28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
It was a nice day for flying on Saturday. My personal check in assistant told me to enjoy my flight; the cool black and grey cabin crew attended to my every need on the day time trip across the big pond; I enjoyed the privacy of being on a plane with only 48 seats and the nice person who had collected my luggage helped me all the way to the awaiting limo (skipping the part where as usual I was treated like an illegal immigrant during the immigration process).
But that is where the good news ends. You may be enjoying your Bush sub prime bribe check today; I have just lost out.
EOS has gone bust. A nice email was sent to me over the weekend saying extra funding was not forthcoming. Despite EOS being a Goldman preferred carrier, it wasn't enough and obviously BA and Virgin turned a blind eye.
So here I am stuck in foggy New York reading about gas rationing in the UK; another big company escaping tax-heavy Brown Britain; my oil prediction looking very low end and HBOS coming out with a rights issue that we didn't see coming.
And reading about hedge funds doing ok and not doing ok.
EOS BANKRUPTCY FILING SIGNALS END TO CHEAP EXECUTIVE TRAVEL
Eos, the premium airline that flew between London and New York, filed for Chapter 11 bankruptcy protection last night, a move that appeared to signal the end of cut-price executive-only flights across the Atlantic.
The American carrier's flights were suspended last night, leaving hundreds of passengers stranded at Stan-sted and John F Kennedy airports.
The grounding of Eos follows the collapse of Maxjet last December and the announcement that Silverjet, which operates from Luton, is seeking a bailout from new investors. L'Avion, which flies from Paris to New York, is also thought to be struggling. Last night it emerged that mainstream carrier Continental Airlines had withdrawn from merger talks with United Airlines amid concerns about United's financial health in the face of high oil prices. Continental is now focused on a possible alliance with British Airways and American Airlines.
All four of the pure business class airlines were launched over the past couple of years to take advantage of a boom in business-class travel between Europe and the United States. They hoped to take on the established transatlantic carriers such as British Airways and Virgin by offering services tailored to business-class travellers.
Fintag says Thanks a bunch. Now I will have to hope Silverjet doesn't go down too as flying on big planes with the great unwashed fills my heart with fear.
UNITED BUSINESS MEDIA, the trade publisher and events organiser, is considering a move to Ireland to escape Britain's tax regime.
UBM, publisher of Property Week, will clarify its intentions to the stock market this week, CityA.M. understands. If it does decide to go, UBM — which is a FTSE 250 company employing about 5,000 people — would be delivering a serious blow to the UK's tax authorities.
Earlier this month, CityA.M. revealed that drugs giant Shire would be relocating to Ireland for tax purposes. Shire is the first FTSE 100 company to do this and tax experts warned its move might prompt others to follow.
Ireland offers a corporation tax rate of 12.5 per cent compared to Britain's 28 per cent. About 85 per cent of UBM's revenues are generated by its overseas subsidiaries and therefore not eligible for Ireland's low corporation tax rate.
However, it is understood the company's board is considering the move because the company would still benefit from Ireland's simpler tax regime.
Experts warn many companies are considering relocating because of concerns about the outcome of a government review on the taxation of British companies' foreign profits.
Consultation is under way and a decision is expected in the summer. Corporate Britain is worried that it could end up paying higher tax on its foreign profits than it currently does.
Fintag says Looks like I have escaped the UK by accident. As I was twittering yesterday, life is currently tough in the USA but as least it has kept its taxes predictable. High and mighty.
Why has the UK become a tax unfriendly state?
Perhaps this picture explains (sorry for text vision readers but its is pretty lame anyway) why:
CREDIT CRISIS MAY BE ABATING BUT HOUSE PROPERTY DOWNTURN IN US AND UK MAY LAST MORE THAN SIX YEARS
Credit Crisis:Across Wall Street, the turmoil that for months racked bond and stock markets now shows signs of abating, a signal, albeit tentative, that the worst of the credit crisis might be passing. But the last house property downturn in the US and the UK lasted some six years and it is claimed that this time, this is more like a best-case scenario.
The Wall Street Journal says today that the past two weeks have brought dramatic reversals in a range of markets, including several where investors had been seeking safety. If sustained, the change in sentiment could mark an important early step in what is likely to be a long healing process for financial markets and the economy.
Prices for low-risk Treasury bonds have dropped sharply and their yields have risen, a sign that investors' deep sense of risk aversion might be waning. Gold prices, which had surged to a record high north of $1,000 an ounce, have dropped below $900.
Fintag says This is a little optimistic. The UK has nearly 2 million households with less than 20% equity. If prices fall by 15%, the lenders will start to panic and foreclosures with go through the roof [Editor: Nice pun]. Of course Gordon Brown will bail all the reckless borrowers out there and keep them alive with my hard earned taxes.
If only the rich were applauded. I should be given check rebates for NOT being a debt infested societal leach.
As usual the poor benefit and the [Editor: What the @@@@ are you talking about?]
Brevan Howard Asset Management LLP said on Monday that it will go ahead with the second listing of a fund of hedge funds feeder fund, planning to raise about $500 million.
BH Global Ltd. will invest solely in the Brevan Howard Global Opportunities Master Fund Ltd, which will invest in a number of Brevan Howard's hedge funds.
Up to 40 percent of the assets of this fund will be invested in the firm's flagship global macro hedge fund, the Brevan Howard Master Fund, with the balance being invested across the Brevan Howard Equity Strategies Master Fund, the Brevan Howard Asia Master Fund, the Brevan Howard Emerging Markets Strategies Master Fund and the Brevan Howard Strategic Opportunities Fund.
In March 2007 the firm raised 770 million euros - well below the initial target of 1 billion euros - from the listing of BH Macro Ltd, the first hedge fund feeder to list on the London Stock Exchange
Fintag says Good to see the big boys growing up even more.
Or perhaps not ...
forbes says " BlackRock misses $500 mln target for fund of hedge funds feeder vehicle "
financial news says " Jefferies cuts back on hedge fund investments "
The board of HBOS, Britain's fifth biggest bank, is to hold last-minute talks on whether to stage a rights issue, in a fund-raising effort that could seek as much as £4bn from shareholders.
HBOS's directors, led by the chairman, Lord Stevenson, and the chief executive, Andy Hornby, will make a final decision on a rights issue today, ahead of the trading update that the bank will publish tomorrow morning prior to its annual general meeting, which begins at lunch-time in Glasgow.
On the face of it, HBOS has no pressing need for a rights issue, enjoying a greater degree of capital strength than many of its rivals. It core tier-one equity ratio is 5.7 per cent, significantly above the equivalent figure of 5.1 per cent at Barclays, which last week ruled out holding a rights issue in the near future.
The figure at Royal Bank of Scotland is about 4 per cent, though the bank hopes to push its ratio closer to 6 per cent following a £12bn rights issue announced earlier this month, as well as asset sales.
Fintag says So they don't need to do a Rights Issue but are doing one anyway? HBOS has the UK's largest residential property portfolio. Looks like this capital will be needed to ride the storm over the next 6 years.
independent says " House price inflation hits 'negative' as over half of properties lose value "
Hedge fund managers in danger of missing out on lucrative performance fees routinely raise their exposure to risk in a gamble to meet their performance targets, according to new research.
The study* raises questions as to whether hedge fund managers are acting in the best interests of their investors - who may want a consistent approach to risk - or are more interested in maximising their own bonuses.
"The investor wants them [hedge fund managers] to carry on doing what they mandated them to do from day one. Maybe performance fees don't provide the right incentives," said Nick Motson, one of the authors of the report. "The initial finding was this does not look good."
Christopher Peel, chief executive of Blacksquare Capital, a fund of hedge funds manager, added: "I want to see managers consistently running risk throughout the year in accordance with the opportunity subset."
Mr Motson and Andrew Clare, both of Cass Business School in London, and Chris Brooks of the University of Reading, analysed the Cass database of 2,800 hedge funds, which typically will be remunerated with a 20 per cent performance fee on top of an annual fee of 2 per cent of assets under management.
Fintag says These academics have no idea how hedge fund investing works. The fees that we purportedly get is not true. The rebates we hand out to investors and other leaches often leaves us with barely enough to be incentivised to outperform.
We live on the edge of failure everyday. Unlike being on the prop desk of an investment bank where the worst is you lose your job for a bad trade, hedge fund managers lose their lives. We look after our investors. Investment Banks treat their shareholders with contempt. [Editor: Where is this going?]
ohn Meriwether, founder of the hedge fund Long-Term Capital Management which imploded at the end of the 90s, has run into trouble with his latest business.
His current hedge fund, JWM Partners, gave investors in its JWM Global Macro fund the option of withdrawing money ahead of the redemption period after it fell in value by 14% in the first three months of the year. According to the magazine Hedge Fund Manager Week, principals at the fund contacted investors last week, giving them the option of pulling out cash.
The firm's leading product, Relative Value Opportunity fund, fell by 31% in the first quarter of the year.
Fintag says How can the guy be a guru? He is a very rich loser.
Greg Coffey, one of the hedge fund industry's top performers with a pay packet to match, looks set to start his own hedge fund firm when he leaves GLG Partners in October.
Coffey, who finally resigned last week -- forfeiting a bonus reportedly worth around $250 million (125 million pounds) -- after last-minute talks with GLG about his future, has delivered performance in his specialist area of emerging markets that many managers can only dream of.
"He's regarded by colleagues and peers as one of the most successful managers in that space," said one hedge fund executive, who asked not to be named because he had worked alongside Coffey in recent years.
The 37-year-old Australian, who joined GLG in 2003 from a hedge fund backed by industry legend George Soros and now runs more than $7 billion of the New York-listed company's $24.6 billion of assets, won the Fund of the Year award at the EuroHedge Awards for 2007 for his GLG Emerging Markets fund.
Fintag says As someone commented last week, its a bit like watching a soap opera entitled glg-enders.
Rumors (which will turn into fact as I am rarely wrong; and dislike spreading false ones as you get fined millions and go to prison) are a number of glg staff are going with him but Manny Roman is giving them interim bonuses and guarantees not to go. The problem with 1 Curzon Street is its in the UK and is like working in a battery farm.
I'm always amazed at how naive academics are about the real world of trading and investing.
Aside from such obvious delusions as the assertion that markets are efficient, they seem to have no real grasp of the human side of the business and its impact on investment decision-making.
Anybody who has ever traded for a living, or who has worked in close proximity to those do, will tell you that people who are losing money invariably have the urge to go for broke, and those who are underperforming targets will want to take on more risk, when some sort of deadline -- bonus time, the end of an evaluation period, a prospective margin call, you name it -- is approaching.
Not everyone yields to these feelings, of course, but skewed incentives -- like when the upside is unlimited but the downside is not -- boosts the odds that they will do what underlying investors and risk managers fear most....
Fintag says Another spot on analysis.
And here is another that looks at why we were right to blame the CRA's for the credit crunch:
1) Leach: To remove soluble or other constituents from by the action of a percolating liquid. 2) Leech: A person who clings to another for personal gain, esp. without giving anything in return, and usually with the implication or effect of exhausting the other's resources; parasite.
I assume you mean (2)
28 Apr 08 - 13:36 gmt
SoapWatcher said ...
I was quoted on fintag. Wow. I've arrived.
28 Apr 08 - 16:28 gmt
ozgerbobble said ...
Are you on the run Finbar? Surely Manny hasn't sent the bad men after you has he?
28 Apr 08 - 17:26 gmt
Finbar said ...
the letter from the "i" man of glg has yet to arrive. I think he has more fundamental issues like keeping his [Editor:Really?] hedge fund together ...
Leach or Leach - its a typo ...
28 Apr 08 - 20:44 gmt
mrktwiz said ...
EOS folded....I so find that amusing..whatever will Finbar do(?) Ride with the unwashed masses HAHAHAH.....so amusing thank you Fin...this is the best birthday present today, yo umade this unemployed investment banker laugh.....see you in business class (wink).
29 Apr 08 - 00:21 gmt
anonymous said ...
Enjoy your fortune telling.
Sincerely,
Adrian Burridge CanadianInvestors
29 Apr 08 - 00:26 gmt
unwashedheathen said ...
how is the london underground going to cope when all you city folk can no longer get taxi's..?
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