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Senior Editor

 

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Main News

 

The gathering storm
Times Online - UK
Paulson & Co, the New York-based hedge fund run by John Paulson, has made a killing. Some commentators have speculated that the group may have pulled off ...

 

Mass mortgage restructuring
As defaults soar, America seeks to modify mortgages en masse ... more

Use of derivatives by German car manufacturer Porsche has resulted in a hike in the firms’ pre-tax earnings to €5.86 billion for the year 2006/2007. Earnings from stock option transactions boosted the firm’s total pre-tax profits by €3.59 billion - meaning that only 38% of Porsche's profits came from selling cars. The transactions relate to Porsche’s stake in fellow German auto manufacturer Volkswagen, which stands at 30.6%. “Porsche’s strategy is a well-kept secret,” said Georg Stuerzer, co-head of German equity reseach at UniCredit in Munich. “What we know is that it had options to increase its stake in Volkswagen, and that it has made €3.593 billion on these options, but we know nothing of the strategy and whether these were cash profits or down to fair-value accounting based on international financial reporting standards.”
Porsche's derivatives success a mystery

 

Hedge funds nurse Nov losses as credit woes deepen
Reuters - USA
By Svea Herbst-Bayliss BOSTON, Nov 30 (Reuters) - Investors in some of the hottest US hedge funds are bracing for negative returns this month, ...
See all stories on this topic

 

Citigroup's (C) SIV Problems Get Worse, Perhaps A Hedge Fund Can ...
24/7 Wall St. - New York,NY,USA
Just think of it. The government bailed out Chrysler, and not it is owned by a hedge fund. Maybe a hedge fund can own Citi, too.

 

Barclays Capital issues warning against unwinding CPDOs
A modest five to 10 basis point widening of credit default swap spreads will be enough to tip a complex form of credit derivatives with exposure to banks and other financials over the edge, according to Barclays Capital analysts.
http://mail2.efnmail.co.uk/r/326261/MTk4MTI1OjE1ODEz/

 

Quant funds trail pack in third quarter
Quantitative fund managers, including US-based Renaissance Technologies and Analytic Investors, were among the worst-performing managers in US equities in the third quarter.
http://mail2.efnmail.co.uk/r/326337/MTk4MTI1OjE1ODEz/

 

 

Hedge funds hit seven-year low
Hedge funds are set to record their worst month of returns since 2000 after struggling to protect the value of their portfolios from last month's volatile markets.
http://mail2.efnmail.co.uk/r/326346/MTk4MTI1OjE1ODEz/

 

Dollar Gains Most in Almost 3 Years Versus Yen, Franc on Stocks
Bloomberg - USA
The US currency posted its largest weekly gain since August versus the euro after Fed Chairman Ben S. Bernanke signaled he may lower interest rates to ...

 

Real Estate, Not So WonderfulWhat Old Man Potter knew about subprime.
http://online.barrons.com/article/SB119646757107910106.html?mod=djemWR

 

Hedge Fund Liquidations Outpace Inflows in Q2, Q3
FINalternatives - New York,NY,USA
Total hedge fund assets increased in the third quarter, but assets lost in liquidations outpaced the increase from new fund launches in the second and third ...
See all stories on this topic

 

Recent Legislative Developments Affecting the Taxation of Private Equity Funds, Hedge Funds and their Managers
By Peter Pront
Seward & Kissel LLP 212.574.1221
During the past four months, Congress has focused significant attention on several issues relating to the taxation of the general partners and investment managers (collectively, the "Managers") of private equity funds and hedge funds (collectively, "Funds") and the investment by U.S. tax-exempt entities ("U.S. Tax Exempts") in Funds incorporated in foreign jurisdictions ("Offshore Funds").

 

Collateralized Debt Obligations
106 Ratings Lowered On 22 U.S. Cash Flow, Hybrid CDOs Of ABS; $4.416B In Securities Affected
We lowered our ratings on 106 tranches from 22 U.S. cash flow and hybrid collateralized debt obligation (CDO) transactions. At the same time, we affirmed our ratings on another 33 tranches from these transactions. The downgraded tranches have a total issuance amount of $4.416 billion, and all are from CDOs of asset-backed securities (ABS) collateralized by structured finance securities, including U.S. residential mortgage-backed securities.
To learn more, click or copy and paste the URL below:http://standardandpoors.rsys1.net/servlet/cc5?kHiQYBADQTVsLgHxhilpuHQJhuV2VY

 

MAINTENANCE FLEECE CO-OP COMMON CHARGES $OAR
 By SUSANNAH CAHALAN and MELISSA KLEIN
While Manhattan has mainly dodged the national foreclosure crisis, it's on the verge of a different catastrophe - maintenance-fee defaults.  Skyrocketing common charges are the last straw for condo and co-op owners barely staying afloat in a...
http://www.nypost.com/seven/12022007/news/regionalnews/maintenance_fleece_co_op_common_charges__952332.htm

 

 

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Yield Curve Corner

 

Bernanke hints at further rate cut
Chicago Tribune - United States
By Bill Barnhart | Tribune markets columnis 7:04 AM CST, November 30, 2007 Federal Reserve Board Chairman Ben Bernanke, in a speech Thursday night, ...

 

Stocks Surge on Bernanke Remarks
The Associated Press -
NEW YORK (AP) — Wall Street soared Friday, resuming this week's rally after Federal Reserve Chairman Ben Bernanke gave investors more reason to believe ...

 

The Fed's $64,000 question: How big a cut? - Nov. 30, 2007*

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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/FSHSafrica334_MO.jpg

Joe Bastardi's accuweather.com Hurricane Forecast Most Accurate ...
PR.com (press release) - Levittown,NY,USA
Throughout the season, Bastardi was also often the first to give warning of individual storms. As part of the 2007 hurricane season forecast, Bastardi and ...

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Iranian Situation and Other Man Made Disasters

 

French official: Iran resolution near
AP via Yahoo! News Sat, 01 Dec 2007 11:10 AM PST
Leading international powers may have an agreement within weeks on a third U.N. sanctions resolution against Iran over its nuclear program, a French diplomat said after high-level talks in Paris on Saturday.

 

Major powers to seek sanctions against Iran: diplomat
AFP via Yahoo! News Sat, 01 Dec 2007 12:03 PM PST
The six powers dealing with Iran's contested nuclear programme will start work on a resolution calling for new sanctions against Iran at the UN Security Council, a French diplomatic source said Saturday.

 

Iran between the West and the Kremlin
 http://www.stratfor.com/products/premium/read_article.php?id=299194

 

RUSSIA, IRAN:  The International Atomic Energy Agency has approved the quality of Russian nuclear fuel for delivery to Iran, Konstantin Grabelnikov, deputy head of Russia's Novosibirsk Chemical Concentrates Plant, said. "Inspection of fuel rod arrays confirmed the enrichment of uranium-235 to lower than 5 percent," he added, noting that the fuel will be sent to Iran once it is required.

 

Iran Much Closer to Nuclear Bomb than West Admits
DEBKAFile Exclusive Report

19 Nov.: DEBKAfile’s sources report this suspicion was strengthened by the discoveries made in Syria as a result of the Israeli attack of Sept. 6:

1. If Syria with its relatively meager resources could aspire to a plutonium reactor, then Iran must be much farther ahead in the same direction.

2. If Syria could hide its North Korean plutonium reactor under construction for years, Iran must have a fully-functioning reactor hidden away even longer.

3. Additional data indicate that Tehran has more than the admitted 3,000 working centrifuges for uranium enrichment, more likely 5,000 or is even close to 7,000 working machines – enough to turn out fissile material for at least two bombs a year.

The knowledgeable Israeli Air Force Colonel (Res.) Shmuel Gordon says Iran may have accumulated enough fissile material for two to four nuclear bombs. He recalls the small research reactor with “hot cells” which the United States gave to the shah of Iran in 1967 and which has since then been turning out 0.6 kilos of plutonium every year – adding up in 35 years to 21 kilos – enough for two to three bombs.

The Israeli colonel points out that while India, Pakistan and North Korea required 15 years of development before attaining a nuclear weapon and a missile for its delivery, Iran has been working on its program longer than that and its engineering, technical and technological infrastructure is superior

 

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Opalesque’s Corner

 

- Opalesque Exclusive: Hedge Fund World Zurich, day 2 - How family offices play commodities, undervalued Russia, event-driven strategies and HF`s incomparability to PE
- Citadel: Citadel pumps US$2.5b into ETrade as CEO exits,  Citadel to buy ETrade`s $3bln asset-backed securities portfolio for $800m,  Citadel`s 2006 debt sale looks well-timed now, permanent capital is boon
- New Launches: New Horton fund to use evolved quant trade methods, Cambridge preps Asian currency hedge fund, Newly launched Mermaid Nordic joins Nordic Hedge Fund Index
- Global HFs: Half of top performing hedge funds are Asia-focused, according to Banque Syz
- Managed Futures: US dominance of managed futures funds under threat as London funds double share
- Convertibles: Hedge fund inflows, leverage help to fuel rebound in U.S. convertible market, European hedge funds show appetite for synthetic convertible bonds
- Regulators: Swedish FSA initiates tighter control of hedge funds: comprehensive monthly reports required, CFTC Commissioner seeks SEC cooperation, though not merger
- Tech Update: Alpha Magazine ranks hedge fund managers` preferred technology firms, Insch sets up IT R&D firm in Bulgaria with ex-Forsyth Partners staff
- Credit Crunch: Buyout firms, hedge funds see year-long credit slump, PE `back to basics` due to liquidity crunch, BoE`s Governor puts UK economy on danger watch
- Liquidity: Shrinking liquidity in one part of the global economy (the U.S.) is offset by pools of liquidity elsewhere, sovereign wealth funds
- New service aims to be matchmaker for corporations seeking hedge fund loans
- Earners:  Bloomberg ranks 2007 hedge fund earners, Paulson ($1.14bln), Falcone, Simons, Griffin, Atticus` Barakett and Slage, Who holds the best paid position at a hedge fund?
- People: Capula hires Japan fund manager
- Charities: Robin Hood`s Wall Street titans toast four nonprofits, Canadian Hedge Fund Care event raises over $200,000
- EM views: Merrill Lynch says bull run in Latin America to continue, The Asian bull run will continue, says ING economist
- China: Ping An buys 4.2% stake in Fortis, China Investment Corp to seek `strong returns`, use outsourced managers, allocate to alternatives
- Commodities: Gold ETF added over 100 tonnes in just 3 months
- Energy: WWF: A fifth of UN carbon credits may be bogus
- Indexes: S&P to launch three U.S. credit derivative indexes
- Exchanges: Rumored regulatory verger worries exchange leaders, Montreal Exchange and TSX Group resume negotiations on merger, São Paulo futures exchange set to float,  Brazilian exchanges may merge after IPO, Report: Dark liquidity pools in Europe, Canada, and Japan: A US phenomenon goes abroad
- IAFE event: Liquidity Risk Buffers, Lessons from 2007
- Activist News: Activist hedge fund returns hit hard, Pendvest tests Babcock & Brown Capital, Millbrook to nominate four for Brink`s board
- News Briefs: HDF FoF leads 5yr total return and Sharpe ranking, Dynamic Power Hedge Fund, Salida receive Canadian hedge fund awards, Sears Holdings 3Q profit plunges 99%,  little hope for improvement in the near future, Morgan Stanley: Zoe Cruz out as co-president, Man Group ex-CEO Fink sells GBP27m shares, stock up 17.2% last three months,  Temasek third China divestment this week, $1.1bln total, Shuaa Capital launches custody services on Dubai International Financial Exchange, AIMA Japan to annual hedge fund conference in Tokyo on 6th March
- ...And finally: Man gets his gold ID bracelet back 25 years after losing it in grandad`s barn,  turned up inside a chicken gizzard. It`s always in the last place you look
- Logon: http://www.opalesque.com/main.php?act=archive

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Misc. Items of Interest

 

China property tycoon jailed for graft -- [at FT.com]
By Geoff Dyer in Shanghai FT.com
11/30/2007 12:25:23 PM

 

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Funnies, Facts, Quotes, etc….

 

cavalcade kav-uhl-KAYD; KAV-uhl-kayd, noun:

1. A procession of riders or horse-drawn carriages.
2. Any procession.
3. A sequence; a series.

 

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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.