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
Interest rates are nearly zero; equities, real estate, commodities and pretty much everything else is volatile and downward looking. So what do you do? Why of course you buy up the stuff that caused the problem in the first place - junk type debt with huge yields. These finger crossing trades are perfect if you like a gamble. Buying a high yielding asset with a high probability that you will lose your capital is an ideal strategy if there is a good chance that the initial interest payments will cover the capital invested in a short period of time. Anything above this and you are laughing. Otherwise you may lose everything.
The rise of distressed debt funds is being driven by asset allocators who have lost a lot and want to make a quick buck. Whatever goes on, greed is always ever present and time waits for no one.
Not that all fund managers will initially be able to satisfy the transparency requirements being asked of by investors. But as we see later on, "Enron" syndrome is short lived. If Bush leaves one legacy that failed it is Sarbanes-Oxley. What a joke. But that is another story. 2009 has a new story and that is of Valuation Experts who are making a killing valuing things (read the small print). Tire kicking is the new black.
Advertising I have decided to allow anyone who wants to, to advertise on my blog - for free. Limited period. The only condition is I decide whether to allow the adverts to be published. [Editor: What is the point of that?]. All others will have to pay. The banner at the top costs USD50 a month.
Even before word came on Tuesday that Citigroup might split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama's transition team: the banks need more taxpayer money.
In all likelihood, a lot more money.
Fintag says Once a liar, always a liar? Of course when you feed a drug addict with free drugs, paying for it looks less interesting.
MADOFF CO-OPERATES IN "PONZI SCHEME" INVESTIGATION
Bernard Madoff appears to be moving closer to some form of plea bargain deal with the US authorities after allegedly perpetrating what could be the biggest ponzi scheme of all time.
Mr Madoff, who remains free on bail, albeit under round-the-clock house arrest, is understood to be working with the US Attorney's office behind the scenes in an attempt to shorten any potential prison sentence.
Fintag says Spilling the beans ...ready for the lawyers to make a killing for those who lost out.
dealbook says " Hedge Fund That Invested With Madoff Shutters "
Shareholders in nationalized mortgage lender Northern Rock were going to court Tuesday to try to force the British government to compensate them for their now-worthless stocks, The Associated Press reported
The legal challenge is being brought by hedge funds SRM Global , once the bank's largest shareholder, and RAB Capital, along with about 150,000 private shareholders who held as much as a quarter of the company's shares
Fintag says Good luck. And then can I sue Rob Peston for losing on my RBS longs?
MAN GROUP ASSENTS UNDER MANAGEMENT FALL 21PC IN LAST THREE MONTHS
Man Group had $53.3bn (£6bn) under management as of December 31, down from $67.6bn at the end of September and $61 billion at the beginning of November, the London-based company said in a statement today.
The company last month said it had investments in two funds linked to Bernard Madoff, 70, who was arrested for allegedly running a $50 billion fraud. The investments were made through RMF, a Man Group fund of funds business.
Fintag says A small blip I am sure. But am I sure? There is always the suing Madoff route ...
portfolio says " Hedge firm Man Group to sue over Madoff exposure "
Year after year, the hedge fund industry dazzled Wall Street by delivering "absolute returns" — outsized profits whether markets rose or fell. Using sophisticated trading models, the pools of managed capital made wealthy people wealthier with eye-popping returns that carried seemingly moderate risk.
Not these days. Blind-sided by a colossal market collapse and the widening Bernard Madoff scandal, hedge funds suffered their worst showing on record last year. And they're bracing for more pain in 2009. The industry's fall proves that even the quantitative brilliance and market wizardry of elite hedge funds are no magic bullet for investors during brutal times.
Fintag says Luckily we all have short memories. Remember when Enron would never happen again? Remember when it was deemed a bad idea to tie up ones wealth in the company you worked for? Remember Bear Stearns and Lehman and all those poor employees who lost their retirements?
The short term upshot is investors now what full transparency. No hiding behind side letters or having ones positions leaked to the market, they have a right to know. And they want to know how and who are valuing these positions. And then Mr Greedy will come back and we will all forget why we wanted to know what the manager was actually doing.
BERNANKE TELLS OBAMA $775BN FISCAL PACKAGE IS NOT ENOUGH
Ben Bernanke, chairman of the US Federal Reserve, warned yesterday that the economic recovery package planned by the incoming Obama administration will not succeed unless financial stability is restored.
Mr Bernanke used a speech in London to issue a clear challenge to the US president-elect, Barack Obama, who is planning a huge fiscal stimulus - expected to be worth $775bn (£535bn) - to get the US economy going again.
Fintag says These people don't know when to stop. All he wants to do is spend other people's money. I wish I could do that.
HEDGE FUNDS LOSE $350B TO POOR PERFORMANCE, REDEMPTIONS
The global hedge fund industry contracted by almost 20% last year, with $350 billion falling victim to the twin terrors of poor performance and investor redemptions.
Hedge funds now manage about $1.5 trillion, according to preliminary estimates by Eurekahedge. The industry once boasted as much as $1.9 trillion in assets under management.
Most of the asset evaporation took place during the last quarter, when 90% of the money was lost. On the year, Eurekahedge estimates that the average hedge fund lost 12.3% of its value as the credit crisis battered most asset classes.
Fintag says Shame we don't have our own printing presses. Still, it will sort out the dross from the dross. [Editor: Uh?]
Citigroup is to break itself up by separating higher risk US consumer finance and securities businesses from its global commercial banking operations in an attempt to ensure its survival.
People close to the situation said Citi would place unwanted assets and businesses worth more than $600bn - a third of its balance sheet - into a “non-core” unit to isolate them from healthier parts of the company.
Fintag says About time too.
this is money says " 2,100 jobs axed as Barclays leads City cull "
The federal budget deficit expanded by USD USD83.6 billion in December, the Treasury Department reported Tuesday, bringing the total deficit for the first three months of the 2009 fiscal year to USD485.2 billion. By comparison, the budget deficit for all of fiscal year 2008 was $455 billion. In fiscal 2007, it was USD161 billion....
Click the link to see the nice chart.
Fintag says What does it all mean, Basil?
19 comments
Moron said ...
look at the bright side....rents are coming down...and if u have the cash.....u can get an incredible deal on ur next ferrari/aston if u buy it out of distress.....there's always a bright side to everything!
14 Jan 09 - 12:05 gmt
Moron said ...
it sounds parasitical...but there has to be a fortune just waiting to be made taking advantage of the trouble everyone has gotten themselves into...even after factoring in the expectation of a lame duck recovery whenever it happens.....provided u have the liquidity
14 Jan 09 - 12:08 gmt
Panta said ...
...SRM....yep Ok!!
14 Jan 09 - 12:27 gmt
A lady - formerly a man said ...
I see i wasn't the only muppet who got burnt by RBS then...bloody peston!
14 Jan 09 - 12:37 gmt
anonymous said ...
@ A lady - formerly a man do you have a long ring finger?
14 Jan 09 - 13:32 gmt
Darby O'Gill said ...
I might buy Ireland with my redundancy pay.
14 Jan 09 - 13:43 gmt
fitzcaraldo said ...
@moron - yes, buyer's market, great if you have cash...enjoy your ferrari...
14 Jan 09 - 14:09 gmt
fitzcaraldo said ...
@fin: what is your e-mail to enquire about advertising?
14 Jan 09 - 14:12 gmt
Moron said ...
i don't like ferraris....i do like boats though:))
14 Jan 09 - 14:17 gmt
Moron said ...
i think the market has probably stopped going up for now!
14 Jan 09 - 14:27 gmt
anonymous said ...
Quelle surprise. The markets go down and Moron emerges.
14 Jan 09 - 20:46 gmt
Finbar said ...
info @ fintag.com re adverts
Sorry about the outage - I forgot to pay my bill
14 Jan 09 - 22:56 gmt
Bud Fox said ...
B of A needs more government money ASAP. What a surprise! After over paying for Merrill, B of A finally saw the crap paper Merrill was holding and runs to the US treasury for an additional $30 billion. Citi, B of A and JPM will all be taken over by the US government within 30 days!!! The world banking system is a nightmare.
14 Jan 09 - 23:51 gmt
anonymous said ...
Last!
15 Jan 09 - 06:04 gmt
AthenaDelphi said ...
Not quite.
15 Jan 09 - 08:23 gmt
AthenaDelphi said ...
Finbar - seriously, can you tell me WHERE does the money come from for all these programs of Obama/Congress?
At least China can sell T-bonds and make a profit here, reinvest in their country.
Is the USA really screwed and if so, what comes next besides turning over and snoring?
15 Jan 09 - 08:25 gmt
Tradebot said ...
well, Fed will self-finance the purchase of T bonds by printing cash.
15 Jan 09 - 09:12 gmt
AthenaDelphi said ...
@Tradebot - right, figured that, but what happens as they are printing cash or after they've printed the cash? What realities should we expect? My current $10 bill becomes a $1 bill in purchasing power?
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