The Financial Times reported today, in a page one story, “Funds take firm grip on US Treasuries,” Big hedge funds have recently grabbed such a large share of trading in US Treasury bonds that their activity is eclipsing many of the investment banks which have traditionally dominated the market. This falls in the category, “I […]
Read more...There was a great flurry of activity last year when many hedge funds either sought to comply with new SEC registration requirements that applied to all but fairly small hedge funds, or reorganized themselves so as not to qualify (either by having long lock-ups, or by reorganizing themselves offshore). But it all came to naught […]
Read more...A fine post on Seeking Alpha, “What Good is the Carry Trade?” by Tim Iacono, takes a stab at the impact of the alleged unwinding of the carry trade (we have though it played a fairly big role in the upheaval of the last week plus, but no one can tell for certain) and the […]
Read more...Mark Thoma on Economist’s View, sums up his view in his headline, “Kenneth Rogoff: German Leaders Are Right About Hedge Fund Transparency and Regulation“. Rogoff takes issue with Paulson’s dismissal of the idea of making hedge funds more accountable. It’s odd that Paulson even thinks he had a vote on this issue, since the Treasury […]
Read more...An interesting report in the weekend Wall Street Journal, “A Risky Profile,” by Robert Frank, argues that the very wealthy (ah, our favorite top 1%) have taken on more risk and therefore were likely, as a group, to have taken a bigger hit last weak than the wealthy of the past. Now in a way, […]
Read more...The Wall Street Journal discussed the role of the carry trade in Thursday’s issue, quoted below, and Friday’s Financial Times, pointing to overnight trading in Tokyo, says the situation is worsening. The Economist and other financial publications have commented on the magnitude and risks of the carry trade, and how disruptive it could be if […]
Read more...Berkshire Hathaway’s annual report is out, and with it, Warren Buffet’s famous letter to shareholders. I took a quick look, and found the Financial Times’ take on the main points (“Buffet attacks hedge fund fees“) is as good as anything I could say: Warren Buffett, the world’s second-richest person, on Thursday stepped up his criticism […]
Read more...Earlier this month, Blackstone Group acquired Equity Office Properties Trust for $39 billion, the largest leveraged buyout in history. When a guy as smart and as plugged in as Sam Zell decides to cash out of his biggest asset, it’s worth considering that he might know something that the rest of us don’t know. But […]
Read more...Funny how one man’s shareholder activism is another man’s shareholder democracy. As we’ve discussed, and as is probably evident to any reader of the Wall Street Journal, the corporate establishment has long been demonizing shareholder activists (ah, those long haired rebels!) of all sorts. Before, the Business Roundtable and the Chamber of Commerce lambasted environmental […]
Read more...An informative article in the current Economist on the dangers and economic distortion created by the carry trade, a topic we’ve discussed. On a massive scale, investors, typically hedge funds, are borrowing in yen, a currency with very low borrowing costs, and investing in currencies where the interest rates are high, like the New Zealand […]
Read more...No, we don’t mean the end of the world, but the end of this credit cycle. An aside: forgive us if you found some of our posts last week sketchier than usual. We’re at a location with very erratic broadband, which makes it hard to get anything Internet-related done efficiently. We’ve run a few comments […]
Read more...A gloomy but all-too-plausible scenario from Stefan-Michael Staimann and Susanne Knips of Dresdner Kleinwort regarding how the current hedge fund boom might (in their view, will) lead to a nasty bust they call “The Great Unwind.” Their core observation is that, despite their apparent diversity, many hedge funds strategies are similar at their core: they […]
Read more...The Financial Times, as is often the case, carried a story on hedge fund risks that was not covered in the Wall Street Journal or the New York Times. Titled “Regulators concerned at hedge fund collateral,” it discusses how an international group of financial regulators is working with some of the biggest Wall Street firms […]
Read more...While this topic may seem a bit esoteric to some readers, it is just about the most simple-minded trade in the financial markets, which is precisely why so many players are involved in it. You borrow in a currency that has low prevailing interest rates, like the yen, and invest in instruments in a currency […]
Read more...There is a widespread belief in the US that editorializing in the Wall Street Journal is limited to the editorial page. We’ve seen in the past that this just ain’t so (see posts of January 12 and January 16). And today we have a doozy. We have a real news event, reported as the lead […]
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