30JUN08:
Oil to be USD200 by 30OCT08
USA Inflation to be 7.5% by 30OCT08 23APR08:
Next Rights Issue:
HBOS...yes
All & Lec ... 17APR08: Oil to be USD127 by 30SEP08
...16MAY08 losing my touch 27FEB08:
2 Banks go bust by 30JUN08
BS down, whose next? ... 20NOV07: Northern Crock to be sold for 15p
Nationalized 01NOV07: Oil to be USD103 EOM
...peaked too soon The Big Crash: 17OCT07
...well it's here 08OCT07:
SEC to fine Goldman for pricing issues
...still waiting 15JUN07: ML to buy-out BS
JPM got there first
Yesterday I was asked to complete an FSA questionnaire regarding Market Rumors. My lawyers couldn't stop laughing and nor could I as the naive questions droned on about if we had a policy and how often was it amended and how did we react to market rumors and if we kept a log how often was it reviewed. And not once did it define what a rumor was.
And then a friend of mine who runs a corporate finance boutique (not quite as busy as he was last year) said he used to compete 1 return a year to the FSA. Now they want him to complete 20 and put then into a system called Gabriel, the cousin of Edgar I suppose, via the internet. How can they ask a Corporate Financier to use the internet? It is like asking a small child to perform a surgical operation on the brain. So now he has to hire someone to fill these forms in. His costs have gone up and all because the FSA was berated for not spotting Northern Rock.
The FSA once prided itself on Principals Based regulation. That is no longer the mantra. Today it is all about CYA. Just like a Japanese bank, they want to collect lots and lots of information. For no other reason than collecting information means they feel good about themselves and protects them with a layer of data and information for when things go wrong again.
In the UK we have this silly trading tax called stamp duty. So we invented a derivative called a CFD to avoid paying this tax. Now the FSA have decided to get us to disclose significant holdings in CFD's. Not that I think this is a problem as we have to disclose significant long positions, it is the tax that still irks.
I can see the FSA are trying to see what the hedge funds are shorting so that they can monitor financial institutions that hedge funds see as being in trouble. Well they don't need to see what we are shorting. Look at the stocks that are falling. The markets usually do a good job in telling which stocks have a high probability of failure because hedge funds represent about 60% of all market trading!
In the mean time Bradford & Bingley and HBOS are truly in big trouble. Almost bankrupt. Why aren't the FSA doing something about this? This is of course my rumor. I am a rumor mongerer. We all are. This is how the markets work. Facts and Press Releases do not tell you the full picture. Just follow the trials and tribulations of UBS or Citi to see for yourself.
Now as I am telling you my opinion, this must be an unsubstantiated rumor and needs to be collaborated with extensive research and then under the next FSA knee jerk proposal disclosed to the FSA.
By this time next year, all hedge funds (why not Goldman or JP Morgan who have enormous prop desks) will be posting their positions, their google searches and a log of every time they went to the bathroom onto their websites. What next? Hedge Fund managers with facebook accounts?
I always wondered what it must be like living under communism.
July 4 is the day that Capitalism died.
Today we look at a hedgie who couldn't face another night in a tent and handed himself in. Oil bubbles nicely to new highs and the UK's largest house builder is refused an overdraft increase. We also look at crooks.
My laptop has finally died and this letter is very brief. Sorry about that. Something to do with my service pack not being compatible with my virus scanner. I must get a mac ...
New Readers Just to let you know I type this up in 45 minutes. If it takes longer I stop. For those wanting to subscribe, and yesterday I got quite a few mail from JP Morgan, please do so via the website.
The success of Curzon Street has been quite overwhelming. A number of you have asked to be extras which is very flattering. I have no idea why there is so much interest but the credit must go to some of readers who thought of the idea. Next I need a theme tune ...
Deutsche Bank this morning moved to put an end to speculation that it will need to raise additional capital, confirming it expects to report a profitable second quarter at the end of the month, after bank stocks have come under further pressure in recent weeks on concerns the balance sheet repair cycle is not yet over.
The bank also said it expects its tier-one ratio, a regulatory measure of its financial strength, to remain around 9%.
Fintag says This is either very exciting news or a load of lies. Take your pick.
FSA TO BLOCK COVERT STAKES BY IMPOSING DERIVATIVES DISCLOSURE
Hedge funds will no longer be able to build secret stakes in companies after the UK Financial Services Authority announced it would introduce unexpectedly strict rules on the disclosure of derivatives.
The regulator said big holdings through contracts for difference - which give investors economic exposure to share price moves but no voting rights - should be disclosed as if they were shares.
The move comes amid an international shift towards more transparency for derivatives, after a series of cases of activist hedge funds and companies planning to bid for rivals have used CFDs to take big holdings by stealth.
Fintag says To save the FSA a lot of hassle, I have emailed them my windows logon and password.
In the meantime, my lawyers are looking at moving us to Singapore. Looks like we are back on again.
A hedge fund swindler who set off a national manhunt when he faked his suicide to avoid reporting to prison rode his scooter to a small-town police station in Massachusetts on Wednesday and turned himself in while talking to his mother on his cell phone.
Authorities say Samuel Israel III showed up at the police station in Southwick at about 9:15 a.m., after hiding out for the last three weeks in his RV. The U.S. Marshals Service had been in touch with the mother for several days as the feds zeroed in on her fugitive son.
''Obviously, she probably had some kind of influence, which mothers usually do,'' said Frank Dawson, public information officer for the U.S. Marshals Service in Boston. ''He knew they were getting close to him, so he probably did the right thing.''
Former Refco chief executive officer Phillip R. Bennett gets his at 11 am this morning, when he appears before US District Court Judge Naomi Reice Buchwald for sentencing on charges related to his role in the Oct. 2005 collapse of the futures brokerage and crime syndicate. While theoretically eligible for a sentence of 315 years and a $2.4 billion restitution order, the kindly folks at the Probation Service are recommending 20 years for the 58-year-old.
Fintag says If anyone should have done a runner it was this guy. Unlike Plusfunds' Chris Sugrue, his partner in crime, who has landed up in Angola (FBI take note), the British villain of Bennett will be given thousands of years. Mind you I don't think Angola is particularly nice at any time of the year.
dealbreaker says " How To Tip Off DealBreaker: A User's Guide "
EUROPEAN CENTRAL BANK TO RAISE BENCHMARK INTEREST RATE TO 4.25%
The European Central Bank Governing Council at a meeting in Frankfurt today, is expected to raise the ECB's benchmark interest rate to 4.25%.
In June, ECB President Jean-Claude Trichet warned that the central bank was in a "state of heightened alertness" in its battle against inflation and said that the Governing Council could possibly agree to a "small" rate increase at today's meeting. In the interval, inflation has accelerated to 4% - the fastest in 16 years and double the bank's target. On Wednesday, it was reported that producer prices had risen at an annual rate of 7.2% in May.
Fintag says Take note Ben Bernanke (who has gone very quiet recently....)
Philippe Jabre is not a man a company wants shorting its stock. Yesterday the former star GLG hedge fund manager revealed that he had a £37 million bet that shares in HBOS would fall even further, having already lost 75 per cent of their value in the past nine months.
When the market closed it appeared that he was already on the money: shares in HBOS closed down almost 3 per cent at 261p each, well below the bank's rights issue subscription price of 275p.
That is exactly the kind of bet that the Financial Services Authority (FSA) is trying to deter. Jabre Capital Partners announced to the stock exchange that it had a short position on 0.27 per cent of HBOS only because new FSA rules force investors shorting more than 0.25 per cent of a company in a rights issue situation to reveal their hand.
Fintag says And talking of crooks ...
15 comments
anonymous said ...
Fin - Bit of a rant today!
03 Jul 08 - 09:21 gmt
GalwayBoy said ...
I thought REFCO were always known as the Mafia's brokers. Surely now is the time to sing like a canary about all his accomplices
03 Jul 08 - 09:35 gmt
anonymous said ...
Could we add the HFWG to Curzon st as a sort of annoying 'local council' trying to legislate every part of our working life.....
03 Jul 08 - 10:01 gmt
Finbar said ...
Yes, and you have to pay to join HFWG too. Who would want to do that?
03 Jul 08 - 10:10 gmt
anonymous said ...
Hadnt thought of that. At least the council doesnt charge £25k for collecting your bins........
03 Jul 08 - 10:17 gmt
MacroHedgeBoy said ...
the FSA is great. lets collect loads of information because it makes us feel as if we are in control. And the fact that most of the staff have been there for about 5 minutes really helps them carry out their role
03 Jul 08 - 10:23 gmt
Moron said ...
we are going to get another bear market rally soon...will be a good rally.....but still just a bear market rally....
03 Jul 08 - 11:53 gmt
anonymous said ...
word on the street - ubs is the next to go... any thoughts? old paine webber business is thought to being bought by barcap. investment banking closed down.
03 Jul 08 - 12:17 gmt
anonymous said ...
I thought barclays were about to buy a fund of hedge fund business....must have deep pockets..(?!?)
03 Jul 08 - 12:20 gmt
anonymous said ...
well the old paine webber is now wealth management, prime brokerage etc (yes?) so that would be an interesting move. if ubs is in as bad straights as i'm led to believe it could be a bargain for barcap. but god know everything is such a mess.
03 Jul 08 - 12:25 gmt
anonymous said ...
Sir Andrew Massive to come into Curzon Street then?
03 Jul 08 - 13:12 gmt
HJ said ...
Yupp come down to Singapore...its just no fuss here
03 Jul 08 - 14:46 gmt
anonymous said ...
Sorry - but Hong Kong is a much better Asian destination for hedge funds. Singapore regulation is lighter, but Hong Kong is a better place to live
03 Jul 08 - 15:11 gmt
GalwayBoy said ...
So, Paul Findley has left Threadneedle. Has he fallen victim to the Eurohedge curse? He stood in for Coffey at their conference in Paris didnt he?
03 Jul 08 - 16:17 gmt
Geeklawyer said ...
" Yesterday I was asked to complete an FSA questionnaire regarding Market Rumors. My lawyers couldn't stop laughing and nor could I as the naive questions droned on"
Congratulations on finding lawyers who can laugh. We are a rare breed. Unless it was a laugh of pain, or slightly mad cackling.
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Deutsche Bank this morning moved to put an end to speculation that it will need to raise additional capital, confirming it expects to report a profitable second quarter at the end of the month, after bank stocks have come under further pressure in recent weeks on concerns the balance sheet repair cycle is not yet over.
The bank also said it expects its tier-one ratio, a regulatory measure of its financial strength, to remain around 9%.