john paulson and george sorros more more of ged in the second quarter. that's the second time paulson has added to his gold position since 009. take a look at shares of gld, that spider trust there, down 0.5% yesterday. you can look at other holdings as well. what i find interesting, though, is that we know how gold underperformed during the first half of this year. i think it's only up 2% year to date. the question for a lot of people, even as they've been talking about why the gold trade hasn't worked, are these investors signaling there could be another leg up? >> i think it never really got below 1500, did it? it looks like -- it will tell you it's looked to build a solid base, right? the point is, it doesn't matter if you believe that orren. people trade on -- >> what's interesting, we can look at the spot gold price there but gold has gotten whacked the last couple of trading sessions. there it is, just below 1600 level. it's basically gone nowhere. you have to -- >> that's the other thing, qe/gold thing don't work. clearly there's been no inflation

those that tried to trade it, i traded gold futures for many years, what john paulson is doing and otherseing tactical in the gold trade is the wrong way to play it. i suspect they will be proven wrong. >> we can talk long-term investment ideas on this show all day long. >> think the thing with miners that paulson probably sees, don't forget what his background is. there's a great arm here if you think think there will be a revision. both gold and s&p are up 30%. if you look at gdx, that's actually down close to 15. so you might get this idea that at a certain point this thing has to catch up. the problem with this trade is it hasn't worked yet. number one. number two, underneath it all, these are not leverage plays on gold. they are actually gold at a discount because of how poor management is. they tend to issue shares and hedge wrong. i don't like the trade. if you think ecb will print and fed is going to print, you are better with physical combined with stocks believe it or not rather than miners. >> yields on ten-year touching a high of 1.8%. incredible climb from record low of 138 h

now bank of america says it has no plans to ends its relationship with john paulson or withdraw from funds. you recall last week, david, citi pulled 410 out of paulson's advantage plus fund which ended down, what was it over 50%, 2011. and the advantage fund is down roughly 36% this year. so having some trouble with the funds but again bank of america has no plans it says to end the relationship with them or the withdraw money. david: adam shapiro thank you very much. tracy. tracy: apple taking a one billion dollar bite out of samsung as a jury rules against the core reason company in korean dispute. one says apple may have a secret motive in choosing the opponent. malware is on the rise and new more creative threats are hitting computer users. how can you protect yourselves from these threats? the president of mcafee joins us in a fox business exclusive. that is all next. ♪ . . . . . . . >> i'm adam shapiro with your fox business brief. general motors has banned both president obama and mitt romney from all of its factories at least until after the election. the u.s. treasury still r

liz: george soros and john paulson, two billionaires, have just released their 13f filings, and they'vepouring a ton of money into the spider etf, the gold etf, the exchange-traded fund. tell me why your stock, fand, is a better deal at $10 a share than buying into the spieder? if those guys are the smart money, why shouldn't i be doing what they're doing instead of putting it into their stock? >> if you want to take a long-term bet on gold, spider is a good thing to do, but if gold doesn't go up, you don't make money. if there's expiration upside at the mine, gold doesn't need to go up a lot to make a lot of money. liz: what was your first job? you're only33. >> my first job was a life guard, but in business, doing mergers and acquisitions, and when i was 26, i was cfo of a multibillion dollar company. liz: nolan watson at sandstorm gold, ceo and president. good luck, thanks very much. >>> closing bell ringing in 17 minutes, we're bringing back jason pride, he's got some stock picks including one company he calls the poster child for big dividends, so stay tuned. ♪ ♪ you see us, at the

. ♪ >>> hedge fund manager john paulson facing his investors today during a conference call with bankf america's wealth management group. the call comes just days after citi private bank said it's yanking over $400 million from paulson's fund. kate kelly is here with what to expect. is he trying to hang on to more money? >> absolutely. there's no secret that after enjoying some of the most impressive hedge fund returns of all time, john paulson has hit some tough spots. right? his assets under management have been slashed in half from over $30 billion at their peak to $19.5 billion right about now. interesting will he, though, redemptions have been limited so far, and bank of america's brokerage firm has of late expressed its support for paulson's funds. even issuing a later it that affect a few days ago. what's unclear is how the firm's brokers feel about that. a topic we'll get a better sense of at the abbing acall today. the call itself is ru toon. paulson briefs major platforms at least once a quarter on its performance in strategy. what questions arise under brokers potentially w

filing shows that he's not the only one hedge fund manager john paulson is also the biggest has the biggest stake as gold trust which is the largest exchange traded product backed by bullion now this is all according to bloomberg so these heavy hitters are gold bugs you know off memory right now remember correctly source was buying the gold e.t.f. paulson was either in the. buying physical one of these two guys or both had been unloading of one point or the fact that they're getting back on is interesting i think also the fact that this coincides with source of speech means that maybe he's going short credit he's going along gold is going short currencies so you know these guys are these guys could potentially these guys can these guys work on the margin so if source is right if this is true as yours is betting on gold and he's right then we're in for a real storm of sorts so the money system where a storm in quotes was going to say something storm a big storm. and i don't know the guy because people believe in time guys so. what we have soros and paulson flight a flowing away on a gold bal

what the future could bring for gold as a monetary metal this as billionaires george soros and john paulson have again loaded up on it they ramped up their gold holdings or at least holdings of the largest gold backed exchange traded fund this is according to an s.t.d. filing yesterday that businessweek reported on and as the u.s. continues to run trillion dollar plus a budget deficit the question remains unanswered as to how long this can continue because look one major foreign creditors slowly unloads u.s. debt look how another is stepping in and increasing its holdings look at what's happening right behind me with china and japan and japan staggering debt as we know has withstood collapse for two decades so we'll discuss let's get to dave capital account. let's talk about capitalism because some many who have been on this show say we're not living in a capitalist era this is kuoni capitalism and others like our guest today say we're living under something entirely different this is credit to them so when we're trying to solve economic problems we have to address not capitalism but credit

but moving on, john paulson buried the lead on his call yesterday.ng lost is their gold fund which represents the core of their thesis was down 22% year to date through july 31st. all the focus is on the flagship funds, down 13% and 18% respectively. but the gold fund is doing the worst. spencer bogus who is the head of hedge fund investments for b of a and the lead lead representative on the call presented paulson and company as a very good way to play the gold minor thesis. if you like this thesis, this is the place to be. if you don't, you may want to rethink this investment because it can be volatile. as people learned later on, paulson is a five-year thesis. he says, or he told people yesterday, it is very difficult to predict the gold price because of so many different factors that go into it, including, but not limited to, liquidity issues, commodities prices, demand out of china. however, he was asked a little later i'm told about the situation in europe and he brought if back to gold again. he said, europe is likely to print more money, more

citi private bank is pulling $500 million in assets from two of john paulson's funds at his hedge fundo be coming from the advantage in the advantage plus fund, confirmed by a source close to the situation now. of course paulson has had a tough year. those two funds, the advantage plus is said to be down 19.5% at the end of july according to an investor in the fund and the advantage fund is set to be down 13%. noi, of course, this is just a small slice of paulson's overall aum which is roughly $21 billion in assets that he does have under management, but it is a bad sign of confidence in paulson's funds as he continues to try and recover from some of thinks investments, brian. >> kayla, very interesting. pulling 500 million out. could paulson's troubles have any effect at all on the precious metals trade? of course we have been loading up big on gold through the gl detf. bk, let's go to you. >> i think on the margin it certainly would have an effect, a positive effect on gl d. we have seen this happen last quarter or at least looks like the money came out the end of last quarter. we ha

. >>> john paulson is reassuring clients investors aren't fleeing his firm even though his funds haveed. last week citigroup's private bank decided to stop investing with paulson. he says he's disappointed by the move but notes fund withdrawals haven't been unusually high. down nearly 13% this year. >>> nj services in new orleans have reported hurricane isaac topped a levee in the southeast part of the city. cnbc's senior correspondent scott cohen is in new orleans and joins us for more. it's going to be an interesting connection. where is this levee, how far away from the city is it? >> reporter: the levee is in plaquemine's parish. plaquemine's parish is southeast of here. it is not part of the new orleans $14.6 billion flood renovation/repair after hurricane katrina. the issue they're dealing with is this kind of rain and wind -- >> it is a hurricane. that's all i'm going to say. at least we got to hear that. you can see the amount of water and rain coming through. with a slow-moving storm, that's the issue they'll deal with, is the volume of rain coming down because of the slownes

we just learned that john -- george soros and john paulson put a bunch of dough into the gold etf.year-to-date chart. the trade would be to go into this. as part of the reason gold is going up. a record amount of holdings, a record amount of money is now sitting in the gold etf. this buys the gold, take it off of the market and physically stores it which in itself pushes up the price of gold. so the gold stocks have not quite kept up with the rise that we have seen in gold prices. ashley: 1700 by the end of the year. we will see. lori: you made a great point. it was off the radar for a little bit. not anymore. u.s. drug monitor, 51 percent of the u.s. corn crop is facing extreme or exceptional dry conditions, up two percentage points from just a week ago. what does this mean for investors in agriculture? joining me now is the ceo of index iq. good to have you. >> thanks for having me. lori: what is your strategy? you look at the drought, this hurricane, hurricane isaac coming in and oil prices. just agriculture. let's start there. >> it is a scary situation. the drought now, the dr

. >> john mccain paulson, let me kick this off, should we. >> brian: will happy about this rally? not a lot of participation in this market. >> i think you're right. i think the real key here is we're climbing the wall of worry and no one thinks we can. we're climbing despite the fact that the fed is not doing anything. i think that when we see vol yum maria is when we'll be in clear new highs for this recovery and people think the water is safe and that's when it gets dangerous again. i think the underlying catalyst here is that the economy is picking up. i think recent data on chain stores and the surprising jump in consumer confidence, on claim numbers, on payroll employment, i think we're seeing evidence of economic momemtum in the united states improving, and with 14 times earnings, and a 1.5% treasury, that could stimulate a lot of greed. >> how do you want to invest then? what are you doing right now? >> my favorites are the emerging market stocks. i see the stocks performing in line with the u.s. market since may. there is a bottom being formed. i think in the fourth quart

finally, notable moves by john paulson, still one of the biggest money managers, although operating atat he had a year ago when he had about $38 billion after tough set backs in the market. paulson added shares of jpmorgan preponderate it lead to a nearly $6 billion loss for them. unlike stevie cohen, paulson moved toward gold adding to his long-standing holdings even though it's seen a drop. he is consistent for his support in the this one. not only has it been a big piece for some time now, his investors can buy into the funds through government rather than through dollars. >> it >> is it the same as consistently losing? >> in his case, yes. >> that has been discussed for quite awhile now simon, they have fairly strict policies, they have a sixth month notification and notice process. when i talked to investors, they said listen why would be wail out at this difficult time, let's give them a chance to recover some of our money and his, and see if better markets prevail. >> thank you, that comes back to your point that the it's a very advantageous positions to be in. >> when you look

john paulson and george soros bought more of etf or gld in the second quarter. first time paulson has added to his gold position since losing in 2009. among other -- that wasn't in the script. he has -- that has been his -- not a good position for paulson. i mean, you know, future -- after that great year with -- during the financial crisis it's been tough a couple years. gold was not one. >> gold did not work. >> do you feel like we're in the dog days -- i feel like we're in the dog days of august. >> you think we hit that? did you see the market yesterday? >> you don't tell the viewers we're in the dog days of anything. >> the viewers that are still here are die hards. >> because of -- the rest are on vacation? >> they're in the persistent -- >> there's nothing. if there's -- there's no one in europe. actually, it's weird because people just move around in europe. there's no one in europe working. the people that live in portugal have gone somewhere else -- >> they have a lot of time to watch tv. >> they're watching ross westgate and kelly evans. >> we're broa

. >>> breaking news on john paulson. ers. >> some updates on paulson's gold funds which were talked about in the phone call yesterday with b of a clients and investors. actually note g gotten into too much detail. there has been a lot of talk about his flagship funds, the advantage and the advantage plus, down about 13% and 18% through the end of july respectively. the gold fund, which represents a huge bet on his part on the gold miners and then he also buys physical gold or allows investors to invest through physical gold, that was the worst performer as of then. i'm told he's seen an upswing through the month of august. through the end of the day yesterday, that fund recouped 10% of its losses. so on a net basis, now down 12%. where as the flag ship funds are still struggling at more or less 13 or 18% down respectively as well. this is interesting, something that paulson touched on with investors and something that people are likely to be talking about, especially since b of a which organized this call yesterday very m

saw it in john paul's and who collaborated with goldman sachs in designing a financial instrument and head of prime mortgages as profitable for him as devastating for goldman clients. paulson was a brilliant man who could see the financial system racing into a prestigious unlike other hedge fund managers who sounded the alarm and were pilloried as a result. paul some place his bets and kept silent cashing in his chips when the system nearly collapsed. talking with paulson i came away with the impression he devoted his life to one goal, the acquisition of an ever larger sum of money. the goldman sachs deal was the culmination of a single-minded quest. what made these accomplishments so selfish, so seemingly a moral, lacking in public spiritedness, first before a book, these two men and many others personified a philosophy whether it was implicit is not important. what matters is this underlying unspoken philosophy is reflected in the belief, promulgated by greenspan at the fed that the markets were supreme. it was an attitude toward life that pervaded the financial system and was accepted over considerable enthusiasm to regulators and congress and all administration a sizab