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
Nothing seems to work any more. The markets are so dysfunctional that even the smartest traders are scratching their heads. Markets are down again and will probably go up again today for no apparent reason at all. Intra day noise is now end of day noise.
Investors have given up chasing performance and are allocating to brand names and those who buy them a decent lunch. The US seem to want to destroy a breath of fresh air in Sarah Palin and Investment Banks continue to get into trouble for doing what they have always done. Long haul planes are liable to crash if they fly too high and nobody in the UK drives new cars.
Finbar Taggit is also confused. He has been outed as 3 different people, physically abused and derided for not performing. His site has been hacked, spammed and injected with enough script statements to blow Google chrome out of the water. He has lost his touch and trades with his fingers crossed. His quants have gone back to school and his program trades have been put on hold.
The only certainties are that my lunch at the Square will be excellent and the company riveting. And that it will rain again and my USD funds get more valuable everyday as sterling turns into peanut butter.
Thankfully the weekend is here unless you are in the Middle East when yours started yesterday.
Tech comment: I have recently started to use tinyurl to shorten my links. Unfortunately this doesn't always work so from next week the full url will be included. Trying to save band width is not always an option.
PHILIP RICHARDS LEAVES RAB CAPITAL TO REDISCOVER MIDAS TOUCH
Shortly before 8.00am yesterday, staff at RAB Capital received a bland email from the marketing department warning of a new regulatory announcement.
Working at a listed hedge fund that often updates the market, it took a few moments for the shock to sink in: RAB was announcing a new chief executive.
Although most knew of Stephen Couttie, the new boss, few would ever have imagined the indomitable Philip Richards stepping down.
Fintag says This is quite shocking, but RAB has been under pressure after its poor reading of Northern Rock. Thankfully, many of the RAB Capital crew now read FiNTAG so that shouldn't happen again. Couttie is a nice guy but has he the gravitas to lead? And no, Finbar Taggit is not Stephen Couttie for those who think he is.
JPMORGAN, FACING FEDERAL PROBE, EXITS MUNICIPAL SWAPS
JPMorgan Chase & Co. will stop selling interest-rate swaps to government borrowers in the $2.6 trillion U.S. municipal bond market roiled by an antitrust probe and the near bankruptcy of Alabama's most-populous county.
At least seven former JPMorgan bankers are under scrutiny in a Justice Department criminal investigation of whether banks conspired to overcharge local governments on swaps and other derivatives. The bank also is embroiled in negotiations over how to resolve a debt crisis with Jefferson County, Alabama, where the county's former adviser says a group of firms led by JPMorgan, the third-largest U.S. bank by assets, overcharged it by as much as $100 million for financing a new sewer system.
Fintag says And there I was having lunch with a global co head of co heads of IRS at JP Morgan yesterday. He told me that this has happened before after the recession in the early 1990's and is usually what happens when the counterparties run out of money. The fools of the market have always been government bodies. Remember Orange County?
bnet says " Evaluating and controlling derivatives operational risk "
Global wealth assets under management are projected to climb by 26% to $138 trillion (€97 trillion) over the next five years despite the credit crunch, according to a new report.
The projection is in keeping with last year's results, showing 2007 to be the sixth straight year of growth with global wealth rising by 4.9% to 109.5 trillion, according to The Boston Consulting Group.
Fintag says That is a lot of money. What is the margin of error? +/- 50%?
American universities are planning to use recruitment agencies to entice the brightest British students across the Atlantic with generous bursaries.
Admissions tutors in the US are developing new tactics in the global battle to attract students; a move that will benefit the cleverest but will exacerbate competition between American and British universities. In addition to a “brain drain” of the best school-leavers, Britain's share of the lucrative market in overseas students, who pay substantial fees, could be diminished.
Fintag says So all the smartest bankers come from the USA and work in Canary Wharf and we send all our smartest kids to be educated in America. Surely it is time for the USA to buy out the UK - we are going cheap and it would enable me to get that elusive green card. Come on McCain and Palin, win that election and invade Britain.
When people try to figure out what was the cause of today's 344 point whackage, one of the items they will point to will be SocGen's alert today from Albert Edwards:
***Alert****Economic and equity market meltdown imminent****Alert***
Last week saw the publication of Q2 US whole economy profits data. They were shockingly bad. Core measures of profitability are in free-fall and have now reached a tipping point, where corporate activity could easily implode. We have also reached the point where companies give up 'manipulating' their profits higher and admit they are actually in free-fall. A combination of economic and reported profits slumping will catalyse the next equity downleg.
Fintag says SocGen, the bank that doesn't know how to spell risk management has the cheek to tell us a crash is imminent. Typical French. But I mustn't be rude as I am in Paris this weekend and although us Brits hate them to bits, we really love them (I think) and share their sense of humor.
Hedge fund company Atticus Capital denied market rumors it was liquidating its positions and closing down and said it had a large net capital position and was looking for investment opportunities, the Wall Street Journal reported on Thursday.
Atticus's two main hedge funds have been hit with losses of between 25 percent and 32 percent this year through August, but investors are largely sticking with it, according to unnamed investors cited by the Journal.
Fintag says So Atticus must be adopting the Alistair Darling school of spin. Firstly you tell the world you are fcked. Then tell them you aren't. Now that is what I call expectation management. Let us hope that Atticus is fine and dandy as seeing one of your own getting beaten up is not a pretty sight.
If there are any Atticus investors looking to invest in funds that do not perform as badly, send an email to investors_for_rebates@fintag.com.
Airlines are being urged to implement new safety measures for long-haul aircraft after investigators found that the crash-landing of a Boeing 777 at Heathrow was probably caused by ice in its fuel system.
The previously unknown problem was revealed in a report into the accident on 17 January involving a British Airways flight from Shanghai. The Air Accidents Investigation Branch is urging European and US regulators to introduce interim measures for all Boeing 777s powered by Rolls-Royce Trent 800 engines to prevent a similar incident.
Fintag says That must be a relief to all those cost cutting Investment Banks. Now they have an excuse not to allow their employees to fly at all. Long Skype / Short Airlines.
Mounting chatter about a possible sale of Lehman Brothers to foreign investors is muddying the beleaguered investment bank's closely watched sale of its asset-management unit, which is anchored by Neuberger Berman, sources tell The Post.
According to people familiar with the matter, Lehman has asked private-equity investors involved in the asset-management auction to submit the next, and perhaps final, round of bids for all or part of the business by Sept. 12.
Fintag says Of course if Erin Callan was still CFO, we wouldn't be reading this story. She was the Sarah Palin of Wall Street. We were all mesmerised but didn't know why.
It seems we have a failure to communicate about a failure to communicate.
D.B. Zwirn & Co. has denied the key allegations leveled against it by the former CEO of a company it lent $20 million to. The New York Post earlier this week reported that Tama Communications, which ran a group of radio stations in Florida and Georgia, had accused the New York hedge fund of improperly transferring nine radio licenses to itself, and that the Federal Communications Commission had opened an investigation into D.B. Zwirn.
Fintag says More Alistair Darling spin. And we are relieved because Zwirn have the nicest people ;).
Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt on Thursday after the European Central Bank declared a crackdown on abuses of its bank liquidity operations.
Jean-Claude Trichet, ECB president, used his regular interest rate conference to announce rule changes more radical than had been expected. These will affect financial firms that have developed too great a dependence on cheap funding from the bank.
Fintag says Typical. The Fed, ECB, BoE et all have been drug dealers to the market. They gave away high quality valium for peanuts and now the banks are addicted the dealers putting the price up. It had to happen and it has.
Capitalism is about failure. Failure breeds success. Nannying breeds complacency.
MITSUI & CO. WILL CLOSE U.S. HEDGE FUND UNIT AS IT SHIFTS FOCUS
Mitsui & Co., Japan's second-largest trading company, will close its New York hedge fund business as it shifts to investments including property and utilities.
Mitsui, with businesses ranging from import-export to financial services, decided to shut Mitsui & Co. Alternative Investment Corp. because it failed to meet the company's targets amid the turmoil of the global credit squeeze, Masaji Matsuoka, who is in charge of formulating funds at the firm's asset management division, said in an interview in Tokyo yesterday.
The junkie's dilemma, whether we're talking about crystal meth, heroin or cheap credit, is that the spiral of addiction inevitably overwhelms any reasonable judgment about what constitutes a “cure.” That is precisely why a junkie can never be relied upon to offer up an honest, sensible path to good health. No matter what treatment or plan is offered, the only goal is to get the supply to the beast... at all costs. Today, Gross let the freak out. And the plan is simply to open up the government's balance sheet to the beast...at all costs
Fintag says Oops. Someone got to the drugs analogy first. Great minds think alike.
18 comments
anonymous said ...
100% accurate comment on RAB/Couttie. Nice guy - knowledgeable. But not CEO material. Sadly I think RAB's star is waning
05 Sep 08 - 07:37 gmt
anonymous said ...
you've got some balls soliciting investors today after admitting yesterday your performance is crap
05 Sep 08 - 08:20 gmt
Anon said ...
Come on Fin, Rab were nothing more than a spiv shop churning out worthless garbage onto the AIM market during the good times. Now the inflection point has come they've found themselves and their "micro cap+ leverage" game, wanting . Richards tried his hand at a sector he clearly knew nothing about (Financials) and got utterly creamed. Game over for these guys, period. I bet they'll be the next to put up their gate shortly.
05 Sep 08 - 08:51 gmt
anonymous said ...
feel i need to come to finbar's help after yesterdays abuse. I for one am a big fan. One issue I have is re Finbar's preference for kippers at wolseley - eggs benedict far better.
05 Sep 08 - 08:55 gmt
MacroHedgeBoy said ...
Agree with Anon. Rab=low quality
05 Sep 08 - 09:05 gmt
GP said ...
fin - i have an idea, can you put a voting box that closes at say 10am that yyour readers can predict where the markets will end up. Flat being up or down say 20 both ways up over 20 down, down 20. and so on, you get the idea - would be quite interesting. no?
05 Sep 08 - 09:05 gmt
Moron said ...
even better....just short everything and watch as the great september meltdown takes place before our very eyes
05 Sep 08 - 10:30 gmt
anonymous said ...
Re Fin's breakfast: I can tell you he had granola this morning
05 Sep 08 - 10:41 gmt
anonymous said ...
i guess kippers is reserved for up months . . .
05 Sep 08 - 11:43 gmt
Moron said ...
nokia profit warning just out on weak consumer....the meltdown continues
05 Sep 08 - 13:09 gmt
anonymous said ...
No, it was too tiring to cook him kippers...granola is easier
05 Sep 08 - 15:35 gmt
anonymous said ...
Albert Edwards, the socgen analyst who told us all the sky was falling yesterday, is a Brit, not French.
05 Sep 08 - 15:39 gmt
Finbar said ...
1. Thanks for the Brit comment 2. Muesli was eaten 3. Like the idea of the index guessing (will try and get this up and running)
05 Sep 08 - 15:52 gmt
anonymous said ...
If the person who designed GABRIEL from the FSA was stood in front of me now, I would smash the teeth clean out of his skull. But, it is Friday.
05 Sep 08 - 16:05 gmt
Moron said ...
so the september crash intensifies....just how predictable can this market get:))
05 Sep 08 - 16:17 gmt
Moron said ...
tis is all gonna get pretty nasty guys...be careful....SEPTEMBER 2008 will go down in history
05 Sep 08 - 16:30 gmt
Moron said ...
time to buy another boat:))))
05 Sep 08 - 16:44 gmt
Berserker said ...
Finbar, is today's photo a relic painting from your kindergarden collection?
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Shortly before 8.00am yesterday, staff at RAB Capital received a bland email from the marketing department warning of a new regulatory announcement.
Working at a listed hedge fund that often updates the market, it took a few moments for the shock to sink in: RAB was announcing a new chief executive.
Although most knew of Stephen Couttie, the new boss, few would ever have imagined the indomitable Philip Richards stepping down.