Wednesday, June 30, 2010
So a number of my clients are talking about cash. They are fed up with volatility and want to preserve capital so are dressing up in orange robes and seeking salvation. I don't blame them although cash is just as volatile.
Being worth $10million last year isn't the same as being worth $10million this year. It sounds the same but if you are unhappy this year and would be happier if you had $12million then its not the same. What am I talking about? Bollox mostly.
Hedge Fund managers have always enjoyed cash bonuses but alas no more. (cityam) As usual the regulators have missed the point. If I charge 2 and 50 then its not a bonus, its just a fee. They cannot cap that. If a fee is deemed a bonus then we are all in big trouble. What do I get instead? I am already the owner in my company, why would I want share options? These people are stupid, really dumb.
The King Is Cash (bloomberg)
Spain: At Long Last The CRAs Wake Up (bloomberg)
Cash No More For Bankers (bbc)
Short Fat Totty In The Money (hitc)
Regulators Get Jobs At Hedgies (reuters)
Brits To Live In Mud Huts (telegraph)
UK Residential Property 27% overvalued (thisismoney)
UBS Goes After Highland Again (dealbook)
Free Lunches (allaboutalpha)
AIG Was A Good Company (independent)
RBS to be renamed the Green Investment Bank.
Tuesday, June 29, 2010
Something is in the air. Google spluttering in China; the almost dead Alex Hurricane Higgins causing grief in the Gulf; Spanish Banks having their oxygen cut off; Tesla to solve the world's problems; English Football players booed back home for being back home; Primark to hike up its prices; Left Handed people to be spared iPhone 4 fun; Steve Jobs to be replaced by some guy who went to Newcastle Poly; and Russia denies spying on itself.
But the strangest thing happening in London, apart from the boris-bicycle is the pay as you go car. I don't get them. I have modeled the finances and it doesn't stack up. A bit like delivering groceries. The fundamentals are all wrong and yet we all want a piece of Ocado (once Europe's biggest private equity white elephant and full of Goldman money hence why it is being offloaded under a fanfare of this is the best thing since slice bread: these are delivery vans. Where is the IP in that?).
Brevan Howard have modeled their tax payments and are moving to Geneva. Now that makes sense.
Banks Escape Tax (citywire)
Live in Greenwich And Work On Park Ave? Tax Here We Come (nymag)
Newcits by NT (icfa)
Ponzi Scheme Discovered (nytimes)
Bayou: Long Gone But Not Forgotten (hitc)
Cheap Debt = US Real Estate Boom. Here We Go Again (bloomberg)
Double Dip Ice Cream (cityam)
Cheap Debt, Low Supply and a Weak GBP Helps London Property Boom (independent)
Obama to be accused of putting spies in the Banks (oh, that is Google, of course)
Despite trading opportunities being available 24 hours a day, the summer always goes a bit quiet. To recharge my batteries I like to escape the city and catch butterflies, fish for tench and lie in cow pat splattered fields staring at the sky. The markets turn into a distance memory, tinnitus lovin' night clubs and hotpanted women seem like a dream and English failure is but a figment of the media's imagination.
I decided to go to Glastonbury to see Jimi Hudson-Bellamy in action but soon discovered it was not only last week but I am too young to go. The average festival goer is a freedom bus pass holder apparently - thankfully I missed it then.
In my gym last night I was the only man. There were 7 women and under normal circumstances this would be heaven. Alas, despite wonderful personalities, top bodies and kit, they were not my type. Now I know summer is truly here.
Rich Man's Jewelry Weighs More Than His Body Weight (nymag)
SatNav Maker Gets Lost In Switzerland (msnbc)
G20 Talk Bollox (bbc)
Death Of Big Hedgies: Long Live Small Ones (ftalphaville)
50% Off Global Debt (nytimes)
Deutsche Bankers Are All Swingers (hitc)
Sad indictment of the day:
Hard Rock Calling: Over 60's only.
Monday, June 28, 2010
Something isn't right in England. We have the best football league, the best payed players and we own the copyright and yet on the world stage we are useless. We invented Tennis and Formula 1 and although we are trying hard, we just aren't their yet. We will hopefully win F1 but the drivers who represent the UK live in Monaco, not Guildford or Newcastle and our Wimbledon hopeful is Scottish who learned his trade in Spain.
Hedge fund managers are deserting these shores for foreign climates and London has no locals anymore (even I am an alien having invaded the place, via a short spell in HMP Ford (only kidding), from the West country). Our GBP is all over the place, Cameron is all over the place and the place is all over place too.
And yet England is the best country in the world for we invented most of the modern world and have caused most its current problems (Israel, Oil and Simon Cowell).
G20: More Useless Than England (ft)
Losses Cause Grief To Useless Hedgie (independent)
Sea Creature Predicts Future: Hedge Fund Bidding Frenzy (bbc)
BP to be bailed out by Royal Dutch Shell.
Friday, June 25, 2010
I was playing around with the Financial Times flash app that shows you the US and Japan have lots of debt. Of course this is a silly comparison.
An extrapolated time series of
- interest payments / gdp
- log (Interest payments / average age of the population)
- percentage of tax revenue paid by foreigners / debt principal
- debt time buckets
- debt as a percentage of consumers debt
- debt / iPhone sales
would be much more interesting and useful.
Most analysis is like sitting on a chair and rating its comfortableness. Feathers and silk can however conceal some nasty underlying supporting material. Debt, as in Japan is almost meaningless. It is like a big Ponzi scheme. More debt is issued so that other debt holders interest can be serviced. Unlike a Madoff type ponzi, the underlying assets can be created (printing money) so it's not such a big deal. Unless of course the debt is short term like Greece and Spain where a handy bank like the EU tax payer funded ECB comes in to the rescue and the debt is spread around the prudent and sensible.
NY VS BP (globalpensions)
Mistresses Dumped To Save Cash (telegraph)
Debt, Consumption, Death (bloomberg)
ING 20 years too late (icfmag)
Third Country Trouble Stalls Redtapers (reuters/yahoo)
Trillions and Trillions (bloomberg)
UCITS IV will be de facto fund structure for hedge funds in Europe.
Thursday, June 24, 2010
Us Brits usually wear raincoats and thick vests so its a treat when the sun comes out and all these half clad attractive people appear from nowhere and the dimply bigger ones just disappear. I am sure it's because I have been good and a higher being is rewarding me.
When the choice is limited, sometimes it is easier to choose. A mustache, baldness or large feet just don't seem so important when the pool of assets is small. Making decisions is easy. Take the Euro. One super currency, one simple choice - Long / Short. As Soros predicts and wants, the EUR will soon break into more currencies and more choice = more trading opportunities.
Goldfish attention span sound bites
I found myself in someone else's apartment this morning. I knew this because when I grabbed my TV remote on waking, the CNN had been replaced by Gay Rabbit TV.
The USA beat us Brits at our own game (soccer) as we struggled on purpose to appease Obama about BP. Most of the people in my office had never seen a Soccer match before. One person thought the referee chose the substitutes, another thought you got half a goal if you hit the post, another was more interested in the strong thighs of the players. My head of research thought the final score was 2-0.
A friend of mine, who is a motivational speaker, has the hard task of educating some Analysts at Goldmorgan Stanley to be "Optimistic". Good luck to him. It will be like teaching an American the rules of Cricket.
Last night I was at a dinner / party / session and had the chance to chat at great length to Investment Banker WAGS. The most interesting was a lady whose husband had just retired from Goldmorgan Stanley at 35 and was struggling with the dullness of life. His WAG was being treated like his PA of old and she was having nothing of it. Another WAG said her arrangement was to "be with him" for only 1 day a week and he had recently cut back on his travelling and was causing a nuisance at home. Another soon to be married WAG was coming to terms that she was marrying someone who had very few interests in life - his outlook calendar, a blackberry, his driver and his tumi luggage.
So where am I going with this? Well I have found the CNN channel and am writing this on my host's iPad and my hang over is kicking in.
US Homes to house unemployed UK civil Servants (bloomberg)
Soros: Euro: Short: Crisis (cityam)
Australia Has Had Enough Ruddles (finfacts)
Hedgie On Community Garden Leave (telegraph)
XML to replace Quill Pens (hedgefundsreview)
SocGen Hiring Spree (hitc)
Obama's Love Of Hedgies (newsweek)
USA to win world cup.
Wednesday, June 23, 2010
"Move out of the way you fcking idiot."
I left my house yesterday morning, dressed in my best suit, ready for some important meetings and general time wasting. The budget was praying on my mind and as I crossed the road a rather unpleasant man deliberately bumped into me and with violent eyes said unkind words.
There were 3 choices. First was to ignore and run. Second was to find the nearest flower and put it in his hair. Third, was to have a good old fist fight and see who was the man.
Of course if I hadn't been wearing my Trands suit, number 3 would have been the decision. However, in those flash trading few split micro seconds I took the first option and thanked myself for running in the gym the day before.
With more anger as a result of the UK budget, people wearing suits will be seen as establishment and in need of a good beating. London is going to get more angry, I can feel it.
Let us hope its not 1970's New York anger otherwise I will buy a Hummer, stock it with Red Bull and live in it on Wimbledon Common.
But enough of day to day living.
So the UK is to cap weekly rent welfare to £400 a week. Well for those outside London, this will be fine but those in London who live off welfare will struggle (as I previously predicted) and soon we shall have more unpleasant people on the streets looking to be rude at me.
So the budget in detail?
VAT up at 20% but not until next year. How pathetic. Why not now? So it is going to raise GBP13 billion. What if nobody buys anything? Welcome to Double Dip Britain. VAT up means inflation.
CGT up to 28% for some of us. How pathetic. More complicated tax that will be avoided like the plague. A relief to buy to let and others who do nothing and make money off asset appreciation.
Income Tax. So I will not be able to buy a 10 pack of Trands suits anymore. I hope the money goes to someone who deserves it ...why of course most of the UK debt interest is paid to Banks. The bankers win again.
Tax credits for having children and living in Oxfordshire. Why weren't these removed completely? Pathetic tinkering. Tax credits are a joke and should all be banned. Anything Gordon Brown did should be eradicated.
GBP200 billion a year goes to paying benefits and welfare. Good grief. Why not give it to a couple of hedge fund managers and they could lose even more.
Corporation Tax down to 24%. How pathetic - most Hedgies are partnerships. 24% is still 24% more than Malta (after rebates). Pathetic.
Overall the budget was a missed opportunity. CGT on homes, debtors prisons and the reopening of Newgate prison. Osbourne failed to deliver. Pathetic.
Indices. Remember them? (hedgefundsreview)
Wall Street Sold For A Few Thousand (nypost)
The coalition ends by next Tuesday.
Tuesday, June 22, 2010
Whilst most of you were watching North Korea suffer at the hands of a useless European country but pretty good football team, it felt only appropriate for me to pick up my new linen jacket made by a well known tailor.
The tailor pictured is not the culprit (it was the only relevant picture I had in my photo library) but another one. I had my first fitting and the jacket fitted well. It hung perfectly and clung around my neck and shoulders like treacle on pudding. The jacket was unlined and the horn buttons had yet to be sewn on but the pocket linings were in tact.
Inside the left pocket I found a piece of paper. It was a spreadsheet print out and being one for numbers I put it in my jeans pocket. I thanked my tailor, who said come back in 2 weeks, and I went back to my office.
The spreadsheet was partly in English and Chinese. So I had it translated by my quant team (who complained it was in simplified Chinese) and they revealed it was cutting and sewing instructions for a factory that makes Trands suits in China, the ones Warren Buffett wears.
So there is the dilemma. The jacket is made in England and yet it is really made in China. Is this a good thing or a bad thing?
But enough of this China is taking over the world nonsense. Today I will be paying more tax, much more tax and wondering what all these old Etonians are up to?
Kerviel Denies He Is Mad (independent)
China > USA (finfacts)
Double Dip Here We Come (thisismoney)
Yuan And The Renminbi Go For A Spin (wallstreetjournal)
Art Art Art (telegraph)
Selling For Dummies (allaboutalpha)
A Billion For Starters (commitments, PR spin, or real cash?) (nyt)
Today is a good day for the dead and a bad one for the living.
Nice quote from yesteryear:
'Never trust a crown green bowler/ under the age of 30'
HMHB: From Improv Workshop Mimeshow Gobshite, on This Leaden Pall CD.
Monday, June 21, 2010
Like most of the England football team I spent the weekend distracted by Red Dead Redemption. With its cowboy theme and making the rules up as you go, it appealed to my Hedgie background. It is one of the greatest computer games ever and I can see why England were off the mark against Algier on Friday - their brains were exhausted.
Of course the real reason England were poor is a change of leader. The manager speaks no English and the Captain Stevie Gerrard is too feeble to boss his team of misfits and ego maniacs. A bit like BP, England needs better PR as we are continually told. When my performance is poor, I know how to bullsiht my way out - my shareholders are demanding and need words to give them a good nights sleep.
Communication is more difficult than ever it seems. If you are being watched you had better keep your nose clean. Perhaps the CEO of BP should have spent more time in front of his XBox.
Citi Capital Causes Compliance Crunch (nymag)
France Strike Over Football Madness (globalpensions)
Freddie Fannie Tax Payers Suckered (nytimes)
BP Lies Keep Coming (telegraph)
Brits Go Back To Bread And Water (independent)
Rain Gaim Gone (dealbook)
TTWO - Soon to be bigger than MSFT.
Friday, June 18, 2010
Gibraltar, another tiny country that benefits from Europe (it gets a currency, the GIP which is a GBP, and free legislation), is doing a Malta. If you like Cornwall, then you will pleased to know that Gibbo [Editor: You made that up] is related.
Now the UK is officially becoming the place you don't want to be resident of, unless you enjoy paying the pensions of civil servants, it is time once again to look for a new home.
Malta can get you a management company up and running in 5 days. The tax is highish, about 30% but they kindly rebate you back most it to the annoyance of HMRC. You see, HMRC is in a pickle because with places like Eire, Gibbo and Malta offering 10%ish tax rates they cannot go after tax payers for tax avoidance under the FA 2010, unlike those real tax havens like Jersey, Cayman and the Isle of Depression.
Gibbo et al are looking to steal a few Hedge Fund managers from London. Not incurring CGT is hard so what they are doing is setting up new managers and slowly novating the advisory and management contracts over. Lawyers do nicely and we legitimately reduce our horrendous tax burdens.
Choice is Gibbo and Malta. A rock in the sea that irritates the Spanish or a religious island full of rude people and poor hotels? I am looking forward to the Falklands offering financial services just to spite Messi. Argentina are now my favourites to win the World Cup 2010.
[Disclaimer: Please note these opinions have not be ratified by my lawyers, any lawyers or others who know more about this sort of stuff than me. This blog is in draft mode and is subject to change without you knowing. All opinions and facts are probably wrong and you should not put all your eggs in one basket. I have not been paid by any of the companies or countries discussed and if you want further information please refer to wikipedia and your friend at Ernst & Watercooler]
Northern Rock Is To Spain ... (independent)
Fund Liquidates (finalternatives)
Hedgies Earn Less Than The Man At The Job Center (cityam)
Eurocrats Argue: Excel or Google Apps? (finfacts)
The Bank Of England Are No IMRO, FIMBRA, SFA (telegraph)
Gibbo The New Black (hedgefundsreview)
Newcits Joke No Longer Funny (reuters)
Northern Rock Compensation (telegraph)
Murdoch To Charge For Breathing His Air (bbc)
Hedgies To Abandon Hats (washingtonpost)
Goldman Calls In Rentokill (postchronicle)
Goldmorgan Stanley to launch fund to buy distressed countries.
Wednesday, June 16, 2010
A day of joy. The burden that is Gabriel and the temporary staff who know nothing, is coming to an end. The FSA is to be turned over to the Bank of England who will no doubt create something even more complicated. The UK needs a regulator, just like every other jurisdiction, but not one that changes its rule book nearly everyday and sees compliance cost as a good thing. I tried to print it out once and it was 7 feet high, I kid you not. How can the finance arena be regulated with an in-comprehensive rule book with no rules but only interpretation and guidance and call centre staff who know nothing?
Take Pillar 3 disclosure. Should this be on your website or assumed that anyone interested would just email you for it? Why do hedge fund managers need to put up capital that varies over time and have to write an annual icaap report that states the capital you have told the FSA you have is actually wrong?
Roll on UCITS IV and the passporting of regulation. I look forward to the day when my management company in is Gibraltar and I no longer have the sort of compliance costs that could add an extra weeks holiday to all my staff.
No longer is regulated and authorised by the Financial Servies Authority seen as a badge of honour.
Not that BP care. The oil industry is not regulated. The US based Minerals Management Service tries to have a go but with different bodies all over the world, regulatory arbitrage is rife. I am sure Obama will do something silly but with elections coming up he is torn between SUVs and bicycles. The man would make a great but inept John Grisham character or an FSA call center operative.
Young People Don't Pay Their Debts (telegraph)
FSA Banned For Being Obsessed With Collecting Data And Filing It Away (bloomberg)
USD5 Billion Newcits (hedgefundsreview)
Hollywood Futures Almost Here (independent)
BP To Hire New PR Companies (bloomberg)
Brit Unis Run Worlds Largest Flash Trading Hedge Fund (yahoo/reuters)
Fred Launches Libya Fund (finalternatives)
King Kong (cityam)
BP to be renamed American Petroleum.
Odds on Switzerland winning the World Cup 10-1.
Marshall Wace to be given the first ever corporate knighthood for helping the LibDems into power.
Tuesday, June 15, 2010
GAIM. About as interesting as this:
So you are thinking about setting up a fund in Cayman. This is why us hedgies love the place (hedgefundsreview). Not that Ernst & Young care. Despite being the auditors to more hedge funds than anyone else, their time maybe finally over. Like Andersens and Enron, they are close to the BP business model of failure. All thanks to Lehman (cityam)
Parking For Dummies (tpa)
EUR Back In Fashion (bloomberg)
UK Private Equity Dead In The Water (bloomberg)
Lender Of Last resort To The Spanish Banks (ft)
Hedgies Back To Being Big (globalpensions)
Spain Goes On Strike (bbc)
EU to Ban Trading (euractiv)
Ernst & Young to be dead and buried Andersen style by September 2010.
Someone sent me this:
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100..
If they paid their bill the way we pay our taxes, it would go something like this...
The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
The tenth man (the richest) would pay £59.
So, that's what they decided to do...........
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by £20". Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes.
So the first four men were unaffected.
They would still drink for free. But what about the other six men? The paying customers?
How could they divide the £20 windfall so that everyone would get his fair share?
They realised that £20 divided by six is £3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid £2 instead of £3 (33% saving).
The seventh now paid £5 instead of £7 (28% saving).
The eighth now paid £9 instead of £12 (25% saving).
The ninth now paid £14 instead of £18 (22% saving).
The tenth now paid £49 instead of £59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a pound out of the £20 saving," declared the sixth man.
He pointed to the tenth man,"but he got £10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a pound too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get £10 back, when I got only £2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works.
The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
Warrior Wongs WAG (nymag)
Blair Bungs Bureaucrats (taxpayersalliance)
Greece Downgraded To Economy (bloomberg)
More Cheating Newcits Style (hedgefundsreview)
Starbucks Lattes Hedgies (telegraph)
Anarchy in the PIGS (dailymail)
Hedgie Goes Dutch (globalpensions)
UK Tax To Reach 100% (ft)
The Conference Nobody Goes To (ftalphaville)
Fintag Is Full Of Bllushti (allaboutalpha)
Hedge Fund Trading Strategy Based On Vuvuzela Noise (finalternatives)
BP is an American company (well about 40% - State Street, Goldman Sachs et al) and the spill was caused by outsourced American companies. Us Brits are totally innocent and Obama is destroying American pension funds who invest in BP and being nasty. As I predicted when he was elected, the man is a one term president who will make Jimmy Carter look like Bill Clinton. I mean, comparing BP to 9/11 is an insult to George Bush.
BP to be the best bargain of the year 4-1
BP to go the way of Enron 3-1
Monday, June 14, 2010
Tip for the day:
I have found a way to read headline pages of the FT without a subscription.
Go to ft.com and copy the title. Go to google and paste into the search bar. The story will usually appear first. If you hover over the link, it will say traxfer.ft.com/xxxxx. Click on the link and you get to read the whole story.
This only works if you click the link from the Google page as ft.com checks the referrer.
I usually delete my cookies when I exit my chrome browser and its a pain having to type in my id and password combo.
Somebody needs to come up with a better solution.
50 Inch Plasma
Having watched a couple of the World Cup matches, I now watch with the sound off and subtitles on. The hornet noise is ruining it.
The CRAS (cityam)
The UK (bbc)
Germany to win the world cup.
Friday, June 11, 2010
So there I was at C. Cipriani to those who aren't lawyers, sipping on a Bellini with my many girlfriends. Such places as this are so far away from the boarded up houses in Liverpool, the starving in Ethopia and the mugged in South Africa, it feels like being in heaven.
The discussion was not about US failing to gain EU equivalence status and being ranked a second rate third country; or China cheating with its peanut currency; or the cheapness of BP or whether Obama dyes his hair; no chuckles about the uselessness of SocGen's risk management function; no gasps in horror at DB's shorting of its own motherland currency; no whispers at how much Goldman has bunged the SEC to make it go away; alas the talk was about how to avoid being seen as an easy mugging target by the soon to swell unemployed ranks and if Harrods new revamped mans department was any good or not.
Places like C are wombs of the selfish and over privileged. Which is nice as its warm and banal and helps cover up lifes complexity and irritation.
DB Middle Fingers Merkel (telegraph)
USA Unemployed Unamused (bloomberg)
Small Boys And Crooked Traders (hitc)
Goldman Versus SEC Stalemate (reuters)
USA is not equal and never will be: fight, fight, fight (hedgefundsweek)
Cheap BP Beep Beep (bbc)
China Decides Never To Import Anything (telegraph)
Soros 2.0 (dealbook)
Malta will be the new Cayman by 2014.
Thursday, June 10, 2010
Once upon a time people who had a coffee read a newspaper, contemplated life or talked to complete strangers. Yesterday I had to have a meeting in Starbucks and all around were people pretending to be turtles tapping away at screens. What has become of the world? My greatest fear is that dreaded star. The one that tells me a message hasn't been read, a voice mail not listened to or a text not deleted.
Most text based communication is banal and useless. It of course helps fill up the day and make dull people feel important. Clutching onto that wireless device has given meaning to a life, so bereft of fun, to those who will one day have tunnel vision and finger cancer.
I hate my Blackberry and today is no Blackberry day. I lost it in the loos at some nightclub last night.
US to put up rates (bloomberg)
US show Greece et al what real debt is (aka 1% = 1 Million Jobs) (reuters)
Petters People Patted (msnbc)
Gordon Browns Pal Buys Big House (telegraph)
Timberwolf Bites Goldman's Ass (ftalphaville)
USA Declares War On UK (ft)
No Future 2.0 (bbc)
Franco-German Last Push To Save Euro (independent)
Hedgies Are Nothing But Soft Fluffy Kittens (allaboutalpha)
Monopoly Bureaucrats Probe Investment Banks (cityam)
Oil Hating Man Beats Up Oil People (reuters)
JP Morgan Takes Mexico Into Custody (icfa)
June to be another scorcher for most Hedge Funds.
Tuesday, June 8, 2010
GBP, strangely, is the current whipping boy of the fx markets. Despite the UK have some of the longest term debt out there, averaging about 14 years, and an unblemished track record in paying its debt off, it is being beaten up.
Us hedgies are partly to blame, especially us with USD assets and GBP liabilities (fees and remuneration) so we are lovin' it.
USD is seen once again after a few sweaty years when the EUR nearly took over the mantle, to be the world's reserve currency. Despite Obama showing Gordon Brown how to spend such that its debt is nearly overtaking its GDP, the USD is seen as a good place to be.
As an economist, I see the world as more irrational and stupid than ever before. If I had my time again I would have studied psychology for the market is not Mr Spock but Mr Freddy Kruger.
Of course you know I had a bad May. We all did. Once again our models were left behind and we messed up again. But this is nothing compared to the mess the UK chancellor has to sort out. Unlike Thatcher's cost cutting where she sold the family silver, Osbourne doesn't have any to sell. Asking the people what to cut is like asking a patient which part of their body should be amputated. Best if you don't tell and just do it.
Arki Playboy And His Girlie Bracelets (nymag)
12 Year Old Prepares To Sell His Skateboard (cityam)
Cohen Seeks Helper (businessweek)
Canadians Launch No Fee Hedge Fund (dealbook)
Mrs Arki and her Cuban(telegraph)
FoHF To Be Given Bracelets For Good Behaviour (hedgefundsreview)
Fitch Fists Frightened Financier (independent)
Idiots and Copulation (hitc)
Steve Jobs to stand for President.
Monday, June 7, 2010
So the UK spends GBP20billion on housing welfare and benefits. Why is this so high? Answer: Property owners.
You see if there is a property boom, rents go up. For example, rents in London are very high and if some broke people need to be homed, the councils have to pay current market rates. If some recent immigrants have fallen on hard times and given birth to triplets and need to look after a few sick relatives, one place to consider would be SW6.
A 4 bed house in Fulham costs about GBP5,000 a month. GBP60,000 a year. Fulham is one of the most dangerous places to live in London so not only would a homeless family need GBP60k of our taxes, they would have to live with French people and endure the White Horse in Parsons Green, as well as the number 22 bus, plus a high mugging and burglary rate.
For Cameron to slash this huge bill will be very difficult if not impossible. People need to live somewhere and unless Cameron puts CGT at 100% on all properties over GBP750k, or brings in rent caps, or compulsory forces house sharing where any unused rooms will have to be handed over to the homeless, there will be people squatting in all those second and third homes, sleeping in parks and generally causing a nuisance.
Let us not forget the Anarchists Cookbook was written in a squat in the 1970s. [Editor: Complete bollox]
I look forward to see how this Government plans to cope with the new Labour homeless.
Brevan Howard: From Bling To Bread (telegraph)
America: The Land Of The Lazy (financialarmegeddon)
Limo Driver Seeks Alpha (crainsnewyork)
Bernie Has The Lat Laugh (nymag)
UK To Convert All Debt Into Never Ending (cityam)
The Greece Spain Portugal Ponzi Scheme (finfacts)
Biggest IPO Ponzi Ever (independent)
Hedgies Reminisce About Paper (guardian)
Subprime ...Sovereign Debt ...The Premier League (bbc)
Goldman Forget To Open The Door (ft)
Blue Genes For Hedgies (secindustry)
Ocado - A man with a van to be the biggest IPO joke of all time. Do you really believe this is worth a billion? The Private Equity industry coupled with Goldman Sachs just want to offload asap. Buyer beware.
IT won't be long before the revolting peasants say enough is enough and countries like Greece, Spain, Portugal, Ireland and Belgium turn towards the Cuban model of democracy. Hungary has been there and it looks like it is going back too.
1953 - Stalin died, Soviet tanks put down revolting East Germans, the CIA plotted an Iranian coup and Castro kicked started the Cuban revolution. Will 2010 become the new 1953?
A couple of years ago I predicted the Euro would have a sticky end and today we have a number of slow off the mark economists boasting the same prediction. Economists, Academics, Hacks and Credit Rating Agencies have one thing in common. The snail.
Of course my FX mates would love to see the Euro break up because there would be more currency business. I too would like to stop the Italians and French buying up London because the Euro is (well it was) strong against GBP. If they had their own currencies back (Frankie Lira) then us Brits would be buying up their cheap villas and palazzos as should be.
Of course this is dull. June 22 is the date we are getting excited about ...not the date England come back from the World Cup but the 25% public sector cuts and rationing of food and broadband access.
My palms are sweaty and so are those of my currency models. Not enough cuts and GBP falls; severe lock up your daughter cuts and GBP falls.
The FSA, the UK's Snail Breeders Association, has just realised that tier 1 capital is mostly sovereign debt and much of it will soon become tier junk. Another banking crisis? Quite possible. The banks are being forced to have even more capital, thanks to the G20 snails, and this risky debt will be offloaded for less than they paid. You see, someone has to pay off debt eventually. Writing off debt is not really feasible (although with todays twitter generation running the world, memories are short) but there is a solution. A new world currency.
Fintag Bank (it doesn't need a license in Fintag Land where there is no regulator) will create a currency. It maybe stones, shells, condoms, gold paper, who knows. Ideas welcome.
Snails Predict End Of Euro (times)
Hungary Denies Revolution (ft)
G20 Sort Out Capital Requirements: More Sovereign Debt (wallstreetjournal)
TSB HBOS Fight (times)
Banking Levy Dropped (ft)
Obama to go the way of UBS.
Friday, June 4, 2010
Whether its gorgeous george in accounts, oil in the works at BP or Bebo selling out to some money launderers, hedge funds are in a betting mood.
The Euro is a short, Europeans are too short and BP is short of credit ratings but worst of all Foxconn iPad makers are short of goodwill and the meaning of life.
Useless UK Ready To Throw The Towel In (telegraph)
Cable Cobbles Corporate Cupcakes (telegraph)
Traders Read Hedge Funds For Dummies (ftalphaville)
Clueless JP Morgan Compensates for Comingling Client Cash (cityam)
CRAs Claim Bosses were Gorgeous Bullies (independent)
Gorgeous Woman Revealed As Man (dealbreaker)
GLG and Man struggling to get on.
Thursday, June 3, 2010
It always takes a disaster or two to change the way we do things. California was the state that forced car manufacturers into producing fuel efficient hybrids and it looks like BP will stop us being so dependent on oil to produce useless things like iPads and machine gun bullets.
So cutting to the chase. BP is cheap. So cheap it could be taken over by Google. It won't go bust because it has so much cash, and a hefty fine will have little impact. It might get bought out; or as usually happens it will change its name to Sunflower Enterprises or Obamas Nobush to help us forget about its evil past.
The hypocrisy is outrageous. BP had an accident. But as pollution goes this is nothing like Saddam setting fire to the Kuwait oil rigs in the early 90s. Bush may have been an idiot but not as much as Obama who has forgotten that an American company killed 167 people on a UK oil rig during Thatcher's reign and she never said an anti-American word. Accidents do happen. Lawyers are good at analysis and coming up with solutions but are not designed to deliver anything but a few good words. Obama is such a man and his continual blaming and moaning makes him look weak and pathetic as I always knew he was. Good news for those buying BP when its on its knees though. Bad news for a Capitalist country run by a Socialist wordsmith.
NT HFM PMS NEWCITS (emii)
Bank Default Swaps Rise (bloomberg)
Third Man Haunts AIFM (hedgefundsreview)
Bored Hedgie To Give Up (finalternatives/vanityfair)
BP Worth A Punt (independent)
BP Blghts Florida Real Estate (hf-implode)
Credit Rating Agencies Given Buffet Job (bbc)
Peter Pockets Packets (hitc)
Scottish Curry (dealbook)
BP (British Petroleum) to be nationalized by the US government.
Wednesday, June 2, 2010
The elephants are out following each other into the mud. The news of the Gores going their own way, BP going down the pan and Hippies being beaten up by gun wielding soldiers defending themselves against iron bar wielding Hippies, the markets were markedly down.
As I have said repeatedly, most market participants follow the trends and have no real idea or for that matter any time to actually work out what the true value of anything is. Following people is so much easier than leading.
No need to look for advice from me because I am as confused as ever. Shorting oil, commodities and inflation? Going long Cuckoo Clocks, Hybrids and oil dispersing chemicals?
Take the easy option and sit on USD/EUR and enjoy the summer.
An Inconvenient Truth (bloomberg)
US To Sue The UK (newyorktimes)
Euro Caught Up In Oil, Gaza and Gore Blimey Love Triangle (reuters)
Walcott Wonders Why, What and When? (bbc)
Derivatives Taken Off MBA Courses (hedgeweek)
Euro Is Dead (wallstreetjournal)
Swiss Drop Rates To Attract Tax Savers (bloomberg)
Companies with the word British to go bust by end of year ...BP ...BA ...
Tuesday, June 1, 2010
So we all love Apple. Microsoft is the new IBM all thanks to iThis and iThat.
My iThing broke at the weekend and I was unsuccessful in repairing it. Apple are masters of waste and pollution and forced obsolescence. Read this Guardian article and think again before you buy that next iPlop.
Communist China Closed (bloomberg)
Hedgies To Be Shot On Sight (Again) (telegraph)
Gas Guzzling Gooners (bloomberg)
Banks and Countries are Doomed (finfacts)
iThings Sell Lots (cityam)
Google Has Had Enough Of The Blue Screen Of Death (financialtimes)
Hedge Funds Forget How To Short (Again) (bloomberg)
Yawn To The Lewis Short (allaboutalpha)
House Hounds Hedgies (newyorktimes)
NewCits, Conceits and YouHaveBeenFramed (allaboutalpha)
German President Jumps On Sword (bloomberg)
Apple to be the new Microsoft and Google the new Apple.
One day we will never work for ourselves: