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
When I said yesterday Gold is what we were piling into, I didn't expect it to reach a new high. So what else is up? Oil, unemployment at Citi, redemptions at Drake, wheat, corn, soybeans, palm oil, and the chance of stagflation and US recession.
Bernanke does it again. The markets are told another shipment of grade A coke is on its way and those who are recovering from the 12 step program can see there is trouble ahead: rates go down, the USD drops further, bonds and equities collapse because although they are cheap they are much riskier as imported inflation flares up. And who said oil would push thru 100? Well that would be us, except we were a month early. We also predicted the August 2007 credit crunch about a month early too.
So if you want to know what the news will be in February, then read us. [Editor: And you predicted Merrill would buyout Bear Stearns 6 months ago? Fintag: Could still happen; read on]
What happens when people feel economically depressed? They stay in and watch DVDs and movies. Restaurants close, sales of news cars slump and holidays are cancelled. Well we are not there yet because film going was down in 2007 but I believe will be up in 2008.
So what are the rumours I heard over Christmas? Well a top FSA insider told me that 1.5 million households will be refinancing in 2008 and 700,000 will not be able to. That is a lot of foreclosures.
The rest I am keeping to myself.
Down "2008 will be the biggest bear market since the last big bear market." Fintag after a long day at the office.
Up "2008 will be flat but will turn good at the year end as the credit crunch is isolated to the financial sector. Basel 2 will be scrapped and hedge funds will be up on average 6% above Libor (which will be zero-ish). The S&P will be up 9% and Clinton is elected as president. Wall Street 2 is the film of the year." Fintag after a bottle of Vodka.
Crude oil prices briefly hit the $100-a-barrel mark and gold prices jumped to an all-time high as investors poured money into commodities on Wednesday amid deepening fears about the weakness of the US dollar.
The oil price rally soured the first stock trading day of the year, with the Dow Jones Industrial Average closing 1.7 per cent lower, its worst start since a slide of 1.9 per cent on the first day of trading in 1983.
The dollar fell against the euro and the yen after a report that showed the US manufacturing sector slumping to its lowest levels in five years during December. Investors bet that the Federal Reserve would be forced to lower interest rates in response to economic weakness, potentially increasing the downward pressure on the dollar.
Fintag says At long last, rationality is starting to appear in the markets - fear. When the authorities and politicians start acting strangely it is time to find that comfort blanket - instead of being half the leg of a well loved teddy bear, it is black and sticky and shines brightly.
Despite a modest increase in 2007 box office receipts, moviedom is trudging into January with a droop in its shoulders.
Ticket sales at North American movie theaters totaled $9.7 billion, a 4 percent increase over the previous year, according to Media by Numbers, a box office tracking company. But attendance was flat, after a narrow increase in 2006 and three previous years of sharp declines. Movie fans bought about 1.42 billion tickets last year, according to Media by Numbers. The high watermark of the last 10 years came in 2002, when moviegoers bought about 1.61 billion tickets.
The results last year were largely driven by expensive sequels like “Spider-Man 3” (the top-grossing film) and “Shrek the Third” (the runner-up), although a handful of expert marketing campaigns turned some oddball entries like “Alvin and the Chipmunks” into bona fide hits. One surefire franchise was born to Paramount and DreamWorks in “Transformers” (which placed third).
Nine of the Top 10 grossing films were science fiction, fantasy or animation. The sole exception (unless you count the mock-historical “300”) was Universal's action thriller “The Bourne Ultimatum,” which placed sixth with $227 million in domestic ticket sales.
As the movie industry turns its attention to 2008, the dark “No Country for Old Men” is showing box office legs, and one film in particular is already shaping up as a home run. Early results for “Juno,” about a quirky teenager who becomes pregnant, have outpaced those for the indie hits “Little Miss Sunshine” and “Brokeback Mountain.”
Fintag says During the depressing 1930's, Hollywood was in its hey day. The movie houses were homes to the homeless and romance and fantasy films were churned out like butter. If 2008 goes the same way, we can surely say that we have entered a new low. Movies are always a great signal of economic progress. Think 1970s and its Godfather and French Connection. Think 1980s and its Flashdance and Top Gun. Think 1990's [Editor: Where is this going?]
Facebook fatigue Social network fatigue will set in as people tire of getting yet another invitation from so-called friends to join yet another social network. And, in the wake of Facebook's fumbled social ads initiative, it will become even more apparent there's no obvious way to pitch products on these sites without turning off members. Social features will wend their way into all kinds of Web services, from search to news, but the gold rush in social networks themselves will begin to wane.
Bloomberg's historic run New York Mayor Michael Bloomberg will enter the Presidential race in February, after it becomes clear which nominees will get the nod from the major parties. His multiple billions and organization will impress voters—and stun rivals. He'll look like the most viable third-party candidate since Teddy Roosevelt. But Bloomberg will come up short, as he comes in for withering attacks from both Democrats and Republicans. He and Clinton will split more than 50% of the votes, but Arizona's maverick senator, John McCain, will end up the country's next President.
Drake Management is sharply restricting redemptions from its flagship hedge fund after a disastrous autumn threatened the fund's very existence.
In a letter to investors last week, Drake said it would honor only about 25% of requested withdrawals from its $4 billion Global Opportunities Fund, which was down almost 24% through November. New York-based Drake did not say how much investors had sought to pull, but the firm has an arrangement with its lenders that would have allowed them to seize its collateral had the fund's net assets dropped by 30%. Drake said an agreement with those lenders is allowing the redemptions to go forward.
“This decision was made only after we attempted to convince redeeming investors to voluntarily rescind their redemption requests,” the letter, dated Dec. 28, said.
Drake said the fund was down 23.7% through November. Global Opportunities, which returned better than 40% last year, had reportedly been in positive ground as late as September, before dropping more than 10% in October. Through October, the fund was down 9.91%.
The $13 billion firm said redemptions will not be limited or suspended at its other funds. But that doesn't mean they've escaped unscathed: Drake's $1.74 billion multi-strategy Absolute Return Fund is down 11.5% through November.
More than 100,000 people a week are catching norovirus, which causes sudden vomiting and diarrhoea, and the numbers contracting the disease will peak this month.
The NHS advises patients affected to stay at home for 48 hours after they last suffered the symptoms
Thousands of workers and children who fell ill over the holiday period are due to return to jobs and classrooms in the coming days. Many have already called in sick and doctors warn them not to go back until they are fully recovered, such is the risk of spreading the disease.
Patients affected should stay at home for 48 hours after they last suffered the symptoms, the NHS advised. The absences will cost the economy millions of pounds.
So far this winter about two million people have fallen ill with norovirus, the highest number for five years and double the amount of cases by this time last year.
Fintag says Of course if you came down with norovirus and you worked for Virgin Atlantic, Richard Branson would fire you for letting him down.
MERGER SAID ON THE TABLE AS TOP FIRM TRIES TO AVERT CRISIS
John Thain and his executive team, it is claimed, didn't enjoy much festive cheer this Christmas and New Year. According to The Observer, Thain cancelled leave for his top executives as the firm desperately attempts to shore up its under-pressure balance sheet by raising additional capital.
Merrill wrote down $8.4bn in mostly subprime lending-related assets in the third-quarter, and speculation is mounting that the firm faces additional write-downs of up to $15bn for the fourth-quarter (Merrill is due to announce its fourth-quarter earnings later this month).
Despite selling $6.2bn in shares to Singapore's Temasek and asset manager Davis Selected Advisers, and freeing up $1.3bn of capital by selling Chicago-based Merrill Lynch Capital to GE Capital just before Christmas, the newspaper says that Merrill is in the midst of a 'desperate bid' to raise as much as another $7.5bn.
The Observer quotes unnamed sources who say that 'Thain is desperately seeking an additional infusion of foreign capital to bolster Merrill's balance sheet. It could be done by selling shares or other assets to raise cash', and 'the multi-billion cash injection from Temasek was not enough, and Thain is taking calls from a host of other potential saviours, which are understood to include sovereign fund investors from the Gulf and China'. The newspaper also quotes an insider who said that 'it is all hands to the pumps here', adding that 'everything is on the table', including exploring the possibility of a merger with another firm. (The supreme irony here, of course, is that the final nail in the coffin of former Merrill CEO Stan O'Neal, who left a few weeks back, was that so-called 'unauthorised' telephone call to his opposite number over at Wachovia, in which he is alleged to have put out feelers about a possible merger between the two firms. Some say that Merrill might not have looked so desperate now if the firm's board had backed O'Neal and his plan then, instead of asking him to step down).
Merrill Lynch staff are bracing themselves for further job cuts, many thought likely to come in fixed income. CNBC reported last week that an additional 1,600 jobs globally are likely to go in the New Year, in all units except M&A and private clients.
Fintag says I am willing, I am praying, I am pleading, Merrill will buy out Bear Stearns. OK, I admit it, I was wrong.
Merrill doesn't at this moment in time have the energy or resources to buy them yet; but it will. It needs to be friendly to more Chinese people who don't want USD any more and pump up its balance sheet as Basel 2, CRD and other nasty capital regulatory requirements rear their ugly heads.
Jobs are being fired but nobody is letting on. UBS, Citi and Merrill are letting people enjoy gardening leave and the plans are for this to continue for some time. It is a horrible time. I have fired people, closed down departments and been fired myself. It is horrible and people are scared. My empathies go out to those impacted.
The Investment Banks are in a horrible place. They have cash but no tangible assets and its real assets, the people and going to be fired very soon.
cnbc says " Citigroup Layoffs Could Start Next Week "
The hedge fund industry remains on course to beat stock market returns in 2007, The Financial Times said, citing data from Chicago-based Hedge Fund Research.
While The Financial Times noted that calculating hedge fund returns is difficult, the two main Hedge Fund Research indexes both beat developed market indexes including the FTSE 100, S&P 500 and Eurofirst 300. This year has seen previously out-of-favor strategies such as global macro, which bets on bonds and foreign exchange, return to form, the Financial Times said.
According to the report, 7,500 funds have nearly $2 trillion under management globally.
Fintag says Well what do you expect? We are the best.
Plans for a hedge fund code of conduct need to be beefed up to protect institutional investors piling cash into the industry, one of the biggest British specialist advisers warned yesterday.
Albourne Partners, which advises investors including Hermes, Fleming Family & Partners and Caisse de Dépôt et Placement du Québec, said more detailed standards were needed to ensure that hedge funds complied with the spirit of the voluntary rules.
"Additional standards . . . are considered appropriate and necessary in order to mitigate the significant headline risk these investors are taking by investing in new and unregulated structures," Albourne wrote to the Hedge Fund Working Group.
"It is imperative that the industry accepts that times have changed and their responsibilities to investors have as well."
The working group brought together 14 of London's top hedge fund managers last year to draw up a set of best practice guidelines it aims to implement on a "comply or explain" basis. Albourne sent its letter to the group last month but published it yesterday, before the final decision this month on what the standards should look like.
The working group was set up amid demands from Germany for action by the G7 to oversee hedge funds, and has been welcomed by the German government. But since it began its work, the credit crunch has shifted the focus of regulators from hedge funds to banks, whose reckless lending to US subprime borrowers has generated tens of billions of dollars of losses.
Fintag says Why is Albourne saying all this?
1 comment
anonymous said ...
Most people who've had any sort of interaction with the Hedge Fund Working Group have been very frustrated by Sir Andrew Large's attitude and dont expect his report to amount to much. Albourne are weak on due dilligence and seem to be using this as an opportunity for a bit of PR
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