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
Something feels good about the markets. The recent highs and lows are reverting to mean. The recent media frenzy of gloom and doom is wearing a bit thin and as Christmas approaches into another period of denial, all things bad are pushed to one side.
Hedge Funds are having a torrid time and November looks like a shocker. Banks are Basel 2 beaten and write off's look likely to continue for Q4. Europe looks towards more regulation.
Sometimes I wish I could sing and be one of the spice girls. It must be easier waving silicon breasts at middle age men than doing this.
I had a phone call from a well known rating agency yesterday for market data abuse. My lawyers were called in and apparently we have been storing rating agency ratings against various positions without their permission. Apparently the triple A and BB- and so on (clues as to who it might be) are owned by the rating agencies and you have to pay to use them.
So I have asked our analysts to delete them all and replace with words instead. AAA = "Could be good quality" to Junk = "Not worth a bean but could be worth something in 2009". What a world we live in.
VIETNAM OPPORTUNITY FUND RAISES $272M IN RECENT SHARE PLACING
The Vietnam Opportunity Fund (VOF), a closed-end fund traded on the AIM Market of the London Stock Exchange, has raised an additional $272m in its seventh round share placing. The amount raised exceeds the $200m target set at the commencement of the fundraising in early October 2007.
From January to October 2007, the VOF has achieved a 37.4% return. VOF is one of the largest capitalised and most liquid stocks on AIM, with an average daily volume of approximately $9-10m.
Fintag says Vietnam. Why?
finalternatives says " Eden Rock Launches ABL Fund of Hedge Funds, Preps Distressed Opps. Fund "
While there are a whole group of analysts wondering if the Fed is going to cut rates this month, there is another group that believes that the Fed will end up making fairly large cuts over the next 12 months. Text in bold is my emphasis. As you will see from my comments (not in italics), there are parts of the article I do not agree with. From Market Watch:
By the way, bps (pronounced bips) stands for basis points and is financial speak for percentage. 25 bps equals 0.25%, so 50 bps is one-half percent, and 100 bps is 1%. Therefore, 1 bip equals 0.01%.
The Federal Reserve will cut interest rates by 100 basis points before June to help the housing market, Citigroup's chief economist, Lewis Alexander, said on Monday.
Alexander, who worked at the Fed before joining Citi, also said Asian economies would probably suffer only a modest slowdown as a result of the U.S. housing turmoil as the spillover effect from housing was much smaller than from sectors such as information technology.
"When the tech bubble burst, there was a substantial amount of capital and employment that had to be worked off," he said at a talk for Citi clients in Singapore.
Citi, he said, expected the Fed to cut its Fed funds rate by 25 basis points when it meets later this month and by 50 basis points in the first quarter of 2008. The final 25 basis-point cut would probably take place in the second quarter.
Alexander said the Fed would not be too concerned that the drop in the dollar would be inflationary. Studies carried out over the years had shown that the dollar's value had little impact on consumer prices in the United States, he said. (Does this guy shop for groceries or buy gas?)
Fintag says I just cannot see it. The dollar is being trashed. The greatest fear is OPEC repricing in EUR and as oil falls, they will receive even less real cash. If the ECB and BoE et al drop rates then the US will be justified. Given inflation is so low, it is quite likely they will drop rates. [Editor:Up or down?]
independent says " Profit warnings jar UK high street as slowdown looms "
here is the city says " Top Firm's Q4 Write-Downs Likely To Come In Much Higher "
Hedge funds, which once shrank from scrutiny, are sidling into the spotlight. Public hedge fund ratings, offered by the credit rating agencies, are beginning to catch on. Moody's now gives “operational quality” ratings based on all manner of funding, liquidity and governance criteria. Standard & Poor's and Fitch carry out similar studies, wrapping them in overall assessments of counterparty credit quality.
From an investor's point of view, it is theoretically appealing to see some kind of risk-control standard. Everyone's big fear is another Amaranth - a fund brought down by a rogue trader. But there are several strikes against the ratings as they stand. First, a high selection bias - 13 of 14 funds rated so far by Moody's are large, long-established outfits that have gained the top “OQ1” ranking.
It is hard to establish a framework for excellence if all you are seeing is excellence. Second, the agencies' record in judging anything outside plain bonds is patchy: there are big questions over their ratings in structured finance, for example.
Fintag says Why would you want to be rated if they are to give you a low one? This smacks of big boy bias. And they will charge us for using these ratings in our marketing literature. Look at Morning Star which also has a rating system - it was saying the high grade enhanced toxic Bear Stearns funds were top class for about 4 weeks after they blew up.
Credit crunch fears drive the EU to plan Super-Regulator that would wrest control from City, says Ambrose Evans-Pritchard
Momentum is building for the creation of an EU-wide "Super Regulator" to oversee financial markets and clamp down on short-term speculators. This could emasculate the Financial Services Authority and bring the City under the direct control of Brussels for the first time.
The European Commission as well as key EU finance ministers and leading politicians have seized on failings exposed by the credit crunch to press for a pan-European gendarme to police the banking system and cross-border flows of capital.
Tommaso Padoa-Schioppa, Italy's finance minister and a former board member of the European Central Bank, has sent a letter to EU colleagues calling for a plan to be discussed urgently at today's meeting of finance ministers.
Mr Padoa-Schioppa said the Commission and the ECB had come through the crisis with flying colours, but the supervisors had failed - chiefly because they are scattered across the EU and answerable only to capitals.
Hedge funds are set to record their worst month of returns since 2000 after struggling to protect the value of their portfolios from last month's volatile markets.
The industry lost 2.6% of its investors' capital in the first 29 days of November, according to an investable, global hedge-fund index published at the end of last week by U.S. data provider Hedge Fund Research. The result is worse than the loss of nearly 2.6% recorded in August. The index hasn't recorded another loss of 2% or more since April 2000, the end of the technology boom, ...
Fintag says It has been tough for some of my funds. The markets are officially mad, irrational and illiquid. The volumes are low and most prices are based off computer driven limit orders that are cancelled at the last minute.
finalternatives says " November Could Be Worse Than August, HFR Says "
A LURID AFTERMATH TO A HEDGE FUND MANAGER'S FAST LIFE
It was just after midnight on Sept. 4 when Mr. Tobias's wife, Filomena, frantically called 911. “Please send somebody, please!” Mrs. Tobias screamed. “He's not breathing!” By the time the police arrived, she had pulled her husband's body to the edge of the pool, where she cradled his head in her arms, sobbing.
Mr. Tobias, who was 44 years old, had apparently suffered a heart attack, his brother Spence said at the time. The police did not consider his death suspicious.
But now an unfolding drama over Mr. Tobias's estate is providing a lurid account of fast money and faster living in the volatile world of hedge funds. Mr. Tobias's four brothers and Mrs. Tobias are locked in a legal battle over the estate, which is worth at least $25 million. And, in a civil complaint, they have gone so far as to accuse her of murder.
Many hedge fund investors have had a rough ride this year. Some have tried to redeem poorly performing investments, while others, such as those who found themselves in some imploding Bear Stearns funds, have actually sued their funds.
The only real definition of a hedge fund is that it is a privately managed pool of money. This can have many advantages: there is a certain amount of discretion guaranteed (although, it must be said, mutual fund companies and banks hardly go around telling everyone who their investors are); the investing style is unconstrained and therefore a good manager is able to earn above-market returns.
But while all the publicity in the past few years has mostly been about the amount of money going into such funds, one recent case instructively illustrates some of the difficulties investors can have when they try to pull their money out. Five years after they put in their redemption notice, the investors still do not have all their money or an explanation of the delay.
The case, which involves the Bernstein family's investment in the Sovereign Partners hedge fund, shows two separate issues that can make the redemption process, and any attendant conflicts, difficult for hedge fund investors. It highlights several points that are worth clarifying for those considering direct hedge fund investment.
Fintag says Happy Christmas!
financial times says " Oil dips below $88 prior to Opec meeting "
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