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
Like many an Investment Bank graduate, I spent hours on useless management training courses and learned how to speak like David Brent and conduct win-win scenarios.
Of course in the real world, The Office star David Brent is an actor and there are only ever winners and losers. As I recall there was only one course I remember and live by today (and that is one I made up about 15 minutes ago). So here goes:
Never trust anyone except your mother; and success comes from being a big D.
So what does this mean?
Well, there are 5 ways to tackle work based tasks.
Do. Don't Do. Delegate. Dither. Destroy / Delete.
In the world of Hedge Funds you find mostly Doers. They see a challenge, overcome it and decisively do. Traders, Fund Managers and salespeople that close deals are typical examples.
Don't doers work in Government agencies and in Middle Offices of Investment Banks. They may work in Compliance or IT and dabble and tinker and like to say No a lot. These people are important for Doers as it makes them want to Do more.
Delegaters tend to work as Directors on the boards of Hedge Funds because they would rather be playing golf or in the case of most US CEO's playing Bridge. They take out insurance, and marry people 30 years their junior.
Ditherers are found everywhere except Hedge Funds. Ditherers die young.
Destroyers work in Hedge Funds. Risk Managers, Operations, Marketing - these people see a challenge, weigh up the odds and decide to ignore it. These people hate time wasting and are the Doer's best friend.
FINTAG courses are available in Q1 2008 and cost USD6000 plus excellent lunch. Next will be held in New York; precise location to be determined although maybe held in the Buddha Bar.
Now back to the news.
Today we have Art acquisitions, Kidnapping, Rape, Sexual Harassment and people hiding in the closet. The word Gay is banned in the UK and saying or writing the word could lead to a 7 year prison sentence.
PlusFunds, Donuts, transparency and rules for Don't Doers.
London Frieze Art Fair Lures Collectors, Hedge Funds
Hedge-fund art advisers and VIP collectors converged on London's Frieze Art Fair today as dealers fretted that sales would be hurt by financial market turbulence and threatened bonus cuts.
``You have to be foolish to not be concerned because Wall Street and the hedge funds are a lot of our clients,'' said New York gallery director Natalia Mager Sacasa of Luhring Augustine. ``When they start to lose money, it affects how they collect.''
The retail value of art at Frieze, the largest fair in the No. 2 art market, may be $250 million, estimated Charles Dupplin, chairman of the art and private client division of insurer Hiscox Ltd. Dealers, including New Yorker Larry Gagosian, London's Jay Jopling and Zurich's Iwan Wirth, may sell a third of that amount if the market holds up, Dupplin said.
Hedge-fund manager Adam Sender's art curator, Todd Levin, said ``the stands seem overcrowded with works that are not necessarily of the highest quality.'' He did buy one piece, by the Tobias brothers, and said he was still in talks about some previously reserved works by Stephan Balkenhol, Alighiero e Boetti, Thomas Hirschhorn, Anish Kapoor, On Kawara, Richard Prince and Rosemarie Trockel. Sandy Heller, who advises U.S. hedge-fund collectors, said he was ``looking forward to the action.''
Fintag says: I am here today. You can never enough art.
Ex-Hedge Fund Manager Pleads Guilty To Attempted Kidnapping
Former high profile hedge fund manager has pleaded guilty to attempted kidnapping and trafficking in personal information. Conn. resident Albert Hsu entered his plea yesterday in Stamford Superior Court. He faces more than two years in prison.
In February, Hsu, a 43-year-old married father of two, was arrested after going onto the Internet, posing as his ex-girlfriend and describing a fantasy of being abducted and raped. He even went into such detail as to list the woman's address and where she stood on the train platform for her daily commute.
In addition to time in the clink, the former co-founder and managing director of fund of hedge funds Anchor Point Capital will also have to register as a sex offender and has been placed on probation for 12 years.
The former Cub Scout leader will be sentenced on Dec. 10.
Fintag says: Hedge Funds attract real weirdos. Imagine going on-line and pretending to be someone else? [Editor:Finbar Taggit - does he really exist?]
Game on. Fourteen former directors, officers and employees of the defunct PlusFunds have been ordered to “produce documents and appear for examination” by the SPhinX Funds Trust, which has—following approval of PlusFunds' bankruptcy organization—set about recovering the SPhinX investor losses.
The order, signed by US Bankruptcy Court Judge James M. Peck last Friday, comes almost exactly two years since Refco announced, on Oct. 10 2005, that it had found a $430 million hole in its accounts. Two days later, PlusFunds' founder Christopher Sugrue arranged for $312 million in SPhinX assets to be moved out of Refco, setting off a chain of events cost investors in the SPhinX funds, and especially its managed futures strategy, some $250 million. It also took out PlusFunds, and the S&P hedge fund index, which was tracked by the once near-$3 billion SPhinX complex.
On deck: similar orders for service providers including the funds' administrator DPM-Mellon, along with its former chief executive Robert Aaron, and chief operating officer Guy Castranova; auditors Deloitte & Touche LLP and PricewaterhouseCoopers LLC; and a grab-bag of second-tier law firms, including Gibson Dunn & Crutcher LLP, Pillsbury Winthrop Shaw Pittman LLP, Seward & Kissel LLP, and Curtis Mallet-Prevost LLP.
Fintag says: As I have mentioned in the past, the Refco /PlusFunds debacle has a Hollywood plot and I hope that Wall Street 2 follows the same theme.
French bank BNP Paribas took it in the neck early last year (probably a bit unfairly), when The Times came out and reported that City headhunters had been 'bombarded' with cvs from BNP staff after they received 'much smaller annual bonuses than they had been led to expect'. Some staff are said to have complained that they received 'doughnuts' by way a bonus - a term which means no bonus at all. Things, however, are likely to be different this year, as BNP Paribas staff might well be among those who are relatively better off when it comes to bonus payout time
Fintag says: Well a donut is better than having no job. Well done to BNP.
A group of leading hedge fund executives on Wednesday published recommendations for voluntary standards on governance and disclosure to address criticisms regarding the opaqueness of the fast-growing industry.
The Hedge Fund Working Group (HFWG), headed by Andrew Large, former deputy governor of the Bank of England, called for hedge funds to be more transparent to enhance the industry's reputation and boost confidence in the sector.
The consultation paper comes at a time when the $2 trillion (1 trillion pound) hedge fund industry has come under pressure from some commentators and politicians who favour regulation or more stringent supervision, arguing that the activities of some hedge funds could undermine the strength of the financial system.
"You need to see this as a first step, and a very important step, along a road," Large, former head of the Securities and Investment Board, the predecessor of regulatory body the Financial Services Authority, told Reuters.
"It's the first time a group of hedge fund managers have got together in this way and come up with a pretty serious approach to all the various issues" facing the industry, Large said.
It recommended that hedge funds should adopt clear and robust methods for valuing complex assets and disclose whether they own assets in their portfolio that may be hard to value and could be difficult to sell in an emergency.
Fintag says: Yawn...
Trichet signals tentative signs of improvement in the money markets credit situation; Report says banks may have to hold $400 billion in leveraged buyout loans for months to come
Some hedge funds may intentionally inflate returns to avoid reporting losses and keep investors on board, according to a new study.
Signs of such misreporting in the $1.7 trillion industry are more common among managers who focus on securities that don't trade much, Nicolas Bollen and Veronika Pool, wrote in the study released earlier this month.
Concerns about how hedge funds value such illiquid holdings and report performance have increased in recent months as this summer's credit crisis disrupted trading of mortgage-backed securities and other more complex securities such as collateralized debt obligations.
Mr. Bollen and Ms. Pool's study suggests that some hedge fund managers distort reported returns when possible including when returns are at their discretion and when reported returns are not closely monitored. Such activity is widespread, they added.
Fintag says: Of course if they had independent Administrators this would not be possible. The story should read "US based" Hedge Fund managers because the rest of the world use third party valuers.
The secretive hedge fund industry has made a big step towards increasing transparency and improving risk controls with UK plans for the first voluntary industry code of conduct.
A group of 14 of London's biggest hedge funds has drawn up a broad agenda for change in a bid to fend off pressure from Germany for a clampdown by the Group of Eight leading industrial nations and financial watchdogs. This pressure has intensified in wake of the credit squeeze and subsequent calls for more transparency in financial markets.
Under the plan by the London group, which manages some $180bn (€130bn) of assets or about 10 per cent of the global industry total, hedge funds would have to “comply or explain”, agreeing to meet the standards or tell people why they were not meeting them.
Apart from increased transparency for the public through better disclosure of information about managers on their websites - many of which contain nothing except the corporate logo - the plan sets out three main standards to protect investors.
These are disclosure of holdings of complex, hard-to-value securities, and the methods used to value them; clear risk management plans, including plans to address liquidity risk and the danger of running out of cash; and clear policies on dealing with conflicts between investors and managers.
Fintag says: Yawn. Still, as long as it keeps the Don't Doers employed and busy then great.
The chairman of Barclays Capital, the investment banking arm of the UK bank, has called for greater transparency in financial markets and urged politicians to prevent the creation of "opaque structures" such as hedge funds.
Hans-Jörg Rudloff, a veteran of the capital markets in Europe, said the recent market crisis was a "warning sign". "The guardians of currencies and the financial system have to familiarise themselves with the new conditions on the markets and have to take the necessary measures," he said in an interview to be published today in Die Zeit, the German newspaper.
Mr Rudloff's comments reflect a widely held view among senior bankers that greater transparency is necessary to restore confidence in the markets. But they will also come as a surprise given the role played by Barcap in the creation of complex credit structures.
Barcap has been a big beneficiary of the growth in the debt markets and has been an active participant in lending to private equity groups and underwriting subprime mortgages - two of the activities that helped contribute to the recent turmoil.
Fintag says: Barcap were heavy uses of HFR (managed accounts, full transparency, etc etc) until Nomura bought it out. Given Barclies Capital is the leader in off balance sheet trading and Enron like activities, it is the last bank that can talk about transparency.
Goldman Sachs Group Inc has raised the estimated percentage of credit losses on its mortgage-backed securities portfolio, the U.S. investment bank disclosed on Wednesday.
Goldman's anticipates credit losses of 4.5 percent on $2.92 billion in mortgage-backed securities as of August, the company said in a quarterly filing with U.S. regulators. Its previous anticipated credit loss estimate was 3.8 percent on $3.5 billion in mortgage-backed securities as of May.
Meanwhile, the value of the New York-based investment bank's stake in mortgage-backed securities and pools of loans, or collateralized-debt obligations, has declined 35 percent to $4.77 billion from $7.3 billion since May. Goldman Sachs and other Wall Street banks have had to write down the value of these assets amid a global credit squeeze.
Goldman Sachs produced stellar profits in the third quarter, showing a 79 percent gain, while rivals such as Bear Stearns Cos Inc and Merrill Lynch & Co Inc stumbled from poor risk management and wrong-way bets on securities tied to mortgages given to people with weak credit. Merrill said last week it expects to lose money when it reports third-quarter results next week.
As defaults on U.S. mortgages continue to escalate, pensions, hedge funds and insurance companies are no longer keen to buy securities backed by homeowner loan payments.
Fintag says: Goldman remind me of Gordon Brown. You never know when they are telling the truth (I should know as I used to work for them)
Goldman:Aug level 3 asset value $72.05B, 7% of total says marketwatch
Australia's Absolute Capital to Restructure Two Hedge Funds
Absolute Capital Group Ltd., an Australian hedge fund that suspended withdrawals because of the turmoil in credit markets, will restructure two funds after losses increased in September.
The Yield Strategies Fund and Yield Strategies Fund NZD, which together have about A$200 million ($177 million) under management, declined about 11 percent in the third quarter, the Sydney-based firm said in a statement on its Web site. Absolute said in August the funds may fall as much as 9 percent in the two months to Aug. 31.
The roller-coaster career of maverick trader Victor Niederhoffer took a sharp downturn after losses mounted and a key investor withdrew money from his firm, demonstrating how the market's recent volatility has shaken even some veterans.
Mr. Niederhoffer's hedge-fund firm, Manchester Trading LLC, ran into difficulties a decade after Mr. Niederhoffer lost most of his personal savings when his previous hedge fund collapsed. Last month, Mr. Niederhoffer's largest hedge fund, Matador Fund Ltd.,
Fintag says: When is Murdoch turning the WSJ into an FT bashing sub free site?
One in five Americans - almost 41 million - in working families, struggling to make ends meet
Geneva is the biggest riser in the ranking of Europe's top cities to locate a business (up eight places to 12th) as regional cities start to make inroads.
Moscow comes top for future expansion.
London has the best hotels and Barcelona the best expatriate accommodation.
London has once again increased its margin over Paris as Europe's top city to locate a business according to European Cities Monitor (ECM), the annual location survey of Europe's leading companies carried out by global real estate consultant Cushman & Wakefield.
The UK capital is the top-rated city for half of the 12 factors which are ranked to give the overall league table. This year, London has improved its scores in areas including climate created by government (up three places to No 2). However, it fell nine places to 25th for cost of staff.
Fintag says: I hate London. It doesn't work and the Don't Doers don't like Hedgies.
Defendants have moved to compel plaintiff Andrew Z. Tong to arbitrate his discrimination claims under an arbitration clause in an agreement he signed upon beginning his employment at defendant S.A.C. Capital Management, LLC (SAC), and to stay litigation pending the arbitration, pursuant to CPLR 2201, 7501 and 7503. For the reasons that follow, I grant defendants' motion and stay the action pending the outcome of arbitration.
Tong's allegations are based on events that took place while Tong was recruited for employment as an analyst/trader for defendants from August 2005 until his termination, which became effective on April 10, 2006. Defendants do not dispute the facts as alleged by plaintiff for purposes of this motion.
According to documents submitted by plaintiff, Tong is a 37-year-old, married, Chinese man. Between 1992 and 1994, Tong pursued a Ph.D. in computer science at Columbia University. In 1994, he took a leave of absence for family reasons, after receiving his Master's degree. Tong went to work at Bear Stearns, and later at Fuji Bank. (Notice and omnibus cross motion, exhibit S.) In this capacity, Tong worked in financial risk management and gave presentations in Virginia, New York, and Canada about artificial intelligence, which were related to his graduate work in computer science.
Fintag says: Not nice.
SEC Fines Sandell Asset Management For Naked Short Sales
The Securities and Exchange Commission today said it has settled an enforcement action against New York hedge fund adviser Sandell Asset Management for engaging in improper short sales. The allegations are in connection with trading in the securities of Hibernia Corporation in the immediate aftermath of Hurricane Katrina.
Hibernia was a New Orleans-based bank holding company and the subject of an acquisition agreement with Capital One Financial Corporation at the time Katrina occurred. As part of its merger arbitrage investment strategy, Sandell held approximately 9.3 million shares of Hibernia stock for one of the firm's hedge fund clients. According to the Commission, Sandell's traders believed that Capital One would lower its offering price for Hibernia shares in the wake of Katrina, and began to sell short as many shares of Hibernia stock as possible, improperly marking certain sales orders as "long" or misrepresenting them to the broker-dealers executing some of the trades.
Fintag says: Naked shorts - how amateurish. Now I wonder where they were based - oops, the US.
2 comments
anonymous said ...
Please sign me and my colleagues up for one of your management courses, I work for MegaConstruction PLC and we fully embrace your 5D style of management!
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