Hedge fund manager David Einhorn’s quarterly letter reports a non-event Q1 and is pretty lackluster until you get to the part where he rips into the Wall Street Journal for their “hedge fund managers are colluding to short on the Euro” story.
His funds returned just 0.4%, 0.5% and 1.3% in the quarter because “we had a very hard time identifying significant new opportunities.” And now for the fun part.
Einhorn tears apart the WSJ for running a story on one idea dinner among “thousands” he and other hedge fund managers attend as though it were a rare, secret scandalous event where rich guys whispered trade secrets during a feast of raw baby legs.
In sum, Einhorn says:
“The discussion of one manager’s view about the Euro lasted a total of about 3 minutes” during a 2 1/2 hour long dinner.
Yet the WSJ said the article “suggested that discussing the Euro might be manipulative and practically begged regulators to investigate possible collusion… The Antitrust Division of the Dept of Justice read the story and opened an investigation into possible violations of the Sherman Act on the same day the WSJ story ran.”
Here are the harshest of his comments:
He calls the story “Yellow journalism” and “sensationalist.”
Rips into the reporter for lying: “David did not mention gold or inflation – which the Jounral reporter probably knew, as she inquired about CIT. Apparently, our decline to comment left her feeling she had free reign to report whatever she wanted. That is shameful.”
And destroys the entire story’s plot: “The story took an even more bizarre twist a few days later when Greek PM Papandreou personally thanked Obama for launching the investigation of hedge funds regarding currency manipulation and sough further investigation into Greek CDS. Nor surprisingly, it was later reported that speculative buyers of Greek CDS included a large Greek bank.”
Score: Einhorn 1, WSJ, 0.
For more funny Greece vs. hedge funds news, check out how Greek authorities tried to ban hedge funds from buying their bonds and then caved and practically begged them to buy because no one else wanted them.
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