institution.
SEC Commission Hester Pierce who voted no on market transparency belonged to an anti-regulatory party that compensated her outside of her career’s salary.
We see this corruption everywhere.
Gary Gensler himself is worth more than $100 million according to Bloomberg sources.
US and Allies remove Russia from SWIFT banking system amidst Ukraine Conflict
The U.S. and its allies are targeting Russian’s banking system along with physical assets through SWIFT.
The Biden administration announced on Saturday they’ll hunt down the assets of sanctioned Russian oligarchs.
Some of these assets include their yachts, mansions, luxury apartments, and ability to send money to their kids in prestige colleges out west.
I’m going to break down what SWIFT is and how this is going to impact Russia’s finances below.
Welcome to Franknez.com – entrepreneur Ed Mylett recently said on Instagram to watch out for anything having to do with SWIFT. He said it was going to further escalate things.
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What is SWIFT and why does it matter in Ukraine-Russia conflict?
What is SWIFT?
SWIFT stands for Society for Worldwide Interbank Financial Telecommunications.
It is a global payments system used by more than 11,000 financial institutions and companies around the world, across 200 countries.
In short, it is a messaging system for money transfers between banks and institutions globally.
SWIFT essentially acts as the middleman for money transfers between a foreign sender and a receiver.
This worldwide bank system counts central banks of countries like the US, UK, Germany, France, Japan, India, China, Singapore, and others on its list.
The EU, UK, Canada, and US have pledged to remove Russia from SWIFT.
US and Allies cut Russian banks from SWIFT
How will SWIFT ban affect Russia?
Vladimir Putin – Russia-Ukraine conflict – how will SWIFT affect Russia?
If Russia is removed from SWIFT, they would have to look for alternative options to send and receive money.
The ban would force Russia to isolate from most of the world and to sustain itself and its economy without the aid of other countries.
How does SWIFT affect Russia’s stock market?
Investors are bracing for volatility though economist Anders Aslund says the stock market and Russian bonds will collapse.
In the U.S., we can expect ongoing volatility as well.
Credit cards and other international means of payment will also cease for the Russian people.
Tomorrow, Russia will be outside global finances. Few can travel there because almost all international flights have ceased. Credit cards and other international means of payment will cease. The stock market and Russian bonds will collapse. Putin is a true disaster for Russia.
Russian President Vladimir Putin is causing serious distress not only for Ukrainians but for his own country and people.
The strategy is to prevent Russia from further investing in war by eliminating its global financial networks.
US and European Union begin to remove Russian banks from SWIFT banking system
WASHINGTON — The U.S., European allies and Canada agreed Saturday to remove key Russian banks from the interbank messaging system, SWIFT, an extraordinary step that will sever the country from much of the global financial system.
It’s official.
The U.S. said this will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.
Iran was removed from SWIFT in 2014 following developments of their nuclear program.
World leaders are also limiting the sale of “golden passports”, also known as loopholes that have allowed wealthy Russians to become citizens in other countries.
The Biden administration said they’re going after their yachts, their luxury apartments, their money, and ability to send their kids to fancy colleges in the west.
What do you think of these restrictions?
Are they enough?
Be sure to leave a comment below.
How is the world reacting to the Ukraine invasion?
Many Russians disagree and fear for both Ukrainian and Russian lives.
There’s a lot of negative reaction towards the government’s decision in Russia.
Russians have been rushing to withdraw US dollars at ATMS these past few days as the ruble hit a record low.
Very few have been able to obtain foreign cash with many out of luck.
The world is saying no to Putin and people on social media are representing Ukraine’s flag to show their support to the Ukrainian people.
Protests have broken out in Moscow against war with Ukraine with many Russians being arrested.
Vladimir Putin has been in power for 22 years now.
A former U.S. ambassador says Putin has become increasingly unhinged and disconnected from reality.
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