News and Views from the heart of Hedge Fund land.
MOT.
In the UK, when an automobile is more than 3 years old it has to have a yearly MOT. This involves a garage checking the vehicle is road worthy. Given nobody is stupid enough to buy new cars, with all this anti bling sentiment and old being the new black, many more cars will be having MOT's.
The financi ...
Absence.
So I came into the office to find nothing but tumble weed. It appears today is a free holiday and my staff are doing one of two things: shopping like crazy in the sales or sleeping off hangovers. Given their bonuses were derisory, I can guess they will be sleeping.
Being an employer is a very grown ...
Happy New Year.
I expect a Hollywood film to be called "2008" will be released in the coming few months. Actually I don't because Hollywood has had problems like everyone else in finding finance. The year has been quite extraordinary and once in a lifetime events occurred every day. Nothing can phase us any mo ...
Poor Obama.
His to do list is enormous and quite complex too. Expectations are high that he will be able to conjure up magical powers to sort out the horrendous mess the west is in. The markets are in a state of heightened paranoia and waiting for signals to react to. Where interest rates are almost zero, divi ...
Well that's that.
Christmas is over and so it seems are more and more retail outlets. Over that is. Like most of you, I spent my time over the festive season at endless Christmas drinks parties and eating as if the end of the world was nigh, and the only topic of conversation was fear and loathing. 2009 isn't ...
Happy Chrismukkah.
With news of suicides, homelessness, Ponzi schemes and general grimness, I hope a few days off will help recharge the batteries.
2008 started out well. A large trading error at SocGen and 12 months later an old man shows a young Frenchie how it should be done. And in the middle Freddie an ...
Playing the detective.
The day Madoff hit the news, most hacks were fast asleep. It took them a couple of days to realise that the Madman was the new bogeyman and Hollywood were writing scripts for a film to be released next year. So in the space of a few more days, the media have uncovered a lot about him as ...
Christmas is cancelled.
Firstly, I must apologize for asking why didn't anyone report Madoff to the SEC in my last ramble. It now transpires he was a regular in their offices but had a certain turn of phrase and a Rolodex to impress and so always escaped any sort of real sanction. My complaint was that nobody ...
Oil.
Oh dear. With crude oil falling under USD40, the oil producing countries must be worried. Dubai, that fantasy city which was built on borrowings from other Arab states is in my opinion going to turn to dust in the next 20 years. It has no oil and nothing except buildings and air conditioning. Those fundin ...
Madoff contd.
So more people have been inflicted with Madoff disease and many are European. The mad man is on bail and no doubt wondering if his alleged fraud is a conspiracy to deflect the electorate from the real economic woes that we all face. Maybe Madoff was just a normal guy who just lost the plot and th ...
Madoff part 3.
Apart from the media assigning people to fund losses and assuming its their own wealth lost, the matrix of real counterparties exposed to the Madoff funds is truly staggering. I trust Mr Madoff has around the clock protection because there are so many unhappy investors, old and new, whose lives ...
Madoff part 2.
Last Thursday the news broke and it hardly registered a blip on the news radar. Today we face financial meltdown of the hedge fund industry and the loss of tens of billions of dollars and the destruction of livelihoods. Yesterday I looked critically at the investors who had not read the prospect ...
Greed.
Tremont, Fairfield Greenwich, UBP, SFG, EIM, RBS, Notz Stucki, Syz & Co, Pictet (see below), Carl Shapiro, Nomura, the Loeb family, HSBC, Fred Wilpon, Optimal (Santander), The Robert I. Lappin Charitable Foundation, Vincent Tchenguiz, Pioneer, UniCredit, Bramdean to name just a few of the red face idiot ...
Risk Management.
But before my ramble, here is a PRESS RELEASE
Many people have made a good living peddling courses on risk management. These two words are the most overused in the world of finance and I still haven't a clue w ...
Cash or no cash.
I was queried yesterday. Apparently I am not sitting on cash and most hedge funds aren't. Well my response is those who aren't in cash are sitting on lots of illiquid assets. I do have some legacy positions but I need to get some perspective on the markets so I am waiting; not that my investor ...
The irony.
One of the joys of running your own business is you can make up the rules, write your own staff handbook and dress like a slob. It is a well known fact that there is a correlation between wearing a tie and baldness and to preserve my locks of thick luscious Patrick Dempsey hair, my hand made gold th ...
Confidence.
There are a lot of unconfident people around. Existing frameworks, values and modus operandi are under attack. Take counterparty risk. Analysts were hired to rip apart financial statements, ratios calculated and compared to other company statistics. Credit Rating Agencies did the same and rubber st ...
Twiddling one's thumbs.
This week we will witness more lay offs and firings. It will be worse than last week. The hits on redundancy based websites will rise and the roads will be quieter as ex workers stay at home and plan for the future. Families will enjoy extended periods of being together and no longer wi ...
Unemployment.
As I said on Monday, this and next week are to be horrible for many people. The run up to Christmas has traditionally been a time to fire. Budgets and forecasts for the new year mean the dead wood needs to be burned so that profit targets, or in many other cases - survival, can be met.
Yesterd ...
Anger.
I think we are starting to reach the anger stage of the cycle. This isn't funny or remotely something one can feel smug about; the world is turning dark. Inequality is breeding anger and hatred. In the UK, debt lovers who over extended are being bailed out whilst savers, who are mostly pensioners, suffe ...
Trade off.
What's worse? Unemployment or inflation? For many years after World War 2, when Keynesian economics was the new black, Politicians fought many battles but none as difficult as controlling the effects caused by rebuilding the world and keeping one's gdp growth positive after years of decline.
Infl ...
Red alert.
Funny how we make up a word, define what it means and then get all gloomy when an event occurs that makes that word true. The US is in "Recession", apparently, and the markets turned to the color of blood last night.
As we said yesterday, the next two weeks are HR's favorite time for firing and ...
Shopping.
Before Google (BG), analysts had to make phone calls and visit companies to be able to write research reports. Government statistics suffer a serious time lag and if they wanted to know how the economy was performing, simple activities like wandering around shopping malls would be undertaken. Imagine ...
Money.
It is becoming clearer. Bush's ill fated US Patriot Act is a major cause for the current credit crunch. I arrived back from the land of the depressed to find a pile of mail on my doormat. Apart from the usual invites to the best parties, there were a couple of credit card applications. Quite simple real ...
Slow Food.
One of the key features of today's modern America is slow food. Because it has a poor welfare system, the unemployed are often found in McDonald's sipping slow coffee but enjoying the warmth and buzz. My trips to such establishments are very rare, but as an enlightened traveller it made sense to see ...
Cavaliers.
Last night I watched the Knicks being slaughtered at Madison Square Garden and a fire breathing LeBron James sporting more tattoos than skin, wow the crowds. As a Brit, and only used to watching proper sports, it was intriguing to watch the adulation adorned upon a netball [Editor: Basketball] playe ...
New York.
So here I am. It is raining and cold and the city looks very unwell. It reminds me of London. As usual, when I go away catastrophe happens. The FTSE 100 decided that increased taxation and hiring more civil servants was a very good thing for the UK economy, as well as the bail out of a foreign bank, ...
Bad Parenting.
As the credit crunch morphed into a game of blame, our socialist leaning nanny governments have seen the boundaries of their responsibility move from laissez faire, with the odd detention for bad behavior, to full blown naughty step beatings and confusing messages. Telling a child off but not fo ...
7552.
As predicted a few months ago, the current support for the Dow is 7550 and we forecast by the end of year it would touch this. However, the speed has taken us by surprise, and I guess many others too. Comparing the decline to the last 4 bear markets, the decrease has occurred in a more expedient fashion ...
As predicted.
Yesterday I said something would happen. And by all accounts it looks like another trigger of downward pain in the equities markets did happen. With anarchy on the seas, a dancing pig forced out of a reality TV show and the membership list of a far-right political party dumped onto the internet, ...
Moral vacuum.
So we sent you some warning shots, predicted with accuracy the demise and followed up with told you so's. But it is time to move on. Moaning about a bonus that did not meet expectations, or the Polish builders who don't speak English or adding another house to your property portfolio is yesterday ...
Shoot the pig.
There seems to be glee in the air as capitalists who once managed thousands of people and added wealth to a country are slaughtered for being greedy and smug. It is true there are many with a disdain for the greedy goings on in banks and when Goldman and UBS announce the end of bonuses, they che ...
O2.
Having lined up to enter the Lehman's (known as Libby) Creditor's meeting on Friday, the anticipation was high. The meeting was delayed by 30 minutes and the hall bustling. The neon blue strip lights, the lack of windows and the extra warmth were enough to get us all excited. Well, 3 hours later and most o ...
People want more for less.
This line is taken from a quote reported yesterday by a BT spokesman following the firing of ten thousand workers. Like this news letter, less should be more and more can mean less. Yesterday I wrote an interesting monologue but it was too long, full of errors and quite frankly cheap ...
Is it me or am I turning into a Dinosaur?
One of the downsides at the speed and opaqueness of the current "public ownership at all costs" debate, is there is no analysis.
The role of analysts and academics used to be spend a lot of time digesting, interpreting and concluding on the state of companies, count ...
Student politics.
Today's "after the horse has bolted analysis" from Dr Finbar "Satre meets the Matrix" Taggit is as follows:
Funny how clouds always appear when you are enjoying yourself. For the past few years, we all sat outside getting a nice sun tan but not knowing why or caring about the after effects ...
The signs are all is not well. I read a freebie newspaper last night and this is what I discovered.;
Iceland has become a must go to holiday destination.
Shoplifting for food is on the increase.
Nobody admits they work in the financial services industry anymore.
Black is certainly the new black (tried ...
Sheep.
While we all watch perplexed at the fall out starting to hit the ground, it is evident we are all but sheep looking for a lead. Poor Obama is looking like a newly trained sheep dog who has yet to be told by his handlers where the sheep should go. But not to worry; there is a grumpy dour Scotsman whistli ...
Mates Rates.
So Asian imported inflation is no longer a cause for concern? The ECB and Bank of England decided to follow the Bernanke path and slashed rates. Lots of media excitement, equities took a pounding and Libor hardly moved. You see base rates don't mean much when they fall to silly levels. Look at Jap ...
We are all saved.
The effusiveness of Obama's victory is welcomed after the media's preoccupation with gloom and the doom over the past few months. Not wanting to be a doubting Thomas, but the expectations being put on him are truly unbelievable and the young guy who has no economic experience (another academi ...
O-kay he did it.
Obama is like the second coming. He is the new beginning, the saviour of America. Congratulations to the media who predicted his win and I am humbled that America is at last on a new road with a new team. As long as he gets rid of Paulson and Bernanke then in the short term this will be a posi ...
A big Mac or a Cheery O?
The world is waiting on baited breath to see who is going to be given the job to pay off the Greenspan / Bush credit card? The honeymoon will be short and the gloom long. In the meantime, the sales of safes continue to rise and cash hoarded like tins of baked beans. Equities are going ...
Jason Bond.
Having escaped this weekend into the world of James Bond and his Quantum of Violence, it was noticeable that I was joined by many others wanting to avoid the stresses of the current economic turmoil. Not that the cinema is the only sanctuary of relief. In the early hours of Sunday morning I was jog ...
Six pack.
People who work in the financial services industry tend to be obsessive compulsives with a high degree of mental instability. My compulsions include eating, regular visits to the gymnasia and being well groomed. [Editor: That's it?] Despite enjoying my lunches, I eat in moderation and have a rock har ...
Desperation.
Lets face it, being a civil servant right now is a tough job. Your job is guaranteed for life, you can spend tax payers money and not be fired and there is a fat pension at the end of it. Top Civil Servant Ben Bernanke has cut rates to 1%, has bailed out banks, wants to bail out conglomerates, rec ...
I have got a headache.
Another day passes when the long tails got fat again and volatility made it impossible for most of us to ride. US confidence is at its lowest ever and the DOW shoots up into double digits. The Porsche trade (was it legal? Does it contravene EU law? How did they build up a stake so large? ...
Gloating.
Unlike plane hopper Nouriel Roubini, that miserable Dr Gloomy, who continually tells us the world is doomed like a depressed Jehovah Witness, I am not a gloater. The fact I was the only person in the whole wide world to predict with precision the actual top of the market and the subsequent crash does ...
Bling.
In times of boom, women like to show off their corsets and midriffs and men their diamond encrusted watches and gleaming white teeth. When the gloom hits the fan, flesh is covered, men forget to clean their teeth and we all turn to religion.
If we could start a religion fund, we would. It would be th ...
It is so easy to be grim.
A few months ago, many pundits like John McCain were telling us the fundamentals were fine. And some still are. The consensus today is that we are falling into a large black hole. This is good news, for those who make their fortunes tend to do so while the majority have their heads ro ...
Distortion.
A level playing field is a myth. Take shopping. A beautiful hand made Turnbull & Asser shirt will cost you 200 times more than an equivalent shirt bought at Primark. The first shirt is made in England (high labor costs, health and safety, pensions and low productivity) and the other in a Vietnamese ...
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