TheChek News Flow

Billionaire George Soros Lost Nearly $1 Billion in Weeks After Trump Election

Hedge-fund manager’s ex-deputy, Stanley Druckenmiller, profited by bet on market rally

Billionaire hedge-fund manager George Soros lost nearly $1 billion as a result of the stock-market rally spurred by Donald Trump’s surprise presidential election.

But Stanley Druckenmiller, Mr. Soros’s former deputy who helped Mr. Soros score $1 billion of profits betting against the British pound in 1992, anticipated the market’s recent climb and racked up sizable gains, according to people close to the matter.

The divergent bets of the two traders are a stark reminder of the challenges even acclaimed investors have faced following Mr. Trump’s unexpected victory. Many experts had predicted a tumble for stocks in the wake of the election, but instead the Dow Jones Industrial Average has climbed 9.3%.

Last year, Mr. Soros returned to trading at Soros Fund Management LLC, which manages about $30 billion for Mr. Soros and his family. Mr. Soros was lured back by the opportunities to profit from what he saw as coming economic troubles.

Mr. Soros was cautious about the market going into November and became more bearish immediately after Mr. Trump’s election, according to people close to the matter. The stance proved a mistake—the stock market has rallied on expectations that Mr. Trump’s policies will boost corporate earnings and the overall economy.

As a result, some of Mr. Soros’s trading positions incurred losses approaching $1 billion, the people say. Mr. Soros adjusted his positions and exited many of his bearish bets late last year, avoiding further losses, the people added.

The broader portfolio held by Mr. Soros’s firm performed better, posting profits before and after the election from long-held investments in sectors including financials and industrials, according to people familiar with the firm. Those gains helped Soros Fund Management gain about 5% on the year.

Mr. Soros, chairman of the firm, continues to trade a portion of Soros Fund’s cash and his positions often are quite volatile, the people said. The firm is currently interviewing candidates for a vacant chief investment officer position. Some close to the firm say Mr. Soros could play a reduced trading role when someone is hired to fill the role. In recent years, the 86-year-old billionaire has focused on public policy and philanthropy. He was a large contributor to the super PAC backing Democratic presidential nominee Hillary Clinton and has donated to other groups supporting Democrats.

Mr. Druckenmiller, who left Mr. Soros’s firm in 2000 and now invests his own money, took a very different stance on the presidential election.

Days before the election, Mr. Druckenmiller predicted to an investor that if Mrs. Clinton emerged victorious the stock market likely would rally initially but then would fall. Mr. Druckenmiller said if Mr. Trump won the election, the opposite result likely would occur—stocks first would tumble and then soar.

Mr. Druckenmiller’s call was prescient.

Stock futures fell sharply on the evening of Mr. Trump’s victory, but the market has since surged. Mr. Druckenmiller has publicly said on television that he exited bearish positions on the night of the election, for example, selling long-held gold. He also became bullish on certain sectors of the stock market, and said he was shorting bonds globally and expected the dollar to rally against the euro.

These trades have paid off as Mr. Druckenmiller’s firm, Duquesne Family Office LLC, scored gains of more than 10% in 2016, the people say. As a private office, the firm doesn’t have to disclose its assets under management.

Mr. Druckenmiller also was politically active during the campaign, donating to Ohio Gov. John Kasich. Overall, Mr. Druckenmiller gave about $3.5 million to Republican candidates, according to the Center for Responsive Politics, while Mr. Soros gave more than $20 million to Democratic candidates during the 2016 election cycle.

In October, Mr. Druckenmiller told Reuters that he backed Republican candidates for Congress in the hope of creating a “firewall” against Mrs. Clinton’s likely economic policies, including more government control of health care. He also said Mr. Trump had an “unstable personality,” and Mr. Druckenmiller added that he might not vote in the presidential election.

Link : http://bit.ly/2j48XY4

The coalition partner also calls for tax reductions. "With his reimbursement fetish, Mr. Schäuble has strangled urgently needed investments in the future of our country," said SPD General Secretary Katarina Barley. Schäuble was to provide money to rehabilitate bizarre schools and bridging bridges as well as expand the fast Internet in the country. "It is completely insane to grow the rehabilitation and investment stagnation," said Barley. This course of Schäuble and the Union would cost the citizens dearly.

In fact, the surplus would have to flow into the already established reserve of almost 13 billion euros for the financing of the refugee costs. At the end of 2015, Schäuble had a budget surplus of 12.8 billion euros reserved to use 2016 and 2017 around 6.1 billion and 6.7 billion euros respectively for the integration of the refugees. Most of the reserves did not have to be used - also because of the markedly reduced number of refugees.

A lot of money flows back from the refugee costs reserve

In view of the still higher financial pressure, budgetists of the coalition are also likely to make the effort to speed up the repayment of old debts. Especially after 2017 some billions of holes have to be stuffed in the Federal Council. Union and the SPD had already prevailed that a portion of the Bundesbank's profits could again be used to repay debts and no longer flow into the refugee reserve.

SPD budget politician Johannes Kahrs called for tax reductions in the "Stuttgarter Zeitung" and "Stuttgarter Nachrichten" as well as more funds for investments. The Union's budgetary spokesman, Eckhardt Rehberg (CDU), said that the refugee reserve should not be too high, "and we should also pay off debt as much as possible".

SPD and FDP demand tax cuts

Left-chef Katja Kipping spoke out to invest the surplus in the fight against child poverty. The 6.2 million kitas and school children in Germany would be fed up too often with inferior food or would not get anything to eat. The Green Budget expert Sven-Christian Kindler sees additional room for investment in climate protection, social housing and good education. From the perspective of taxpayers, citizens and businesses must be relieved. An important signal would therefore be the immediate entry into the exit from the solidarity surcharge.

At the end of November, the Cabinet had adopted a supplementary budget for 2016, which is still in the parliamentary deliberations. In this way, the Confederation is halving the restructuring program for poor schools in financially disadvantaged municipalities by a further EUR 3.5 billion. This is financed through savings in interest costs for previous loans. Total expenditures in the federal budget of 2016 should remain constant at EUR 316.9 billion.

Old debts have already been eradicated, such as the investment and redemption fund launched in the global financial and economic crisis (ITF). At the end of November 2016, this fund had a debt of EUR 18.738 billion, compared to EUR 21.022 billion at the end of 2015. The Bundeshaushalt was not impacted by this limited-term special fund. He was financed through new debts and received his own credit authorization.

*SCHAEUBLE SAYS BREXIT NEEDS TO BE WAKEUP CALL FOR EUROPE

Swiss researchers have given a literal twist to the proverbial ticker, designing a clock-like device that could help power pacemakers by harvesting energy from the heart itself — just like an automatic watch harvests movement from the motion of the wrist.

Pacemakers and other implanted devices require a source of power, and providing that power is usually a battery; but batteries run out and need to be replaced — not a simple task when it’s an inch or two beneath your skin.

Andreas Haeberlin, from the University of Bern, and Adrian Zurbuchen, from the University of Michigan, have proposed an alternative that relies on actual clockwork — as in, salvaged from a (naturally, Swiss-made) wristwatch.

“The continuous and powerful contractions of a human heart ideally qualify as a battery substitute,” they write in the abstract of their paper, published in IEEE Transactions on Biomedical Circuits and Systems. For although a pacemaker helps keep the heart beating in time, the body itself provides abundant energy to move the actual cardiac muscles.

How to capture and store that kinetic energy, though? If only the researchers were from a country that for centuries has famously built and refined mechanisms that do exactly that. Realizing that this was in fact the case, they took apart a Swatch wristwatch and began repurposing it for internal use.

Ordinarily the watch would be on a wrist, and as that wrist moved, a weight inside would swing back and forth, its motion stored in a spring. Put near the heart, the weight would instead be moved by the heartbeat itself, and modifications were made to the mechanism to accommodate this. Initial tests in pigs found that the setup yielded about 6 microwatts, which is enough to power a pacemaker.

A small backup battery would likely be necessary in case both tickers wind down at the same time — but it too could be kept charged by the motion of the heart during periods of healthy cardiac action.

More studies are being put in place for the next few years to further test the device, which might make replacement pacemaker batteries a thing of the past.

December talks petered out despite maker of UP wristbands facing cash crisis

Fitbit made an approach late last year to buy Jawbone, its longstanding rival in wearable technology, as the struggling maker of UP fitness trackers scrambles to secure its future.

In the run-up to Christmas, Fitbit expressed interest in a deal that would see it acquire Jawbone’s assets, including its intellectual property, at the same time as settling ongoing litigation between the two San Francisco-based companies, according to several people familiar with the situation.

Fitbit, the market leader in fitness trackers, and Jawbone, the maker of UP wristbands and Jambox Bluetooth speakers, have been suing each other for patent infringement and theft of trade secrets for more than a year.

However, these preliminary talks quickly fizzled after Fitbit suggested a price that was a tiny fraction of Jawbone’s $1.5bn valuation just a year ago.

Pressed to find a solution to its present funding crisis by BlackRock, which would have the first claim to any sale proceeds, Jawbone has sought alternative bidders, according to these people. Jawbone has failed to secure an offer that its management sees as valuing the company fairly and it is now seeking to secure new financing, as it eyes a pivot towards clinical medical devices.

According to people close to the company, Jawbone is close to securing funds from a new investor that would enable the company to remain viable as an independent entity.

Fitbit and Jawbone both declined to comment.

Despite raising more than $1bn in total funding over the course of more than 15 years, Jawbone has faced a series of financing problems over the past two years.

Last year, Jawbone saw its valuation cut in half as it raised $165m. In 2015, when it was priced at $3bn, BlackRock had led a $300m financing, largely in debt, and the fund manager has been pushing Jawbone towards a sale, according to people familiar with the discussions. BlackRock declined to comment.

Another restructuring is now under way as Jawbone repositions its business away from its historical focus on “lifestyle” products aimed at consumers. Jawbone has been working on a health-monitoring wearable that would come with regulatory approval from the Federal Drug Administration, enabling it to be sold through the US healthcare system or for consumers to reclaim the cost from insurers.

Jawbone was founded by Hosain Rahman and Alexander Asseily in 1999 as Aliph, when it pioneered Bluetooth headsets for mobile phones. After the popular Jambox line of wireless speakers, it moved into health-tracking wearables with the launch of UP in 2011. The most recent significant product launch was the heart-rate tracking UP3, which went on sale in 2015 but has struggled to win a large following.

A low-priced takeover or collapse of the company would mark the latest failure in the wearable technology market, as some analysts question whether mainstream consumers will ever take to the idea of wearing tiny computers on their wrists.

As the market leader in fitness trackers, Fitbit has been rolling up some of the industry’s smaller players and also-rans. It snapped up assets of smartwatch pioneer Pebble in a cut-price deal late last year and earlier this week it acquired certain assets from the European company behind the Vector smartwatch.

“As with our recently announced acquisition of Pebble assets, Vector brings valuable industry expertise that will help accelerate the development of new products, features and functionality,” Fitbit said.

Just before Christmas, Fitbit withdrew its complaint against Jawbone at the US International Trade Commission, where it had sought an import ban against its rival’s UP products, alleging patent infringement.

In its motion to the ITC to dismiss the case, Fitbit said Jawbone “no longer offers for sale any of its wearable activity trackers, nor any of its other products. Press reports and other public documents indicate that the demise of Jawbone’s products has created substantial questions regarding Jawbone’s ability to continue to operate.”

Food prices ended 2016 higher for the first time in four years, thanks to a jump in vegetable oil, sugar and dairy, according to the UN Food and Agricultural Organization.

The UN FAO index for December rose 12 per cent from a year before, although on an average basis, 2016 prices fell for the fifth year in the row, main due to subdued cereals, including rice, wheat and corn.

December’s vegetable oil prices rose almost 30 per cent from the previous year thanks to due to low global inventory levels for palm oil while soya oil firmed on both weather concerns in Argentina and the prospect of rising uptake by the biodiesel sector in the US and Argentina.

Restrained milk production in the EU and Oceania and buoyant international and domestic demand continued to underpin the dairy market which was up 29 per cent while sugar was up 26 per cent year on year.

- Sells €3.0B vs. €2.50-3.0B indicated in 0.05% Oct 2019 BTP; Avg Yield: 0.06% v 0.30% prior; Bid-to-cover: 1.46x v 1.55x prior

- Sells €2.75B vs. €2.25-2.75B indicated range in 0.65% Oct 2023 BTP; Avg Yield: 1.15% v 1.37% prior; Bid-to-cover: 1.47x v 1.45x prior

- Sells €1.5B vs €1.0-1.5B in 2.25% 2036 BTP: Avg Yield: 2.53% v 1.91% prior; Bid-to-cover: 1.46x v 1.34x prior