Gold

John Paulson sat at his desk, staring at the office supplies that were all but making a mockery of him. The gold pens. The gold paper clips. The gold-plated keyboard, identical to the ones that he’d decreed everyone in the office have, too. He’d ordered them last year, along with the gold staplers, gold tape dispensers, gold paper weights. As his analysts were begging him to dump his holdings, he was directing his secretaries to get rid of everything in the office that didn’t reflect his position–nay, his feelings– for the precious metal that wasn’t nailed down to the floor. And how had gold repaid him? How had it treated his fund? By losing something like 10,000% and spitting in his face. And yet he still would not budge. Not when gold lost him hundreds of millions. Not when his friends, people who really cared about him, took him aside and said, “I’m telling you this as a friend: she’s out there making a fool of you.”

But now, as he stared at the keyboard, all he could think was how much he hated gold. He had a right mind to kick her to the curb, and that’s exactly what he was going to do. Paulson shot up out of his chair and raised his arm to sweep the keyboard, the pens, and the paper-clips into his, yes, gold-plated waste paper basket, with one cleansing motion, when a trusted adviser came bounding through the door.

“P!” he shouted. “You’re not going to believe this.” Read more »

Paul Singer Explains It All

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. Read more »

Last month, John Paulson sat down with his investors and told them he wouldn’t personally be putting any more money into his worst-ever investment thesis, gold. This pronouncement came several months after Mr. Paulson made clear he didn’t want to talk about the shiny stuff anymore, since all of his other investments are doing swimmingly and because he is basically the only person still losing money on his chastened-but-still-extant belief that his gold investments, while down 60%-plus this year, will richly reward him when people realize that all the Fed has been doing for the last five years is setting us up for one hell of an inflationary headache.

Well, if he’s going to keep his new pledge, J.P.’s going to have to ignore what must look to him like some pretty attractive prices for the precious metal: After looking briefly like it had maybe kinda sorta hopefully turned a corner, gold went and had its worst November since the Carter administration. Read more »

What they lack in numbers they make up for in signage, flyers, and to the point demands (“GTFO”…of your investment in a company that wants to mine gold in a Romanian village). Read more »

He still loves the stuff. He just doesn’t need to hedge it quite so much anymore, because really, how much lower can it go? Read more »

A couple of ASU grads come up with a golden idea worth celebrating. It’s called 24 Karat Wines, a sparkling wine laced with gold. We were there for the big launch. “Tonight people are going to see what me and my partner Keagan love,” says Nicholas Cower, CEO of 24 Karat Wines. What they love is this sparkling wine created by the pair. “We looked at why do people go out and drink champagne, why do people go out and they buy these bottles of champagne. It’s the celebration it’s the fun it’s the excitement.” “This is the first product of its kind. American-made, we’re home grown Arizona boys.” And these Arizona boys see gold in their wine, literally. 24 Karat is made with flecks of gold, shimmering in each glass. “It’s the first, the first California sparkling wine with real 24 karat gold in it.” 24 Karat Wine is available in Tempe only. It’s a start off point for what they hope will become a huge phenomenon. [Fox10, Related re: John Paulson’s documented love of all things gold]

Paulson Gold Fund Continues To Build Upside Potential

Down 65% this year after losing another 23% in June, JP&Co. can’t quite say that there’s no place to go but up. So they’ll say this: Read more »

We’re sure that John Paulson and his ilk are taking some comfort in Bill Dudley’s soothing words. Unfortunately for them, no one else seems to be paying attention. Read more »