Archive: 03/03/2008

Main News

A book-keeping mistake led Merrill Lynch to overestimate
cashflow from its derivatives business by $43.1 billion over the past three
years, the bank has revealed. In a filing with the Securities and Exchange
Commission, Merrill Lynch said it had been overstating cashflows - both
received from derivatives financing and paid used for trading liabilities -
associated with its derivatives business since 2005. Although it plans to
restate its accounts, the mistakes will have no effect on revenues, profits
or capital levels, as the mistakes in cash received and cash used are equal
and opposite, the bank said.
Merrill Lynch misplaces $43 billion in
derivatives cashflow

MF GLOBAL TO REVIEW ORDER ENTRY SYSTEMS AFTER $141.5M
ROGUE TRADING LOSS
Commodity broker MF Global has hired external risk
consultants to review its order entry systems after a trader dealing in
wheat futures was able to exceed his limit order and place unauthorised
trades that will cost the firm $141.5 million in losses.
More on this
story: http://www.finextra.com/fullstory.asp?id=18161

The future of fund
management
Why the industry will still be thriving in ten years' time ...
more

Housing bust means at least 12 more months of pain
Reuters - USA
The
implosion of the subprime mortgage market has been rampantly spreading
throughout the economy, slamming consumers, banks, investors, even state
and ...

Financial Institutions
Major Japanese Banks Expected To Sidestep
Additional Subprime Fallout; Focus Falls On Potential Impact Of Other
Securitized Products
Earnings at Japan's major banks were constrained by
downward pressure from expanding subprime loan-related losses in the third
quarter of fiscal 2007. However, the major banks have built up sufficient
reserves to counter any additional write-downs stemming from subprime
loans. As such, attention is now shifting to the widening aftershocks of
the subprime loan problem, and we are focusing on the quality of loans,
corporate bonds, and overseas securitization transactions.
To learn more,
click or copy and paste the URL below:
(subscription required)
https://www.ratingsdirect.com/Apps/RD/controller/Article?id=633222&SctArtId=12371&from=CM&nsl_code=CMT

Emerging
Markets Lose Some Risk
(By Jane Bryant Quinn, The Washington
Post)

PRIVATE EQUITY IS EXPLODING
Post Wire Services
The world's leading
private-equity firms are raising tens of billions of dollars for their
funds despite massive losses in the existing funds, published reports say.
The amounts raised rival those of the peak in the private-equity boom of
2006...full story

Muni-MeltHedge funds shed bonds of many stripes on
credit-fear
contagions.
http://online.barrons.com/article/SB120432853594604165.html?mod=djemWR

Citigroup
Underwrote $6.9 Billion of Ambac's Most Troubled CDOs
Bloomberg - USA
Of
those CDOs, $6.9 billion, or 92 percent, are experiencing so-called events
of default, Tavakoli said. Such events signal the most-senior classes may
not ...

CPDO fears exaggerated, but CDO unwind risk is real
Reuters -
USA
... of positions in each of the CDX and iTraxx," Citigroup analysts
said. "Large enough, but nothing compared to the prospect of CDO unwinds."
Continued...

UPDATE 1-Credit squeeze to hit US economy hard -
economists
Reuters - USA
By Mark Felsenthal NEW YORK, Feb 29 (Reuters) - US
subprime mortgage delinquencies and the credit squeeze of the past year
will trigger $400 billion in ...

Risky - but Worth It? Investors who play
their cards right could see big payoffs in debt-laden companies whose
shares have been pummeled in recent months. A look at stocks that could
rebound sharply when the credit climate
improves.
http://online.barrons.com/article/SB120432872859704223.html?mod=djemWR

The
Latest Carbon Prices (Alex Kirtland)
Meant to link to this earlier, but
Alex Kirtland offers up a surprising chart of carbon offset prices. Check
it out. Let's just say, if there were anything like a true market price, it
sure as hell isn't showing up. The price to offset a metric ton are all
over the place. It also means that there's probably a way to make money on
this, although liquidity and fungibility would both probably be an issue.
But if you could.

Pile-up as Peloton runs out of road
Times Online -
UK
THE sumptuous, Turkish-style low sofas in Peloton’s Soho office
provided little comfort to the hedge fund’s founders, Ron Beller and
Geoff Grant, last week.

Furniture company - or hedge fund?
CNN Money Fri,
29 Feb 2008 2:09 AM PST
Everybody's heard of mattresses stuffed with cash,
or coins lodged beneath the cushions of a couch. But one venerable Virgina
company seems genuinely confused about whether it's in the furniture
business or the money business.

$2 Trillion of Petrodollars Looking for a
Home
by Trader Mark

Hedge Fund Boards Face Higher Legal Risk
Reuters -
Friday February 29, 10:21 GMT

Top 10 Most Influential Hedge Fund Leaders
in 2008
HedgeFundBlogger.com - Friday February 29, 02:44 GMT

Wealth Funds
More Popular For Loans

Hedgie Guilty Of Insider Trading

Private equity
boss: U.S. may face "lost decade"
Tim Collins, head of Ripplewood Holdings,
said the U.S. economy may suffer a "lost decade" similar to what Japan went
through in the 1990s. Collins said the Federal Reserve, which has
repeatedly cut interest rates, is "running out of policy alternatives" in
its attempt to avoid a long recession. Telegraph (London) (28 Feb.)

_________________________________________________________________________
Yield
Curve Corner

Coming Week: The Nail in the Coffin?
TheStreet.com - USA
Even
Federal Reserve Chairman Ben Bernanke forecasts that economic growth will
continue -- albeit at a snail's pace -- through 2008, and even pick up in
the ...

Two-Year Yields Fall Most Since October on Bernanke
Assessment
Bloomberg - USA
Bernanke told the Senate Banking Committee on
Feb. 28 that it's ``fair'' to say the Fed has a tougher time responding to
the current slowdown than the ...

Treasurys Rally on Growth Worries
Wall
Street Journal - USA
The bad news from the financial sector hit investors
already reeling from comments by Federal Reserve Chairman Ben Bernanke, who
said Thursday in his ...

Why the Fed Is Compelled to Lie to Congress
 

Bernanke avoids saying "recession" but still implies
it
http://r.smartbrief.com/resp/jShsrwlGvMlioxCibSfXvsRs?format=standardhttp://r.smartbrief.com/resp/jShsrwlGvMlioxCibSfXvsRs?format=standardAnalysts

listening to Federal Reserve Chairman Ben Bernanke's testimony to Congress
this week say that while he avoided voicing the word "recession," he came
as close as he dared. The Fed, concerned with overreaction in the markets,
has remained cautious about predicting that economic conditions in the US
could worsen.
http://r.smartbrief.com/resp/jShsrwlGvMlioxCibSfXvsRs?format=standard
Bloomberg/ClipSyndicate (29 Feb.) , Reuters

_________________________________________________________________________
Natural
Disaster
Corner

http://www.noaa.gov/
http://www.sec.noaa.gov/Data/index.html
http://tsunami.gov/
http://earthquake.usgs.gov/eqcenter/
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:

_________________________________________________________________________
Iranian
Situation and Other Man Made
Disasters
http://www.globalincidentmap.com/home.php
http://icasualties.org/oif/

U.N.
Says Iran May Not Have Come Clean on Nuclear Past
Washington Post Sat, 01
Mar 2008 8:13 PM PST
Iranian documents obtained by the United Nations'
nuclear watchdog strongly suggest that Iran was working on a nuclear
weapons design as recently as four years ago, U.N. officials disclosed last
week in a private briefing.

U.S. Zeal for Iran's Non-Muslims
Faulted
Washington Post Fri, 29 Feb 2008 7:52 PM PST
TEHRAN -- For decades
the United States has funded an effort intended to help Christians,
Zoroastrians and Jews escape persecution in Iran. Now some of their leaders
are questioning American motives as sects that have endured here for
thousands of years dwindle rapidly as a result of the
migration.
_________________________________________________________________________
Opalesque’s
Corner

Editor's Note
- Peloton: Peloton to liquidate ABS fund after
mortgage losses, Peloton faces collapse after fund liquidation, Peloton
blames Wall Street lending crackdown for fund collapse
- MF Global: Rogue
wheat trader at MF Global loses $140m, MF Global plans to tighten
risk-management controls, MF Global`s work to win over investors suffers
big blow, Gold and oil rise to hit record highs, Commodity prices surge, as
investors seek a haven
- Fund launches: Spanish regulator approves new
Altex GLG FoHFs, South African manager Nedgroup launches innovative FoHF to
counter equity market correlation
- Opalesque Exclusive: Schonfeld
confident latest fund will continue to outperform, feeding on `uncertain
environments`
- Fund profile: Vulture fund deals with delinquent homeowners
lost by subprime
- HF Picks: Thomson Financial: Hedge Funds bought tech,
healthcare and financial stocks in 4Q, Leading hedge funds` best ideas for
2008
- Polygon`s Tetragon listed CLO fund shrugs off price declines, plans
to pay a third quarterly dividend since floating in April
- Fund
management: Investors pay too much to have their money managed, shell out
$1 trillion a year to the custodians of their cash
- Indices: Russell
Investments to launch global style index
- Credit Crunch Update: F&C: Hedge
funds not a huge threat to credit market, Jaded market shows little
appetite for striking new deals in loan markets, Leveraged funds rush to
sell debt to avoid defaulting, SIVs face wave of medium-term debt
repayments over next few months, RBS to make GBP2.9bln in writedowns, Allco
hurt by global credit crisis, plans to sell A$3.37b assets, Merrill to shut
down subprime lending unit, Net loss of $5.3bln at AIG, BoA sidesteps US
prosecutors but faces SEC probe
- International accounting rules and the
credit crisis: Axa chiefs claim international accounting rules helped
contribute to global volatility, HFs and exotic instruments intensified it,
Paper: True impact of mark-to-market accounting standards on the credit
crisis
- Comment: Director`s liability for valuations? Insurance
please....
- SocGen Update: Bouton puts own cash into rescue
-
Institutions: SSgA to offer synthetic hedge fund investments for DC pension
schemes, Watson Wyatt reveals surge in scheme demand for alternative
managers, German medics EUR9 bln pension to double allocation to
alternatives, UK Merseyside pension to raise HF investment, Norway
municipalities rethink FoHFs proposals
- Governance: UK FSA looked at how
HF managers tackle market abuse - study
- Regulators: Update: Australian
Securities Exchange annouced companies may have to disclose financing,
margin loans
- Legal: Rebel investors seize Bear Stearns hedge funds,
Ex-hedge fund trader pleads guilty to insider trading following massive
round-up last March, FBI arrests head of Folsom investment fund
- People:
Adviser CrossBorder appoints sales director ahead of new fund launches this
year, Oxford Funding Corporation hires new vice president of business
development, Vote: Top 10 hedge fund leaders
- Environmental trading: Why
energy companies are not investing in the future
- Europe: London as a
financial center is moving in the wrong direction, European investment
banking suffers worst start of the year since 2003
- Asia: Asian hedge fund
industry set to thrive despite headwinds, Getting more from Asian hedge
fund with stochastic dominance approach, Singapore Hedge Funds Club launch
party draws 200 guests, Henderson: Asian stocks to pick up in H2 as
fundamentals shine through, CFA report hits Japan, Asian pay disclosure
-
Japan: Japan hedge funds to rebound after two losing years, says Ed Rogers,
Japan inflation at decade-high but unlikely to slip into recession
(video)
- News Briefs: State Street planning to launch an enhanced
derivatives processing system, Alpha to introduce 130-30 real estate fund,
Internos launches with message of the return of opportunity in European
real estate, Ethiopia forms commodity exchange, Morgan Stanley indices:
Brazil takes over as world`s largest EM
- And Finally. What a nightmare:
Americans get too little sleep, `at night, we`re doing everything except
for sleeping`
- Logon:
http://www.opalesque.com/main.php?act=archive

_________________________________________________________________________
Misc.
Items of
Interest

_____________________________________________________________________
Funnies,
Facts, Quotes, etc….

amanuensis uh-man-yoo-EN-sis, noun:
A person
employed to take dictation or to copy manuscripts.

supererogatory
soo-puhr-ih-ROG-uh-tor-ee, adjective:
1. Going beyond what is required or
expected.
2. Superfluous;
unnecessary.

_________________________________________________________________________
Conference,
Courses, Books, Papers

Great Research
Sites:
http://www.highbeam.com/
http://www.dealbreaker.com/
http://seekingalpha.com/
www.riskmterics.com
http://www.allaboutalpha.com/blog/

Merrill
Lynch research Link to full report including important disclosures see
example
http://rsch1.ml.com/9093/24013/ds/78763025.PDF

John Mauldin’s
Weekly Analysis
www.frontlinethoughts.com

James Altucher’s
Website:
www.stockpickr.com

Other useful
sites:
www.flyonthewall.com
www.gloriamundi.com

_________________________________________________________________________
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
http://www.cogenthedge.com/home/inv_strategy.asp
_________________________________________________________________________
Regulatory
Info

Commodity Futures Trading Commission (CFTC)
Division of Enforcement:
+1
866-FON-CFTC
http://www.cftc.gov/enf/enfform.htm
http://www.cftc.gov/enf/enfform.htm
Securities
and Exchange Commission (SEC)
e-mail:
enforcement@sec.gov
http://www.sec.gov/complaint.shtml
http://www.sec.gov/complaint.shtml
Autorité
des marchés financiers (AMF)
Ombudsman's office: +33 (0)1
5345-6464
French:
http://www.cob.fr/affiche_page.asp?urldoc=mediateur.htm&lang=fr&Id_Tab=0
English:
http://www.cob.fr/affiche_page.asp?urldoc=mediateur.htm&lang=en&Id_Tab=0
http://www.cob.fr/affiche_page.asp?urldoc=mediateur.htm&lang=en&Id_Tab=0
Financial
Services Authority
(FSA)
http://www.fsa.gov.uk/consumer/01_WARNINGS/scams/mn_scams.html
http://www.fsa.gov.uk/consumer/01_WARNINGS/scams/mn_scams.html
Financial
Ombudsman Service: 0845 080 1800, outside the UK: +44 (0)20 7964
1000
complaint.info@financial-ombudsman.org.uk
http://www.fsa.gov.uk/consumer/01_WARNINGS/scams/mn_scams.html
Hong
Kong Securities and Futures Commission
(SFC)
http://www.sfc.hk/sfc/html/EN/inutilbar/contact/contact.html
Investor
Hotline:
852-2840-9333
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

_________________________________________________________________________
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.
 

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