Daily Alpha: 3.23 Dumping Luxor, Investigating Rubin, and Argentina’s Long Economic Climb

Daily Alpha: 3.23 Dumping Luxor, Investigating Rubin, and Argentina’s Long Economic Climb

Garrett Baldwin

Here’s what you might have missed…

"Cliffwater recommends that ERSRI redeem from Luxor Capital Partners, L.P."

Rhode Island's state pension fund may soon pull its money out of Luxor Capital Partners.

Cliffwater told the Employees' Retirement System of Rhode Island (ERSRI) to pull $35 million out of Luxor as the hedge fund continues to mount losses. Cliffwater’s Thomas Lynch says that

Luxor isn’t as good of a stock picker as advertised.

Why push the exit? "Poor investment selection and inadequate hedging," writes Lynch.

The hedge fund has lost an average 18.3% between March 2014 and February 2016, with a relatively large loss fueled by underperformance from Yahoo stock.


“We hadn’t heard anything about this and have no knowledge of it.”

Here’s one of those – in case you missed it – stories.

According to Fortune, the Financial Crisis Inquiry Commission, a panel that was once responsible for trying to determine who and caused the 2008 financial crisis, considered an investigation of Robert Rubin.

It was late 2010… Firework by Katy Perry was topping the music charts and horrible movie Skyline was somehow making money. The Commission said that Rubin and other leaders at Citigroup “may have violated the laws of the United States in relation to the financial crisis.”

Simply put the bank was hiding its exposure to the subprime crisis…

The announcement came after the National Archives released a lot of documents made public for the first time about the Commission’s meetings. In conversations, both Rubin and former Citi CEO Charles “Keep Dancing Until the Music Stops” Prince were specifically mentioned for potentially violating the law.

This shouldn’t be news to anyone who paid attention to Rubin’s actions since the mid-1990s. Elizabeth Warren recently said that former Treasury Secretary Rubin was patient zero of the “unholy alliance” between the government and Wall Street bankers.

Rubin was the third member of “The Committee to Save the World,” according to Newsweek, which included Larry Summers and Alan Greenspan. But if you read the book 13 Bankers and do any analysis, you’ll know helped push through a financial law that helped fuel the housing crisis… Gramm-Leach-Billey.

He wouldn’t be around when the The Commodity Futures Modernization Act of 2000 passed, but he sure would profit from it. Rubin made more than $126 million in a decade after he walked out of the Treasury office.

The 1990s era of Rubin-Summers-Greenspan is why economists and financial pundits should wait at least a decade before judging the success of monetary policy, the implementation of new laws, and anyone’s legacy. We’re too wrapped up in the now to remember that past events from 15 to 20 years ago are the real reason why we’re still digging ourselves out of the financial crisis.

It seems like we forget a lot of things about the 1990s…

Like the fact that Rubin and company ran Brooksley Born out of town when she warned everyone about derivatives…

Or the fact that Jennifer Aniston was the co-star in the movie Leprechaun.

“It’s the most technologically advanced arena in the world, so it’s perfect for eSports.”

From a guy making $7.4 million a year to watch video games to a Chicago university offering full athletic scholarships for an e-Sports team, no shortage of money and interest exists in this surging sector.

Now, NBA legend Shaquille O’Neal is putting big money into the world of eSports.

Here’s the breakdown.

“I’m a celebrity internally. I haven’t had a chance to do an ounce of work. Don’t tell Warren.”

Warren Buffett’s “Perfect Bracket Contest” didn’t even last two days…

“They, too, are skeptical of change, and fear the return of harsh government.”

President Obama is in Argentina, a nation that was once one of the richest sovereign nations in the world, and in 60 years plummeted to have the fourth-least free economy in the world, according to the Heritage Foundation.

The nation’s currency is in a freefall since it lifted currency controls in an effort to end its currency black market.

It was just three years ago that someone could cross the border in Uruguay, collect a few thousand dollars in U.S. dollars, sell it on the black market, and then transfer the Argentine pesos back to the government – all while doubling their money in the process.

That said, Argentina is struggling to grow, even though it has a lot to offer the global economy.

With inflation soaring, Argentina is learning the hard lessons how hard it is to move past its failed economic policies. It will take time, and this economy could flourish.

Despite their frustration from change, hopefully, voters don’t go backward…

Here’s a update on the economy's struggle.

We’ll be back tomorrow with a big announcement about the upcoming issue of Modern Trader…


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