Fresh off a busy week in Davos, the Elliott chief pronounceth on the top issues of the day. For starters, he doesn’t get this whole bitcoin thing:
Paul Singer, founder of $23.3 billion Elliott Management Corp., told investors he was “shocked” by the virtual currency Bitcoin’s popularity and skeptical of its long-term prospects, according to a quarterly letter sent this week.
“There is no more reason to believe that Bitcoin will stand the test of time than that governments will protect the value of government-created money, although Bitcoin is newer and we always look at babies with hope,” Mr. Singer wrote.
Gold, however, he likes, even if he doesn’t fully understand what’s going on with it right now.
Mr. Singer encouraged investors to consider gold, which he wrote was “currently available at a good price….”
Gold is out of fashion, but we think the explanation for why it has been drifting down is not compelling. The economy seems stuck in the doldrums, but most so-called ‘experts’ have been changing their minds almost weekly about when they think the economy will finally begin a long-term acceleration to the upside,” Mr. Singer wrote in the letter.
He doesn’t like banks breaking the law and getting away with it.
“Lawlessness is a slippery slope,” the letter said, addressing one of the most controversial topics in financial services today, one seldom reported on or discussed in the media. “If a little ‘excess discretion’ is used… or a law is ignored in thousands of subtle ways, then over time the rule of law will be replaced by corruption and whim,” the letter said….
“Laws are not self-executing,” Singer wrote in the investor letter, as he cited a need for those entrusted to interpret the law and handle investigation and enforcement responsibilities to do so “with honesty and intelligence.”
He really doesn’t like all this talk about raising the minimum wage.
“Put bluntly, these policies would destroy jobs and cause companies and even entire industries to move elsewhere. These movements are politically motivated–a way for politicians to fake compassion,” Singer wrote in a letter to investors of his $23.3 billion Elliott Management on Jan. 27.
“If they gain traction, millions more people will make the transition from gainful employment to government dependency as jobs get priced out of existence by the rise in employment costs. Such policies would inexorably lead to lower economic growth, higher unemployment and a citizenry that is less and less self-sufficient.”
But most of all, he really, really doesn’t like it when hedge funds stupid enough to invest in Argentina’s post-haircut bonds waste his goddamned time with ridiculous pie-in-the-sky bullshit, when he and Cristina Kirchner could just hash the thing out over lunch.
Elliott, which has sued for full repayment on defaulted bonds in U.S. courts, will only negotiate a settlement with Argentina directly, the fund said in a letter to investors obtained by Bloomberg News. A proposal by hedge fund Gramercy Funds Management LLC called for holders of restructured debt to cede a portion of their interest payments to holdouts.
“We find this idea beyond bizarre and entirely impracticable,” Elliott wrote. “It is a stunt.…”
“The only way this dispute can be resolved is for Argentina to negotiate in good faith with holders of its defaulted bonds,” Elliott wrote. “If the Argentine government simply and at long last did what every other sovereign in need of restructuring has done and actually talked to its creditors, we are confident that this long-running saga could be resolved quickly and thoughtfully.”
Hedge-Fund Manager Paul Singer ‘Shocked’ by Bitcoin Popularity [WSJ MoneyBeat]
Paul Singer Says Financial Lawlessness Must End [ValueWalk]
Paul Singer: Minimum wage hike would ‘destroy’ jobs [NetNet]
Elliott Rejects Gramercy’s Argentina Proposal as a ‘Stunt’ [Bloomberg]
Elliott Management’s Paul Singer: ‘We could settle this thing in an afternoon’ [Buenos Aires Herald]