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
In the UK, when an automobile is more than 3 years old it has to have a yearly MOT. This involves a garage checking the vehicle is road worthy. Given nobody is stupid enough to buy new cars, with all this anti bling sentiment and old being the new black, many more cars will be having MOT's.
The financial services industry should implement MOTs. This would involve once every three years (and not every year as it would slow everything down) a more detailed and thorough audit than the accountants currently do when signing off an institutions statutory financial statements off every year. As we have seen, these yearly audits are a waste of time.
Consequently, I would expect a team of lawyers, ex traders, ex product accountants and some forensic scientists like those in NCIS to be tasked with snooping around. 2008 was a year of lies and 2009 should be one of truthfulness. The banks are extremely important to us all, as well us hedgies and other fund managers, and we need to bring back trust.
So one of my many news years resolutions will be to trust more and forgive those whose trust has let me down in the past. In today's review it appears many others are looking at forcing people to tell the truth. I like this idea.
In today's award winning photo, I have the back of a lady (representing an opaque bank) and a guard dog (the communication department). Don't you just want to know what the bank really looks like?
"This is an extremely challenging time and many of AIMA's members have suffered. We are mindful of the difficulties facing the industry and markets," said Groome. He said the industry's diversity and flexibility as well as "the many talented professionals and the variety of different funds" and their strategies would be essential in 2009.
"These strengths, as well as the industry's desire to contribute as an important and established financial market participant, will greatly help us contribute to policy development in the months ahead," noted Groome.
Fintag says Sounds to me like a body trying to survive. Given many of its clients (that is you and I) are going bust, its revenues must be falling. However much we all love self regulation, AIMA should ask to be taken over by the FSA or bailed out by the UK government.
...Close the revolving door between the S.E.C. and Wall Street. At every turn we keep coming back to an enormous barrier to reform: Wall Street's political influence. Its influence over the S.E.C. is further compromised by its ability to enrich the people who work for it. Realistically, there is only so much that can be done to fix the problem, but one measure is obvious: forbid regulators, for some meaningful amount of time after they have left the S.E.C., from accepting high-paying jobs with Wall Street firms.
Fintag says The article everyone has been talking about. So the media are going to sort out the crisis. Perfect.
There are some positive contributions and I was pleased see only a couple had been appropriated from previous Fintag rantings. I must be losing my touch.
telegraph says " Finance: Expert predictions for 2009 "
US BANKS DRAWN INTO BERNARD MADOFF SCANDAL AMID FEAR OF MORE VICTIMS
The role of America's federally regulated banks in the $50 billion Bernard Madoff investment scandal has come into question after it emerged that a number of victims of his alleged Ponzi scheme thought they had invested their money with an ordinary bank.
Two law firms in Florida, which are gathering claims from Madoff victims, are both representing a couple who say that they believed that they had invested about $1 million (£688,000) with the Westport National Bank, a regulated savings bank in Connecticut, rather than with Mr Madoff.
Fintag says Doesn't the news have a 2008 ring to it? As much as I look for optimism and joy, there doesn't appear to be any. Am I the joker or batman? [Editor:uh?]
AS VACANT OFFICE SPACE GROWS, SO DOES LENDERS' CRISIS
With job cuts rampant and businesses retrenching, more empty space is expected from New York to Chicago to Los Angeles in the coming year. Rental income would then decline and property values would slide further. The Urban Land Institute predicts 2009 will be the worst year for the commercial real estate market “since the wrenching 1991-1992 industry depression.”
Banks and other financial companies have not had the problems with commercial properties in this recession that they have had with residential properties. But many building owners, while struggling with more vacancies and less rental income, will need to refinance commercial mortgages this year.
Fintag says Given the UK is always 12 months behind the USA, does this mean when I come to renegotiate my lease in Curzon Street that the rents will be considerably lower? The UK has a bizarre upward only rents policy but hopefully this is no more. Good news to all.
The recent slump in the price of oil could help boost the UK economy, but too much of a further fall could reverse the good done, said a study backed by accountancy firm Ernst & Young.
The value of oil has tumbled in recent months. It fell below $40 a barrel last week, after peaking at almost $150 a barrel last year.
Fintag says Strange how a few speculators pushed oil up to nearly USD150 last year and we have a raging war in the middle east and the oil barometer barely registers anything.
I think most people would prefer to be employed and happy than unemployed and oil to be a few dollars.
Redundancies should be a "last resort" as firms trim costs in the economic downturn, the Chartered Institute of Personnel and Development (CIPD) says.
Planning for recovery by keeping staff is a better approach, it added, saying an average redundancy costs employers £16,375 before any savings are made.
The CIPD has put together a formula to estimate the financial cost of redundancy:
z = percentage reduction in output per worker caused by lower morale
p = number of people employed prior to redundancies
Source: CIPD
Fintag says Should I laugh or should I cry? The first and easiest variable cost to reduce is human labor. It always has and always will be. Each person has to contribute to covering their cost at a minumum otherwise you have a charity not a business.
Of course in the long run it is a bad business but sometimes having a business is better than no business.
Why is the news still so grim? 6 reviews in and I don't fancy going into work ...
Leading companies are being probed by the financial watchdog over possible failures to disclose key trading data to the stock market, in a wide-ranging crackdown that threatens fines and criminal prosecutions.
Top City lawyers say they have seen a surge in inquiries by the Financial Services Authority about whether businesses - including Rentokil Initial, the support services company, and Rok, the building group - kept investors properly informed ahead of profits warnings that sent shares tumbling.
Fintag says As I said in the intro, 2008 was the year of lying. It has to stop. Given 2009 will continue to be a year of blame and denial (although smart cookies like me a year of opportunity and reality), let us blame the PR agencies.
In future, all CEO's should be forced to read all Press Announcements under the influence of a lie detector.
That would cut back the Press Releases and make the media have to work for a living. No more easy copy ...
BUFFETT HAS 'NOWHERE TO HIDE' AMID BERKSHIRE'S PLUNGE
Billionaire Warren Buffett's Berkshire Hathaway Inc. slumped 32 percent last year, the worst performance in more than three decades, as the U.S. recession forced down the value of the firm's equity holdings and derivative bets.
Most of the stock decline happened in the last three months as Berkshire posted a fourth straight profit drop amid sagging insurance results. The company still beat the 38 percent tumble of the Standard & Poor's 500 Index, the 14th year in 20 that Buffett outperformed the benchmark. Just six of 1,591 U.S. stock mutual funds with at least $250 million in assets made money for investors last year, according to data compiled by Bloomberg.
Fintag says As we noted on Friday when most of you were calling in sick, the Buffoon has got sales fever. Now he is stuck with a lot of crap he thought looked good because it was 70% off. Time for the man to retire. Still, he has bucket loads of cash to fund his derivative losses and he will be laughing at us later this year I am sure.
With thousands of post-meltdown City traders getting the heave-ho in recent months, the time isn't obviously ripe to launch a TV show that sets out to prove how easy it is to be one. But here comes BBC2's Million Dollar Traders, which takes a group of ambitious butchers, bakers and candlestick makers and finds out who has the right stuff for a highly paid job shouting at computer screens and tearing their own ears off.
With these so-called "novices" stationed for hours at their desks, episode one resembled a sort of sunlight-deprived Apprentice, but no, says executive producer Ruth Pitt. "It's absolutely not The Apprentice. It's more 'observational documentary' - more like The Choir or The Secret Millionaire." Yes, it's a format, she says, but there's no weekly eviction, no footage of the team angsting in their accommodation, no dog-eat-dog treachery, no live sex show. "We tried to avoid it being contrived," she says.
Fintag says Poor timing. I was looking for office space last year (sitting on cash gets a bit boring) and came across the space they used to film this program. Its quite nice. Near to the Liar's Poker building in the city. As for the TV, I hope they hired a bunch of monkeys. They certainly cannot have faired worse that most professional hedge fund managers did last year. Surely?
Three of the Big Flaw auditors — PricewaterhouseCoopers, Ernst & Young and KPMG — have already been caught with their fingers in the Bernard L. Madoff Investment Securities LLC cookie jar, as auditors of various Madoff feeder funds, . They will be sued, for a large multiple of the assignments' fees (which will anyway be far exceeded by their legal costs) in actions likely centered on their duty to “look through” the feeders into the performance reported by Madoff, and the existence of the alleged underlying assets.
President-elect Barack Obama is seeking as much as $310 billion in tax cuts as part of a massive stimulus plan to counter what senior policymakers warned could be a prolonged period of economic stagnation and deflation.
Obama's plan is the latest in a series of measures aimed at tackling a financial crisis that began with U.S. mortgage defaults in 2007 and has now plunged major economies into recession, reshaped the banking landscape and taken entire countries to the brink of bankruptcy.
Fintag says Now I am confused. We were told Obama was a socialist who wanted to tax until the pips squeaked. Now he wants to add even more to the US debt pile with tax cuts. Is he trying to turn the USA into a tax haven? Now that would be ironic.
Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said.
This concern was echoed somewhat by the president of the St Louis Federal Reserve Bank, James Bullard, who also took part in the panel discussion. He said the close collaboration between the Fed and U.S. Treasury in fighting the crisis could have unintended consequences.
"We are blurring the institutional arrangements a little," Bullard said. "I am concerned about independence. Fed independence is very important," he told reporters.
Fintag says The FED were 2008's jokers. Let's see what 2009 offers.
Hedge funds, which have been among the biggest spenders on technology over the past five years, are expected to slash the amount they spend on new systems by 20% or $350m (€251m), this year, in the wake of heavy losses and record investor redemptions, according to new research.
Fintag says That is such a wild guess. 20%. Most IT budgets are going to be wiped out because most hedge funds will not exist end of 2009.
I am abandoning the use of Excel at Fintag Management LLC. We are going back to abacuses and Google Docs. I think my quants spend too much time tweaking their VB macros and not enough telling me why I should pay them so much.
15 comments
anonymous said ...
Happy New Year! Heard over the weekend talk that the hedgies (those left) will go all in again - releverage- pyramid style, and then in June, everyone rushes out.
Then I heard that since Jan. 2nd the Dow was up 2%, Monday everyone would sell and that would mean at least pocket 2% upside for the year.
Crazy already!
05 Jan 09 - 07:22 gmt
AthenaDelphi said ...
Drat! I'm not first... Is that a picture of MrsR, Fin?
I'm here, and now I'm going to bed. Moron-Don't be mean to me. 2009 is the year of being kinder and gentler.
05 Jan 09 - 07:25 gmt
AthenaDelphi said ...
@anon7:22 - 1st part I also read in FT. 2nd part makes no sense.
05 Jan 09 - 07:26 gmt
Panta said ...
Happy new year old chap...your favourite broke broker is back and yes i was calling myself sick on Friday..Did i miss something...
05 Jan 09 - 09:34 gmt
Shane Warne said ...
Stalking ladies in Richmond Park Fin? You will go down for that sort of thing........
05 Jan 09 - 09:43 gmt
macrohedgeboy said ...
Yes, it is Richmond park, isnt it....
05 Jan 09 - 10:02 gmt
anonymous said ...
I want to know where Robert Peston has disappeared to... any ideas anyone?
05 Jan 09 - 11:23 gmt
BrianSJ said ...
Stopping spending on fancy IT and making do with google docs has seemed to me to be a big prospect. Missed GOOG below 300. SAP, Oracle, Salesforce and the like are going to get some nasty shocks as their clients come off the cocaine.
05 Jan 09 - 11:45 gmt
Alpha60 said ...
Re: the BBC 2 prog - Fin your derisory comment about monkeys and hedgies is uncalled for. I like to think my blindfolded dart throwing method to be quite scientific and precise...im up already this year
05 Jan 09 - 13:00 gmt
dizzy banker said ...
Blimey, me thinks I sees a beard on that lady ...
05 Jan 09 - 16:01 gmt
GalwayBoy said ...
Isnt that the pic taken outside the Windmill on Wimbledon Common? In which case it could be a Womble
05 Jan 09 - 16:05 gmt
Super Mario said ...
Fintag/ fellow commentators any views on emerging mkts for 09 many were badly effected in 08 unfairly in my humble opinion.
05 Jan 09 - 16:39 gmt
anonymous said ...
down
05 Jan 09 - 17:14 gmt
anonymous said ...
yep. 2009 is another down year. Unless you want IG bonds.
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