Main News

 

Buffett Offers Help to Bond Insurers
He may not be willing to bail out the bond insurers and their ticking C.D.O.'s, but Warren Buffett is willing to do business to help them out. Read More

 

Where are the Huge Hedge Fund Blowups?
Wall Street Journal Interactive - Tuesday February 12, 08:15 GMT

 

Big FOHFs Growing Faster, Up 32%
The largest funds of hedge funds grew 32% last year, beating the 2006 rate of 29%, according to the latest InvestHedge Billion Dollar Club Survey.Read more

 

Emerging market hedge funds pull in $9 bln in '07
Reuters - USA
By Svea Herbst-Bayliss BOSTON, Feb 11 (Reuters) - Hedge funds specializing in emerging markets took in $9 billion in new money last year as strong ...

 

Trading Security

Banks across the City of London have launched urgent reviews of their security procedures in the wake of the Société Générale scandal. It is understood that several have contacted the Financial Services Authority (FSA) during the last few days to inform the City regulator of their actions in the midst of growing alarm at the way in which SocGen trader Jérôme Kerviel was able to circumvent internal controls to place multi-billion- euro bets (although in interviews with police he has reportedly claimed that his superiors must have been aware of his activities). Link read entire story on source's website

 

France's Lagarde - banks must heed operational risk

PARIS, Feb 4 (Reuters) - Banks and regulators must take operational risk more seriously, French Economy Minister Christine Lagarde said on Monday after handing in a report into a rogue trading scandal at Societe Generale. Link read entire story on source's website Source Reuters.com

 

A Trader's Tale

In the early afternoon of Saturday, Jan. 19, Jérôme Kerviel was on a weekend break by the sea when he got a call on his mobile phone from his boss at Société Générale. "We need some explanations," said a manager of Delta One, a lowly trading unit that handled humdrum, low-risk trades, according to people familiar with the conversation. Link read entire story on source's website

 

THE STRIKING
PRICE DAILY  By STEVEN M. SEARS
Walk-Away Housing Trades Ways to profit as Americans opt to walk away from their homes.
http://online.barrons.com/article/SB120276684414560105.html?mod=djemBF

 

The Senate approved new rules for government eavesdropping on phone calls and emails, giving the White House much of the latitude it wanted and granting legal immunity to telecom companies that helped in the snooping after the Sept. 11 terrorist attacks. Protection for the telecom companies is the most prominent feature of the legislation, something President Bush had insisted on as essential to getting private sector cooperation in spying on foreign terrorists and other targets.
http://online.wsj.com/article/SB120284273324062869.html?mod=djemalertNEWS

 

Gross: How to Speak Hedge-Fund
Newsweek Mon, 11 Feb 2008 10:37 PM PST
Translating the strange dialect of hedge-fund managers who are trying to explain big losses.

 

Flush times are over for hedge funds
International Herald Tribune Tue, 12 Feb 2008 0:29 AM PST
Mark Fishman was a modern prince of the markets - a pedigreed money manager who raised billions of dollars at the height of the hedge fund boom.

 

U.S. Corporate Default Outlook: Defaults Appear Poised To Breach Long-Term Average
Corporate defaults, though slow to materialize, are on the first leg of an ascent that will gain momentum in the second half of 2008 and likely continue into 2009. A material risk remains that defaults could be significantly more pronounced and severe beyond the one-year forecast horizon. We expect the U.S. speculative-grade default rate to accelerate substantially from near its 25-year low of 1.09% in January, reaching 4.6% in the next 12 months.
To learn more, click or copy and paste the URL below:
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http://standardandpoors.rsys1.net/servlet/cc5?kHiQAARDQTVsLgHxhilpuHQJhuV2VY

 

AIG says actual CDO losses will be immaterial
MarketWatch - USA
AIG's Financial Products unit sold guarantees on complex securities known as collateralized debt obligations (CDOs), using credit default swaps, ...

 

Monoline ACA sells CDO business; averts disaster?
FT Alphaville - London,UK
The monoline is being broken up - selling off its CDO and CLO management businesses. That in turn may raise enough cash for the monoline to meet capital ...

 

Investors Slam AIG Over Swaps
BusinessWeek - USA
The problem in assessing fair market value of the CDOs stems from there being two different ways to estimate default rates in the CDO market, ...

 

by Bespoke Investment Group

 

by Mark J. Perry

Weak equities increase DB deficit by over £40bn
http://www.ipe.com/news/Weak_equities_increase_DB_deficit_by_over_40bn_27127.php

 

Geopolitical Diary: An Espionage Arrest and Intelligence Questions
February 12, 2008 0346 GMT
Engineer Dongfan Chung was arrested Monday for economic espionage; he allegedly has been conducting espionage for China since 1979.
http://www.stratfor.com/geopolitical_diary/geopolitical_diary_espionage_arrest_and_counterintelligence_questions

 

In the Sunday (February 10) op-ed section of The New York Times, Dallas Fed economists W. Michael Cox and Richard Alm argue that consumption is “a better guideline of economic prosperity than income” (You Aree What You Spend). The authors point out that while the share of national income going to the richest 20 percent of U.S. households rose from 43.6 percent in 1975 to 49.6 percent in 2006 as the share of national income going to the poorest 20 percent of households fell from 4.3 percent to 3.3 percent, the poorest really have not been falling behind so much if consumption is taken into consideration.

Full Story...

 

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Yield Curve Corner

 

Economist says months, not weeks, needed to gauge effectiveness of ...
BloggingStocks - USA
Second, the Fed's term auction facility - - which US Federal Reserve Chairman Ben Bernanke has said will remain in operation "for as long as necessary" ...

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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/FSHSeast043_N7.jpg

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Iranian Situation and Other Man Made Disasters

 

Olmert says certain Iran still seeks nuclear arms
Reuters via Yahoo! News Tue, 12 Feb 2008 6:43 AM PST
Israeli Prime Minister Ehud Olmert said on Tuesday Iran was still seeking to build nuclear weapons and called for a greater international effort to prevent Tehran from succeeding.

 

Welcome to Iraq, President Ahmadinejad
February 12, 2008 0413 GMT
The official invitation to Iranian President Mahmoud Ahmadinejad to visit Iraq next month would not have been extended without U.S. agreement. Whether it takes place or not may depend on the success of secret talks between the Americans and Iranians this week. Colin Chapman reports.
http://www.stratfor.com/podcast/welcome_iraq_president_ahmadinejad

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Opalesque’s Corner

_- Report: Hedge fund assets reach estimated $2.787 trillion in Q4 2007
- German firm launches Statistical Value Market Neutral (SVMN) Fund based on Harry Kat`s FundCreator
- Fund launches: Strategy launches Asian Markets Alpha Currency hedge fund, New mutual fund set up to invest in alternative investments, Matrix plans closed-ended versions of FoHFs ahead of reduction in UK capital gains tax, Hallgarten sets up new LatAm HF, LaGrange markets fund despite 2007 woes, Epsilon MD launches hedge fund
- Jupiter closes Hyde Park Fund to new investors at $600mln
- Absolute Capital Update: Rialas brothers up Absolute Capital stake to 33%, AbCap to to raise performance-related pay in an effort to recruit and retain staff
- Outlook: Advisor says `This will be the year with the highest number of hedge fund failures`
- Views: Barton Biggs is bullish on U.S. equities
- Analysis: Inalytics uses quantitative processes to measure manager skills
- Indices: Greenwich Global Hedge Fund Index at -2.44% in January, biggest decline since July 2002, Barclay CTA Index: Managed Futures gain 1.96% in January, RAM Partners` Diversified Fund I joins the Nordic Hedge Fund Index
- U.S. President`s Working Group Committee expects to open hedge-fund practice recommendations for public comment this quarter
- SocGen Update: SocGen accused of complicity by Kerviel lawyer, Theory gains that trader had a helper, `It`s between you and me...`: However lawyers reject Kerviel-broker instant messages as `irrelevant`, Bouton defiant as SocGen launches rights issue,  BNP Paribas not planning SocGen bid
- Comment: Kerviel case exemplifies IT security issues affecting many organisations, `surveillance problem not a risk management problem`
- Credit Crunch Update: BofA: Citi and Goldman most exposed to further loan writedowns, Moody`s: Record low default rates in 2007, sharp rise expected in 2008, AIG discloses potential losses in its derivatives portfolio, may be latest credit crisis casualty, Bush administration and six banks to announce new homeowners` rescue plan, Comment: Survival tactics in the wake of the downgrade plague
- Outside the box: Nouriel Roubini: The Rising Risk of a Systemic Financial Meltdown: Twelve Steps to Financial Disaster, McKinsey: Long-term trends in the global capital markets
- Institutions: CalSTRS selects four FoF managers for  $1.8bln U.S. equities developing manager program to `find stars of tomorrow`, Dutch pension fund SPF to double hedge fund exposure, Hegde funds must alter personality to fit institutional investors` expectations, according to SEI paper, Pension plans increase currency investments, Scandinavian pension funds among top ETF investors, Deutsche Bank says
- ETFs / 130-30 / HF Replication: SocGen AM launches ETFs offering leveraged L/S exposure to S&P MIB Index, 130/30 Report says brokers and custodians earn $1.26bln p.a. by 2012, 130/30 to erode boundaries in asset management, brokerage and custody: 44% of institutions to custody planned 130/30 investments with prime broker instead traditional custodian, Fidelity seeks entry into 130/30 market, Investment gimmick or genuine alternative? Liability Solutions: no publicly available performance data
- Environmental Trading News: Research estimates $7 trillion in new alternative energy investments by 2030, Health care company Abbott joins Chicago Climate Exchange, Japanese government in talks with Russia to buy emission credits
- Commodities: U.S. grain handlers urge CFTC go slow on fund rules, system of futures hedging showing strains
- Exchanges: CBOE and CBOT in talks to settle lawsuit blocking the options market from going public
- People: Goldman`s Gerard Gardner joins North Asset Management as partner, Christopher Long new CEO at Endowment Capital Group, Hillsdale hires Dr. Taha Jaffer as director of research, Touradji Capital Management hires shipping and oil specialist for new Singapore office, Daken J. Vanderburg joins  Chartwell Investment Partners as portfolio manager and director of quantitative research, Update: Kate Colchester named VP of Sales for Asia by the BoNY Mellon Alternative Investment Services
- Legal: Update: Seth Tobias death involved no crime, prosecutors say
- Locations: Emerging markets funds prefer London, European and US investment banks are redeploying their staff in the Middle East
- Middle-East: Abu Dhabi Investment Company and GAM tie up for MENA infrastructure joint venture, GCC states to spend $700bln on infrastructure
- Asia: Hedge fund growth in the Far East: A comparison between Hong Kong, Singapore and China
- Events: HFMWeek and Allenbridge HedgeInfo to present HFMWeek EMEA Awards 2008, 8th May, London
- Activist News: Hedge Fund group raises stake in NYT to at least 10%, Hedge funds pile into Biffa expecting a higher offer, Hedge funds pile into Biffa expecting a higher offer, TCI faces extended govt review of J-Power stake hike bid
- News Briefs: Goldman Sachs buys stake in TrimTabs, Incapital to buy LaSalle`s broker-dealer division from BofA, BlackBerry e-mail service fails in North America, RAB Capital pushes Northern Rock stake past 8%, joint stake with SRM Global now approaching 19%, Planned tax crackdown on UK`s non-domiciled foreigners debate intensifies, Walkers adds four lawyers in Jersey, Seventh Islamic bank enters UAE
- And Finally. 10 body-builders pluck up car stuck in 6 feet ditch, grateful driver splashes out round of protein shakes
- Logon: http://www.opalesque.com/main.php?act=archive

 

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Misc. Items of Interest

 

 

 

 

 

 

 Contact Mercer

 

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Funnies, Facts, Quotes, etc….

 

copacetic koh-puh-SET-ik, adjective:

Very satisfactory; fine.

 

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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.