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New York Post – The days of hedge funds operating behind a curtain may soon be over.
Bruised and bloodied by unprecedented losses, hedge-fund investors are rebelling, demanding lower fees, greater transparency and, in a growing number of cases, unfettered access to their dough.
They’re doing this through separately managed accounts (SMAs), which basically act as a portfolio for individual investors.
SMAs are common with brokerage firms but have long been shunned by hedge-fund managers.
Mike Murray of Shoreline Trading Group, which acts as a prime brokerage for small hedge funds, said he’s seeing such a spike in demand for SMAs among hedge fund investors that he expects them to double by next year.
CNBC – As losses mount, hedge funds no longer have the ability to drive speculation in the markets, Hugh Hendry, chief investment officer and partner at Eclectica hedge fund told "Squawk Box Europe" on Tuesday.
"There is no role for speculation or speculators today. This is kaput," Hendry said. "If we were Second World War generals, we’ve exposed our flanks. We’ve been wiped out. This is about fundamentals … this is about losing money."
As the crisis unfolds, the policymakers’ focus should shift from the threat of inflation to that of the world economic downturn, which could be more severe than economists anticipate, he said.
China, which many believe will balance out slowdowns elsewhere, will struggle if difficulties in the U.S. continue, while the current spike in producer prices is just a hangover from rising oil prices earlier this year, Hendry said.
"I fear that the central bankers of the world are fighting yesterday’s battle," he said.
Forbes – The dollar edged up towards a one-month high against the euro on Friday before monthly U.S. jobs data later in the day, with investors viewing the report as a key hurdle for whether the U.S. currency can sustain its rebound.
A mixed bag of U.S. data released the previous day showing the economy expanding less than expected in the second quarter, a spike in jobless claims but a pick-up in Midwest business activity did not prove decisive for the dollar. [ID:nN31399964]
Investors are still looking for the Federal Reserve to raise interest rates later in the year, just as mounting signs of economic slowdown from the euro zone to Australia have started to take a toll on other major currencies.
Daily Telegraph- German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.
It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.
Uwe Beckmeyer, transport chief for Germany’s Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It’s an extreme step but it has to be done," he told the Berlin media.
