Soros Reports Over $239mm In Gold Positions, Buys $25mm In Call Options On Juniors
In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.
This stunning move by one of the world’s top performing hedge funds, suggests a powerful surge ahead for gold equities. It should be noted, that in the forty years prior to 2010, the Soros Fund averaged a 20% annual rate of return.
A breakdown of the 13-F data indicates that during the first quarter, the Soros Fund:
1. Maintained a $32mm stake in individual miners.
2. Added a staggering 1.1 million shares of GDX to its holdings, at a reported price of $37.84 per share. Total Soros Fund GDX holdings now stand at 2.666 million shares, at a reported value of over $100,000,000.
3. Reduced it’s long position in the GDXJ Junior Miners Index fund, from 1.998 million shares to 1.2 million shares—only to turn around, and purchase 1.510 million call options on the same index, at a reported value of $25,200,000.
4. Lastly, the fund reduced its stake in the GLD gold fund from 600k shares to 530k shares, for a total reported value of $82,000,000.
In summary, as of May 15th, 2013, Soros Fund Management LLC reported owning over $239.2 million in gold related positioning, with over $25 million dedicated to call options on junior mining stocks.
Bottom Line: While debate continues as to how far gold and gold equities will continue to drop, the Soros Fund is lightening up on physical gold in exchange for gold mining equities and call options on the extremely volatile junior mining stocks.
There couldn’t be any stronger indication by the fund as to its beliefs about the timing of this bottom (outside of selling everything and going all-in on call options of course).
It remains to be seen whether these positions will end up in the green or not, but with a forty year track record of 20% annual returns, I’ll be betting on the Soros Fund.
To view the entire Q1 2013 13-F filing as reported by Soros Fund Management LLC, visit: SEC.gov
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Tekoa Da Silva
Bull Market Thinking
Statistics: Posted by DIGGER DAN — Fri May 17, 2013 5:45 am
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Are you willing to bet against three of the wealthiest men in the entire world? Jacob Rothschild recently bet approximately 200 million dollars that the euro will go down. Billionaire hedge fund manager John Paulson made somewhere around 20 billion dollars betting against the U.S. housing market during the last financial crisis, and now he has made huge bets that the euro will go down and that the price of gold will go up. And as I wrote about in my last article, George Soros put approximately 130 million more dollars into gold last quarter. So will the euro plummet like a rock? Will the price of gold absolutely soar? Well, if a massive financial disaster does occur both of those two things are likely to happen. The European economy is becoming more unstable with each passing day, and investors all over the globe are looking for safe places to put their money. The mainstream media keeps telling us that everything is going to be okay, but the global elite are sending us a much, much different message by their actions. Certainly Rothschild, Paulson and Soros know about things happening in the financial world that the rest of us don’t. The fact that they are all behaving in a consistent manner right now should be alarming for all of us.
Let’s start with Jacob Rothschild. Apparently he believes that the euro is headed for quite a tumble. The following is from a recent CNBC article….
You know the euro is in deep water when a doyen of the banking industry, Lord Jacob Rothschild takes a £130 million ($200 million) bet against it.
Okay, but the euro has already been falling dramatically. In mid-2011, the EUR/USD was above the 1.40 mark, and right now it is at about 1.23.
Does it really have that much more that it can fall?
If the eurozone ends up breaking apart it sure does.
If there is a Greek default, or if Germany leaves the euro, or if a new currency comes along to replace the euro those currently betting against it will end up looking like geniuses.
Another big name in the financial world that is betting against the euro right now is John Paulson. The following is from a recent Der Spiegel article….
One of these warriors is John Paulson. The hedge fund manager once made billions by betting on a collapse of the American real estate market. Not surprisingly, the financial world sat up and took notice when Paulson, who is now widely despised in America as a crisis profiteer, announced in the spring that he would bet on a collapse of the euro.
And as I noted in my last article, Paulson has also been putting billions of dollars into gold.
So just what are Rothschild and Paulson anticipating?
Could we be on the verge of a massive financial collapse in Europe?
According to the Der Spiegel article mentioned above, a lot of investors seem to be preparing for such a possibility right now….
Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar’s structure isn’t in doubt.
The financial world is starting to wake up to the fact that the globe is absolutely drowning in debt and it is not really good to be holding fiat currencies when a debt crisis erupts.
When men like John Paulson and George Soros start pouring huge amounts of money into gold, it is time to start becoming alarmed about the state of the global financial system.
The amount of money that these men are investing in gold is staggering….
There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).
Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.
At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.
And the central banks of the world are certainly buying gold at an unprecedented rate as well. According to the World Gold Council, the central banks of the world added 157.5 metric tons of gold last quarter. That was the biggest move into gold by the central banks of the globe that we have seen in modern financial history.
But that might just be the beginning.
According to a recent Marketwatch article, there are persistent rumors that China has plans to buy thousands of metric tons of gold….
Within the gold market, there is unconfirmed speculation that China plans to buy up to at least 5,000 to 6,000 metric tons of gold and that it will start to buy during this year, according to Kevin Kerr, president of Kerr Trading International.
If China buys this much gold, that would exceed annual, global production of gold, he said. “We do not have enough gold for China to buy that much, and it will take China time to purchase this amount of gold.”
So what comes next?
Nobody is quite sure.
Another major financial crisis could erupt in Europe at any moment.
A major war in the Middle East could start literally at any time.
Renowned investor Jim Rogers believes that things are really going to get “bad after the next election“.
Others believe that the action could start even sooner than that.
The truth is that even though we have not seen a “Lehman Brothers moment” yet, things in Europe just continue to get progressively worse. The following is from a recent article by Mark E. Grant….
Whether you turn your attention to Greece, Spain, Italy, Portugal or even Ireland; it is getting worse. Nowhere on the Continent are things improving and even in France and Germany the financial strains are beginning to show. It is not a question of Euro-bear or Euro-bull; it is just the numbers as they come rolling out month after month.
There is a growing realization in Europe that the euro simply does not work. Italy is absolutely drowning in debt, the Spanish economy has basically descended into a depression, and Greece has been experiencing depression-like conditions for years at this point.
The euro is doomed. The only question is who is going to blink first.
Nobody wants to be the first to leave the euro. There are rumblings that it could actually be Finland that leaves the euro first, and that would please Germany just fine because they don’t want to look like the bad guys in all of this.
But that doesn’t mean that Germany won’t eventually pull the trigger if nobody else does. The German public is sick and tired of bailing out the weak sisters of southern Europe, and at this point it looks like it would take perpetual bailouts just to keep the euro together.
And recently there have been lots of little signs that Germany is starting to move slowly toward the exit doors.
In fact, I found it quite interesting that a giant euro sculpture was recently removed from the Frankfurt International Airport….
A massive € sculpture (identical to the one in front of the European Central Bank) was dismantled and removed from the Frankfurt International Airport in Germany Thursday.
The official explanation is ‘the plastic parts are getting weak after 11 years and the terminal needed the space‘.
Does € sculpture’s removal from the Frankfurt Airport indicate Germany is preparing for a surprise return to the Deutsche Mark?
Sure that might just be a coincidence, but it also could be a harbinger of things to come.
Sadly, most average people living in North America and Europe have absolutely no idea what is coming. Most of them just want to be able to get up in the morning and go to work and pay the bills and take care of their families.
Unfortunately, millions upon millions of those hard working individuals are in for a very rude awakening.
A lot of people are about to have their current lifestyles totally turned upside down.
But it doesn’t have to be all bad.
In fact, I found it very interesting to read about how some young people are responding to the depression in Greece….
In the spring of 2010, just as the Greek government was embarking on some of its harshest austerity measures, 29-year-old Apostolos Sianos packed in his well-paid job as a website designer, gave up his Athens apartment and walked away from modern civilisation.
In the foothills of Mount Telaithrion on the Greek island of Evia, Mr Sianos and three other like-minded Athenians set up an eco-community.
The idea was to live in an entirely sustainable way, free from the ties of money and cut off from the national electricity grid.
The group sleeps communally in yurts they have built themselves, they grow their own food and exchange the surplus in the nearest village for any necessities they cannot produce.
I think there is a lesson to be learned there.
When the system fails, it is going to be important to be able to live independently of the system.
Governments and big banks all over the world have been rapidly preparing for the coming financial collapse.
Perhaps the rest of us should be too.
If you can believe it, 77 percent of all Americans live paycheck to paycheck at least some of the time.
If another major economic crisis comes along, many of those people are going to be totally wiped out.
And there are already signs that the U.S. economy is basically on life support at this point.
Just look at the velocity of money.
In an economy that is growing and healthy, money tends to circulate very, very quickly.
But when an economy is sick, money tends to circulate very slowly.
And that is exactly what is happening right now. In fact, the velocity of money is currently at the lowest level in modern U.S. history….
For much more discussion on this, please check out this article.
This is exactly what happened back in the 1930s. The velocity of money absolutely plummeted. When people are scared, credit is tight and times are hard, money does not exchange hands as rapidly.
But this is just the beginning.
What we are experiencing right now is rip-roaring prosperity compared to what is coming.
Jacob Rothschild, John Paulson and George Soros are preparing themselves for the tremendous chaos that is coming.
Are you getting prepared?
View full post on The Economic Collapse
As the old saying goes, to find out what really happened you need to … “Follow the money trail”
A warning to former MF Global segregated account holders: If the news has already been more than you can bear, please do not read this post — it may really push you over the edge
While the congressional hearings have been interesting, at times shocking, at other times even quite entertaining, Congress has yet to connect the dots. So I will do it for them.
In short, when the dots are connected, a significant portion of the $1.2 billion (some say more, some say less) of segregated account money illegally stolen by Jon Corzine’s MF Global (with the CFTC driving the get-away car) has landed in the pockets of George Soros.
Let’s go through this step-by-step:
1. Jon Corzine figured out a brilliant trade in the European debt market.
While I won’t go into the details, Corzine would have made a fortune if the trade could have been held to maturity of the debt instruments. The money was NOT lost because Corzine made a bad trade.
2. Corzine leveraged the trade to the hilt. He had the trade on with uber leverage. In fact, MF Global ended up with a $6.3 billion trade.
3. The Greek and Italian bonds tanked (rates went higher) over concern about a possible default.
The spike in rates would not have affected the final profitability of Corzine’s trade, but did put the trade on margin call after margin call. MF Global used every last penny of cash reserves to meet the margin calls, knowing that if it could survive the margin calls the trade would have made money at maturity. MF Global was unable to secure additional loans to meet the margin calls because it was leveraged to the max on the trade it .
4. MF Global illegally took segregated customer funds out of J.P. Morgan to meet margin calls in an attempt to survive the trade. It was the legislated responsibility of the U.S. government to protect this from happening.
5. MF Global’s clients (without their knowledge or permission and as an illegal manuever) became the default counterparty to MF Global’s trade. This is a fact Congress has not yet figured out.
6. MF Global puked about $1.5 billion of the trade, but it filed for bankruptcy when it was finally unable to meet further margin calls.
The remaining $4.8 billion trade was taken over by KPMG LLP, MF Global’s bankruptcy administrator in London. REMEMBER FROM POINT #5 ABOVE, MF GLOBAL’S SEGREGATED CLIENTS REMAINED A COUNTERPARTY TO THE TRADE BY DEFAULT.
7. KPMG peddled perhaps half (or more) of the trade to George Soros. The actual amount reported was $2 billion, but at a discount.
Remember, this trade was a guaranteed winner at the maturity of the bonds, so Soros was locked into a profit. Also, with his deep pockets ,Soros knew he could withstand interim margin calls if necessary.
Final point #8: MF Global’s segregated account holders became the default counterparty to Soros’ trade.
The profits that Soros has locked in represent, in large part, the segregated money previously belonging to MF Global clients that had been safe and secure (at least that is what the CFTC’s responsibility was) at J.P. Morgan.
Let me conclude by emphasizing that George Soros did nothing illegal in this manuever. The great speculator/shark simply smelled blood in the water and had the money to buy a distressed trade that was a guaranteed winner.
But in the process, the profits Soros will realize will in part (or in whole) be the segregated funds of MF Global’s clients. Technically, and legally, these funds belong to Soros because they were laundered through the complex process of rehypothication. But make no mistake about it, this is the money that previously belonged to MF Global’s clients.
So the dots are connected. MF Global’s clients (by default) became the counterparty to George Soros’ trade. MF Global’s client’ money, while illegally taken, legally became George Soros’ money.
And, Congress seemingly has no hint this money trail exists; the CFTC takes no responsibility for this ugly episode in history; and the Administration and the Fed would rather spend their time hearlding the $180 billion-plus money it gave to AIG.
Statistics: Posted by yoda — Sun Dec 18, 2011 10:12 pm
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