Tuesday, July 10, 2012

John Paulson reports further losses

My driver maintains his speed as we approach a traffic light, then slows down until the light switches from green to orange and eventually to red. We are headed south and as traffic starts to move east and west he accelerates. I look out of my window and see a truck slamming his breaks, but as I look behind me through the tainted back window I see our tail decided not to engage into this crazy maneuver and stopped at the red light.

My driver continues to speed through traffic as I tell him job well done. I call my contractor and inform them of recent events. They dispatch a security team which will escort me to the high level meeting. My phone rings and I receive the most recent update on the testimony of former Barclay's Chairman Marcus Agius as well as the potential involvement of Bank of England's number two Paul Tucker. Diamond voluntarily waived his GBP 20 million deferred bonuses. I thank my informant for the update, which is secondary at the moment. We will deal with this scandal later I am afraid.

The more pressing issue is this meeting about Iran, Turkey and Syria and the absence of my flash drive has me scrambling for data necessary. It will be at the corporate vault until after the investigation which will be too late for the current purpose. The security detail arrives and escorts us to the south of Singapore. My phone rings again and I am being told about a potential gold and silver fixing scandal related to the LIBOR scandal. The situation heats up, but there is no time for this now.

We need to determine the Turkish troop buildup at the Syrian border. The only thing that is certain is that army vehicles and anti-aircraft guns were sent as Syrian forces came within 500 meters of the boarder. Plenty of checkpoints have been set up by secret police forces and army units which may impact container traffic. I am waiting for the exact numbers, waiting for the phone call with that intel.

My phone rings a third time and I hope to get the data I was waiting for so I can head into the meeting with breaking news. Paulson dropped 5.7% in June and 12% in 2012 in his Advantage Fund. More and more start to wonder if John Paulson was a one hit wonder. He made a fortune betting against the U.S. subprime mortgage market, but has struggled ever since then. His Advantage Plus Fund dropped 7.9% and is down 16% so far this year. His Gold Fund has not performed any better with losses of 0.7% and 23% respectively. This time his losses were in connection to the Eurozone debt contagion.

Time will tell how his investors will react to continued losses, but Paulson has struggled for a while there is only so much investors are willing to take. Paulson tries to recover from a terrible 2011 where some of his funds were slashed in half.

Photo Credit: The picture in the top left corner was downloaded for free use at freedigitalphotos.net.


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