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
While we all watch perplexed at the fall out starting to hit the ground, it is evident we are all but sheep looking for a lead. Poor Obama is looking like a newly trained sheep dog who has yet to be told by his handlers where the sheep should go. But not to worry; there is a grumpy dour Scotsman whistling at the dog, trying to get him to follow him instead. Of course the dog path only leads to one thing; Socialism. So it is intriguing to see China turn to Capitalism while the West turns towards red tunics and state run everything.
We have been living in an era of pseudo-Monetarism, espoused by Milton Friedman and Ronald Reagan as the way forward. This appears to have been found wanton so we are now looking forward to a neo-Keynesian nightmare of public spending and inefficient resource allocation. The latest ideas, following on from GW Bush is of massive tax cuts to stimulate demand. We are but pawns in a game of roulette. Of course the only pawns who are doing well are pawnbrokers and gun manufacturers.
So on that bombshell of sixth form philosophical cynicism, let us look at what is tickling my fancy.
AIG needs USD150bn and is going to bring down the USA; and all because it has the word American its in name. Shame General Motors doesn't as it needs to be bailed out too.
Financial Services 1 Manufacturing 0.
Today's newsletter has very little about Hedge Fund news but a lot of news that Hedgies find interesting. Especially Welsh ones ...
A crime that farmers thought belonged to history is back, with flocks worth thousands being stolen by gangs. With its rolling meadows, tree-lined lanes and streams of fresh-flowing Malvern water, John Bishop's world is the quintessential English rural idyll. On arrival, it is difficult to see how he could be any less than blissfully happy. But he isn't. John Bishop is seething with anger.
For the perfection of this setting has been shattered by an outbreak of a crime most people thought had been consigned to the history books; sheep rustling. Spitting fury, he clutched his fist and waved at the corner of a field where dozens of lambs grazed last month. Now, nothing. In all, the 58-year-old Worcestershire farmer has lost more than 200 of his flock to a ruthless gang of rustlers, costing him more than £10,000...
Fintag says The upshot of the knee jerk bail out funds is quite strange indeed. However, this is surely a signal that social unrest is on the way. What next? Tanks on the streets of New York hosing down ex Investment Bankers mugging civil servants?
Farallon Capital Management, one of the world's largest hedge funds, has been anything but immune from the market downturn. The San Francisco firm's flagship hedge fund is facing its first-ever losing year after almost of quarter of its value during the first 10 months of 2008.
Farallon Capital Partners is down 23.8% though last month, according to Bloomberg News. A smaller fund, Farallon Capital Offshore Investors, is down even more, losing 28.3% this year.
Fintag says What is wrong with their models? Everyone knows October is always a torrid month and those who read Wikipedia know October is the month when you sit on cash. [Editor: Where does it say that?]
General Motors, the largest car maker in the US, which celebrated its 100th anniversary this year, said it will be bankrupt within months unless it gets government money to tide it over during the biggest economic crisis since the Great Depression of the 1930s.
With sales slumping across the world, GM's chief executive, Rick Wagoner, said it had burnt through $6.9bn (£4.4bn) in the three months to the end of September and had drawn on the last of its credit lines from its banks. With just $16.2bn left in the bank, and about $12bn of that needed as a cushion to fund its day-to-day operations, a day of reckoning is now within sight.
Fintag says So does Obama nationalise GM like the British did to British Leyland? More bail out and unfotunately in the car industry this usually means disaster. If he does, which I think he will do, we can say hello to protectionism. The Japanese will be pissed and threaten to dump their large holding sin USD and T-Bills. I can already hear in the playground the words fight, fight, fight ...
HAMISH MCRAE: BLUE SKIES IN THE UK WILL ONLY BE SPOTTED FROM THE ROOFS OF HIGHER-PRICED HOUSES
One is that very low rates in the US have not revived the economy there, nor did they do much to help the Japanese economy escape from stagnation during the 1990s. A second is that there is a huge gap between official rates and the rates at which the banks can borrow from each other, the wholesale money market rate, even if these markets were open and they are still pretty much shut. And third, insofar as rates for savers will come down too, there will be losers as well as gainers. There are about four times as many people in Britain who have interest-bearing deposits as those who have loans, so numerically more people lose from a fall in rates than gain....
Fintag says There you go. Dropping interest rates hits savers, pensioners and the mormons hardest. But I guess the Islamic community must be loving it for they will soon be able to borrow money at no interest.
It really irks the way the media seem to enjoy seeing rates fall because it enables existing debt owners a breather and those who haven't got enough debt to enjoy some on the house.
Food for thought
At the end of 2006, the UK paid off its World War 2 debts (bbc). I wonder when it will pay of its 2008 bank bail out debts? 2068 perhaps?
NEW JAMES BOND THRILLER QUANTUM OF SOLACE 'FULL OF BLUNDERS'
n another scene, Bond's wristwatch appears in two different positions in the same shot - once with the face turned to the outside and once facing to the inside.
The final blunder occurs when Bond arrives in the South American city of La Paz and the temperature is shown to be an uncharacteristic 46 degrees Fahrenheit - a chilly 7.8 degrees Celsius.
Fintag says Shocking. No wonder M16 is advertising for new OO's. With all those fit, politically savvy and ruthless (or is that reckless?) Investment Bankers looking for work, M16 will be inundated with applications. First task - Operation Sheep Rustling.
When Greg Coffey p h o n e d h i s mother last Sunday to tell her about his new job, it was not the news she was expecting.
“What the hell are you doing?” she said. “I wanted to see your name over the door.”
Her reaction was reasonable and was shared by many in the City. In April when the star hedge-fund trader had walked out of his £150m-a-year job at GLG, one of Britain's biggest hedge funds, it was widely assumed he would set up his own firm. It was the assumption too of the 12 GLG traders who resigned with Coffey to follow him to pastures new.
Fintag says I too was astounded at this non article. Greg "Mummys Boy" Coffey is the Curzon Street Chef. He is like Gordon Ramsey. He takes any old illiquid crap, puts it into a blender and hopes the air beefs it up and more comes out than went in. And then it goes back into the pot again.
Bernard V. Drury is a rarity on Wall Street: a hedge fund manager who is making money rather than losing it.
A hedge fund operated by Bernard V. Drury, of Drury Capital, has risen 60 percent since Jan. 1.
Marek Fludzinski, of Thales Fund Management, created a fund in May that has grown to $350 million.
While most hedge funds are sinking into red this year and unsettling the markets in the process, a handful of them are posting spectacular gains. Mr. Drury's fund, for instance, is up 60 percent since Jan. 1.
The congressional committee that made headlines last month grilling former Lehman Brothers Holdings Inc. Chief Executive Richard Fuld and former executives of American International Group Inc. has summoned a handful of top hedge-fund managers to answer questions on topics ranging from their pay to influence on the markets.
Philip Falcone, Kenneth Griffin, John Paulson, James Simons and George Soros on Thursday are expected go before the House Committee on Oversight and Government Reform. They will have several minutes each to make opening remarks, then will field questions from lawmakers, according to a committee spokeswoman.
Fintag says Of course. Hedgies are the experts. We know best.
The hedge fund industry in Asia is nervous as firms cut costs and conserve cash. “Everyone is worried about redemptions,” says one senior Asia-based partner of a big US fund that was scaling back operations in the region. “People are sitting on their hands thinking about what to do.”
The Asian hedge fund industry has grown rapidly since the turn of the century. The number of funds has tripled since 2002 to 1,198 by the end of September, according to the Eurekahedge database, and the assets they manage has increased from $28bn (£18bn, €22bn) to $157bn in that time.
Fintag says My beloved Singapore being bashed like this ...still, in this new world of low single digit returns we should be able to produce alpha, surely?
FULD SOLICITED BUFFETT OFFER CEO COULD REFUSE AS LEHMAN FIZZLED
``Here we go again,'' Fuld erupted at one point, the person recalled. ``Perception trumping reality once more.''
It was vintage Fuld, a man so physically imposing, so volcanically explosive that, even at age 62, he scared underlings and competitors alike. He was raging on the captain's bridge, while a storm engulfed the company he had willed into becoming one of Wall Street's finest. Couldn't the short-sellers see how much he had done to shed bad assets? Couldn't they understand what a great franchise it still was?
Fintag says This guy even scares me. Which ever prison he goes to, inmates be warned. [Editor: He hasn't been found Gulity? What are you talking about?]
1. Maybe they'll up the foreign aid budget and put the US on the list of eligible recipients. 2. Great. Their turn to buy their own carp (deliberate typo).
Fintag says Ooops. Why anyone thought the Chinese would help everyone else out is beyond me? Given only 1 third of Chinese enterprise is state owned, and the way things are going in the USA, role reversal is on the cards. The USA will be lucky to have any private enterprise left anytime soon, and China will be the new land of democracy and free markets.
independent says " China unveils $586bn economic stimulus "
BLOOMBERG SUES FED TO FORCE DISCLOSURE OF COLLATERAL
Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn't seek money damages.
``The American taxpayer is entitled to know the risks, costs and methodology associated with the unprecedented government bailout of the U.S. financial industry,'' said Matthew Winkler, the editor-in-chief of Bloomberg News, a unit of New York-based Bloomberg LP, in an e-mail.
Fintag says A campaign I fully endorse. Will BB be setting up a facebook group?
I am currently banned from Facebook so cannot check to see if there is one already.
bloomberg says " AIG, U.S. May Expand Bailout to $150 Billion, Cut Interest Rate "
The financial industry is bracing for a fresh round of job cuts as Wall Street banks slash costs to cushion the blow of further market turbulence and deepening economic woes in 2009.
Executives and analysts say the redundancies - to be finalised this month as banks prepare next year's budgets - could top 70,000 among US groups alone and add to the estimated 150,000 jobs already lost by the financial sector worldwide.
The job losses are expected to be concentrated in the investment banking and trading businesses that have been hit hard by the near-freeze in capital markets and the collapse in takeover and financing activity.
Fintag says And a happy story to end on. Of course, once the financiers go many other support services also go so no need to gloat. We are the world's economy.
Now where did I leave my copy of "Sheep farming for Dummies"?
30 comments
Dan said ...
Sad how many people believe the fed is anything but a private enterprise. Shocking what a little research will do.
10 Nov 08 - 08:12 gmt
KONG said ...
The nitpicking over the Bond film fails to mention that they land in Bregentz airport- which does not exist.
10 Nov 08 - 09:03 gmt
anonymous said ...
and the fact that bond does not sleep with the leading lady at the end.. very un bond like...
10 Nov 08 - 09:34 gmt
anonymous said ...
Bregentz - perhaps it's one of those non-existent airports they use for extraordinary rendition
10 Nov 08 - 09:52 gmt
anonymous said ...
Or continuing the cheap orange jump suit theme.. it could be an Easy Jet destination...
10 Nov 08 - 10:07 gmt
Svetlana said ...
Svetlana she think Coffey look dirty but underneath ohsocarefully studied Hedgie casual expensive he more sheep than Siberian tiger.
10 Nov 08 - 10:18 gmt
Top Cat said ...
Amazing markets go up so much on this China news. Views on its effectiveness anyone?
10 Nov 08 - 10:33 gmt
anonymous said ...
Where is Moron? Didn't he so proudly predict last wed how he was shorting this rally, what a clown!! The troll must be in the toilet right now bricking it...:)))))
10 Nov 08 - 12:02 gmt
Moron said ...
Anon u sound desperate mate grow up
10 Nov 08 - 12:31 gmt
anonymous said ...
Top Cat - China may have bounced on the news, but has still lost the thick end of 2/3rds of its value YTD. Any clarity on how much is new money and how much is reaccounting for previously announced public spending? Politicians (not just in China) have a habit of adding new money to existing spending and talking in terms of a totally new eound of investment.
10 Nov 08 - 12:38 gmt
fitzcaraldo said ...
Hope the real MI6 is better in reserach than the Bond scriptwriters....unfortunately I do not think hiring useless ex IB's will be helpig them much...
10 Nov 08 - 12:47 gmt
fitzcaraldo said ...
sorry for the spelling errors in my previous comment, folks, Svetlana does not set a very good example...
10 Nov 08 - 12:49 gmt
cockyspiv said ...
Ive been to La Plaz - it was bloody cold, so Bond was right
10 Nov 08 - 12:55 gmt
Alpha60 said ...
The action/fight scenes in Bond were worth the entrance fee alone, tho the story was pretty paper thin.
10 Nov 08 - 13:39 gmt
Jaa said ...
This is a bear market rally, spirited it may be, is being fuelled by hope once again. The larger trend is DOWN and fear will soon return..
10 Nov 08 - 14:36 gmt
Moron said ...
yup...too much hope...explains the v shaped bounce...so twisted anon....from ur excitement this morning i gathered u are long and very badly stuck this year....which means u will not have a job by the end of the year...which is rather sad...another reason to take up the paddington offer mate..do it!
10 Nov 08 - 15:04 gmt
Concerned said ...
Moron - suicide is not a joke
10 Nov 08 - 15:11 gmt
Jaa said ...
hehe...me thinks!
10 Nov 08 - 15:11 gmt
Jaa said ...
GS US... sliding into oblivion
10 Nov 08 - 15:13 gmt
Moron said ...
yeah i agree...that was a bit harsh...apologies:))
10 Nov 08 - 15:13 gmt
Svetlana said ...
Fitzcaraldo; Svetlana she only speaking English two year...she prefer language of Imperial Russia: French
10 Nov 08 - 16:14 gmt
fitzcaraldo said ...
@svetlana: alors ma biche...
10 Nov 08 - 16:21 gmt
Svetlana said ...
@ Fitzcaraldo: "Biche?" Tres familier mais vous ne connaissez pas Svetlana...
10 Nov 08 - 17:10 gmt
fitzcaraldo said ...
@svetlana: so you are a long-haired Frenchie working in Westend hedge fund wonderland...sounds like Lagrange...
10 Nov 08 - 17:18 gmt
Moron said ...
Svetlana is benW dont ask me how i figured it out but i bet im right
10 Nov 08 - 17:26 gmt
Svetlana said ...
Svetlana she messing with you..remember Svetlana she working in writing...sometimes of no name..but no Ben...anon, yes...more than one way to skin a horse. Svetlana she must working now...
10 Nov 08 - 17:47 gmt
Moron said ...
aha...so Ms R = Svetlana...:))
10 Nov 08 - 18:07 gmt
Svetlana said ...
@ Moron..for today...you want help Svetlana with book research Moron?
10 Nov 08 - 18:11 gmt
Moron said ...
any day Svetlana....but it had better be a loooong book...bcos Moron likes to take his time doing research u know:)))
10 Nov 08 - 18:27 gmt
Svetlana said ...
Seriously...Mr Moron...few questions...but only emails from workplace first of all because no anons wanted (confidentiality respected) first. Hedge fund questions....Not difficult
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