THE FINTAG NEWSLETTER
@ Fri 08 May 2009 : GMT

FINTAG COMMENT

Mark to pricey Market data.

I reckon 80% of my exposures are to listed instruments. They are easy to price and easy to buy and sell. The other 20%, and I am not telling you the value because I haven't a clue, is exposure to unlisted, unquoted, OTC, off exchange stuff. I own debts in Lehman so its probably a good 4 years before I get to see value; I own AIG instruments that have spreads as wide as my ego; and bits of Icelandic paper knocked together using tippex and sellotape that I have framed for prosperity. Valuing much of it is not possible or quite frankly warranted. I buy for the long haul and have no interest in valuing something that has no market and I cannot sell anyway.

My investors aren't happy. For many years they turned a blind eye. Now they won't accept my marks anymore and are demanding independent pricing. Problem is the brokers charge a lot of money for prices. If I pay for it, it cuts into my lifestyle. My Administrators won't pay because the license arrangements are onerous and they work to tight margins as it is. They are too scared to assign Bloomberg tickers or Cusips to my listed positions as it is. If you want independence, the investor should pay. But the investor won't pay so why should I? So we end up in stale mate.

You see in boom times, data is free. Or freely stolen. Vendors didn't care. Today it costs an arm and a leg. It really does. And this is causing Regulators a real pain in the art works. Regulators, mifids, compliance jockeys and internal and external auditors want independent mark to marking. But they want it for free as if they were checking prices off google finance. They want to cherry pick instruments but the brokers only offer global non distribution licenses on portfolios of instruments. They cost tens of thousands of dollars.

Mike Bloomberg or Markit didn't get where they are today by giving away data for global consumption. The Regulators want to ensure RBS or Barclays are telling the truth. But they won't pay for the data that is out there. And nor will the banks or hedge funds. The upshot is as usual, data vendors are the winner, and the regulators and investors losers.

So if Obama wants to do something useful, then nationalize the data vendors and create a market data source that we can all use for free.

THE INTERNET'S ROLE IN GAMING THE MARKETS

new york timesFintag says
A good reason why markets are so volatile. Information transparency was always thought to be a great leveller to the efficient market exponents. Alas, it has not done so. RSS feeds and streaming news is also contributing to a market of ups and downs.

We love it.

HEDGE FUND GIANT GOTTEX TAKES STAKE IN SJC CAPITAL

finalternativesFintag says
Don't forget to pack the toothpaste ...

AIG BLAMES MARKET DISRUPTION FOR LOSS

financial timesFintag says
Well it is never going to blame itself for its incompetence, is it?

This loss is a tax payer loss so what is the US taxpayer going to do then? Pump in more money or ride out the losses and hope the future gains are really stellar?

bloomberg says " Morgan Stanley to Raise $5 Billion in Stock, Debt "

HEDGE FUNDS RISE 3.8 PERCENT IN APRIL

dealbookFintag says
Warm glow. Pride. Middle finger.

bloomberg says " Income Partners to Reopen Oldest Hedge Fund to Redemptions "

STERLING SPOOKED BY BANK'S SPENDING SPREE

this is moneyFintag says
As it should be. Looks like Mervyn is really worried about deflation and so I am I. My bet to run naked down Regent Street still stands if the UK suffers deflation.

So a message to Mervyn - please print faster ...

U.S. BANKS RACE TO FILL $74.6 BILLION STRESS TEST HOLE

reutersFintag says
That is a lot of money. Will Obama ask the US taxpayer to fill the gaps I wonder?

The real question is what is the point? These banks are all underwritten by the US government so they might as well not have any capital reserves.

alea says " New York Fed Board Chairman Stephen Friedman Resigns "

BROWN EXPENSES CLAIM REVEALED

financial timesFintag says
Imagine a UK Prime Minister trying to avoid tax. I go to prison and he gets to be able to say "sorry" and carry on.

Soon we will have murderers in court saying "I had an off day but don't worry I will pay the funeral bills."

FORTRESS SHEDS OVER $2 BILLION IN FIRST QUARTER

finalternativesFintag says
It loses 10% AUM and loses USD300m. So 1 billion of AUM is worth 100m in income. Wow. 10% return. Not bad at all.

CHRYSLER AND THE NON TARP LENDERS - AND INVESTORS' REPUTATION RISK

castlehallFintag says
I haven't reported this saga because I, frankly, am finding it really dull. Where are the horses and dancing girls?

MAJOR BANKS NEGOTIATE, SPIN, CHAFE AT STRESS-TEST RESULTS

washington postFintag says
Now that isn't a surprise.

Bankers versus Civil Servants.