Main News

 

It’s Time to Take a Deep Breath -- [at NY Times]
By BEN STEIN New York Times
09/09/2007 01:33:16

 

Despite the unique risk challenges posed by hedge funds, the practices currently used by financial institutions to manage counterparty credit risk are still the best starting point for limiting the funds’ potential for generating systemic disruptions, according to a study forthcoming in the Federal Reserve Bank of New York’s Economic Policy Review, “Hedge Funds, Financial Intermediation, and Systemic Risk.”

Full Story...

 

Policymakers in both advanced and emerging market countries should learn some lessons from the recent turbulence in global financial markets, IMF Managing Director Rodrigo de Rato said.

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Barton Biggs: Why Markets Are So Shaky
Newsweek - USA
The clients of the hedge funds, particularly the funds of hedge funds, will yank their money if a fund has a couple of months of 3 to 4 percent declines in ...
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Weather derivatives shine through the gloom
Trading in weather derivatives may be one of the smaller niches in the alternative investment industry, but at least it made a profit this summer when almost every other strategy lost money.
http://mail2.efnmail.co.uk/r/314663/MTk4MTI1OjE1MDMz/

 

Skeletons come out of State Street's cupboard
Custodian banks are generally about as exciting as watching paint dry, so it is not surprising the skeletons to emerge from Boston-based State Street Corporation, the world's second-largest custodian by assets, have attracted plenty of attention.
http://mail2.efnmail.co.uk/r/314669/MTk4MTI1OjE1MDMz

 

What SAT scores say about your hedge fund
Sun, 09 Sep 2007, 04:35
New York Times
IF investors want a performance edge in their hedge funds, they may want to do a little background research on the managers: look for those who attended colleges with relatively high SAT scores. Funds run by such managers regularly posted higher returns, according to a study, "Investing in Talents: Manager Characteristics and Hedge Fund Performances," which has been circulating since May as an academic working paper.

 

BlueCrest to shut USD500m hedge fund
Sun, 09 Sep 2007, 01:43
Financial News
One of the UK's largest hedge fund managers has closed a fund with assets of more than USD500m (EUR360m) as market conditions continue to buffet the sector. Hedge funds' miserable August BlueCrest Capital Management, with almost USD12bn of assets under management at the end of June, last week told investors it was shutting an equity fund after a period of unacceptable performance. The fund recorded losses of 8.2% for the first eight months of the year, including a 5.4% loss in August, according to a spokesman for the firm who said market conditions were "bizarre".

 

Treasury Gain May Falter; Foreign Holders Flee Dollar (Update3). By Wes Goodman and Daniel Kruger. Enlarge Image/Details. Sept. 10 (Bloomberg) -- Treasury ...
www.bloomberg.com/apps/news?pid=20601103&sid=aLv4kVv3l.j8 - 4 hours ago - Similar pages - Note this

 

Banks pay extra $300m in interest charges

The world's leading banks are already paying out an extra $300m in interest rate charges as the credit squeeze takes its toll on the troubled financial sector

 

Carlyle beefs up financial services team

Carlyle is gearing up for a round of dealmaking in the financial services industry by hiring one former US Treasury official and five banking executives including Sandy Warner, the former chairman of JPMorgan Chase

 

The list of badly-hit hedge funds in August reads like a Who's Who of the best-known on Wall Street, including Paul Tudor Jones, Louis Bacon, Bruce Kovner and Matthew Tewksbury

 

While some funds were hit hard by market turmoil, others emerged unscathed

 

In the wake of the credit squeeze, ratings agencies may face litigation from investors and regulatory action over conflicts of interest

 

 

1,600-Point Market Plunge Is Forecast
BY DAN DORFMAN
Perennial disappointments are part of everyday Wall Street life. But a particularly large one could be in the offing, Oppenheimer & Co.'s veteran chief investment strategist, Michael Metz, told me over the weekend. Mr. Metz is predicting a...

 

 

Global Reinsurers' Complex Risk Profiles Demand Sophisticated Enterprise Risk Management
Enterprise risk management (ERM) is emerging as one of the strongest indicators of an entity's ability to deliver an appropriate cross-cycle risk-adjusted return, which is expected to be a key driver for reinsurer ratings over the medium term. With 241 insurers and reinsurers assessed through 2006, only 14% had strong or excellent ERM, while 81% of the industry was viewed as adequate.
To learn more, click or copy and paste the URL below:
(subscription required)
http://standardandpoors.rsys1.net/servlet/cc5?kHiQWWTCQUVsLgHxhilpuHQJhuV2VT

 

 

Collateralized Debt Obligations
European Cash CDOs Of ABS Review Q2 2007
In terms of CDO of ABS issuance, the second quarter of 2007 was surprisingly active, compared with the slower second quarter of 2006 (three transactions), with a marginal increase over 2005 (six transactions). In fact, issuance was similar to the issuance volume for the second and third quarters of 2006 combined, when ratings were also assigned to seven transactions. However, three of the seven transactions were CDO-squared compared with only one rated during the second quarter of 2007.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQWWTCQUVsLgHxhilpuHQJhuV2VD

 

Tudor, Caxton, Moore Posted Losses in August Turmoil (Update1). By Katherine Burton. Sept. 10 (Bloomberg) -- Hedge funds run by Paul Tudor Jones, ...
www.bloomberg.com/apps/news?pid=20601087&sid=a3H93OWF7hqo&refer=home - 2 hours ago - Similar pages - Note this

 

Recession alert
Weak jobs figures darken the outlook for America’s economy
Full article

 

US Federal Agents Probing Alleged Hedge-Fund Scam - Report
Nasdaq Sat, 08 Sep 2007 10:55 PM PDT
NEW YORK -(Dow Jones)- U.S. federal agents are investigating a group of suspected New York scam artists who are said to have raised about $30 million from unsuspecting investors by posing as principals of a successful hedge fund and then fled with the money, the New York Post reported on its Web site Sunday.

 

The real reason to worry about bank conduits -- [at FT.com]
FT.com
9/9/2007 9:40:39 AM

 

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Yield Curve Corner

 

Bernanke, the Fed and 2008
New York Times - United States
7 -- when Fed chairman Ben S. Bernanke engineered a cut in the less critical discount rate at which banks borrow directly from the central bank -- Mr. ...
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Linkfest: The Week Ahead
TheStreet.com - USA
Chairman Ben Bernanke is due to speak Tuesday (subject: global imbalances). Governor Frederic Mishkin speaks Monday after the close about the economic ...
See all stories on this topic

 

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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:

 

 

 

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Iranian Situation

 

'The Iranian Time Bomb'

 

The California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) will be forced to sell certain holdings linked to Iran, following a new bill passed by the state senate.

 

Iran has to meet all U.N. demands: U.N. chief
Reuters via Yahoo! News Mon, 10 Sep 2007 12:14 PM PDT
U.N. Secretary-General Ban Ki-moon said on Monday Iran had to meet Security Council demands to suspend its enrichment programs and not only cooperate with U.N. nuclear inspectors.

 

 

 

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Opalesque’s Corner

 

- Paulson hedge funds YTD 410% and 229% (26% / 32% in August),  Theta Deep Value Fund tops InvestHedge league table
- Goldman raised over $1.5 billion for new distressed fund, Martin Currie plans trio of hedge funds
- Connecticut pension to put $2.6bln into alternatives
- Big names down in August: Tudor, Caxton, Moore, Tewksbury, Atticus, Third Point , BlueCrest closes fund after poor results, Tykhe quant fund hasn`t recovered August losses, August hedge fund losses may be lighter -investors
- Mixed fortunes for quants at month-end, investors, advisers change approach, Can supercomputing save the quants?  Private research firm develops new mathematical framework for credit models
- FT Comment: The real reason to worry about bank conduits, why to revive the lost art of credit analysis, Investment banks in private talks over how to account losses in leveraged lending and securities businesses, CDO losses can`t be quantified, France regulator says, proposes global information warehouse, a DTCC for CDOs
- Survey: Larger financial institutions will increasingly purchase hedge fund firms
- Private Carlyle Group suffers rare public humiliation as partners are forced to bail out failed hedge fund
- Six hedge funds walk away from Sears
- Bear Stearns withdraws report on Ceres, firm still hit,  SocGen CEO says bank faces no new subprime risks but some ops hit in August,  Credit crunch hits investment banks for $25bn
- Bond funds could get hit by mortgage mess
- Citigroup`s hedge-fund unit hires Callahan from Credit Suisse, JPMorgan veteran Geiling to start marketing Christie Street Capital Management funds, Four equity traders to leave London hedge-fund giant CQS,  Bear Stearns expands top management to 15, integrating more unit heads, Grohowski defects to BoNY Mellon, Hedge fund moves in Asia
- Unsuspecting U.S. investors set to lose $30m as NY `hedge fund` A.R. Capital turns out as boiler room scam,  Protesters unite in front of Greenwich hedge fund, pleading to halt foreclosures, Cayman `letterbox` companies not protected from US Law, judge quotes EU law in Bear Stearns fund case
- BP: Inedible plant could become biodiesel savior
- Dexion Trading shareholders agree Permal fund move, however 41% opt to cash out
- Regulators under fire as money markets freeze up,  Treasury Select Committee `set to grill the BoE and UK FSA`
- Italian hedge funds with net inflows in August
- South African regulations may get extended to include service providers in aim to become hub for administration biz
- Barclays and Shariah Capital to launch unique  Shariah
compliant investment platform including prime brokerage, investment screening, short sales solution
- Citigroup applies for Tokyo listing in ambitious growth program
- Activist News: Background: European activist hedge funds show unprecedented growth of AUM, number of funds, The activist letter that has put HSBC in focus,  Knight Vinke isn`t a typical activist investor, but HSBC should certainly brace itself
- News Briefs: CalPERS buys 10% stake in Apollo, Gold hits 16-month high of $700,  Prosperity says Russian stocks overdue for rally
- ...And finally: `And then he made the mistake to grab my wife`: How 69 year old home owner punished burglar
- Logon: http://www.opalesque.com/main.php?act=archive

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Misc. Items of Interest

 

Wall Street Six Years Later
Liz Moyer
The world remembers Sept. 11, 2001, every year. The financial industry lives with it every day.

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Funnies, Facts, Quotes, etc….

 

cozen KUZ-un, transitive verb:

1. To cheat; to defraud; to deceive, usually by petty tricks.
2. To obtain by deceit.
3. To act deceitfully.

 

1998:  Special Prosecutor Kenneth W. Starr sent to Congress the report on his investigation into the actions of U.S. President Bill Clinton in the Whitewater affair and subsequent matters, including Clinton's improper sexual relationship with intern Monica Lewinsky.

1956:  Rock and roll star Elvis Presley made his first appearance on The Ed Sullivan Show.

1948:  The Democratic People's Republic of Korea (North Korea) was proclaimed, setting the stage for the Korean War.

1919:  The Boston Police Strike began after the city denied the police's right to unionize.

1861:  Sally Louisa Tompkins was commissioned a cavalry captain; she was the only woman to be commissioned in the Confederate army. 

1774:  The Suffolk Resolves, protesting the Intolerable Acts, were passed at a meeting in Massachusetts.

1754:  William Bligh, the English admiral who commanded the HMS Bounty at the time of the famous mutiny, was born.

1087:  The English king William I (the Conqueror) died from an injury suffered while attempting to capture the town of Mantes and was later buried at St. Stephen's Church.

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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.