Tag: credit crisis

Not a good start to the holiday season for hedge funds

Feet in the flames, or just being kicked while they’re down?

Either way, hedge fund managers across most strategies are getting an earful. Performance (with managed futures the exception, likely due to the distinct downward trend in commodities prices), is getting walloped. High water marks (i.e. having to recover previous losses before performance slices can be paid out) mean many funds will be digging themselves out of their hole for some time to come.

Meanwhile, investors aren’t waiting around to see if traders are good with a spade – they are running in the other direction, at a pace of over $100 billion for October alone. And to add insult to injury, the top dogs are now testifying before Congress – in other words, they are trying to justify their existence to a group of people who barely possess the mental faculties to wipe their own behinds let alone understand how buying a bond while shorting the issuer’s stock leads to price discovery the rest of us schleps can benefit from.

Happy holidays?

Tuesday Tidbits – November 11, 2008

Neither tidbits, nor juicy

  • Author Michael Lewis speaks to the end of Wall Street, only this time it really seems like the end. If you want the inside scoop on how the credit debacle came to be, read the whole thing – it’s a doosie, but worth the coffee break. (h/t Paul Kedrosky)
  • “A Suburb Can Survive” – trading up to bigger and bigger homes, showcasing the “American Dream”, might have turned out ugly, but since you have a big yard and juvenile trees, you can still put up unobstructed solar panels and windmills, and plant yourself a garden. You can’t say that about condo dwellers, which is why I’d bet that as fuel prices gyrate, urban renewal is going to hit a brick wall.
  • Virtual-machine enabler for Mac, Parallels Desktop, just got a speed boost. As a licensed Parallels user, I’m not sure I need to upgrade – the latest OS X is offers plenty for development and database analysis, and I’ve been able to shuck some software I was still hanging onto from the Windows days. In other words, I don’t need Windows or Linux as much as I use to. Nevertheless, it’s half off time for those who do have a need for speed, but you have to act fast.
  • And last but not least…

  • Oh where, oh where has our $2 trillion gone, oh where, oh where can it be?

Adieu.

Roubini, Shiller, Schiff and Ron Paul – they were all right!

Continuing the new found tradition of Hitler parodies…

3:37 – “I’ll just sell some of my Lehman and AIG stock”

Classic.

We Are Facing an ‘Inflation Holocaust’

Snippets from Jim Rogers:

The way to solve this problem is to let people go bankrupt. “Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who aren’t sound and we will start over. This is the way the world has worked for a few thousand years…

The current rescue plans, which will force governments to issue more debt, print money and flood the markets with liquidity, will flare up inflation after the crisis is over and will create worse problems…

We had the worst excesses we had in credit markets in world history. We’re going to have to take some pain…

Many people bought 4-5 houses with no money down and no job… you think we’ll just say well, that’s too bad, we’ll start over and nobody loses their job? Be realistic.

And this:

We’re setting the stage for when we come out of this of a massive inflation holocaust.

Jim Rogers has been right about as much as Nouriel Roubini, which is to say an awful lot. I do, however, find it somewhat odd that their prospective remedies seem to differ quite a bit.

How Entrepreneurs Can Survive

Bernard Lunn makes another outstanding contribution at ReadWriteWeb. This time it’s a look at the credit crisis, and what entrepreneurs must do to survive. I’m oversimplifying in this summary, but for entrepreneurs the uncertainty remains, stupid business plans will still hit the can, and startups are still more work than fun.

Read the whole thing.

News I missed while I was intermittently visiting hell

Hell = golf course

    From betting on the game when the other team doesn’t show…

  • Bridgewater Associates say financial losses from the credit meltdown will hit $1.6 trillion. That means we’re just a few pitches into the second inning in this mess. (h/t Paul Kedrosky)
  • In 2008, autumn seems to be coming early (and looking a lot like 1987). I’ve mentioned this already.
  • Retailers won’t be able to hide rising prices in the revenue line forever – consumer spending is invariably linked to the housing market. (h/t Calculated Risk)
  • From pointing fingers is old hat, and old hats fit nicer than new ones…

  • European politicians are conflicted over how to deal with bloggers. Might I suggest they send a patsy to quiet them down?
  • Some social networks are having trouble monetizing their traffic. Forget the problem of short attention spans amongst teenagers – blame Google.
  • Global warming hysteria has a new friend, the plasma TVs everyone bought with their second mortgage loan.
  • And from technology is my oyster, now give it a sniff before you eat it…

  • How does a thriving technology company morph itself into General Motors? Become extremely bureaucratic about minutia. ADDED: Make sure that minutia is completely irrelevant too.
  • Voicemail is dead. I agree, not because of fabulous web services, but something much simpler – caller id and internal phone contact lists.
  • Email is in trouble too? I’ll agree with that as well, but not because of the newfangled services that exist today. Too few people are ever going to want their communication publicized, and too many are shifting platforms for Outlook to be a long term handicap. Someone is going to rise to the occasion for the mainstream user.

On Credit Crisis, Where Is The SEC?

Liz Moyer asked the question, albeit in past tense.

Giving lenders a whole lot of leeway at the expense of investors, I suspect.