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Reuters – Even some strong hedge fund managers may not survive the ongoing credit crisis due to a lack of funding or credit, the president of hedge fund John W. Henry & Co. said on Tuesday.
"There are going to be some firms that have good strategies that were strong in terms of discipline and their strategy itself, but may not survive this because they don’t have the assets or the funding to be able to survive," Ken Webster, president of the firm, said at the Reuters Investment Summit in New York.
The hedge fund industry has been hit hard by the worst global financial and economic crisis in decades.
Reuters – Chrysler LLC is rapidly burning through cash and being driven to prepare for a possible break-up if it can’t clinch a merger with General Motors Corp or get government funding needed to ride out the economic crisis, people with knowledge of the situation said.
Without new funding or a wrenching restructuring, executives have raised concern about the automaker’s ability to finance its operations from existing cash beyond the first half of 2009, said the sources, who were not authorized to discuss Chrysler’s performance.
Chrysler has had to pay out over $100 million a month to support strained suppliers on top of a total $200 million support to sales through dealers in August and September as it suspended vehicle lease financing, the sources said.
New York (HedgeCo.Net) – In his first press conference since winning the presidential election, Barack Obama discussed ways to tackle the economic crisis while describing the “enormity of the task that lies ahead.”
In the wake of what looks to be a pending recession, Obama talked about his focus on job production and the extension of unemployment benefits. He also talked about ways of helping the faltering auto industry and other small businesses, as well as possibly tweaking his tax plan to help more low and middle income families.
“I think the plan that we’ve put forward is the right one, but, obviously, over the next several weeks and months, we’re going to be continuing to take a look at the data and see what’s taking place in the economy as a whole,” Obama explained.
He did mention that a good majority of his first year may in fact be spent on reviving the troubled economy.
“Immediately after I become president I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity,” Obama stated.
Before the news conference, Obama and Vice-Presidential elect Joe Biden met with the transition economic advisory board, where they discussed ways to stabilize the sinking economy. Although Obama did state that President Bush would be handling the situation for the days leading up to January 20, he did reinforce his belief that “a new president can have an enormous impact.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
Bloomberg – Moore Capital Management LLC, founded by Louis Bacon almost two decades ago, tapped Greg Coffey, former GLG Partners Inc.’s top-performing money manager, to be co-chief investment officer of Moore’s European business.
Coffey, 37, will join London-based Moore Europe Capital Management LLP with a 12-person team. Eric Dannheim, a senior member of that team will become chief operating officer of Moore Europe.
“Greg Coffey is one of the most impressive trading professionals operating anywhere in the world today,” said Bacon in a statement announcing the hires. “I have known Greg for a number of years and we have similar views with respect to markets and investment decisions,” he said.
Bacon, 52, has been the sole chief investment officer for the New York-based firm since he started it in 1990. A so-called macro investor — chasing macroeconomic trends by trading stocks, bonds, currencies and commodities — he’s been adding employees and attracting capital this year even as other funds have been firing personnel and facing client withdrawals in the worst economic crisis since the Great Depression.
Boston Globe – US Representative Barney Frank yesterday staked out the next battlefront in the economic crisis gripping the world: more regulation of hedge funds, investment banks, and other financial institutions.
Frank, who heads the House Financial Services Committee, blamed a lack of strict oversight for the failures of Wall Street investment banks such as Bear Stearns Cos. and Lehman Brothers Holdings Inc., as well as dozens of subprime mortgage companies. He said hedge fund investments in arcane securities based on those mortgages deepened the crisis, which has spread worldwide. In contrast, heavily regulated commercial banks escaped the crisis largely unscathed, Frank said.
"The cause of this problem was a lack of financial regulation in the industry," the Massachusetts Democrat said at a Newton City Hall press conference, one of two events he held in the Boston area yesterday. "If the regulated institutions had made loans, we would not be in the crisis we’re in."
