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jacobwolinsky

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    Bill Ackman - Pershing Square Q1 2012 Shareholder Letter

    in General Discussion

    Posted

    Two questions, 1. Anyone have any idea why he didnt include may returns? Letter was dated June 12th, I got stat sheet for May yesterday, dated early June? Seems a bit strange? http://www.valuewalk.com/2012/06/ackmans-pershing-square-up-2-6-ytd-rare-short-position-added/. He did awful in may but is that reason he would just leave it out (and April is missing)

     

    2. Anyone have an idea what his short is? Hes usually long only?

    Kyle Bass Likely Made Nearly $10 Billion on Greek CDS Trigger

    in General Discussion

    Posted

    Appreciate the correction on the Gross vs. Net here.  I had thought what I had read was <$4B *gross*.

     

    If $70B is the Gross figure, I could see Bass being larger there.

     

    I also share skepticism of those who wonder about how accurate the Net numbers are, but after Lehman and Wamu went down, the cash trading hands in both situations was 4-7% of Gross as a data point which from what I recall was inline with the net #'s.

     

    Interesting to see what Bass makes here if he really is still holding some of this.

     

    Ben

     

    No worries Ben. I think $10b now is prob unlikely I am trying to get more info to get a #. What denominations do CDSs come in? Bc if they come in $100k units of $1m, we would know he at least made $65,-$650m

    Kyle Bass Likely Made Nearly $10 Billion on Greek CDS Trigger

    in General Discussion

    Posted

    This is complete hogwash, the entire market for Greek CDS was $3B with avg price paid nearly 7 million to protect 10 million of debt. Even if Kyle had bought every CDS in existence (which is an impossibility) the total profit on the trade could only be: 840,000,000

     

    Someone told me it actually might be around $3billion

     

    John Mauldin disagree w/ the net CDS #:

     

    Secondly, the number that keeps showing up in the press is that there are only $3 billion of credit default swaps on Greek debt. That is only half true. The reality is that there is a NET $3.2 billion of CDS on Greek debt. The total or GROSS amount of swaps written is estimated to be about $60-70 billion (Dan Greenhaus, Chief Global Strategist, BTIG). This is in the 4,323 contracts that are known about.

    Of the net exposure, the loss is likely to be less than the $3.2 billion, unless Greek debt goes to absolute zero. But that does not tell the whole story. For instance, just one Austrian state-owned "bad bank," KA Finanz, faces a hit of up to 1 billion euros ($1.31 billion) for the hole Greece's debt restructuring punches in its balance sheet. That loss, which will be borne by Austrian taxpayers, is someone else's gain. The net number means nothing to them – they lose it all, over a third of the expected total loss.

    Every bank and hedge fund, insurance company, and pension fund has its own situation. Care to wager that the larger banks won't win on this trade? My bet is that there will be $30 billion in losses, out of which maybe someone will make $27 billion in gains.

     

     

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