Main News

 

Massive hedge fund speculation is getting blamed for pushing oil to a new high above $88 a barrel - triggering a chorus of alarms ringing from the White House to Saudi oil sheiks.  Crude roared to an intraday trading high of $88.20 a barrel...
full story: http://www.nypost.com/seven/10172007/business/feds_liquidity_helping_flood_o.htm

Move to Put Subprime into Side Pockets

NEW YORK (HedgeWorld.com)—Side pockets—typically long-term portfolios separated from a fund's regular investments and net asset value—are popular with managers, if not always with investors. ......

 

Paulson attacks 'shameful' lenders -- [at FT.com]
By Jeremy Grant and Eoin Callan in Washington FT.com
10/16/2007 7:55:35 PM

 

Credit squeeze leaves long shadow -- [at FT.com]
By Chris Giles FT.com
10/17/2007 2:00:21 AM

 

Fears of Hedge Fund Sell-Off Spur Tokyo Share-Plummet
Forbes - Wednesday October 17, 09:50 BST

 

India financial markets plunge at open -- [at FT Investor]
By Jo Johnson MarketWatch
10/17/2007 12:15:28 AM

 

Collateralized Debt Obligations
CDO Spotlight: The Effect Of Mortgage Market Stress On U.S. CDO Ratings In Third-Quarter 2007
U.S. collateralized debt obligations (CDOs) haven't been immune to the recent stress in the mortgage markets. The third quarter of 2007 witnessed significant negative rating activity among U.S. CDOs, primarily due to downgrades of RMBS, which represent a substantial portion of the assets underlying certain CDO types. Still, the news wasn't all bad for U.S. CDOs in the third quarter. We upgraded 74 CDO tranches during the period, 52 of which were from cash flow and hybrid CDOs, primarily CDOs of CMBS or unsecuritized commercial real estate debt.
To learn more, click or copy and paste the URL below:
(subscription required) https://www.ratingsdirect.com/Apps/RD/controller/Article?id=608015&SctArtId=8369&from=CM&nsl_code=CMT

 

The subprime collapse didn't bother the Bush administration, until ...
Slate - USA
When upstart subprime mortgage lenders ran into trouble, Bernanke and Paulson shrugged again. The market would clear out the problem through the bankruptcy ...
See all stories on this topic

 

The investment portfolios of large U.S. corporations took a sharp turn for the conservative as a result of recent turmoil in financial markets according to Treasury Strategies, which conducted the first comprehensive study to investigate how corporations are responding to these recent market developments.

Full Story...

 

Kazakhstan to Hedges: "Mugabe, Set, Match, Dudes"
Long or Short Capital - Wednesday October 17, 08:16 BST

 

India Markets Plunge in Face of Policy Changes
Financial Times - Wednesday October 17, 07:17 BST

 

Absolute Return Global Elite in Secret Boston Meeting
All About Alpha - Wednesday October 17, 07:40 BST

 

Residential Mortgage-Backed Securities
S&P Alters Modeling Assumptions For Step-Down Provisions To Enhance Credit Support For U.S. RMBS
We continue to review the impact of the trigger provisions governing the release of credit support after the step-down date in U.S. RMBS transactions. As a result, we will, in most cases, look for higher minimum overcollateralization (O/C) levels throughout the life of rated RMBS deals. Because a number of the rating changes affecting the 2005 subprime vintage resulted from the projected release of credit support following the step-down dates, we reviewed the impact that O/C floors have on the release of credit support. We have determined that an O/C floor, derived on a transaction-specific basis, may better protect the stability of the ratings on classes in future securitizations.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQYRBSQTVsLgHxhilpuHQJhuV2VY

 

Residential Mortgage-Backed Securities
Ratings Lowered On 402 First-Lien Subprime U.S. RMBS Classes From 1Q-3Q Of 2005
We lowered our ratings on 402 classes of U.S. RMBS backed by first-lien subprime mortgage loans issued during the first three quarters of 2005. These classes are from 138 transactions. This represents approximately $4.6 billion of original par amount, which is 1.45% of the $320 billion original par amount of U.S. RMBS backed by first-lien subprime mortgage loans rated between the first and third quarters of 2005. These rating actions incorporate our most recent economic assumptions, and reflect our expectation of further defaults and losses on the underlying mortgage loans and the consequent reduction of credit support from current and projected losses.
To learn more, click or copy and paste the URL below:

http://standardandpoors.rsys1.net/servlet/cc5?kHiQYRYWQTVsLgHxhilpuHQJhuV2VR

 

US – The California Public Employees’ Retirement System (CalPERS) have planned to pay fund managers on a performance only basis because of underperformance in a move that could potentially shake up the industry.

 

UK - Rising longevity has been causing headaches for large companies with defined benefits (DB) pension plans, according to a survey by Watson Wyatt.

 

Material world
Oil is not the only commodity on a tear
Full article

 

Inflation Tame, Housing Lame
C.P.I. rises 0.3%, while starts on new homes tumble. Read More

 

 

 

Plunge Seen in Applicants for College
Seek Freshmen Abroad, Institutions Are Told
BY ANNIE KARNI - Staff Reporter of the Sun
For years, New York City colleges have been awash in a record number of applicants, but beginning in 2009 they will have to contend with a shrinking pool from which to choose their freshman classes, a new report warns. Education and demographic...

 

Seattle Dumps Bear Stearns, May Hire Quellos For Portable Alpha ...
FINalternatives - New York,NY,USA
The $2 billion Seattle City Employees' Retirement System in August terminated its portable alpha mandate with the beleaguered firm over performance issues ...
See all stories on this topic

 

Goldman's Agus Starts In-House Hedge Fund
Source: FINalternatives
Goldman Sachs has moved its most successful proprietary trader to its asset management unit, where he will run a new hedge fund.

Funds of hedge funds see opportunities in turbulence
Source: Reuters UK
Market turbulence has created windows of opportunity for managers of funds of hedge funds eager to scavenge profits from ongoing volatility even while they are wary of an economic downturn, a Reuters poll showed.
The quarterly survey of 12 such managers in the U.S. and Europe showed that six still see event-driven strategies as delivering the best returns in the final three months of the year, and first quarter of 2008. More... <http://www.hedgefund-index.com/newseventdriven.asp>

 

Goldman Sachs Asset Management has begun to raise money for Raanan Agus' new fund, which will employ a similar strategy to that he used at the Wall Street giant's multi-strategy principal strategies group. More... <http://www.hedgefund-index.com/newstoday.asp>

 

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Yield Curve Corner

 

Paulson, Bernanke Say Housing Woes May Last
(By Neil Irwin, The Washington Post)

 

Stocks Slide on Bernanke Comments
The Associated Press -
NEW YORK (AP) — Wall Street sank for a second straight session Tuesday after Federal Reserve Chairman Ben Bernanke said the slumping housing market remains ...
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/TRCkiko290_G12.jpg

 

 

 

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Iranian Situation

 

Nuclear-armed Iran risks 'World War III,' Bush says
International Herald Tribune Wed, 17 Oct 2007 11:51 AM PDT
The comment came in reaction to a warning by President Vladimir Putin of Russia against any military strikes on Iran to halt its nuclear work.

 

Putin gave "special" atomic message to Iran: report
Reuters via Yahoo! News Wed, 17 Oct 2007 6:09 AM PDT
Russian President Vladimir Putin delivered a "special message" to Iran on its disputed atomic program and other issues, Iran's chief nuclear negotiator told an Iranian news agency on Wednesday without giving details.

 

How friendly is Russia to Iran?
Russia's president pays a visit
Full article

 

A smiling Vladimir Putin was warmly greeted by a beaming Iranian President Mahmoud Ahmadinejad yesterday in a showcase summit designed to prove Russia is standing by Iran in any confrontation with the West over its nuclear program.  Ahmadinejad won...
full story: http://www.nypost.com/seven/10172007/news/worldnews/axis_of_sleazebags.htm

 

Russia, Iran: A New Jet Engine
    http://www.stratfor.com/products/premium/read_article.php?id=296901

 

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Opalesque’s Corner

 

- Opalesque Exclusive: Fixed income asset manager Princeton Advisory Group acquires minority stake in FoFs manager NewMarket Capital Partners, NewMarket: This is a strategic alliance, hedge funds are a natural extension
- Opalesque Exclusive: Ferrell Concert FoF returns 2.25% in September, 12.34% YTD
- New launches: Goldman`s Agus starts in-house hedge fund, Maiden offering from Horton Point in Q4, JPMAM launches four 130/30 funds
- Survey:  Leading hedge funds most concerned about attracting and retaining talented people, managing growth, some focus on permanent capital, retail access, see fees falling
- HFRI Fund Weighted Composite Index gains 2.82% in September, 8.91% YTD, Hedge funds have best month in over a year, Eurekahedge says, Morningstar hedge fund performance report: 2.44% in Q3
- Moody`s assigns 1st European Operations Quality rating to Brevan Howard Master Fund  - OQ1 Excellent
- Cole Partners hires two, moves office
- Third Party Marketers Association launches strategic growth effort
- Consultants unhappy with quant trading, State Street Global Advisors faces legal action over its products,  Prudential case is of 'low risk' to State Street, State Street's earnings to rise more than 15% in 2007
- Paulson warns of damage to come, Foreign investors flee US securities, Many consumers blame banks, lenders for subprime mortgage woes, #6 of top 10 concern list, Gross predicts further rate cuts
- Commodities: Interview: `Single biggest change for commodity investors is the advent of exchange-traded funds and exchange-traded notes`,  Comparing commodity ETFs,  oil `education gap` to deepen, Banks and securities firms hired a record 450 commodity traders this year, Record price of oil raises new fears, investors and hedge funds have also contributed to the run-up, French pension tenders EUR2bn in commodities mandates
- State capitalism: The rise of sovereign wealth funds (bank report)
- Comment: Hedge funds can`t reveal secrets and do business, Today`s improved and sophisticated hedging techniques have created a false sense of security among investors
- Dark Pools threaten Wall Street, handling over 20% of volume
- Legal News: Update: Huizenga family renews fight against Ritchie Capital, Embattled art dealer cancels exhibit as HF executive partner removes Caravaggios
- Sentinel client sues top executives, Lawyer quit before Sentinel collapse,  Sentinel losses put at up to $350 million
- CDC Group to boost microfinance fund with GBP30m, Bedrock offers operational services for hedge funds, BlackRock is favorite at sixth annual Financial News Awards for Excellence in Institutional Asset Management
- China`s bubble may burst but the impact will be limited, Why China isn`t Japan of 1989, Survey: China investor sentiment still bullish, The opportunity in asset management in China: 60% growth p.a., Alarming talk in Hong Kong: Soaring stock market, but prospects of an all-China exchange raise fears
- Analysis: Number of Japanese IPOs, capital raised falling
- Activist News: Hedge fund TCI agitates for change at CSX, Ronson settles litigation with Steel Partners
- News Briefs: Dresdner derivatives head steps down, Out next month: `Starting a hedge fund: a Canadian perspective - 2nd edition` , Continuing credit concerns leave LevX index struggling to achieve par, Aussie regulator warns investors on offshore financial products not complying with local requirements, India markets trim losses after trading resumes, Chinese bank in Bear Stearns stake talks
- ...And finally: Priest has no problem worshipping God and Elvis
- Logon: http://www.opalesque.com/main.php?act=archive

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Misc. Items of Interest

 

Naked business television
Fox’s innovative new business channel
Full article

 

"Help yourself see more by looking past your beliefs."
Marcia L. Conner, author, "Learn More Now"
http://trax.fastcompany.com/k/w/mailman/fasttake/20071017/seebelieve

 

Guardian: The U.K. is planning to claim sovereign rights over a vast area of the remote seabed off Antarctica, a move likely to signal a quickening of the race for territory around the South Pole in the world's least explored continent. The Foreign Office says data is being gathered and processed for a submission to the U.N. that could extend British oil, gas and mineral exploitation rights up to 350 miles offshore into the Southern Ocean.

 

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Funnies, Facts, Quotes, etc….

 

extant EK-stunt; ek-STANT, adjective:

Still existing; not destroyed, lost, or extinct.

 

1854:  British and French troops began the Siege of Sevastopol during the Crimean War.

1777:  British General John Burgoyne surrendered his troops following his shocking defeat in the Second Battle of Saratoga.

1707:  German Baroque composer Johann Sebastian Bach married his cousin Maria Barbara Bach at Dornheim.

1448:  The last major effort by Crusaders to free the Balkans from Ottoman rule began with the second Battle of Kosovo in Serbia, in which a Hungarian-Walachian army suffered a crushing defeat.

1346:  At the Battle of Neville's Cross, the English defeated the Scots who, as allies of the French, had invaded England in an attempt to distract Edward III from the siege of Calais, France.

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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.