Weekly Investmtent & Economic Recap: 4.4.08

April 7, 2008 | Leave a Comment

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Attached/linked please find And That’s The Week That Was, the Brounes & Associates market/economic commentary for the week ended April 4, 2008.  So the books on the dismal 1st quarter 2008 are officially closed (and not soon enough) and investors seem intent on moving past the recent negativity. Though financial (more write-downs) and economic (weak housing, manufacturing, services, labor) news highlighted the week, the markets moved higher as investors looked at the carnage of the past three months and found some value in equities.  Bernanke stood up nicely to the heat as he was grilled by a finger-pointing Congress over his role in the JP Morgan/Bear Stearns transaction.  Paulson set out to reform the entire financial regulatory system, though he knows he will be long since retired (or back on Wall Street) before any of his proposals are approved/rejected.  The new quarter is off to the races and many investors believe the worst of the news is behind us.  Let’s hope the newfound optimism lasts (despite the  continued talks of recession.  Sorry, just a friendly reminder). 

Coming up in the week ahead:  Construction Spending (Tuesday), ISM - Manufacturing (Tuesday), ISM - Services (Thursday), Unemployment Rate (Friday), Nonfarm Payroll Additions (Friday)

And That’s The Week That Was: Sept. 7, 2007

September 8, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended September 7, 2007.  So, did everyone return from the Labor day holiday only to find that their jobs had been eliminated?  A surprising decline in payroll last month prompted a major late week sell-off in equities and caused investors to scramble (again) back to the safe-haven of treasuries.  Alan Greenspan didn’t help the market mindset when he compared the current turmoil to the Black Monday crash of 1987 AND the Long-Term Capital Management debacle.  The Fed’s policy meeting on September 18 can’t get here soon enough as all eyes remain on Bernanke and friends with most analysts now calling for at least a 25 bps funds rate cut.  Small-caps have suffered more than most as the Russell 2000 Index is now down 1.50% for the year.  It could be worse…At least you have a job.  

Coming up in the week ahead:  Trade Balance (Tuesday), Retail Sales (Friday), Industrial Production (Friday)
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Hedge Fund News: Friday, August 31

August 31, 2007 | Leave a Comment

There is a lot going on today with the subprime situation, etc.  So, for the sake of brevity, here are some of the more compelling headlines today …

• Dispelling the ‘Bin Laden’ Options Trades [theStreet]
• Star fund manager at Janus to leave the firm [financialnews-us]
• Barclays Rescues $1.6 Billion Cairn Capital Debt Fund [bloomberg.com]
• Citi Research Discusses a Dow Crash Scenario [The Kingsland Report]
• Risk of redemptions loom over 2,000 hedge funds [financialnews-us]
• Treasuries Tumble in Asia as Bush to Propose Subprime help [reuters]

 And for a bit of fun, our friends at Fintag have some scoop on the Wall Street sequel, Money Never Sleeps

Gekko is back – as a hedge fund manager.
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Debacles, Implosions and Fraud = the SEC

August 30, 2007 | Leave a Comment

Well, times are definitely a changin’.  The SEC continues to monitor the hedge fund industry for fraud and they now have a new rule meant to deal with it.  As the FT reports …

The five SEC commissioners in July voted unanimously to adopt a new rule clarifying hedge fund fraud. It prohibits advisers to investors in hedge funds as well as pooled investor vehicles from making false or misleading statements to investors or defrauding investors and prospective investors.

The rule stems from a 2005 case before the US Court of Appeals brought by Phillip Goldstein, head of Opportunity Partners, a New York-based hedge fund. He successfully overturned the SEC’s registration requirement passed in 2004 by protesting that it would lead to hedge funds being saddled with additional compliance costs.

At the time, the SEC argued that the rapid growth of hedge funds in recent years combined with the rising interest of retail investors and a growing number of fraud cases in the industry justified the registration requirement.

HFL says: The SEC needs to find Jimmy Hoffa and bring him back from the dead.  Instead of trickling out little rules here and there over time, Jimmy would simply impose the regulations all at once (we all know its coming anyway).

Another hedge fund bites the dust: Basis Capital is now dead and ready for burial.  Another victim of the subprime situation. 

HFL says: Check out hf-implode.com.  They have a nice run through of the Basis situation.

Don’t worry your little head about the subprime situation because Sen. Chuck Schumer is on top of things — see the letter from Bernanke to Schumer here.
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Psycho Pile-Drives Investment Banker

August 29, 2007 | 1 Comment

Truly, as Percy Walker points out, it is open season on Wall Street types.  It seems that they might not be safe to walk the streets - no less attend spin classes.  Now granted, the victimized investment banker, Stu Sugarman …

“… grunted a lot, admittedly. He war-whooped. He hollered, “Great song!” and “You go, girl,” and he probably was the noisiest guy in the spin class,” according to the New York Post article.

You go, girl? [Originally, it was reported that he was a hedge fund manager — THANK THE GODS he is not.  It might also explain the weird grunting and shouting] This is how it all went down according to the Post:

“First, the furious broker demanded the hedge-fund manager please stop making so much noise. “Then it escalates to ‘Shut up!’ and “Shut the f— up!”

The broker complained to the instructor, who “basically shrugs,” Davis said.

The broker then allegedly issued the final ultimatum - “If you don’t shut the f— up, I’m getting off my bike.” The hedge-fund manager said: “Stop being a baby.”

Finally, the ballistic broker dismounts and “charges my client’s bike like Leonard Marshall of the New York Giants hitting a practice sled,” Davis said.

The broker tipped the hedge-fund manager and his bike into the wall, smashing a hole in the sheetrock, Davis said. “Then he smashes him back onto the ground, with the bike falling on top of him.”

Sugarman still has no feeling in his left side. He may need more surgery.

Carter’s lawyer, Dan Ollen, called Sugarman “a piece of work.”

“The first thing he does after the incident is hop on his bike and work out another 40 minutes,” he said. “The second thing he does is hire a personal-injury lawyer and the third thing he does is alert the media.

‘Who’s kidding who?’ “

You can’t make this stuff up!   A bitch slap would probably have been sufficient.
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And That’s The Week That Was

July 27, 2007 | Leave a Comment

And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended July 27, 2007.  How can investor sentiment change so much so quickly?  Just a week ago, the Dow and S&P 500 stood around all-time highs, and double-digits annual gains for the major indexes seemed like a foregone conclusion.  Enter…a couple of surprising earnings announcements (thanks Countrywide), and now a new dark cloud suddenly hovers over Wall Street.  (That’s what the worst week in five years will do for you.)  For a change, investors are suddenly noticing the never-ending housing woes and contemplating the impact that the subprime (and even prime) mortgage fiasco can have on the overall economy and markets.  Just don’t throw in the towel so quickly.  Go home; rest up; read about the GDP in the 2^nd quarter; and remember the bright spots investors were touting just last week.  Things couldn’t have possibly changed that much that quickly?  Or could they?

Coming up in the week ahead: ISM Manufacturing (Wed), Unemployment Rate (Friday), ISM Services (Friday)

Bear Sterns to Their Hedge Fund Investors: No Value Left

July 18, 2007 | Leave a Comment

Most folks following the financial news are already aware of this …

July 18 (Bloomberg) — Bear Stearns Cos. told investors in its two failed hedge funds that they’ll get little if any money back after “unprecedented declines” in the value of securities used to bet on subprime mortgages …

Estimates show there is “effectively no value left” in the High-Grade Structured Credit Strategies Enhanced Leverage Fund and “very little value left” in the High-Grade Structured Credit Strategies Fund, Bear Stearns said in a two-page letter. The second fund still has “sufficient assets” to cover the $1.4 billion it owes Bear Stearns, which as a creditor gets paid back first, according to the letter, obtained yesterday by Bloomberg News from a person involved in the matter.

Wow.

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