The Daily Deal - Lehman Brothers Holdings may have gone bankrupt eight weeks ago, but the filing continues to reverberate throughout the financial world and even in some unexpected places like the National Football League’s New York Giants. The latest to join the ranks of the exposed are hedge funds. All those 140,000 failed or reconciled credit derivative swaps trades that PricewaterhouseCoopers is involved in identifying could hit the hedge funds and numerous other Lehman clients next month.

According to the Financial Times, four unnamed U.S. hedge funds are likely to close in mid-December because they cannot access holdings held at the London arm of Lehman Brothers. All of the shares and loans cannot be accessed so that PwC can unravel those CDS’s.

Read Complete Article

Tags: finance, investment-funds, lehman-brothers-holdings, lehman-brothers-holdings-inc, mail-fraud, municipal-bond, strategist, student-housing, subsidiaries

Bloomberg – Credit-default swap dealers reduced the volume of outstanding contracts for the first time amid efforts to reduce risks in a market used to hedge against bond losses and speculate on corporate creditworthiness.

The volume of outstanding trades fell to $54.6 trillion from $62 trillion in the first half, the International Swaps and Derivatives Association said in a statement yesterday. It was the first decline since ISDA started surveying traders in 2001.

“This decrease primarily reflects the industry’s efforts to reduce risk by tearing up economically offsetting transactions and demonstrates the industry’s ongoing commitment to reduce risk and enhance operational efficiency,” ISDA Chief Executive Officer Robert Pickel said in the statement. “We expect to see more effects of this over time.”

Read Complete Article

Tags: accountant, beta, conspiracy, fourth-quarter, global-credit, municipal-bond, public-offering, qualitative-assessment, strategist, trillion, wb

New York Post- A looming decision in a heated lawsuit brought by railroad giant CSX Corp. could shut down a loophole used by activist hedge funds to hide their stake from the market.

CSX alleges that two big hedge funds – The Children’s Investment Fund (TCI) and 3G Capital Partners – used complex swap agreements with investment banks to secretly hide their 12 percent ownership stake in the rail operator.

TCI boss Christopher Hohn admitted in a bench trial Thursday to buying millions of dollars worth of swaps for CSX shares early last year.

Hohn, the son of working-class Jamaican parents who emigrated to London, disclosed his position in CSX last December and has launched a proxy contest to unseat five of the company’s directors.

Read Complete Article

Tags: allianz, carramerica, embarrassment, finance, industry-experience, investment-returns, japanese-government, mortgage-lenders, municipal-bond, target, telegraph, us-congress, value-investors