Month: August 2017

Malia Zimmerman, a Fox News reporter, was accused of fabricating two quotes for a story that connected now-deceased DNC staffer Seth Rich to Wikileaks in a lawsuit filed Tuesday by Washington police detective Rod Wheeler, the private investigator hired by Rich’s family and himself a longtime Fox News commentator. The lawsuit, which accused Zimmerman and Trump supporter, Ed Butowsky, of inventing a story to “shift the blame” away from Russia’s hacking of the 2016 election, also claims that President Trump collaborated with Fox News and was allowed to review a draft of the story before it was published.

The plaintiff claims that the motive behind the report was “to shift the blame from Russia and help put to bed speculation that President Trump colluded with Russia in an attempt to influence the outcome of the Presidential election.” Wheeler also said that the fabricated quotes attributed to him were meant to back up the network’s false thesis, and amount to defamation.

Wheeler says he was forced to retract the fabricated statements after Zimmerman’s (since retracted) article was published:

“Mr. Wheeler — who was the only named source quoted in the article — did not make these statements,” states the complaint. “According to Butowsky, the statements were falsely attributed to Mr. Wheeler because that is the way the President wanted the article. Zimmerman, Butowsky and Fox had created fake news to advance President Trump’s agenda. Mr. Wheeler was subsequently forced to correct the false record and, as a result, lost all credibility in the eyes of the public. Mr. Wheeler has suffered irreparable damage to his reputation and his career will likely never recover.”

According to Wheeler’s lawsuit, Butowsky reportedly approached the private investigator in February and offered to finance an investigation into Rich’s murder for Zimmerman’s story, but it was all just an elaborate setup.

“Butowsky and Zimmerman were not simply Good Samaritans attempting to solve a murder,” Wheeler said in the suit. They “hoped that, if they could confirm that Seth Rich leaked the DNC emails to WikiLeaks, that would debunk reports the Russians were responsible for the DNC hacks.”

The allegedly faked quotes used in the story, attributed to Wheeler, include, “My investigation up to this point shows there was some degree of email exchange between Seth Rich and Wikileaks.” Wheeler was also falsely quoted saying the Democratic National Committee or Clinton’s team were blocking the murder investigation, according to Bloomberg.

The first paragraph of the lawsuit includes a screen shot of a May 14 text message, which Wheeler claims was sent by Butowsky, which indicates the president had reviewed the article before it was published:

“Not to add any more pressure but the president just read the article,” the text message reads. “He wants the article out immediately. It’s now all up to you. But don’t feel the pressure.”

In an interview with NPR, which broke the story, former White House Press Secretary Sean Spicer acknowledged that Butowsky and Wheeler briefed him on the Seth Rich story a month before it was published.

In addition to Spicer, Butowsky allegedly also kept Steve Bannon apprised of the work on the Rich murder story, as well as the Justice Department’s director of public affairs, Sarah Flores. She denied the allegation. “I have not communicated with Mr. Butowsky at any point this year,” Flores said in an email to Bloomberg.

The lawsuit cites several statements from Butowsky, a financial adviser who has appeared on Fox News, that the story was politically motivated. As Poynter notes, after Butowsky was told by journalist Seymour Hersh that there was an FBI report establishing that Seth Rich sent emails to Wikileaks, he allegedly said, “The most important thing is this. Everyone, there’s so many people throughout Trump’s four years and maybe eight years are always going to fall back on the idea that he is not legitimate and the Russians got him elected. This [information about Seth Rich providing emails to Wikileaks] changes all of that. He also said, according to the lawsuit, that the story “solve[s] the problem about Russians are the ones that gave the emails because that did not happen. I know that did not happen.”

After the article with the fabricated quotes was published, the lawsuit states that Wheeler met with executives at Fox News and “explained to Ms. Brandi and Mr. Wallace that he had not provided Zimmerman with the quotations she used in her article.” Despite this, according to the lawsuit, “Fox has not issued any statement admitting that the quotes attributed to Mr. Wheeler were not made by him.”

“Fox News was working with the Trump administration to disseminate fake news in order to distract the public from Russia’s alleged attempts to influence our Country’s presidential election,” Douglas Wigdor, a lawyer for Wheeler, said in a statement announcing the lawsuit.

Wheeler, who is black, also claims Fox discriminated against him based on his race by giving him less air time than white colleagues who are more frequently hired into full-time positions.

In a statement, Fox News president Jay Wallace pushed back against allegations it published the story to advance the Trump administration’s agenda and acknowledged the retraction of the story is still being investigated:

The accusation that FoxNews.com published Malia Zimmerman’s story to help detract from coverage of the Russia collusion issue is completely erroneous. The retraction of this story is still being investigated internally and we have no evidence that Rod Wheeler was misquoted by Zimmerman. Additionally, Fox News vehemently denies the race discrimination claims in the lawsuit — the dispute between Zimmerman and Rod Wheeler has nothing to do with race.

Wheeler is represented by Wigdor LLP, the firm that has previously brought numerous complaints of discrimination against Fox News on behalf of former employees.

The full lawsuit is below (link from Mediaite).

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Back on May 16th, private investigator Rod Wheeler said in a Fox News interview with Sean Hannity that he ‘had very little communication with’ the secret third party who helped finance his investigation into the murder of DNC staffer Seth Rich.

In that same interview, he also said that he knew of someone, that was very credible, who claimed he saw Seth Rich’s email(s) to Wikileaks.

Watch, in his own words — claiming that the DC police shut him down each time he asked about the Wikileaks.

“Maybe it is related to the DNC…a high ranking member of the DNC called the Rich family and wanted to know why was I snooping around.”

 

Now, all of a sudden, Mr. Wheeler is having a change of heart.

He’s claiming that, Malia Zimmerman, author of the fake Fox News article that wrongly attributed two quotes to Wheeler that had not been said, which has since been retracted, wanted to ‘shift the blame from Russia and help put to bed speculation that President Trump colluded with Russia in an attempt to influence the outcome of the Presidential election.”

Named in Wheeler’s suit are Zimmerman and Fox News contributor Ed Butowsky — a friend to former Press Secretary Sean Spicer and Steve Bannon.

According to Wheeler, Butowsky approached Wheeler in February with an offer to finance an independent investigation into the unsolved murder of Seth Rich. Bear in mind, Wheeler had said, on the record, that he was hired by the Rich family and had very little contact with the anonymous third party who was financing the whole thing.

Wheeler now alleges Butowsky contacted him about investigating the Rich case, but warned him to “Make sure to play down Fox News. Don’t mention you know Malia.”

Source: Bloomberg

“Butowsky and Zimmerman were not simply Good Samaritans attempting to solve a murder,” Wheeler said in the suit. They “hoped that, if they could confirm that Seth Rich leaked the DNC emails to WikiLeaks, that would debunk reports the Russians were responsible for the DNC hacks.”
 
The allegedly faked quotes used in the story, attributed to Wheeler, include, “My investigation up to this point shows there was some degree of email exchange between Seth Rich and Wikileaks.” Wheeler was also falsely quoted saying the Democratic National Committee or Clinton’s team were blocking the murder investigation.

 
Wheeler claims that Butowsky kept Spicer, Bannon and DOJ director of public affairs, Sarah Flores, apprised on his findings.

Ms. Flores flatly denied having any contact with Butowsky this year, saying “I have not communicated with Mr. Butowsky at any point this year.”

According to the suit, Wheeler said President Trump wanted the bogus quotes attributed to Wheeler in the Fox story, saying “that is the way the President wanted the article.”

The first paragraph of Wheeler’s complaint includes a screen shot of a May 14 text message to Wheeler by Butowsky that reads: “Not to add any more pressure but the president just read the article. He wants the article out immediately. It’s now all up to you. but don’t feel the pressure.”

Wheeler’s attorney issued the following statement:

“Fox News was working with the Trump administration to disseminate fake news in order to distract the public from Russia’s alleged attempts to influence our Country’s presidential election. Rod Wheeler unfortunately was used as a pawn by Ed Butowsky, Fox News and the Trump administration to try and steer away the attention that was being given about the Russian hacking of the DNC e-mails.”

 
NPR has confirmed that a meeting had taken place between Butowsky and Spicer at the White House.
 

Spicer now confirms meeting with the two but denies claims about the president.
 
“Ed’s been a longtime supporter of the president and asked to meet to catch up,” Spicer tells NPR on Monday night.
 
“I didn’t know who Rod Wheeler was. Once we got into my office, [Butowsky] said, ‘I’m sure you recognize Rod Wheeler from Fox News.’ “
 
Spicer says Butowsky laid out what they had found about the case. “It had nothing to do with advancing the president’s domestic agenda — and there was no agenda,” Spicer says now. “They were just informing me of the [Fox] story.”

 
According to the suit, Butowsky was also responsible for informing Wheeler of the ‘credible’ third party who had seen Rich’s emails to Wikileaks.
 

On May 10, Butowsky and Zimmerman call Wheeler to say they have an FBI source confirming emails were sent from Seth Rich to WikiLeaks, though they do not share the source’s identity, according to the investigator’s suit. Wheeler will later say this is the only federal law enforcement source that Fox News — or he — has related to this story.

 
Moreover, the night before the Fox story ran, Butowsky coached Wheeler on what to say on tv.
 

“[T]he narrative in the interviews you might use is that you and [Fox News reporter Malia Zimmerman’s] work prove that the Russians didn’t hack into the DNC and steal the emails and impact our elections.” In another text, he writes: “If you can, try to highlight this puts the Russian hacking story to rest.”

 
Adding insult in injury, the Fox News author of the fake news article, Malia Zimmerman, contacted the father of Seth Rich, distancing Fox and herself from Wheeler, stating: “Much of our information came from a private investigator, Rod Wheeler, who we understand was working on behalf of you.“

When Wheeler confronted her about the letter she had sent to Mr. Rich, Zimmerman claimed “That’s the email that Fox asked me to send him. They wrote it for me.”

Butowsky tried to calm Wheeler by saying “One day you’re going to win an award for having said those things you didn’t say.”

The night before Wheeler was scheduled to appear on the Hannity show, Malia Zimmerman texted him “Reread the story we sent you last night [that contained the invented quotes] and stick to the script.”

Wheeler had recorded some of his conversations with Butowsky and had them transcribed for purposes of the suit.

Before Fox retracted the story.

After Fox retracted the story and Wheeler threaten to sue.

Butowsky has since deleted his Twitter account. Ed is a self described wealth manager who ‘for serial entrepreneurs, high-net worth and ultra-high-net worth individuals, professional athletes and celebrities.’
 
…………
 

If you thought the suit couldn’t get more bizarre, think again. Wheeler is also suing for racial discrimination against Fox, claiming the network had given him less airtime than white colleagues.

It’s worth noting, Wheeler’s attorney, Douglas Wigdor, represents several other current and former Fox staffers who’ve made similar claims.

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July was a great month for virtually all asset classes (at least those tracked by Deutsche Bank) with the notable exception of what, which tumbled after surging previously.

As DB’s Jim Reid writes, there was strong performance for most assets in the bank’s sample as various market volatility measures trended lower over the past month to touch new all-time lows. 33 out of 39 assets posted positive total returns in local currency terms while all assets except for one (wheat) saw positive returns in USD terms after a tough month for the Greenback (-2.9%). In summary commodities and equities make up the top of both the local currency and USD performance tables while European assets (equities and government bonds) crowd at the bottom of the LC performance table. However the strong performance of the Euro (and USD weakness more generally) lifted most European assets into more positive territory in USD terms. Thus in USD terms the worst performers were mostly US credit and treasuries, rounded out by two relatively underperforming agricultural commodities in Corn (+0.1%) and Wheat (-7%).

In terms of the key movers on the month, oil was one of the strongest performers as it led all assets in local currency terms (WTI +9%; Brent: +8%). It should be noted that nearly all of the gains came at the tail end of the month following news of Saudi Arabia’s pledge to reduce crude exports in August. Elsewhere the Bovespa (+11%) and FTSE MIB (+8%) matched gains in oil to top the USD table following a rally in the underlying equities (Bovespa LC: +5%; FTSE MIB LC: +5%) and strong performance in their respective currencies (BRL +6%; EUR +3%). Broader EM equities also saw strong performance in general (MSCI EM: +6%). An important dynamic to note is the fact that despite the poor performance of broader European assets in LC terms (and middling performance in USD terms), European banks actually saw strong returns on the month with gains of +3% in LC terms and over +6% in USD terms as Euro area economic momentum continues to hold strong and Eurozone government bond yields have risen following Draghi’s speech at Sintra.

Now taking a look at the other end of the performance table. US Dollar weakness in July in general weighed on non-US equities with the DAX (-2%), Greece Athex (-1%), Nikkei (-0.5%) and STOXX 600 (-0.3%) making up four out of only six assets that saw negative total returns in LC terms. European government bonds (Bunds 0.0%; BTPs +0.6%) also underperformed other assets in LC terms as they remained mostly flat on the month. However as noted above, much of their poor performance in LC terms was mitigated in USD terms as most currencies advanced against the dollar. The main losers on the month in USD terms were  US credit and treasuries that broadly saw limited LC returns and were dragged further down the table by USD weakness that propelled other assets. Corn (+0.1%) and wheat (-7%) were the worst performers on the month in USD terms however as weather conditions were reported to boost supply.

Now a quick look at YTD returns.

In USD terms the top of the leaderboard is dominated by European equities with Greek equities (+43%), Spanish equities (+29%) and Italian equities (+28%) making up the top 3.

Broader European equities are up +20% on the year with European banks outperforming with YTD gains of +27%. In comparison the S&P 500 has posted returns of 12% and is actually the second worst performing DM equity market this year with only the Nikkei trailing it by a small margin. EM equities are also broadly delivering strong performance YTD with the MSCI EM index posting gains of +26% in USD terms. Over in bond markets European fixed income has broadly outperformed relative to the US. European government bonds have broadly posted returns of 10-13% in USD terms in comparison to Treasury returns of only 2%, while European credit has posted returns of between 13-19% in comparison to US credit returns ranging between 4-7% YTD. However it should be noted that much of the gains in European assets can be attributed to the strong  performance of the Euro which is now up 12% YTD.

Finally over in commodity markets wheat remains the top performer (+16%) despite its poor performance in July, while oil (WTI -7%; Brent -10% YTD) remains the worst performing commodity and at the bottom of YTD performance table in general despite its late rally in the past month.

Source: DB

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Appearing on the Today Show earlier this morning, Senator Lindsey Graham (R-SC) said that President Trump has indicated to him that the administration is prepared to strike North Korea to prevent an attack against the U.S.  Pushed on by Matt Lauer on whether a viable military option exists in the region, Graham responded: “They’re wrong.  There is a military option to destroy North Korea’s program and North Korea itself.”

“They’re wrong.  There is a military option to destroy North Korea’s program and North Korea itself.  If there’s going to be a war to stop him [Kim Jong Un], it will be over there. If thousands die, they’re going to die over there, they’re not going to die here and he’s [Trump] told me that to my face.”

 

“And that may be provocative, but not really. When you’re president of the United States, where does your allegiance lie? To the people of the United States. This man, Kim Jong Un, is threatening America with a nuclear tip missile. President Trump doesn’t want a war, the Chinese can stop this, but to China, South Korea, and Japan, Donald Trump is not going to allow this missile.”

 

“I’m saying it’s inevitable unless North Korea changes because you’re making our president pick between regional stability and homeland security. He’s having to make a choice that no president wants to make.  You can stop North Korea militarily or diplomatically, I prefer the diplomatic approach. But they will not be allowed to have a missile to hit America with a nuclear weapon on top and to allow them to do that is really abandoning homeland security.”

WATCH: “They’re wrong. There is a military option to destroy North Korea’s program and North Korea itself.” @LindseyGrahamSC http://pic.twitter.com/R0Bxjegjjn

— TODAY (@TODAYshow) August 1, 2017

 

Of course, North Korea tested a second ICBM over the weekend which prompted the following statement from President Trump:

“North Korea’s test launch today of another intercontinental bassistic missile – the second such test in less than a month – is only the latest reckless and dangerous action by the North Korean regime.  The United States condemns this test and rejects the regime’s claim that these tests – and these weapons – ensure North Korea’s security.  In reality, they have the opposite effect.  By threatening the world, these weapons and tests further isolate North Korea, weaken its economy, and deprive it’s people.  The United States will take all necessary steps to ensure the security of the American homeland and protect our allies in the region.”

And now @POTUS statement on the #DPRK “reckless and dangerous” ICBM launch. http://pic.twitter.com/hdhxMLCHXd

— Steve Herman (@W7VOA) July 28, 2017

* * *

For those who missed it, below is our note on NK’s latest launch.

While North Korea has test fired numerous ballistic missiles (mostly intermediate-range, including one intercontinental) in the past, and as such today’s launch was largely seen as merely the latest political provocation to Trump by a seemingly oblivious Kim John-Un, there was one notable difference in the launch post-mortem: according to press and Pentagon reports, the maximum altitude attained by the ICBM was 3,700 km (2,300 miles) with a flight time of about 47 minutes. This is material because according to All Things Nuclear, based on the latest information, today’s missile test by North Korea could easily reach not only the US West Coast, but also a number of major US cities.

As reported earlier, North Korea launched its missile on a very highly lofted trajectory, which allowed the missile to fall in the Sea of Japan rather than overflying Japan. It appears the ground range of the test was around 1,000 km (600 miles), which put it in or close to Japanese territorial waters.

This is the place where North Korea launched its latest missile (left) and the Japanese island closest to its landing spot (right) http://pic.twitter.com/IPl4eRG5Yf

— Anna Fifield (@annafifield) July 28, 2017

According to physicist and co-director of the UCS Global Security Program, David Wright, if those numbers are correct, then the missile flown on a standard trajectory would have a range 10,400 km (6,500 miles), not taking into account the Earth’s rotation. Adding the rotation of the Earth increases the range of missiles fired eastward, depending on their direction. Calculating the range of the missile in the direction of some major US cities gives the approximate results in Table 1.

Table 1 shows that Los Angeles, Denver, and Chicago appear to be well within range of this missile, and that Boston and New York may be just within range. Washington, D.C. may be just out of range.

Wright caveats his calculations saying that “it is important to keep in mind that we do not know the mass of the payload the missile carried on this test. If it was lighter than the actual warhead the missile would carry, the ranges would be shorter than those estimated above.”

While the above calculation has yet to be confirmed by third parties, the US is not taking any chances. According to Reuters, top U.S. and South Korean military officials “discussed military options after North Korea launched an intercontinental ballistic missile (ICBM) on Friday.”

Marine General Joseph Dunford was joined by the Commander of U.S. Pacific Command, Admiral Harry Harris, when they called General Lee Sun-jin, chairman of the South Korean Joint Chief of Staff. “During the call Dunford and Harris expressed the ironclad commitment to the U.S.-Republic of Korea alliance. The three leaders also discussed military response options,” said Captain Greg Hicks, a spokesman for Dunford.

In light of North Korea’s reportedly expanded offensive capabilities, now that the US has an justification to launch a preemptive “defensive” attack on Pyongyang, a US military operation in North Korea now appears to be only a matter of time.

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Remember what Goldman said when it reported atrocious earnings two weeks ago, when it revealed that FICC revenues plunged by 40%? Here is a reminder:

“During the quarter, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment characterized by low levels of volatility, low client activity and generally difficult market-making conditions… During the quarter, Equities operated in an environment characterized by generally higher global equity prices, while volatility levels remained low.”

Spot the common theme? Yup: lack of volatility.

Fast forward to today when Goldman became the first bank to warn that Q3 is shaping up to be a continuation of Q2. This is what its CFO Chavez said moments ago, via Reuters:

• GS CFO CHAVEZ: FICC TRADING MARKET BACKDROP, LOW VOLATILITY WE SAW IN SECOND QUARTER HAS CONTINUED INTO THIRD QUARTER

However, Chavez declines to provide specifics on trading revenue so far this quarter during the company’s fixed-income call with investors.

Some other highlights from the ongoing Fixed Income presentation currently taking place, according to which Goldman is increasingly hoping to become a commercial bank. Maybe it can be the next Wells Fargo? It certainly shares the ethics…

• TREASURER ROBIN VINCE: WE HAVE PLANS TO EXPAND ONLINE DEPOSIT PLATFORM

It sure does: judging by this the once feared Goldman, is happy to be seen as a boring, old deposit gatherer:

Some other comments:

• Filling out the gap in client coverage in trading business is first priority, he says
• Excluding treasuries from Goldman’s supplementary leverage ratio would boost it by 70 basis points, Treasurer Robin Vince says on call
• “We are believers in risk-based” capital requirements, Vince says

• GOLDMAN CFO MARTY CHAVEZ: WE ARE TRYING TO CLOSE COVERAGE GAPS TO IMPROVE OUR FIXED INCOME BUSINESS
• GS CFO CHAVEZ: WE’RE ASKING OUR FIXED INCOME CLIENTS HOW WE’RE DOING AND WHAT WE CAN DO BETTER
• GS CFO CHAVEZ: WE SEE OPPORTUNITY IN BUILDING OUT CASH SERVICES, MORE CROSS-SELLING WITH INVESTMENT BANK AND TRADING

And if the revenues don’t materialize soon, taking a page out of the Wells Fargo playbook, Goldman will be just as happy to “cross-sell” you into a long CDO position the next time you deposit $500 with the bank.

Full presentation below:

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosprity,

President Trump seems to be impatiently racing toward at least one disastrous war. Maybe two. The big question is who will be first? North Korea or Iran?

Over the past several days President Trump has sent two nuclear-capable B-1 bombers over the Korean peninsula to send a clear message that he is ready to attack North Korea. On Saturday he blamed China for North Korea’s refusal to cease its missile tests. He Tweeted: “I am very disappointed in China… they do nothing for us with North Korea, just talk. We will no longer allow this to continue.”

One press report from an unnamed Pentagon source claimed that President Trump “is to order a military strike against North Korea within a year,” after this weekend’s North Korean test of a longer-range missile.

Iran, which along with North Korea and Russia will face new sanctions imposed by Congress and expected to be signed into law by Trump, is also in President Trump’s crosshairs. He was reportedly furious over his Secretary of State Rex Tillerson’s certifying that Iran was in compliance with the nuclear deal – even though Iran was in compliance – and he seems determined to push a confrontation.

Twice in the past week the US military has fired at Iranian ships in the Persian Gulf. On Tuesday an Iranian military ship in the Persian Gulf was warned off by machine gun blasts from a US Naval vessel. Then on Friday the US Navy fired warning flares toward another Iranian ship operating in the Persian Gulf.

Imagine if the US Navy had encountered Iranian warships in the Gulf of Mexico firing machine guns at them when they approached the Iranians.

Facing new sanctions, the Iranian government announced that it will not end ballistic missile testing even under US pressure. The missile program is not a violation of the P5+1 Iran deal unless it is specifically designed to carry nuclear weapons.

So whom will Trump attack first? Let’s hope nobody, but with continuing pressure from both Democrats and Republicans over the unproven “Russiagate” allegations, it increasingly looks like he will seek relief by starting a “nice little war.” If he does so, however, his presidency will likely be over and he may end up blundering into a much bigger war in the process.

Although Trump’s bombastic rhetoric on Iran and North Korea has been pretty consistent, the American people voted Trump because he was seen as the less likely of the two candidates to get the US into a major war.

A recent study by the Boston University and the University of Minnesota concluded that Trump won the most votes in parts of the country with the highest military casualties. Those most directly suffering the costs of war were attracted to the candidate they saw as less likely to take the US into another major war. These are the Americans living in the swing states of Wisconsin, Pennsylvania, and Michigan that surprised the pundits by voting for Trump over Hillary.

Will Trump’s legacy be blustering us into one or two wars that will make Iraq and Afghanistan look like cakewalks by comparison? Millions dead? It’s time to make our voices known before it’s too late!

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The woes for hedge funds continued in the second quarter, and nowhere more so than among the macro fund community, which posted its worst first half since 2013, losing 0.7% , and according to Hedge Fund Research have returned just 1% annually in the past five years, in an investing world which no longer makes much sense courtesy of central bank intervention. Most impacted by this revulsion against the active investing community has been none other than Paul Tudor Jones, whose investors are increasingly deserting him according to Bloomberg, which reports today that clients yanked 15% of their assets from his main BVI fund in the second quarter, leaving AUM at just $3.6 billion, roughly half from a year ago.

Jones, whose BVI Global Fund is down 1.9% through July 21, has been taking aggressive steps to revive his firm, including reducing fees and headcount. As revenue at Tudor declined, Jones last month sold the firm’s 43-acre Greenwich, Connecticut, headquarters’ property. Tudor then said it plans to move to a location in lower Fairfield County that’s more convenient to New York City, where the firm has offices. It is probably also cheaper. One year ago, Jones also dismissed 15% of his employees. He has told clients he will manage a larger chunk of their money and has encouraged his portfolio managers to take more risk. Jones has also leaned on quantitative tools to help with trading, including introducing technology that replicates the bets of his best managers.

Finally, Tudor has this year reduced its management fee to between 1.75% and 2.25% while taking a 20% cut in profits, after decades of being one of the most expensive hedge funds. The firm had once charged management fees as high as 4% for some clients, and a performance fee of as much as 27% for others, Bloomberg reports.

Alas, so far these “aggressive steps” have failed to yield results. Jones, 62, and his peers including Brevan Howard’s Alan Howard and, of course, John Paulson, are experiencing a “punishing shift”:

The old guard who shot to fame in the 1980s and 1990s are foundering, while a younger set of managers are making money, hiring and attracting new investments. The veterans are finding it’s no easy feat to replicate stand-out profits of yesteryear, when markets were more opaque and less efficient.

One can debate whether markets were less efficient then compared to now, but one thing is certain: icons such as PTJ have failed to find their groove in a world where central banks have injected $15 trillion in liquidity. Aside from BVI Global, Tudor also manages a fund tied to the performance of multiple teams of managers, an event-driven portfolio, and individual accounts. In total, the firm now has just under $8 billion in assets, compared with $14 billion in June 2015 according to Bloomberg.

Meanwhile, Tudor employees have also defected along with clients.

Global rates money manager Adam Grunfeld quit in May after nine years and is set to join Element Capital, the macro fund run by 42-year-old Jeff Talpins. Zorin Finkelsen and Dudley Hoskin left to join Balyasny Asset Management. Other departures have included risk-management chief Joanna Welsh, who departed for Ken Griffin’s hedge fund Citadel last year. Separately, money manager Dan Pelletier took a sabbatical to design quantitative tools for trading, people with knowledge of the firm said. Pelletier, who had worked at Tudor for nine years, couldn’t be reached for comment.

Jones’ recent troubles are a humiliating fall from grace for the once-storied investor, whose main BVI Global Fund produced average annual gains of about 26% from 1987 through 2007. However, since 2008 his annual average return has slid to about 4.7% with results turning increasingly more negative in recent years.

In his biggest losing bet – so far – Jones banked on macro making a comeback. Last year he said central bank policies, which have suppressed volatility and encouraged more government debt, will backfire and macro strategies will profit when the debt bubble bursts. So far that hasn’t materialized.

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