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American Thinker – There are several culprits in the recent market crash, but one key source of the problem has hitherto escaped attention: an economic index that can be easily manipulated by hedge funds and whose gyrations have shaken the foundation of Wall Street: the ABX index, launched in 2007 by the Markit Group, a London-based company that specializes in credit derivative pricing and that administers the index.
The collapse in the American stock markets was a calamity for the campaign of John McCain. In September, McCain was running strongly against Barack Obama. Some polls had him leading Barack Obama by 3 percent before the market broke. By October 7th, Obama had taken the lead across America. What changed in one month? The trigger was the market crash. Who pulled the trigger and why? Who benefited?
New York (HedgeCo.Net) – President-elect Barack Obama has been granted permission to dole out the second half of the $700 billion in the Troubled Asset Relief Program, after a vote of confidence from the Senate. They shot down a resolution that would have prevented him from distributing it, after much criticism came from the handling of the first $350 billion by the Bush administration.
"I’m gratified that a majority of the U.S. Senate, both Democrats and Republicans, voted today to give me the authority to implement the rest of the financial rescue plan in a new and responsible way," Obama said in a statement after the vote. “I know this wasn’t an easy vote because of the frustration so many of us share about how the first half of this plan was implemented.”
While most democrats were on board with the release of the funds, a few voted against it. A final vote of 52-42 gave Obama his first legislative victory just days before taking office. John McCain, who supported the enactment of the TARP program, voted against the release of the funds by Obama.
“If the Bush administration was going to continue to dole out this money, I wouldn’t give them three dollars, let alone $350 billion,” said Barbara Boxer, a California Democrat.
Republican Senator Jim Inhofe of Oklahoma expressed his disdain that it is “probably going to be one of the most egregious votes in the history of this institution."
Larry Summers, who Obama has chosen to head the White House National Economic Council, wrote a letter to Congress earlier this week, urging them to let Obama take action. He focused on the fact that Obama would use a large chunk of the money to help troubled homeowners avoid foreclosures, while keeping public records so that all of the money could be accounted for. In addition, he expressed their belief that small businesses and community banks should be getting more help.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Another hedge fund is backing Carl Icahn’s proxy battle against Yahoo, days after Paulson & Co. gave their support.
Third Point LLC, a hedge fund that manages $5.7 billion in assets, is believed to be on board after accumulating 5 million shares of Yahoo Inc., along with T. Boone Pickens, an oil investor who has amassed 10 million shares.
An undisclosed source told reporters that Third Point head Dan Loeb “strongly supports Icahn and supports his slate and thinks that he is shining a bright light on the botched process at the Yahoo board in negotiating the deal with Microsoft.”
Icahn believes that Yahoo should be sold to Microsoft, in order to better compete with Google. Yahoo rejected Microsoft’s initial offer of $47.5 billion before the software giant broke off talks earlier this month.
Initiating his fight last Thursday, Icahn believes, “it is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis." Talks between Microsoft and Yahoo are said to have been revived.
Paulson & Co., the $30 billion hedge fund manned by famed John Paulson, currently holds 50 million shares in Yahoo. Paulson has expressed his desire for the merger, aligning himself with Icahn last week.
Hedge funds, who push for high returns in the short run, many times take a proactive approach in restructuring a company in which they are invested. Icahn is also aiming to strategically place himself, along with Mark Cuban, Frank Biondi and Robert Shaye on the board.
Even with only a few companies backing the proxy battle, the force behind them is monumental. The supporters will have accumulated over 80 million shares of Yahoo, which equates to over 5% of the total shares.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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