Archive: 03/12/2008
Main News
Why Financial Crises Are Inevitable
by Brett Steenbarger
The
Buy Side Risk Managers Forum has created "Risk Practices for Asset
Managers" that we thought might be of interest to you. We at Capital Market
Risk Advisors, Inc. (www.cmra.com) are pleased to have served as advisors
to the working group. Please visit our site to download a copy of the
Principles.
Alternatives transparency and risk "more important" -
PwC
http://www.ipe.com/news/Alternatives_transparency_and_risk_more_important_PwC_27401.php
Risk
Assessment of Credit Derivative Market Turmoil
by Ed Kim
Risk Coverage
Spending On Rise
New research shows investment managers are pooling
resources to ensure they have established a comprehensive risk and
compliance infrastructure.Read more
Credit Risk - The Various Risks of the
Volatile Credit Derivative Market
With the current turmoil in the credit
derivative market, the business risks have substantially increased. For
those investors who are “In the Money,” the focus is on whether the
counterparty, the party who is on the other side of the trade and owes the
money, can pay on the trade. As the uncertainty of the counterparty’s
ability to pay increases, investors will choose to buy credit default swaps
(CDS) to hedge against the possibility of the counterparty not being able
to pay.
Full Story...
FSA WARNS ON ROGUE TRADER RISKS
The UK's Financial
Services Authority (FSA) is calling on City banks to tighten up systems and
controls in order to prevent a repeat of the rogue trading scandal at
French bank Société Générale.
More on this story:
http://www.finextra.com/fullstory.asp?id=18210
L.A. Land : Los Angeles
Times : 'Helicopter Ben' Bernanke and the ...
In an article on
http://www.bloomberg.com titled, "Moody's, S&P Defer Cuts on AAA Subprime,
Hiding Loss (Update2)" Reporter, Mark Pittman puts the story in ...
Shave
and a haircut. Banks who lend to hedge funds are reducing their exposure by
increasing "haircuts" on all forms of collateral -- even T-notes. Banks
typically lend funds a smidgin less than the value of the securities used
as collateral (hence a "haircut"). Recently, haircuts on AAA asset-backed
securities are up to 15% from 3% last summer; corporate bonds are 10% up
from 5%; and at least one bank has increased Treasury haircuts (usually
0.25-3%). Coupled with the imploding value of some of the assets, bank
cutbacks have many hedge funds hanging on to liquidity by their
fingernails.
Hedge fund strategies: Credit funds continue to
sink
Euromoney Magazine - london,UK
by Helen Avery As credit hedge funds
increasingly stall, the distressed markets might seem the only option left.
Another month, another hedge fund closes ...
See all stories on this
topic
Sprint's debt close to edge. Sprint Nextel's (S) debt covenant is
under intense scrutiny after the company drew down $2.5B of its revolving
credit facility in February. Sprint's debt covenant limits its debt to 3.5
times Ebitda. Goldman analysts think a "credit event" is unlikely, but
caution Sprint is "dangerously close to trouble." Jefferies analysts say
Sprint will have to produce $7.6B in Ebitda in order to satisfy the
covenant. A Sprint spokesperson says it will not have problems with its
covenants this year.
76 Trust Preferred REIT CDO Ratings From 10
Transactions Put On CreditWatch Negative
We placed our ratings on 76
tranches from 10 trust preferred REIT collateralized debt obligation (CDO)
transactions on CreditWatch with negative implications. The affected
tranches have a total issuance amount of $3.896 billion. All of the
transactions are collateralized in part by subordinated debt issued by
mortgage real estate investment trusts (REITs). The CreditWatch placements
primarily reflect the weakening credit quality of the mortgage REIT debt
held within the collateral pools backing these CDO transactions.
To learn
more, click or copy and paste the URL
below:
http://standardandpoors.rsys1.net/servlet/cc5?kHiQABWBQTVsLgHxhilpuHQJhuV2VD
Focus
on Risk Management - Six New
Articles:
http://www.gtnews.com/risk/default.cfm
Are Hedge Fund 'Clones' a
Fabricated Product?
by Michael Steinberg
Really? The High Cost of Alpha?
New York Times - Tuesday March 11, 09:47 GMT
WALL STREET DAILY By RANDALL
W. FORSYTH
A Palliative, Not a Cure From the Fed The central bank's
securities-lending scheme is at least a solid step in addressing the credit
crisis.
http://online.barrons.com/article/SB120524767738227325.html?mod=djemBF
CDOs:
Dead. CLOs? Not So Much
Conde Nast Portfolio - New York,NY,USA
Vipal Monga
takes a look at the CDO and CLO markets, and asks: are they really dead? Or
just taking a breather? He draws the conclusion that they're very ...
See
all stories on this topic
MBIA turning the tables
CNNMoney.com - USA
A
recent presentation by an MBIA competitor, Assured Guaranty (AGO), says
MBIA has $22 billion of CDO and CDO-squared exposure from 2005-2007, which
are the ...
See all stories on this topic
Better Risk Management Could
Have Prevented Some Losses
Hedgeworld (subscription) - New York,NY,USA
A
super senior tranche designates the top tranche of a synthetic CDO. Unlike
"cash CDOs," synthetic CDOs are not backed by physical assets but by
...
See all stories on this topic
Citigroup to inject $1 billion into a
group of hedge funds - report
Source: CNNMoney.com
Citigroup (NYSE:C) Inc.
will inject a total of $1 billion into six hedge funds that have fallen in
value, according to a report in the New York Times. More...
Investment Group hires manager for planned hedge fund
Source: The
Chicago Tribune
Citadel Investment Group LLC, the Chicago-based hedge-fund
firm founded by Kenneth Griffin, said Monday that it hired Kaveh Alamouti
to run a hedge fund that will trade stocks, bonds, currencies and
commodities. More...
Economy weak but not enough for recession: report
March 11, 2008 04:19
AM ET
SAN FRANCISCO (Reuters) - The U.S. economy will shrink in the
second
quarter, but avoid a recession this year as housing's
drag will ease in
the second half, helping normal growth return
next year, according to a
UCLA Anderson Forecast report released
on
Tuesday.
http://links.reuters.com/r/JLVW3/5KO1V/WQNBD/BXVK8/5FCWF/YT/t
_________________________________________________________________________
Yield
Curve Corner
Bernanke Invents a New Weapon
by Felix Salmon
Fed
Liquidity Actions: 28 Days Later
by Steve Waldman
PAUL B. FARRELL
Derivatives the new 'ticking bomb'
MarketWatch - USA
Unfortunately, that
"bad 2%" did blow up a few months afterwards, even as Bernanke and Paulson
were assuring America that the subprime mess was "contained. ...
See all
stories on this
topic
_________________________________________________________________________
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/
Iran
hardliners slam reformists ahead of polls
AFP via Yahoo! News Tue, 11 Mar
2008 8:37 AM PDT
Iranian hardliners on Tuesday charged leading reformers
with being too close to Iran's Western enemies, days ahead of an election
expected to see conservatives consolidate their hold on
parliament.
Ex-President Khatami Urges Iran Reformists To Vote En Masse -
AFP
Nasdaq Tue, 11 Mar 2008 11:06 AM PDT
ISLAMSHAHR, Iran (AFP)--Reformist
ex-president Mohammad Khatami Tuesday urged Iranians to vote en masse in
this week's parliamentary elections despite the disqualification by
hardliners of hundreds of his
allies.
_________________________________________________________________________
Opalesque’s
Corner
- Editor's Note
- Fund launches: Absolute Alpha launches new
capital guarantee fund, Resolution Asset Management plans American 130/30
fund, Schroders adds multi-asset fund to U.S. lineup, Update: Baer Capital
to launch two India-centric hedge funds, Pequot launches sector-focused
hedge fund, Cohen and Steers starts property hedge fund business, Spanish
asset manager launches onshore global macro, multi-strat hedge funds
-
Performance: Opalesque Exclusive: Arsago`s Global Macro fund up 8.56% YTD,
takes on new principal, AIMhedge managed futures fund up 27.51% during the
first two months of 2008, Paulson & Co hedge funds surge again in 2008,
Blackstone profits plummet 90% in Q4, folds credit business into GSO
-
Indices: Update: Hennessee Hedge Fund Index up +1.28% in February, Barclay
Hedge Fund Index up 1.58% in February, HFRI Fund Weighted Composite Index
up 2.54% in February, FoFs up 1.80%, Emerging Markets gain 3.06%, Hedge
fund index performance vs. the S&P 500
- Investors: PwC report: Investors
rank transparency, risk alongside returns in alternatives, Laven Partners:
Larger, established hedge funds may be the riskiest bets, Risk averse
investors rush into yen
- EDHEC and EuroPerformance publish Alpha League
Table 2008 for France
- Study: The cost of active investing, index funds
the panacea?
- HF Replication: Credit Suisse forms strategic alternative
beta research partnership with Professors Fung, Hsieh and Naik
- Credit
Crunch Update: Tequestra`s hedge fund liquidated when unable to meet margin
calls, Carlyle Capital lenders poised to liquidate $16bln, Carlyle Capital
begs nervous banks not to sell collateral, Citigroup acts to bolster hedge
funds, Citigroup faces $9bln in write-downs in Q1, Credit spreads widen on
rumours of Bear Stearns` liquidity problems, Investor group CtW attacks
banks over subprime, China`s CIC to pump more in subprime-troubled overseas
firms
- SocGen Update: SocGen`s accounting is questioned, SocGen rights
issue oversubscribed
- People: Opalesque Exclusive: Optima`s CIO leaves
firm, continues to manage hedge fund investments, SilverStreet Capital
appoints Edwin Doeg as director, Reallocation of portfolio management roles
at FoHFs manager Infiniti Capital, BlueMountain hires from Deutsche Bank
and Citigroup, Copernico Capital Partners adds price risk manager,
Toscafund names new director, Bear Stearns funds chief joins investment
bank Askar, Blackstone pinched team of nine structured debt specialists
from large hedge fund, Ambassador Clayton K. Yeutter joins board of
directors of Chicago Climate Exchange
- Institutions: PwC survey:
Institutional investors to increase alternatives allocation, Lyxor:
Institutions prompt FoHFs to rethink manager selection, managers should
start with top-down research, Canadian institutions add foreign exposure,
real estate, PE while hedge fund exposure shrinks to 1.2%,
- Legal: Law
firm Drinker Biddle & Reath forms hedge funds task force, Charming Shoppes
sues two activist hedge funds
- Regulators: Swiss regulator seeks action
against Laxey Partners, Update: Australian regulator investigates on
heavily sold stocks, Update: Better risk management could have prevented
some losses, says supervisory agencies` report
- Commodities: Barclays
Survey: Commodities investments hit $178bln in 2007, at least $200bln
expected for 2008, New Star: Commodity prices may be hit by Fed tightening
on upturn, liquidity stuck in commodities, heading for bubble, Commodity
bubble debate: will it burst or won`t it?, Gold and oil panel (video)
-
Environmental Trading News: Breakthrough seen in emissions trading
-
Europe: Nedgroup in talks with distributor, to exploit UK retail hedge fund
market, European funds assets under management rise ?400bln to ?7.9trn in
2007, Aegon to invest $650m in hedge fund spin-off
- Middle-East: Opalesque
Exclusive: EFG-Hermes expands its Saudi offering with new equity fund, HSBC
gets brokerage permit for trading on UAE exchanges
- Other Voices: Putting
some hard numbers on bank credit spreads
- Activist News: Implenia proposes
CHF0.50 per share face value reduction, recommends rejection of Laxey`s
proposals, Steel Partners moderates its approach to Sapporo
- Event: Book
panel on credit derivative strategies: New Thinking on Managing Risk and
Return, 24th March, NYC
- News Briefs: EFG says bond fund liquidated,
Lehman Brothers cutting work force by 5%, SunTrust`s Trusco to become
RidgeWorth Capital Management, Trichet sounds alarm at euro`s rise
- . And
Finally: Vatican lists new sins, including pollution
- Logon:
http://www.opalesque.com/main.php?act=archive
_________________________________________________________________________
Misc.
Items of Interest
Monkeys challenge language theory *
Researchers observe
putty-nosed monkeys using human-like language skills.
Full
story:
http://news.bbc.co.uk/go/em/-/1/hi/scotland/edinburgh_and_east/7288104.stm
_____________________________________________________________________
Funnies,
Facts, Quotes, etc….
assuage uh-SWAYJ, verb:
1. To make milder or less
severe; to reduce the intensity of; to ease; to relieve.
2. To appease; to
satisfy.
3. To soothe or calm; to
pacify.
_________________________________________________________________________
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
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information contained in this document does not constitute an offer or
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considered as financial advice, or as a sufficient basis on which to make
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