Mar 31, 2008

Interesting site for tech news - Silicon Valley Insider

The Dow industrials finished March down 7.6% from where it started the year, at 12262.89, marking its worst quarter in 5½ years, since the depths of the tech-stock bust.

Mar 30, 2008

BlackRock Inc (BLK.N) launched a USD500 million initial public offering for a fund of hedge funds to trade on the London Stock Exchange, the Wall Street Journal said in an article on Friday. The fund, BlackRock Absolute Return Strategies Ltd, will provide investors access to its so-called Appreciation Strategy of investing in pools of hedge funds, which it acquired last year as part of its purchase of the funds-of-funds business of Quellos Group LLC, the Journal said.

Hedge funds that make money by speculating on the success of takeovers may be the next round of casualties in the industry, not because of bad bets but because of a lack of anything to bet on. Bloomberg News is reporting Friday that Tisbury Capital Management LLP plans to close up shop and hand the money in its fund back to investors because of there aren't enough takeovers to play to make the game of merger arbitrage worthwhile.

Monsoon Capital didn't start the year off right and it is only getting worse. The Bethesda, Md.-based hedge fund, which has pinned its fortunes on Indian stocks, told investors that its Monsoon India Inflection Fund plummeted 28.3% as of March 20, and the month still had 10 days to go. That's on top of the 17.6% it dropped in the first two months of 2008, for a whopping -45.9%. The Monsoon Indian Inflection Fund 2 was almost as bad, plunging 26.8% through March and tumbling a total of 44.4% year to date. The losing ways reflect that of India's Sensex Index, which is off 26% since Jan. 1, with more than half the losses coming this month.

Mar 29, 2008

Interesting site that serves as a central site for news on Auction Rate Preferreds. Old columns still on www.InSearchOfThePerfectInvestment.com.

More bad news - UBS could be the next bank to go down. UBS can no more justify marking down the value of the ARPs it sold its investors than it can justify having lied to its investors about ARPs being "cash equivalents." UBS Lowers Price of Security Seen as 'Cash'. Some Face Paper Losses Of More Than 20% On Auction-Rate Bonds. March 30 - UBS AG may ask shareholders to approve a capital increase of as much as 16 billion Swiss francs ($16.1 billion). The bank needs that amount of money to keep its Tier 1 capital ratio at 12 percent, the newspaper said.

Fremont General Corp. and its Fremont Investment & Loan subsidiary have been categorized as an "undercapitalized" depository insititution by the Federal Deposit Insurance Corp. and was directed to recapitalize the bank by May 26, or sell.

Mar 27, 2008

Oracle came out with cautious outlook. Generally Chambers has been optimistic specifically around global growth.

ConAgra Foods, Inc., (NYSE:CAG), announced today that it has reached an agreement to sell its commodity trading and merchandising operations conducted by ConAgra Trade Group to the Ospraie Special Opportunities fund and other investors for approximately $2.1 billion, subject to certain adjustments. The Ospraie Special Opportunities fund is an affiliate of Ospraie Management, a leading investment management firm focused exclusively on commodities and basic industries with approximately $9 billion under management. ConAgra Trade Group will be renamed Gavilon LLC upon completion of the sale.

AGAIN we see the big man going down. The largest hedge fund run by John Meriwether has plunged 28 percent this year, forcing the co-founder of the defunct Long-Term Capital Management to scramble again to stem losses and keep investors from fleeing, the Wall Street Journal said on Thursday. Losses for the Relative Value Opportunity leveraged bond fund accelerated this month, after the fund had dropped 9.19 percent from Jan 1 to Feb 28. The broader JWM Global Macro fund, also run by Meriwether's Greenwich, Connecticut firm JWM Partners LLC, was down 6 per cent through February, the newspaper said.

To quickly disappear - Hedge funds are collapsing at a rapid clip in 2008, with managers who oversaw some USD3.9 billion in assets shutting down in the first quarter. Since most of 2007's failures came in the summer, with few at the start of the year, the industry may be on track to beat last year's closures of 49 funds that managed about USD18.6 billion in assets.

WOW - how does a guitar fund raise money? / London-based Anchorage Capital has composed The Guitar Fund, a USD100 million-plus number that will invest in vintage guitars, a commodity that has played to the tune of an average 31.6% annually for the past 17 years.

Mar 26, 2008

Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001.

Orders for U.S. durable goods unexpectedly fell in February, led by a slump in demand for machinery, as the housing downturn and the prospect of a recession made companies hesitant to invest.

Bloomberg's site for calculations- quite useful

Mar 17, 2008

Abby Joseph Cohen, the second-most bullish Wall Street strategist at the start of the year, was replaced by Goldman Sachs Group Inc. as the bank's chief forecaster for the U.S. stock market.

Cohen, 56, gave up the title of chief investment strategist and will no longer make predictions for the Standard & Poor's 500 Index in her new role as senior investment strategist.

JP Morgan to pay about $240 million for the fifth-largest securities firm in a transaction in which the Fed will guarantee as much as $30 billion of Bear Stearns's ``less-liquid'' assets. No downside risk for JP.

"Whac a mole" - Fed reduced the rate on direct loans to banks by a quarter-percentage point to 3.25 percent.The Fed said it will allow primary dealers to borrow at the discount rate in exchange for a ``broad range'' of investment- grade collateral. Fed also extended the maximum term of discount- window loans to 90 days from 30 days. Inv Banks can now go directly to the window, previously not available.

Evolution Markets - interesting play on carbon credits, etc.

Mar 14, 2008

S&P down 49% from peak March 2000 to Oct 2002.

Today CPI report holds steady.

Fed is accepting bad and good collateral in these deals when they swap for treasuries. There are published definitions.

Macklowe could be the leveraged real estate freak in NY. He put up maybe $50MM to borrow $3B. Big trouble for him today. Hedge funds are coming in.

Munis have been offering a risk adj return that exceeds munis. 30 yr AAA muni avg yld of 5.14% earns a Cal resident in top bracket 8.72%.

Mar 13, 2008

Traders merely closed their shorts, which added huge volume to the market, driving prices higher.

As the dollar continues to fall and commodities are seen as an instrument to hedge inflation. Dollar falling to lowerst levels vs the YEN in years.

VIA SEEKING ALPHA "Well, the point of Tuesday’s dramatic $200bn intervention by the Federal Reserve in mortgage-backed markets was to stabilize the price of US government agency AAA-rated residential mortgage-backed securities and – by implication – to encourage the big banks NOT to seize assets in the way they’ve been doing at Carlyle.

Right now, it’s not clear that the Fed’s medicine has worked.

In fact, it’s arguable that the banks’ seizure of Carlyle’s $20bn-odd in assets has actually been encouraged by the Fed’s mortgages-for-Treasuries offer. Because the Fed’s new lending emergency lending facility allows the banks to swap mortgage-backed debt for Treasury Bills in a way that Carlyle could not do.

So it would be rational for the banks to take Carlyle’s assets and exchange them for top-quality, liquid US government bonds, rather than leave loans in place to a business, Carlyle, whose assets remained highly illiquid."

Mar 12, 2008

In an effort to provide liquidity to cash-strapped financial institutions, the Federal Reserve will lend up to $200 billion of treasury securities to bond dealers in exchange for collateral such as mortgage-backed securities.The securities will be made available through an auction process. Auctions will be held on a weekly basis, beginning on March 27.

The announcement pushed markets to their biggest one-day percentage gain since 2003.

Mar 05, 2008

Great info about Auction Rate Market

Spread movement on HY versus Treasuries. High yield spreads (based on the Merrill Lynch High Yield Index) rose yesterday to 775 basis points above Treasuries, which is the highest level since March 2003. Since their lows in June, spreads have now risen by 221%, which makes the current period the largest spike the market has seen over the last ten years.

Variety ways on water investing. Only practical choice seems to be the only water related ETF, PowerShares Water Resources ETF (PHO) - launched in December 2005. Recent introduction of two new water ETFs: Claymore Securities’ S&P Global Water Index ETF (CGW) and First Trust Advisors’ ISE Water Index ETF (FIW).

Mar 04, 2008

And another one - Goldman Sachs Group Inc. investment management co-head Peter Kraus is leaving after his division's Global Alpha hedge fund suffered a 40 percent drop last year.

Issuers are pushing for change after municipal bonds fell 4.9 percent last month, the most since Merrill Lynch & Co. started compiling the index in 1989. California, with the second-lowest credit ratings among U.S. states after Louisiana, sold bonds today at yields ranging from 2.85 percent on debt due in two years to 5.40 percent on securities maturing in 2038.

Very good Muni news and updates

Mar 02, 2008

When have we ever seen muni yields at significant premiums to taxable Treasury yields.

Investment banks saw revenue from advising on M&A fall 44% in the second half of 2007.