Main News

 

Detailed Descriptions Of S&P's New Actions Aimed At Strengthening The Ratings Process
Standard & Poor's Ratings Services ("S&P") announced that we have begun implementing a broad set of new actions to further strengthen our ratings operations and better serve capital markets around the world. "The ongoing transformation of the financial markets requires us to continue to bring more innovative thinking, greater resources, and improved analytics to the ratings process," said Deven Sharma, president of S&P. "By further enhancing independence, strengthening the ratings process, and increasing transparency, the actions we are taking will serve the public interest by building greater confidence in credit ratings and supporting the efficient operation of the global credit markets."
To learn more, click or copy and paste the URL below:
https://www.ratingsdirect.com/Apps/RD/controller/Article?id=629696&SctArtId=11551&from=CM&nsl_code=CMT

 

UPDATE 1-UBS analysts criticise Fitch's CDO overhaul plan
Reuters - USA
Fitch on Tuesday said it was considering a change in methodology that would probably hit ratings of $75 billion worth of synthetic CDOs the hardest, ...

 

S&P cuts 94 CDO of ABS classes totaling $8.9 bln
Reuters - USA
... RMBS securities and changes made by S&P to the recovery rate and correlation assumptions it uses to assess RMBS held within CDO collateral pools. ...

 

Goldmans Warns on $15bn Monoline Rescue
Business Times Online - Thursday February 07, 10:06 GMT

 

 Blackstone Target GSO Hires Trader Canaan to Bet on Mortgages

 http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=ao0cwgusP_vM

 

 Hedge Funds Lost 1.8?ast Month as Global Stock Markets Fell

 http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=aIV_r2_VRIwg

 

A Public Hedge Fund With Good News to Report
New York Times Blogs - New York,NY,USA
The British hedge fund made its first-ever earnings announcement as a public company, reporting $127.1 million in net income for its fourth quarter, ...

 

Goldman CFO Sees Less Risk In Commercial Mortgages. "Goldman Sachs Group Inc (GS) CFO David Viniar remains bearish with regard to "subprime" residential mortgages extended to people with poor credit. Goldman's negative view on the sector served it well last year, as the firm generated billions of gains by betting subprime securities would fall. Despite more than $100 billion of write-downs by banks and brokerages last year... Viniar said he is not convinced that market prices have fallen to appropriate levels." (Reuters, Feb. 6th)

Goldman Eager To Buy Into Battered Mortgage Market. "CFO David Viniar: Goldman Sachs Group is eager to get into the battered mortgage market... Wall Street's biggest firm by market value [largely] sidestepped the subprime mortgage mess. Viniar: "There will be purchasing of distressed assets and, at the right price, we will be buyers worldwide. We have the capacity to service them and the ability to analyze these assets from the perspective of who is underwriting them and where they're located, so we will be there." Viniar said that while the firm regarded mortgages

 

Three Early Lessons from the Subprime Lending Crisis: a French Answer to President Sarkozy
http://www.edhec-risk.com/edito/RISKArticleEdito.2007-09-17.4732
European leaders, eager for an explanation absolving them of responsibility, have once again laid blame on the seemingly detrimental role played by hedge funds in this summer's crisis. This crisis is the result of a sudden fall in asset prices, combined with increased aversion to risk on the part of investors. To suggest that hedge funds are to blame for this crisis is simplistic but tempting, as their speculative, unregulated, and opaque nature make them easy targets - all the while, more delicate market and regulatory issues are avoided. So, as a counterpoint to these accusations that often come from France, it seemed necessary to us to provide a French perspective on the lessons to be learned with respect to financial regulation in France.
More...

 

Natural Resources Fund-of-Funds: Active Management, Risk Management, and Due Diligence
http://www.edhec-risk.com/edhec_publications/all_publications/RISKReview.2007-05-23.2903
This article comprehensively covers the new field of natural-resources fund-of-funds investing. The authors first explain why the demand for such an investment has emerged, and then discuss the opportunities that an actively-managed natural-resources fund-of-funds can potentially exploit.
More...

 

The Impact of Non-Normality Risks and Tactical Trading on Hedge Fund Alphas
http://www.edhec-risk.com/edhec_publications/RISKReview.2007-04-04.1850
This paper highlights the importance of non-normality risks and tactical asset allocation in assessing hedge fund performance. As such, it underlines the inaccuracies of previous papers on hedge fund performance that ignored higher moments in the distribution of hedge fund returns and assumed constant asset allocation.
More...

Measure for Measure
http://www.edhec-risk.com/edhec_publications/RISKReview.2007-03-30.0754
In a previous paper, Life at Sharpe's End, the author touched upon the difficulty of using standard measures to evaluate a number of hedge fund strategies. In this article, after reviewing these difficulties, she discusses the state-of-the-art methodology in this area.
More...

Life at Sharpe's End
http://www.edhec-risk.com/edhec_publications/RISKReview.2007-03-30.3725
For futures programs, the meaning of rate-of-return numbers can be somewhat ambiguous, given that one does not need to set aside capital in the amount of a program's funding level. Instead, an investor can fractionally fund an account using "notional funding".
More...

 

Lessons from Davos, One of Globalization's Best Classrooms
Deliberations at the World Economic Forum in Davos last month did not go entirely as planned, but few of the 2,400 people attending the meeting were deterred by the plunging market. In this opinion piece, management professor Michael Useem, who directs Wharton's Center for Leadership and Change Management and who attended the forum, discusses how Davos has emerged as a "classroom on globalization." Among the key lessons from this year's class: Central bankers have lost their way; sovereign wealth, hedge and private equity funds are the new power brokers; and no new authority should be put in control.
http://knowledge.wharton.upenn.edu/article/1893.cfm

 

Lebanon in confrontation with Syria, Iran: Hariri
Reuters via Yahoo! News Thu, 07 Feb 2008 10:49 AM PST
The leader of Lebanon's pro-Western majority in parliament said on Thursday the country was in direct confrontation with Syria and Iran, which back the Hezbollah opposition group in its conflict with the Beirut government.

 

Egypt: Zero Tolerance For Border Violations
February 7, 2008 1457 GMT
Egypt will not tolerate any border violations, Egyptian Foreign Minister Ahmed Abul Gheit said...
http://www.stratfor.com/sitrep/egypt_zero_tolerance_border_violations

 

Icahn: A-Blogging He Will Go
Activist hedge fund icon Carl Icahn is preparing to get active in the blogosphere with a site of his own that will focus on corporate management problems.Read more

 

Thursday , 07 Feb 2008
Ernst & Young says metals analysts’ prediction of metal prices “have consistently and significantly lagged behind the actual spot market,” and that mining and metals equities have been undervalued.

 

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Yield Curve Corner

 

UPDATE 1-Sen. Dodd says confident Bernanke to use Fed tools
Reuters - USA
WASHINGTON, Feb 6 (Reuters) - The chairman of the US Senate Banking Committee on Wednesday praised Federal Reserve Chairman Ben Bernanke and said he was ...

 

Bending It Like Bernanke Shows Error of Fed Ways
Bloomberg - USA
So I don my flight jacket, climb into the helicopter, and prepare to bend it like Bernanke. The game begins with the Fed rate at 4.5 percent, which is where ...

 

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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/TRChondo038_GJ.jpg

 

KOLKATA, India, Feb 5 (Reuters) - India's worst outbreak of bird flu appears ... Bengal and a special watch was in place in districts bordering Bangladesh. ...

India: A Bird Flu Outbreak to Watch. February 6, 2008 | 1929 GMT. Health official and poultry workers at Indian chicken farm after bird flu outbreak ...

 

How Do You Identify Potential Risks From a H5N1 Pandemic Simulation?

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Iranian Situation and Other Man Made Disasters

Iran's Khatami furious over reformist vote 'catastrophe'
AFP via Yahoo! News Wed, 06 Feb 2008 11:53 PM PST
Iran's ex-president Mohammad Khatami labelled the mass disqualification of reformist candidates for parliamentary elections as a "catastrophe" which threatens the Islamic revolution, the press reported on Thursday.

 

Why Russia Worries About Iran
February 7, 2008 0502 GMT
In the wake of Tehran’s latest rocket launch, Russia’s deputy foreign minister expresses concern about Iran’s nuclear program. Nate Hughes assesses the Kremlin’s concern and the progress of the missile program.
http://www.stratfor.com/podcast/why_russia_worries_about_iran

 

Iranians Plant Their Flag In Wilds of Nicaragua
BY TODD BENSMAN - Special to the Sun
MONKEY POINT, Nicaragua — If the ruling mullahs of the Islamic Republic of Iran were chafing enough about U.S. Navy vessels in the Strait of Hormuz to send speedboats after them last month, they must take some comfort in having projected an...

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Opalesque’s Corner

 

- Opalesque Exclusive: French convertible bond shop Acropole reaches almost $1bln assets, to launch an Asian convertible bond Fund by mid-year
- Fund launches: Pequot raises money for another L/S distressed debt fund, Former TCI partner to unveil global L/S equity hedge fund, Robeco launches 130/30 emerging markets fund, Cambridge Strategy Asset Management launches Asian markets alpha currency hedge fund, Fairfield Greenwich Group plans Asia-focused best-of-breed FoHF with Lion Fairfield, GLG might set up a distressed debt fund to capitalise on post-credit crunch collapse in bond prices
- Performance: Opalesque Exclusive: Managed Futures FoF up 4.25% in January, 9.23% in 2007, GLG Partners profit beats estimates, Clarium surges on recent bets against leveraged companies, Gottex optimistic on 2008 after excellent results, SRM Global down 30% in January, GS Strategic Japan FoHFs has reportedly closed
- Investors seeking their fortune may find it in Frontier Markets, index holding up better than more established emerging markets and most developed markets
- Update: Deephaven plots path to autonomy, investors speculate on the viability of a spin-off or buyout
- Hedge Fund World Awards, Middle East, to take place on 4th March in Dubai, List of nominees:
- People: Opalesque Exclusive: Eli Combs joins Alden Global as MD, Beeson named COO at hedge fund Citadel, Hovan Capital ramps up market neutral fund team, Diamondback Capital hires Searock veterans, Octavian Advisors expands distressed debt team, Infiniti Capital appoints new head of qualitative research, Kim Iskyan joins Diamond Age Capital Advisors as Managing Director and Portfolio Manager, Salus Alpha hires new head of European business development
- A fierce battle for brain power: Europe`s biggest HFs looking for smart mathematicians
- Institutions: London borough plans hedge FoF allocation, New Jersey awards $75m to L/S fund Level Global
- Credit Crunch Update: Swiss government rules out aid for UBS, Goldmans COO warns on $15bln monoline rescue, Comment: Monoline update: hedge funds the only people who know what they`re doing
- Credit Crunch Commentaries: Credit woes to spread to non-financial institutions, says PwC chief, Wealthy stressed by rocky economy, confidence tumbles to all-time low in January, Pioneer: Market turmoil is creating attractive credit and equity valuations, U.S. bank woes are `poetic justice,` Buffett says
- Credit Crisis: Where was the SEC? Shying OTC markets
- IOSCO addresses subprime crisis, focuses on ratings agencies and `strict due diligence`, to publish consultation paper in March
- SocGen Update: HSBC bid talk boosts SocGen as rights issue looms, Merrill analysts say HSBC bid for SocGen would make sense, SocGen reshuffles derivatives/equities team, SocGen faces US investigation, McCreevy condemns SocGen`s `abject` failure
- ETFs: Claymore Investments launches natural gas commodity ETF, Why managed ETFs may not be as advantageous for investors
- Commodities: Interview with Kevin Kerr, commodities veteran: shifts in food prices expected
- Exchanges: Eurex and European Energy Exchange to launch CERs (Certified Emission
Reductions)Futures March 26th, Activity surges in CME, Nymex on worries about merger`s fate
- Events: Hedge Funds Care announces honorees receiving  HFC Award for Caring at Feb. 13th NY Event, IAFE Event:  How I Became a Quant: London
- Europe: Opalesque Exclusive: Subdued mood for Swiss funds at the end of 2007 after a successful start, alternatives assets rise by 23.6% to CHF18.4bln ($16.76bln),
- Middle-East: Unease voiced over Islamic bonds:  Scholar names sukuks `unislamic`, forcing financial engineers back to drawing board
- Asia: Nomura seeks exposure to LatAm hedge funds
- Australia: Chanos sees reward for Macquarie short as double act becoming solo one
- Syncova launches HF margin and funding platform, designed to help HFs to replicate the margin requirement models of prime brokers
- New Book: Mercer expects hedge fund industry shakeout
- Northern Rock Update: SRM increases stake in Northern Rock to 10.77%, RAB Capital raises stake to back in-house rescue, Investors back team from Rock, a blow to Virgin consortium, Northern Rock faces 2,400 job cuts under management`s plans
- Activist News: SAC says Pharmion worth more than Celgene bid, Italian hedge fund`s interest in Mitchells & Butlers
- News Briefs: NYC professor sees junk bond defaults at 4.64%, Fulcrum leverages Advent`s Geneva for growth strategy, US senator determined to push through legislation on offshore HF tax shelters, $70 oil to boost Gulf GDP threefold until 2020, by 2050 GCC will have combined GDP equivalent of Germany or Japan, Deutsche Bank posts 48% fall, but no subprime write-downs, Threadneedle buys Invesco Perpetual DC unit
- And Finally.: You can`t even shave while driving anymore? Scores of Mexican motorists get caught in 346 peso plot
- Logon: http://www.opalesque.com/main.php?act=archive

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Misc. Items of Interest

 

NFL Runs Up the Score
Patriots? Giants? Either way, rating agencies like the way the National Football League plays its game.

 

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Funnies, Facts, Quotes, etc….

 

extempore ik-STEM-puh-ree, adverb:

1. Without premeditation or preparation; on the spur of the moment.
2. Done or performed extempore.

 

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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.