Archive: 03/10/2008
Main News
Anatomy of a hedge fund collapse
CNNMoney.com - USA
Here's how
one fund got crunched by the credit crisis. By Roddy Boyd, writer NEW YORK
(Fortune) -- In this market, even when a hedge fund is doing well, ...
See
all stories on this topic
Hedge Funds Squeezed As Lenders Get
Tougher
Wall Street Journal - USA
By CARRICK MOLLENKAMP and SERENA NG The
financial turmoil is taking on a new dimension: Banks that lent money to
hedge funds and other big risk-takers are ...
See all stories on this topic
Meriwether hedge fund loses 9 percent this year
Reuters - USA
By Dane
Hamilton NEW YORK, March 6 (Reuters) - John Meriwether's Relative Value
Opportunity hedge fund is suffering its worst year since inception in 1999
...
See all stories on this topic
Risk Profiles Of Distressed Hedge
Funds
An examination into the risk premiums of individual distressed hedge
funds may provide evidence of why the funds eventually dissolved.Read more
Uncertain Political Environment Makes Asian Investing Risky
by Enzio von
Pfeil
MUNI'S RECOVERING
By PAUL THARP
Investor Wilbur Ross is betting $1
billion he'll make a tidy fortune from cities and towns struggling to find
money for schools, roads and even dogcatchers in the new credit crisis.
Billionaires like Ross and others, who can smell desperation...full story
Tabulating the Credit Crunch's Effects: One Educated Guess
by Menzie
Chinn
All Recessions Are Local
by Tim Iacono
The International Bank
for Reconstruction and Development (IBRD), part of the World Bank, has
announced a new loan facility designed to provide emergency finance for
middle-income countries suffering natural catastrophes. Countries that have
World Bank-certified hazard risk management programmes in place can apply
for the catastrophe risk deferred drawdown option (Cat DDO), which will
provide them with bridge financing while other sources of funding are
mobilised. The maximum amount available will be limited to $500 million or
0.25% of a country’s gross domestic product, whichever is smaller. Loan
pricing is in line with standard IBRD terms, which include a 0.25
percentage point front-end fee. The funds may be drawn down over a
three-year period, which may be renewed up to four times for a total of 15
years.
World Bank group launches Cat DDO
Mena on track to be the new
Bric
While the developed world is teetering on the brink of a recession and
credit lines have all but dried up, the Middle East boasts a booming
economy and oceans of liquidity. As a result, asset managers from all over
the world are scrambling to secure a slice of the
action.
http://mail2.efnmail.co.uk/r/346155/MTk4MTI1OjE2NjQ3/
Credit
crunch stretches indebted hedge funds to breaking point
Guardian -
UK
Credit market turmoil is stretching a growing number of highly-indebted
hedge funds to breaking point. Lending banks are taking an increasingly
...
See all stories on this topic
Dark liquidity helps brew perfect
storm
The chief executive of US broker and trading system Nyfix is eyeing
opportunities in Europe as it prepares to launch its first share trading
system outside its home turf next
week.
http://mail2.efnmail.co.uk/r/346143/MTk4MTI1OjE2NjQ3/
Investors
want more hedge fund controls
Two thirds of institutional investors are not
happy with levels of regulation in the hedge fund industry and have called
for greater transparency and accountability, according to a survey
published today.
http://mail2.efnmail.co.uk/r/346145/MTk4MTI1OjE2NjQ3/
Climate and food will shape future
It seems hard these days to strike up
any conversation with professionals in the financial markets without an
undertone of manic depression, which may in itself be a sign that the cycle
is about to turn. The best rule in markets is always to remember that booms
never last, but neither do
busts.
http://mail2.efnmail.co.uk/r/346149/MTk4MTI1OjE2NjQ3/
First
Fully-Integrated Hedge Fund Platform Now Available for Citadel Solutions
Clients on Bloomberg
Centre Daily Times Sat, 08 Mar 2008 1:03 AM
PST
Citadel Solutions, an affiliate of Citadel Investment Group L.L.C.,
today announced the creation of the first fully-integrated hedge fund
trading platform for users of Bloomberg AIM, the buy side order management
system ("OMS") of the BLOOMBERG PROFESSIONAL(R) service.
Miscalculating
the Risks
Statistical geniuses of finance at the banks and hedge funds got
it wrong. They were lulled into a false sense of security by their
spreadsheets and risk models. Meanwhile, the old-fashioned wisdom of
contrarians like Prem Watsa saw trouble. And profited. Link read entire
story on source's website Source Globe and Mail
back to top
THE WEEK'S
WINNERS AND LOSERS
WARREN BUFFETTThe Oracle of Omaha named richest man by
Forbes magazine as he guides Berkshire Hathaway up11% in 2007.LLOYD
BLANKFEINIs $100M a year enough, sir That's what the Goldman Sachs CEO took
home in total compensation in 2007.ALEX...full story
Company Bond Risk
Soars to Record on Hedge Fund Sale Concerns
Bloomberg.com Fri, 07 Mar 2008
2:33 AM PST
March 7 (Bloomberg) -- The cost of protecting corporate bonds
from default soared to a record after the suspension of Carlyle Group's
mortgage-bond unit in Amsterdam trading sparked speculation more hedge
funds will be forced to sell assets.
Solar Energy Firms Leave Waste Behind
in China
(By Ariana Eunjung Cha, The Washington Post)
Desirable
Properties of an Ideal Risk Measure in Portfolio Theory Authors Rachev,
Svetlozar; Ortobelli, Sergio; Stoyanov, Stoyan; Fabozzi, Frank J. ;
Biglova, Almira ; Date February 2008 Category Portfolio Optimization
Click
above to see all GloriaMundi resources from these categories Abstract This
paper examines the properties that a risk measure should satisfy in order
to characterize an investor's preferences. In particular, we propose some
intuitive and realistic examples that describe several desirable features
of an ideal risk measure. This analysis is the first step to understand how
to classify an investor's risk. The risk is an asymmetric, relative,
heteroskedastic, multidimensional concept that has to take into account
asymptotic behavior of returns, inter-temporal dependence, risk-time
aggregation, further sources of risk, and the impact of several economic
phenomena that could influence an investor's preferences. In order to
consider the financial impact of the several aspects of the risk we propose
and analyze the relationship between distributional modeling and risk
measures. Similarly to the notion of ideal probability metric to a given
approximation problem, we are in the search for an ideal risk measure or
ideal performance ratio for a portfolio selection problem. Then we
emphasize the parallels between risk measures and probability metrics
underlying the computational advantage and disadvantage of different
approaches.
VOLUME 11, NUMBER 1
THIS IS A PREPUBLICATION VERSION OF THE
DOCUMENT. Links view complete description on GloriaMundi
Hedge Fund
Holdings Still Underperforming?
by Bespoke Investment Group
Custodians juggle challenges of risk and reward
Custodians have a
love/hate relationship with risk. On the one hand, they are wary of using
their balance sheets for client financing, a reluctance that has helped
investment banks make headway in the administration
business.
http://mail2.efnmail.co.uk/r/346150/MTk4MTI1OjE2NjQ3/
Credit
Suisse to set up hedge fund clones
Financial Times Sun, 09 Mar 2008 10:41
AM PDT
Credit Suisse will today unveil a plan to muscle in on the nascent,
but potentially highly lucrative, hedge fund replication industry.
Japanese Corporate Default And Rating Transitions Study 2007
In 2007, we
observed no default by a Japanese entity that has, or previously had, a
long-term issuer rating. As a result, default rates declined marginally in
all rating categories and over all time intervals because the expansion of
the observation period resulted in a larger number of issuers as
denominators of default rates. We do not expect default rates on rated
Japanese entities to rise significantly in 2008.
To learn more, click or
copy and paste the URL below:
(subscription required)
http://standardandpoors.rsys1.net/servlet/cc5?kHiQABUDQTVsLgHxhilpuHQJhuV2VR
78 Ratings Lowered On 13 U.S. CDOs Of ABS, 1 Synthetic Deal; $12.555 Bil.
In Issuance Affected
We lowered our ratings on 77 tranches from 13 U.S.
cash flow and hybrid collateralized debt obligation (CDO) transactions. We
removed 69 of the lowered ratings from CreditWatch with negative
implications. Additionally, we affirmed our ratings on six tranches and
removed them from CreditWatch negative. The downgraded tranches have a
total issuance amount of $12.554 billion. At the same time, we lowered our
rating on one tranche from one U.S. synthetic CDO transaction, which had a
total issuance amount of $1.8 million.
To learn more, click or copy and
paste the URL
below:
http://standardandpoors.rsys1.net/servlet/cc5?kHiQABUDQTVsLgHxhilpuHQJhuV2VY
AAA Exclusive: An interview with Prof. Harry Kat about his newest project,
“super-diversification”: As the Flying Dutchman predicted, his
distributional replication method is now used as a risk management overlay,
not as a “hedge fund replicator”.
2007 data suggests 130/30
outperforms: Data from one of the largest databases of institutional money
managers seems to suggest 130/30 can deliver.
Pimco's warning could have
saved Allianz shareholders billions
Allianz SE, the parent company of Pimco
and Dresdner Bank, could have saved its shareholders $45 billion of market
value had internal advice been heeded. A year ago, Pimco money managers
warned Dresdner Bank traders that subprime-related losses could poison the
entire financial industry. "It's staggering that Dresdner bought so much of
those crappy investments despite being part of the same group as Pimco,"
said one outside observer. Bloomberg (07 Mar.)
Market Risk – IMF
Intensifies Work on Sovereign Wealth Funds
With sovereign wealth funds
(SWFs) rapidly gaining importance in the international monetary and
financial system, the IMF has stepped up its work across a broad range of
issues related to these state-owned funds, including their impact on global
financial stability and capital flows.
Full Story...
_________________________________________________________________________
Yield
Curve Corner
DR. BEN AT THE PUMP
By PAUL THARP
Ben Bernanke is trying to
wrestle down a new dragon that's stamping out credit across the economic
landscape. Already weary from shouldering a limping economy, and on full
alert for more inflation wildfires, the Fed chief made an emergency...full
story
Fighting Recession Instead of Inflation
Wall Street Journal -
USA
Regarding "The Bernanke Reflation" (Review & Outlook, Feb. 29): The
Federal Reserve has chosen to fight recession rather than inflation. ...
_________________________________________________________________________
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:
Moderate quake rattles Iran
AP via Yahoo! News Sun, 09 Mar 2008 1:46 AM
PST
A moderate earthquake and several aftershocks rattled a remote area in
eastern Iran on Sunday morning, cracking walls and forcing some to seek
shelter in tents, state media reported. No injuries were immediately
reported.
_________________________________________________________________________
Iranian
Situation and Other Man Made
Disasters
http://www.globalincidentmap.com/home.php
http://icasualties.org/oif/
Letter: Iran Dialogue
New York Times Fri, 07 Mar 2008 9:48 PM PST
To the
Editor: Your story ?The Other Iran? (Feb. 10) prompted several letters
reporting that Iranians evidence no anti-American sentiment but object only
to our president. Fair enough. But apparently all of the writers were
unaware of Iran?s brutal repression of individual liberties, suppression of
women, support for terrorism and calls for the destruction of Israel.
Otherwise they might have ...
Peres says Israel will not act alone on
Iran: report
Reuters via Yahoo! News Sat, 08 Mar 2008 3:49 AM PST
Israel
will not consider unilateral action to stop Iran getting a nuclear bomb,
President Shimon Peres was quoted as saying on Saturday.
Iran, no. 3
investor in Malaysia's industrial sector
Payvand Iran News Sat, 08 Mar 2008
11:22 AM PST
Iran invested $940 million in Malaysia's industrial sector in
2007, making it the third leading investor in the country's industrial
sector after Japan and Germany and ahead of the U.S., Singapore, India, and
China, according to a report by the Malaysian Industrial Development
Authority (MIDA).
Historically significant women in Iran and the
neighboring areas
Payvand Iran News Sat, 08 Mar 2008 11:23 AM PST
1350 -
1300 BC. Politically Influential Queen Napir Asu, Elam, Khuzistan; Around
580s B.C. Aryenis, Queen Consort of Media; Around 584 B.C. Mandane
(Mandana) of Media; and many more -Massoume Price, Culture of Iran
Will
Iran Display American Art Treasures?
ABC News Fri, 07 Mar 2008 8:54 AM
PST
An interview with the director of Iran's Museum of Contemporary Art.
_________________________________________________________________________
Opalesque’s
Corner
- Risk Management Special: Opalesque Exclusive: Greenwich
Roundtable and Quinnipiac University produce first ever annual survey of
investors` due diligence practices, Supervisory agencies issue joint report
assessing risk management practices
- Fund launches: Axa launches Asian
FoHF, Paragon Capital launches offshore offering
- Performance: Titan
Capital reports strong start in 2008, no down months in hedge funds in
2007-08, Meriwether hedge fund down 9% in 2008, Friedberg fund up 9.57% in
February (17.64% YTD), may open new share class or fund, Welton Global
Directional Portfolio up 5.78% in Feb (+9.09% YTD), Update: Highland
refutes redemption rumors, Hedge funds worldwide show more losses in
February, likely -2% says Hennessee
- Peloton Update: Peloton to suffer
from rapid liquidation
- Indices: >Four of six Dow Jones Hedge Fund
Strategy benchmarks posted positive returns in February, Merger Arbitrage
and Equity Long/Short lead, Parker FX Index down -0.33% in January, top
performer: quantitative financial strategies` IPS Currency Program up
8.21%, HFRX indices - February results show distressed securities and macro
lead, arbitrage indexes lag behind
- M&A: GLG Partners in talks to buy
Tisbury Capital
- Trends: Hedge funds squeezed as lenders get tougher,
producing negative cycle, Hedge funds are buying less investment-bank
research, Hedge funds increasingly moving to stem investor outflows
-
Kleinwort Benson study: Diversified investment not as effective in crisis
-
Tech Update: Software firms target growing workload of funds of funds as
technology infrastructure becomes differentiator
- Forced selling and
margin calls at hedge funds stress fixed income markets, Carlyle fund
misses margin calls
- Credit Crunch Update: Citigroup to cut mortgage
exposure by $45bln, Fortis quarterly profit falls on subprime writedowns,
ABK problems not over (video), US credit crisis worsens as Carlyle and
Thornburg default on loans, Americans` percentage of equity in their homes
drops below 50% for the first time since 1945, US corporate bond spreads
approach widest levels on record, UBS denies loan sales speculation
-
Debate on alternative beta: Kat to Jaeger: `Let`s skip the nitpicking.how
useful is modern finance theory, really?`
- People: Bear Stearns M&A
chairman Friedman joins Schoenfeld to lead new strategy, Mercer investment
consulting adds four professionals, Endeavour hires market strategy chief,
LaCrosse Global Fund Services appoints Robert Helszajn to lead client
relationships and business development in Europe
- Institutions: AP7
considers hedge fund replication investments, Plymouth (Mass.) begins
search for manager of managers, Mass PRIM has $900m mandate for natural
resources, CalPERS to invest 1% in timber
- Regulators: SEC proposal could
ease broker moves
- Legal: Earlier inquiry at MF Global, firm paid $77m to
resolve probe, Comment: Some traders accepted inducements from brokers, Two
Lehman traders in London suspended
- Life moves on for rogue traders:
Kerviel could take lessons from Leeson, Mr. Iguchi`s nightmares
-
Commodities: Castlestone prepares agriculture fund for launch
- Sovereign
Wealth Funds: Taiwan mulls sovereign wealth fund, IMF intensifies work on
sovereign wealth funds
- Activist News: QVT, Artradis win court
injunction
- News Briefs: ReachCapital changes name, Liechtenstein
vulnerable to money-laundering: IMF, Bank of England declines to cut
interest rates, Investcorp wins two hedge funds awards, Global, Dubai
Islamic Bank and Millennium Capital to launch $500m Shari`a-compliant
buyout fund, Japan holds rates, nominates Muto for BoJ
- And Finally. For a
challenging run, try the stiletto race in Amsterdam
- Logon:
http://www.opalesque.com/main.php?act=archive
_________________________________________________________________________
Misc.
Items of Interest
Are You Rich?Special Report: Retirement -- These days,
a $25 million nest egg will get you only into the beer-and-peanuts crowd.
You'll need more like $500 million to join the true elite-and even that
caste is getting
crowded.
http://online.barrons.com/article/SB120493403520820695.html?mod=djemWR
_____________________________________________________________________
Funnies,
Facts, Quotes, etc….
gewgaw G(Y)OO-gaw, noun:
A showy trifle; a
trinket; a bauble.
kismet KIZ-met; -mit, noun:
Destiny;
fate.
_________________________________________________________________________
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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