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
In times of boom, women like to show off their corsets and midriffs and men their diamond encrusted watches and gleaming white teeth. When the gloom hits the fan, flesh is covered, men forget to clean their teeth and we all turn to religion.
If we could start a religion fund, we would. It would be the fastest growing asset class and retirement would beckon. But we cannot. According to the media hedge funds are dead (again) and the world stands on the edge of another volatile precipice. Bailouts of countries, conglomerates and the unemployed is the new order. Where the money is to come from is not being asked. Just like a 0% credit card, spend now and work how to pay off later. Isn't this what got us into this mess in the first place?
Welcome to another week of pre US presidential fun and more scarey stories and dumb struck journalists.
What I want to know is what should we be going long in?
Soup Kitchens, copies of the bible, copies of Little Dorrit, JPY, Hollywood, Safes, Pawnbrokers, Brothels, McDonalds, Pizza Hut, trainers, ....
Here is a chart I knocked up that shows you why going long the UK is a bad move:
BLOODBATH IN MAYFAIR AS HALF OF ALL HEDGE FUNDS FACE TERMINATION
The shiny new technology is part of the nerve centre of AHL, one of Man's most successful hedge funds, which has notched up returns of 7 per cent in the past month alone, despite the financial turmoil.
Others in the industry have been less fortunate. Analysts warn that global hedge funds are facing the biggest bloodbath since their rapid expansion in the early 1990s, especially in Britain, where about half of 2,000 firms are expected to be taken over by larger rivals or liquidated.
Fintag says A few banks are threatened to go down and the media panics; 50% of hedge funds and they gloat. Don't they realise that hedge funds ARE the stock markets and without hedge funds the market meltdown / crash / unwind / correction / adjustment will be a whole heap worse?
Of course this is a good thing too. There are too many people pretending to be hedge fund managers who should be running a chain of starbucks. Capitalism will sort out the wheat from the chaff and we welcome this.
US HEDGE FUND ADMITS 35% PLUNGE IN VALUE SINCE DOWNTURN
One of the world's biggest hedge fund managers, Citadel, told clients last night that two of its main funds have lost 35% of their value this year after rumours swept the market about its financial position.
The Chicago-based firm, which has $20bn (£12.5bn) of funds under management, blamed "panic" and "dislocation" on global exchanges for its predicament.
Citadel is run by 40-year-old billionaire Kenneth Griffin, an investment prodigy who was married at Versailles palace and who once spent a reported $60m on a Cézanne painting.
Fintag says
As much as I dislike the odious gryffindor [Editor: uh?], I do respect his company and the way it is managed. Rumors were everywhere on Thursday followed by Friday and the weekend and we are no clearer. Where are Goldman et al to bail them out? We watch with interest.
Here is an article from the Times plagarising us from a couple of weeks ago: times says " Hedge funds stop cash withdrawals "
And here is another story from Reuters plagarising my newsletter about distortion: reuters says " Distortion is the new normal for markets "
When financial institutions teeter, liquidity is in short supply, and correlations between asset classes converge in unexpected ways, even sophisticated investors can be forgiven for questioning some of the fundamental tenets of money management.
“Our protection is supposed to be diversification,” lamented one member of the Institute for Private Investors, a peer networking organisation for ultra-wealthy families, during a recent IPI meeting in New York.
Fintag says I never thought I tasted that good anyway [Editor: Not what the ladies tell me ...].
The financial hurricanes of the past two months have pushed many of our most beloved urban species to the brink. The rapacious investment banker, the oleaginous Foxtons salesman, the ruinously expensive Russian escort: all are now on the endangered list. But none has seen their habitat battered so mercilessly as the lesser- spotted hedge-fund wife of South Kensington.
Before the crash, the wives of the most successful hedgies — Hags, as they were termed, to distinguish them from the glitzier footballer Wags — lived in some style. While their husbands made a fortune speculating in exotic financial products from their tie-free Mayfair offices (Noam Gottesman and Pierre Lagrange of GLG, for instance, paid themselves £400m each last year), the wives put their degrees to good use by starting boutique handbag businesses. They split their time between five-storey townhouses in SW7 or W1, sprawling country piles in the home counties and bijou bolt holes in Sardinia. They dressed like peacocks and ate like sparrows.
Fintag says Who writes this stuff? I mean, most hedge fund managers are normal people. They really are, and very dull too. The odd botox loving egoist pops up from time to time (mostly French) but like working for the secret services, most of us never tell anyone we work in the hedge fund industry. Anyone asks me and I am an unemployed actor or talent scout for the next super model.
FSA CHIEF REJECTS CALLS FOR MORE HEDGE FUND REGULATION
The head of the British Financial Services Authority had some surprisingly kind words for the hedge fund this week, arguing that there is no need for further regulation of the industry.
Hector Sants told the Hedge 2008 conference in London that hedge funds were holding up better than many other parts of the financial services industry, although he expects more hedge fund failures in the months to come. But despite calls on both sides of the Atlantic for tighter control over the industry, Sants says increased regulation is not needed.”
Fintag says ...which is the right answer. Banks were overly regulated and have crashed all around us. Hedge Funds are not regulated and crashing all around us. Conclusion? Regulation is a good thing and regulation is a bad thing.
Gordon Brown has raised the prospect of fresh international action to cut interest rates and stimulate the global economy. Mr Brown used an interview to hint that falling interest rates may lead to rate cuts by the Bank of England and central banks around the world, raising the prospect of another co-ordinated cut like this month's 0.5 point reduction to calm the financial crisis.
The Prime Minister told the BBC: "Now inflation is coming down over the next few months, it gives scope to monetary authorities, including the Bank of England, round the world to make a decision about interest rates. Over the world, you will see people responding to this lower inflation."
Fintag says So is this inside trader going to be prosecuted?
When this man predicted a global financial crisis more than a year ago, people laughed. Not any more...
As stock markets headed off a cliff again last week, closely followed by currencies, and as meltdown threatened entire countries such as Hungary and Iceland, one voice was in demand above all others to steer us through the gloom: that of Dr Doom.
For years Dr Doom toiled in relative obscurity as a New York University economics professor under his alias, Nouriel Roubini. But after making a series of uncannily accurate predictions about the global meltdown, Roubini has become the prophet of his age, jetting around the world dispensing his advice and latest prognostications to politicians and businessmen desperate to know what happens next - and for any answer to the crisis.
While the economic sun was shining, most other economists scoffed at Roubini and his predictions of imminent disaster. They dismissed his warnings that the sub-prime mortgage disaster would trigger a financial meltdown. They could not quite believe his view that the US mortgage giants Fannie Mae and Freddie Mac would collapse, and that the investment banks would be crushed as the world headed for a long recession.
Fintag says Ah yes, but only one person predicted the crash would start on the 17th October 2007 and that was me. The rest of these miserable doomers couldn't get the date. Although the crash has taken about 12 months, this was the top of the market.
However, Roubini is right. When banks and countries go bust, the knock effect will be horrendous. It has taken us 12 months to get here. It will be another 12 months to get to a place where large mutlinational conglomerates are bust, hundreds of millions of unemployed workers are stuck in valueless houses and governments in many countries are propped up by the IMF.
Of course it is going to get much worse. These are unprecedented times. We have many more banks that need bailing out and many more countries too. Time to update my predictions in the next few days [Editor: After your outrageous claim oil would hit USD200 by eom...I think that is a good idea]
Hold onto your vegetables and watch Mad Max on DVD.
Of course in the new world of 2009, the rich will be the lawyers. Today the world wants to lynch a banking CEO or bling spending hedgie or even a yacht owning mandy entertaining money launderer. Tomorrow it will be the lawyers who will live in fear.
bloomberg says " Defense Lawyers See Bonanza From Lehman, Bear, Other Collapses "
BANKRUPTCY FEARS RISE AS CHRYSLER, GM SEEK FEDERAL AID
As talks between General Motors Corp. and long-time rival Chrysler LLC continued over the weekend, a harsh reality has emerged: Without a merger and possibly an assist from the federal government, two of Detroit's Big Three auto makers could run out of cash within a year.
Though GM and Chrysler dismiss the notion, analysts and investors have begun to question whether one of the companies -- locked out of the credit markets and burning cash rapidly -- might have to seek bankruptcy protection. Such a filing could set off a chain reaction across the U.S. auto industry, choking off parts ...
Fintag says I don't get it. Accusations of protectionism will not endear the world to the USA. The UK lost its car industry in the 1970's because it was crap. GM and Ford are in the same league. Let them go. Others are better.
Hedge funds are down and out; investment banks are having to reinvent themselves; asset managers are struggling; big private banks are losing their cachet and their customers due to their parent bank travails. Where do unemployed investment folk turn? Wealth management may be one of the answers, judging by the growth in boutique outfits offering the service.
It is definitely one of the areas more insulated from the cold wind blowing through the financial services industry, according to James Anderson, chairman of Tru-Est, a specialist financial publishing group. Like asset management, wealth management represents a geared play on the stock market, and asset-based fees will be hit by the fall in value of client portfolios. But the annuity-style income stream remains attractive.
"If you look at the ability of a business to generate consistent steady revenues, wealth management is the only game in town," says Mr Anderson.
Fintag says Merchant Banks. Pawn shops. Hedge Funds. Family Offices. These are the future.
19 comments
Dan said ...
Why not just take it all the way. Maybe Hubbard wasn't so dumb after all. Forget managing their assets, take them and make them yours. Or maybe it's just semantics.
27 Oct 08 - 08:16 gmt
ibilly99 said ...
Seriously Fintag follow your own advice - we are looking for a sign from the master .
27 Oct 08 - 08:46 gmt
First time buyer said ...
You want some predictions Finbar. Here is mine. I call the bottom of the market when the Dow falls below 5,000. As for other indices they will fall to the same extent so just do the maths.
27 Oct 08 - 10:08 gmt
Moron said ...
Dribble dribble dribble
27 Oct 08 - 12:46 gmt
anonymous said ...
I lost my job at Merrill, and am looking to be the next male super model. Are you holding any Fintag MS paint photo shoots soon?
27 Oct 08 - 13:42 gmt
Shane Warne said ...
7,500 on the Dow, soon.
A slow climb back from there.
27 Oct 08 - 13:58 gmt
anonymous said ...
long? if you can figure out what the modern equivalent of the lipstick factor is ...
27 Oct 08 - 14:14 gmt
anonymous said ...
anyone know why AIB's CDS Spread has zoomed up this morning?
27 Oct 08 - 15:09 gmt
GalwayBoy said ...
Citadel shorting?
27 Oct 08 - 15:20 gmt
anonymous said ...
galwayboy are you from citadel!
27 Oct 08 - 15:49 gmt
GalwayBoy said ...
No it's public information. They disclosed a short position last week
27 Oct 08 - 16:24 gmt
anonymous said ...
What makes you believe they have the skill to manage a Starbucks?
27 Oct 08 - 16:53 gmt
Moron said ...
galway boy is from....galway....almost as irish as finbar:)))
27 Oct 08 - 16:56 gmt
Morons disciple said ...
Moron u beat me to that joke
27 Oct 08 - 17:43 gmt
GalwayBoy said ...
To be sure, to be sure,
27 Oct 08 - 18:00 gmt
Jeeves said ...
Today in the US a large hedge fund was bailing out the last half hour. It was nasty.
27 Oct 08 - 21:06 gmt
anonymous said ...
Citadel?
27 Oct 08 - 21:09 gmt
Alpha60 said ...
VIX has skyrocketed in last half hour..
27 Oct 08 - 21:32 gmt
anonymous said ...
Citadel Parters Hotel where limited partners check in but they can't check out! (until the fund is down another 35% and shut down)
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The shiny new technology is part of the nerve centre of AHL, one of Man's most successful hedge funds, which has notched up returns of 7 per cent in the past month alone, despite the financial turmoil.
Others in the industry have been less fortunate. Analysts warn that global hedge funds are facing the biggest bloodbath since their rapid expansion in the early 1990s, especially in Britain, where about half of 2,000 firms are expected to be taken over by larger rivals or liquidated.