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
I was given a skateboard for Christmas. Skateboards get you from a to b without polluting the planet and cost virtually nothing to run. Akin to running a hedge fund, you have to balance your body /portfolio and focus hard or you fall off / take losses. The key risk management is wearing elbow pads and a hat / compliance officer plus taking out adequate insurance against hurting any passers by.
Just like my funds, it goes mostly straight and cannot corner quickly. It suffers if the road is rough and stops. Again, parallel this to the VIX. Other people get jealous as I learn how to do tricks and slalom.
Best of all it makes one feel cool and nerdy. I think I will issue all my staff with skateboards. [Editor: Lame]
In today's news we look at the cost of debt, the continuing Madoff soap opera and why money laundering is so not now.
Federal prosecutors said that investigators who searched Bernard Madoff's office desk after the money manager's arrest on Dec. 11 found about 100 signed checks totaling more than $173 million.
The revelation came Thursday as part of a motion by the U.S. attorney's office in Manhattan to revoke Mr. Madoff's bail after he mailed valuable jewelry, watches and other heirlooms to relatives and friends shortly after his arrest and in apparent violation of a court-ordered asset freeze in a separate but related case filed by the Securities and Exchange Commission.
Fintag says He was writing out checks? Of course he was. The man loved his fax machine and quill pens. These good ol' fashion devices leave no audit trail.
SFO OPENS INVESTIGATION INTO BERNARD MADOFF'S UK OPERATION
The SFO, which wants ex-employees of Madoff to turn whistleblowers and aid its inquiries, said: "The focus of the investigation will be on UK victims and any criminal offences that might have been committed in the UK." Mr Madoff is alleged to have defrauded clients of $50bn (£33.5bn) over more than two decades.
On both sides of the Atlantic and around the world the heat has been turned up on the banks, brokers, hedge funds and personal go-betweens who funnelled investor money to Madoff Investment Securities, which was shut down after his arrest in December last year.
Fintag says So much for anti-money laundering. Everyone involved in Madoff, whether they knew it or not, were money launderers. So is the FSA going to send to prison all those people who said Madoff was a crook but didn't tell them? According to the AML legislation and FSA handbook, anyone who suspects money laundering who doesn't tell the authorities will be prosecuted.
This is the problem with all this regulation. Too much and mostly useless.
The Bank repeated its plea for fresh action to help homeowners and businesses and warned that further measures were needed to help kick-start the economy.
It is the fourth such appeal the Bank has made since the start of December following growing evidence that the Prime Minister's £300 billion bail-out of the banks has not worked.
Fintag says Interest Rates. What are they good for? Absolutely nothing. The base rate is a joke. Default risk is perceived to be so high that lenders are increasing lending rates. The base rate is a guide line. But let us not complain because if they do indeed fall to below 1%, lending will be almost free for the first time ever. The Bank of England will be able to close shop.
telegraph says " Merrill Lynch says rich turning to gold bars for safety " (which is a funny thing as I was looking at some gold bars in that shop on the Strand. I went in to ask if they need to be polished and they threw me out ...)
HEDGE FUNDS POST FIRST POSITIVE RETURNS IN SIX MONTHS
The US hedge fund industry had its first positive returns in six months in December, even as hedge funds and fund of hedge funds had their worst performance in at least 18 years during 2008.
Fintag says See. Us hedgie survivors are back in the race.
INTEREST RATE CUT 'WILL STARVE BANKS OF CASH', AS SAVERS ARE DETERRED
The lowest interest rate in the history of the Bank of England will deter savers from depositing money and further undermine troubled banks, it was claimed yesterday.
Two thirds of savings accounts are set to pay less than 1 per cent after the Bank cut the cost of borrowing to 1.5 per cent yesterday. It has now cut interest rates by 3 percentage points in as many months.
Financial experts warned that the ultra-low rates would not boost the stalled economy.
Fintag says What savers? The UK has a negative savings ratio already. The people I feel very sorry for are the pensioners. In times like this, the black economy really kicks in and insurance fraud becomes the new black.
All these abnormal events have unwanted side effects. There are many elderly people where I live and I fear going out at night. They are a threat to our society so I plead to the UK government, please give them something; vouchers, free meals, and free v i A g r *.
I know you want fun so here is some fun:
times says " Inquiry launched into 'UFO attack' on turbine "
DELL DELIVERS EXOCET TO LIMERICK WITH CLOSURE OF ICONIC PLANT OF THE CELTIC TIGER PERIOD; 1,900 DIRECT JOBS TO BE LOST; CONTRACTOR AND SUPPLIER JOBS ALSO GONE
Dell delivered its long feared Exocet missile to Limerick today with the announcement of the closure of its iconic PC computer plant of Ireland's Celtic Tiger period with up to 1,900 direct jobs set to be lost. Related contractor and supplier jobs could exceed 1,000.
Fintag says Ireland. Poor and lonely. EU give it nice grants. USA fall in love. Dell, HP et al move in. Hedge Fund Administrators do the same. Credit Crunch. Demand falls. USA moves out. Back to being poor and lonely. Except those who didn't gamble away the huge fortunes they made at the expense of the EU taxpayer.
The business world is losing confidence in Gordon Brown and Alistair Darling amid growing evidence that the recession will last much longer than the Treasury predicted only six weeks ago. A ComRes poll of leading businessmen for The Independent shows that trust in the Prime Minister and the Chancellor, which rose after the Government rescued Britain's banks last autumn, is now on the slide.
Only 28 per cent of respondents said they were confident in the Prime Minister's ability - down from 42 per cent last October - and only 16 per cent voiced confidence in Mr Darling, down from 25 per cent over the same period.
Fintag says But the big question is will Obama go from Bust to Boom? Or will it be Bust and even more Bust? The latter meez thinks ...
SWISS BANK UBP, AFTER BIG HIT, TAKES U.S. HEDGE FUNDS TO TASK
Swiss bank Union Bancaire Privée, which faces hefty losses in the alleged Ponzi scheme run by money manager Bernard Madoff, is threatening to pull several billion dollars of investments from large U.S. hedge funds because they don't use a full-time independent administrator.
The effort by Union Bancaire Privée, or UBP, is notable because it is one of the world's largest investors in hedge funds, with about $124.5 billion of assets as of June. The Geneva-based bank has said it had about $700 million in Madoff-related investments through its funds-of-funds and client portfolios.
Fintag says Now if Hedge Funds offered Segregated Managed Accounts, as I am being asked to every day, then UBP would know what is going on.
Let us face it. The Hedge Fund industry needs to adopt some lessons from the Mutual Fund industry. UBP need to learn about Trust and Due Diligence.
MADOFF INVESTIGATORS SAID TO BE STRUGGLING OVER SCHEME'S SCOPE
Almost a month after Bernard Madoff was arrested for securities fraud, investigators are still struggling to learn how the investment adviser directed an alleged $50 billion Ponzi scheme and how widespread it may have been, a person familiar with the probe said.
Personnel from the Federal Bureau of Investigation, U.S. Securities and Exchange Commission and the U.S. Attorney's Office in Manhattan are examining a steadily growing mass of data in an effort to unwind the alleged fraud, said the person, who declined to be identified for lack of authorization to speak publicly on the case. Documents include transaction records and investors' monthly statements, the person said.
Fintag says Did I say yesterday I would not be reporting any more Madman Madoff stories? Well like the man himself, I lied.
naked shorts says " No mere Buffett, a 14-course menu "
China has bought more than $1 trillion of American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home, a move that could have painful effects for American borrowers.
The declining Chinese appetite for United States debt, apparent in a series of hints from Chinese policy makers over the last two weeks, with official statistics due for release in the next few days, comes at an inconvenient time.
Fintag says That is what you get if you print money, drop rates to zero and whack up one's debt.
If I were China, I would switch into Euros. However, as we have seen with Japan, owning lots of US debt is a good way to bargain against trade protectionism.
The German government has stepped in to salvage a multibillion-euro merger between two of the country's largest banks, Commerzbank and Dresdner Bank, with a €10bn (£9bn) cash injection.
The announcement, in effect a partial nationalisation of the combined group, came after several days of tense negotiations between executives from the two banks and state officials. "The government just couldn't afford to let this deal fail," one insider said.
Commerzbank had been under intense pressure to strengthen its balance sheet as it prepared to buy its loss-making rival. It is understood that the deal, agreed last year, would have collapsed had the government refused to invest through its Financial Markets Stabilisation Fund (Soffin). The merger is now expected to complete by the end of the month.
Fintag says Locust's eh? These people are suckers.
Clifford Chance, the largest law firm in the world, is to axe 8 per cent of its staff in the City. It warned staff yesterday that 70 to 80 lawyers would be made redundant. Insiders added they would be surprised if many of its peers did not follow with job cuts in the coming months.
Clifford Chance employs 1,000 in Canary Wharf, and 3,800 worldwide.
Fintag says So even the Lawyers are struggling? We heard yesterday (spoof) that the P O * n industry wants a bail out, and unemployment is becoming the new fashion. So I have been wondering which jobs are actually safe?
Answers in my comments section please [Editor: How dull ]
21 comments
H said ...
Hi Finbar,
hey dont pay that much for writing consultant stuff -600k, do some stuff with that money, convert it into 45+ times in indian ruppee, start something here, buy indian stuff or start investing soon in chinese bonds -sitting here in india. Atleast u will stick to what u are great at -being a hedgie and not a parttime cartoonist parttime biographer
09 Jan 09 - 06:38 gmt
anonymous said ...
fortune-teller and fung-shui master business boomed
09 Jan 09 - 07:36 gmt
anonymous said ...
China owning lots of US debt/treasuries also guarantees their soft takeover of Taiwan, despite our signed Treaty to protect the island.
But with King Obama telling his barons to pass the 'cram-down' legislation that will give judges the ability to negate all bank/home owner contracts and arbitrarily tell the bank how much the mortgage will be for the owner, all contracts and treaties are worthless.
Long Russia NatGas. Short Nato.
09 Jan 09 - 08:30 gmt
anonymous said ...
Borrowing on credit cards and auto loans tumbled 3.7 percent from October to November to an annual rate of $7.94 billion. US consumer credit declined $2.8 billion in October. The report on consumer credit excludes borrowing secured by real estate and mortgage loans.
Total US consumer credit was left at $2.57 trillion.
Hmmmm........
09 Jan 09 - 08:39 gmt
AthenaDelphi said ...
@Anon8:30 - the actual trade would be
Long Russia Imperialistic resurgence/short Nato AND the UN. . Too bad we can't trade UN and Nato paper.
Finch needs to start rating these.
09 Jan 09 - 08:43 gmt
anonymous said ...
@anon - year of the Ox - brown / earth. That's all I know from being in Hong Kong recently.
09 Jan 09 - 08:46 gmt
Top Cat said ...
I feel sorry for the p o r n industry. I'm sure there are plenty of unemployed bankers ready to lend a hand though...
09 Jan 09 - 09:25 gmt
anonymous said ...
fluffers are required
09 Jan 09 - 10:18 gmt
fitzcaraldo said ...
re safe jobs: butchers, owners of soup kitchens, undertakers, physicians (although not as weel paid as before)...
09 Jan 09 - 10:55 gmt
long time reader, first time customer said ...
i am not too happy about giving you money, but i have just bought a copy of your book.
does it go to charity? it really should go to charity
additionally, is there a golden ticket? and will there be a tour of your offices? please advise, as there really should be a golden ticket
09 Jan 09 - 10:55 gmt
Master Blaster said ...
Who run Bartertown? Master Blaster run Bartertown!
09 Jan 09 - 11:25 gmt
fitzcaraldo said ...
are civil servants' jobs safe?
09 Jan 09 - 11:45 gmt
Master Blaster said ...
Are their pensions safe? Long Mad Max 3 when the civil servants realise they have no chance in hell of getting indexed linked 2/3 final salary pension for a third of their lives. Short Iceland bad times. Free electricity, lots of children and fish.
09 Jan 09 - 12:07 gmt
Super Mario said ...
Golden ticket...good idea long time reader. But only if Fintag hires a bunch of oompah loompahs to sing and dance in every room of the guided tour!!
09 Jan 09 - 12:15 gmt
anon said ...
@ Super Mario - certainly a more attractive prospect than fluffing for an unemployed banker
09 Jan 09 - 14:10 gmt
Panta said ...
Really boring today...since Lennar came waking me up.....
09 Jan 09 - 14:57 gmt
FSA said ...
@fitzcaraldo How dare you even ask that question.
09 Jan 09 - 15:59 gmt
Too Bad So Sad said ...
I'm hoping to be one of 5 gold ticket winners and I promise to eat the blueberry candy where I will have to be (shudder in delight) pressed!
09 Jan 09 - 19:37 gmt
anonymous said ...
The Paulson Advantage Plus Fund added 38% in 2008, while its Paulson Credit Opportunities I Fund—which soared 590% in 2007—returned a more modest, but still impressive, 19%.
Hey Finbar: In addition to your China comment I found this: officials blamed the United States and believed the controversial assertions set forth in the book “Currency War,” a Chinese best seller published a year ago. The book suggests that the United States deliberately lured China into buying its securities knowing that they would later plunge in value.
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