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.
Alibaba News Channel – Aggressive government action can hurt the market, but regulators should clamp down on leverage among banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.
Singer said the current "anti-capitalist" fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.
By the same token, he observed that highly regulated banks fueled last year’s market implosion because they ramped up their use of leverage, or borrowed money, for trading and investments. High levels of leverage in a downturn can multiply losses and throw markets into chaos.
Forbes – Aggressive government action can hurt the market, but regulators should clamp down on excessive borrowing by banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.
Singer said the current ‘anti-capitalist’ fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.
Reuters – Aggressive government action can hurt the market, but regulators should clamp down on excessive borrowing by banks and investors to prevent another credit crisis, veteran hedge fund manager Paul Singer said at a conference.
Singer said the current "anti-capitalist" fervor, inspired by last year’s market meltdown and the ongoing recession, will likely lead to increased regulation. These measures would only prolong the problem, he told some 1,200 hedge fund executives at the Ira Sohn Investment Research Conference on Wednesday.
Times Online – While many lose sleep over each twist and turn of today’s economy, New Jersey collector Ralph DeLuca has found a hedge against the recession in the musty memorabilia of Hollywood’s past.
A former private investment consultant, DeLuca hardly batted an eye when he bought a vintage poster from the 1932 cult movie "Freaks" at auction in March for more than $100,000. The poster had cost $10 in the early 1970s.A few minutes later he outbid competitors for a rare poster of the original "Dracula" from 1931, owned by actor Nicolas Cage, snapping it up for more than $300,000.
Bloomberg – The euro fell to a one-month low against the dollar after European Central Bank President Jean- Claude Trichet’s pledge to boost confidence failed to assuage concern the bank’s policy makers are split. The Dollar Index rose for a fourth day before a report that may show consumer confidence in the U.S. increased for a second month, underpinning signs its recession may be easing.
Vancouver Sun – Prime Minister Stephen Harper won a key commitment for Canada at the G20 summit, getting world leaders to agree to extend for 12 months a pledge not to raise new trade barriers.
“The biggest single thing that could turn this recession into a very long, extended depression would be global protectionism,” Harper said in a television interview Wednesday. “In our recent budget in Canada, we actually lowered tariffs on imported machinery and equipment. It’s important that we start to see some initiatives push in the other direction, to push towards trade liberalization.”
Bloomberg – Finding a parking spot for your Mercedes or BMW on Greenwich Avenue, the main shopping strip of the U.S. hedge-fund capital, used to be a challenge. Not anymore.
With the recession hammering retail sales, empty curbside spaces abound along the suburban Connecticut thoroughfare, known as the Rodeo Drive of the northeast, and “For Rent” signs decorate vacant storefronts. Ann Taylor, Banana Republic and Borders have all closed their Greenwich Avenue locations.
As banks and hedge funds cut jobs or close down in the worst financial crisis since the 1930s, Greenwich merchants are suffering sales declines. Some stores are simply packing it in. Many are renegotiating rents, cutting inventory or offering cheaper products.
San Francisco Chronicle – Virgin America could not have picked a worse time to launch an airline, on the eve of gravity-defying fuel prices and a cruel recession. The financial numbers are still red after a year and a half of operations, but the chief executive sees a break in the clouds and profitability on the horizon for the only California-based airline.
Xconomy – Vertex Pharmaceuticals has been around the block with biotech hedge funds. These are the people who aim to get rich trading volatile stocks second-to-second, and make big bets, long or short, on whether an experimental drug will work. Now that Vertex has passed some of the riskiest stages of drug development, the company figured it was time for steady, buy-and-hold investors to support the next phase, as it morphs into a commercial player.
That was one of the insights that I gathered yesterday in a conversation with Vertex chief financial officer Ian Smith. He was in a pretty good mood—as you might be too, if you’d just helped your company raise $320 million in a secondary stock offering. The financing is important because it gives Vertex (NASDAQ: VRTX) enough cash to operate until it introduces its lead drug to the market and starts generating positive cash flow, according to analyst Thomas Russo of Robert W. Baird & Co. Especially in the midst of a recession, that’s good news for Vertex’s 1,300 employees in Cambridge, MA, and 200 in San Diego.
Forbes – The cost of protecting Japanese government debt against default has risen sharply as political uncertainty and worries about the nation’s fiscal position grew after data this week highlighted the depth of recession in the world’s second-biggest economy.
But traders say the market is quite illiquid and dominated by foreign investors such as hedge funds.
Japanese players do not believe the government would default on its debt and seldom buy protection for their holdings of Japanese sovereign bonds.
Boston Globe – At a time when most foundations are cutting back or maintaining last year’s spending, a few are doing what hedge fund manager Ken Nickerson of the Eos Foundation calls "counter-cyclical giving." They’re increasing their grants.
Nickerson heard a story last October that helped him decide how to steer his family foundation through this severe recession: A gentleman visiting a local food pantry offered $5 for his groceries. Even after a pantry worker assured him they were free, the man insisted on paying. "There are people out there who need this $5 more than me," he said. The worker then laid his own $5 on the counter. Others did the same, and within moments the food pantry had collected $50.
Gold Seek – This January was one of the worst on record for financial markets. US Treasuries crashed after enjoying a recession-beating run in 2008. Gold and silver were the only major asset class to end the month higher.
Hedge funds that previously ignored precious metals have become converts, with hedge fund star Greenlight Capital buying the yellow metal for the first time.
Another money manager Osmium Capital Management is offering a hedge fund priced in ounces of gold to protect it from exchange rate fluctuations. Subscriptions are in dollars, euros or pounds and then converted into gold.
