THE FINTAG NEWSLETTER
@ Fri 27 February 2009 : GMT

FINTAG COMMENT

Political corrections.

If I say blondes are prettier and more fun, but are more unstable and hence not good marriage material... Or the Scottish are solely responsible for the demise of the UK and Scotland should be annexed... Or Obama is useless because he is a lawyer and is too tall... then some of you will agree and others disagree. Some of you will say, you can't say that. Others will want an argument. I prefer the latter as dictatorships grow out of socialism and we don't want that do we. Or do we?.

When debating serious issues is suppressed by society, the aggrieved find new ways to vent their frustrations. After the first world war when Germany was humiliated, it turned towards National Socialism and look where that ended.

The stifling of debate is feeding the rise in fascism. The UK is seeing a rise because only at the ballot box can you state how you really feel so underground it is bubbling unpleasantly. The conventional media are oppressed like a parmesian cheese wrapped in plastic in the fridge and we are always being told off for being thin, fat, greedy, smart, stupid, intelligent and working in finance. I have no idea what is right and wrong anymore.

Take house prices in the UK. They fell a lot yesterday but the media suppressed talking about it. Don't mention House Prices. Don't mention the gloom. Don't mention the masses are very pissed off and want to see the introduction of capital punishment.

That is where the bloggers come in. Soothsayers and lights of wisdom in a world of rabbits staring at on coming traffic.

Why should I defend being a hedgie? I employ lots of people directly and indirectly, provide happiness to my investors who look after your pensions or spend the money on goods and services. We are the markets. And yet I am detested but I am the answer too. [Editor: Are you starting a new religion? Fintagology perhaps?]

So please call me Finbar L Taggit.

3 in a bed
Yesterday I visited a Prime Broker and thanks to a co-fintagger putting me onto Single Stock Futures as an alternative to existing stock lending arrangements for some of my financing needs, we had a lively debate indeed. No more fees, no more counterparty risk, no more state street hot stocks, no more trading errors. My PB agreement has also been finessed and all that one way clausing has now gone and my cash is spread around various other banks. My boot was firmly on my foot.

So I cabbed it to Fleet Street to see the paled skin. It was a similar story and suddenly the arrogance was gone. It was when I went into the local branch of Boots (a bit like a posher version of Duane Reade) for my weekend's supply of protection that I stumbled across a paradox. A dichotomy. We are in a depression and copulating is the new hi-def black for 2009. So one would have thought the price of contraception would go up. But no. Unlike most pubs where a condom costs two quid, Boots are selling them for 42p each. A buy one, get one free offer. I am sure the pope must be livid. Still, if it stops STD's that cannot be a bad thing. Or is it a sign deflation is here already?

It was national no smoking day and the lady in the store told me they couldn't find any smokers. I told her next year would be busier because if condoms are so cheap, there will be plenty more post coital cigarettes being smoked.

CNBC
For years now I have selected a CNBC news clip. Today they changed their videos and didn't tell me so I have to get my IT geek to sort out the new code.

THE MOST SENSIBLE SOLUTION IS TO POLICE THE BANKS FROM THE BOTTOM UP

telegraphFintag says
It has taken decades to get to where we are now. Trying to change the way the financial landscape works in 6 months is like ripping up all legal precedent and starting again. Madness. The banking model works; its just the politicians cannot stop interfering. As the heart of capitalism it is like getting someone who can barely read a medical textbook to perform open heart surgery.

Changing the regulation is a bit late now. The balance sheets of the banks are shot because the Auditors never bothered doing their job properly and the cumbersome capital ratio reporting was abused by the banks.

In 1991 I sat at the Bank of England in secret (still wearing nappies too) watching small banks being looked after the big. It was done in secret. Nobody knew. It worked. France have already done this and their banks are safe.

Sometimes transparency is not always a good idea.

Personally I think this is more worrying:



independent says " King warns banking sector may need more bailouts "

JAPAN RECESSION DEEPENS AS FACTORY OUTPUT PLUNGES

bloombergFintag says
No wonder the Japanese hate the Americans. Look what they have done - again. Twice bitten is careless.

DARK DAY FOR DIVIDENDS

cityamFintag says
No dividends is fine when interest rates are zero. Its the capital appreciation I am worried out. Best to stick with Junk Bonds for the time being.

BIGGER ROLE SOUGHT FOR ECB IN BANK SUPERVISION

timesFintag says
After the EU watched the FSA become the lead regulator worldwide, its time has come. And I welcome this. Time to scrap the FSA and have a regulator that has consistent regulation across many countries.

When BCCI went down years ago, the critics said it was because there was no one regulator. We never learn do we.

I bet in 20 years time we will be having the same discussions.

If everything was perfect it would be very dull indeed.

UBS UNDER ATTACK OVER MADOFF FUND

icfaFintag says
Ponzi schemes are everywhere. Someone pointed out to me yesterday that the Insurance industry is just one huge Ponzi scheme. They get a bad rap. AIG excepted, most insurance Ponzi schemes do very well. Even Buffet thinks so.

OBAMA PROPOSES BUDGET DEFICIT OF $1.75 TRILLION OR 12.3% OF GDP - - HIGHEST SINCE 1942

finfactsFintag says
He must be very proud. I am deeply shocked.

TAX CUTS

new york timesFintag says
When you are in a recession, people don't have income so tinkering with tax does very little as we have seen in the past. Confidence is what you need and it is in short supply.

NY HEDGE FUND CHARGED WITH FRAUD

hedge funds reviewFintag says
Another American Hedgie does it again. If you are an investor, forget the detailed due diligence. Ask these questions:

1. Do you have a well known independent Administrator?
2. Do you offer Managed Accounts?
3. Do you offer monthly or better liquidity with no silly 3 month notice?
4. Is the Prime Broker segregating the assets?
5. Is the fund audited by a top Accountancy firm?

If the answer is yes, then look at the performance and the volatility.

SMALL NEW STAR FUNDS EXTINGUISHED

financial timesFintag says
Oh dear.

AS IF CITIGROUP HAS JUST BEEN SOOOOO SUCCESSFUL AT INVESTING IN HEDGE FUNDS: IT'S PROVIDING SEED MONEY (ALONG WITH BLACKSTONE) TO SOME FORMER EMPLOYEES FOR THEIR $200M STARTUP

wall street follyFintag says
And why not eh? Another sad day in the world of Citi. So why hasn't the Bandit been fired yet?

GLOOMY LLOYDS GROUP RESULTS DUE

bbcFintag says
Oh dear. HBOS pulls down a decent bank. We warned you of course and many didn't listen:

GOODWIN STANDS FIRM £16M RBS PENSION

financial timesFintag says
His pension is even bigger than I thought. I will leave the viral as is though. Given RBS is costing the UK tax payer hundreds of billions, it is rather irrelevant. The man will need around the house protection unless he leaves the country and lives in France where he will be feted as a hero.

ISDA CDS STANDARD MODEL LAUNCHED/

aleaFintag says
Having banged on about the CDS market being an unregulated nightmare of comic proportions, I am pleased to see it becoming regulated. Many people love the CDS market and it has replaced the Credit Rating Agencies. We applaud this. The market is so much better when it is run by its participants.

VOLCKER URGES 'STRONG' RESTRICTIONS ON HEDGE FUNDS

bloombergFintag says
Hat tip to the fintagger who pointed out Volker's roadshow speech. He has strong opinions. I like that and I like the fact he can air them. Here are mine. The man is an idiot.