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
Yesterday my Prime Broker came to visit. That is twice so far this year. So I took them out for lunch at some restaurant in a department store called Fenwicks. A glass or two of fizzy italian beer and the truth came out. The business model is unprofitable.
In the heady days of low volatility, PB's made money from charging libor+ for leverage, fees for stock borrow and sitting on interest free cash. They charged brokerage fees, hypothercated and co-mingled for fun. The gravy train was full of fees but alas the gravy has dried up.
There is no leverage, stock lending volumes are down and we are all sitting on cash that is distributed around various banks with interest rates at historic lows. Segregation of asset demands following the Lehman debacle means it is costing the PB even more than usual to administer hedge funds. Gone are settlement clerks earning a million dollars a year. Now it is the legal departments who are in charge.
There is of course no sympathy. The party is over and they made their money.
All PB's do the same thing and differentiation used to be a brand game. Having Goldman as PB was like driving a Ferrari. Today, Goldman prime is just the same as Citi prime - both government owned banks - and now it's all about screwing your PB whoever they are. How the boot has got bigger on my foot. Counterparty risk is still a real issue though, whatever these banks say, and multi prime is the safest option.
As your know I have been banging on about position theft for years, especially when I see Goldman et al with their hedge fund replicators replicating what we do (by stealing our positions despite legal contracts saying no). Strangely they do not correlate with hedge fund performance anymore so my assertions that they were stealing my positions from the PB's is alas just a dead theory. But I still think they do. Front run that is.
I don't trust banks. I never have and never will. They are spies, crooks and imbeciles who ride their balance sheets like I ride my [Editor: Enough]
Gilty of Confusion So I forgot to mention the 10 year low UK Gilt auction uptake on Wednesday. Nobody wants our debt so the next grab will be my income and assets. Nice. And yet the Bank of England, having dropped rates to a ludicrous level on Thursday, are saying they will now buy up Gilts by printing money to do so. Now I am confused. Its not as if there is any fee income in it.
Now the markets are tanking and testing levels of support that look like wood worm ridden planks balancing on melting ice, it's time to reflect on the losses coming faster than the whole of last year. The ECB's pathetic catch up rate drop is lip service to the markets catching cold. Again.
But first, a sincere apology for missing out on the GLG story. I did read it but somehow got distracted. Thanks for berating me after I berated the journalists. I am as bad or as good as them.
The banking giant Citigroup commanded a stock price of $55 just two years ago. But at one point Thursday, as markets hurtled to their lowest close in 12 years, the shares were worth less than an item at the Dollar Store.
The number of companies trading at $10 or less on the Standard & Poor's 500-stock index has increased tenfold since the market reached a peak in October 2007. And with no end in sight to the downward spiral, the New York Stock Exchange has temporarily suspended its $1 minimum share-price requirements to prevent a wave of delistings.
Fintag says Blue Chip Penny Stocks. But of course post-Enron, nobody has stock in their employers any more. Do they? Now if these are penny stocks, everything else must be complete junk. How can Google be worth so much more than these dinosaurs?
Bargains of the century.
new york times says " You're Dead? That Won't Stop the Debt Collector "
PRINTING MONEY: £150 BILLION LEAP IN THE DARK FOR BANK OF ENGLAND
It pledged for the first time in its 315-year history to start effectively printing money as its main means of controlling the economy, warning that this was the only way to prevent the UK from suffering a lengthy recession and potentially becoming mired in deflation.
The move means that for the first time, interest rates are no longer the primary tool for monetary policy, with the Bank instead directly pumping cash into the system.
Fintag says I look forward to the 2 for 1 ATM offers coming very soon. Ideally I would like the government to give us a 1 year tax amnesty. That would work wonders and certainly stimulate my stimuli.
As for the moral hazard, is this just something in Wikipedia?
This is an historic event, but one I cannot be proud of. The UK was the world's greatest nation. Now it is a banana republic without the bananas. Or the weather.
LONDON BANKER TO BE QUESTIONED IN US OVER £25M MERRILL LYNCH BONUS
Mr Orcel is one of seven senior executives from investment bankers Merrill Lynch subpoenaed by the New York Attorney General over bonuses.
Andrew Cuomo is investigating $3.6 bn (£2.5 bn) in bonuses paid by Merrill shortly before it was bought out by Bank of America (BoA) last September.
Fintag says The man should be hounded back to Newgate and sent to the debtor's prison. In fact better still, Merrill Lynch should be turned into a debtor's prison. Charles Dickens must be lovin' it.
Britain's second largest insurer trimmed its final dividend by 6pc to 19.91p, but kept its total payout at 33p - provoking concern that it was jeopardising its capital position by maintaining the payment to shareholders.
Aviva's decison sparked a sell-off in the sector, with the shares topping the list of blue-chip fallers as they crashed 95.1 to a record low of 189.9p. Renewed concerns about the sector's solvency levels saw insurance companies account for six of eight biggest FTSE 100 casualties.
Fintag says Ah yes, my favourite short for 2009. Insurance. I still have no idea why Buffet loves these ponzi schemes. The trade is easy. AIG is a bag of manure so why should all the others be pot pourri?
times says " Are hedge funds banking on insurance killing? "
FRANK SEEKS TO CURB 'PHENOMENON OF SECURITIZATION'
The “phenomenon of securitization” must be curtailed by lawmakers to prohibit banks and mortgage lenders from shifting all the risk on loans they originate and sell to investors, U.S. House Financial Services Committee Chairman Barney Frank said.
“I will be pushing for legislation that will make it illegal for anybody to securitize 100 percent of anything,” Frank, a Massachusetts Democrat, told reporters at a briefing in Washington today. Securitization is a “large part” of the problem in the housing market, he said.
Fintag says Wow. The markets have being doing this for hundreds of years. Look at reinsurance. Its all about pass the parcel.
Top former Merrill Lynch executives, including two former CEOs, invested in hedge funds that lost money with alleged fraudster Bernard Madoff, becoming the highest-level Wall Street victims of the scandal to date, the Wall Street Journal reported on Thursday.
Former chief executives Daniel Tully and David Komansky and former investment-banking chief Barry Friedberg personally invested in the funds, set up by former Merrill brokerage chief John Steffens, the paper said, citing people familiar with the matter.
Fintag says Let us hop Mr Orcel invested his GBP 25million bonus in Madoff ...
During the first nine months of 2008, 2,717 institutional investors worldwide reported using one or more ETFs, according to research from Barclays Global Investors. Over the past 12 years the number of institutional users has increased 1,547%. This represents a compounded average growth rate (CAGR) of 26.29% over the past 12 years.
Institutional investors in 41 countries reported using at least one ETF through to the third quarter of 2008. The US, UK, Canada, Spain and Switzerland institutional users were the largest accounting for 83%. Investment advisors are the largest category of users accounting for 74% of institutional users. The CAGR for this category over the past 12 years is 27.51%.
Fintag says Given we are about the people in the markets, this is not a surprise.
A French court has rejected hedge fund GLG Partners' appeal of a fine for alleged insider trading.
The London-based hedge fund, which is listed on the New York Stock Exchange, said in a U.S. regulatory filing that its appeal was denied by the Court of Appeals in Paris. GLG was fined €1.5 million (US$1.9 million) by the Autorité des Marchés Financiers, the French markets regulator, for alleged insider trading of Vivendi shares.
Fintag says Better late than never. Sorry to see Pauline go to the laundrette in the sky. GLGenders will soon be returning to our screens later this year.
Top Goldman Sachs executive Jon Winkelried, will be barred from selling most of his shares in the bank when he steps down as one of its presidents at the end of this month because of a provision in the 2008 deal to sell a stake to Warren Buffett.
Only days after the collapse of Lehman Brothers in September, Mr Buffett's company, Berkshire Hathaway, agreed to invest $5bn in Goldman in return for 50,000 preferred shares, granting it a 10 per cent annual dividend, and warrants to purchase $5bn in common stock at $115 per share.
Fintag says Well at least the Buffoon did something right.
Commerzbank has put Comas, its $900m fund of hedge fund manager, up for sale just months after it gave its main asset management unit to Allianz, the insurer, as part-payment for its takeover of Dresdner Bank. The German bank is already in talks with several groups about selling the unit, which is likely to fetch a price tag in the tens of millions of euros.
Fintag says I do know of this unit and it was like a circus. Run by clowns for clowns.
36 SOUTH PLANS INFLATION HEDGE FUND AFTER 236% BLACK SWAN GAIN
36 South Investment Managers Ltd., a New Zealand-based hedge fund firm set up by derivatives traders, will close its Black Swan Fund after it gained 236 percent in the last 12 months and start a fund that wagers on inflation.
36 South will move to London from Auckland in May to boost its assets under management as investors have overlooked the manager because of its location, said Jerry Haworth, co-founder of the firm that manages more than $40 million.
Fintag says Unbelievable. This must be a ponzi scheme ... [Editor: Lawyers, he is only joking]
Like plenty of financial players, hedge funds are taking a beating.
Many once-high-flying managers have been swamped by losses. Others have abandoned the business after discovering it wasn't such an easy path to riches. Even some of the biggest firms -- Citadel Investment Group LLC, D.E. Shaw Group and Tudor Investment Corp., among others -- have had to block investors from withdrawing money.
Fintag says I like to be beaten, purged and berated. But that was last year. This year, we are stronger and fitter and ready to take on anyone. I mean who is David Reilly?
PUBLIC MAY ACCESS STAFF CANTEENS AT BAILED-OUT FIRMS
US lawmakers are now considering passing legislation which will result in the general public being given access to staff canteens at banks and other institutions where firms have taken financial assistance from the US government.
One lawmaker told Here Is The City: 'We are actively looking at ways to ensure that the US taxpayer feels better about the bail-out of these large financial institutions. One way is to give members of the public access to the (often) subsidized food provided at these canteens. We acknowledge that there are security implications to be considered, but we are confident that we can overcome these issues. Giving the public access to staff toilets and restrooms at these firms is also under active consideration. We aim to move forward aggressively on this'.
Fintag says I think April the 1st is in a few weeks time. Seriously, this is the funniest thing I have read today!
The Morgan Stanley canteen in Canary Wharf is quite nice but I would like to visit the Goldman one in New Jersey.
Perhaps someone could offer tours - I will sign up immediately.
Better still, I want pictures. Send me your anon pictures to info @ fintag.com and the best will enjoy lunch with me - at their canteen.
BEAR STEARNS'S 'DIRTY SECRET' BURSTS IN COHAN'S RECONSTRUCTION
The end for Bear Stearns Cos. proved swift and brutal.
As the scrappy U.S. securities house slipped into a sudden death spiral a year ago this month, Chief Executive Officer Alan Schwartz was hosting a media conference in Palm Beach.
Chairman Jimmy Cayne was playing tournament bridge in Detroit and didn't fly back to New York right away.
Fintag says We all know why it went wrong. It was when they started to hand out condoms at their conferences. With holes in too.
44 comments
anonymous said ...
The joke yesterday in the trading rooms was that McDonald's could put Citibank on its Dollar menu.
06 Mar 09 - 07:26 gmt
anonymous said ...
The US has the Federal Deposit Insurance Corp. (FDIC) which is intended to cover accounts with $250k or less in them and make them whole if the bank goes under.
In Sept. 2008 Sheila Beir said "Let me be clear: The insurance fund is in a strong financial position to weather a significant upsurge in bank failures."
Today, $500billion is being asked for by the Senate Banking Committee Chairman.
I guess the proposed $500 billion is just a loan and not a bailout.
06 Mar 09 - 07:31 gmt
anonymous said ...
Hey Fin - can't believe you missed this one - unless its YOU:
London Wealth Manager Offers Multi-Strat Fund:
London-based wealth management shop Rathbone Investment Management has launched a second multistrategy fund for risk-averse investors looking for broad exposure to traditional and alternative asset classes.
06 Mar 09 - 07:34 gmt
anonymous said ...
Another day, another alleged Ponzi scheme uncovered. This time, it’s from the heart of Texas, with the Commodity Futures Trading Commission accusing Ray White and his hedge fund of stealing $10.8 million from investors.
Pittance really. Wake me when we get to another trillion dollar deal. That's how cynical I am now. Anything below that T mark is just so yesterday!
06 Mar 09 - 07:37 gmt
AJ said ...
GE was a Ponzi scheme.
06 Mar 09 - 07:42 gmt
AthenaDelphi said ...
Moron, you'll be tickled to know that I blew a trade but I'm hanging on to see if the mark to market issue is resolved in congress at its March 12th mtg. and it bumps up to even the position. Since we're down to the ?Dollar Menu? (who comes up with this stuff) price, there doesn't seem much point in selling it since I can still take it as a capital loss on taxes.
06 Mar 09 - 07:45 gmt
AthenaDelphi said ...
I don't like it that I wasn't first comment. I'm taking my marbles and going home. Besides which, that Fin article about using Goldman toilets and the cafe are so Bolshevik, I want to vomit.
Have a sweet weekend MrsR. You too donkey.
06 Mar 09 - 07:49 gmt
anonymous said ...
Sun UK - The Queen to Meet Privately with Obama.
Maybe she'll get some nice movies from the man who would be king. His wife looks like a Klingon from Star Trek.
06 Mar 09 - 07:54 gmt
anonymous said ...
h t t p://blogs.telegraph.co.uk/james_delingpole/blog/2009/03/05/was_lady_macbeth_behind_barack_obamas_snub_of_gordon_brown
Lady McBeth not Klingon.
06 Mar 09 - 07:58 gmt
anonymous said ...
Fortis loses 6.6million euros and its up?
06 Mar 09 - 08:04 gmt
damiendamien said ...
FDIC one is scary. LA riots on steroids. Trillions can be spent on AIG but when Travis loses the money he was saving for his car...time to start practicing James Stewart speech from Its A Wonderful Life and buy armour.
In other news, any unemployed fancy the midday showing of Watchmen? Conflicting reviews...
06 Mar 09 - 09:21 gmt
Moron said ...
dribble dribble dribble.....i am so stupid....it hurts:))))
06 Mar 09 - 09:22 gmt
anonymous said ...
any body think that this setting up of a government backed good bank to lend to the people is a good idea, hybrid quant easing. I was told the other day that if the governemtn had paid off every mortgage in england it would be cheaper! ha amazing.
06 Mar 09 - 09:35 gmt
Moron said ...
start going aggressively long here......i am smelling a 10% plus rally.....still a bear market rally....but a great opportunity to pick up a few pennies before the bulldozer returns!!
06 Mar 09 - 09:48 gmt
anonymous said ...
ig index is cool isn't it moron. sitting at home doing a little bit of this betting on that, £1 a point hahah.
06 Mar 09 - 09:50 gmt
Moron said ...
bitter anon is back.....looooser:))))!!! life sucks doesn't it ...remember what i said last year matey....paddington....on the double!!
06 Mar 09 - 09:53 gmt
anonymous said ...
moron up £23 today. good work mate
06 Mar 09 - 10:11 gmt
Moron said ...
so bitter....just don't wanna give anyone any credit don't u.....naturally just assumed that if u r a miserable piece of sh*t....then so shud everyone else be....ppl like u shud be locked up in a high security mental asylum....!!
06 Mar 09 - 10:14 gmt
anonymous said ...
moron, we all know that you are a lonely individual with no mates. you say your office is full of dicks i bet they bully you, if of course your office doesn't just consist of a sofa a lap top and a cat or two. moron up £15 today
06 Mar 09 - 10:18 gmt
Moron said ...
whatever lights ur fire mate....feel free to assume whatever u want.....i am happy to be whatever u think i am in ur sick little head.....bottomline.....u don't exactly matter in my existence...doubt if u exactly matter in anybody's existence....flattered though that u have been noting every word i have said on this blog....it takes a little bit of tact to deal with sick fu*ks like urself....:)))
06 Mar 09 - 10:25 gmt
Moron said ...
as for getting bullied....don't worry....i know how to stand up for myself....in real life i'm not always as nice as i seem to be here....i know very well how cowards like u work....certain dogs need a hard kicking from time to time!!
06 Mar 09 - 10:29 gmt
anonymous said ...
i just have a feekish memory. plus love getting a rise out of you on a hungover Friday. I envy your sofa, gs back office isn't the best place to be. hahaha yup lonely PB back office staff.
06 Mar 09 - 10:29 gmt
Moron said ...
cool...so at least i get upgraded to gs back office...thank you very much~:))
06 Mar 09 - 10:33 gmt
anonymous said ...
moron up £3 today
06 Mar 09 - 10:34 gmt
anonymous said ...
no mate thats me.
06 Mar 09 - 10:35 gmt
PPSec said ...
Love acually: "Love is all around..."
06 Mar 09 - 10:48 gmt
Moron said ...
:))) Happy Friday!
06 Mar 09 - 10:51 gmt
Anonymous Bull said ...
Hey anon 10:34/10:35 you shd take some pics of the gs staff canteen, get you that lunch with fintag..
06 Mar 09 - 10:52 gmt
fitzcaraldo said ...
public access to staff toilets - I like this, we will be able to mingle with people from real life...
06 Mar 09 - 11:34 gmt
Moron said ...
i think this rally might just be finished bfore it even started.....diseased market!!
06 Mar 09 - 14:47 gmt
Osiris said ...
yay for the banana republic; keating would be proud. the moral hazard of printing is nucking futs, and which new pariahs will they force to run the 'bad' banks? what comes next is to remain between me and my therapist (until it happens independantly of my actions)
06 Mar 09 - 15:50 gmt
Moron said ...
reload ur shorts....this market is so broken...it can't even manage a bear market rally....welcome to the great decession!!!!
06 Mar 09 - 15:55 gmt
Osiris said ...
at the gates of heaven - st peter at the gates of hell - moron welcome to limbo :-p
06 Mar 09 - 16:39 gmt
Moron said ...
i am the devil!!!!........and also a donkey:))
06 Mar 09 - 16:51 gmt
MsR said ...
Good morning. I see the kids have been chucking toys out of the pram again. Moron I told you not to bully the disabled children:)
06 Mar 09 - 17:06 gmt
Moron said ...
ms R I is a nasty piece of work....grrrrrrrr!!!!!:))))
06 Mar 09 - 17:08 gmt
MsR said ...
@Moron: I think I know better:)
06 Mar 09 - 17:19 gmt
Moron said ...
trust me...I is so nasty.....I make M Roman look like a sweetie by comparison:)))))
06 Mar 09 - 17:26 gmt
AthenaDelphi said ...
wow. i leave for a few hours and there's a spat between anon and moron the donkey.
i'm glad its friday!
1. Liked the Klingon and Lady McBeth comments. I read the article 2. Seems like O Head's head can be turned by the Queen's invite to tea. 3. FDIC is a huge problem since there is $4trillion in regular deposits and now we know only $500 billion to back them. That means they're levered x8. Yikes!
06 Mar 09 - 17:44 gmt
AthenaDelphi said ...
Moron - if you knew the USA was singing its swan song - what would be the trade?
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