Category Archives: Hedge funds

Who Benefits From Sovereign Debt Crises?

Even though the struggle over Greece’s bailout has receded from the news, with many countries carrying large debt burdens, the need to restructure sovereign debts is not going away. This Real News Network segment gives an overview of the state of play.

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Time to “Fire” Mary Jo White: SEC Covers Up for Bank Capital Accounting Scam Promoted by Her Former Firm, Debevoise

Pam Martens and Russ Martens published a mind-boggling expose yesterday on how the SEC is refusing to stop an abuse by major banks that increases systemic risk.

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Nomi Prins: The Volatility/Quantitative Easing Dance of Doom

The battle between the ‘haves’ and ‘have-nots’ of global financial policy is escalating to the point where the ‘haves’ might start to sweat – a tiny little. This phase of heightened volatility in the markets is a harbinger of the inevitable meltdown that will follow the grand plastering-over of a systemically fraudulent global financial system.

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Christie Allies Offer Dubious Defenses for Payments Made to His Wife’s Firm

Increasingly defensive responses from the Christie administration and friendly media outlets show that David Sirota’s relentless reporting on pension fund improprieties is starting to draw blood.

The New York Times ran a story last week that recapped (and cited) the Sirota’s reporting on a new Garden State impropriety: that of Christie’s wife, Mary Pat, being hired by hedge fund Angelo Gordon after the firm had been told by the state to liquidate a $150 million custom fund. That should be uncontroversial except Angelo Gordon has failed to sell a portion of the fund after three years, meaning it is still generating fees from New Jersey even as Christie’s wife works there. This relationship looks to run afoul of New Jersey’s strict pay-to-play rules, which state officials from “being involved” in “any official manner” in which they have direct or indirect personal or financial interest.

The Newark Star Ledger also wrote up the story, with the addendum that Tom Bruno, chairman of the state’s largest pension fund, called for an ethics investigation.

The day after the Times story appeared in print, the Newark Star Ledger in an editorial tried to depict the accounts as off base. The timing of the response, coming so quickly on the heels of the Times’ account, strongly suggests that it was planted. An all-too-consistent feature of the rebuttals to Sirota’s charges is that they play fast and loose with facts. The bone of contention is that the state is still paying fees to Angelo Gordon, when by all normal standards payments should have ceased years ago.

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Ilargi: Drilling Our Way Into Oblivion

Lambert here: So the fracking companies have purchased “risk insurance.” I wonder what happens when they all file their claims at the same time. What could go wrong? By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth. Oh, that sweet black gold won’t leave us alone, will it? West Texas […]

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Hedge Fund Investors Starting to Push Back Against Big Fees for No Performance

Bloomberg reported on Wednesday that hedge fund investors are finally getting serious about reining in hefty fees when investment performance is underwhelming, particularly since that has been the case for the industry as a whole in recent years. But regular readers of this blog can tell how serious this initiative really is from the very first paragraph of the article:

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Hedge Funds Closing At High Rates

CalPERS’ decision earlier this year to exit all hedge fund investments turns out to have been a particularly visible manifestation of a trend underway: that of investor dissatisfaction with hedge funds. CalPERS politely attributed its withdrawal to excessive fees, too much complexity, and the difficulty of finding funds where it could put a meaningful amount of money to work. The latter point gets at the real problem: hedge funds have underperformed and investors are less and less willing to pay big fees for lousy results.

A Bloomberg story revealed that a marked uptick in the number of hedge funds closures this year.

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