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
Whizzing in a taxi to Heathrow last night, re-reading yesterday's newsletter and counting the spelling mistakes and my 1976 history lesson, I saw a man with yellow hair. He was about 50 and was wearing s&m gear too. He was lining up with others dressed up in outlandish diy clothes and I assumed it was a fancy dress party. It wasn't. Like an episode from Life on Mars, was I dreaming, in a coma or completely mad?
The Sex Pistols, who hit the music scene in 1976, were playing for pensions. So yes, I can confirm that the UK is repeating history as the IMF will be called in any day now. So you are still long GBP?
With the number of hedge funds performing very badly, a hedgies advice is pretty worthless these days. We know less than the average non performing pension fund that has failed to beat the inflation rate for the past 30 years. I told you oil would shoot up and it went down. I told you Lehman would go bust but it is selling itself out to the Koreans.
So please read the news items I think are relevant and ignore my comments for it looks like we are no longer fit to be called alpha hunters or something less appropriate.
The $2,000bn (£1,122bn) global hedge fund industry is experiencing its worst performance in 18 years as a result of the continued credit crisis and wider economic malaise.
The industry, which has until now prided itself on out-performing other money managers, has become one of the many victims of the general downturn affecting financial markets.
Hedge funds are experiencing the worst returns since 1990, the year that Hedge Fund Research began tracking performance, with the average fund down by 4.7pc on the year to August 28.
Fintag says For all my posturing and gloating, I am indeed humbled. The hedge fund industry has grown too big and is run by morons. Like the Investment Banking world, one or two will shine but the rest are poorly run and return less than the froth on a Starbucks cappuccino.
A shake up is needed and will occur. There are too many z-list hedgies who frankly should stick to spread betting. Of course in the USA you cannot do that and have to make do with these fictional "prediction markets" which are pretend gambling sites. Of course without real money behind the trades, the "predictions" are meaningless. It is about time the USA hit the 21st century. The Asian's are addicted to gambling and don't get the prudishness of the Yanks as much as Christians don't get how Mormon's can get through life without the numbing of the brain through alcohol.
POWER, money and sex are rampant in the City, if this little gem of a survey is anything to go by.
Brokers have been voted the “best in bed” outperforming their City peers in the sack, according to a poll by dating website BeNaughty.com (which intriguingly has 18,000 City members and describes itself as a “flirty and addictive community of seriously sexy and naughty singles”).
Male and female brokers gave each other the highest ratings; were found to have sex more often than other City workers; were more likely to satisfy their partners (how did they find that out?). They were also deemed to be more adventurous in their sexual encounters.
Female lawyers came in a close second behind brokers while male analysts lagged behind, letting themselves down with poor foreplay.
Their female peers said they were not getting anywhere near as much as they wanted. Accountants, unfortunately, seem to be having the worst sex in the City, with the male breed exposed as the least adventurous and least satisfying.
BeNaughty founder Max Polyakov seems to have found the problem: “They spend all day at work paying a huge amount of attention to detail but it seems to have stifled their sexual creativity.”
Fintag says Of course Hedgies are so good they do not have to join dating sites. If I am in a bar and say I am hedgie, the men beat the crap out of me and the women take me back to their places for a coffee.
One of my best mates is an Accountant who is a stock broker. No wonder he is divorced.
TCI AND ATTICUS READY TO DEMAND THE HEADS OF SENIOR DEUTSCHE BÖRSE EXECUTIVES
Two of the world's most feared activist investors laid siege to the Deutsche Börse for the second time in four years yesterday as the hedge funds Atticus and TCI demanded urgent action to improve shareholder value at the Frankfurt exchange.
The two funds, which together own 19 per cent of Deutsche Börse, threatened to demand the resignation of senior executives unless the German exchange demonstrated “leadership and urgency”.
Their assault puts Kurt Viermetz, the chairman of the supervisory board, under acute pressure
Fintag says Exchanges - why bother? Turquoise is the future.
Measurisk, formerly the risk measurement affiliate of The Bear Stearns Companies, has been integrated within J.P. Morgan's alternative investment services business.
Measurisk is known for providing risk transparency and measurement services, including value-at-risk, stress testing and position-based analytics, to institutional investors and asset managers. More then 1,000 hedge funds representing over $650bn in assets provide data each month to Measurisk, making it the leader in hedge fund risk solutions, J.P. Morgan said.
Fintag says I think they are saying Measurisk will be gobbled up internally. Given JP Morgan have a big interest in Risk Metrics, this makes sense. Bear Stearns' record in using this product was not good. It failed to stop two hedge funds blowing up and being a catalyst to the current world wide crash.
Looking towards "new" technology, I see Google has been forced to rush out its new browser. With IE8 threatening to destroy Google's adsense business model with its privacy filter, and firefox addons coming this way to do the same, Google is launching Chrome in a very crowded browser space. It has no choice.
OSPRAIE TO CLOSE FLAGSHIP HEDGE FUND AFTER 27% TUMBLE
The hedge fund manager Ospraie Management will close its flagship fund after it fell 27 percent in August on losses in energy, mining and natural resources equity holdings, in one of the biggest ever closures of a commodities-focused hedge fund.
The closure of the fund, announced Tuesday by the firm's founder, Dwight Anderson, in a letter to investors, could be more bad news for Lehman Brothers Holdings, which took a 20 percent stake in the hedge fund manager in 2005.
The first official warning that Britain is about to slide into recession has overshadowed Gordon Brown's attempts to revive his political fortunes with a £1bn plan to kick-start the housing market.
Yesterday's gloomy forecast by the Organisation for Economic Co-operation and Development (OECD) contradicted declarations yesterday by the Chancellor, Alistair Darling, that he is "optimistic" about the British economy.
The OECD said that Britain would be the only one of the G7 group of leading industrialised nations to fall into recession during the rest of the year.
Fintag says The UK government is incapable of either cutting costs or lowering taxes which is what everyone wants. No wonder we are a lame duck country.
I think we should lobby Ben Bernanke to be the next UK Prime Minister. Even I could overcome my beard fears.
As for the markets reaction to Gordon Brown's package to revive the housing market, apart from the Mortgage Council which by its very nature is the devil (imagine running a body that encourages people to go into debt) thinking it is a great idea, the rest of the market said it was pointless and would make no difference. So that is more of my tax payer's money being used to fund debtors.
I think we should bring back debtors prisons. They seemed to work well in Charles Dickens' day.
Thames River Capital's Warrior Fund, a multi-strategy fund of hedge funds, has reached $1.1 billion and is now closed to new subscriptions.
The Warrior Fund, which has exposure to directional and non-directional hedge funds such as the Paulson Credit Opportunities fund and the CQS Directional Opportunities fund, finished July down 2.82%, bringing its year-to-date loss to 2.07%.
Fintag says The media are getting very confused.
A closed fund is a fund where no more subscriptions are allowed. It signals a very successful fund.
A closed down fund is a fund where all the money is given back to investors. The Americans call this a shuttered fund, the word shuttered being a bushism that makes me laugh whenever I read it. The word shuttered is the same as the word shut. So why don't they say the fund is shut?
So reading this, it looks like they have closed the fund to avoid redemptions...
The Securities and Exchange Commission has amended its complaint against Wextrust Capital, its principals and four affiliated Wextrust entities, to include defendant Joseph Shereshevsky's wife, Elka.
Joseph Shereshevsky and his partner, Steven Byers, were charged last month with defrauding investors of $255 million, misappropriating at least $100 million of it. Most of the victims were Orthodox Jews, a community in which Shereshevsky enjoyed prominent standing
Fintag says Oh dear.
finalternatives says " Atticus Funds Down Double-Digits, Redemptions Limited "
The collapse of Peloton Partners back in February elicited just a twinge of pleasure from quite a few in the City. There were all the bankers, jealous of Ron Beller's hedge fund success, and there were all the hedge funds, pleased that even the Goldmanati get margin calls from aggressive repo desks.
Alas, another Goldman-alum led structured finance fund has come-a-cropper. This time at the hands of Steven Mandis, COO at Halcyon - one of New York's oldest hedge fund operators. Mandis, like Beller, was something of the celebrity-hedgie. Reports the New York Post:
Mandis, 38, a protégé of former Treasury Secretary and Goldman partner Robert Rubin, bolted Goldman for Halcyon in 2004. At the time, Mandis was seen as a rising star in both the hedge-fund world and in New York's social circles.
Mandis and his wife, Alexandra, a Greek shipping heiress, are staples of Manhattan's social scene and formidable charity fundraisers. Mandis ran two of Halcyon's structured finance funds. Both of which have seen massive redemptions and huge falls in value. Unlike Peloton, they're still standing. Mandis, not so much.
It's not confirmed, but the Post says the partners at Halcyon have voted to oust him.
Fintag says Celebritity hedgie? No wonder hedge funds are doing so badly.
I better call my agent and find out why I haven't been booked for Celebrity Big Brother.
20 comments
anonymous said ...
finbar you are showing yourself as a classic hedge fund scummer, in your analysis of a fund that closes for new subscriptions in the current environment. If you had any experience working at a responsible shop you would realise that it is good practise not to accept new investor money at a juncture when you as a manager fear n-t falls in the value of investment.
03 Sep 08 - 08:02 gmt
Finbar said ...
Never been called a scummer before. Is that a compliment?
03 Sep 08 - 08:17 gmt
benw said ...
Celebritity? is that like JOrdan or Abi titmuss?
03 Sep 08 - 10:48 gmt
MacroHedgeBoy said ...
Could it not be that they have reached a level that they are happy with and have shut to new subscriptions? TRC try to avoid the larger managers and so they will always be capacity constrained. It also doesnt mention redemptions which can, i guess, take place....
03 Sep 08 - 10:51 gmt
anonymous said ...
The TRC fund is down 2% YTD so hardly an obvious candidate for large redemptions; I'm guessing Finbar would love to be only down 2%.
03 Sep 08 - 10:55 gmt
Moron said ...
can't imagine why everyone is down so much...this market is abt as predictable as it gets.....we've had two bear market rallies and they've both fizzled out...just short everything now, ride the september crash down and make back all ur performance
03 Sep 08 - 11:35 gmt
anonymous said ...
Moron -- that's a fine strategy if you assume limitless liquidity in being able to structure short positions across assets -- it doesn't exist so unless you are managing not much more than £2.50 then in many HF sectors you will continue to see red numbers.
03 Sep 08 - 12:16 gmt
Moron said ...
well...if you are liquidity constrained any need to claw yourself back out of a hole...then you have to take bigger risks......unfortunately
03 Sep 08 - 12:40 gmt
Mark said ...
How are you doing Fin YTD?
03 Sep 08 - 12:58 gmt
Fan said ...
Leave the guy alone. He is doing his best.
03 Sep 08 - 13:44 gmt
Moron said ...
yes.....he has a good soul
03 Sep 08 - 14:18 gmt
Finbar said ...
My YTD is shockingly bad across all my funds. As to be expected.
03 Sep 08 - 14:26 gmt
Fan said ...
Most people are down. You can be right and still lose money.
03 Sep 08 - 15:06 gmt
Moron said ...
i disagree....i don't think you can be right and lose money....that is an excuse....there are funds like caxton up 9% ytd....we have to be fair
03 Sep 08 - 15:25 gmt
Fan said ...
So rich people are right and poor people are idiots if you reason like that M. Life just isn't that simple. Some funds have shown top performance only to blow up soon after.
03 Sep 08 - 15:37 gmt
anonymous said ...
Not sure why your YTD is "shockingly bad", since you have had some very accurate predictions! Are you running too much money?
03 Sep 08 - 16:36 gmt
Finbar said ...
When I mean down, I mean they aren't exceeding my internal hurdles (libor + some volatility)
03 Sep 08 - 16:39 gmt
Moron said ...
cool....so just short everything into the coming september crash and then they will meet your internal hurdles
03 Sep 08 - 16:54 gmt
Dr. Death said ...
I had internal hurdles once - a quick trip to the clinic and some 'special cream' will sort that right out!
03 Sep 08 - 17:18 gmt
ed said ...
hmmm Google Chrome doesn't work very well with that embedded video. how ironic.
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