just starting

http://www.zerohedge.com/news/2016-02-18/citadel-unwinding-50-billion-portfolio-aftermath-surveyor-debacle

Citadel is quietly trying to unwind the $50 billion leveraged Surveyor portfolio.

Following massive losses last year by a Boston-based trader Scott Carmel (who lost over $150 million from 2015 through January 2016 trading financial stocks, and was fired for performance last month), Ken Griffin, angered by the underperformance of Surveyor vs the core Global Equities book, ordered the dismissal of several teams. As the WSJ confirmed today, more employees have been fired since.

Not surprisingly, Carmel promptly scrubbed his LinkedIn profile to remove any trace of association with Citadel although it still remains in the google cache.

As the WSJ also reported today, the head of Surveyor - Jon Venetos was demoted and quickly quit, leaving the unit in disarray.

What the WSJ did not note is that "now there is a desperate scramble to try to unwind a massively leveraged equities portfolio (over $50 billion gross)."

Our source concludes that "Citadel investors do not know the truth of what is happening here. They are trying to maintain the illusion but there is chaos amongst employees."

http://www.zerohedge.com/news/2016-02-18/worlds-largest-hedge-fund-trouble-bridgewater-pure-alpha-loses-over-10-two-weeks

It is what happened since then that is disturbing, because according to sources, the fund lost over 4% in the subsequent week ending February 5 when it was suddenly down 3.8% YTD, and was down more than 5% in the next week, pushing its total MTD loss to -10.0% as of February 12, and -9.3% YTD.

This means that in just 2 weeks, the fund which prides its lack of volatility and its Sharpe ratio, suffered a multiple-sigma volatility event, one which has seen it lose over 10%.

With the fund's AUM around $81 billion, it means Pure Alpha has lost over $8 billion through the middle of February, and is on deck for one of its worst months in recent history.

While we don't know if it is directly related, the sudden hit to Bridgewater performance may be linked to the unexpected blow up across the market neutral hedge fund space, which as we showed yesterday have suffered a dramatic hit to performance, one comparable to the market volatility in the aftermath of the Lehman failure and the August 2007 quant crash.