THE FINTAG NEWSLETTER @ 20 October 2009

FINTAG COMMENT

Pop.

Funny how the people I talk to are waiting for the big pop. And yet they are piling into the markets because they believe it has some way to go before the big bang 2.0.

Many commentators have gotten bored about debt, protectionism, Bernanke china bashing, export crazy Asians and living off bread and water and aren’t discussing it anymore. Most markets are fundamentally overvalued because the huge wall of cash that is rushing around like a tsunami on speed is looking for returns that are safe and known. When demand exceeds supply prices go up but that doesn’t mean that the underlying asset bought is worth the price paid. But hey, who cares. Rising markets give us optimism and keeps people employed and only a deluded bear sucking moron would dare predict a crash.

Thankfully this one has already tried and had to readjust but given I am no longer actively trading, I am pouring everything into commodities. Why? Why not? When the pop pops, those with real stuff will win out. Be warned.

In the meantime, 3 cheers to Apple! We all love your products even if they fall to pieces after 1 year less 1 day. My Macbook of the same age has a bust cd drive, two stuck keys and a screen that has vertical lines going down it.

U.S. SAID TO TARGET WAVE OF INSIDER-TRADING NETWORKS

bloomberg

Federal investigators are gearing up to file charges against a wider array of insider-trading networks, some linked to the criminal case against billionaire hedge-fund manager Raj Rajaratnam that shook Wall Street last week, people familiar with the matter said.

The pending crackdown, based on at least two years of investigation, targets securities professionals including hedge- fund managers, lawyers and other Wall Street players, the people said, declining to be identified because the cases aren’t public. Some probes, like the one focused on Rajaratnam, rely on wiretaps. Others stem from a secret Securities and Exchange Commission data-mining project set up to pinpoint clusters of people who make similar well-timed stock investments.

Fintag says
If only the UK’s FSA could take a leaf out of the SEC book given regulation doesn’t work anymore. Britain’s own Jabre the Crook was long gone before the sleepy FSA prosecuted him and the small spate of low life insider trading has been pathetic. Of course I used to keep a “Rumors” policy document (as required by the FSA) and this stopped my traders from carrying 3 mobile phones and visiting websites using vtunnel.com and using PGP encryption for their emails.

HEDGE FUND LEGEND ROBERTSON LIKES PLASTIC NOT GOLD

reuters

Hedge fund pioneer Julian Robertson, whose Tiger Management once oversaw $22 billion in assets, told a conference of money managers on Monday he is bullish on credit card companies, but would steer clear of gold as an inflation hedge.

Speaking at the New York Value Investing Congress, a private event where hedge fund managers share trading ideas, Robertson reaffirmed his positive view on the shares of Visa Inc (V.N) and MasterCard Inc (MA.N), citing their growth potential.

Fintag says
For a moment I thought I was going to have start wearing those plastic wrist bands. I am sorry but I don’t have the same view on plastic. While interest rates are low then this is fine but the CCC are hiking up rates. Default rates are going to rocket.

BRAZILIAN HEDGE FUNDS LURE $19.7 BILLION THIS YEAR

bloomberg

Brazilian hedge funds are luring more money than any type of investment pool in the country after record withdrawals last year, offering returns four times the yield from certificates of deposit.

Local hedge funds attracted a net 33.7 billion reais ($19.7 billion) this year through Oct. 15 after posting 54.6 billion reais in redemptions in 2008, preliminary data from the National Association of Investment Banks’ Web site show. Third-quarter inflows surged to 36.3 billion reais, according to the data. The figures will be revised and re-published this week, said a spokesman for the association known as Anbid.

Fintag says
I am going to have to divert towards Brazil meez thinks asap. We all love an emerging market play when the west has run out of Alpha.

GOLDMAN SACHS MUST FAIL

here is the city

That’s the message. In just one short year, Goldman Sachs has morphed from an organisation that was ‘too big to fail’ into one which is now ‘too successful to exist’.

At a time when we should be celebrating that the world’s largest financial institutions, vital to our own economic wellbeing, have come back from the brink, we are pointing the finger of blame at the likes of Goldman, and complaining about how successful they have become. And Goldman, of course, is being beat about the head for government interference it never wanted, and a bailout it never sought.

Fintag says
Word on the legal street is that by this time next year, GS will be a private partnership hedge fund manager.

SCHRODERS LAUNCHES UCITS PLATFORM WITH EGERTON FUND

hedge funds review

he platform, Schroder GAIA (Global Alternative Investor Access), will be run jointly by Schroders and its fund of hedge fund (FoHF) subsidiary NewFinance Capital.

NewFinance’s business development manager Eric Bertrand said the platform had been in development since 2007.

Bertrand said GAIA would build on Schroders’ existing expertise in Ucits funds but would open up hedge fund expertise to more investors.

Fintag says
I didn’t know Schroders had any Hedge Fund business left. If you are a fund of funds in doubt, launch a UCITS platform (with a few cta managers only). That will revive your business.

BERNANKE WARNS ON IMBALANCE RISKS

financial times

Ben Bernanke said on Monday that it was “extraordinarily urgent” that the US and Asia adopt policies that prevent a revival of global economic imbalances as the financial crisis ebbs.

The Federal Reserve chairman warned that global imbalances – the big gaps between national saving, consumption and investment rates reflected in large trade deficits and surpluses – had helped cause the crisis and needed to be corrected.

Fintag says
Go on Benny. Nuke those Chinks … [Editor: Is this your Jan Moir moment?]

This is truly an offensive speech. The man is deluded.

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