Main News

 

Banks' In-House Funds Fail to Shine
Source: The New York Times
While many big-name hedge funds prospered in 2007, Dow Jones notes that one notable group struggled: funds run by large Wall Street firms and traditional money managers. More... <http://www.hedgefund-index.com/newstoday.asp>

 

 

After the SIV Mess, Are Munis Next? By Emma Trincal, Senior Financial Correspondent | Monday, December 31, 2007 ...
www.hedgeworld.com/news/read_news.cgi?section=peop&story=peop3308.html - 63k –

 

Technology is changing how we invest and product innovation impacts the markets. So I am looking forward to the Money:Tech and Battle Of The Quants events in New York next week. It will be interesting hearing about how technologies are being utilised to safely put capital to work. Successful investing is difficult so it makes sense to keep up with the times. Just like new media changed the old media space, new strategies, derivatives and other financial inventions have altered money management.

 

Guide to hedge funds imminent
FT.com via Yahoo! News Wed, 30 Jan 2008 5:10 PM PST
Big investors in hedge funds are banding together to produce a guide to the industry in part to head off concerns that neophyte pension fund trustees have been pushed into piling money into risky funds.

 

'Unreal' figures 'mislead' accounting standards - Cass
http://www.ipe.com/news/_Unreal_figures_mislead_accounting_standards_Cass_26924.php

 

There was a point at which Jerome Kerviel had a $70 billion position sitting in his books and there wasn’t a single person that was able to catch it. (all $70 billion).  Leaving the human element out of a situation such as this one is… essentially what will cause the problem in the first place?  Managers have to understand that it’s the people on the floor that matter.

 

Kerviel's brother quit bank BNP Paribas: It runs in the family!
The Telegraph - Thursday January 31, 07:52 GMT

 

by Christopher Holt

 

by Barry Ritholtz

 

by Zubin Jelveh

 

Pension Funds lose $1.5 trillion in Share Slump
Reuters - Thursday January 31, 09:50 GMT

 

Activist Hedge Fund Stock Ideas
TheStreet.com - USA
By James Altucher Great hedge funds are always seeking value for their investors, and ultimately strong returns for themselves. Hedge funds differ from ...

 

Dilemma about Hedge Fund Cash
Hedgeworld (subscription) - New York,NY,USA
The Reserve did run an enhanced cash fund for investors like hedge funds. This fund shrank to about half a billion dollars from $6 billion in the exodus ...

 

 

 

 

Monoline flatline: Bill Ackman’s letter to the insurance ...
FT Alphaville - London,UK
This should include not only confirmatory data on CDO and related RMBS exposures detailed in the Open Source Model, but also municipal and other structured ...

 

Merrill Lynch to Cut Back Structured Finance, CDOs (Update1)
Bloomberg - USA
``We are not going to be in the CDO and structured-credit types of businesses,'' which generated 15 percent of the firm's fixed-income revenue, Thain, 52, ...
See all stories on this topic

 

S&P Takes Action On 6,389 U.S. Subprime RMBS Ratings And 1,953 CDO Ratings
We placed on CreditWatch with negative implications or downgraded our ratings on 6,389 classes from U.S. residential mortgage-backed securities (RMBS) transactions backed by U.S. first-lien subprime mortgage collateral rated between January 2006 and June 2007. At the same time, we placed on CreditWatch negative 1,953 ratings from 572 global CDO of asset-backed securities (ABS) and CDO of CDO transactions. None of our ratings on any outstanding asset-backed commercial paper notes or structured investment vehicles will be adversely affected solely as a result of these rating actions.
To learn more, click or copy and paste the URL below:
http://standardandpoors.rsys1.net/servlet/cc5?kHiQAWCSQTVsLgHxhilpuHQJhuV2VR

 

Financial Institutions
What Is The Potential Impact On Banks Of Subprime Securities Downgrades?
Banks are bracing for another chapter in the unfolding story of their mortgage market problems. We recently announced further rating actions on residential mortgage-backed securities and subprime-related collateralized debt obligations. These actions could affect bond pricing and liquidity in certain sectors. For example, many investors whose investment guidelines do not allow them to hold lower rated instruments could be forced to divest, creating the potential for an imbalance in the markets. In the U.S., we see potential losses moving to regional banks, credit unions, and government-sponsored enterprises.
To learn more, click or copy and paste the URL below:
http://standardandpoors.rsys1.net/servlet/cc5?kHiQAWCSQTVsLgHxhilpuHQJhuV2VW

 

Geopolitical Diary: U.S.-Northeast Asian Relations
January 31, 2008 0155 GMT
South Korean and U.S. officials met Jan. 30 to discuss ways to rebuild momentum in the stalled six-party process to denuclearize North Korea.
http://www.stratfor.com/geopolitical_diary/geopolitical_diary_reviving_six_party_talks

Brazil: Brasilia's Unclear Naval Priorities
January 30, 2008 2049 GMT
Brazil has sought French assistance on its long-time nuclear submarine program, according to the Brazilian defense minister.
http://www.stratfor.com/analysis/brazil_brasilias_muddled_naval_priorities

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Yield Curve Corner

 

Dilemma about Hedge Fund Cash
Hedgeworld (subscription) - New York,NY,USA
The Reserve did run an enhanced cash fund for investors like hedge funds. This fund shrank to about half a billion dollars from $6 billion in the exodus ...

 

Fed May Cut Rate to 3%, Hold Out Chance of More Cuts (Update2)
Bloomberg - USA
To avoid the impression of a blank check, Chairman Ben S. Bernanke will also seek language that notes the cumulative cuts since September, Fed watchers said ...

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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/SNWchina031_MO.jpg

 

Food warnings amid China freeze *
China struggles to cope with its worst snowfall in years, as officials warn of catastrophic damage to crops.
Full story:
http://news.bbc.co.uk/go/em/-/1/hi/world/asia-pacific/7219092.stm

 

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Iranian Situation and Other Man Made Disasters

 

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Opalesque’s Corner

 

- Opalesque Exclusive: Swiss bank and asset manager UBP`s consolidated net profit at CHF 510.5m, up 23.5%, hedge fund assets at CHF60.3bln (US$55.7bln) in 2007, Geneva banks` stability a boon in credit turmoil
- Fund launches: Opalesque Exclusive: Sloane Robinson launches new Asia-focused fund, Capstone plans long only hedge fund, PSource Asia distressed debt fund to seek $100m, Baring launches Asia Strategic Fund as equity multi-strategy fund
- Trends: Scion shuts Asian funds to focus on recession opportunities, Gargour`s LNG Capital prepares for gains in distressed, HFR: Investors swarm to Asian hedge funds, poured $12.4bln into the market in 2007
- Performance: Artemis liquidates maiden hedge fund, Update: Traders at Sailfish ordered to liquidate positions, Crosslink closes largest venture capital-hedge fund hybrid fund
- Investment banking in-house hedge funds struggle, some predict sales
- Manager Profile: Russia`s hedge funds show strong growth and potential according to Pharos
- Sovereign Wealth Funds Risk Index created, ranks top 20 prominent funds according to potential risk they present to western interests - guess who comes out on top?, Standard Chartered invites UAE funds to buy stake, Hong Kong praises UAE wealth funds
- New indices: FTSE launches Shariah global index series, can be used by even most conservative investors, S&P`s new dividend indices: Really alpha or just alternative beta?
- Update: FBI`s subprime crackdown may expand to more firms
- Credit Crunch Update: Fed slashes rates to blunt economic slowdown, Banks may write down another $70bln, Oppenheimer says, S&P`s ratings to be slashed on more than US$500bln of investments tied to bad mortgage loans, Pandit to make Citigroup leaner, no break up but job shedding expected, Merrill plans to cut back on CDOs, structured finance, UBS suffered a further $4bn writedown, Barclays and RBS warnings add to banking woes, Questions over continuing write-downs in Europe
- Bond Insurers: Ackman: MBIA, Ambac may each lose $11.6bln, Market drops as bond insurer fears hit financials, Tender-option bonds pile up at banks, shunned by investors
- SocGen Update: SocGen backs CEO, SocGen boss survives and says bank can too, London hedge fund trader criticizes `blind eye` culture, The minefield of derivatives: What can we learn that Risk magazine in January named a certain French bank `Equity Derivatives House of the Year`?, Low-tech hack was behind $7.2bn SocGen fraud - Kerviel simply used co-workers` access codes to set up fraudulent transactions, Low-tech hack was behind $7.2bn SocGen fraud - Kerviel simply used co-workers` access codes to set up fraudulent transactions, Kerviel in his own words, `Particularly young women` hail rogue trader, Kerviel`s brother quit bank BNP Paribas last year after trading methods concerns
- People: Invesco seeks credit analyst, fixed-income fund manager, CIBC World Markets rebuilds hedge fund sales team, New hire at Daiwa Singapore
- Currency Trading: Weak dollar inspires bullish bets on Asian currencies
- Hedge funds must address OTC volume surge, concerns about ability of market`s infrastructure to accommodate growth effectively
- AIMA Investor Steering Committee to publish first global collaborative guide for investors in Q2
- Institutions: Boeing shifts $49.6bln pension fund toward alternatives, Pennsylvania pension takes step towards HFs, UK`s West Yorkshire Fund to add sixth FoHF to portfolio, Mercer estimates US pension plans down 7-8% due to recent market volatility, Watson Wyatt: January`s fall could hit 2007 global pension gains, AP7`s Grottheim: Pension funds might opt for long-only managers offering alpha at reasonable fees
- Environmental trading news: Sweden`s AP7 outlines $500m cleantech mandate ahead of tender, Canadian provinces eye carbon-trading plan
- Commodities: Which commodities work now?  Commodities tend to have positive returns during equity bear markets, however some sectors may not perform as well, The Petrodollar bubble pump explained, Mainstream investors and money managers rush to gold, metal hits new high
- Exchanges: CME`s bid for Nymex facing opposition from derivatives industry, one HF may sue Nymex, European stock exchanges facing `perfect storm` of new competition, Eurex considers BRIC futures to tap into growing institutional demand
- Europe: As hedge funds are using credit derivatives to short Spain`s fragile property market, bank debt insurance rise by a third, Icelandic banks fall victim to financial crisis
- Activist News: Harbinger calls Media General action not `hostile`, Hedge funds oppose Tousa refinancing
- News Briefs: Frontier Capital attracts $20mln - $30mln in assets each month says CEO, Alliance Data sues Blackstone, seeks LBO`s completion, Paladyne and Reuters expand offering to include hosted Reuters DataScope Onsite, ISE and EUREX to jointly develop new Options Trading System for ISE, AllianceBernstein`s AUM increased 21% partly offset by lower HF performance fees, Anchoring ships may have cut undersea cables, disrupting internet across large parts of the Middle East and south Asia, Barclays: Gulf should not depeg in a hurry, Dollar my turn around, Bear is bullish on Chilean equities
- ...And finally: Manhattan hotel unveils new room made entirely of chocolate
- Logon: http://www.opalesque.com/main.php?act=archive

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Misc. Items of Interest

 

Wasserstein gets $96 million stock award as Lazard booms. Read More

 

The War and Its Markets

Book Review Wealth, War & Wisdom, by Barton Biggs; John Wiley & Sons Inc., Hoboken, N.J., 2008, 358 pp., $29.95 (cloth). Two years ago Mr. ......

 

Brearley Tops Survey of Private Schools
BY ELIZABETH GREEN - Staff Reporter of the Sun
The New York Sun assigns letter grades using a mathematical formula that takes into account the school's net assets and the number of students it sends to Harvard and adjusts for the size of the student body.

 

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Funnies, Facts, Quotes, etc….

 

irascible ih-RASS-uh-buhl, adjective:

Prone to anger; easily provoked to anger; hot-tempered.

 

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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.