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West Palm Beach (HedgeCo.net) – Hedge funds, private equity firms are using “political intelligence” to monitor tax reform, SEC registration, TARP, TALF and PPIPs, according to the OSINT Group, a boutique advisory firm based in Washington specializing in “open source intelligence” (OSINT).
The US Federal Reserve, the Treasury Department, the SEC and Congress are all playing a major role in rapidly evolving monetary policy and regulatory change across the international financial marketplace, OINST said. Those institutions, along with the IMF and World Bank, make Washington DC the financial centre for policy decisions and breaking financial news.
“To understand what financial and political leaders are doing today and planning for tomorrow, institutional investors need to do more than monitor news and data services. They need to know more. They need answers to questions from a consistently reliable source of insight into the world of politics and policy,” said Michael Bagley, a principal with the OSINT Group.
“When you need to understand policy and politics accurately and consistently, we take the guesswork out of the analysis. Top corporations and foreign governments set a very high standard for the outside counsel they retain for managing risk and unearthing new opportunities,” Bagley said. “We consult with a group of experts from the ranks of lobbying, academia, industry, journalism and law who are skilled in every major area of policy and politics. Our ‘political intelligence’ unit is built on a single powerful idea: to provide institutional investors with accurate, actionable and timely information created by the currents of political forces and regulatory decisions.”
The group was established to assist government and commercial sector clients in the energy and financial industries with unique “open source” intelligence collection and delivery. In addition to technology used by the US Intelligence Community, the firm uses its network of relationships and personal connections in Washington to gather “political intelligence” for clients who need to better understand how the US Government will influence the international markets with new financial-sector regulation and legislation.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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West Palm Beach (HedgeCo.net) – The Treasury Department said that they have recieved 100 applications from potential fund managers interested in participating in the Legacy Securities portion of the Public Private Investment Program (PPIP).
A variety of institutions applied, including traditional fixed income, real estate, and alternative asset managers, such as hedge funds.
Successful applicants must demonstrate a capacity to raise private capital and manage funds in a manner consistent with Treasury’s goals, they must have experience investing in eligible assets and headquartered in the United States.
Applicants can expect to be informed of their preliminary qualification around May 15, 2009, when they can begin raising a minimum of $500 million in private capital that will serve as the investment that, pending further approval, will be matched with taxpayer funds.
Since announcing the program details on March 23, the Treasury has encouraged small, veteran, minority and women owned private asset managers to partner with other private asset managers. On April 6, Treasury extended the deadline for fund manager applications to provide more time to facilitate these types of partnerships.
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Herald Tribune – The Treasury Department has increased its offer to repay Chrysler’s senior lenders as part of continuing talks on how to reduce the company’s debt, a person who had been briefed on the talks said on Wednesday.
The government’s new plan, however, still shows a broad chasm between the two sides as Chrysler races to complete a reorganization plan by April 30 or face a near-certain liquidation through bankruptcy.
Daily Times – Banks and hedge funds that hold $6.9 billion in Chrysler LLC debt have proposed forgiving $2.5 billion of it in exchange for about a 40 percent stake a Chrysler-Fiat alliance, according to two people briefed on the proposal.
One of the people said the lenders delivered their counterproposal to Chrysler and the U.S. Treasury Department late Monday night. Neither person wanted to be identified because the negotiations are private.
Mail Tribune – The Treasury Department on Thursday defended the viability of its $1 trillion plan to get soured mortgage investments off of banks’ books after JPMorgan Chase’s chief executive said the company won’t participate in the program.
Some analysts said comments by JPMorgan Chase & Co. CEO Jamie Dimon could spell trouble for Treasury’s program, which is aimed at what many view as the heart of the current financial crisis — toxic assets that are weighing on banks’ balance sheets and preventing them from resuming more normal lending to consumers and businesses.
Norristown Times Herald – The Treasury Department is making it easier for hedge funds and other private investors to participate in its plan for buying up banks’ bad assets, an acknowledgment that the interest level so far has been lackluster.
Analysts said the move shows the program hasn’t yet attracted enough large fund managers who may be wary of ending up on the wrong side of a congressional probe or public backlash. The program’s requirements also excluded too many smaller managers, they said.
AFP – The United States and Switzerland will begin negotiations to amend their bilateral income tax treaty to provide for improved transparency, the US Treasury Department said Monday.
The announcement came following Group of 20 pledges last week to clean up tax havens and fight tax fraud and as bilateral relations have been strained by a massive tax fraud case involving Swiss banking giant UBS.
The negotiations to amend the 1996 treaty are expected to begin April 28 in Berne, Switzerland, the Treasury Department said in a statement.
CNNMoney.com – General Motors and Chrysler LLC have about a week or less before they find out if they’ll get the additional help they need from taxpayers, creditors and unions to avoid bankruptcy.
What they already know is that any assistance they receive won’t be given happily.
The two companies face a March 31 deadline to win concessions from bondholders and unions in order to prove to the Treasury Department that they can be viable in the long term. Without such a finding, the government can recall the $13.4 billion it has already lent to GM (GM, Fortune 500) and the $4 billion it loaned to Chrysler.
Few expect Treasury to take such a drastic step.Still, it’s clear that the automakers need more than the loans they already have received. Chrysler is on record as saying it needs as much as $5 billion in additional funds by March 31 to avoid being forced into bankruptcy.
10 News – Investors will be listening closely to details of the $1 trillion toxic asset-purchase program to be announced Monday as the Obama administration seeks to provide enough information to satisfy markets and avoid the kind of stock meltdown seen last month.
Then, Treasury Secretary Timothy Geithner disappointed by giving only broad outlines of the government’s approach to kick-start lending and the overall economy. With the sharp market plunge that followed Geithner’s speech on Feb. 10 still a fresh memory, administration officials Sunday sought to temper expectations for Monday’s announcement. "Ridding bank balance sheets of problem assets is the next step in that process of fixing the financial system, but it alone won’t solve the credit problem," Treasury Department spokesman Andrew Williams says.
New York (HedgeCo.Net) – As the national outrage over bonuses paid to AIG execs reaches epic proportions, U.S. Treasury Secretary Timothy Geithner promised the government will recoup the $165 million that was shelled out using bailout money.
“We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of retention rewards just paid,” Geithner wrote, after claiming it would be difficult to physically take back the bonuses. “In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments.”
Arguing that the U.S. government essentially owns a majority of the failed insurance giant, Chairman of the House Financial Services Committee Barney Frank said, “I think the time has to exercise our ownership rights, and then say, as owner, ‘No, I’m not paying you the bonus. You didn’t perform. You didn’t live up to this contract.’”
House Speaker Nancy Pelosi agreed, saying she would urge members to draft legislation this week that could recoup frivolous spending from taxpayer-funded aid.
“Most appallingly, while millions of Americans struggle through this economy, those who have received the largest measure of taxpayer assistance from the Treasury Department have shown no restraint,” Pelosi said.
New York Senator Charles Schumer warned that if those bonuses were not returned to their “rightful owners,” then Congress would pass laws to tax those bonuses “at a very high rate.” Senate Finance Committee members agreed, proposing taxes as high as 70 percent on those payments.
While disdain over the issue may have caused Barack Obama to act swiftly, the nearly decimated public opinion on bailouts may pose a problem for institutions seeking government funds going forward. AIG has so far received $173 billion of taxpayer-funded federal assistance.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Bloomberg – Treasury Secretary Timothy Geithner’s financial-rescue plan may be doomed if he doesn’t offer low-cost loans to hedge funds and other investors to help them buy toxic assets weighing down bank balance sheets.
Creating a “bad bank” or “aggregator bank” that would use federal funds to acquire and warehouse the assets, as some have proposed, would be costly for taxpayers and require too much government interference, say two experts on distressed securities who have pitched an alternative plan to officials.
John Ryding, chief economist at RDQ Economics LLC in New York, and Matt Chasin, chief operating officer of Sorin Capital Management LLC, a Stamford, Connecticut-based hedge fund that manages about $1 billion, say the Treasury Department should provide loans at commercial rates to investors for up to 50 percent of the purchase price of securities. The financing would be for as long as the maturities of the assets being acquired.
Bloomberg – Bank of America Corp., the largest U.S. bank by assets, received a $138 billion emergency lifeline from the government to support its acquisition of Merrill Lynch & Co. and prevent the global financial crisis from deepening.
The U.S. will invest $20 billion in Bank of America and guarantee $118 billion of assets “as part of its commitment to support financial-market stability,” the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement shortly after midnight in Washington.
