Reuters – From the edge of the abyss, most investment banks and hedge funds have roared back this year thanks to equity markets that have surged 60 percent from their March lows and healthier credit markets, said Novogratz, who manages $4.6 billion through Fortress’ Drawbridge global macro hedge funds.

But the post-crisis surge cannot last, he said. A still-shaky economy and volatile stock markets with no clear direction will suck the wind from the sails of investment banks, trading houses and the hedge funds, he said.

“Mark my words: Next year will be far harder for Wall Street to make money,” Novogratz said. “The easy meat is off the bone.”

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Tags: investment-banks, macro hedge funds, stock-markets, volatile stock

Bloomberg – Paul Tudor Jones, the billionaire hedge-fund manager who outperformed peers last year, is wagering that Goldman Sachs Group Inc. and Morgan Stanley got it wrong in declaring the start of an economic recovery.

Jones’s Tudor Investment Corp., Clarium Capital Management LLC and Horseman Capital Management Ltd. are taking a bearish stand as U.S. stock and bond prices rise, saying that record government spending may be forestalling another slowdown and market selloff. The firms oversee a combined $15 billion in so- called macro funds, which seek to profit from economic trends by trading stocks, bonds, currencies and commodities.

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Tags: capital-management-llc, hedge-fund-manager, macro hedge funds

HedgeCo.net (West Palm Beach) – Long/Short Equity managers who maintained a cautious stance through the recent market run-up appeared to be positioned to profit as markets shifted from cyclicals to defensives in June. Overall, the Credit Suisse/Tremont Hedge Fund Index (“Broad Index”) finished up 0.43% for June, bringing year to date to 7.18%.

Convertible Arbitrage funds continued to post the best performance of all the strategies in the Broad Index, with 4.05% for June and 23.95% cumulative performance YTD, Credit Suisse/Tremont Index’s monthly commentary reported. As equity markets’ recovered in the second quarter, managers began to profit again from the volatility arbitrage aspect of the strategy.

Overall, Emerging Markets finished the month relatively flat despite a rebound in economic activity in Asia, as countries across the region saw rising industrial and manufacturing output, the Index reported.

Credit-oriented hedge funds performed well as credit markets showed healthy activity, with $102 billion of investment grade bonds brought to the market in June. Many believe continued governments’ activism in the markets could provide additional opportunities for these managers.

Global Macro hedge funds posted their first negative monthly performance since October 2008 as the sell-off of short rates in US Treasuries negatively impacted the positions of a number of Global Macro hedge funds early in the month, Credit Suisse/Tremont said.

Editing by Alex Akesson

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