January 23, 2009

The conglomerate's shares have suffered of late as investors braced themselves for the possibility of a cut to GE's dividend or credit rating amid increased credit losses at its financing unit, GE Capital, and the falling demand in the industrial economy. U.S. industrial production fell another 2% in December, the fourth drop in six months. In fact, GE said infrastructure orders fell 6% from a year earlier in the fourth quarter.

January 22, 2009

Singapore cut its economic outlook as GDP shrank at a 16.9% annual rate in the fourth quarter, prompting concerns that Asia's slowdown is intensifying. Singapore, a bellwether for Asia's export industry, sharply reduced its economic outlook for 2009, prompting concerns that the region's slowdown is intensifying and putting additional scrutiny on a slew of economic figures expected in coming days.

The city-state said Wednesday it expects its economy to shrink by 2% to 5% this year. The forecast marks a downward revision from just three weeks ago, when officials at Singapore's Ministry of Trade and Industry predicted a worst-case decline of 2% and possible growth of 1%. The ministry blamed increasingly pessimistic signals of weakening global demand for key products such as electronics and chemicals.

Investors filed a proposed class action against Bank of America in New York on Wednesday, accusing the bank and its officers of failing to disclose risks in its January 1 takeover of Merrill Lynch.

The hedge fund industry saw a record $152 billion in investor redemptions in the last three months of 2008, according to data released Wednesday by Hedge Fund Research.

The news is not all bad for the industry. While the bottom 10 percent of all hedge funds declined an average of 62 percent, the top 10 percent of funds gained an average of 40 percent. Investors could eventually reward the winners with more cash and possibly offset the money flowing out of the industry. The total capital invested in the hedge fund industry fell to $1.4 trillion at the end of last year, a decline of $525 billion from its peak of $1.93 trillion, recorded in the summer of 2008, the research firm said.

 

December 22, 2008

Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200bn programme intended to support consumer credit.

The Fed said on Friday it would offer low-cost three-year funding to any US company investing in securitised consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before, although the Fed may not permit hedge funds to use offshore vehicles to conduct the transactions.

Fortress Investment Group LLC will not pay a fourth-quarter dividend, saying it will use the capital for investing or operations.

Global 2008 deal advisory ranking (preliminary)
Rank Firm Volume Pending Ratio
1 Goldman Sachs $816.1 $358.5 44%
2 JPMorgan Chase 773.1 237.9 31%
3 Citigroup 705.3 327.0 46%
4 UBS 565.1 238.7 42%
5 Morgan Stanley 553.3 281.8 51%
6 Merrill Lynch 507.8 213.9 42%
7 Credit Suisse 478.6 179.0 37%
8 Deutsche Bank 436.0 112.6 26%
9 Barclays Capital318.4 90.1 28%
10 BNP Paribas 269.4 148.7 55%
Source: Thomson Reuters; volume in billions

January 05, 2008

http://static.seekingalpha.com/uploads/2008/12/26/saupload_screenhunter_1.jpg

The picture above shows a one year chart for United States Oil fund (USO), PowerShares Bullish US dollar index (UUP) and SPDR Trust (SPY). You can see there is an inverse correlation between the value of the US dollar and crude oil prices. The slide from record crude prices of $140 triggered the US dollar rebound. In the past few days, the Euro and other currencies are regaining ground against the US dollar, but crude oil is still heading down.

http://www.nytimes.com/interactive/2008/12/31/business/20081231_MARKETS.html

interactive graph

The Dow Jones Euro Stoxx 600 index, a measure of the broad European market, finished the year down 46 percent. The MSCI Asia-Pacific index fell 43 percent. United States stocks were not much better, with the Dow Jones industrial average falling 33.8 percent, its worst year since 1931, while the broader Standard & Poor’s 500-stock index fell 38.5 percent.

If the news from the developed world sounded bad, it was even worse for many emerging markets. The Shanghai composite index fell 65.4 percent, the Russian RTS index fell 72 percent and the Sensex 30 in Mumbai fell 52.4 percent.
Stocks lost 42 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and all of the gains made since 2003. Just about the only assets to prosper were government bonds of developed countries and gold, where prices rose as investors ran for cover.

Looking for someplace comparatively safe? You would have needed the foresight to put your money into Bangladesh, where the main Dhaka stock index lost only 7.4 percent last year, or Venezuela, down the same amount.