Posted by guest , Oct 15, 2008 5:36PM

Good to see pot is still legal in Switzerland.

Posted by guest , Oct 15, 2008 5:44PM

http://gawker.com/5063986/credit-crunchs-dr-doom-is-a-facebook-stalker

Posted by guest , Oct 15, 2008 5:44PM

@1 Shut it

Posted by guest , Oct 15, 2008 5:59PM

#4 is really me, I'm just kidding #1.
Short, sweet, and truthful. What more can you ask for given these shitty times? Its people like number 1 who stop this great country from falling into the abyss.

Thank you number 1.

http://www.youtube.com/watch?v=yPzAjiLr5Zw

SPODE

Posted by guest , Oct 15, 2008 6:02PM

http://i30.photobucket.com/albums/c320/kentucky_princess/cartoons/05-1.jpg

Posted by guest , Oct 15, 2008 6:02PM

@3

That link is priceless.

Posted by guest , Oct 15, 2008 6:12PM

UBS advice ideas:

1. Using offshore accounts as tax havens
2. Innovative diamond smuggling methods
3. Yodel coaching
4. Profiting from blood money without getting your hands dirty

Posted by guest , Oct 15, 2008 6:28PM

Is that the Swiss version of the "shocker"?

Posted by guest , Oct 15, 2008 7:08PM

"They've become a clientele of whiners."

Posted by guest , Oct 15, 2008 7:13PM

8-

5. Allow various trading desks to amass a $50 billion position in Super Senior CDOs without telling management.

Posted by guest , Oct 15, 2008 8:03PM

Citadel Investment Group, one of the world's most successful and influential hedge funds, has been having a miserable year with returns that have dropped 26% to 30%.

But rumors that its performance was far worse were so rife that they helped drag down the stock market on Wednesday, and prompted Citadel to take steps to set the record straight.

The rumors swirled for days and gained momentum on Tuesday morning when they were published on a financial Web site. After a complaint from Citadel, the site pulled down the item within an hour. Still, by Wednesday afternoon, the rumors were buzzing all over Wall Street -- and around the globe.

Kenneth Griffin
On Wednesday, Kenneth Griffin, head of Citadel, sent a letter to investors.

September, he wrote, was the "single worst month, by far, in the history of Citadel. Our performance reflected extraordinary market conditions that I did not fully anticipate, combined with regulatory changes driven more by populism than policy."

In coming weeks, Mr. Griffin wrote, the firm's earnings will continue to be volatile, "as the world manages the unfolding crisis."

Citadel has told clients that, contrary to the rumors, it has not seen its borrowing lines cut or the terms of its borrowings altered. Standard & Poor's last week affirmed its long- and short-term counterparty credit ratings at BBB-/A-2, a reasonably strong rating. The firm also has assured clients that it is on solid footing. It has $6 billion in cash.

Also, Citadel doesn't rely on prime brokers like many hedge funds. It floated its own debt. S&P lowered the outlook for Citadel debt to "negative" from "stable."

The Citadel chatter comes at a time when financial firms need confidence more than ever just to stay in the game, and as investors are increasingly worried that hedge funds' woes could further destabilize the broader markets.

"The system is very fragile," said Cambiz Alikhani, partner at London-based asset manager Iveagh Ltd. "Any form of bad news isn't what it needs."

The fact that some large hedge funds are under stress could provide a window for governments to step up their regulation of hedge funds, as many have long wanted to do, Mr. Alikhani said. Since Mr. Griffin, 40 years old, founded Citadel about 20 years ago, it has been one of the world's most lucrative places to invest. Its returns, on an annualized basis, have been 18% to 20%. The firm manages about $17 billion now -- down from about $20 billion at the beginning of the year.

Last year, Mr. Griffin wrote in his letter, "was the most successful year in the history of our firm." Its core strategy has long been convertible-bond arbitrage, which allows investors to profit from differences in the movements of convertible bonds and other securities.

This summer, Citadel increased investments in that area. "Regretfully, I did not foresee the financial disaster that was to unfold in September," he wrote in the letter.

The financial crisis dramatically raised the cost of borrowing and reduced availability of credit, he wrote, reducing the value of cash assets as compared to the value of derivative instruments. At the same time, the decision of regulators around the world to temporarily ban the short selling of equities "created material dislocations across many of our portfolios and disrupted our ability to assume and manage risk."

Other hedge fund firms that focus on convertible-bond arbitrage have also been hurt. CQS LLP saw its flagship CQS Convertible and Quantitative Strategies Fund down about 14.5% in September, leaving it down roughly 17% for the year and with about $3.5 billion in assets. The fund has had annualized returns of about 12.3% since inception in 2000.

GLG Partners LP, another large London hedge fund with about $20 billion of assets, has seen its roughly $1.4 billion GLG Market Neutral fund decline about 25% for the year. The fund has had annualized returns of about 12% over the past decade.

The Citadel rumors gained momentum as the Web site Dealbreaker published some of them.

The item was posted for about an hour on the site, but was taken down after a Citadel executive called. "We removed the Citadel post after it was brought to our attention that it was a baseless rumor, and was irresponsible to repeat," Dealbreaker wrote on its site. The site had labeled it the item an "unfounded" rumor.

One of the rumors had to do with the amount of money the firm borrows. Citadel, in reality, borrows about $4 for each dollar it has of equity, which is heavy leverage for a hedge fund. But the figure is down from $7 of leverage earlier this year.

Still, some investors were worried Wednesday, as evidenced in the movement of the price of protection on Citadel's debt. Now, it costs $2.5 million up front plus a fee of $500,000 annually to protect against default on $10 million of the hedge fund's debt for five years, according to one junk-bond fund manager. That's up from a price in early September of about $350,000 annually for five years.

The hedge fund's $500 million in bonds were privately placed in December 2006 and are rarely traded.

Posted by guest , Oct 15, 2008 8:06PM

Citadel Hedge Fund Falls 30% in 2008 on Convertible-Bond Losses

By Katherine Burton

Oct. 16 (Bloomberg) -- Citadel Investment Group Inc.'s biggest hedge fund fell as much as 30 percent this year, primarily because of losses on convertible bonds, said two people familiar with the Chicago-based firm.

Kenneth Griffin, who founded Citadel in 1990, said in a letter to investors this week that returns for the $10 billion Kensington Global Strategies Fund may swing wildly as markets are battered by the global credit crunch. Griffin holds 30 percent of the firm's $18 billion of assets in cash, according to an Oct. 8 report by Standard & Poor's.

``In the weeks to come, I expect we will continue to see significant volatility in our earnings as the world manages through the unfolding crisis,'' wrote Griffin, 40. ``It is incumbent upon us to navigate through this period and to create value for our stakeholders over the years to come.''

Kensington's loss, more than double the decline of the Credit Suisse/Tremont Hedge Fund Index, may dent Griffin's reputation as a consummate risk manager with no patience for traders who can't make money. Kensington's only annual loss was a 4 percent drop in 1994.

Katie Spring, a Citadel spokeswoman, declined to comment.

Citadel may have difficulty selling convertible bonds because there is little demand. The market tumbled 13 percent in October, according to a Merrill Lynch & Co. index. The benchmark is down 21.5 percent since the end of August.

``It's very hard to get out of positions,'' said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey, which manages $22 billion.

Not Pessimistic Enough

Convertible bonds are debt securities that can be converted into stock. They usually gain most when the difference between yields on corporate bonds and U.S. Treasuries is narrowing and the stock market is rallying. That hasn't been the case most of the year. By the end of September, Kensington was down 22.5 percent year-to-date.

Griffin told investors his main mistake was not being pessimistic enough about the extent of the financial crisis, which began in 2007, a year he described in his letter as ``the most successful in the history of the firm.'' Last year, Kensington climbed about 30 percent.

``Regretfully, I did not foresee the financial disaster that was to unfold in September,'' Griffin wrote in the letter, a copy of which was obtained by Bloomberg News.

September was the worst month for convertible bonds since 2001. The market fell as hedge funds found it hard to borrow in the wake of the Lehman Brothers Holdings Inc. bankruptcy and the U.S. Securities and Exchange Commission temporarily banned short selling of more than 900 stocks.

Stock Losses

In a short sale, a trader borrows stock and sells it in the hopes it can be bought back later at a cheaper price. The restriction, which was lifted Oct. 8, prevented investors from hedging the risk that convertible bonds would fall in value.

About a quarter of Citadel's losses in September came from stocks, as industrial, technology, communications, media and entertainment shares all tumbled, according to the letter. The fund also lost money on energy, reinsurance and mortgages, it said. The fund's bets on macroeconomic trends using stock indexes, bonds, currencies and commodities was the only strategy that made money in the month.

Citadel executives have been outspoken about their expectations for traders to make big returns even in difficult markets.

No Apologies

``When the markets change, we don't accept lower returns,'' said Mike Pyles, Citadel's head of human resources in a 2005 interview. ``We aren't that kind of firm. We expect the manager to go figure out how to make money in the new markets. We make no apology for it.''

Even with the losses, Griffin continues to take steps to turn Citadel into a diversified financial firm. He is close to hiring a senior executive for his capital-markets business, according to a person familiar with the matter. At the beginning of the year, Citadel separated that business, which includes an options market-making group and a service that handles administrative chores for hedge funds, from its money-management operations.

Citadel also plans to start single-strategy hedge funds, including a fixed-income fund, a macro fund and a convertible- bond fund. These funds will charge investors 2 percent of assets and 20 percent on any investment gains. Citadel's current funds also get 20 percent of any gains, and instead of paying a management fee, clients cover the fund's expenses.

Posted by guest , Oct 15, 2008 9:01PM

@14...saw that...Bess stirring the pot again! Nice...DB is the guy doing its fucking job!

WSJ must be the other guy.

Posted by guest , Oct 15, 2008 9:56PM

DB moving the markets!

Posted by guest , Oct 15, 2008 10:41PM

"Italy under the Borgias produced Michelangelo, Da Vinci and the Renaissance... Switzerland had 400 years of democracy and brotherly love and produced - the cuckoo clock"

"THE THIRD MAN" Graham Greene as adopted by Orson Wells

Posted by guest , Oct 16, 2008 12:01AM

Who do they think we are? If the advice were any good the bank would be using its own advice.

Another insult to us is below:

" Bailout plan guarantees banking CEO 70M salary!

http://www.marketwarnings.com/2008/10/bail-out-plans-and-ceo-salaries-lloyd.html

Posted by guest , Oct 16, 2008 12:15AM

The thing that I found most disgusting is that these fuckin' morons from UBS still have the chutzpah to come out to make big statements about themselves and the markets.

Let see how good their IB and PWM businesses are if they have to disclose their banking relationships with CEO's and directors of the boards of the Fortune 500 companies. Giving FREE services to CEO's in return for IB mandates and businesses...............

Also, how the hell did David Aufhauser (former General Counsel of UBS) get off by just forfeiting the $6.50 million. For fuck sake, Aufhauser was the top lawyer at the Treasury and the Justice Department before he joined UBS. He knew what he did was against the law. How did they get off so lightly?! Where's the justice?

Posted by guest , Oct 16, 2008 1:40AM

Pathetic bunch of wankers!

Those rumourmongering UBS wankers were running around telling their clients to withdraw money from Fortis/ABN Amro because Fortis was going to go bust.

Anyone who knows the European markets would tell you that Fortis could not have gone belly up because the entire Benelux region will have to shut for business, not to mention most of the futures exchanges in continental Europe.

These fuckin' Swiss jokers make me puke! Oh well, the upside is the Swiss citizen will have to bear the financial pain and the Swiss Francs should go down down down. Cheaper Rolexes, Patek Philippes, and chocolates for the kids.

Nothing quite like socializing $60 billion of toxic securities.

Posted by guest , Oct 16, 2008 2:01AM

Further info has been posted on their corporate website now.

No information on how the $60 billion figure came about. No valuations were given and no information on whether an independent valuation expert was hired to look at the numbers. No information on whether this is the end of this mess. There might be more skeletons that have not been disclosed...........

The Swiss government is going to purchase CHF6 billion of mandatory convertibles from UBS. UBS will then put the new government money (CHF6 billion) as equity into a SPV and then the Swiss government will put in up to CHF54 billion to buy up the approximately CHF60 billion of toxic CDO's on UBS's books.

It looks a sweet deal. Maybe the Swiss government felt they have suffered enough embarassment and indignities and thought it was time to put this portfolio of CDO's until a cloak away from public scrutiny.

Posted by guest , Oct 16, 2008 2:29AM

what happened to citadel ?

Posted by guest , Oct 16, 2008 2:46AM

Kiefer Sutherland?

Posted by guest , Oct 16, 2008 5:41AM

According to this recent release from CNN, David Kernell, the son of a member of the House of Representatives, Mike Kernell, allegedly reset the password and accessed the personal e-mail account of vice presidential candidate Sarah Palin. He also allegedly read the contents, took a screenshot of her directory, and got into her address book information. Her address book contained the contact information including cell phone numbers of family members as well as birthdates and other information. He also then allegedly posted all of this including the password on a public website. After turning himself in, he pled not guilty. Kernell faces up to 5 years in prison, 3 years of probation and supervision after release, and up to $250,000 in fines. Think about this: to pay that down, he would have to take almost 200 payday loans at the maximum allowed amount of $1,500.
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Posted by guest , Oct 16, 2008 8:50AM

When they took my pinkie it didn't hurt a bit, but if this plan fails they are going to take my thumb next.