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 […]
Read more...A host of star-quality economists made a forceful case at Davos that governments in advanced economies need to reduce income inequalty; otherwise there will be a backlash against globalization. They also took a swipe at the dangers posed by hedge funds and excessive leverage. As cogent as their arguments are, they cross an ideological fault […]
Read more...In case you missed it, Madeleine Albright is part of a hedge fund start-up, according to Slate. And before you dismiss the ability of a Jewish (well, by ancestry) anti-babe to pull in big bucks, let us not forget the considerable sucess of Abby Joseph Cohen. Till recently, there was no better way to monetize […]
Read more...BusinessWeek’s Moria Herbst thinks so, and I have heard similar things from brokers: The battle between bulls and bears in the energy market is beginning to look like something of a rout. On Jan. 16, oil prices tumbled yet again, dropping 3% to settle at $51.21 on the New York Mercantile Exchange. Oil is down […]
Read more...What’s amazing isn’t that Gerson Lehrman is under scrutiny, but that it has taken so long to happen. From today’s Wall Street Journal: In recent weeks, the New York Attorney General’s office has begun examining whether employees of companies including Best Buy Co. may have inappropriately discussed material nonpublic information in consulting arrangements like these […]
Read more...The Financial Times has had three stories on loose credit conditions in three press days: one on Friday the 12th, two on Monday the 15th, all worried in tone. Apologies for getting this to you on a delayed basis, but the FT website was not cooperating from Friday evening through Monday (colleagues had the same […]
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