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
It runs out in 42 years time. Ish. The USA consumes 22% of the world's oil. Demand is falling rapidly for new oil and the supply in reserves is plentiful. The US demand fell over 6% last year due to the death of SUV's and flying being the preserve of the rich. Total demand globally has fallen nearly 4% and will fall as countries like China develop non oil consuming industries (coal is much cheaper). So says the CEO of BP.
Upshot is to short BP and all oil companies.
When supply is plentiful and demand is falling, basic economics tells us prices fall and BP et al profits shrink.
So why has the cost of USD barrel of brent crude oil increased? A few months ago it was in the 30s and now its in the 70s. I note future trading volumes have dropped off so is this another Goldman 200 dollar speculative bubble?
All very fishy but not as interesting as watching mummy's boy Ronaldo, the world footbal player of the year who is dating someone called Paris Hilton, be sold for GBP80m. Why is he leaving the UK for Spain? Sun and tax of course.
Professional hedge fund seeders are showing renewed interest in backing nascent managers, after a year when the burden of financial support for entrants into the beleaguered industry often fell on the relatives and friends of aspiring managers.
Fintag says Now this has made my weekend. Much of the chaff has been taken out of the market but the lifeblood of any industry are lots of participants to keep us all on our toes. Of course, once the cap intro team take their cut, the hard part is pretending to make alpha when you are just making beta.
HF MANAGED ACCOUNTS MAY NOT BE NO-BRAINER. MAY REQUIRE QUARTER - MAYBE HALF - A BRAIN AFTER ALL.
But despite the fact that managed account platform provider Lyxor sponsored the paper, Giraud wrote:
“Managed accounts are often cited as the panacea when it comes to investor protection, but one should not overestimate the benefits of such platforms as the extent of the protection is highly dependent on the nature of the platform and the infrastructure supporting the trading activity.”
So what used to be a no-brainer may require, say, half a brain now in order to navigate some of the potential pitfalls.
(For more on the pros and cons of managed accounts and of Lyxor's platform in particular, see my interview with Tris Lett of Lyxor's Canadian partner, Integra Capital.)
Fintag says I needed half a brain to realise that this product placement article was a no brainer too.
“The shock originated in the U.S., but Europe is paying a higher price,” said Jean Pisani-Ferry, a former top financial adviser to the French government who is now director of Bruegel, a research center in Brussels.
Almost from the beginning of the crisis, the United States and Europe chose largely different paths to aiding their economies. The most stark was Washington's willingness to commit hundreds of billions of dollars to stimulus spending — in addition to moving aggressively to shore up banks and keep credit flowing — versus Europe's worry that similar spending would increase inflation in the future.
Fintag says The old adage, "The US sneezes and Europe catches swine flu" still holds true.
It seems like a paradox: Demand for oil, which almost always rises, is likely to drop by 3 percent in 2009 — the worst decline in almost 30 years. Stockpiles are so high that an ocean of oil is building up around the world in tankers or in depots. Yet since hitting a low of $34 per barrel on Feb. 12, the price of light, sweet U.S. crude has more than doubled, to $71 per barrel. Why are prices soaring?
OPEC officials and oil traders say that market sentiment has changed dramatically. Investors, who dumped oil last fall, are no longer deterred by the prospect of a glut. Instead, with extreme pessimism about the world economy giving way to cautious optimism, markets are reverting to last year's worries about future supply shortages. "Hedge funds and asset managers who have been sitting on cash now feel it's time to buy (oil)" says Göran Trapp, head of global oil trading at Morgan Stanley in London. Some $3.8 billion has flowed into oil and gas exchange traded funds this year, vs. $1.4 billion in the first half of 2008.
Fintag says The oil market is like disney land. All fanatasy.
Highbridge Capital Management's Henry Swieca plans to leave the firm by the end of the year as JPMorgan Chase completes its takeover of the hedge fund giant.
The Highbridge-JPMorgan partnership has been one of the most successful in the hedge fund industry, making the Wall Street giant one of the largest hedge fund managers in the world. Most of its assets under management—which stood at nearly $33 billion at the end of last year—are invested with Highbridge, which has seen its own assets under management triple over the past five years to $21 billion.
Hedge funds returned an average 5.2% in May, the best performance in more than nine years, as they drew more money and global markets rallied, said research firm Eurekahedge, reports Bloomberg. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, has returned 9.2% this year, according to a preliminary report. The industry recorded net inflows for the first time in 10 months in May, with a $1.5bn gain, while total assets rose by $5bn, it said.
Fintag says Hedge funds should have low volatility. Unfortunately we don't because most of us are useless long only donkeys. So this is actually very bad news.
bloomberg says " Hedge Funds Post Best Performance in 9 Years, Eurekahedge Says "
ONE of the longest-running transfer sagas of recent years edged close to conclusion yesterday when Manchester United accepted a world record-shattering £80m bid from Real Madrid for Cristiano Ronaldo.
United said they gave Real permission to discuss personal terms with Ronaldo, 24, after the Fifa World Player of the Year informed the Old Trafford hierarchy that he wanted to move to the Spanish club.
Fintag says The world is in recession and this goes on. Nice.
BUYERS FACE HIKE IN MORTGAGE RATES AS INFLATION FEARS MOUNT
• Oil prices have more than doubled, hitting an eight-month high of $72 a barrel yesterday;
• Manufacturing output in the UK increased in April, prompting predictions that the recession is coming to an end;
• There are fears the Bank of England's £125bn quantitative easing policy could feed through into rising prices if consumer demand recovers rapidly.
Fintag says Phew! As I said a while back, deflation was never going to happen. Inflation is needed to revalue debt but this all comes at a cost. Interest rates will have to rise and hence slow down any recovery unless of course the ECB, Fed and BoE decide to leave rates low and really stoke it up.
Remember after the 1970's recession, inflation shot up for similar reasons.
this is money says " West Bromwich BS 'close to rescue' "
CALLS FOR BROWN TO GO NUCLEAR IN CITY BATTLE WITH EU
As Europe's leaders prepare to strip Britain of ultimate control over finance, insurance, and securities, defenders of the City have begun to talk darkly of the nuclear option - known in EU lore as the "Luxembourg Compromise"
"Once we lose of control over the City of London we will never get it back, and the consequences could be catastrophic. I think we are in 'Luxembourg terrritory'. If the City was in Paris you could be pretty sure that French would fight like tigers to save it," he said.
Fintag says Jealousy. But Brown is going to lose the City because of his tax hikes too. Why is the UK still part of Europe?
HOUSEHOLD WEALTH IN U.S. DECREASED BY $1.3 TRILLION
U.S. household wealth fell in the first quarter by $1.3 trillion, extending the biggest slump on record, as home and stock prices dropped.
Net worth for households and non-profit groups decreased to $50.4 trillion, the lowest level since 2004, from $51.7 trillion in the fourth quarter, according to the Federal Reserve's Flow of Funds report today. The government began keeping quarterly records in 1952.
Fintag says That seems quite a lot.
EX-LEHMAN, GIC MANAGERS FUEL ASIA HEDGE-FUND INDUSTRY RENEWAL
Former Lehman Brothers Holdings Inc. and Government of Singapore Investment Corp. traders are among an estimated 32 hedge-fund startups in Asia that are offering strategies beyond equities, after a record 180 funds closed in the region during last year's global markets rout.
About 65 percent of hedge funds in Asia trade only equities, compared with a global average of 44 percent, data compiled by Singapore-based GFIA Pte and Eurekahedge Pte show. As a result, Asia's managers underperformed their peers from Europe and the U.S. after the MSCI Asia-Pacific Index fell 43 percent in 2008, the biggest drop in its two-decade history. The U.S. benchmark Standard & Poor's 500 Index declined 38.5 percent last year.
Fintag says Asia is really important in the hedge fund arena and this is good news.
BlackRock Inc. said on Thursday it will buy British bank Barclays Plc's investment arm BGI for $13.5 billion in a blockbuster deal that will create the world's biggest asset manager.
For BlackRock, a 21-year old company which relied heavily on acquisitions to grow from a one-room bond investment firm into the largest publicly traded U.S. money manager, the deal will more than double assets to roughly $2.7 trillion.
Fintag says Unbelievable. Barclays shareholders are letting it sell its silver and Bobby Geezer and Richman Ricci make themselves tens of millions. Time to buy a new shirt Mr Diamond:
Investors in two feeder funds have sued Kingate Management and its directors regarding their investment in the defunct Bernard Madoff firm, The Wall Street Journal reports. The investors are seeking to recover around $3.5 billion in alleged losses.
The two funds Kingate Global Fund and Kingate Euro Fund were launched by Italy's Carlo Grosso. The investors involved in the suit are Criterium Capital Funds, BBF Trust, Wall Street Securities, Banca Arner and Alvaro Castillo, a Swiss individual who invested in Kingate Global.
Fintag says In January Kingate were going to sue Madoff!
market watch says " Kingate considers joining class action on Madoff "
telegraph says " Inquest into death of Bernard Madoff fraud victim "
35 comments
anonymous said ...
I love it when you use that picture of "Diamond Bob"
12 Jun 09 - 06:17 gmt
Munch said ...
Damn, f*ck, sh*t, p*ss!
Miunch wanted to be FIRST!
Who this "anonymous" fella?
Scram!
12 Jun 09 - 06:34 gmt
AthenaDelphi said ...
fin- 1. the numbers say americans lost 1.x trillion but I can tell you, the lines at Starbucks for $5 coffees are just as long as they used to be.
2. Not to be picky but I thought deflation and inflation were a function of money supply as opposed to prices. Remember this from my austrian economics class.They were pretty strict on getting this right.
12 Jun 09 - 06:48 gmt
Top Cat said ...
Presume you mean capital gains taxes on the profits of houses, not sales proceeds, which would seem a little harsh. Why the random picture of a hand dryer?
12 Jun 09 - 07:14 gmt
Finbar said ...
Yes, I meant sales proceeds. Houses are not investments and we should all rent. As for price changes, Austrian economics died with Denis Thatcher. Money supply is a fantasy.
12 Jun 09 - 08:09 gmt
Top Cat said ...
A bit excessive Mr Taggit. Anyone who decides to bite their thumb at you and own a house would lose a big chunk of their equity every time they moved! More reasonable to tax profits with some sort of time indexing of cost, but as you're an accountant, I'm sure I am preaching to the converted...Or perhaps your socialist tendencies are suggesting we live in standardised commune blocks?
12 Jun 09 - 08:30 gmt
Shirley Tang said ...
Finbar - you should ask Driss how he is getting on with his walk-on part in GLG-Enders....apparently he's having a very "interesting" month.....me thinks the curtain call is not far away....
12 Jun 09 - 08:35 gmt
anonymous said ...
do tell more shirley where is driss exposed? he was down 10.5% YTD as of end April
12 Jun 09 - 08:48 gmt
anonymous said ...
had lunch with a german IB who advises the vatican yesterday. arrr isn't insight a wonderful thing. "My boy, we invest in centuries not years"
12 Jun 09 - 10:09 gmt
silver surfer said ...
isn't that air dryer in Goodmans on Maddox Street? Nice steaks. Bit weird to eat in a Russian owned New York style steakhouse in London....
12 Jun 09 - 10:15 gmt
Osiris said ...
care to rethink that one fin? keeping govt. interest rates low doesn't necessarily stoke inflation. uncle milt was wrong. it could create a new bubble IF spreads come down AND the sector starts lending, otherwise its a slow decline or at best a japan-style stagnant decade. the real myth is a fiscal deficit-debt correlation.
12 Jun 09 - 12:17 gmt
anonymous said ...
So quiet today, I almost wish that twat Moron was commenting here. Hang on a minute - perhaps not
12 Jun 09 - 13:09 gmt
Moron said ...
AAAH CHOOO!!!!!!!!!!
12 Jun 09 - 13:30 gmt
anonymous said ...
swine flu i hope
12 Jun 09 - 14:06 gmt
auckland said ...
Don't short oil today. There will be a slight dip at some point, but to me it is too risky to play. Demand in emerging economies is going to be a monster, so don't buy all the talk about demand destruction occurring for five years. Lastly, don't forget that oil is priced in USD . . . for now.
Look for $100+ within 12 - 18 months. Alas, yes I know that Alexei Miller, the ultimate contrarian indicator, opened his fat idiotic mouth yesterday.
12 Jun 09 - 14:33 gmt
Moron said ...
WE ARE GOING TO CRASH!!!!!!!!!
12 Jun 09 - 15:05 gmt
Etaoin said ...
Moron, are you heckling yourself anonymously, as Anonymous?
12 Jun 09 - 15:39 gmt
Moron said ...
no...but shud I .....sounds like fun!!!!
12 Jun 09 - 15:43 gmt
anonymous said ...
I reckon moron works at GLG...In what capacity cannot be said
12 Jun 09 - 16:05 gmt
Moron said ...
no mate...I have never worked at GLG....whats the point....they r finished anyway
12 Jun 09 - 16:12 gmt
noroM said ...
(:::::::::HSARC OT GNIOG ERA EW
12 Jun 09 - 16:37 gmt
Moron said ...
I see on bloomberg Driss is not even in the office today...incredible...a trader who takes a summer Friday off.....sounds very long only to me!!!
12 Jun 09 - 16:54 gmt
anonymous said ...
Seriously - if anyone has enough time to make the muppet comments you make Moron, including writing the same unfunny comments several times a day, and now writing them backwards, they simply cannot be anyone of any importance. You're a junior trading assistant, junior back office monkey, or window cleaner. Stop making out you are a big time PM
12 Jun 09 - 16:55 gmt
Moron said ...
I have all the time in the world mate....bcos I just happen to work, type, think, process blah blah a lot quicker than idi*ts like u.....so shut up!!!!
12 Jun 09 - 17:05 gmt
anonymous said ...
You protest too much
12 Jun 09 - 17:11 gmt
FSA said ...
Dare I say it but that sneeze from Moron was almost funny. I don't know how but it nearly achieved comic timing in my mind.
The second comment was reassuringly back to normal however.
12 Jun 09 - 17:27 gmt
Moron said ...
ATTACK KILL DESTROY!!!!!!!!!!!!....where is Maria......the tiger is in the mood for some Friday afternoon romance:)))
12 Jun 09 - 17:32 gmt
Anonymous Bull said ...
Either Moron has 5+ screens on his trading desk ( unlikely) or he is a window cleaner at GLG...lol!!
12 Jun 09 - 17:39 gmt
Moron said ...
Anon Bull.....when we crash.....what are u gonna call urself:)))) at least Moron can be Moron in bull and bear markets!!!
12 Jun 09 - 17:45 gmt
Anonymous Bull said ...
IF and WHEN we crash moron I will call myself anon bear. But I can't see that happening for a v long time
12 Jun 09 - 18:44 gmt
Moron said ...
I will make u eat ur words....and then u will worship at the feet of the dark sith lord!!!!!
12 Jun 09 - 19:03 gmt
Osiris said ...
what scares the shit out of me: in 5-10 yrs time the consensus of economists may be that this whole episode was caused by excess; first on the part of consumers, then on the part of corporations, then on the part of governments. simple and compelling, the democratic way of aggregation, and so utterly false.
13 Jun 09 - 08:33 gmt
Osiris said ...
neo-liberalism has (or should) die in the arse because: public sector surplus = private sector deficit corporate/industrial surplus = employee/consumer deficit the process is slowed and the fall made worse by leveraging of the last two. a dearth of free equity created by governments not deficit spending; it spikes the income distribution and forces a discharge. far more like an electric capacitor cycle than a harmonic oscillator.
13 Jun 09 - 08:47 gmt
Osiris said ...
6 months ago it was too late for a v recovery, in the last few months it has been too late for a w. v recoveries are for paper shuffling that has little to no effect on physical output, w recoveries are for an unexpected adjustment confined to a single sector, then propped up by the rest. L recoveries are a failure to either isolate a problem or to recognise a systemic one.
13 Jun 09 - 08:54 gmt
Osiris said ...
most macro indicators are ratshit, micro indicators are ratshit, the market no longer reacts to the fall of large, well established companies (or seemingly any bad news) and yet equities soar because ... why? noone wants to miss the bottom? winter turned into spring into summer? the phases of the moon? there, i've had my rant. now i can ignore this site for quite a while
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