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.
Gold Seek – Risk has quickly regained its status as a four-letter word.
No one wants to hear about it and no one wants to think about it. But those willing to take it on (pragmatically, mind you) will likely earn greater rewards than they would have at any other point in the past twenty years.
Right now, the herd is absolutely afraid of any risk at all…even good risks. My case in point is when the bond market went upside-down again yesterday. Investors were buying up the “safest” assets in the world as fast as they could.
At one point in the day, T-bills were yielding less than zero. Essentially, someone was willing to lend the government money for nothing, absolutely zero, in return.
It’s like selling dollar bills for 99 cents. It just doesn’t make any sense, but it does prove one thing; practically no one is willing to take on any risk right now. No one knows what’s going to happen next and the sidelines are a cozy, warm, and safe place to be. I can hear the beaten down hedge fund managers (that still has a job) now, “I may not get ahead, but I’m not going to fall behind either.”
BusinessWeek – For the first time in 76 years, a financial crisis is occurring at the same time as a Presidential election. Based on recent polls, the coincidence seems to have boosted the chances that Illinois Senator Byearack Obama, the Democratic nominee, will defeat Republican Arizona Senator John McCain on Nov. 4.
The financial crisis has affected the Presidential race, but how is the election affecting the financial markets? Pundits offer endless theories on that question, and their answers are often suspiciously similar to their political views.
Thus, right-leaning market experts insist Obama’s tax proposals would be disastrous for investors. More liberal Obama supporters insist the market will celebrate if he is given the job of leading the world out of the financial crisis.
Taipei Times- Two years there was a music festival at Knebworth, in central Britain, that was very different. At “Hedgestock” 4,000 hedge fund managers and investors paid US$1,000 a ticket for a weekend of rock’n’roll, champagne, laser clay pigeon shooting and seminars on arcane aspects of how to make even more millions.
Some wore beads as part send-up, part veneration of Woodstock, 1960s hippies and “hedgies” bound by the bond of anti-establishment love of liberty, as if the aims of getting stoned and making a fortune gambling in unregulated financial markets were curiously united. The Who played out the event, with proceeds going to the Teenager Cancer Trust. “Hedgies” were the cool face of capitalism.
This year, a rerun of Hedgestock would be pilloried and rightly so. Oil prices are spiraling higher and the plight of stricken banks, property companies and housebuilders is made more acute because of hedge funds’ aggressive speculation. Late last month there were fresh fears that the Western financial order simply could not cope and global stock markets reeled. Hedge funds are emerging as one of the triggers of a first order crisis.
Daily Herald- The computer screen on Scott Topping’s desk at Southwest Airlines flickered with row after row of dates and numbers, but they had nothing to do with arrivals and departures. They tracked the price of oil futures for the next several months, and they told a grim tale: No letup in sight from record prices for jet fuel.
"We’re on a one-way street right now," Topping said as he hunched over the screen, shaking his head. It’s Topping’s job to oversee Southwest’s battle to control surging fuel costs. It is the most successful program of its kind in the airline industry.
In the first quarter of this year, Southwest paid $1.98 per gallon for fuel. American Airlines paid $2.73, and United paid $2.83 per gallon in the same period.
West Palm Beach (HedgeCo.net)- William Galvin, Massachusetts’ top securities regulator has charged the hedge fund manager of the River Stream Fund with improperly soliciting investors.
The investigation also turned up a brokerage statement that showed the fund had $1,625 in its account in April. Regan had said he ran $15 million. The regulator said investors who entrusted their savings to Regan feared the money is now lost.
Investigators found River Stream client data thrown into a dumpster near an empty office where Regan said he worked. Wiliam Galvin, whose job includes protecting investors in Massachusetts, has waged aggressive campaigns against anyone caught trying to cheat investors.
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Chicago Tribune- Maybe plain-vanilla stock and bond mutual funds will do the job after all.
Long-short funds — the newfangled mutual funds designed to give common investors a hedge fund experience and protection during downturns — recently went through one of their first major tests. And they flopped.
In July and August, with investors concerned over subprime loans and a credit squeeze, the benchmark Standard & Poor’s 500 stock index went down 9.4 percent. Long-short mutual funds — which are designed to hedge risk by betting on some stocks to rise and others to fall — went down 8.4 percent, according to Lipper Inc., a mutual fund tracking firm.
