Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Bloomberg – The steepest plunge in crude prices on record may be setting up oil investors for a rally this year, if history is any guide.
The so-called forward curve of futures contracts traded on the New York Mercantile Exchange suggests oil will rise 30 percent to $60.29 a barrel by December. The curve looks almost the same as 10 years ago, after Russia’s default and the collapse of the Long-Term Capital Management LP hedge fund raised concerns that a global economic slowdown would reduce energy demand. Crude prices fell 25 percent in the final quarter of 1998, the steepest drop in seven years.
Globe and Mail – Amaranth Advisors LLC and two of its former traders have reached a settlement with U.S. regulatory staff over the alleged manipulation of natural gas futures prices.
The deal, which was submitted to the U.S. Federal Energy Regulatory Commission, could end the long case against hedge fund traders Brian Hunter and Matthew Donohue.
A spokesman for Mr. Hunter, a Calgarian who made more than $100-million trading natural gas for Amaranth before the hedge fund collapsed, declined to comment.
The commission accused the traders last year of manipulating prices on the New York Mercantile Exchange, and proposed a $291-million (U.S.) fine.
Independent – An unprecedented crackdown on speculators preying on falling share prices began on both sides of the Atlantic yesterday, as Gordon Brown promised to "clean up the financial system" after days of turmoil.
The Financial Services Authority (FSA) banned "short selling" of bank shares from midnight last night, after warnings that the practice helped fuel market turmoil that forced the dramatic £12.2bn takeover of HBOS by Lloyds TSB. This came as the New York Attorney announced his office had launched an investigation into illegal manipulation to profit from short selling. The move is to uncover whether speculators have spread misleading information or acted in concert to purposely drive down share prices.
Wealthy hedge fund traders, heavy users of the shorting strategy, have sparked fury after making millions from the collapse in value of UK banking stocks.
Folks, I want to share some information with you on "hedge funds."
I have wanted to do this for some time now, but it seems each week some other topic pushes this one aside.
Hedge funds are simply large – no, huge is a better term – piles of money. The very rich and very large institutions, like pension funds and banks, give billions of dollars to a "money manager" to play with. These funds aren’t used to produce anything. They are mainly for the manipulation of markets.
Hedge funds are the least regulated of all money institutions. That in itself is scary because when we deregulated the savings and loan industry, greed cost the taxpayer, you and me, in the neighborhood of $750 billion. Then, when we deregulated the banking industry, it cost us, the taxpayers, $500 billion to save banks from their own greed. This was the recent sub-prime mortgage fiasco. And of course the sub-prime problem not only cost taxpayers, it also cost home owners a number too large to write in this space, in lost home value.
Reuters- Bear Stearns Cos plans to turn over documents to securities regulators showing that financial giants like Goldman Sachs Group, Citadel Investment Group and Paulson & Co cut their exposure to the securities firm before its collapse, the Wall Street Journal reported on Wednesday.
The Securities and Exchange Commission (SEC), as part of an inquiry into events surrounding the implosion of Bear Stearns in March, has sought and will examine these trading records, people familiar with the matter told the newspaper.
The SEC is expected to use the data to determine whether any trading activity was improperly coordinated, constituted manipulation or otherwise contributed to Bear Stearns’ collapse, the report said.
