Hedge Funds Focused on Currencies Get Big Payoff (WSJ)
Thanks to a consistently soaring dollar—and plunging euro—investment funds focused on currencies had the best month in years in January. Data from Hedge Fund Research Inc., which compiles a broad measure of currency-fund performance, show the group had its best start to a year since at least 2008. Meantime, Barclay Hedge, another research firm, says that funds that use computer algorithms to chase market trends had an even better month, reaping their biggest monthly gains in a decade in January. The funds surveyed by Barclay Hedge, with nearly $20 billion in assets, also outperformed the average hedge fund last month, the firm said. Funds that trade currencies saw returns of 3.4% in January. Funds that take bullish and bearish positions in stocks gained 0.5%, while firms that buy and sell emerging-market assets lost 0.9%, according to Barclay Hedge. HFR found currency funds gained 2.1% in January, while money managers as a whole gained 0.5%.
IMF ‘Very Close’ to Agreement on Ukraine Bailout, Lagarde Says (Bloomberg)
Lagarde, speaking to reporters in Brussels after Wednesday’s meeting of European finance ministers, didn’t elaborate and said she’ll give further details at a press conference at 9 a.m. Thursday in the Belgian capital. Ukraine’s Prime Minister Arseniy Yatsenyuk and U.S. Treasury officials have also indicated that agreement on an international bailout may be close.
Kyle Bass Fires Opening Salvo Against Pharma Patents (FINalternatives)
Texas hedge fund manager Kyle Bass, head of Hayman Capital Management, has taken the first step in what has been described as a “short activist” strategy against U.S. drug makers. In a 60-page petition filed with the U.S. Patent & Trademark office, Bass challenged the legitimacy of Acorda Therapeutics’ patents on multiple-sclerosis drug Ampyra. Bass claims the patents rely on previously known technology and minor tweaks to such things as dosage and packaging.
Dominique Strauss-Kahn: I’m ‘rougher’ in bed than most men (NYP)
Dominique Strauss-Kahn admitted to a French court on Wednesday that he is “rougher” in bed than most men — but claimed he had no clue the prostitutes he slept with hated it so much. After two former hookers described brutal sexual encounters with the disgraced former International Monetary Fund chief, he said he finally understands the sex wasn’t as good for them as it was for him. “I think I must have a form of sexuality which is rougher than the average. I am beginning to realize that and I deplore it. But I had no idea at the time that these experiences were so unpleasant as the women now say,” he said, according to the UK Independent...One of the “episodes” was during a “three-way” with a former prostitute named Jade and a female friend at a hotel in Brussels in 2009, he said. “If Jade was so upset as she now tells us, why did she stay and chat and drink coffees with others afterwards,” Strauss-Kahn said, ignoring the possibility that she may have simply been waiting to get paid.
Bank of America Mixed Serious Banking and Fun Swaps (BloombergView/Matt Levine)
Bank of America used its insured bank to finance tax avoidance trades for hedge funds. There is a lot to unpack there. There are the tax trades, for one thing, and the insured bank thing, for another, and then there is the eternal question: Why Is This Bad?
Japan to Impose Exit Tax (Bloomberg)
The ruling Liberal Democratic Party intends to introduce a bill in parliament this month that requires people with more than 100 million yen ($840,000) in financial assets to pay tax on unrealized capital gains before moving overseas. Japan, with the heaviest debt burden among major economies, is catching up with countries including Canada and France with a levy.
In Wake of Financial Crisis, Goldman Goes It Alone (WSJ)
In the wake of the financial crisis, though, many of those rivals are retreating. J.P. Morgan Chase & Co., Deutsche Bank AG , Credit Suisse Group AG and Barclays PLC are shedding some or even all of their commodities operations. In contrast, Goldman has sold just small parts of its business, including a controversial metal-warehousing unit. “We’re different from everybody else now,” says Goldman Chairman and Chief Executive Lloyd Blankfein. “But everybody’s different from everybody else now.” At an investor presentation Tuesday, he described the company as “unabashedly an investment bank.”
The Most-Promising Emerging and Frontier Markets, Ranked (Bloomberg)
1. South Korea 2. Qatar 3. China 4. U.A.E. 5. Chile, Malaysia
KKR, Blackstone Back New Asian Hedge Funds (Bloomberg)
KKR & Co., Ziff Brothers Investments and Goldman Sachs Group Inc.’s money management unit entered partnerships providing startup capital to hedge funds in the region for the first time in the past year. Blackstone Group LP, the world’s largest alternative asset manager, struck its second regional seed deal after a five-year hiatus, supporting a new fund in exchange for a share of its revenue.
Apple deal, tax change could spark corporate solar stampede (Reuters)
Apple Inc's deal to buy nearly $1 billion of power from a massive First Solar Inc plant could be the first of a stampede of contracts driven by the looming change in a solar tax incentive that makes such projects particularly attractive. Together with a sharp drop in the cost of solar power and corporate efforts to rack up green credentials, the expiring tax subsidies have large energy purchasers taking a hard look at buying solar under big long-term contracts. Apple on Tuesday said it would spend $848 million over 25 years to buy 130 megawatts of electricity from a 280 MW plant - the solar industry's largest-ever corporate power purchase agreement, or PPA. Apple's major financial commitment gives solar a level of mainstream credibility that should entice other new customers.
Middle School Students Given 'Fifty Shades Of Grey' Puzzles (AP)
Parents in a Pennsylvania school district are turning 50 shades of red over word search puzzles given to middle school students based on an erotic novel and movie. The students in Monessen were given puzzles based on "Fifty Shades of Grey" that contained terms including "spanking," ''submissive," ''leather cuffs" and "bondage." Other words on the list were more explicit. Parent James Carter complained about it at Tuesday night's school board meeting, saying he tried to question the school's principal and dean of students, but they refused to talk when he insisted on recording their conversation...Monessen district officials said at the meeting that they couldn't discuss the issue because they just learned about it Monday. Superintendent Leanne Spazak said the circumstances of the puzzle are under investigation. One school board member who didn't attend the meeting told WTAE-TV that the puzzle was a big mistake. "It was a huge but unintentional error and collected from the five students involved as soon as it was realized," Roberta Bergstedt wrote in an email. "Unfortunately one copy was taken by a student who then posted it on social media."