30JUN08:
Oil to be USD200 by 30OCT08
USA Inflation to be 7.5% by 30OCT08 23APR08:
Next Rights Issue:
HBOS...yes
All & Lec ... 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 The Big Crash: 17OCT07
...well it's here 08OCT07:
SEC to fine Goldman for pricing issues
...still waiting 15JUN07: ML to buy-out BS
JPM got there first
It certainly beats being at the back of a plane. The cabin crew bends over backwards; the leg room is so enormous you could start a yoga class; and the food is cooked by Gordon Ramsey. All the other people around you are beautiful and interesting; the opportunities for attaining a membership to the mile high club are increased; and there isn't a back packer in sight.
The problem of course is the price. Not all of us can afford to enjoy the best in life and that includes investing in the best hedge funds. [Editor: Lame link]
Keeping out retail investors (the back packers of the investment world) is a good thing for hedge funds. Small people like to complain if their USD1000 investment loses as little as 10%. USD100 isn't a lot of money but having to explain via a call center what is going on costs more than the USD100 loss. If you have 10 thousand of these small people complaining then the hassle gets too much. Thankfully the regulators such as the SEC discourage hedge funds from allowing back packers into their funds.
The upshot is hedge funds have first class people. These big fat investors don't complain to us if they have lost money - they blame themselves for being duped into investing - and then redeem. So when I travel American Airlines first class and find that their definition of “First Class” is different (a seat that reclines, a steward who isn't over 50 years old, and a pot of dead plastic flowers in the bathroom) I know I have been duped. I kick my wash bag goodies along the floor and say to myself never again. Recently a number of funds have become UCITS 3 compliant which means they can come on shore and back packers can invest. This is a horrible idea. But unfortunately this is the new order.
All the old First Class investors cannot redeem fast enough to cover up the bad debts that keep appearing on their balance sheet. Hedgies need assets. Lots of them.
So it looks like fintag will soon be opening a call center in the near future.
Today's news looks at the ever expanding commodities bubble, the end of the world and Busson's hair.
Lehman Brothers and US credit manager Aladdin Capital are each raising $3bn (€1.9bn) funds to back small hedge fund managers in the hope of capitalizing on the worst dislocation in the industry for a decade.
Lehman Brothers aims to raise $3bn to $5bn for a fund to buy strategic minority stakes in hedge fund managers, according to sources at the bank.
The fund, which has been called Omega, plans to invest in up to 12 managers, and follows a series of investments by Lehman, including stakes in GLG Partners, DE Shaw, and BlueBay Asset Management.
Fintag says Surely Lehman should be retaining as much capital as possible? However, anything that helps out poor and unloved hedgies gets my full approval. However, this is just spin. It makes out that for Lehman it is business as usual. Start up platforms are fraught with problems.
New managers feel obliged to retain the seed capital for as along as possible and do not trade the way they should. But that is their capital to waste.
US JUSTICE DEPARTMENT FILES SUIT TO FORCE SWISS BANKING GIANT UBS TO DIVULGE NAMES OF SUSPECTED US TAX EVADERS; CLAIM THAT $20BN OF ASSETS IN "UNDECLARED" ACCOUNTS
The US Justice Department announced on Monday that it has filed papers seeking an order from a federal court in Miami, Florida., authorizing the Internal Revenue Service (IRS) to request information from Swiss banking giant UBS AG about US taxpayers who may be using Swiss bank accounts to evade federal income taxes. The Justice Department seeks permission to allow the IRS to serve what is known as a "John Doe" summons on the bank. The IRS uses a John Doe summons to obtain information about possible tax fraud by people whose identities are unknown.
The Justice Department's filing is an unprecedented move against a foreign bank.
Fintag says This spells the end of UBS and Switzerland. The Useless Bank of Switzerland has done it now. UBS will be broken into small pieces are go back to being a wealth management office except nobody will invest anything in Switzerland as it will be seen as a haven for money launderers, terrorists and drug runners.
Switzerland is the new Panama. Oh dear.
hereisthecity says " UBS Said To Be Considering Unit Sale "
The Vanity Fair piece blames everyone from shorts to CNBC to Charlie Gasparino and David Faber.
Yet bottom line remains: If your financial condition is so precarious that rumors can bring you down, then its the finances, and not the rumors, that are to blame . . .
Fintag says The good old blame game. How about they were unlucky? No that doesn't sound right.
Bear Stearns, like Lehman and Merrills were levered up to the hilt and once a couple of their own internal hedge funds blew up the writing was on the wall. That and everyone hated them.
finalternatives says " Bear Dodges Bullet, Wins Battle Over Collapsed Hedge Fund "
Back in January, economists were calling food and energy expensive. They didn't know what expensive was.
In the just-ended first half of 2008, commodities prices soared well past most forecasts. Corn shot up 66 percent and soybeans gained 31 percent. Meanwhile, crude oil and retail gasoline prices spiked about 46 percent since Jan. 1.
The surge in food and energy prices has been a boon to many banks and hedge funds who have used commodities trading to turn a profit during the worst credit crisis in decades. But fortunes made on the trading floors of New York, Chicago and London have meant food riots in Africa, Asia and the West Indies.
Fintag says Nice.
TRINITY WARNS ON PROFITS AFTER SLUMP IN ADVERTISING
Trinity Mirror issued a profits warning yesterday and joined the growing list of newspaper groups struggling in the face of the straitened property market and worsening economic climate.
The forecast that profits for the year will be 10 per cent lower than anticipated sent the group's stock down by 28 per cent, on top of the 59 per cent the price had already lost since the start of the year.
Despite the fact that online revenues are up 24.4 per cent and a £20m cost saving scheme is on track, the preliminary figures for the last six months make grim reading. Underlying half-year revenues are expected to be down by 4.5 per cent compared with last year, and circulation revenues have dropped by 2.4 per cent at the group's regional papers, and 1.4 per cent at its national titles, which include the Daily Mirror and The People.
Fintag says One forgets that property listings in newspapers generate a lot of advertising revenue. The vicious circle of declining newspapers (although the UK's metro seems to have defied that trend), declining advertising revenue, everything on the internet, nobody wanting to pay for subscription services, blogs stealing from newspapers, newspapers stealing from blogs, and a massive and continual demand for 24 hour rolling news.
The upshot? Ask Rupert Murdoch.
'AS WE SUFFER'... LIGHT SUNDAY READING FOR HEDGIES
We still don't feel that sorry for hedge funds, although undoubtedly the “champagne quaffers of Mayfair” are feeling a little unloved following the UK's new short-selling disclosure rules and some very hostile press.
It's doubtful that your average hedgie in the UK is an avid reader of the Independent, Guardian or Observer - though they might read the Daily Mail, which recently described hedge fund chiefs thus:
...what they do and how they do it affects thousands of ordinary people across Britain, anyone who has shares or even a pension.
They can directly affect share prices, influence whether a fund performs well. indeed, some fear they could trigger a world crash in the stock markets that could make the falls of the past few weeks seem mild.
How do they do this? The most obvious, and some would say pernicious, strategy is 'short selling', whereby thanks to a quirk in the trading system financiers sell shares they don't actually own. They might do this if they believe the ...
Fintag says I was so enraged over the weekend that I forget to mention this yesterday so I am glad ftalphaville reminded me.
When a rabbit faces on coming headlights it can do many things. Stand still. Run away. It can stand still blaming everyone for being on the road or running away blaming everyone for being on the road. [Editor: And?]
The level of knowledge about our industry is sometimes truly shocking.
If these journalists actually read my blog or even wikipedia they would realise that without hedge funds there would be no liquidity in the markets and we would have one almighty depression. We are here to help. We are nice people too.
If anyone is to blame for our current market woes we can point it to the short termist politicians, allowing China to be used as a slave substitute, Greenspan, the CRA's and greedy Private Equity associates. And of course Bernanke and the Fed.
STAGFLATION GRIPS EUROZONE AS INTEREST RATES LOOK SET TO RISE
Eurozone inflation surged to an all-time high of 4pc in June despite worrying signs of a slump in manufacturing, confronting the European Central Bank with the toughest challenge since its creation a decade ago.
Soaring oil and food prices guarantee a quarter-point rise in interest rates to 4.25pc on Thursday, further widening the gulf in rates between Europe and America.
The only question is whether the ECB opts for a "one-and-done" move or sets the course for yet more rises in the autumn.
Fintag says Up, up and away. Stagflation - a word not recognised by my Blackberry's dictionary.
'SPLASHING MONEY AROUND IS WRONG. GIVING IT BACK ISN'T'
Arpad Busson (aka the future Mr Uma Thurman) made a fortune in the shadowy world of hedge funds. Now, he seems desperate to give it away - and equally keen to get his super-rich friends to do the same. Is he just racked with guilt, or does he really want to make the world a better place? He talked to Stephen Moss
Fintag says Let me tell you a secret. Busson is a really unpleasant man. So says Elle McPherson who was often on the end of this "You are so thick" tirades. I hope Uma can give him the intellectual ego boosts that this aristo needs on a regular basis.
The final trading session of June featured many of the stormy conditions that gave the Dow Jones Industrial Average its worst month since 2002, and its worst June since 1930: Another intraday spike for energy prices helped commodities stocks like Petrohawk and hurt aerospace concerns like Boeing, and renewed fears about credit risk took down the financial sector.
The Dow landed flat, up just 3.5 points, or 0.03%, to 11350.01, after an early bounce, leading one hedge fund manager to observe that he hadn't seen such consistent selling on the Dow without a bounce since the week following the terrorist attacks of September 2001.
Fintag says And I am still hearing commentators saying " We are not in a recession yet ...strong fundamentals ...". We are on the top of the big dipper as foretold here. 17th October 2007 was my prediction and I got it spot on (give or take a few months)
Debate has raged as to whether rising commodity prices owe more to the actions of speculators and less to an imbalance in supply and demand. Speculators have not come out well in this debate - not surprising in light of the food riots in developing nations and fuel protests in developed ones.
But amid the often heated exchanges about responsibility for booming commodity prices, few stop to define what they mean by speculation. Perhaps it suits some of the participants not to have a clear definition. Yet if this debate is to have merit, we must agree on its terms.
Fintag says Good grief. A well written article. That is because he isn't a journalist.
Foreign sovereign wealth investors are targeting London's hedge fund industry as they seek to boost returns on their vast savings, much of it generated from trade with the west in oil and other commodities.
The hedge funds have seen billions of pounds pour into their investment plans at a time when the industry desperately needs cash to replace debt funding that collapsed during the credit crunch.
Fintag says It is nice to be loved. However, I haven't had these people beating down my doors. Maybe my brown envelopes aren't big enough.
35 comments
Top Cat said ...
Metro will be dead in the water within two years. Their advertising revenue will decrease, but their costs will go up as they'll be distributing more papers as the recession bites and people switch to freebies.
What's the status of Curzon Street? I thought "Arkwright" Busson had been suggested as a major character.
01 Jul 08 - 08:11 gmt
Finbar said ...
..Arkwrights plans for a new life with Uma come crashing down. Roman has a proposition for Greg and Tony. Top Cat gets a new job.
01 Jul 08 - 08:32 gmt
MsR said ...
Monsieur Thurman is too smug and so utterly obvious for me. He is without surprise.
However I know what he means about not being smart enough: I try to discuss the Metaphysical poets with Finbar and he goes all blank.
"Sigh" I say "I suppose just being cute and charming will have to be good enough."
For now.
01 Jul 08 - 08:42 gmt
Finbar said ...
@TopCat - you need to help me out here. I want to create a poster launching "Curzon Street" - have Busson, Coffey, and others plus Rovers Return equivalent but there is a real lack of women. I may have to retain Ms R services. Do you know of any high profile hedgie women that are UK based that are prepared for fintags casting couch?
01 Jul 08 - 08:45 gmt
Top Cat said ...
Ms R could play Belle "the Body" Macfearsome, a leggy Aussie lady outraged at her treatment by Arkwright in his dodgy Curzon Street corner shop
01 Jul 08 - 08:48 gmt
Top Cat said ...
Simple - get a flight to Geneva on 4th September and attend the 100 Women in Hedge Funds event there. You can take your pick then. You may need to go in drag though.
How about Ms Sadeque of RAB?
01 Jul 08 - 08:53 gmt
Top Cat said ...
Fin - one other thought - eating lunch in Berkeley Square yesterday I was pleasantly surprised at the delightful ladies streaming past me. Get yourself down there today (hot weather) and I'm sure you can get someone to rival Bet Lynch, even if she is a low profile Ops hedgie. Stunners don't need to be high profile.
01 Jul 08 - 08:57 gmt
anonymous said ...
GLG-enders have a few:the Middle east marketing lady who left; the lady who joined in the Credit area (at least that's what hedge fund hello tells me). These soaps stars are always moving around so you could have them leaving GLG-enders and moving to Curzon street to work behind the Champers bar at The Rovers
01 Jul 08 - 08:58 gmt
MsR said ...
Top Cat: I don't want to dump Finbar- he is excellent totty - but I would love some clever conversation. Do you think we could have an intellectual affair? Would Mrs TC be ok. It would be all very Jane Austenish.
01 Jul 08 - 08:59 gmt
Top Cat said ...
oh alright then. Email me on my fake email account set up to abuse people - harryturner75@googlemail.com and then we won't need to upset anyone here
01 Jul 08 - 09:03 gmt
Tired of Top Cat! said ...
Top Cat get your own blog - this is not the Finbar & TopCat show. Your constant moaning is getting tedious.
01 Jul 08 - 09:24 gmt
Top Cat said ...
Moaning - I'm not moaning. However - at your request, I won't post here any more, I actually thought some comments were appreciated - my apologies
01 Jul 08 - 09:31 gmt
MsR said ...
Goodness, where did that come from? I thought this morning was pleasant diversion to a world that is making me ask "Is it morning yet?"
01 Jul 08 - 09:45 gmt
Moron said ...
oh topcat.....please don't go...we love your posts actually.....every blog needs its resident lunatic:))
01 Jul 08 - 09:51 gmt
GalwayBoy said ...
MsR dont bother with John Donne try Finbar with a bit of the auld W.B. Yeats:
My arms are like the twisted thorn And yet there beauty lay; The first of all the tribe lay there And did such pleasure take; She who had brought great Hector down And put all Troy to wreck
01 Jul 08 - 10:04 gmt
Moron said ...
women are amazing creatures.....we know they wanna destroy us....and yet we can't stay away from them....all my ex girlfriends (and there were many) would keep telling me how they wanted to stangle me in my sleep because I annoyed them so:))))) what was god thinking when he created the female species....look at what eve did with the apple and all that:)))
01 Jul 08 - 10:21 gmt
GP said ...
FTSE being hammered this morning. is today the day!
01 Jul 08 - 10:22 gmt
Moron said ...
ho ho ...gentlemen,,,keep shorting.....don't even try to fish for a bottom here....this bear market is just entering phase 2.....the time to fish for a bottom will probably be april next year at the earliest...and even then ...it shall be an apology of a bottom....:)))
01 Jul 08 - 10:28 gmt
anonymous said ...
Surprising you didn't comment on Will Hutton's awful article recently
01 Jul 08 - 10:46 gmt
GP said ...
thank the lord for short shorts + the girls in mayfair + the beautiful weather. did you all see yesterday's data from Deutsche regarding securitized mortgage lending q2 2007 market size of around 700 billion jan 2008 about 10 billion (i actually think fintag mentioned it) and george soros the gloomy git after all his doom and gloom interviews recently is behind closed doors laughing his head off.
01 Jul 08 - 10:54 gmt
Casting said ...
Fin, I have your perfect female Hedgie - the CEO of Emergent Asset Mgt. The spitting image of an existing, iconic soap star, ready to make waves on Curzon Street with her bright red barnet and annoying catch-phrase...
01 Jul 08 - 11:42 gmt
anonymous said ...
The likeness to Patsy Palmer is uncanny.
01 Jul 08 - 12:01 gmt
anonymous said ...
I agree - maybe she is the Ginger one from Eastenders, scary, as is the bio......
01 Jul 08 - 12:52 gmt
slackful said ...
day late here... personally i love the timezone but based on the piece shown yesterday, you must consider that very backpacker. cheers to a fellow fan.
01 Jul 08 - 13:03 gmt
Hammer said ...
Finbar, have you seen Alex in the Telegraph today? Some tongue-in-cheek support for SageGauge...
01 Jul 08 - 14:44 gmt
anonymous said ...
h t t p ://www.telegraph.co.uk/money/graphics/2008/07/01/calex01.gif
01 Jul 08 - 15:08 gmt
Finbar said ...
Thanks for the casting suggestions. I may have to carry out some due diligence; I will get some fake Calpers business cards printed ...
01 Jul 08 - 15:10 gmt
Moron said ...
ladies and gentlemen....this is so exciting....we are witnessing the slow and gradual decline of the empires of the Western world....this is history in the making:))
01 Jul 08 - 15:37 gmt
GalwayBoy said ...
The Washington Hotel on Curzon Street could easily become morphed into the CrossRoads Motel.
But who would be Benny?
01 Jul 08 - 15:57 gmt
Moron said ...
or there could be a new curzon street created in sudan....after all with the benefits of technology and flights u can run a hedge fund out of timbuktoo.....and the same for most other knowledge based businesses.....the world is rebalancing.....london is yesterday's business model! ....what an opportunity!
01 Jul 08 - 16:00 gmt
anonymous said ...
Outstanding!
01 Jul 08 - 16:30 gmt
Finbar said ...
01 Jul 08 - 16:36 gmt
Benbarn said ...
This site has digressed so much...The info is interesting - the banter is not.
01 Jul 08 - 17:52 gmt
anonymous said ...
Interesting. I read this blog every day in the evening, and have never commented until today. I have also noticed the increase in spamming comments, but I think a few lighthearted comments are surely ok. The analysis is good and if people make 1 or perhaps 2 comments a day, that seems fine. I actually thought TopCat made a few good comments in the past - less so Moron, but that's my point of view. Keep up the good work Mr Taggit.
01 Jul 08 - 20:11 gmt
Hedgehog said ...
re UBS - the US justice department and the IRS are pretty optimistic at filing papers in Miami to force UBS to reveal US account holders - this would be in direct violation of Swiss laws under which UBS in Switzerland is operating. Unless the US JD and IRS can pinpoint to individual criminal investigations, I believe there is little chance that anything will be revealed. Sabre rattling!
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Lehman Brothers and US credit manager Aladdin Capital are each raising $3bn (€1.9bn) funds to back small hedge fund managers in the hope of capitalizing on the worst dislocation in the industry for a decade.
Lehman Brothers aims to raise $3bn to $5bn for a fund to buy strategic minority stakes in hedge fund managers, according to sources at the bank.
The fund, which has been called Omega, plans to invest in up to 12 managers, and follows a series of investments by Lehman, including stakes in GLG Partners, DE Shaw, and BlueBay Asset Management.