Archive: 01/17/2008
Main News
Pearlstein: Recession?
(Steven Pearlstein, washingtonpost.com)
(Steven Pearlstein, washingtonpost.com)
Standard & Poor's Ratings Services said yesterday it has extended its comment period to March 1 on the proposal to introduce Enterprise Risk Management (ERM) analysis into the corporate credit ratings process globally. In addition, we have clarified the analysis process being proposed.
The overall economic trends and business indicators have led executives at credit card issuer American Express Co. “to adopt a more cautious view of the environment,” Dan Henry, executive vice president and chief financial officer, said Thursday during a conference call announcing expected fourth-quarter charges.
U.S. RMBS Surveillance & CDO Of ABS Assumptions Revised Amid Defaults, Negative Housing Outlook
We have revised the assumptions we use for the surveillance of U.S. residential mortgage-backed securities (RMBS), and are in the process of revising the correlation and recovery assumptions we use to rate and monitor collateralized debt obligation (CDO) transactions backed by U.S. RMBS. These revisions reflect the growing economic consensus that U.S. home price declines will be larger than previously forecasted and that the slump in the U.S. housing market is expected to last far longer than previously anticipated.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VS
We have revised the assumptions we use for the surveillance of U.S. residential mortgage-backed securities (RMBS), and are in the process of revising the correlation and recovery assumptions we use to rate and monitor collateralized debt obligation (CDO) transactions backed by U.S. RMBS. These revisions reflect the growing economic consensus that U.S. home price declines will be larger than previously forecasted and that the slump in the U.S. housing market is expected to last far longer than previously anticipated.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VS
Global Issuers
Corporate Governance: How Has Sarbanes-Oxley Changed The Face Of Corporate Governance After Five Years?
Since the Sarbanes-Oxley Act was signed into law in July 2002, there has been much hand-wringing over whether the costs of compliance with the act's provisions have been worth the benefits. There are those who have pointed to the steep appreciation in stock values since 2002 (despite recent volatility) as evidence of the act's efficacy. But critics have pointed to the seemingly inexorable increase in company restatements and the oversupply of corporate scandal that the act was supposed to prevent.
To learn more, click or copy and paste the URL below:
(subscription required)
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VW
Corporate Governance: How Has Sarbanes-Oxley Changed The Face Of Corporate Governance After Five Years?
Since the Sarbanes-Oxley Act was signed into law in July 2002, there has been much hand-wringing over whether the costs of compliance with the act's provisions have been worth the benefits. There are those who have pointed to the steep appreciation in stock values since 2002 (despite recent volatility) as evidence of the act's efficacy. But critics have pointed to the seemingly inexorable increase in company restatements and the oversupply of corporate scandal that the act was supposed to prevent.
To learn more, click or copy and paste the URL below:
(subscription required)
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VW
Structured Finance
162 Ratings From 33 CDO Of ABS Transactions Put On Watch Negative
We placed our ratings on 162 tranches from 33 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities (CDO of ABS) on CreditWatch with negative implications. The CDO tranches with ratings placed on CreditWatch negative have a total issuance amount of $5.369 billion, and all are backed in part by recent-vintage residential mortgage-backed securities (RMBS) either by directly holding notes from the RMBS transactions or by holding notes from other CDO transactions that are in turn collateralized by RMBS.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VB
162 Ratings From 33 CDO Of ABS Transactions Put On Watch Negative
We placed our ratings on 162 tranches from 33 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities (CDO of ABS) on CreditWatch with negative implications. The CDO tranches with ratings placed on CreditWatch negative have a total issuance amount of $5.369 billion, and all are backed in part by recent-vintage residential mortgage-backed securities (RMBS) either by directly holding notes from the RMBS transactions or by holding notes from other CDO transactions that are in turn collateralized by RMBS.
http://standardandpoors.rsys1.net/servlet/cc5?kHiQATAWQTVsLgHxhilpuHQJhuV2VB
An Effort to Stem Losses at Citigroup Produces a Renewed Focus on Risk
New York Times - United States
It had purchased those securities intending to repackage them as part of collateralized debt obligations and sell securities in the CDO’s to investors. ...
New York Times - United States
It had purchased those securities intending to repackage them as part of collateralized debt obligations and sell securities in the CDO’s to investors. ...
Foreign Funds Ride to the $21bn Wall Street Rescue
Financial Times - Wednesday January 16, 09:33 GMT
Financial Times - Wednesday January 16, 09:33 GMT
Bloomberg Picks Hedgie to Manage His Billions
New York Times - Wednesday January 16, 09:31 GMT
New York Times - Wednesday January 16, 09:31 GMT
by David Merkel
Canada's banks could split with BoC. In a move that could destabilize Canada's monetary policy, certain banks are considering freezing their prime interest rates despite an expected rate cut by the Bank of Canada. Bankers say matching the BoC's expected 0.25% cut may add to their woes in the midst of a credit-market crunch
by Mebane Faber
Tue, 15 Jan 2008, 16:34
Euromoney Institutional Investor
Performance problems last year have earned quant funds an investment warning from Watson Wyatt. In a release issued to its U.K. pension scheme clients, the consultancy wrote, "We remain cautious on the outlook for quantitative managers given the strong tailwind many experienced." That's not the only thing giving Watson Wyatt a queasy feeling. It added that is also "nervous about all the 130/30 hedge fund products being launched." According to Financial News, Watson Wyatt's attitude toward quants has been going on for the past year and a half, during which time WW's Craig Baker and his team have downgraded a number of quant managers from "hold" to "weak hold."
Performance problems last year have earned quant funds an investment warning from Watson Wyatt. In a release issued to its U.K. pension scheme clients, the consultancy wrote, "We remain cautious on the outlook for quantitative managers given the strong tailwind many experienced." That's not the only thing giving Watson Wyatt a queasy feeling. It added that is also "nervous about all the 130/30 hedge fund products being launched." According to Financial News, Watson Wyatt's attitude toward quants has been going on for the past year and a half, during which time WW's Craig Baker and his team have downgraded a number of quant managers from "hold" to "weak hold."
Geopolitical Diary: The U.S. Economic Anti-Crisis
January 16, 2008 0242 GMT
Global stock markets dropped on Tuesday after the U.S. Commerce Department reported that U.S. retail sales dipped 0.4 percent in December 2007. But one bad month for one statistic does not a slowdown make.
http://www.stratfor.com/geopolitical_diary/geopolitical_diary_u_s_economic_anti_crisis
January 16, 2008 0242 GMT
Global stock markets dropped on Tuesday after the U.S. Commerce Department reported that U.S. retail sales dipped 0.4 percent in December 2007. But one bad month for one statistic does not a slowdown make.
http://www.stratfor.com/geopolitical_diary/geopolitical_diary_u_s_economic_anti_crisis
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Yield Curve Corner
The Education of Ben Bernanke
By ROGER LOWENSTEIN
Banks won’t lend money. Oil has reached $100 a barrel. Unemployment is up. What’s a Fed chief to do?
By ROGER LOWENSTEIN
Banks won’t lend money. Oil has reached $100 a barrel. Unemployment is up. What’s a Fed chief to do?
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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/TRCfuna016_GJ.jpg
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Iranian Situation and Other Man Made Disasters
Bush says Iran and Syria must end Lebanon interference
Reuters via Yahoo! News Wed, 16 Jan 2008 10:54 AM PST
President George W. Bush said on Wednesday that Syria and Iran must end interference in Lebanese politics, and called for nations in the region to support Prime Minister Fouad Siniora.
Reuters via Yahoo! News Wed, 16 Jan 2008 10:54 AM PST
President George W. Bush said on Wednesday that Syria and Iran must end interference in Lebanese politics, and called for nations in the region to support Prime Minister Fouad Siniora.
Faulty heaters kill many in Iran
BBC News Wed, 16 Jan 2008 10:32 AM PST
Faulty heaters are blamed for 89 deaths in Iran, while neighbouring Afghanistan also struggles with a cold spell.
BBC News Wed, 16 Jan 2008 10:32 AM PST
Faulty heaters are blamed for 89 deaths in Iran, while neighbouring Afghanistan also struggles with a cold spell.
Iran: Security Official To Visit China
January 16, 2008 1511 GMT
Saeed Jalili, secretary of Iran's Supreme National Security Council, is set to visit China on...
http://www.stratfor.com/sitrep/iran_security_official_visit_china
January 16, 2008 1511 GMT
Saeed Jalili, secretary of Iran's Supreme National Security Council, is set to visit China on...
http://www.stratfor.com/sitrep/iran_security_official_visit_china
The Strait of Hormuz Incident and U.S. Strategy
January 14, 2008 1955 GMT
Iranian speedboats reportedly menaced U.S. warships in the Strait of Hormuz on Jan. 6. Since then, the United States has emphasized the threat posed by Iran to U.S. forces in the strait and to the transit of oil from the Persian Gulf region.
http://www.stratfor.com/weekly/strait_hormuz_incident_and_u_s_strategy
January 14, 2008 1955 GMT
Iranian speedboats reportedly menaced U.S. warships in the Strait of Hormuz on Jan. 6. Since then, the United States has emphasized the threat posed by Iran to U.S. forces in the strait and to the transit of oil from the Persian Gulf region.
http://www.stratfor.com/weekly/strait_hormuz_incident_and_u_s_strategy
Middle East/North Africa:
Annual Forecast 2008: Beyond the Jihadist War -- Middle East
http://www.stratfor.com/analysis/annual_forecast_2008_beyond_jihadist_war_middle_east
Annual Forecast 2008: Beyond the Jihadist War -- Middle East
http://www.stratfor.com/analysis/annual_forecast_2008_beyond_jihadist_war_middle_east
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Opalesque’s Corner
- Opalesque Exclusive: Friedberg Global Macro Fund reopens for $10m slot, December +2.82% (26.04% YTD)
- Fund launches: Adept Capital Partners launches Early Stage Asia Fund, niche approach investing, Magnum launches multi-manager, multi-strategy India FoFs, Private Advisors to start FoPEFs and new finance fund of hedge funds
- Europe`s big hedge funds outperform peers, Sloane Robinson comes out atop list with a return of 41%
- HFR: Investors allocate $30.4bln into hedge funds in the fourth quarter, total inflows for the year top $194bl, Hedge fund investors shrug off credit crunch, more concerned by the Amaranth collapse, Investors turn defensive in early January but flow data suggests they see some value in Japan, Middle East/Africa region, Real Estate and hard currency EM debt
- Indices: Credit Suisse/Tremont Hedge Fund Index is up 0.47% in December, ends 2007 up 12.56%, Eurekahedge Hedge Fund Index returned an estimated 0.83% in December 2007, 13.20% for 2007, RBC Hedge 250 Index returned an estimated 0.50% in December 2007, YTD 8.27%
- Survey: Debtwire unveils 2008 Distressed Debt Outlook for North America, sharp increase in hedge fund liquidations and recession are expected
- Report says US asset managers increasingly turn to alternatives (derivatives, hedge funds) to achieve growth in 2008,Family offices increasingly capture assets of ultra-high-net-worth client
- Institutions: Survey says more UK funds shifted to fixed income (exposure of 29%), alternatives and cash (16%)
- People: Soros hires BlackRock co-founder as investment chief, MFA announces Congressman Richard Baker to become new president & CEO, Senior portfolio manager joins Marathon, Bear Stearns appoints CEO for securities division, Mill Creek hires director of alternative investments
- Commodities: Giant hedge funds are drawn to agricultural markets, believe this is a `bull commodity market for some years to come`, Indonesia takes emergency action over record soyabean prices, View on current upswing in commodity prices, ETF Securities seeing strong investment growth as appeal of commodities grows
- Credit Crunch Update: Merrill, Citigroup announce plans to raise $21bln in fresh capital, Singapore SWF, Davis Selected Advisors, HF TPG-Axon, New Jersey, Olayan Group, T.Rowe Price are some of the investors, Citigroup posts record loss on $18bln writedown, China might block Citi sale, Citigroup seeks $5bln from Singapore fund, Singapore`s GIC says Citi, UBS investments unique, New Jersey fund bets on Citigroup and Merrill, Merrill Lynch gets $6.6bln infusion
- BofA sells prime brokerage unit, RBS rumoured to be buying BofA`s equities division
- Northern Rock Update: Shareholders vote down all but one of the SRM and RAB proposals
- US municipal bonds, one of the few strong fixed-income performers, could fly this year
- Legal: Basis Yield Alpha Fund loses U.S. protection bid for liquidation, CFTC wrapped up two cases against commodity traders, ormer Royal Dutch Shell trader tried to manipulate gas prices, jury finds, The Supreme Court ruled that investors cannot sue third parties in securities fraud cases, Lawsuit database launched
- India: Pandit`s Old Lane, Oz Management granted FII status, More managers are turning bullish on India at the expense of China
- Exchanges: Trading volumes soared on European exchanges last year despite system failures and market volatility, Japan exchanges to study carbon trading, possibly create domestic market
- Events: Top speakers at this year`s AIM Japan Hedge Fund Forum, 6th March
- Activist News: TCI seeking to increase J-Power stake, Harbinger is new Tate & Lyle activist shareholder, Jana buys into Coleman Cable but stock price still down, CalPERS joins Knight Vinke's HSBC crusade, Ackman raises stake in Borders Group to 24.4%, Luby`s shareholders reject Ramius Capital nominees
- News Briefs: Thomson`s acquisition of Reuters to complete in Q2, Full Circle launches offshore asset-based lending fund, Donald Putnam lines up $200m blank check IPO, SSgA Q4 AUM show marginal fall, China to allow banks to invest in insurers, only 4% of Chinese with life insurance currently, IBM and Algorithmics to build first advanced risk management system for a Securities House in China
- And Finally. Bye bye Christmas. man goes out window with Christmas tree
- Logon: http://www.opalesque.com/main.php?act=archive
- Fund launches: Adept Capital Partners launches Early Stage Asia Fund, niche approach investing, Magnum launches multi-manager, multi-strategy India FoFs, Private Advisors to start FoPEFs and new finance fund of hedge funds
- Europe`s big hedge funds outperform peers, Sloane Robinson comes out atop list with a return of 41%
- HFR: Investors allocate $30.4bln into hedge funds in the fourth quarter, total inflows for the year top $194bl, Hedge fund investors shrug off credit crunch, more concerned by the Amaranth collapse, Investors turn defensive in early January but flow data suggests they see some value in Japan, Middle East/Africa region, Real Estate and hard currency EM debt
- Indices: Credit Suisse/Tremont Hedge Fund Index is up 0.47% in December, ends 2007 up 12.56%, Eurekahedge Hedge Fund Index returned an estimated 0.83% in December 2007, 13.20% for 2007, RBC Hedge 250 Index returned an estimated 0.50% in December 2007, YTD 8.27%
- Survey: Debtwire unveils 2008 Distressed Debt Outlook for North America, sharp increase in hedge fund liquidations and recession are expected
- Report says US asset managers increasingly turn to alternatives (derivatives, hedge funds) to achieve growth in 2008,Family offices increasingly capture assets of ultra-high-net-worth client
- Institutions: Survey says more UK funds shifted to fixed income (exposure of 29%), alternatives and cash (16%)
- People: Soros hires BlackRock co-founder as investment chief, MFA announces Congressman Richard Baker to become new president & CEO, Senior portfolio manager joins Marathon, Bear Stearns appoints CEO for securities division, Mill Creek hires director of alternative investments
- Commodities: Giant hedge funds are drawn to agricultural markets, believe this is a `bull commodity market for some years to come`, Indonesia takes emergency action over record soyabean prices, View on current upswing in commodity prices, ETF Securities seeing strong investment growth as appeal of commodities grows
- Credit Crunch Update: Merrill, Citigroup announce plans to raise $21bln in fresh capital, Singapore SWF, Davis Selected Advisors, HF TPG-Axon, New Jersey, Olayan Group, T.Rowe Price are some of the investors, Citigroup posts record loss on $18bln writedown, China might block Citi sale, Citigroup seeks $5bln from Singapore fund, Singapore`s GIC says Citi, UBS investments unique, New Jersey fund bets on Citigroup and Merrill, Merrill Lynch gets $6.6bln infusion
- BofA sells prime brokerage unit, RBS rumoured to be buying BofA`s equities division
- Northern Rock Update: Shareholders vote down all but one of the SRM and RAB proposals
- US municipal bonds, one of the few strong fixed-income performers, could fly this year
- Legal: Basis Yield Alpha Fund loses U.S. protection bid for liquidation, CFTC wrapped up two cases against commodity traders, ormer Royal Dutch Shell trader tried to manipulate gas prices, jury finds, The Supreme Court ruled that investors cannot sue third parties in securities fraud cases, Lawsuit database launched
- India: Pandit`s Old Lane, Oz Management granted FII status, More managers are turning bullish on India at the expense of China
- Exchanges: Trading volumes soared on European exchanges last year despite system failures and market volatility, Japan exchanges to study carbon trading, possibly create domestic market
- Events: Top speakers at this year`s AIM Japan Hedge Fund Forum, 6th March
- Activist News: TCI seeking to increase J-Power stake, Harbinger is new Tate & Lyle activist shareholder, Jana buys into Coleman Cable but stock price still down, CalPERS joins Knight Vinke's HSBC crusade, Ackman raises stake in Borders Group to 24.4%, Luby`s shareholders reject Ramius Capital nominees
- News Briefs: Thomson`s acquisition of Reuters to complete in Q2, Full Circle launches offshore asset-based lending fund, Donald Putnam lines up $200m blank check IPO, SSgA Q4 AUM show marginal fall, China to allow banks to invest in insurers, only 4% of Chinese with life insurance currently, IBM and Algorithmics to build first advanced risk management system for a Securities House in China
- And Finally. Bye bye Christmas. man goes out window with Christmas tree
- Logon: http://www.opalesque.com/main.php?act=archive
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Misc. Items of Interest
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Funnies, Facts, Quotes, etc….
nonagenarian
on-uh-juh-NAIR-ee-uhn; no-nuh-, noun:
A ninety year old person; someone whose age is in the nineties.
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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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