Archive: 04/18/2008
Main News
The risk of financial catastrophe has receded, barring any unanticipated collapse of a pillar of Wall Street or a European bank. But the economy where most Americans live and work looks likely to get worse before it gets better.
http://online.wsj.com/articles/capital?mod=djemtct
http://online.wsj.com/articles/capital?mod=djemtct
The survey finds 95 percent of credit portfolio managers believe their reputation for managing risk has strengthened during the crisis. At the same time, the results reveal institutions take significantly different approaches to portfolio management and that affects how managers view additional action steps.
Use of collateral in privately negotiated derivatives transactions grew significantly in 2007, with the amount of collateral in circulation now estimated at $2.1 trillion. The results show an increase of almost 60 percent over the estimated $1.335 trillion of collateral in the 2007 Survey. Cash continues to grow in importance among most firms, and now stands at over 78 percent of collateral received and 83 percent of collateral delivered.
Financial Regulation: Will It Fly? (The Economist)
Hank Paulson kicks off what promises to be a long and bruising debate about how best to police America's financial firms.
Hank Paulson kicks off what promises to be a long and bruising debate about how best to police America's financial firms.
By PAUL THARP
Even in the worst of times, Jamie Dimon keeps sprinting ahead in his winning streak. Although Dimon said his JPMorgan Chase's profit plunged 50 percent - and openly warned housing will only get worse - he drew enough investor cheering to...full story
BASEL COMMITTEE CALLS FOR FINANCIAL MARKET SHOCK TREATMENT
Financial regulators will push banks to overhaul risk management practices and improve liquidity cushions as part of a series of measures aimed at making the global banking system more resilient to "financial shocks" such as the credit crunch.
More on this story: http://www.finextra.com/fullstory.asp?id=18353
Financial regulators will push banks to overhaul risk management practices and improve liquidity cushions as part of a series of measures aimed at making the global banking system more resilient to "financial shocks" such as the credit crunch.
More on this story: http://www.finextra.com/fullstory.asp?id=18353
Ratings On 331 Classes From 79 U.S. CDOs Of ABS Put On Watch Neg; $50.9B In Issuance Affected
We placed our ratings on 331 classes from 79 U.S. cash flow and hybrid collateralized debt obligation (CDO) of asset-backed securities (ABS) transactions on CreditWatch with negative implications. The affected CDO tranches have a total issuance amount of $50.989 billion. These CreditWatch placements follow the recent negative CreditWatch placement of 559 classes from 103 U.S. residential mortgage-backed securities transactions backed by U.S. first-lien subprime mortgage collateral rated between January 2007 and June 2007.
To learn more, click or copy and paste the URL below:
http://standardandpoors.rsys1.net/servlet/cc6?kHiQACSWQUVsLgHxhilpuHQJhuV2VU
We placed our ratings on 331 classes from 79 U.S. cash flow and hybrid collateralized debt obligation (CDO) of asset-backed securities (ABS) transactions on CreditWatch with negative implications. The affected CDO tranches have a total issuance amount of $50.989 billion. These CreditWatch placements follow the recent negative CreditWatch placement of 559 classes from 103 U.S. residential mortgage-backed securities transactions backed by U.S. first-lien subprime mortgage collateral rated between January 2007 and June 2007.
To learn more, click or copy and paste the URL below:
http://standardandpoors.rsys1.net/servlet/cc6?kHiQACSWQUVsLgHxhilpuHQJhuV2VU
Singapore's OCBC says does not expect CDO impairments
Reuters - USA
SINGAPORE, April 17 (Reuters) - Oversea-Chinese Banking Corp (OCBC.SI: Quote, Profile, Research), Singapore's third-biggest lender, said on Thursday that it ...
Reuters - USA
SINGAPORE, April 17 (Reuters) - Oversea-Chinese Banking Corp (OCBC.SI: Quote, Profile, Research), Singapore's third-biggest lender, said on Thursday that it ...
WASHINGTON (Reuters)—Critics blasted a U.S. Treasury Department call for the $1.8 trillion hedge fund industry to better police itself, saying voluntary guidelines would do little to protect investors and regulate the pools of capital. ......
Agricultural Commodity Prices Continue Having A Field Day
Any U.S. driver will tell you that adding corn-based ethanol to gas doesn't seem to have made gasoline any cheaper. American farmers, on the other hand, have seen historically high corn prices boosting their income and ignited a chain reaction: As farmers plant more corn to cash in, they are reducing the share of land devoted to other crops, leading to higher prices for wheat and soybeans, and an overall surge in agricultural commodity prices that shows no sign of ending quickly.
To learn more, click or copy and paste the URL below:
https://www.ratingsdirect.com/Apps/RD/controller/Article?id=643083&SctArtId=14355&from=CM&nsl_code=CMTSE
Any U.S. driver will tell you that adding corn-based ethanol to gas doesn't seem to have made gasoline any cheaper. American farmers, on the other hand, have seen historically high corn prices boosting their income and ignited a chain reaction: As farmers plant more corn to cash in, they are reducing the share of land devoted to other crops, leading to higher prices for wheat and soybeans, and an overall surge in agricultural commodity prices that shows no sign of ending quickly.
To learn more, click or copy and paste the URL below:
https://www.ratingsdirect.com/Apps/RD/controller/Article?id=643083&SctArtId=14355&from=CM&nsl_code=CMTSE
by Felix Salmon
Finance and Investment
'Bear Raid' Stock Manipulation: How It Works and Who Benefits
When Bear Stearns collapsed in March, some insiders argued it was wrong to blame the firm's risky bets on mortgaged-backed securities. They had another culprit: malevolent traders working together in the upside-down world of short sales -- making money by knocking down Bear's stock. There has, however, been little academic research to explain the forces at work. Now Wharton finance professor Itay Goldstein and a colleague have shed some light on the process in a paper titled, "Manipulation and the Allocational Role of Prices."
http://knowledge.wharton.upenn.edu/article/1939.cfm
'Bear Raid' Stock Manipulation: How It Works and Who Benefits
When Bear Stearns collapsed in March, some insiders argued it was wrong to blame the firm's risky bets on mortgaged-backed securities. They had another culprit: malevolent traders working together in the upside-down world of short sales -- making money by knocking down Bear's stock. There has, however, been little academic research to explain the forces at work. Now Wharton finance professor Itay Goldstein and a colleague have shed some light on the process in a paper titled, "Manipulation and the Allocational Role of Prices."
http://knowledge.wharton.upenn.edu/article/1939.cfm
Hedge Hype, Anyone?
Reuters - Wednesday April 16, 11:21 BST
Reuters - Wednesday April 16, 11:21 BST
N.Y. Mulls Tax On HF, PE
New York City appears to be trying to one-up the federal government on the issue of higher taxes on carried interest.
New York City appears to be trying to one-up the federal government on the issue of higher taxes on carried interest.
Despite Some Improvement, Recession Risk Remains 4/16/08
Beth Ann Bovino, Senior Economist, Standard & Poor's
While the news this week for the U.S. economy was a little better, it still points to a recession in 2008. The housing sector remains weak, but industrial production and retail sales reports showed surprising strength. Finally, consumer prices were tamer than earlier feared to give the Fed some breathing room. The data continues to indicate that a recession is likely. We expect this recession to be mild—only slightly deeper than the 2001 recession. We are forecasting negative GDP growth for the first two quarters of 2008. We expect the economy to improve in the third quarter, as rebate checks get spent. The business tax credits provide a boost to the fourth quarter, preventing a double-dip recession. But after the stimulus package ends, the economy will decelerate and the risk of falling back into recession remains high.
Watch Now (3:28 min)
Beth Ann Bovino, Senior Economist, Standard & Poor's
While the news this week for the U.S. economy was a little better, it still points to a recession in 2008. The housing sector remains weak, but industrial production and retail sales reports showed surprising strength. Finally, consumer prices were tamer than earlier feared to give the Fed some breathing room. The data continues to indicate that a recession is likely. We expect this recession to be mild—only slightly deeper than the 2001 recession. We are forecasting negative GDP growth for the first two quarters of 2008. We expect the economy to improve in the third quarter, as rebate checks get spent. The business tax credits provide a boost to the fourth quarter, preventing a double-dip recession. But after the stimulus package ends, the economy will decelerate and the risk of falling back into recession remains high.
Watch Now (3:28 min)
Goldman star trader quits to form hedge fund
Reuters - USA
... Research) engineer investments and hedges in subprime mortgages that generated billions of dollars in profit, has quit to form his own hedge fund, ...
Reuters - USA
... Research) engineer investments and hedges in subprime mortgages that generated billions of dollars in profit, has quit to form his own hedge fund, ...
Thames River hedge fund manager goes long subprime
Reuters - USA
Kinsey-Quick, who runs around $2.3 billion (1.2 billion pounds) in fund of hedge funds and who made money last year by having up to half of his assets in ...
Reuters - USA
Kinsey-Quick, who runs around $2.3 billion (1.2 billion pounds) in fund of hedge funds and who made money last year by having up to half of his assets in ...
Turkmenistan: Natural Gas and the European Union
April 16, 2008 2210 GMT
Turkmen and EU officials agreed April 9 to have 10 billion cubic meters of natural gas available for export to Europe by 2009.
http://www.stratfor.com/analysis/turkmenistan_natural_gas_and_european_union
April 16, 2008 2210 GMT
Turkmen and EU officials agreed April 9 to have 10 billion cubic meters of natural gas available for export to Europe by 2009.
http://www.stratfor.com/analysis/turkmenistan_natural_gas_and_european_union
What Price Fair Value Assumptions?
FAS 157 is making auditors and investors eager to find out more about your company's third-party pricing data.
FAS 157 is making auditors and investors eager to find out more about your company's third-party pricing data.
Two Views of Volatility
Mark-to-market accounting will lead to steeper ups and downs in share prices. But is that a bad thing?
Mark-to-market accounting will lead to steeper ups and downs in share prices. But is that a bad thing?
Och-Ziff Hit by Fraud in Japan
Wall Street Journal Interactive - Thursday April 17, 09:12 BST
Wall Street Journal Interactive - Thursday April 17, 09:12 BST
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Yield Curve Corner
Look What You Did, Bernanke
Motley Fool - USA
Alan Greenspan's lengthy span of "free money" instigated the housing bubble, and Ben Bernanke's reaction to the bubble's collapse is crushing the value of ...
See all stories on this topic
Motley Fool - USA
Alan Greenspan's lengthy span of "free money" instigated the housing bubble, and Ben Bernanke's reaction to the bubble's collapse is crushing the value of ...
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: http://www.osei.noaa.gov/Events/Current/DSTchina108_MO.jpg
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Iranian Situation and Other Man Made Disasters
Rice says Arabs must shield Iraq from Iran's sway
Reuters via Yahoo! News Thu, 17 Apr 2008 11:02 AM PDT
Secretary of State Condoleezza Rice said on Thursday she would press Iraq's Arab neighbors hard next week to do more to support Baghdad's government and shield it from Iran's "nefarious influences."
Reuters via Yahoo! News Thu, 17 Apr 2008 11:02 AM PDT
Secretary of State Condoleezza Rice said on Thursday she would press Iraq's Arab neighbors hard next week to do more to support Baghdad's government and shield it from Iran's "nefarious influences."
Ahmadinejad boasts over Iran's military power
AFP via Yahoo! News Thu, 17 Apr 2008 10:35 AM PDT
President Mahmoud Ahmadinejad on Thursday proclaimed Iran as the "most powerful nation" on earth as the country's air force showed off its prowess at a time of mounting tension with the West.
AFP via Yahoo! News Thu, 17 Apr 2008 10:35 AM PDT
President Mahmoud Ahmadinejad on Thursday proclaimed Iran as the "most powerful nation" on earth as the country's air force showed off its prowess at a time of mounting tension with the West.
Bush, British PM push tough approach on Iran
AP via Yahoo! News Thu, 17 Apr 2008 12:30 PM PDT
President Bush called it "naive" on Thursday to think that Iran couldn't transfer nuclear enrichment capabilities from energy development to atomic bomb production.
AP via Yahoo! News Thu, 17 Apr 2008 12:30 PM PDT
President Bush called it "naive" on Thursday to think that Iran couldn't transfer nuclear enrichment capabilities from energy development to atomic bomb production.
Could Israel use submarines against Iran?
Reuters via Yahoo! News Thu, 17 Apr 2008 5:29 AM PDT
Anticipating a showdown with Iran, Israel decides secretly to deploy a submarine off its arch-foe's coast.
Reuters via Yahoo! News Thu, 17 Apr 2008 5:29 AM PDT
Anticipating a showdown with Iran, Israel decides secretly to deploy a submarine off its arch-foe's coast.
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Opalesque’s Corner
- Opalesque Exclusive: BlackRock quarterly reporting gives insight into market environment, Analysts cut State Street, shares down again
- New Launches: Goldman trader Birnbaum to form $1bln hedge fund after subprime gains, Clinton Group`s Hall plans new fund as another declines 45%, Wegelin re-launches multi strategy fund without double fee structure, Lyxor launches four new ETFs offering exposure to markets in Asia and Eastern Europe, Conquest ramps up portfolio with new offerings
- Performance: Deephaven posts first quarter loss of $4.1m, drags down Knight Capital
- Some of the bigger funds now charge `5 and 40`
- M&A: LGT Capital Partners to acquire Hong Kong-based KGR Capital
- Fund Closure: K Squared to wind down long/short fund
- Rothstein Kass survey shows HF managers expect more firms and funds in 2008 but also declined U.S. economy
- Indices: Scotia Capital Canadian HF Index down -2.95% for March, Canadian Hedge Watch indices in March, worst return for Equity Hedged Index at -3.32%, best HF Notes Index at 0.26%, all indices down YTD
- Trends: Opalesque Exclusive: HFI survey reports hedge fund growth at 27% during 2007, pegs industry assets at $2.6 trillion, Hedge funds cut risk, wait for opportunities, Hedge funds and private equity lines blurring, hybrids in demand
- GLG Update: GLG stock fell 9% in wake of Coffey`s possible departure, Comment: GLG episode suggests star power still drives hedge-fund industry
- Earnings: Forbes` second annual look at Wall Street`s highest HF and PE earners
- Regulators: Hedge funds are beyond UK FSA`s jurisdiction - but not the managers, Vocabulary analysis of US President`s Working Group Regulation recommendations, Hong Kong SFC to update fund regulations
- Tax Update: Update: NY Council members push for hedge fund tax
- Credit Crunch Update: Citigroup now has to deal with fallout from blowups at a series of hedge funds
- Bear Stearns Update: `Bear Raid` stock manipulation: how and when it works and who benefits
- People: Fairfield Greenwich Group adds David B. Horn as partner, Citadel hires Nick Taylor as head of Principal Investments for Asia and Europe, SuperDerivatives hires Chris Zingo as sales and support VP for the Americas
- Institutions: Pension funds attracted to long/short strategies
- Legal: Judge dismisses Costa Brava`s claims against Telos
- Environmental Trading: Opalesque Exclusive: Systematic Absolute Return AG to conduct a survey of the environmental alternative investment universe
- Commodities: Crude oil rises to record above $114 a barrel as dollar plunges
- Exchanges: Tense exchanges between trading platforms like Chi-X and big exchanges
- Europe: Partners Group opens Luxembourg office,Switzerland ratchets up costs for tax exiles, Geneva sees a few arrivals `but not a tidal wave`
- MidEast: Unemployed bankers head to Dubai
- Asia: Och-Ziff hit by fraud in Japan, loses around $77m, Templeton`s Mobius has been buying Taiwanese stocks
- Australasia: IPAC markets US FoF Prisma Capital Partners in Australia
- Latin America: Opalesque Exclusive: Partner leaves Brazilian fund Mauá, hedge funds down 8.10% and 14.64%
- Infovest21 Survey: Only 17% of institutions use 130/30 strategies, HFs to face tougher competition from 130/30 funds
- Event: 100-Women-in-Hedge-Funds`s presentation on microfinance, `an alternative asset class with a conscience?`, Geneva, 23 April
- Sovereign Wealth Funds: MidEast economy expected to be 6% for 2008, double the growth of the West, SWFs` growing size causes concern in the West
- Activist News: Update: TCI calls J-Power rejection `sad day for Japan`, Hedge fund fails in efforts to extract dividend payments
- News Briefs: Stock market bells ring for Thomson Reuters` debut, Fitch sinks Jefferies` rating outlook, NYC hedge fund pays $175m for royalties on new heart drug, Connecticut hedge fund community backs first CancerCare golf fundraiser May 12, Bio-tech hedge fund manager buys $30m NY Condo, Ex-Fidelity trader is charged with fraud in Boston mutual fund`s trades, Macquarie, SBI plan $2bln Indian infrastructure fund launch in June
- And Finally. Who needs Swiss banks to hide wealth when you`re sporting a face altering magic marker moustache?
- Logon: http://www.opalesque.com/index.php?act=archive
- New Launches: Goldman trader Birnbaum to form $1bln hedge fund after subprime gains, Clinton Group`s Hall plans new fund as another declines 45%, Wegelin re-launches multi strategy fund without double fee structure, Lyxor launches four new ETFs offering exposure to markets in Asia and Eastern Europe, Conquest ramps up portfolio with new offerings
- Performance: Deephaven posts first quarter loss of $4.1m, drags down Knight Capital
- Some of the bigger funds now charge `5 and 40`
- M&A: LGT Capital Partners to acquire Hong Kong-based KGR Capital
- Fund Closure: K Squared to wind down long/short fund
- Rothstein Kass survey shows HF managers expect more firms and funds in 2008 but also declined U.S. economy
- Indices: Scotia Capital Canadian HF Index down -2.95% for March, Canadian Hedge Watch indices in March, worst return for Equity Hedged Index at -3.32%, best HF Notes Index at 0.26%, all indices down YTD
- Trends: Opalesque Exclusive: HFI survey reports hedge fund growth at 27% during 2007, pegs industry assets at $2.6 trillion, Hedge funds cut risk, wait for opportunities, Hedge funds and private equity lines blurring, hybrids in demand
- GLG Update: GLG stock fell 9% in wake of Coffey`s possible departure, Comment: GLG episode suggests star power still drives hedge-fund industry
- Earnings: Forbes` second annual look at Wall Street`s highest HF and PE earners
- Regulators: Hedge funds are beyond UK FSA`s jurisdiction - but not the managers, Vocabulary analysis of US President`s Working Group Regulation recommendations, Hong Kong SFC to update fund regulations
- Tax Update: Update: NY Council members push for hedge fund tax
- Credit Crunch Update: Citigroup now has to deal with fallout from blowups at a series of hedge funds
- Bear Stearns Update: `Bear Raid` stock manipulation: how and when it works and who benefits
- People: Fairfield Greenwich Group adds David B. Horn as partner, Citadel hires Nick Taylor as head of Principal Investments for Asia and Europe, SuperDerivatives hires Chris Zingo as sales and support VP for the Americas
- Institutions: Pension funds attracted to long/short strategies
- Legal: Judge dismisses Costa Brava`s claims against Telos
- Environmental Trading: Opalesque Exclusive: Systematic Absolute Return AG to conduct a survey of the environmental alternative investment universe
- Commodities: Crude oil rises to record above $114 a barrel as dollar plunges
- Exchanges: Tense exchanges between trading platforms like Chi-X and big exchanges
- Europe: Partners Group opens Luxembourg office,Switzerland ratchets up costs for tax exiles, Geneva sees a few arrivals `but not a tidal wave`
- MidEast: Unemployed bankers head to Dubai
- Asia: Och-Ziff hit by fraud in Japan, loses around $77m, Templeton`s Mobius has been buying Taiwanese stocks
- Australasia: IPAC markets US FoF Prisma Capital Partners in Australia
- Latin America: Opalesque Exclusive: Partner leaves Brazilian fund Mauá, hedge funds down 8.10% and 14.64%
- Infovest21 Survey: Only 17% of institutions use 130/30 strategies, HFs to face tougher competition from 130/30 funds
- Event: 100-Women-in-Hedge-Funds`s presentation on microfinance, `an alternative asset class with a conscience?`, Geneva, 23 April
- Sovereign Wealth Funds: MidEast economy expected to be 6% for 2008, double the growth of the West, SWFs` growing size causes concern in the West
- Activist News: Update: TCI calls J-Power rejection `sad day for Japan`, Hedge fund fails in efforts to extract dividend payments
- News Briefs: Stock market bells ring for Thomson Reuters` debut, Fitch sinks Jefferies` rating outlook, NYC hedge fund pays $175m for royalties on new heart drug, Connecticut hedge fund community backs first CancerCare golf fundraiser May 12, Bio-tech hedge fund manager buys $30m NY Condo, Ex-Fidelity trader is charged with fraud in Boston mutual fund`s trades, Macquarie, SBI plan $2bln Indian infrastructure fund launch in June
- And Finally. Who needs Swiss banks to hide wealth when you`re sporting a face altering magic marker moustache?
- Logon: http://www.opalesque.com/index.php?act=archive
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Misc. Items of Interest
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Funnies, Facts, Quotes, etc….
abulia uh-BOO-lee-uh; uh-BYOO-, noun:
Loss or impairment of the ability to act or to make decisions.
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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)
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Regulatory Info
investor.info@sfc.hkhttp://www.sfc.hk/sfc/html/EN/inutilbar/contact/contact.htmlhttp://www.sfc.hk/sfc/html/EN/inutilbar/contact/contact.htmlhttp://www.sfc.hk/sfc/html/EN/inutilbar/contact/contact.html
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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
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