Comments on: JOHN PAULSON’S HUGE REFLATION BET

By: TPC

TPC — Thu, 13 Aug 2009 17:23:41 +0000

VCC,

If these guys keep beating and raising (which is a sign of a bad analyst community and not a strong economy) based on cost cutting measures (as WMT did) we could see the market continue to rise with the assumption that retail sales are strong.

Of course, today’s retail sales data should have slaughtered this market so I am really out to sleep on today’s action.

The entire 10 o’clock hour looked like a rally chasing, speculative, bubble type trade….I think people are just chasing performance now no matter how high it goes. Where it stops nobody knows….

And yes, reading into Paulson’s equity positions is pretty useless. He uses a lot of instruments that aren’t listed here so it’s impossible to know his allocation.

By: VCC

VCC — Thu, 13 Aug 2009 16:15:05 +0000

TPC,

What is it about retailer earnings that concerns you? Especially with the data out today of a weak consumer, I would imagine their earnings to be less than stellar. Wal-Mart has traditionally been the exception but even their SSS were down for the first time in over a year. Thanks.

By: James

James — Thu, 13 Aug 2009 14:11:05 +0000

Arbiter I did notice a position in the ultra short financial etf as well.

By: Arbiter

Arbiter — Thu, 13 Aug 2009 12:13:41 +0000

Did any see to notice that Paulson also has a 2×1 short postion in financials hedging off his risks.

Most of his ownership came from the conversion of BAC preferreds to common stock.

By: kimiraikkonen

kimiraikkonen — Thu, 13 Aug 2009 11:21:18 +0000

$2bn is for sure a lot of $. But $2bn in the context of a $30+bn fund ? Also nobody knows what the play is, you might only see part of the game plan in stock holdings. Could be hedge against calls sold, or even massive short credit position, nobody knows.

By: Paul

Paul — Thu, 13 Aug 2009 10:45:19 +0000

Hi TBC, Walmart reports today. Which company marks the end of retailer earnings? Any other catalyst to go higher? Tape very bullish… Thanks in advance.

By: TPC

TPC — Thu, 13 Aug 2009 08:45:22 +0000

It’s a massive position James. Massive.

By: James

James — Thu, 13 Aug 2009 08:37:54 +0000

What I think is odd is that financials popped AH after this news was published but I remember when BAC offered new equity, John Paulson bought like 100 million shares at around 10 dollars/share. And it was known that he did that, since it was published in the WSJ. So why is it such a surprise that he owns like 50 more million shares? At least enough to pop BAC up 4% AH…

By: TPC

TPC — Thu, 13 Aug 2009 04:33:51 +0000

Paul,

I am concerned that stocks could rally through the end of retailers earnings….

By: Chris

Chris — Thu, 13 Aug 2009 04:25:36 +0000

similar holdings to Merger Fund MERFX, except for the financials exposure. I guess he knows that there will be no more capital raises to dilute his BAC position.