30SEP08:
31DEC08 INDICES:
FTSE100:3550
DOW30:7550
# HEDGE FUNDS:4425 30JUN08: Oil to be USD200 by 30OCT08 USA Inflation to be 7.5% by 30OCT08
...oops 23APR08:
Next Rights Issue:
HBOS...yes
All & Lec ...
...1 Nil. 17APR08: Oil to be USD127 by 30SEP08
...16MAY08 losing my touch 27FEB08:
2 Banks go bust by 30JUN08
BS down, Lehman (a bit late I know) 20NOV07: Northern Crock to be sold for 15p
Nationalized 01NOV07: Oil to be USD103 EOM
...peaked too soon 08OCT07:
SEC to fine Goldman for pricing issues
...still waiting 15JUN07: ML to buy-out BS
JPM got there first 06JUN07: The Big Crash: 17OCT07
...well it's here
No wonder hedge funds are struggling to work out how to trade. The markets are confused. Fixed Income are on suicide watch and the Equities markets are snorting more coke and singing loudly. Today is rate cut day, the day the Fed tells the markets what to do, not the other way round. Thank you papa Ben "Bear" Bernanke. Now I can sleep soundly.
More Japanese banks hit by subprime (Mizuho). And UBS has written off USD18bn to date - it must surely be bankrupt by now.
The French government tell SocGen to replace its board (so its not a state owned asset then?).
Benny King gets another chance.
And NCIS investigate sub-primes-crimes at Goldman Sachs.
The SEC tell us the hedge funds can solve the market crisis but the Fed prefers to help its mates at the Incompetent Banks - I mean, where did all my leverage go? Give me a break. Why don't they force the banks to give me my lines back so I can shore up these volatile markets? One rule for the incompetents and one rule for the saviours of the planet.
The Hedge Fund industry will explode this year. Only 50 hedge funds will survive (read the article).
And Fintag tells you UK house foreclosures would hit a big number 4 weeks before the FSA tell you.
Mervyn King was today handed a second five-year term as Governor of the Bank of England.
The appointment, which is made by the Queen on advice from the Prime Minister, will take effect when Mr King's current term of office expires on June 30.
Mr King's position has been under close scrutiny following criticism of the Bank of England's handling of the Northern Rock crisis.
Chancellor Alistair Darling said he was "delighted" that Mr King had been reappointed as Governor.
He added: "He has played a key role in delivering macroeconomic stability in the UK, and his leadership and experience will continue to prove invaluable to the Bank of England."
Mr King, who also acts as chairman of the Bank's Monetary Policy Committee, was Deputy Governor from 1998 to 2003.
Fintag says Ben Bernake's Boston room mate has been rewarded for prudence and looking after the Northern Rock debacle. What can you say? Incompetence really does pay when there is no one else wanting your job.
This morning's Ahead of the Tape column($) in the Wall Street Journal qualifies as another "Greenspan mess" sighting. Remember the rule - these two words within two paragraphs or 100 words of each other with total points awarded based on proximity.
Jon Hilsenrath argues it is far too early to judge Federal Reserve Chairman Ben Bernanke who celebrates his two-year anniversary as Fed chief this Friday.
Ben Bernanke can't get a break.
Two weeks ago, the Federal Reserve chairman's critics complained he was standing idly by while the markets sank, and they clamored for more-aggressive action. Last week, when he did what they asked, they called him a pawn of fickle investors. Had he done nothing, the same critics probably would have said he was ignoring the potential economic damage of a stock-market collapse.
In the end, all this hand-wringing about Mr. Bernanke's style and demeanor will be long forgotten if the Princeton professor gets his economics right. He's betting he can head off a recession by quickly lowering interest rates, possibly again tomorrow after the Fed meets. And he's betting he can do it without igniting inflation. ... It probably doesn't help Mr. Bernanke that he has to manage the situation while his former boss, Alan Greenspan, and potential successor, Lawrence Summers, chime in with opinions from places like Davos and from book tours.
If the U.S. economy somehow gets out of this mess without a recession and with inflation under control, Mr. Bernanke will be a hero regardless of what market critics say now. Wall Street might give his policies a chance before writing him off.
Yes, he could be a hero indeed...
Fintag says So where is the USA going?
Treasury Markets say recession Equity Markets say soft landing USD says it has no idea Futures Markets say it will be renamed the United States of Anticipation Commodities Markets say it is safe in here, come and join us
Thanks to Ben Bernanke, the markets haven't a clue what is going on. And where does Mr Inflation appear in all of this? Perhaps he wants to destroy the economy so that everyone becomes unemployed, diets and never buys anything? Perhaps he should visit Zimbabwe for his summer holiday and see what the USA is going to be getting into.
Chancellor Alistair Darling has proposed that failing banks should be able to receive help from the Bank of England in secret.
It is part of the legislation that he has proposed to avoid another bank crisis like the one at Northern Rock.
The proposals suggest allowing a "period of non-disclosure" so that there is not an "immediate adverse impact on consumer confidence".
There will be a 12 week consultation period on the new legislation.
Under the plans, the Bank of England will no longer have to publish accounts each week setting out how much money it has lent as emergency funding.
Fintag says Just like in the old days. Sometimes the old practices do work. Remember the 1970's when NatWest collapsed? No because the bank was propped up and you didn't know about it. In the early 1990's, a large number of small banks were also propped up and again you don't know about that because it was kept secret. This is what the lender of last resort does. Keeps quiet and ensures the markets remain stable and liquid.
Banks may need to raise as much as $143bn (£77bn) to weather the credit crisis, Barclays Capital reports.
They say the banks will need extra money if bond insurers, who insure the products at the centre of the sub-prime crisis, lose their top credit ratings.
If their credit ratings are cut, it could make it harder for them to pay out, leading to banks reporting bigger losses on sub-prime debt.
Fears about bond insurers helped spark off this week's stock market falls.
The world's largest banks have already admitted losing more than $100bn from mortgage bonds gone bad.
$820bn at risk
Analysts at Barclays Capital said banks own $820bn of securities guaranteed by bond insurers.
"This is a huge amount, but the assumptions used are also very aggressive, designed only to show how, taken to its extreme..., bank capital could be influenced," the Barclays Capital report said.
Bond insurers, such as Ambac Financial Group and MBIA, have suffered billions of dollars of write-downs in recent months and are expected to sustain more, after insuring debt hit by the sub-prime mortgage crisis.
Fintag says Dropping interest rates doesn't solve capital problems. This is very nasty, very scary and totally unprecedented. So where are the homeless Incompetent Bankers? Still hanging onto their jobs as usual.
Another middle finger to shareholders. But this cannot be sustained. We still haven't seen the credit card write offs? If you owe USD10,000 and cannot pay this off, you don't really care if the interest rate is 0% or 30%. You cannot pay it off. The banks are hanging onto to future fair values. That is all right then.
A high-profile hedge European fund manager is predicting a “very severe recession” in the U.S. and Britain. Philippe Jabre said he supported the Federal Reserve's emergency rate cut last week, but warned that it left monetary authorities unprotected against a spike in inflation, and will not prevent a serious economic downturn.
“We're at the end of a 10-year credit orgy,” he told the Financial Times. “We are going into a very slow cash period so those who have debt have to liquidate at any price. The system is reaching self-cleaning.”
The former star GLG trader suggests that hedge funds are ready to profit from the pain.
Fintag says Since when did we start listening to market abusing crooks?
Residing in the land of the cuckoo clock, its prized asset is in real trouble. Before we know it, he will be the next UBS CEO.
Singapore must be laughing all the way to the bank ...
Companies need all their skills to make large deals following the credit crisis
No section of the private equity market has been more afflicted by last year's credit crisis than the mega-buyout segment. Having basked in what Kohlberg Kravis Roberts founder Henry Kravis called a “Golden Age”, the sheen disappeared when plentiful, cheap credit evaporated as lenders tightened their belts.
Kravis, speaking last summer before the US sub-prime crisis provoked panic in the debt markets, said the “stars are aligned”. But the astral misalignment that followed brought his firm's bread-and-butter deal, the large ticket leveraged buyout, into question.
Buyout companies including Kohlberg Kravis Roberts, Blackstone and Carlyle found that without cheap debt to leverage equity, which had made multi-billion dollar deals common, they were unable to continue their run on new benchmarks for deal sizes.
Fintag says Only last summer, when the sun was out and rum was plentiful, the Pirates had a swagger and an arrogance that defied belief. Today, their egoes and credit-fest ways are over. It is not a sad day but one to rejoice. They were partially to blame for the credit-crunch but the media seem to have forgotten this. Time is short these days.
financial news says " KKR Financial makes full year loss "
SEC COMMISSIONER BACKS HEDGE FUNDS TO SOLVE SUB-PRIME
Paul Atkins, one of the five commissioners at US regulator the Securities and Exchange Commission, said he expects hedge funds to help solve the market turmoil surrounding sub-prime US mortgage loans. Related Stories
Regulators let hedge funds off the hook for credit crisis 20 Nov 2007
Atkins told French business school Edhec that, as far as he was able to see, hedge funds could not be blamed for the sub-prime problems. Moreover, he said: "Most importantly, we must remember that hedge funds are likely to be an important part of the solution to the sub-prime crisis."
He added that some hedge funds had been among the victims of the sub-prime troubles, which he said served as a reminder that hedge funds are only appropriate for those who can assess the risks and are able to bear the potential losses.
Fintag says As usual, we were kicked in the head in August, blamed for crimes against pension plans and now we are the saviours. Make your mind up.
The former finance chief of bankrupt hedge fund company Bayou Management was yesterday sentenced to 20 years in prison, among the harshest sentences meted out in the US for a white-collar crime, for his part in defrauding investors of more than $400m.
The judge in Manhattan Federal Court said that in determining the sentence, she considered the size of the fraud and the role played by former finance officer Daniel Marino, who she described as the "linchpin'' of the scheme.
Few corporate executives have been sentenced to 20 years or more in prison in recent times. Those that have include former WorldCom chairman Bernard Ebbers, jailed for 25 years for fraud, and former Enron chief executive officer Jeffrey Skilling, who was given a 24-year term.
Fintag says Head in shame. These people give Hedgies a bad name. Thankfully, in regulation-lite free USA where transparency means telling one thing and doing another, he is of an older generation. Good riddance.
Experts predict a shakeout of the hedge fund industry, with collapses among funds with less than $10bn under management
Hedge funds worldwide are heading for their worst monthly performance in almost ten years amid signs that the credit crunch is claiming fresh victims across the investment markets.
Industry experts predict that there will be a shakeout of the hedge fund industry this year, with a rash of collapses among funds with less than $10 billion under management.
Sources said that last week's stock market volatility would have hit some managers hard, raising question marks about their reliance on equity strategies. Other managers would have made substantial profits despite the market storm, they said.
“The next few months will sort the men from the boys. January has asked some big questions, as no one was predicting the market movements of last week,” one prime broker said. “But plenty of hedge funds are making money in the current environment, even as there are those making losses.”
Global hedge fund returns fell 3.1per cent in the month to last Thursday, according to the most recently available HFRX indices, published by the Hedge Fund Research (HFR) organisation in Chicago. That was the worst monthly performance since mid-1998 and outstrips negative performances posted by many hedge funds last August, at the height of the turmoil in credit markets.
Fintag says According to my statistics, there are less than 100 Hedge Funds with more than USD10bn under management (correct me if I am wrong - it is probably nearer 50 but I cannot be bothered to find out)
Does this mean that as all the Investment Banks fail, they will be replaced by a new order of mega hedge funds?
Goodbye Goldman Sachs, hello Goldman Sachs (for they are the world's largest hedge fund).
This is a bit lame but what the heck (and it is a real photo - thanks to Ed who got fired there yesterday for the picture - oh yes, Goldman do clear out the bottom 10% every year and it is not a job for life):
I was also sent this picture of SocGen going to work but it has been doing the rounds so I will give you the link anyway.
More than one million families are in danger of losing their home over the next 18 months, Britain's financial regulator warned yesterday.
It fears that huge mortgages and other debts will prove a lethal cocktail during the global credit crunch. As banks become more wary, many coming out of a fixed-rate term on their home loan will find they cannot switch to another cheap deal.
Even the smallest increase in bills or repayments will tip some over the edge, according to the Financial Services Authority (FSA).
Fintag says Oo I am good. I leaked this out just after Christmas from a top source at the FSA. It was 700k then so they must have revised upwards.
"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." 3rd January 2008, Fintag.com
'BLANK CHEQUE' VEHICLES PROVE POPULAR IN A VOLATILE MARKET
Spacs are luring investors into fresh opportunities
At least 75 hedge funds are trying to take advantage of corporate acquisition opportunities, left open by the evaporation of debt finance, by investing in special purpose acquisition companies - publicly-quoted “blank cheque” vehicles.
US hedge fund managers Fortress, Och-Ziff Capital, Ospraie Management, Pequot Capital, SAC Capital, Tudor Investment, Wellington and York Capital are among new investors in Spacs.
Spacs have cash with which to make acquisitions. Investors pay an average of $10 each for a combined share and a warrant, which allows buyers to acquire additional shares in return for more cash.
The companies and private equity firms that would normally compete with Spacs for acquisitions rely on loans to finance their purchases and have had to put their plans on hold because of the credit crunch. Meanwhile, market volatility has lowered the price of acquisition targets.
Fintag says Nice.
2 comments
ozgerbobble said ...
I see Penfold has just got a second term as Governor of the BOE. I wonder what dirt he's got on Darling & Brown?
30 Jan 08 - 13:50 gmt
Finbar said ...
...ever the cynic.... but true of course. I hear Mervyn is talking about his memoirs already to Random House.
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Mervyn King was today handed a second five-year term as Governor of the Bank of England.
The appointment, which is made by the Queen on advice from the Prime Minister, will take effect when Mr King's current term of office expires on June 30.
Mr King's position has been under close scrutiny following criticism of the Bank of England's handling of the Northern Rock crisis.
Chancellor Alistair Darling said he was "delighted" that Mr King had been reappointed as Governor.
He added: "He has played a key role in delivering macroeconomic stability in the UK, and his leadership and experience will continue to prove invaluable to the Bank of England."
Mr King, who also acts as chairman of the Bank's Monetary Policy Committee, was Deputy Governor from 1998 to 2003.