The Wound and the Transition — Gawker Outs Thiel — The Architecture of Secrecy

CHAPTER II · 2007–2008 The Wound and the Transition — Gawker Outs Thiel. His Partner Leaves BlackRock. New York · San Francisco, 2007–2008

In December 2007, Valleywag published a post titled "Peter Thiel is totally gay, people." Thiel's response was not a lawsuit. Not a statement. He went silent and began assembling a legal team to identify cases he could fund anonymously against Gawker — a project that would take nine years to reach its conclusion in a $140 million judgment and Gawker's bankruptcy. The author of the post later said he didn't consider it an outing, that Thiel's sexuality was known to a wide circle. To Thiel, that distinction didn't matter. What mattered was that information about him had been published without his control.

At the time of the Valleywag post, Thiel was in a relationship with Matt Danzeisen, then a Vice President and Portfolio Manager in BlackRock's fixed income division. They had been dating since at least 2007. In April 2008, Valleywag noted that Thiel had appeared on a Forbes list of billionaire bachelors and wondered whether his boyfriend was aware — identifying Danzeisen as someone Thiel had "reportedly hired from BlackRock Securities."

Danzeisen left BlackRock in 2008 and joined Clarium Capital Management, Thiel's hedge fund. The timing matters.

In March 2008, Bear Stearns faced imminent bankruptcy. The Federal Reserve Bank of New York created Maiden Lane LLC and extended a $28.82 billion loan to it, using the funds to purchase approximately $30 billion of Bear Stearns' mortgage-related assets. The due diligence review of those assets was conducted by the FRBNY's investment manager: BlackRock Financial Management Inc. BlackRock received no-bid contracts to manage all three Maiden Lane vehicles, plus the $300 billion Citigroup ring-fence, plus the toxic asset evaluation for Fannie Mae and Freddie Mac. [Federal Reserve Bank of New York · Maiden Lane LLC official records · Federal Reserve History · Wall Street on Parade]

In the first half of 2008, Clarium Capital gained 57.9% through short positions on housing-related assets and long exposure to energy — positioning that capitalised specifically on the Bear Stearns collapse in March 2008. By July, Clarium had $7.3 billion under management. [Hedge Fund Insight · Grokipedia Clarium Capital · Bloomberg 2011]

AnalyticalANALYTICAL: The H1 2008 gains are consistent with someone who had reason to anticipate that Bear Stearns would be managed through an orderly rescue rather than allowed to collapse. The H2 losses — specifically the shift into long financials just before Lehman failed — are consistent with someone who did not know Lehman would be allowed to go bankrupt. Whether Danzeisen's proximity to BlackRock's Maiden Lane management decisions influenced Clarium's positioning is not established in the public record. The proximity is documented. The proximity coincides with extraordinary gains during precisely the period those government decisions were being made. It was never investigated.