Opening Bell 12.22.08

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Giants Top Panthers For Top Seed, Home Field Advantage (Bloomberg)
"Brandon Jacobs scored the winning two-yard touchdown for the defending Super Bowl champions last night after Derrick Ward rushed for 82 yards on New York's second overtime possession at Giants Stadium in East Rutherford, New Jersey"
Meanwhile:
"For the Jets to win the division and reach the postseason, they'll need to beat Miami this week and have the Patriots lose to the Buffalo Bills. The Dolphins would capture the AFC East with a win over New York. New England needs to win its game and have the Jets beat the Dolphins to claim the division title."
President-Elect Obama Expands Bounds Of Stimulus Package (FT)
The incoming administration is expanding the bounds of the package they're looking to enact once sworn in: from 2.5MM jobs to 3MM, from ~700B to $800B.
Munich Re Picks Up AIG HSB For $742MM (Reuters)
HSB was a profitable line for AIG, to the tune of $158MM after-tax in 2007 and cost AIG $1.2B in 2000. Frankly, AIG got hosed in this deal - all we're doing by forcing them to unwind is creating stronger foreign entities, if the US Government had a clue they would realize that. Good Job, Team.
Currency Traders Suck Least This Year (Bloomberg)
Volatility in the currency markets is making for good money: 3rd year VPs on the trading desk can expect $350 - $450k this year according to the Options Group. Overall, the currency desks are seeing cuts in the neighborhood of 15%, considerably less than the average 45%.
JP Morgan Still Acquiring (DowJones via CNNMoney)
UBS is looking to exit almost all of its commodities holdings - this sale has its Canadian commodities, energy, and global agriculture going to JP Morgan for an undisclosed amount of money, to be closed Q1.
Computer Nerds Still In High Demand (Reuters)
Synopsis: Hedge Funds are still trying to figure out what they missed in the recent downturn, such that it can be modeled on a computer. So they're hiring these kids, who it turns out are some weird amalgamation of BSD and Best Buy employee.
Also, they bite when you try to pet them.
China Cuts Key Rates (Bloomberg)
China dropped both its one year lending rate and its deposit rate by .27% in an attempt to support its economy.


Change Ahead For Hedge Funds (NYT)
1) Liquidity. Investors will be urinating themselves when they receive their year end statements and realize that redemptions are frozen and they're worth roughly half as much as they thought they were.
2) Fees will be scrutinized. After wetting themselves, the investors will probably raise arms (pitchforks) and demand lower fees.
3) High water marks will blur. After such great losses managers will go on Hunter S. Thompson like trips to Vegas, trying to do just enough mescaline to see the "high water mark" to the west. The prospect is daunting: People are going to quit because they aren't making shit and go to more profitable funds. Thus, the prospect of the investor getting any of their money back is daunting.
4) Regulation will intensify. Zoning boards in Connecticut will be less open to design innovation, opting for more conservative approaches to architecture in the near future. Conservative will be the new buzz word.
5) Concentration will accelerate. You will see your peers thinking harder, faster. It's coming people, be prepared.
And finally...
6) Unleveraged returns should improve. Working girls will be willing to do twice as much for the $, given the recession. It's hard to make a buck, baby.

--William Richards

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