Main News

 

Sowood founder apologizes
Boston Globe Sat, 04 Aug 2007 2:11 AM PDT
A contrite Jeff Larson, founder of Boston hedge fund Sowood Capital Management, spoke to his clients for the first time yesterday and tried to explain how events of recent weeks wiped out more than half of their $3 billion investment.

 

 

Market Snapshot: Stock markets face more credit-crunch volatility
By Nick Godt MarketWatch
8/4/2007 9:55:00 AM
NEW YORK (MarketWatch) -- U.S. stocks will fall next week, continuing a broad sell-off seen on Friday, as investors stay on high-alert for more bad news linked to dodgy home loans, credit woes, and their potential impact on the broad economy, analysts said. Complete Story...

 

Bear hedge fund sank as Merrill protected clients
Washington Post Fri, 03 Aug 2007 5:03 AM PDT
NEW YORK (Reuters) - A late June move by Merrill Lynch & Co. Inc. to protect its clients from a struggling hedge fund run by Bear Stearns Cos. Inc. helped hasten the fund's ultimate collapse, court papers show.

 

 

 

Bear Stearns Ousts Spector After Hedge Fund Losses (Update1)
Bloomberg.com Sun, 05 Aug 2007 3:22 PM PDT
Aug. 5 (Bloomberg) -- Bear Stearns Cos. ousted Co-President Warren Spector after credit-market losses and eroding investor confidence increased pressure for management changes at the second-largest underwriter of securities tied to the slumping U.S. housing market.

 

Ticking Time Bomb?
Depending on how the subprime-mortgage problems play out, ACA Capital could endure -- or explode, sending shrapnel flying.
http://online.barrons.com/article/SB118619260136587979.html?mod=djem_bwr

 

Fourth Bear Stearns fund reportedly safe
CNN Money Fri, 03 Aug 2007 5:45 AM PDT
Despite redemption woes at three different hedge funds, Bear Stearns Structured Risk Partners delivered positive results in July, source says

 

Financial Institutions
Bear Stearns Cos. Inc. Outlook Revised To Negative; 'A+/A-1' Rating Affirmed
Notwithstanding the challenges it faces, Bear Stearns' (A+/Negative/A-1) liquidity is strong. Still, the negative outlook reflects our concerns about recent developments and their potential to hurt Bear Stearns' performance for an extended period. We believe Bear Stearns' reputation has suffered from the widely publicized problems of its managed hedge funds, leaving the company a potential target of litigation from investors who have suffered substantial losses.
To learn more, click or copy and paste the URL below:
(subscription required)
http://standardandpoors.rsys1.net/servlet/cc5?kHiQUDSRQTVsLgHxhilpuHQJhuV2VT

 

Bear Stearns Responds to S&P Action
By BusinessWire
8/3/2007 12:04:12 PM

 

PRIM's hedge fund return OK despite Sowood
Pensions & Investments - Chicago,IL,USA
The Massachusetts Pension Reserves Investment Management board's diversified program of hedge fund investments will remain well above its "T-bills + 4" ...
See all stories on this topic

 

Earth to Economist: Credit Is Getting Tighter
Some economists who know what's happening a world away are clueless to what's happening here.
http://online.barrons.com/article/SB118600729177785308.html?mod=djemBF

 

How Deutsche's subprime bet proved a winner -- [at FT.com]
FT.com
8/1/2007 4:10:45 PM

 

Jabre's Fund Profits
Wall Street Journal - USA
LONDON -- The hedge fund that trader Philippe Jabre set up after he received a record fine for market abuse from the United Kingdom's market regulator is ...

 

Some hedge funds racked up big profits amid the markets' woes in July, usually by betting on problems in the subprime-mortgage market.
http://online.wsj.com/article/0,,heard_on_the_street,00.html?mod=djemheard

 

Bear hedge fund sank as Merrill protected clients
Reuters - USA
N: Quote, Profile, Research) to protect its clients from a struggling hedge fund run by Bear Stearns Cos. Inc. (BSC.N: Quote, Profile, Research) helped ...

 

Hennessee Hedge Fund Consultants Out-Jaws Bayou 'Gator
Seeking Alpha - New York,NY,USA
Greg Newton submits: Hedge fund consultants Hennessee Group turned back aggrieved investors this week when an investor lawsuit, alleging recklessness, ...

 

HOUSE EYES NEW HEDGE, P/E TAX BILL: http://www.nypost.com/seven/08042007/business/house_eyes_new_hedge__p_e_tax_bill_business_.htm
Bloomberg
The House next month will combine legislation that would more than doubles taxes for managers of private-equity firms and hedge funds with a measure curtailing the alternative minimum tax, Ways and Means Committee Chairman Charles Rangel said. "It's the top priority," said Rangel...

 

BUISNESS BRIEFS: http://www.nypost.com/seven/08042007/business/buisness_briefs_business_.htm
AP, Bloomberg, Reuters, N.Y. Post
Bankruptcies  Bankruptcy filings were 38 percent higher last month than in July 2006 and are 50 percent higher for all 2007 than they were a year ago, according to data com plied by private research company Jupiter eSource LLC. Almost 307,000 bankruptcies...

 

Are financial markets too complex? -- [at FT.com]
FT.com
8/3/2007 10:25:45 AM

 

Merrill Lynch Report: Hedge Fund Replication Avoids Headline Risk
Seeking Alpha - New York,NY,USA
It covers three strategies: swaps (apparently in relation to portable alpha strategies), commodities and hedge fund replication. The report cites Casey, ...
See all stories on this topic

 

U of T fund CEO decides to leave
Canada.com - Hamilton,Ontario,Canada
As with other managers, UTAM embraced a portable alpha strategy -- essentially combining an synthetic exposure to hedge funds with the returns from a ...
See all stories on this topic

 

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Yield Curve Corner

 

The Search for Nuance From the Fed
New York Times - United States
Some take recent remarks by its chairman, Ben S. Bernanke, as a sign that the next eventual move in interest rates will be up, while others are just as

 

Banca Italease is to reorganise its risk management and control processes following the announcement of a net loss of €686 million from its derivatives business. The Milan-based bank attributed the losses to inadequate controls for evaluating risks and monitoring its derivatives portfolio. The bank also plans to replenish its capital through a rights issue for a maximum of €700 million before year-end. Many of the contracts sold by the bank were highly leveraged and included barriers referenced to Euribor – the instruments provided enhanced returns so long as Euribor remained within a pre-specified range. As European interest rates started to rise, the barriers were breached, causing sizeable mark-to-market losses for the bank. The bank plans a rights issue for up to €700 million before year-end.
Banca Italease restructures after €686 million losses on derivatives

 

The number of pension schemes using derivatives to hedge their inflation and interest rate risks in connection with liability-driven investment strategies has trebled over the past year, according to a survey by Mercer Human Resource Consulting and the Association of Corporate Treasurers. The survey revealed that 17.5% of the respondents are now undertaking interest rate hedging, an increase from 6.3% in 2006, and 16.5% are employing inflation hedging, up from 4.2% last year. Participants’ use of credit derivatives is now at 5.8%, an increase from 0% last year, and 28.2% used currency derivatives.
Pension funds treble use of derivatives, according to Mercer survey

 

Nomura Securities has laid off the three remaining members in its New York-based structured finance research division and transferred two others. Among those let go was Mark Adelson, who spent six years at the firm as its head of structured finance research. James Manzi, head of commercial mortgage-backed securities (CMBS) and commercial real estate collateralised debt obligations (CRE CDO) research and strategy, and analyst Diana Berezina were also laid off. CDO and ABS analyst Edward Santevecchi and head of quantitative research Weimin Jin were transferred to the structured credit trading desk, but it is understood that Jin has given notice and will leave the firm shortly. The changes come on the back of large losses in Nomura’s US mortgage bond unit.
Nomura dissolves US structured finance research team

 

Hedge Fund Confidential
TIME - USA
The art- and yacht-buying escapades of hedge fund operators such as Kenneth Griffin of Citadel and Eddie Lampert of ESL Investments grab the headlines. ...

 

Jamestown Releases a New Occasional Paper

Paper Titled "Putin's Political Party & the Rise of Sergei Naryshkin"

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Natural Disaster Corner

 

Climate Prediction  http://www.nws.noaa.gov/predictions.php

World Meterological Organization http://severe.worldweather.org/

Tornadoes: http://www.disastercenter.com/tornado.htm

Great Sat Pictures of events: http://www.osei.noaa.gov/Events/Current/TRCerick214_G11.jpg

Or http://www.osei.noaa.gov/Events/Current/TRCerick214_G11.jpg

 

 * South Asia floods strand millions *
Millions of people are displaced as South Asia battles against some of its worst floods in recent years.
Full story:
http://news.bbc.co.uk/go/em/-/1/hi/world/south_asia/6927389.stm

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Iranian Situation

Iran to hold further talks with US over Iraq on Monday
AFP via Yahoo! News Sat, 04 Aug 2007 11:52 AM PDT
Iran will hold a third round of talks with United States officials on Monday to discuss the security situation in Iraq, Tehran's ambassador in Baghdad told state IRNA news agency on Saturday.

 

Ahmadinejad says Iran won't give up nuclear plans
Reuters via Yahoo! News Sat, 04 Aug 2007 4:14 AM PDT
Iran will not give up its atomic energy program, President Mahmoud Ahmadinejad said in remarks published on Saturday before a visit to fellow OPEC-member Algeria.

 

Iran negotiator won't rule out eventual suspension of uranium enrichment
CP via Yahoo! Canada News Sat, 04 Aug 2007 9:30 AM PDT
BERLIN (AP) - Iran's top nuclear negotiator said his country might eventually consider suspending uranium enrichment, but made clear that Tehran's right to the technology must be recognized, according to an interview released Saturday.

 

Iran shows off homegrown fighter jet
AFP via Yahoo! News Sun, 05 Aug 2007 6:40 AM PDT
Iran on Sunday showed off for the first time a new fighter jet said to be modelled on the American F-5 but built using domestic technology, state media reported.

 

Global Market Brief: U.S. Pressure on Foreign Firms and Iran's New
Financial Direction

 

Iran's Challenges from Within: An Overview of Ethno-Sectarian Unrest
By Chris Zambelis

 

Pentagon sold plane parts sought by Iran: report
Reuters via Yahoo! News Thu, 02 Aug 2007 11:28 AM PDT
The Pentagon has mistakenly sold the public about 1,400 aircraft parts that Iran is known to be seeking for its aging fleet of U.S. F-14 "Tomcat" fighter planes, according to a government report.

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Avian Flu

 

Avian influenza  (Epidemic and Pandemic Alert and Response (EPR))
Avian influenza (Western Pacific Region)
Influenza and avian influenza (European Region)

Avian influenza (Fact Sheet)

Q&A: Avian influenza: am I at risk?

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Plansponsor.com

 

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Opalesque’s Corner

 

- Like in the `old days`: Hedge funds rake in up to 60% in July, 240% YTD,  For some hedge funds, it was like Christmas in July, Blackstone Kailix hedge fund up 15%, SAC down 1% in July, Friedberg temporarily stops subscriptions for Global Macro fund, allows redemptions, due to `aggressive positions`, AHL down, Winton up: Systematic funds see varied fortunes
- Bear hedge fund sank as Merrill protected clients, Bear Stearns investor letter on bankruptcy, suspension, Bear Stearns funds in Cayman liqudation also filed for protection under Chapter 15 of US Bankruptcy Code, CDO managers feel pain of subprime slide, losses of $50bln may hit companies, CDO managers hit with criticism,Beazer shares rally as Citadel almost doubles stake,  AXA fund shrinks 40% in 2 months, offers redemptions at current prices to avoid rapid sales, Sub-prime toxic mayhem looms over Asia funds of funds
- Opalesque Exclusive: David Einhorn`s suggestions how to fix the ratings agency mess, FT Letter: We should be prepared to bid a tearful farewell to one of the credit agencies
- Buy-out deals may be on hold for months, Subprime deja vu: Also S&L meltdown of the 80s had its origins in financial market innovation and poor regulation, The  iTraxx trade: Strategies correlate after credit market crunch hits
- Iowa pension fund starts RFP for 600m hedge FoF
- Opalesque Exclusive: London manager on low wheat inventories, mass urbanisation, OPEC - `commodities super cycle` is not a marketing gimmick,  Not a typo: $8,000 silver? (in 15 years), How Silver is different from Gold
- Hyerdale Capital launches first hedge fund, L/S equity dollar neutral strategy, Bridge Advisors introduces Alternative Investment and Option Strategy Consulting Services, SocGen taps consumer obsession with luxury fund
- Campbell takes a slappage, Henry`s F&M reverses recent gains
- Report on Drobny Global Advisors global macro think tank event
- Cogenthedge: Don`t panic! Early returns for July are positive, Managed Futures Index leads Vienna listed investable Alternative Investment Indices in July
- Derivatives wizard, Financial Engineer of the Year (2005) Dr. Phelim Boyle publishes free book on derivatives, also Chinese and Japanese editions available
- Is 130/30 `optimal`? (Part 2 of 2)
- NJ Governor Corzine disputes claims private-equity tax increases will damage Wall Street
- Judge dismisses Hennessee lawsuit on Bayou failure, says failure to discover the fraud merely places it alongside the SEC, IRS, others, Ex-Bank of America employee admits kickback scheme from hedge fund,  Morgan Stanley to pay $6.1m for excessive markups
- White House pushes for futures fees
- USFE to list futures on Lehman credit indices
- Knight names Steven Bisgay CFO as John B. Howard leaves for AQR,  Credit Suisse veteran leaves for Brefan Howard to set up CDO unit
- Ex-Wall Street executives storm nonprofit world to help raise money to finance expansion
- News Briefs: Madrid Exchange to buy 5% in Bolsa Mexico
- ...And finally: But Mom! The other 61-year-olds get an allowance! Sicilian mother-son drama gets police ROFL
- Logon: http://www.opalesque.com/main.php?act=archive

 

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Misc. Items of Interest

 

Oldest Profession Flourishes in China
BEIJING -- The 22-year-old was a freelance prostitute. Henna-haired, eyebrows painted and dressed no differently than a college student, she moved from beauty salon to beauty salon, taking calls on her mobile phone from salon managers when they couldn't find enough girls for all their customers.
(By Maureen Fan, The Washington Post)

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Funnies, Facts, Quotes, etc….

 

jeremiad jair-uh-MY-uhd, noun:

A tale of sorrow, disappointment, or complaint; a doleful story; also, a dolorous or angry tirade.

 

1921:  The eight Chicago White Sox baseball players involved in the 1919 Black Sox Scandal were banned from the game for life by the baseball commissioner Kenesaw Mountain Landis.

1914:  In response to the German invasion of Belgium, Great Britain entered World War I, declaring war on Germany.

1901:  Louis Armstrong, a prolifically gifted natural musician and the leading trumpeter in jazz history, was born in New Orleans, Louisiana.

1892:  Lizzie Borden's parents were murdered in Fall River, Massachusetts.

1879:  Pope Leo XIII issued the encyclical Aeterni Patris, making Thomism the dominant philosophical viewpoint in Roman Catholicism.

1790:  U.S. Secretary of the Treasury Alexander Hamilton established the Revenue Marine Service, which became the U.S. Coast Guard.

1578:  The Portuguese armies of King Sebastian—who was allied with the deposed Moroccan sultan al-Mutawakkil—invaded Morocco but were defeated by the Sa'di sultan 'Abd al-Malik in the Battle of the Three Kings.

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Conference, Courses, Books, Papers

 

Great Research Sites:

 

Merrill Lynch research Link to full report including important disclosures see example

 

John Mauldin’s Weekly Analysis

 

James Altucher’s Website:

 

Other useful sites:

 

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Index Corner

 

The CSFB/Tremont Hedge Fund Index www.hedgeindex.com.

The Cogent Dynamic Averages http://www.cogenthedge.com/home/inv_strategy.asphttp://www.cogenthedge.com/home/inv_strategy.asp

The Dow Jones Indices: http://www.djhedgefundindexes.com/index.cfm?event=viewPremiumContent (free registration)

HFRX Indices https://www.hedgefundresearch.com/hfrx_reg/index.php?fuse=login&1170880431

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Regulatory Info

 

 

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Disclaimer

 

The information contained in this document does not constitute an offer or solicitation to sell any security or other type of vehicles to or by anyone in any jurisdictions, nor should it be regarded as a contractual document. Under no circumstances should the information provided on this document be considered as financial advice, or as a sufficient basis on which to make investment decisions. The information contained herein has been gathered by Investor DNA, LLC from sources deemed reliable as of the date of publication, but no warranty of accuracy or completeness is given. Investor DNA, LLC is not responsible for and provides no guarantee with respect to any of the information provided herein or through the use of any hypertext link. Past results are no indication of future performance. All information in this newsletter is for educational and informational purposes and does not constitute investment, legal, tax or accounting advice. All materials are the property of the respective publishers, as referenced by header and appropriate hypertext links.