News Posts

Hedge Fund Performance in 2011 Not All Lemons

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Hedge Fund Performance in 2011 Not All Lemons Chase Coleman Hedge fund may have had a tough year, on average – Amid political uncertainty, the debt-ceiling debate in Congress and mounting fears of a European financial crisis, the Eurekahedge index, which measures average returns, dropped 4.1 percent for the year – but that is just an average. For every hedge fund that lost over 50%, like John Paulson’s Paulson & Co., there is another one that had returns in the upper double digits. Chase Coleman’s Tiger Global Management had a stellar year, posting a 45% gain through mid-December, reports Barrons. Carl Icahn … Read more

Bubble Meter: Zillow CEO on housing market

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Zillow CEO Spencer Rascoff on housing market.. Link here. Recap: Zillow’s data suggests that, while down 29% as a nation, home values haven’t bottomed out quite yet: Another 3-5% decrease in values can be expected based on foreclosure back logs, this decline will most likely be spread out over the course of 2012. While shadow inventory is dwindling due to the majority of 2005-2007 loans that ran the risk of default having done so, a slow and relatively jobless recovery will continue to put a damper on home demand further restrict appreciation. After a 3-5% reduction, home values are expected … Read more

The Mafia Is Now “‘s Largest Bank”| ZeroHedge

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The Mafia Is Now “Italy’s Largest Bank” Whoever says there are no winners in the European banking crisis apparently has never woken up with a horse’s head in their bed. According to a new report by Italian anti-crime group SOS Impresa, as reported by Reuters, “Organised crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest “bank” and squeezing the life out of thousands of small firms, according to a report on Tuesday.” You mean kinda like Intesa credit cards demanding a 39.95% APR: we knew we had seen that “life … Read more

‘s Only Wednesday: Urban Outfitters, WebMD, The White House, Swiss National Bank, and Italy

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Out of the markets and into the midst of  both earnings and elections seasons, volatility seems here to stay.  Here’s a quick recap of the most recent turnovers in the headlines the past few days, gathered from.. well, everywhere.   Clothing retailer Urban Outfitters Inc. said its Chief Executive Glen Senk resigned: The company named Chairman and co-founder Richard Hayne as his replacement.  Shares of the company fell 12 percent after the bell. They closed at $29.41 on Tuesday on the Nasdaq.via Urban Outfitters CEO resigns | Reuters. WebMD Chief Executive resigns: INDIANAPOLIS (AP) — WebMD Health Corp. CEO Wayne T. … Read more

Promising USA Employment Data

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US employers added 103,000 jobs in September, a modest burst of hiring after a sluggish summer. Still, job growth remains too weak to lower the unemployment rate, which stayed at 9.1 percent for the third straight month. The US Labor Department also said Friday that it has revised the previous two months to show that companies hired at a stronger pace than first estimated. Employers have added an average of only 72,000 jobs in the past five months. The economy must create about twice as many consistently just to keep up with population growth. Nearly half of the gains last … Read more

Occupy Wall St, the start of a new protest era?

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(Reuters) – When Paul Friedman met the rag-tag youth camped out near Wall Street to protest inequality in the American economy, he felt he was witnessing the start of a protest movement not seen in America since the 1960s. And Friedman should know. The 64-year-old was a student organizer during the anti-Vietnam War movement, protesting from 1964 for 11 years until the war ended. He also joined Civil Rights actions against racial segregation in America. On Wednesday, as thousands of union workers marched to show solidarity with the movement called Occupy Wall Street, he walked shoulder-to-shoulder with dreadlocked college dropouts, unemployed … Read more

Fitch cuts Italy, Spain ratings, outlook negative

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(Reuters) – Fitch on Friday cut Italy’s sovereign credit rating by one notch and Spain’s by two, citing a worsening of the euro zone debt crisis and a risk of fiscal slippage in both countries. Fitch cut Italy’s rating to A+ from AA- and lowered Spain to AA- from AA+. It kept both countries, respectively the third and fourth largest in the euro zone, on a negative outlook suggesting further downgrades could come in future. Italy and Spain are embroiled in the region’s debt crisis and are reliant on the European Central Bank to buy their government bonds to prevent yields rising to … Read more

Businomics Blog: How Are Consumers Able to Keep Spending?

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How Are Consumers Able to Keep Spending? Yep, consumers continue not only to spend, but to increase their spending in most months. Here’s the latest data: Over the past 12 months, total consumer spending has increased 4.5 percent. I hear people say that consumers are maxed out on credit, no longer can dip into housing equity, and don’t have jobs. So how can they spend? Keep in mind, first of all, that our 9.1 percent unemployment rate works out to a 90.1 percent employment rate. Double check my math if you like. via Businomics Blog: How Are Consumers Able to … Read more

| Reuters

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Wall Street ends worst quarter since 2008 meltdown By Edward Krudy NEW YORK | Fri Sep 30, 2011 4:36pm EDT (Reuters) – Stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe’s debt debacle, a U.S. credit downgrade and a sputtering global economy. A steep slide on Friday closed out a fifth month of losses as weak economic data from China sparked fears of a global economic slowdown while investment bank Morgan Stanley plummeted on concerns about its exposure to European banks. The S&P 500 index has lost more than 14 percent this quarter … Read more

Pivot Point: Investors Lose Faith in Stocks – WSJ.com

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In a historic retreat, investors world-wide during the three months through August pulled some $92 billion out of stock funds in the developed markets, according to data provider EPFR Global—an exodus that more than reversed the total amount of money investors had put into those funds since stocks bottomed in 2009. The withdrawals matched the worst three-month period during the depths of the financial crisis.   I’m sure you read the same news that I read.  I came across this very gloomy headline, one of many this weekend.  Is this a contrary indicator? via Pivot Point: Investors Lose Faith in … Read more

G.O.P. Urges No Further Fed Stimulus – NYTimes.com

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This kind of interference with a sane independent body as important as the Fed is a very bad sign IMHO.   G.O.P. Urges No Further Fed Stimulus By CATHERINE RAMPELL Published: September 21, 2011   Even though the financial markets have been counting on the Federal Reserve to take action, Republican Congressional leadership sent a letter to the Federal Reserve chairman on Tuesday evening urging it not to engage in further stimulus. Chip Somodevilla/Getty Images Ben Bernanke, the chairman of the Fed, which is expected to lower long-term rates. The letter was sent in the midst of a two-day meeting … Read more

Hedge-Fund Manager John Paulson Still a Bull After His Bare Year – WSJ.com

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By GREGORY ZUCKERMAN And STEVE EDER John Paulson stepped away from his desk to greet a group of clients in his Manhattan offices as stocks tumbled last month. Enlarge Image Bloomberg News Fund manager John Paulson is going through the worst period of his career but remains upbeat on the U.S. market. Donning a dark sports jacket, the founder of giant hedge-fund firm Paulson & Co. apologized for the unusual volatility of his funds and vowed to recover recent losses. He acknowledged mistakes and said he was making adjustments. But there’s one thing Mr. Paulson said hadn’t changed—his bullishness. “The … Read more

How Dodd-Frank Fuels Economic Fear

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Since Barack Obama took office, $38 billion in new major regulations have been introduced, imposing an unprecedented burden on businesses, according to last month’s report by the Heritage Foundation. An overly regulated environment is creating uncertainty — and uncertainty is perhaps the greatest obstacle for investing and hiring. The administration hastily introduced the 2,300 page Dodd Frank Wall Street Reform and Consumer Protection Act in the depths of the recession without fully understanding and studying the potential consequences of such unprecedented legislation. To put the Dodd Frank bill in perspective, it is ten times the length of the Sarbanes-Oxley Act … Read more

Italian Yields Jump as Papandreou Fights to Skirt Default

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Sept. 12 (Bloomberg) — Italian bond yields surged at an auction today and Greek Prime Minister George Papandreou failed to reassure investors that his country can avert default as the euro region’s debt crisis worsened. Italy sold 12-month bills today to yield 4.153 percent, up from 2.959 percent a month ago as demand fell. The yield on Greece’s two-year note surpassed 60 percent for the first time after the government said it would raise property taxes to meet the 2011 deficit goal in its European Union-led rescue. Papandreou is struggling to convince investors that Europe’s most-indebted country can avoid a … Read more

Girding for Post-Buffett Era, Berkshire Adds Fresh Investment Manager

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NEW YORK—Warren Buffett plucked a second little-known hedge-fund manager from obscurity to handle a portion of Berkshire Hathaway Inc.’s investment portfolio. The selection of Ted Weschler, managing partner of Charlottesville, Va.-based Peninsula Capital Advisors, is the most recent move to prepare Berkshire for the day when Mr. Buffett, 81 years old, will no longer run the company. Mr. Weschler, 50, will join Todd Combs, selected by Mr. Buffett last year, in handling a fraction of Berkshire’s equity portfolio for the time being. When Mr. Buffett steps aside, the two men, and perhaps a third person, will have responsibility for all … Read more

A race down the down-staircase

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Read this excellent article that outlines the dynamics taking place in the market now.  When Domino Pizza stock doubles in the year the U.S. gets downgraded, market dynamics are at work. It’s a race down the down staircase.   As Middle Class Shrinks, P&G Aims High and Low   By ELLEN BYRON For generations, Procter & Gamble Co.’s growth strategy was focused on developing household staples for the vast American middle class. Now, P&G executives say many of its former middle-market shoppers are trading down to lower-priced goods—widening the pools of have and have-not consumers at the expense of the … Read more

Market turmoil lands hedge funds with big losses – FT.com

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Market turmoil lands hedge funds with big losses By Sam Jones Not for the first time, the hedge fund industry has failed to live up to its name. In a month that has seen equity markets around the world collapse, hedge funds too are facing billions in losses.   August, it now seems likely, will be the industry’s worst month since October 2008, when the collapse of Lehman Brothers triggered a worldwide sell-off. It will almost certainly also be one of the top five worst months for the industry since performance data started to be aggregated in 1990. According to … Read more

Correlation of US stocks highest since 1987 crash – FT.com

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Correlation of US stocks highest since 1987 crash By Telis Demos in New York The correlation between the movement of big US stocks is at the highest level since Black Monday in 1987, with price moves increasingly driven by the ebb and flow of investors’ fears over the economic environment. Stocks, in theory, should move in individual directions based on company fundamentals. But markets of late have been characterised by mass selling alternating with waves of buying, as investors upgrade or downgrade the risk of the US slipping into recession, or a financial crisis sparked by a European sovereign default. … Read more

Gross Says Obama’s $300 Billion Plan Not Enough

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Sept. 8 (Bloomberg) — Bill Gross, founder of Pacific Investment Management Co., said President Barack Obama’s plan to stimulate the economy with more than $300 billion in tax cuts and spending is inadequate. “I don’t think $300 billion does it,” Gross said today in an interview with Bloomberg Television’s Tom Keene. “I would like to see something bold.” Obama will propose cutting payroll taxes for small businesses as part of a plan to spur hiring, according to an administration memo obtained by Bloomberg News. The tax cut will be included in a package Obama plans lay out in a speech … Read more

U.S. Stocks Fall as Bernanke Fails to Offer New Plans for Growth

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Sept. 8 (Bloomberg) — U.S. stocks fell, after the biggest gain in two weeks for benchmark gauges, as Federal Reserve Chairman Ben S. Bernanke failed to offer any specific new plans to bolster growth in the world’s largest economy. Financial and industrial shares had the biggest losses in the S&P 500 within 10 groups. Bank of America Corp. and Boeing Co. fell at least 2.9 percent, pacing declines in companies most-tied to the economy. Dollar General Corp. slumped 5.4 percent after saying that holders will sell 25 million shares. The Standard & Poor’s 500 Index lost 0.8 percent to 1,189.39 … Read more

Geithner on Global Growth

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Tim Geithner says Global action needed boost growth US Treasury Secretary Timothy Geithner Thursday called on the Global finance chiefs to boost growth but said a repeat of the massive co-ordinated fiscal stimulus efforts of Y 2009 is no longer possible. In an opinion piece written for the a UK news paper, Mr. Geithner said the United States must strengthen employment, Europe must act more forcefully to contain its debt crisis, and China and other emerging markets should strengthen domestic demand and allow their currencies to rise more rapidly. “The imperative remains to strengthen economic growth. Fiscal policy everywhere has … Read more

US exports rise signalling firmer growth

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US exports rise signalling firmer growth The US economy is sluggish, but it is still moving along. That was the message from 2 economic reports that pointed to a weak labor market, but also a better performance on trade that should boost Q-3 GDP. The number of Americans filing new claims for jobless benefits rose unexpectedly last week, further evidence of an anemic employment picture just hours before President Barack Obama unveils a plan on job creation in a major address to Congress. Still, a considerably narrower trade deficit for July offers hope for economic growth in Q-3 following a … Read more

Obama jobs speech venue part of election strategy

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(Reuters) – President Barack Obama’s use of a rare joint session of Congress to deliver a jobs speech on Thursday reflects a political strategy to try to blame Republicans for an economy at risk of sliding back into recession. The choice of venue — the Republican-controlled House of Representatives — is aimed at sending a clear message to voters that if his plan to reduce high unemployment is blocked by Congress, it is Republicans and not the White House standing in the way of job growth. With unemployment stubbornly high and most Americans unhappy with his handling of the economy, Obama’s speech … Read more

U.S. recovery still on ropes in late summer: Fed

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(Reuters) – The sluggish U.S. recovery failed to gain speed in recent weeks and softened in some areas of the country, as volatile stock markets and sputtering factory activity weighed on growth, the Federal Reserve said on Wednesday. “Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity,” the Fed said in its Beige Book collection of anecdotal reports of economic conditions in the Fed’s 12 districts. A sharp decline in stock markets since mid-July and increased economic uncertainty have made businesses gloomier about the outlook in several regions, the Fed said. Growth was modest … Read more

Credit Suisse Core Hedge Fund Index fell less than half that of broad equity

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The Dow Jones Credit Suisse Core Hedge Fund Index Down 2.88% in August versus Losses of 7.69% for Global Equity Markets New York, September 6, 2011 – The Dow Jones Credit Suisse Core Hedge Fund Index fell less than half that of broad equity indexes in August. Oliver Schupp, President of Credit Suisse Index Co., LLC, said, “The Dow Jones Credit Suisse Core Hedge Fund Index finished down 2.88% in August. Despite challenging conditions throughout the month, hedge funds appeared to be effective in providing a degree of capital preservation when compared to global equity markets, which fell 7.69% as … Read more

US Banks to Rally on Deal

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US Banks offered deal on faulty mortgage foreclosure practices BAC, JPM, C, WFC US banks that allegedly engaged in improper mortgage foreclosure practices have been offered a deal by State prosecutors that limits their legal liability in exchange for a multibillion-dollar payment, it was reported Monday citing several people with direct knowledge of the discussions. The proposed deal effectively releases the companies; Bank of America Corp. (NYSE:BAC), J.P. Morgan Chase & Co. (NYSE:JPM), Wells Fargo & Co. (NYSE:WFC), Citigroup Inc. (NYSE:C) and Ally Financial from legal liability for allegedly wrongful securitization practices, the newspaper cited the people as saying. The … Read more

Berlusconi Cabinet to Call Confidence Vote on Austerity Plan

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Sept. 6 (Bloomberg) — Italian Prime Minister Silvio Berlusconi called a Cabinet meeting today to authorize a confidence vote in Parliament on an amended 45.5 billion-euro ($64.5 billion) austerity plan that prompted a general strike. The meeting at 6 p.m. in Rome will pave the way for a vote on the measures, which will include raising the value-added tax rate by one percentage point to 21 percent, a 3 percent levy on incomes of more than 500,000 euros a year as well as an increase in the retirement age of women in the private sector starting in 2014, Berlusconi’s office … Read more

U.S. Must ‘Stop Punishing Banks,’ Halt Loan Claims, FBR Says

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Sept. 6 (Bloomberg) — U.S. government-backed firms and agencies should “stop punishing banks” and suspend demands for mortgage repurchases because they are impeding an economic recovery, according to Paul Miller of FBR Capital Markets & Co. Repurchase losses may total $121 billion, wrote Miller, a former federal bank examiner, in an analyst’s note to clients dated today. He previously said the tally might range from $54 billion to $106 billion. Losses for Bank of America Corp. could reach $66 billion in some scenarios, he wrote. Fannie Mae, Freddie Mac, the Federal Housing Authority and the Federal Housing Finance Authority “are … Read more

U.S. Stock Futures Drop Amid Concern European Crisis Worsening

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Sept. 5 (Bloomberg) — U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may slide for a third day when exchanges open tomorrow, as European markets showed growing concern the sovereign debt crisis is worsening. Bank of America Corp. declined 5.9 percent and Citigroup Inc. dropped 4.9 percent in German trading as banks led the Stoxx Europe 600 Index to a 4.1 percent retreat. Alcoa Inc., the largest U.S. aluminum producer, slumped 3 percent in Germany. S&P 500 futures expiring in September lost 2 percent to 1,145.60 at 11:50 a.m. in New York. U.S. markets are closed for … Read more

Why Financial Institutions Should Move to Asia

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Financial Institutions around the world and especially those in Europe and the USA face a crucial set of choices about the future of their institutions. Western Governments are riddled with debt and their only way out is decades of austerity and taxes, but the new world is a mobile world, globalization has set limits on how much a government can impose it’s will on the corporations and citizenry of a nation. Excess taxes and austerity will lead to a mass financial migration to emerging markets. For advise on moving to Asia, contact us Having spent most of my life in Asia, … Read more