SEC Posts Eight And Zero Record (Reuters)
It’s hard to explain how regulators could possibly miss the largest Ponzi scheme in history on eight separate occasions over 16 years, short of BM packing the room with hookers, coke, and a disco ball. Even then there might at some point be some synaptic spark that says “something doesn’t seem right here” (and that explanation would go a long way towards the syphilis defense.)
The Cox and Crew beating on the Hill will be glorious.
Renaissance Futures Fund Waves Management Fee (WSJ)
The fund is waiving its 1% management fee after a 12 percent loss in 2008 on $3B. The sad part is that when you consider all the factors, 12 percent is the new “killing it” – and 1% isn’t much to bark at in the first place. If Renaissance cuts staff on the heels this it’s downright irresponsible – and if the argument turns to client retention: any sales staff that can’t keep clients in the door on 12% down in this environment isn’t doing its job.
Obama Puts Together Economic Package (NYT)
Money-shots:
$500 credit for individuals, $1000 married (200k salary cap), and tax incentives to invest in factories/equipment/job retention. Other unnamed “tax breaks” to “stir capital investment.”
Paulson Closes 2008 With A Loss (Reuters)
“Paolo Pellegrini, who played a crucial role in helping to implement bets against subprime mortgages that netted Paulson & Co about $15 billion in 2007, resigned from the hedge-fund firm on December 31, the Wall Street Journal said.”
The article says the separation was amicable, but I could hardly see it saying otherwise; wouldn’t it be phenomenal if some absolutely insane story came out of this just after JP rails against his colleagues for preserving what’s left of the stability of the market? I’m going to sit patiently and wait for a story that reads “Pellegrini now admits J. Paulson became increasingly erratic, at one point hiring a six foot three man in a chicken suite wearing a Viking helmet to handle in coming faxes.”
Futures Down On Autos (MarketWatch)
According to the article US December numbers are expected to be down ~40%.
GM has about as much chance of making it out of this without a Government Elephant Walk as a bowl of Chunky Monkey® does making it out of a Weight Watchers convention.
Russia Plays Gas Czar (Reuters)
“Russia cut off gas supplies to Ukraine on January 1 in a dispute over debts and pricing that has again placed Russia’s reputation as a reliable gas supplier under scrutiny. Supplies to several European countries have already fallen as a result.”
Every time I read something about Russia now all I can think about is that movie with Chevy Chase and Dan Aykroyd “Spies Like Us.”
–William Richards
Paulson & Co is going down. Hard.
How does Renaissance’s high frequency trading, employee owned fund, Medallion, manage to make 80% in 2008 when the rest of their funds seemed to have lost? Does Medallion pay for dark pool order flow or something….?
Regarding Renaissance:
They make money for themselves (Medallion), they lose money for their clients. I’d love to see how much money they lost for their clients over the past three years in RIEF (Renaissance Institutional Equities Fund) and RIFF (Renaissance Institutional Futures Fund).
RIEF was accumulating assets at an absurd rate a couple of years ago before it started to go down.
RIFF had a very poor year, as their benchmark is certainly not the equity market.
REIF (their other client fund, the equity 175-75% (advertised) long-bias hedge fund) was down much less than the market, but that might be that they weren’t meeting the net 100% exposure that they marketed (not sure about that).
RIFF is a futures fund, the majority of which did quite well in 2008 (the only investment sector to do so).
The benchmarks in the CTA world were up double digits. The Newedge CTA Index was up 13.1% for 2008 (estimated).
hmmm… they make make money for themselves, lose money for their clients and still manage to take 2 and 20 out of most?
is dropping the 2 and 20 from the futures fund for 2009 a small admission that they made too much money for themselves while losing for their clients?
easy, they keep the good strategies for themselves and dump their clients in the marginal strategies. That’s what I’d do. Actually, I wouldn’t bother taking outside money at all, I don’t know why they do it, surely its not worth the paper work. Ren Tech is essentially a market maker, liquidity provider, or what have you.
Rief was down about 20%. (18% was the number I believe). Story I heard re: Medallion is that it got too big to make upside on tiny market moves. SO they kicked all non-employees and family out.
Also hear/know that Simons is basically not running the models there anymore, hasn’t for years. Bunch of PhD’s and techs from India have created and perfected the model (at least for RIEF; also for some if not most of Medallion).
FWIW
Actually, RIFF was basically 1 and 10, which is very low in the managed futures (and hedge fund) space.
So the only thing they waived was the 1% management fee.
Also, they did not waive the 10% incentive, they simply didn’t earn it.
As is customary in the incentive-fee world, they have to make last year’s losses back to earn any incentive fees this year, so this is not a change in policy either, although the WSJ implied that it was.
More on the Noels, in Quest magazine from ’07. THey were promoting themselves for years.
http://www.questmag.com/questmag/200705/?pg=172
0 and 8, not 8 and 0.
@9
What is the purpose of articles like that? Masturbation in public, what?
Why does Renaiisance still have different trading strategies for it’s various funds? Why haven’t the PhD’s been able to come up with a single universal trading strategy that offers uncanny predictive powers? Seriously.
@12. They did. It was called the Medallion Fund. It got too big. First, they sent back all the gains at the end of the year, you could only have your beginning-of-year capital. Then they sent back some of the BOY capital. Then they created RIEF and kicked all the non-employees and non-family out of Medallion and into RIEF.
greed unpunished. amazing. in light of everything that’s happened, where’s the sec?
greed unpunished. amazing. in light of everything that’s happened, where’s the sec?
@13= When Medallion got too large to manage, why couldn’t Renaissance direct some of Medallion’s funds into more liquid territory? Say, currency.
according to wiki, they were taking 5 and 44 for medallion. i guess it took the phds to figure out that taking 100% of 80% on 5b was going to earn more than taking 44% of 0% on 25b.