Main News

 

Stock market woes take toll on hedge funds
Financial Times Sun, 03 Feb 2008 12:27 PM PST
Last month was the worst for hedge funds since the August 1998 crisis that presaged the collapse of Long Term Capital Management, according to data from Chicago-based Hedge Fund Research.

 

NEW YORK (HedgeWorld.com)—Billionaire investor Wilbur Ross, rumored to be a potential buyer of troubled bond insurance company Ambac Financial Group Inc. ......

 

Volatility Drives Dark Pools To Hit Record
Volatility drove two of the largest dark pools to reach record volumes at the end of this month.Read more

 

Pardus value cut as airlines bets sour
Financial Times Sun, 03 Feb 2008 11:26 AM PST
Pardus Capital, the activist New York hedge fund, lost almost a quarter of its value – about $800m – in the past two months as bets on US airlines and a number of European companies soured.

 

Asian Currencies Gain This Week as Rate Differentials Widen
Bloomberg - USA
``Asian currencies at these levels reflect too much confidence, but the won can outperform because its economy is more leveraged to China than others in the ...

 

Moody's reviewing mortgage insurers
BusinessWeek - USA
Mortgages, especially home equity products and subprime mortgage -- loans given to customers with poor credit history -- have increasingly defaulted in ...

 

Calpers and UBS to write hedge fund guide
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.  (Financial Times)
http://mail2.efnmail.co.uk/r/337400/MTk4MTI1OjE2MzA5/

 

Hedge funds could make a killing in a downturn
Times Online - UK
Advisers are even recommending investors salt their Isa allowances in hedge funds, which have produced returns of up to 20% since the market peaked in June. ...
See all stories on this topic

 

The Lifecycle of Hedge Funds
Seeking Alpha - New York,NY,USA
Deephaven Capital Management, a $4 billion hedge fund, yesterday closed up shop on two of its merger-arb funds. The understandable reason: no one wants ...

 

Blog: Death of VaR

Today lets take a look at VaR and take a look at how this risk measure failed to detect the scope of the U.S. subprime mortgage market's collapse as it triggered more than $130 billion of losses since June . I also added a Podcast interview with Nassim Taleb, a research professor at London Business School and former options trader. Link read entire story on source's website Source Financial English

 

Soc Gen: Explanatory Note about the Exceptional Fraud

The present docuement describes the arbitrage activities, the method behind the fraud, the conditions in which the fraud was uncovered, the unwinding of the fradulent position and the measures taken with immediate effect, as revealed by Societe Generale's investigations at January 26th 2008. Link read entire story on source's website

 

Merrill brokers fired after CDO sales
Boston Globe - United States
... sold to Springfield, called collateralized debt obligations, or CDOs, were high-risk instruments that were inappropriate for a municipal cash account. ...

 

Knowledge of debt risk key to loan probe
CNNMoney.com - USA
Some say the subprime mortgage industry long showed signs of questionable accounting practices, both in how loans were made to borrowers, and in how the ...

 

Goldman Moves To Boost Alternatives Business
Source: FINalternatives
Goldman Sachs has moved about half of its wildly successful principal strategies group-and half of the money they were running-into its asset management division in an effort to boost its alternative investment offerings. More... <http://www.hedgefund-index.com/newstoday.asp>

 

Eight banks seek rescue plan for bond insurers: CNBC
February 01, 2008 08:30 AM ET
NEW YORK (Reuters) - Eight banks have formed a consortium to
seek a rescue plan for MBIA Inc , Ambac Financial Group Inc 
and other troubled bond insurers, CNBC said on Friday, citing
an unnamed source.
http://links.reuters.com/r/LHAKU/ER8PI/I24QO/85RRZ/5RC2E/YT/t

 

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Yield Curve Corner

 

Letters: The Education of Ben Bernanke
New York Times - United States
20) was extremely informative about the evolution of Ben Bernanke’s philosophical and scientific approach to Fed policy. Lowenstein says that when Bernanke ...

 

Greenspan: Don't look at me! Ex-Fed chief Alan Greenspan said Friday he did not believe the U.S. subprime crisis was his fault, noting he called for caution as early as 2004.

 

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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/VSHtungurahua132_G12.

 

Malaria and how to beat it
A remarkable study on fighting malaria
Full article

 

China: Another Step Backward in Energy Liberalization
February 1, 2008 1154 GMT
Beijing is taking steps to absorb China’s independent “teapot” refineries.
http://www.stratfor.com/analysis/china_another_step_backward_energy_liberalization

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Iranian Situation and Other Man Made Disasters

 

Iran summons French envoy as relations chill
AFP via Yahoo! News Sun, 03 Feb 2008 5:25 AM PST
Iran summoned the French ambassador on Sunday in a tit-for-tat protest at a similar move by Paris over a new anti-Israeli tirade by President Mahmoud Ahmadinejad, in a further sign of strained relations.

 

Russia says UN resolution sends 'clear signals' to Iran: Interfax
AFP via Yahoo! News Sat, 02 Feb 2008 11:58 PM PST
A proposed UN resolution contains "clear signals" to Iran that it must return to full compliance with the UN's nuclear watchdog, Russian Deputy Foreign Minister Sergei Kislyak said in an interview published Sunday.

 

Barak: We think Iran’s nuclear program is much beyond the level of the Manhattan Project
25 Jan.: In an interview for Newsweek by Lally Weymouth, the Israeli defense minister said: We think that they [the Iranians] are quite advanced… working on warheads for ground-to-ground missiles… [and] that they probably have another clandestine enrichment operation beyond the one in Natanz.
DEBKAfile: If they are “working on warheads,” this would indicate that a nuclear weapon is already within reach.

Still Trying to Squeeze Iran
Time Magazine Fri, 01 Feb 2008 10:43 AM PST
A new U.N. Security Council resolution punishing Iran for its failure to comply with demands to cease uranium enrichment remains weeks away, despite last week's agreement on the matter between the five permanent Council members plus Germany.

 

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Opalesque’s Corner

 

- Opalesque Exclusive: MSCI Barra launches first 4 of new thematic and strategy indices: MSCI Short, MSCI Leveraged, MSCI Infrastructure and MSCI Equal Weighted indices, aim is to capture beta
- Opalesque Exclusive: Hedge fund goes for `real` frontier investing by focusing in `undiscovered` Bangladesh,  Deutsche launches Bangladeshi access platform: New suite of derivatives products give investors exposure to rocking stock market (up 87% in 2007)
- Opalesque Exclusive: Credit Suisse analyses frontier markets and develops a new index, to be launched soon
- Fund launches: Morgan Stanley launches global L/S equity FoHFs
- IPOs: Update: PSource to float new hedge fund on LSE by end of March
- Cessations: Knight to liquidate two Deephaven funds, portfolio manager to depart
- Performance: SVM Highlander Fund delivers +29.4% in 2007 due to successful short positions, Two shipping hedge funds outperform markets as freight trade grows, European power hedge funds may miss return targets, Gary Vasey says, Peaks and troughs of a volatile month: what hedge funds did in January
- Pimco`s Gross says LBO debt not cheap enough
- Outlook: Rothschild Group: Private equity and FoHFs to emerge as key drivers in 2008, AIG sees opportunities in shorting as private equity market dries up, L/S hedge funds are in for a renaissance, Horlick says 2008 will be a good year for HFs due to market uncertainties
- 130/30: 130/30 fund managers face stiff competition, many need infrastructure upgrades, Verdict still out on 130/30 leveraged funds
- Survey: Hedge Fund Replication - Delicacy or a bunch of baloney?
- Countrywide update: SRM Global criticizes takeover, Florida investigating Countrywide for business practices related to its home loans
- SocGen Update: BNP Paribas considers SocGen approach, Traders astonished by SocGen`s explanation, Comment:  Many companies still appear to be in complete denial about magnitude of their exposure to operational risk,  what if we added risk information into profitability calculations and to use risk-adjusted profitability?
- Credit Crunch Update: Morgan Stanley sticks with trading strategy, CEO says, Subprime, CDO bank losses may exceed $265bln, `Vultures` circle companies hit by financial turmoil, Merrill execs miss out on bonuses, get retention stock options instead, Bonuses in London survive credit crunch
- Comment: Last year`s model: Rating agencies` downgrades expose mortgage borrowers` unexpected behaviour
- Bond Insurers: MBIA posts biggest-ever quarterly loss, considers new capital plans, MBIA rejects bankruptcy speculation, New York Fed closely watching AMBAC, MBIA talks, Pershing Square posts MBIA questions ahead of call, Buffett poised to cash in on bond insurer woes, Wilbur Ross, alleged buyer of Ambac, is not optimistic about bond insurance industry
- People: RAS Capital to add managers to India FoFs, Arsago macro manager leaves firm, Merrill exec Manit Rye joins Thomas Funds, NYSE EURONEXT expands Singapore presence
- Legal: US developer sues quasi-governmental Dubai firm for $1bln over Palm land titles, $19m settlement reached in Eustace hedge fund case, HF Costa Brava counts in lawsuit against Telos is dismissed in Maryland, Update: South Korean court convicts Lone Star in bank case
- Asia: Fidelity, Goldman forced to cut exchange stakes, India government caps foreign ownership to 5%, Subprime, SocGen to slow Asian derivatives progress, Subprime losses batter Japan`s banks, Report: Battle for talent in Asia could threaten business growth: Skills shortages and high wage demands greet companies expanding in Asia, on top of credit crunch
- Infiniti Group spins-off Global Fund Exchange as independent fund platform management and consulting firm
- Tech Update: PerTrac launches new application to `create, monitor and manage multi-manager portfolios of alternative investments
- Events: HedgeFundsCare invites to NY (Feb 13th) and SF (March 20th) events
- Sovereign wealth funds: China wealth fund seeks fixed-income managers, Russia creates a $32bln Sovereign Wealth Fund
- Activist News: Pentwater to launch proxy battle at Post Properties, Court blow for UniCredit in HVB buy-out, opponents include Trafalgar, Pentwater plans proxy fight to force real-estate trust to consider selling itself, Steel Partners fights for GenCorp seats
- News Briefs: Nasdaq profits jump fourfold, MEP says it will only be a matter of time before calls are renewed for greater transparency, Eurozone inflation soars to 14-year high, Fortis downplays talk of 900 jobs cuts in ABN asset management demerger, AXA halts property fund withdrawals, Saudi Arabia insists it will not depeg riyal, Credit Suisse awarded Portfolio Management Scheme License in India, Deutsche raises stake in China`s Harvest Fund to 30%
- ...And finally: Bull`s bottom disturbs Bombay brokers
- Logon: http://www.opalesque.com/main.php?act=archive

 

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Misc. Items of Interest

 

A strike against al-Qaeda
The killing of Abu Laith al-Libi
Full article

 

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Funnies, Facts, Quotes, etc….

 

perquisite PUR-kwuh-zit, noun:

1. A profit or benefit in addition to a salary or wages.
2. Broadly: The benefits of a position or office.
3. A gratuity or tip for services performed.
4. Anything to which someone has or claims the sole right.

 

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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.