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GM
Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon – (www.zerohedge.com) Here
we go again... In yet another unsurprising headline, The Wall Street Journal reports that GM will extend the typical summer
shutdown at certain U.S. factories to deal with slumping sales and bloated
inventory, a sign the industry’s hot streak is grinding to a halt. The No. 1
U.S. auto maker in terms of sales will idle its Chevrolet Malibu factory near
Kansas City for five weeks starting in late June, Vicky Hale, president of
the United Auto Workers Local 31, said. Job cuts will be needed if GM is forced
to slow assembly-line speeds when those workers return. Additional downtime is
also slated in Lordstown, Ohio, a small-car factory already stung by deep
layoffs related to a pullback in demand for passenger cars. A GM spokesman
declined to comment on specific plans. GM enters the summer with a glut of
unsold inventory after running production lines at relatively high rates to
prepare for factory downtime related to plant upgrades. WardsAuto.com
estimates GM’s production increased 2.9% over the first four months of 2017,
even as the broader industry pulled back.
Used
Vehicle Trade-in Values Sink, Hit New Vehicle Sales - (www.wolfstreet.com) More
#Carmageddon data – and its impact. This is just relentless: Wholesale prices
of used vehicles up to eight years old going through auctions across the US
dropped another 1.5% in April from the prior month. It pushed the seasonally
adjusted Used Vehicle Price Index by J.D. Power Valuation Services (formerly known as NADA Used Car Guide)
down to 109.9. The 10th month in a row of declines. The index is down 7.1%
year-over-year and down over 13% from its peak in mid-2014. It’s at the lowest
level since September 2010, when prices were still spiking from the
cash-for-clunkers program which had eliminated a whole generation of often
perfectly good cars. In that sense, values are just now beginning to normalize
(chart by J.D. Power Valuation Services):
Low
income families forced to walk 'relentless financial tightrope' (UK) - (www.theguardian.com) Low-income
families are going without beds, cookers, meals, new clothes and other
essential items as they struggle to cope with huge debts run up to pay domestic
bills, according to a survey highlighting the cost-of-living crisis experienced
by the UK's poorest households. ... The pressure of coping with low income and
debt frequently triggered mental illness or exacerbated existing conditions,
with more than a third of clients reporting that they had considered suicide
and three-quarters visiting a GP for debt-related problems. More than half were
subsequently prescribed medication or therapy. ... Experts said the survey
highlighted the extreme hardship faced by the "new destitute" --
people on low incomes who might in the past have been able to rely on a welfare
safety net to help them through financial shocks but who now were forced to go
into debt to survive, leaving them struggling to afford even the basics.
Greeks
Promised Economic Boost Despair of Seeing Debt Deal - (www.bloomberg.com) Across
the country in places like Corinth, an industrial hub about 80 kilometers west
of Athens, Greeks have spent years treading water as news bulletins bombard
them daily with reports of meetings and decisions in Brussels and Frankfurt
that will determine their economic future. In the meantime, as the ECB's
stimulus measures -- including its asset-purchase program -- buoy the rest of
the euro-area economy, Greece's output has been stagnant, leaving its people
the most pessimistic in the region. Yet the ECB remains unlikely to include
Greek bonds in its QE program in the foreseeable future, according to a person
familiar with the matter. That's because a meeting on Thursday of euro-area
finance ministers, whose electorates are leery of debt relief, looks like
delivering another fudge. There may be agreement to disburse more bailout loans
but without easing repayment terms enough to satisfy the ECB and International
Monetary Fund.
Qatar
Banks to Boost Deposit Rates to Attract Dollars - (www.bloomberg.com) Some
Qatari banks are boosting interest rates on dollar deposits to shore up
liquidity as a Saudi-led campaign to isolate the gas-rich Arab state
intensifies, people familiar with the matter said. The lenders are offering a
premium of as much as 100 basis points over the London interbank offered rate
to attract dollars from regional banks, two of the people said, asking not to
be named because the matter is sensitive. That compares with rates of 20 basis
points over Libor before the feud started on June 5. Some of the banks are
dealing with regional lenders directly instead of using brokers, which allows
them to determine interest rates depending on the amount being deposited, two
of the people said. Qatar, one of the world’s richest countries and
biggest producer of liquefied natural gas, is seeking to boost dollar supplies
after Saudi Arabia, the United Arab Emirates and Bahrain cut economic and
diplomatic ties with the country last week, in an unprecedented move designed
to punish it for ties with Iran and Islamist groups in the region. Some banks
in neighboring countries are cutting their exposure to Qatar amid concerns of a
widening of the blockade, people familiar with the matter said on June 7.
Sears
Canada Hires Bankruptcy Advisory Firm - (www.wolfstreet.com) The
shares of Toronto-based Sears Canada plunged as much as 50% early today, from
very little to even less, to C$0.50 at the low point before recovering some and
ending down 24% for the day at C$0.87, on its bumpy ride to zero. The company
announced in its first quarter results that there are “material uncertainties”
about its “ability to continue to satisfy its obligations,” that it has doubts
about its ability “to continue as a going concern,” and that lenders weren’t
willing to keep it afloat for the next 12 months. It further announced that it
hired one of Canada’s leading bankruptcy and insolvency advisory practices –
the same law firm that is representing Target Canada in its insolvency
proceedings.
Axel
Merk's 'Best Bubble Indicator' Is Setting Up For "Major Shock" - (www.zerohedge.com) We
increasingly see claims low volatility in the markets may be structural. Even
as we agree that some of the analyses we see make good points, we are concerned
we may be setting ourselves up for a major shock. "In my
experience, complacency, with its cousin low volatility, is the best bubble
indicator I am aware of. Perceived safety gets investors to pile into
investments that they later regret. When it happens on a massive scale, major
market distortions may be created that can lead to financial crises. And
as the tech bubble that burst in 2000 shows, even if there is no systemic
risk, the unwinding can be most painful to investors." Is the recent
sell-off in the Nasdaq the canary in the coal mine? We think it is, but the
buy-the-dip troopers may well prove us wrong. For a day. Or a week. Or longer.
But maybe not. So while the banks may not need a bailout, I'm not so sure about
pension funds or individual investors. Yet, "needing a bailout" and
actually getting one are different stories.
Buy
the FAANGS Baby! Slow Torture? - (www.mishtalk.com)
Here an amusing MarketWatch Opinion: Now that FAANG stocks are
crashing, which are undervalued?
That title, by Thomas H. Kee Jr., a former Morgan Stanley broker and founder of
Stock Traders Daily, says quite a bit about market sentiment. Let’s
Investigate. Central bank capital infusions dating back to 2013 are exactly
what caused this asset bubble, and the liquidity injections have not stopped.
This bubble will burst, but probably not today, and the recent selling in FAANG
stocks does not appear to be a precursor to an impending market crash. Looking
at the stocks as a group, their influence on the market is tangible, but they
have very different relative valuation metrics. For example, Facebook has an
immediate and relatively exceptional valuation while Amazon is at the other
end, and has virtually no value at these prices.
The
Mall of the Future Will Have No Stores - (www.wsj.com) Some
landlords plug empty spaces with churches, for-profit schools and random
enterprises while they figure out a long-term plan. Others see a future in
mixed-use real estate, converting malls into streetscapes with restaurants,
offices and housing. And some are razing properties altogether and turning them
into entertainment or industrial parks. Ford's 10-year lease at Fairlane Town
Center [in Michigan] "brought 1,800 to 2,000 employed people to our
property, people with a paycheck," said Mr. Powers. The mall, which is
still anchored by Macy's , J.C. Penney and Sears, is currently 91% leased, he
said, and its food operators are doing better in the daytime than they did
before, as Ford workers pile in for lunch. Ford liked the mall's proximity to
its main facility in Dearborn, which is being rebuilt over the next 10 years,
and its wide open spaces.
U.S.
Companies Look Abroad to Sell Their Debt - (www.wsj.com) American
companies sold $107.3 billion of bonds in other currencies in 2017, the most
for any comparable period in a decade, according to data provider Dealogic.
U.S. companies have done hefty issuance of euro-denominated debt but have also
sold bonds in Canadian dollars and British pounds this year, Bank of America
Merrill Lynch data show. The issuers are some of the best-known firms. General
Electric Co. issued $8.7 billion worth of euro bonds last month, one of the
largest sales in the market's history. And AT&T Inc. sold $7.9 billion of
euro bonds last week, according to Dealogic. These so-called reverse Yankee
bonds have become increasingly popular in recent years as companies look to
diversify their portfolios of debt -- particularly if they have a lot of it or
plan to take on a lot to do a deal. Issuance was especially strong in May. At
the moment, companies are benefiting from a favorable set of market conditions,
analysts say. One thing that's lubricated the euro-denominated debt market
recently: The European Central Bank has continued to buy up corporate bonds as
part of its stimulus policies. That has maintained a source of strong demand
in the market for euro corporate bonds.
Here
Are the Theories for Why Mega-Cap Tech Stocks Took a Bath - (www.bloomberg.com)
A
Record Number of Investors Say Stocks Are Overvalued - (www.bloomberg.com)
Sinking
Hong Kong Dollar Has Money Managers Unworried -- for Now - (www.bloomberg.com)
This
Toxic Trifecta for Auto Loans is Fueling #Carmageddon - (www.wolfstreet.com) Subprime
Auto-Loan Backed Securities from 2015 on track to be Worst Ever. Institutional
investors that manage other people’s money grabbed subprime auto-loan backed
securities because of their slightly higher yields. These bonds are backed by
subprime auto loans that have been sliced and diced and repackaged and stamped
with high credit ratings. But those issued in 2015 may end up the worst
performing ever in the history of auto-loan securitizations, Fitch warned. And
then there are those issued in 2016. They haven’t had time to curdle. The 2015
vintage that Fitch rates is now experiencing cumulative net losses projected to
reach 15%, exceeding the peak loss rates during the Financial Crisis.
Puerto
Ricans Vote for U.S. Statehood with 97% of the Vote, But Turnout was a
Mere 23% - (www.mishtalk.com) By
an overwhelming margin, Puerto Ricans Vote for Statehood. But the vote is
nonbinding, and only 23% bothered to vote. “According to early results on a
government website, statehood drew 97% of support with more than 90% of votes
counted Sunday afternoon, but less than one in four voters participated in the
plebiscite as opponents called for a boycott. Polls closed at 3 p.m. Sunday. The
vote was spearheaded by the territory’s governor, Ricardo Rosselló, who has
pushed for statehood as a way to help improve the island’s economy, which is
weighed down by debts of more than $73 billion. In May, Mr. Rosselló declared
what amounts to the largest-ever municipal bankruptcy in the U.S. that placed
Puerto Rico under court protection. Congress would need to authorize a new
state. Mr. Rosselló recently signed into law a measure creating a commission to
press U.S. lawmakers for admission. On Sunday evening, he said he would visit
Washington, D.C. to formally notify Congress and the White House of the
results.
Qatar
Is Running Out Of Dollars - (www.zerohedge.com) "We
have no dollars because there is no shipment or transportation from the United
Arab Emirates. There is no stock," said a dealer at the Qatar-UAE Exchange
House in Doha's City Center mall. "The shipment is blocked from the
UAE." While the Saudi-led campaign to starve Qatar's citizens may end up
short of the target, with both Turkey and Iran volunteering to provide needed
staples to the isolated Gulf nation while local entrepreneurs have started a cow paradropping campaign to offset the decline in milk imports, a
more pressing problem has emerged: Qatar's financial system is running out of
dollars. As Bloomberg reports, several Qatari banks have boosted interest rates
on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate
the gas-rich Arab state intensifies. To boost their hard currency reserves,
Qatar banks are now offering a premium of as much as 100 basis points over
LIBOR to attract dollars from regional banks, some 80 bps higher compared to
the rate they offered prior to last week's crisis. A similar picture is visible
on the 3-Month QIBOR, or Qatar Interbank Rate, which has surged to 2.3% as of
Tuesday.
Subprime
Auto Bonds From 2015 May End Up Worst Ever, Fitch Says - (www.bloomberg.com) Subprime
auto bonds issued in 2015 are by one key measure on track to become the worst
performing in the history of car-loan securitizations, according to Fitch
Ratings. This group of securities is experiencing cumulative net losses at a
rate projected to reach 15 percent, which is higher even than for bonds in the
2007, Fitch analysts Hylton Heard and John Bella Jr. wrote in a report
Thursday. "The 2015 vintage has been prone to high loss severity from a
weaker wholesale market and little-to-no equity in loan contracts at default
due to extended-term lending, a trend which was not as apparent in the
recessionary vintages," said the analysts, referring to lenders’
stretching out repayment terms on subprime loans, sometimes to over six years,
to lower borrowers’ monthly payment. That becomes riskier in the tail end of
the loan, after the car has mostly depreciated and borrowers may be left owing
large balances.
Bond
Market Doomsayers Sound Alarm as Margin of Safety Vanishes - (www.bloomberg.com) Look
around the $14 trillion U.S. Treasury market, and you’d be hard-pressed to
find anything to suggest investors are even remotely concerned about the
possibility of a selloff. Bond yields
keep falling day after day, bullish bets have soared and volatility has all but
vanished. At the same time, traders foresee inflation subdued for decades and
seem to have bought into the idea the Federal Reserve will take its time to trim its crisis-era bond investments. To Binky
Chadha, that’s a recipe for disaster. Chadha, the chief global strategist at
Deutsche Bank’s U.S. securities unit, is part of a group of die-hard bond bears
who say Treasuries have become unhinged from reality and yields have nowhere to
go but up. Like many before him, he points to all the obvious signs investors
seem to be ignoring: higher benchmark interest rates, wage pressures that will
lead to faster inflation, worsening budget deficits that will result in more
debt issuance.
Broadway's
empty storefronts total almost 200, borough president says - (www.amny.com) Manhattan
Borough President Gale Brewer announced Monday that her office tallied 188
vacant storefronts on the iconic thoroughfare, thanks to volunteers who helped
survey storefronts along the avenue's entire span in Manhattan last month. ... Retail
experts cited several factors hindering the industry: people purchasing items
online rather than in brick-and-mortar shops, demographic shifts that have
flooded areas with newcomers who eschew former mainstays, and a rental market
in flux. "You're seeing the highest vacancy [rate] in Manhattan, at least,
in history," said Scott Plasky, a retail specialist in Marcus &
Millichap's Manhattan office. "They have opportunities to rent those
spaces. There are tenants that want to be here: this is New York. But these
guys either are unwilling or unable to lease at what the marketplace is telling
them they're worth."
Albertson’s
Reveals Supermarket Meltdown as Global Deep-Discounters Promise Price War in
Stagnating US Market - (www.zerohedge.com) Aldi’s
$5 billion bet at a brutal time. Today, Albertson’s explained in an amended S-4 filing for a debt exchange offering just how
tough things have gotten for traditional supermarket chains. As is so often the
case, there is a private equity angle to it. Albertson’s was acquired in a 2005
LBO by a group of PE firms led by Cerberus. In January 2015, it acquired
Safeway to eliminate some competition. It then wanted to sell its shares to the
public. But in October 2015, as brick-and-mortar retail began to melt down, it
scrapped its IPO. The filing’s most revealing data are same-store sales on a
quarterly basis through Q4, 2016, comparing year-over-year sales growth at
stores that have been open in the current and prior year. I added the red line
to show the trend since Q3 2015:
Obamacare
Death Spiral: First 2018 Coverage Map Reveals At Least 47 Counties With No
Coverage - (www.zerohedge.com) "This
is yet another failing report card for the Exchanges. The American people have
fewer insurance choices and in some counties no choice at all. CMS is
working with state departments of insurance and issuers to find ways to provide
relief and help restore access to healthcare plans, but our actions are by no
means a long-term solution to the problems we’re seeing with the Insurance
Exchanges." Earlier today the Centers for Medicare and Medicaid Services
(CMS) released the first projected county-by-county map of Obamacare coverage for the 2018 plan
year which depicts at least 47 counties, with 35,000 active Obamacare exchange
participants, that will have no health insurance options next year.
Meanwhile, another 2.4 million people are expected to have only 1 option for
coverage. Per CMS:
The Centers for Medicare & Medicaid Services (CMS) is releasing a
county-level map of 2018 projected Health Insurance Exchanges participation
based on the known issuer participation public announcements through June 9,
2017. This map shows that insurance options on the Exchanges continue to
disappear. Plan options are down from last year and, in some areas, Americans
will have no coverage options on the Exchanges, based on the current data.
US
Oil Production Makes Waves, Swamping OPEC - (www.mauldineconomics.com) It's not just the US production numbers that
are making waves: It's the spike in US crude oil exports. The US exported
830,000 barrels of crude per day in March, a whopping 64.2% increase year over
year. In February, it exported 1.1 million barrels per day, a nearly 200%
increase year over year...[per the WSJ,] the February numbers are closer to the
new norm, as it expects the US to export, on average, roughly 1 million barrels
per day in 2017. This is a huge challenge for major oil producers, especially
Saudi Arabia and Russia. In December 2016, OPEC and its oil-producing partners
agreed to cut production by about 1.8 million barrels per day, or roughly 1.5%
of global crude production at the time...
Stockman
Fears Fiscal Bloodbath As "Mother Of All Debt Ceiling Crises" Looms – (www.zerohedge.com) "Washington
is heading for the unthinkable... And unlike the saves which
were put together at the 11th hour in August 2011 and October 2015 by President
Obama and Speaker Boehner, this time there will be absolute legislative
paralysis." As my colleague Lee Adler has pointed out, Treasury tax
collections have slowed to a crawl. Overall collections are barely even
with prior year, and even withholding payments are now coming in at barely 2% on
a year/year basis. That is far below the built-in spending growth rate of about 4% —
and says nothing to the big increases for defense, law enforcement, border
control and infrastructure being sought be the Trump White House. The four week
moving average of withholding collections — about as accurate a real time
measure of the US economy as exists — is running below the average wage rate
gain of about 2.6% per annum. That means real wage growth is turning
negative — not accelerating like the “escape velocity” narrative being peddled by Wall Street.
Gymboree
files for Chapter 11 bankruptcy; CFO departs retailer – (www.cnbc.com) Gymboree
has filed for Chapter 11 bankruptcy protection. The children's clothing
retailer announced the move Monday morning, only a few weeks after it partnered
with a turnaround firm, AlixPartners, to assist with its operations and then missed a June 1 debt payment. A bankruptcy filing had been seen as imminent,
with S&P Global lowering its corporate credit rating on the company to
"D" from "CC." San Francisco-based Gymboree also announced
Monday the departure of Chief Financial Officer Andrew North, who is leaving
for personal reasons.
Is
the Chain-Restaurant Recession Becoming Structural? - (www.wolfstreet.com) A
15-month downturn, longest since 2009, and no end in sight. There’s simply no
respite for chain restaurants. Industry-wide, same-store sales fell again in
May. The last time, same-store sales actually rose year-over-year was in
February 2016. On that basis, the chain-restaurant recession is now in its 15th
month, the longest downturn since the Financial Crisis. In May, same store
sales fell 1.1% year-over-year. Same-store foot traffic fell 3.0%. Food sales
were down, and alcohol sales were down, according to TDn2K’s Restaurant Industry Snapshot, tracking sales at 27,000 restaurant units
from 155 brands, generating about $67 billion in annual revenue. But the
average amount of the check per person increased by 2%, and not because they
ordered more food and booze, but because prices rose.
Coinbase
Crashes As Bitcoin, Ethereum Join FANG Stocks Meltdown - (www.zerohedge.com) Whether
it is just a curious coincidence or not, cryptocurrencies are crashing
along with FANG stocks this morning... Earlier statements about the
Ethereum network running slow due to extremely heavy activity appear to have
taken their toll on one major exchange... And Bitcoin is tracking FANG stocks
lower (down around 13% this morning)... This is the biggest drop since
January 2015. And Ethereum is down over 15%...after tagging $400 earlier last
night
New
economic woes put Theresa May under fresh pressure - (www.telegraph.co.uk) Theresa
May has been hit by a series of economic blows, with consumers tightening their
belts and businesses increasingly showing fears of a sharp slowdown as she
attempts to cling on to power. The crucial services sector stands on the brink
of a contraction, new data shows, and credit card spending has fallen for the
first time in four years. High Street footfall has also gone sharply into
reverse and manufacturing and construction companies in the English regions
report a widespread slowdown in activity.
The
Biggest Tech Stocks Come Unglued - (www.wolfstreet.com) Wow,
did you see that? That was quick. Friday morning between 10:15 AM and 11:15 AM,
the Nasdaq gallivanted around blissfully for an entire hour in record territory
of around 6,340 with not a worry in sight, and then someone must have looked at
the valuations or something, and it became infectious, and the sell-orders
started pouring out, and by 2:48 PM, the Nasdaq hit a low for the day of 6,160,
down 3.1% from peak to trough. It closed at 6,208, down 114 points, or 1.8%,
its biggest daily decline so far this year. Meanwhile, the Dow rose nearly
90 points or 0.4% to 21,272. And the S&P 500 ended down a minuscule 2
points.
Is
Another Spanish Bank about to Bite the Dust? - (www.wolfstreet.com) Stockholders
and junior bondholders fear a “bail-in.” After its most tumultuous week
since the bailout days of 2012, Spain’s banking system is gripped by a climate
of fear, uncertainty and distrust. Rather than allaying investor nerves, the shotgun bail-in and sale of
Banco Popular to
Santander on Tuesday has merely intensified them. For the first time since the
Global Financial Crisis, shareholders and subordinate bondholders of a failing
Spanish bank were not bailed out by taxpayers; they took risks in order to make
a buck, and they bore the consequences. That’s how it should be. But bank
investors don’t like not getting bailed out. Now they’re worrying it could
happen again. As Popular’s final days showed, once confidence and trust in
a bank vanishes, it’s almost impossible to restore them. The fear has now
spread to Spain’s eighth largest lender, Liberbank, a mini-Bankia that was
spawned in 2011 from the forced marriage of three failed cajas (savings
banks), Cajastur, Caja de Extremadura and Caja Cantabria.
GOP
senators might let their health care bill fail on purpose - (www.cnn.com) So
why vote on a bill that may not pass? The issue could jeopardize other
top-ticket items on the GOP's agenda, Utah's former Republican Gov. Mike
Leavitt told CNN... While conservatives may not be pleased with the changes on
the table, moving the bill to the left could help McConnell protect his most
vulnerable members. There aren't many endangered Republican members up in 2018,
but those who are hail from more purple states, like Dean Heller in Nevada and
Jeff Flake in Arizona. Last week, it became clear that GOP leaders were
seriously considering several moderate concessions on their health care bill,
including keeping some of the Obamacare taxes and not allowing states to repeal
what is known as community rating -- a key protection for people with
pre-existing conditions.
Tech
sell-off spreads to Europe and Asia, Nasdaq seen falling further - (www.reuters.com) Technology
stocks fell heavily across Europe and Asia on Monday and were set to fall again
on Wall Street after the worst day for Apple (AAPL.O) shares in more than a
year, while easing political tensions lifted the euro and European bonds. A
near 4 percent slump in Apple (AAPL.O) on Friday, along with falls in Alphabet
(GOOGL.O), Facebook (FB.O) and others took a heavy toll on rivals including
Samsung (005930.KS) and Europe's big chipmakers STMicro (STM.PA) and Dialog
(DLGS.DE) on Monday. [.EU] ... Europe's tech index .SX8P fell 3.5 percent to
put it on track for its biggest one-day loss since Britain's Brexit vote a year
ago. The index had reached a 15-year high earlier this month having soared
around 40 percent over the last year.
Americans
Suddenly Sour on the Housing Market - (www.wolfstreet.com) It’s
a Great Time to Sell and a Bad Time to Buy, they think. Americans have been
gung-ho in recent years about the housing market, bidding up prices with gusto
as they went. The election helped. By February, the Fannie Mae Home Purchase
Sentiment Index (HPSI) had shot up to 88.3, up 5.6 points year-over-year, and
the highest ever in the data series going back to 2011. But since then, some
dark clouds have appeared, and other dark clouds have been out there for a
while – by some measures the darkest in the data series. The index itself still
looks benign: In May, it fell 0.5 points to 86.2, down 2.1 points from its
February peak, but still up 0.9 points year-over-year: But here are the clouds,
according to Doug Duncan, senior VP and chief economist at Fannie Mae: “High home prices have led many consumers to
give us the first clear indication we’ve seen in the National Housing Survey’s
seven-year history that they think it’s now a seller’s market.”
Viking
Returns $8 Billion To Investors As CIO Departs – (www.zerohedge.com) Viking
Global Investors, one of the world's largest hedge funds founded in 1999 by
Andreas Halvorsen, is returning about $8 billion to investors as CIO Daniel
Sundheim departs to pursue his own business interests, Bloomberg reports. Along
with Eric Mindich's Eton Park Capital Management, Viking Global Advisors was
once a stalwart name in the hedge fund industry, consistently generating double
digit returns no matter the economy or macro climate. However, just like Eton
Park, which shuttered in March, Andrew Halvorsen's Viking Global (thus named
so for obvious reasons) had fallen upon hard times last year, and moments ago
Bloomberg reported that the legendary hedge fund will return $8 billion to
investors (out of a total $30 billion in AUM), as a result of the departure of
its CIO, Daniel Sundheim, who is leaving to pursue his own business interests. According
to Bloomberg and II, Sundheim joined Greenwich, Connecticut-based Viking in
2002 as an analyst. He started managing his own portfolio in 2005, became
co-CIO in 2010 and gained sole responsibility for the job in 2014.
Bloomberg adds that Sundheim is leaving "because the firm couldn’t find a
role for him that would give him the flexible investment mandate he was looking
for."
