Main News

 

The $55 trillion question

 

Failure Is an Option
Poor stock performance? Weak sales? No matter! If you were once a C.E.O., you can surely be one again.

 

Q2 2008: Mortgage Equity Withdrawal Plunges to Near Zero

by CalculatedRisk

Here are the Kennedy-Greenspan estimates (NSA - not seasonally adjusted) of home equity extraction for Q2 2008, provided by Jim Kennedy based on the mortgage system presented in "Estimates of Home Mortgage Originations, Repayments, and Debt On One-to-Four-Family Residences," Alan Greenspan and James Kennedy, Federal Reserve Board FEDS working paper no. 2005-41.

 

A humbled Goldman Sachs quietly demonstrated this past week that it still knows how to exploit the weak for profit.

 

Posted by Bess Levin, Oct 03, 2008, 10:07pm

We've got good news and bad news. Mostly bad news.

 

Some of the governments of Europe's biggest economies have come up with half measures to the current financial crisis despite recognition there needs to be a better coordinated response to the credit crunch.

 

Russia: The Market Plunge and Public Appearance. October 6, 2008 | 1824 GMT. Trader in the Russian Trading System Stock Exchange ...

 

In US dollar terms, crude oil prices increased 525% from the end of 2001 through July 31st, 2008. Was this rally yet another speculative bubble? Specifically, has the oil rally been based on speculative excess rather than fundamental supply-and-demand factors?

 

Treasury issues RFPs for rescue program

Posted: October 6, 5:06 PM

The Treasury Department this afternoon issued RFPs for managers to handle the troubled assets acquired under the $700 billion rescue plan for financial institutions. Read more

 

UP AND DOWN WALL STREET DAILY
Credit -- and Worries -- Don't Ease Ahead of Senate OK of Rescue GE is buffeted until Warren makes his investment while banks stay super tight.
http://online.barrons.com/article/SB122292018585197461.html?mod=djemBF

 

European Government Summit Underlines State Support For Region's Banks<http://now.eloqua.com/e/er.aspx?s=795&lid=8142&elq=C866E56426B0476F9A11E4CBEC388801>

 

Star hedge fund crashes to earth
CNN Money Mon, 06 Oct 2008 11:46 AM PDT
September was the worst month on record for hedge fund performance, but for one legendary player what's going on in the markets now must seem like its coming straight from the gates of hell.

 

Markets' Volatility Pays for Niche Hedge Funds<http://www.hedgefund-index.com/newstoday.asp>
Source: The Wall Street Journal
Global financial mayhem may be laying waste to many hedge-fund portfolios, but whipsawing markets are boosting a small group of hedge funds that bet on rising volatility. More...<http://www.hedgefund-index.com/newstoday.asp>

 

Asia HFs Close At Faster Rate
The hedge fund industry is expected to shrink for the first time, with Asia hedge-fund closures up 19% this year as a result.

 

CIBC Sells Portfolio To Cerberus
CIBC is selling part of its structured credit portfolio to Cerberus Capital Management LP in a $1.05-billion deal, reducing its exposure to the U.S. residential mortgage market.

 

It became fashionable in recent years for hedge-fund managers to take big positions in stocks they loved, but now it's clear that some managers went too far.

 

What the Hedge Funds' Bad September Could Mean for Markets by Trader Mark

 

Hedge Funds Eat Their Young by Paul Kedrosky

 

Weekend Reading: Clock-Cleaning News by Greg Newton

 

September Was a Rough Month for Affluential Hedge Funds by Market Folly

 

How Banks Hedge Counterparty Risk by Felix Salmon

 

Bank Default Risk Decreases from Apocalyptic to Merely Catastrophic by Paul Kedrosky

 

John Hussman: However It's Written, TARP Is a Bad Idea by John Hussman

 

FDIC's Bair emerges as key player in bank rescues - Oct 3, 2008

 

Intelligence Guidance: Week of Oct. 5, 2008 October 3, 2008 2157 GMT The following is an internal Stratfor document produced to provide high-level guidance to our analysts. This document is not a forecast, but rather a series of guidelines for understanding and evaluating events, as well as suggestions on areas for focus.

 

The United States and Iraq are close to concluding a deal on the withdrawal of US combat troops from major population centers by the end of June and from ...

 

Merrill Lynch Monthly Market Analysis

 

PWC: Operational Risk: an alternative challenge

 

EIU:  Assessing enterprise risk management strategy", conducted by the Economist Intelligence Unit on behalf of SAS in June/July 2008. To download the full report, please visit:

For a graphical overview of the survey results, click here (or paste the entire URL into your browser):

 

The End of Mark-To-Market

Posted: 03 Oct 2008 04:24 PM CDT

 

Hedge fund reinvention is on the cards<http://www.hedgefund-index.com/newstoday.asp>
Source: Financial Times
From his office overlooking Geneva’s Jardin Anglais, Guy de Picciotto has a unique insight into the state of the hedge fund industry. More...<http://www.hedgefund-index.com/newstoday.asp>

 

Lehman's Fuld: Where was our bailout?
By: Reuters
Posted: 10/06/2008 6:06:26 PM ET
http://www.hedgeworld.com/news/read_news.cgi?section=dail&story=dail15307.html

 

SEC Short-Sale Rule Stifling U.S. Options Trade
By: Reuters
Posted: 10/06/2008 5:52:04 PM ET
http://www.hedgeworld.com/news/read_news.cgi?section=dail&story=dail15306.html

 

Geopolitical Diary: Three Events and the Tapestry of the Next Decade
October 3, 2008 0158 GMT
Three completely disconnected events occurred this week that will weave together the tapestry of the next decade.
http://www.stratfor.com/geopolitical_diary/20081002_geopolitical_diary_three_events_and_tapestry_next_decade

 

China: Floating a Rumor of Rescue. October 6, 2008 | 1616 GMT. A Chinese investor gestures in front of a stock price board in Shanghai on Oct. .

 

Fasten Your Seat Belts A specter is haunting Europe, and nearly all the developed world—the specter that the U.S. credit crunch is now a global crunch. Read More

Activist Fund Banks on IT Turnaround Hedge-fund jockey Warren Lichtenstein is making a big bet on Unisys' stock.
http://online.barrons.com/article/SB122329241346007347.html?mod=djemBF

 

Citadel is Battered by Trading Restrictions
Financial Times - Monday October 06, 09:01 BST

 

Economists and financial experts don't all agree that a taxpayer-funded purchase of troubled mortgage securities is the best way to attack the credit crunch. Some support it, while others prefer alternatives like a loan program for hard-hit financial institutions or a government-backed mortgage refinancing program -- strategies that could supplement the administration's plan or replace it if it fails. Regardless of their take on the rescue, most experts agree there is a key unanswered question at its core: How would the government know if it is paying the right price for the exotic securities it would buy from troubled firms? Pay too much and the taxpayer could lose hundreds of billions of dollars. Pay too little and the bailout would fail.

Full Story...

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Yield Curve Corner

 

US Preview: Fed's Bernanke to Speak on US Economy
CEP News - Montreal,Quebec,Canada
(CEP News) - Federal Reserve Chairman Ben Bernanke will speak on Tuesday at the National Association for Business Economics, an annual conference held in ...

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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/TRCmarienorbert280_G10.jpg

 

Deadly earthquake hits Kyrgyzstan *
Officials in Kyrgyzstan say an earthquake has killed more than 50 people near its mountainous border with China.
Full story:
http://news.bbc.co.uk/go/em/-/1/hi/world/asia-pacific/7653979.stm

 

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Iranian Situation and Other Man Made Disasters

 

Iran: Normalizing Relations with Egypt, FM Says
October 6, 2008 1526 GMT
Iranian Foreign Ministry spokesman Hassan Qashqavi said Oct. 6 that Tehran is normalizing...
http://www.stratfor.com/sitrep/20081006_iran_normalizing_relations_egypt_fm_says

 

Iran: Normalizing Relations with Egypt, FM Says October 6, 2008 1526 GMT Iranian Foreign Ministry spokesman Hassan Qashqavi said Oct. 6 that Tehran is normalizing...

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Opalesque’s Corner

 

- Opalesque Exclusive: Review of hedge fund launches, closures, trends, and regulatory and legal events - week 40
- Fund launches - Temujin to launch multi-strategy Asia fund, APS readies Vietnam absolute return fund, Security Global to unveil new hedge, 130/30 strategy
- Closures - Tantallon closes its Smaller Companies hedge fund
- Man Group veterans, including ex-chairman Harvey McGrath, form Revere Capital Advisors to invest in hedge fund start-ups
- Dean Art Investments joins hedge fund platform Harbour Capital
- M&A - ARCH Financial Products takes a stake in Asia and Middle East retail market with Financial Partners Group
- Opalesque Exclusive: Friedberg Global Macro Fund returns 4.18% in September, +19.40% YTD, Friedberg Mercantile Group will accept new subscriptions for the fund in October only
- Opalesque Exclusive: Global Commodity Systematic Program posts return of +2.26% in September, +12.67% YTD
- Opalesque Exclusive: Aquila Capital`s HF replication funds are up 1.9% and 1.0% in September, DWS and Aquila Capital launched a UCITS III CO2 fund
- Volatility Funds - Opalesque Exclusive: SGAM AI Global Volatility Fund up 6.17% YTD, Market conditions pay for hedge funds that bet on rising volatility, AM Investment Partners up 6% in Sept
- Assets - New Star AM plans increase in hedge fund assets, EPFR: Few winners in 3Q 2008 fund flows, investors retreat global and emerging markets in favor of US equity, bonds and money markets
- Redemptions - FoHFs will need to pull over $100bln before year-end, says Clontarf Capital, Hedge fund redemptions could trigger more turmoil in the markets
- Hedge Fund in Crisis - Hennessee: September will be worst month for hedge funds in a decade, funds could be down 5% to 9%, Interview: FRM`s Mark Reinisch says FoHFs will fall on hard times this year
- Strategies - Hedge fund TPG-Axon sees a historic investment opportunity, Marshall Wace`s Amit Rajpal: Potential for alpha creation best in financials, Hedge fund strategies in focus, managed futures strategy still attractive, Big stakes come back to bite fund managers
- Comments - UBP`s Guy de Picciotto sees need for hedge fund `reinvention`, changes 40 % of names on `our list`, FT Comment: Time to bury the hedge fund label, Funds face their decision time: should they stick to the 2 and 20 structure?
- Opalesque Exclusive: 12 hedge funds known to have frozen assets following Lehman`s bankruptcy
- Lehman Update - Clifford Chance recaps complaints filed against Lehman, Hedge funds with billions tied up at Lehman face months of uncertainty, Lehman chief Fuld to face the music on Capitol Hill today
- PwC global hedge fund whitepaper puts transparency and tax issues top of agenda
- Short Selling Bans Update - Hedge funds gird for SEC disclosure fight, SEC short-selling ban to end Thursday, Short selling not a big `evil`, say Australian super funds
- Legal - Thomas Petters is arrested in fund fraud case, Gottex corrects inaccuracies and misinformation regarding Petters Group, Lancelot Investment lent about $1bln to Petters Affiliates, Bank of America settles claims on Countrywide loans, deal could be worth $8bln
- Bailout Plan Update - House passed bill, Bush signed $700bln bailout package, Banks could write off billions in losses from bad debt, Wall Street gets rescue, but what about stocks?, Buffett on the Bailout Bill (video), Reaction to Congress (video), MFA applauds passage of economic rescue plan, Analysts don`t think bailout will be enough, Paulson expected to tap Neel Kashkari to run rescue program, Bail-out leads to conflict of interest claims as Wall Street financiers cash in on crisis
- Credit Crunch Update - Weekend turmoil, Credit derivatives market to price $500bln in bad deals related to Fannie Mae and Freddie Mac, Yen unbeatable as credit seizure kills carry trades, Greenwich survey: Credit market seizure deepens and hits companies large and small, Goldman may buy deposits, banks in distress, Can Buffett Rescue the market?
- Wachovia Update - Wells Fargo and Wachovia agree to merge, Citi wins court order blocking Wells, Wachovia deal, Ackman`s Pershing said to have bought 9% of Wachovia
- Europe - UK considers bank recapitalisation steps, Hedge funds flee London as city turns against $450bln industry, Germany guarantees private savings to avert panic, injects extra Eur15bln into Hypo Real Estate, European leaders eye German unilateral moves, Austria, Denmark Sweden also expand bank deposit guarantees, French bank BNP Paribas to take control of Fortis` remaining assets, Iceland moves to prevent bank meltdown, Battered Italian banking group UniCredit to raise Eur6.6bln, G4 summit: Governments vow to restore confidence and back banks, Sarkozy says EU will support banks, seek hedge fund regulations
- Regulatory - U.S. House Oversight and Government Reform Committee asks 5 top hedge fund managers to testify Oct. 16, CFTC may hire Promontory Financial Group to improve market surveillance
- Institutions - Swedish pension schemes push into alternatives
- Central Asia offers shelter from US mess: Eurasia Capital Management
- People - Dechert adds PE, hedge fund startup specialist Angelyn Lim, Brevan Howard recruits high-profile names, Hedge fund third party marketing firm, Agecroft Partners, hires 5th managing director, Barclays takes on Lehman attorney, BDO Stoy Hayward I.M. continues to strengthen its alternatives FoFs team with 3 senior hires
- Opalesque Exclusive: Cambridge Place appoints Stephen White as CIO for Europe, establishes the Talisman/CPIM European Property Debt Opportunity Fund
- Opalesque Exclusive: Opalesque Geneva Roundtable reveals how family offices, fund of funds cope with the markets and a changing hedge fund world
- Environmental Investing - Greentech investments see record 3Q
- Commodities - Commodities headed for biggest annual decline since 2001 as speculators exit, Read Opalesque`s free daily commodities publication, the Opalesque Commodities Briefings
- Read Opalesque`s new free daily Real Estate publication, the Opalesque Real Estate Briefing
- Exchanges - Eurex announces new record month with 229 million contracts, Konstantin Korishenko nominated as new president of MICEX
- Events - Panel discussion on hedge funds in the credit crunch, Chicago, this afternoon
- Activist News - Cleveland-Cliffs investors vote down Harbinger plan to up stake
- News Briefs - Second hedge fund joined Habitat-NYC Build Day on Sept. 19, AIG `swamped` with interest from strategic investors, Aviva Investors builds business in Asia, Holiday in Hong Kong tomorrow, Temasek to target more Asian investments
- ...And finally: Guy gets custom license plate `STOWLN` for his car. Guess what happened next
- Logon: http://www.opalesque.com/index.php?act=archive

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Misc. Items of Interest

 

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Funnies, Facts, Quotes, etc….

 

officious uh-FISH-uhs, adjective:

Marked by excessive eagerness in offering services or advice where they are neither requested nor needed; meddlesome.

 

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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.