30SEP08:
31DEC08 INDICES:
FTSE100:3550
DOW30:7550
# HEDGE FUNDS:4425 30JUN08: Oil to be USD200 by 30OCT08 USA Inflation to be 7.5% by 30OCT08
...oops 23APR08:
Next Rights Issue:
HBOS...yes
All & Lec ...
...1 Nil. 17APR08: Oil to be USD127 by 30SEP08
...16MAY08 losing my touch 27FEB08:
2 Banks go bust by 30JUN08
BS down, Lehman (a bit late I know) 20NOV07: Northern Crock to be sold for 15p
Nationalized 01NOV07: Oil to be USD103 EOM
...peaked too soon 08OCT07:
SEC to fine Goldman for pricing issues
...still waiting 15JUN07: ML to buy-out BS
JPM got there first 06JUN07: The Big Crash: 17OCT07
...well it's here
As you know I suffer panic attacks when I hear the word Starbucks. The business model is a symptom of our recent times. The prices are high, you have to line up behind back packers and the overly cheery customer relations officer confuses you with a wealth of choice. Then you line up again for the bun fight of collecting the right frothy coffee, "yours has the word L written on the side of it", as the back packers steal your straight forward no frills coffee and you have to complain as to where yours is. And then there are the pushchairs to navigate as you fight to find a table that was last cleaned in 2006 for the pleasure of sitting on a half eaten pastry. You burn your lips, struggle to slurp through the froth before realising you have been sold a pup as there is caffeine. The wi-fi cuts out, the music sucks and you wonder why on earth you bothered.
A bit like investing in hedge funds. We make it very difficult for you to invest because we want to choose our investors. Well that is how it used to be. Now, just like Starbucks we will take in any old tom dick and harry. [Editor: Good morning to you too.]
New business ideas are what keep us all interested in the markets. So when the new idea is the market itself, we stand up to attention. Take Turquiose. We had Jiway in the dotcom boom and it fell at the wayside. Today we have a new and better version. Fingers crossed this will work and the transaction costs will be considerably less than the greedy exchanges we have now charge.
Today we look at handbags, tents and qualifications.
Turquoise, the highly-anticipated trading system sponsored by nine of the biggest equities houses, went live in a "soft launch" this morning when it opened for trading in 10 of the most liquid British and German stocks. The platform began trading at 07:00 GMT.
Ashok Krishnan, managing director of electronic trading at Merrill Lynch, which has completed testing for the new platform, said: "This is a significant milestone, a real-life soft launch.
Billionaire Nelson Peltz and his Trian hedge-fund group sold its stake in Starbucks Corp. and added shares of Hansen Natural Corp., sending the maker of Monster Energy drink up 11 percent in Nasdaq trading.
Peltz acquired shares of Hansen and retailer Target Corp. as of June 30, according to filings yesterday by Peltz's funds with the US Securities and Exchange Commission. He also added shares of tobacco companies UST Inc., Philip Morris International Inc. and Lorillard Inc. Trian spokeswoman Carrie Bloom declined to comment beyond the filing.
Fintag says Another person who lined up and then left in frustration.
Up to 300,000 workers will lose their jobs by 2011, pushing the number of people out of work close to 2 million, a leading business group says today.
The British Chambers of Commerce, which becomes the first business group to forecast that Britain would fall into recession, predicts that the economic slump will force unemployment to soar by between 250,000 and 300,000 in the next two to three years, adding that total unemployment of more than 2 million could not be ruled out. This would take unemployment to the same level as the year that Labour came to power.
Fintag says "All this talk of recession is getting me down my love..." Sounds like a song. As you know us Brits maybe gloating over a few Gold Medals, thanks to the Lottery and John Major, but deep down we are masking a fear of desperation. The GBP is now showing its true colors.
Of course since nearly all UK based hedge funds are based in USD, we are happy bunnies.
While layoffs throughout the financial services industry are hitting headings, hedge funds have been bucking the trend, along with asset management.
According to research by eFinancialCareers, total US job postings for hedge funds grew 38% between the second quarter of 2007 and same period in 2008 compared to 10% for asset management. Applications for hedge funds grew an impressive 135% over the period with private banking and wealth management in second place with 116% and asset management coming fourth with only 81% growth.
There has been speculation but we can now offer you statistics that look back on the last few months which prove the demand for folks on the buy-side.
To give a more accurate view of growth over time eFinancialCareers uses quarterly averages rather than monthly. This shows live job postings and applications that professionals have sent in for jobs listed on the eFinancialCareers website.
Fintag says That is because hedge funds are turning into the new Investment Banks.
Students can receive qualifications for almost anything, be it a "maple syrup" course at New York's Alfred University or "cyberfeminism" at Cornell. Basic economics teaches that so long as there is demand and resources, supply will shortly follow.
Richard Wilson, founder of the Hedge Fund Group, a professional networking organisation, witnessed a demand for a programme dedicated to the study of hedge funds. This discovery led to the Chartered Hedge Fund Association Designate initiative.
Mr Wilson previously worked for a currency and commodity hedge fund and a fund of funds in South Africa before joining a hedge fund marketing firm. The charter he has helped create is a programme designed to prepare students for life in a hedge fund. "It will also save two-thirds of training on the job and enable them to walk right in and know what is going on," says Mr Wilson.
Fintag says Richard Wilson is very nice guy. I read his daily blog / news service on hedge funds and it is by far the best out there. It is free and unlike the other old school suppliers, Albourne, Hedge Week and Opalesque, he provides fascinating insights, articles and news stories that make fintag look like old hat. If only he would marry me [Editor: eh?] ...no seriously please subscribe to his service. As for a qualification, I watch with interest.
The CFA is so over rated it is beyond me.
DOLLAR SURGE WILL NOT STOP AMERICA FEELING THE EFFECTS OF A GLOBAL CRUNCH
Two alerts landed on my desk this weekend from the elite markets team at Goldman Sachs. One was entitled "The Dollar Has Bottomed!". Those betting on an imminent disintegration of American economic and political power may have to wait another cycle. Rival hegemons are falling like ninepins.
The US dollar index hit an all-time low in March. It crept slowly upwards in the early summer before smashing through layers of resistance over the past month.
The surge against sterling, the euro, the Swiss franc and the Australian dollar is one of the most spectacular currency shifts in half a century. "Something fundamental has changed," said the bank. Indeed.
US industry is now super-competitive, if small. Mid East funds are drawing up shopping lists of Wall Street takeover targets. Airbus and Volkswagen are shifting plant to America to escape crushing labour costs.
US exports have risen 22pc over the past year, outstripping Chinese growth. The US non-oil trade deficit has shrunk by two fifths since 2002. It is now running at $300bn a year. This is 2.1pc of GDP.
Fintag says Of course Europe and the UK are in a big mess and about 12 months behind the USA. But as to why the USD is getting strong again, it is because you know what you get. The Euro is a fingers crossed and hope it stays up before I die currency. As for the GBP, I have been shorting this since I was born.
But alas no green card. If only the New York Times could offer me a job as columnist. I have many passions I could write about. Fishing, electric cars and handbags.... anything really. Except Coffee shops.
Citi analyst Prasant Bhatia, who helped listed hedge fund and private equity shop Fortress Investment Group (FIG) to a 15 per cent haircut earlier this month, took another shot Friday, pointing out an entirely predictable discrepancy between what Wes Edens said back when, and what he's doing now the chips are down (see above).
Reiterating his sell recommendation, with a $9 target now only 10 per cent under Friday's close, Bhatia noted the magical disappearance of a couple of key disclosures — including total assets under management, and the investment performance of the Castle entities — while picking up subtle changes in the disclosures it did make.
Fintag says Fortress and the Emperors new clothes. I don't know why it has taken the market so long.
When U.S. Federal Reserve officials gathered for their annual conference in Jackson Hole, Wyoming, in August of last year, Bear Stearns shares were trading at well over $100. The Fed's benchmark interest rate was 5.25 percent, more than double where it stands now, and oil cost about $70 a barrel.
Twelve months later, Bear Stearns is gone, as is about $400 billion from the balance sheets of banks worldwide. The legendary oilman T. Boone Pickens thinks the days of oil under $100 a barrel may be gone, too. Looking back at the 2007 conference in Jackson Hole provides some cringe-inducing moments. In his speech at the mountain resort, Ben Bernanke, the Federal Reserve chairman, declared that the central bank was ready to act to shield the economy from the credit crisis but would not save investors who had made bad choices.
Fintag says Ben Bernanke. He doesn't say much these days because he can only raise interest rates and nobody wants to hear that. Of course, if the USD gets back to being a strong currency, coupled with low interest rates, then the man is a genius. If the historians can prove he saved the USA, then I for one, being critical of his efforts, will vote for him being the next president of the USA. Even if he has a beard.
LEHMAN FACES ANOTHER LOSS, ADDING SALT TO ITS WOUNDS
Lehman Brothers Holdings Inc. has been taking its time as it wrestles with how to escape the problems haunting the investment bank. It probably can't wait much longer.
With the end of the New York company's fiscal third quarter less than two weeks away, some analysts are girding for a loss of $1.8 billion or more, instead of the modest profit they previously expected. If the dour projections come true, Lehman's losses since the start of March would total at least $4.5 billion -- or more than the firm churned out in profit during fiscal 2007.
Fintag says Surely a mistake? I thought Lehman went bust months ago.
PROPERTY PRICES ARE SLASHED BUT SALES HEAD FOR NEW LOW
Having previously tried to resist market forces, property sellers have begun aggressively to cut the asking prices for their homes, according to the online estate agency Rightmove.
After months where asking prices moved down by much less than the actual prices agreed on property deals, householders slashed the asking price of the average British home by 2.3 per cent last month - a drop of £5,403. In London, the discounting has become even more marked, with asking prices down by 5.3 per cent last month alone, representing a reduction of £21,000 in the four weeks to 9 August, said Rightmove in its latest survey of the housing market.
Fintag says My mother, Mother Taggit was a communist. I have never mentioned this before, but I have an aversion to owning property for more than a month. That is why I turn over my funds, live in a caravan and live by the mantra that everyday is the last. Having never owned a property, yes this is true, I have no sympathy for greedy property investors although I do for families and the elderly who want a long term nest. [Editor: Is this Kabbalah speak? ]
Soft News: I am often accused of being too macho. So here is an interesting article on GLG, Fashion and Mrs Brown:
8 comments
ratfink said ...
Even the plain coffee at Starbucks sucks. The decor is midwestern Marriott. And the music, as you say, whiffs. But it was never about the coffee. It was about the crummy apartments we live in and having somewhere to sit outside of them. But even that palls. Looking forward to a nice property crash as I plan to buy Mr Mittal's new residence at .0001% of what he paid for it. And have somewhere nice at last to put my feet up.
18 Aug 08 - 07:53 gmt
anonymous said ...
Jiway - there's a blast from the past. Not for nothing did we know it as Jizzway.
18 Aug 08 - 08:01 gmt
jack oval said ...
anybody agree with the name being changed to starSucks :D, at least it would show they have a sense of humour...
18 Aug 08 - 08:46 gmt
hungry student said ...
Guys - I'm a student with one year to go - Just been looking into that Chartered Hedge Fund Associate (CHA) qualification. Any thoughts/ suggestions? Is it worth it? Thanks.
18 Aug 08 - 10:41 gmt
Fotherington Trouserblanket said ...
I say Fintag, I share your sentiments with regards to Starbucks and Backpackers. Not at all akin to those fine Mayfair joints we are accustomed to.
18 Aug 08 - 12:19 gmt
anonymous said ...
Frankly why not go the whole way and blame Starbucks for both obesity and the credit crunch...at £3 a pop with your average office worker buying three a day it's no wonder they maxed out their credit cards. And at 400 plus calories for each frappy, fatty chino thingy it's no wonder they got fat.
18 Aug 08 - 16:34 gmt
John Doe, CFA said ...
The CFA is a wonderful thing. I wish I had come up with it. I hope the CHA membership costs at least twice as much as the CFA membership. That way it will be at least twice as good. Mark-to-market all day, every day.
18 Aug 08 - 16:40 gmt
anonymous said ...
Its pretty easy for a big shot hedge fund guy like you to get a green card. There is a scheme called E-5 investor visa.....invest $500k (chump change for you) in a low income area in the US and bingo...
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Turquoise, the highly-anticipated trading system sponsored by nine of the biggest equities houses, went live in a "soft launch" this morning when it opened for trading in 10 of the most liquid British and German stocks. The platform began trading at 07:00 GMT.
Ashok Krishnan, managing director of electronic trading at Merrill Lynch, which has completed testing for the new platform, said: "This is a significant milestone, a real-life soft launch.