Category: Bearing in the media

Bill Laggner interviewed on Eric King’s radio program again, discusses Goldman Sachs

Bill was on Eric King’s online radio interview broadcast, “King World News” again last Saturday, May 1st, 2010. Here’s a blurb from the site:

In this interview Bill discusses the stock market, corruption inside our banking system and government, the king player in the derivatives world, latest charges against Goldman Sachs, Ponzi schemes gone bad, latest antics of the Federal Reserve and more.
The blurb is the same as the last interview Bill gave because Eric and Bill are continuing their discussion about this theme. It’s generated a lot of interest for the Fund and we’ve had a lot of people checking out the Bearing website over the weekend so if you get some time, give it a listen. Better yet, share it with friends, family members and other sophisticated investors you know.

The interview is available on the King World News website, where you can stream it or download it to your iPod or other MP3 device: Bill Laggner’s latest interview at King World News.

Bill Laggner on the growing corruption and fraud in the financial markets

Bill was on Eric King’s online radio interview broadcast, “King World News” again last Saturday, March 13th, 2010. Here’s a blurb from the site:

Bill Laggner is the Co-Founder of Bearing Asset Management along with his fund partner Kevin Duffy. Bill’s fund has never lost a client in the history of their fund and the returns over the last 3 years have been staggering with a 134% return in 2008 alone. Bill and his fund partner Kevin have correctly diagnosed the markets for many years staying ahead of the curve and positioning their clients for tremendous gains while many funds were hurt in 2008. In this interview Bill discusses the stock market, corruption inside our banking system and government, the king player in the derivatives world, lessons learned as a fund manager, Ponzi schemes gone bad, latest antics of the Federal Reserve and more.

The interview is available on the King World News website, where you can stream it or download it to your iPod or other MP3 device: Bill Laggner’s latest interview at King World News

Shorting the economic recovery

Bill and Kevin were interviewed in the recent Barron’s (subscription only). A few snippets:

Barron’s: You’ve said that perhaps the most redeeming feature of capitalism is failure. Please explain.

Duffy: Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.

Capitalism is primarily attacked by two groups: utopians who wish to impose a more “compassionate” system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else.

As a country we’ve become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on “capitalism.”

What would you have done differently as the credit bubble was bursting and the Fed and the Treasury were declaring that the world would come to an end without an $800 billion bailout package?

Duffy: Allow those who essentially bet wrongly to fail, instead of bailing out people with friends in high places.

What about the argument that a financial panic would have ensued and crushed the little guy?

Duffy: The little guy actually has been crushed. Nobody is asking where this money is coming from. And the money has to essentially flow into the political economy at the expense of the real economy. The little guy is always going to be the last one in the soup line. So he will get a bone tossed to him, like cash for clunkers. But if you are Goldman Sachs or if you have got essentially the red bat-phone to Washington, D.C., you are first in line.

What kind of financial reform would you like to see?

Laggner: We don’t believe in a central bank. The idea that banks can speculate with essentially free money from the [Federal Reserve], which ultimately is the taxpayer, and that when they lose money the Fed bails them out and then passes that invoice to the taxpayer — that whole model is broken and needs to go away.

How would you refashion the system?

Duffy: To get to the heart of the problem, we need to address fractional-reserve banking, which is causing the instability. We have essentially socialized deposit insurance and prevented the bank run, which used to impose discipline on this unstable system. At least it had some check on those who were acting most recklessly. Until we address the root of the problem, we are going to have a series of crises, greater responses and intervention, and more bubbles — and the system will keep perpetuating itself.

Where are we in the deleveraging process?

Laggner: We had a massive real-estate bubble and credit growth, thanks to off-balance-sheet banking that went to four or five times gross domestic product in the latter part of this decade — and of course it burst. Because of huge government commitments, we now have rolled the credit bubble into a sovereign-debt bubble.

The question is, how is the government going to service all this debt? As the real economy contracts and as the political economy expands, this coordinated global debasement strategy ultimately fails.

Obama knows…

… how to give a speech and win elections, but he doesn’t know diddley about economics. See Kevin’s article on LewRockwell.com yesterday about the central planner’s plight: he’s much dumber than the free market.

Bill Laggner on what lies ahead

Last Friday Bill was interviewed by King World News about the repercussions of the banksters and the Fed continually looting the economy. (About a half hour. Warning: Requires a strong stomach.)

Bearing Fund in 97th percentile for 3-year performance

According to the latest Barron’s Hedge Fund Performance rankings, the Bearing Fund placed in the 97th percentile of the “global macro” category for 3-year return through August 31:

  • Number of funds: 33
  • Global Macro Index: +22.55% (+7.01% annualized)
  • Bearing Fund: +127.82% (+31.58% annualized)

Over the same 3-year period, the S&P 500 (with dividends reinvested) was +10.51% (+3.39% annualized), implying significant survivorship bias to the Barron’s sample.

Over a 1-year period, the Fund was the top performer in its category, +76.79%. Balestra Capital Partners LP was next, +55.08%.

Bearing Fund in 97th percentile for 3-year performance

According to the latest Barron’s Hedge Fund Performance rankings, the Bearing Fund placed in the 97th percentile of the “global macro” category for 3-year return through June 30:

  • Number of funds: 33
  • Average: +57.81% (+16.42% annualized)
  • Median: +51.28% (+14.61% annualized)
  • Global Macro Index: +27.70% (+8.49%)
  • Bearing Fund: +146.31% (+35.05% annualized)

Over the same 3-year period, the S&P 500 (with dividends reinvested) was +12.95% (+4.14% annualized), implying significant survivorship bias to the Barron’s sample.

Bearing Fund in 78th percentile for 3-year performance

According to the latest Barron’s Hedge Fund Performance rankings, the Bearing Fund placed in the 78th percentile of the “global macro” category for 3-year return through April 30:

  • Number of funds: 39
  • Average: +48.76% (+14.16% annualized)
  • Median: +33.82% (+10.20% annualized)
  • Bearing Fund: +79.43% (+21.52% annualized)

This sampling is undoubtedly skewed to the upside by significant survivorship bias. Our report card in this elite group is like getting a B+ at Harvard.

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