Archive for July 2010

One of the hardest parts of being a hedge fund manager is coming up with new ideas. Not investment ideas but those related to explaining to clients, via letter, why last month/quarter/year went ass-bleedingly bad. There’s the challenge of generating new ways to describe the massacre (Sac-ripping, clown-facing, donkey punching, etc), the silver-lining (“Now hear the great news: we’ve turned every dollar you invested in the beginning of the year into 15 cents”), and, of course, the rationale.

The last couple years have made all of these tasks but the third in particular an extremely difficult enterprise. Stuff like “We lost it all but you can take solace in knowing it’s not us, it’s the market. The global financial markets are wrong, and we happy few at [insert your firm here] are correct, in a way that has yet to reveal itself but rest assured, is coming” is good stuff but at this point stale. Those taking pride in their missives re: what it feels like to be worked over with the spreader and truss bar for 85 straight trading sessions  know new material is necessary but what? Think, damn it, think, they say as they sit at their desks, knee high in redemption requests.

If you currently find yourself looking for some fresh ideas/excuses for upcoming love notes re: July losses, consider this one, courtesy of Patrick Evershed, which is really not half bad. Read more »

If you were going to (ALLEGEDLY!) try to murder someone, how would you do it? For those who’ve been searching in vain for a way that might not immediately reveal itself to the authorities, a pioneering hedge fund manager’s got a tip for you.

Police have allegedly confiscated four pieces of dangerous sound equipment from the Lyford Cay home of billionaire Louis Bacon. The speakers are said to emit certain frequencies of irritating and annoying soundwaves that could possibly stretch over a wide range. Further investigations revealed that if used properly, the speakers have the potential to cause structural damage and even death.

Read more »

As you may have heard, Goldman Sachs has “banned the use of profanity” in emails. Some are heralding the move as the end of Goldman, where describing the various ways in which clients are screwed (I kid the Sachsians) is part of the daily grind. And at another bank, staffed by unimaginitive fucks* whose lack of creativity is bested only by their mediocre grasp of the English language, this would be a paralyzing edict. At Goldman Sachs, it’s a mere challenge. Read more »

  • 29 Jul 2010 at 9:15 AM

Opening Bell 07.29.10

FSA To Expand Bonus Rules (WSJ)
The U.K.’s financial regulator said on Thursday that it plans to change remuneration rules for the financial-services industry, which could include imposing the changes on all banks, asset managers and hedge funds. The FSA said that while the current rules apply to the largest banks, building societies and broker dealers, the new ones should include over 2,500 firms. Among the changes, the FSA said it will force companies to defer at least 40% of bonuses over at least three years, raising the level to 60% when the bonus is over £500,000 ($779,250). It also said at least 50% of any variable remuneration components must be made in shares, share-linked instruments or other equivalent noncash instruments.

Banks plan for loss of eurozone member (FT)
Just, you know, hypothetically.

Morgan Stanley: Fear Cheap Money, Not A Double Dip (CNBC)
“The gobal economy has momentum,” Joachim Fels, the co-head of economics at Morgan Stanley. told CBNC Thursday. “Global growth is at 5 percent over the last 12 months but real global interest rates remain negative. Fears of a double-dip recession are overdone and the risks are now to the upside,” he said. Fels said he believes the Fed needs to end its very loose monetary stance sooner rather than later, as it will push up inflationary pressures across the world, given many emerging nations are importing US monetary policy in a bid keep their exports to America competitive. “Inflation is rising,” he said. “In India we are seeing signs of rising prices and inflation is now the major risk. Policy in many major economies is behind the curve.”

Singapore’s New Hedge-Fund Regulation Puts City `Back on Map’ (Bloomberg)
Seven new hedge funds set up in May and June, after the Monetary Authority of Singapore said in April that small funds can keep operating without a license as part of its review. The number of new funds last year fell 13 percent to 26, the lowest since 2003, as uncertainty over pending rule changes kept managers away, according to data from the Singapore-based industry researcher. “Singapore did not shoot itself in the foot by putting up proposals that will kill off the business,” said Kher Sheng Lee, a senior associate in the financial services group at Philadelphia-based law firm Dechert LLP in Hong Kong.

Trial ‘Bugs’ On Wall Street (NYP)
FYI: Yesterday, a federal judge in Manhattan listened to arguments about whether to allow thousands of recorded phone conversations as evidence in the upcoming criminal trial of Raj Rajaratnam, the Galleon Group hedge fund founder accused of illegal trading. If the judge rules in favor of federal prosecutors, who want the wiretap evidence heard, it could lead to a lot more bugged phones on Wall Street.

Buffett’s Dairy Queen Chilly on Frozen Yogurt Lawsuit (Reuters)
Warren Buffett will stop at nothing to defend the brand: Dairy Queen has asked a court to stop a southern California rival from selling a frozen yogurt with a name similar to Blizzard, its biggest-selling menu item. Yogubliz Inc had on May 17 filed a lawsuit seeking an order that would “eliminate any doubt” its sale of Blizzberry and Blizz Frozen Yogurt products did not infringe any Dairy Queen trademark and was not likely to confuse customers. But in a 30-page response filed Monday in Los Angeles federal court, Dairy Queen said Yogubliz was causing confusion with the Blizzard, a soft-serve ice cream also blended with candy, cookie pieces and other mix-ins. Read more »

  • 28 Jul 2010 at 5:33 PM

Write-Offs: 07.28.10

$$$ Comerford was working in Goldman’s document production division by evening, while running tours for a firm called The Wall Street Experience during the daytime. But he’s since quit the bank after being told to choose between Goldman and his tours. Comerford tells me that after The Guardian’s coverage of his tours, he was summoned by Goldman’s compliance department. The bank initially demanded whether he was using confidential material – zeroing in on an CDO document that he brandished to tourists as an example of a real, life toxic asset. Although he was able to satisfy Goldman that he wasn’t stealing anything, Comerford was then told to choose between his job at the bank or his tour guiding activities – an ultimatum that he feels was very unfair. After ten years, he quit his job. “I looked at it as an acting gig – and I’d done acting gigs before while working at Goldman, without any problem. But they were very concerned at the tone of it,” says Comerford. Guardian]

$$$ Goldman Sachs Defends Its Fund of Funds Offering [AR]

$$$ Federal Government Hiring Thousands in Wake of Financial Reform Bill [FINS]

$$$ Hedge Fund Tax Changes Cause Indigestion in Greenwich [NYM]

$$$ Carlos Slim Buys Fifth Ave.’s Only Private Townhouse [Metropolis]

$$$ Gaza’s ubiquitous donkey carts are facing stiff competition after an influx of South Asia’s iconic tuk-tuks [WSJ] Read more »

FYI, in addition to hating these newfangled automatic flushers, the PIMCO founder will cut a bitch for speaking and/or audibly breathing on the floor. Read more »

  • 28 Jul 2010 at 5:01 PM

Want To Sue Goldman Sachs? Take A Number

Sorry, the firm’s calendar is all booked up right now with other lawsuits. Come back later or go sue someone else. Read more »

From time to time, perhaps if they’re particularly good looking, or cuddly-seeming or you’ve just got that itch and they’re the first warm body in your line of vision, you may have gotten the urge to touch a client in a way not yet deemed “appropriate” by the freaky ass rules of corporate culture. You probably assumed all was lost and you’d never get to reach out and squeeze one of ‘em. And all was lost. Until a Goldman Sachs employee came along and invented an excuse so genius in its simplicity it works like a charm. Have someone coming in tomorrow you’d like to hold tight but not have it be “weird” or “cause for dismissal”? Write this down. Read more »