28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
One striking thing about hedge fund workers in Greenwich (and the same is true of Westport and Stamford) is they all wear brown trousers with black belts and long sleeve shirts with white t-shirts underneath. And that includes the women. In England these people would be settlement clerks. Thank goodness I left yesterday because there is no way I would be seen dead looking like this. Greenwich Avenue may have a Saks and a Rugby, but it appears no-one shops there. As a local told me, most of the hedge fund workers commute in from New York; another reason why New York has lost its crown as Financial Center of the world.
Of course the real reason the hedge fund workers dress the way they do is because the world's biggest hedge funds are Investment Banks.
Third of bloggers 'risk the sack' (bbc) More than a third of UK bloggers risk the sack by posting derogatory or damaging details about their workplace, boss or colleagues, a survey claims.
Human resources company Croner, which commissioned the study, warned that such bloggers could be sacked from their job for gross misconduct.
Croner surveyed 2,000 people who keep a personal internet blog or diary and 39% said that they made harmful comments.
Bloggers should consider the potential impact of all postings, Croner said.
'False security'
Gillian Dowling, technical consultant at Croner, said the situation was similar to the widespread introduction of e-mail in the 1990s.
She said bloggers had to take care that they were not lulled into "a false sense of security" by the informality and ease of posting their thoughts and opinions.
"If there is a negative impact on the organisation's corporate image which is so serious that it breaches the implied term of mutual trust and confidence, the employee could be dismissed for gross misconduct," said Ms Dowling.
"The blog could also be evidence of other conduct issues or reveal workplace discrimination or bullying."
Ms Dowling added that bloggers could also get sacked for revealing confidential secrets or sensitive financial data.
"Employers need to ensure that they carefully consider the impact of blogging on their organisation and take appropriate steps to minimise any potential risk," she said.
The study was conducted for Croner by internet research group YouGov.
Fintag says I would like to state on record that Finbar Taggit is a moron, a loser and a tosser. Oops, that is me.
AND THE WINNER IS ...
The Biggest Hedge Funds? Investment Banks (dealbook) If you are having trouble telling the difference between hedge funds and investment banks these days, the latest ranking from Alpha magazine probably won't help. In a further sign of how deeply Wall Street firms are getting into the hedge-fund business, the hedge fund arms of two bulge-bracket banks, J.P. Morgan Chase and Goldman Sachs, have the No. 1 and No. 2 positions on Alpha's annual list of the biggest hedge funds. Top-ranked J.P. Morgan has $33 billion in hedge fund assets, putting it just above last year's winner, Goldman, which oversees $32.5 billion.
Hedge funds are private pools of capital, subject to relatively little regulation, that use a wide variety of investing strategies. They are usually restricted to wealthy and institutional investors, who have been increasingly clamoring to put their money in these kinds of funds. Investment banks have noticed the trend and have been buying stakes in hedge fund managers — or entire hedge-fund firms — to get a piece of the action for their clients.
Though it dropped a rung, Goldman's hedge fund business is hardly shrinking. Alpha said that Goldman showed $11 billion more in assets than last year, but it slipped in the rankings in part because its Global Alpha fund has underperformed.
J.P. Morgan seems to be benefitting from its 2004 purchase of a majority stake in Highbridge Capital Management, which had $7 billion in assets under management at the time. Highbridge now has $15.7 billion in assets, or nearly half of J.P. Morgan's total hedge fund assets. Jes Staley, chief executive of J.P. Morgan's asset management arm, told Alpha that the growth stemmed in large part from maturing ties between the firm's private banking business and Highbridge.
Renaissance Technologies, which hires scientists to apply mathematical formulas to its trading strategies, shot up from No. 26 to No. 6 in the rankings, with $26 billion under management. Bridgewater Associates fell from No. 2 to No. 3, with $30.2 billion in assets., and D.E. Shaw Group, with $27.3 billion, dropped from No. 3 to No. 4.
Fintag says Firstly, this report shows that Hedge Funds are managing about the same monies as in 2003. It also shows that the term "hedge fund" now includes investment banks. Thirdly, all managers lie about their AUM (commitments and promises and double counting on advisory). Fourthly the big boys are getting bigger and the rest are scrabbling around (concentration risk?). Fifthly, we have lots of pundits getting very excited.
Hedge funds and market abuse? Surely not (independent) Active fund management used to be a comparatively simple affair: if you didn't like the management, you voted with your feet and sold the shares. With the advance of hedge funds, the activists today are a more belligerent and aggressive bunch.
Underperforming managements are deliberately targeted, and if the hedge funds cannot get their way in behind-the-scenes meetings, they write hostile letters which they leak to the press demanding action, management change, an egm or break-up.
When it is someone with a reputation who is doing the agitating, such as Christopher Hohn of the Children's Investment Fund (TCI), the effect on the share price is generally electrifying. So much so that you sometimes wonder why they hang around to see through the action demanded. Revaluation of the shares becomes a self-fulfilling prophecy.
These strategies have raised eyebrows, with it sometimes suggested by target managements that it is a form of insider dealing in itself to buy shares in a company where you know demands for change are about to be tabled. As far as the principal investor is concerned, this is plainly not the case. If it was, no company could accumulate shares in an entity it knew it might bid for. There is a specific exemption to cover principals. It also applies to hedge funds agitating for change. Yet it self evidently would be a form of abuse if your hedge fund pal down the road also piled into the stock knowing what was about to occur.
Somewhat worrying is that the Financial Services Authority yesterday found it necessary to clarify this point in its regular markets newsletter. This was apparently in response to requests for guidance following the shenanigans which has surrounded dealings in ABN Amro shares. A large number of hedge funds have actively traded this break-up and bid situation. Who knew what and when are still questions being investigated by the FSA.
The request for clarification makes you wonder what on earth everyone has been up to. Hedge funds and market abuse? That's a contradiction in terms, isn't it? Regrettably, insider dealing hasn't been as rife as it is now since the days of Ivan Boesky in the mid-1980s.
Fintag says As is always the case during a credit driven bull run, it is only after it crashes will the fallout be known. The simple fact is that you cannot lose money at the moment as everything is going up, up and up. Shorting is for losers and inside trading is for real losers.
GORDON: WHAT HAVE YOU DONE?
Prices to hit 12-year high says CBI (telegraph) Economists have put the chances of 6pc interest rates this year at one in three, after fresh signs emerged that the Bank of England has lost control of prices and the Organisation for Economic Co-operation and Development (OECD) said Britain has the worst inflation problem in Western Europe.
George Osborne: Prices to hit 12-year high says CBI George Osborne on Gordon Brown: 'truly incompetent'
The CBI said the number of manufacturers intending to raise prices in the coming months had hit the highest level in 12 years. The news is vitally important since the Bank said last week that if this specific measure continued to rise it would imply that it might have to raise borrowing costs again.
The CBI's Industrial Trends survey showed that 32pc of manufacturers expect product prices to rise, compared with 8pc thinking that they will fall. The resulting rounded balance of +25pc was the highest since March 1995.
It came as oil prices hit a nine-month high of $72 a barrel, fuelling fears that higher petrol prices and transport costs could generate further jumps in inflation.
Brent crude was up $1.10 at $71.70 a barrel in late trading, lifted by concerns about the potential for military action against Iran, and strikes by state oil workers in Nigeria.
Howard Archer, chief UK and European economist at Global Insight, said: "The CBI survey adds to the pressure on the Bank of England to lift interest rates by a further 25 basis points to 5.75pc sooner rather than later, and a back-to-back [increase] in June is currently looking like a real possibility. Furthermore, there is an ever-growing danger that interest rates will reach 6pc before the end of the year."
A poll of City economists carried out by Reuters showed that there is now a 75pc chance rates will increase to 5.75pc this year, and a 30pc chance they will hit 6pc. Traders are already expecting an increase to 6pc, with a further half a percentage point rise already priced in on the money markets.
In its twice-yearly look at the world economy, the OECD said the UK would this year have the highest inflation in Western Europe, and most of the developed world.
It said that, at an average of 2.4pc this year, the Consumer Price Index was far above the average in rich countries, adding: "There may even be a case for additional tightening in the United Kingdom, should inflationary pressures persist."
It cut its 2008 growth forecast for the UK from 2.8pc to 2.5pc, and fired a warning at outgoing Chancellor Gordon Brown, criticising him for building up a bigger budget deficit than any other major European country this year.
George Osborne, the shadow chancellor, said: "It's official: Gordon Brown is leaving the Treasury with the public finances in the worst state in Western Europe. You have to be truly incompetent to combine the highest taxes in our history with a budget deficit higher even than Italy's."
Fintag says What a mess. Expect UK interest rates to hit 6.5% by the end of 2007.
As usual the MPC have been caught napping - maybe it is because Mervyn King has been spending too much time on his up and coming marriage plans (although still waiting for my invite). Mind you Mervyn tries to do what is best but he is hampered by a number of highly mortgaged MPC members who are looking after their own interests.
HELLO MAGAZINE
FSA 'reminder' over speculative buyout reports (telegraph) The Financial Services Authority has issued a stern reminder to hedge funds, arbitragers, and other market activists in the wake of a series of highly speculative reports of imminent buyouts of FTSE 100 companies.
The City regulator has warned all market participants to be careful to ensure that they are not making up stories of takeovers, or sharing information in certain companies, to the disadvantage of the majority of other shareholders.
The watchdog, which is responsible for ensuring markets are not distorted, has reminded bankers and other investors that such activities are in clear contravention of its market abuse rules, which could result in unlimited fines or a ban from working in the City.
Perfectly legal shareholder activism is a growing phenomenon in London's markets, spearheaded by hedge fund managers such as TCI, led by Chris Hohn (pictured yesterday), and Polygon, who adhere to the FSA rule book. But there are concerns less scrupulous investors may take advantage of the UK's very open stock market.
The guidance, in an FSA paper entitled Shareholder Activism, comes in the light of a wave of largely unfounded press reports, based on market rumours, that a clutch of Britain's largest companies were about to be on the receiving end of a takeover bid.
In one of the worst instances, shares in Scottish & Newcastle rose 13pc over two days at the end of March on suggestions that it was about to be on the receiving end of a takeover bid from a rival. It has to yet receive any such bid.
Other companies who have fallen victim to such apparent rumours include fashion retailer Next and telecoms group Cable & Wireless, neither of whom have yet to receive any such approach.
Yesterday's publication from the FSA warned: "There is also obvious potential for abuse were a participant deliberately to set out to generate a false rumour or expectation of some future corporate action knowing that it may be able to take advantage of a short-term movement in the price of the target's securities."
In addition, in its wider comments on shareholder activism, the FSA seemingly takes aim at apparently disparate investor groups who may work together to the disadvantage of others.
An FSA spokesman last night said that the comments were not intended as a warning per se, but were issued as much as a reminder as to what people are allowed to do as to what they are not allowed to do.
Fintag says Pump and Dump? Surely not ...
ANGRY PIRATES
We'll hold on to property, says Sir Ken (telegraph) Shares in WM Morrison fell 2pc yesterday after executive chairman Sir Ken Morrison ruled out selling a substantial chunk of its £7bn property portfolio.
"We like to own freehold property. It gives us greater freedom," said Sir Ken at his last annual general meeting as chairman of the company.
Sir Ken was applauded by small shareholders at the meeting, after vowing to retain ownership of its freehold portfolio, although shares in Morrison fell 6¾ to close at 313¾p on the back of his remarks.
"The majority of our estate is freehold which provides us with a considerable degree of operational flexibility, and we believe that owning our own properties is essential if we are to remain competitive and deliver sustainable growth in the business," Sir Ken told shareholders at the meeting.
Hedge funds and activist shareholders have been putting increasing pressure on food retailers to realise value from their freehold property portfolios.
Sir Ken's remarks echo those made recently by Sir Terry Leahy, the chief executive of Tesco, and Justin King, the chief executive of J Sainsbury.
Morrisons announced that like-for-like sales rose 4pc in the 15 weeks to May 20. "We are getting back to the day job. There are not as many distractions," said Sir Ken.
Marc Bolland, the group's newly appointed chief executive, said the supermarket chain "was going in the right direction".
Asked if he had enjoyed his first nine months at the retailer, Mr Bolland joked: "It has been much easier than a pregnancy".
Sir Ken said he had had no discussions with private equity firms about a possible bid for the company, despite recent speculation.
"It is an industry that is always busy doing things. But I do not move in those circles," he said.
The company said it was close to appointing a replacement for Sir Ken, who is due to step down in January 2008.
Fintag says Thatcher was often accused of selling the silver although it compared favourably to Gordon Brown who sold all the UK's gold cheaply. Pirate Equity loves Real Estate rich companies because a sale and leaseback brings in huge amounts of cash for that all important dividend. Cash in the hand is worth more that a paper value building, so I applaud Morrison's for hanging on even if they could make more profit selling their buildings.
WE ARE JUST DOING OUR JOB
Watchdog warns hedge funds on activism (ft) The Financial Services Authority on Thursday embraced the growing numbers of activist hedge funds but warned them not to conspire to mislead the market.
The regulator has issued guidelines for the first time to shareholder activists on what it would view as market abuse in response to calls from some of the most prominent hedge fund activists for clarification of the FSA's views.
Concerns have been prompted by a sharp rise in aggressive stakebuilding by a number of hedge funds and specialist investment funds whose objective is to force change on companies.
The power of these activist investors has been underlined by the Children's Investment Fund, which sparked the battle for control of ABN Amro when it announced plans to call for a sale or break-up of the Dutch bank at its annual meeting. TCI's success has prompted speculation about other activist investors targeting other companies such as Prudential, the UK insurance group.
An FSA spokesman said: “We are as concerned to clarify what is permissible as much as what is not. We do not object to activism in principle.”
Mark Anson, chief executive of Hermes, one of the UK's longest-established activist managers, said: “The FSA is trying to be helpful by providing additional guidance that allows activist investors to get a better understanding of the rules of the game.”
One prominent hedge fund manager said on Thursday: “We brought up a number of grey areas where the FSA could help by clarifying. The guidance is very helpful.”
The FSA specified practices of which it approved and others which it said might constitute market abuse.
It said: “We don't think our market abuse powers should be relevant where market professionals are looking to take advantage of their own expert analysis of otherwise publicly available information.”
But the regulator warned it would take a dim view if several investors bought stakes in a target company to help one investor avoid making a public disclosure of a large holding. FSA rules require investors declare any holding exceeding 3 per cent.
The FSA also said if an investor bought shares in a group knowing that another activist fund was building a stake, that might also be construed as market abuse. So, too, might a fund manager who deliberately set out to generate a false rumour or expectation of corporate action in order to provoke a short-term move in share prices.
The regulator said: “We expect market participants to take reasonable care to ensure that any announcement or informal comment does not give rise to false or?.?.?.?deceptive signals about their intentions”.
Meanwhile, the FSA moved to clarify its position on block trades, the sale of a large slab of shares on behalf of a corporate client or institutional investor, reminding banks that they were obliged to report any suspicious trading.
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