TABLE OF CONTENTS
October 2007
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WEDNESDAY OCTOBER 31
Liquidity: Counting The Seconds
Even with the First Growths off the market, you still have a few ways to go long the rest of the legendary 2005 Bordeaux.
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WEDNESDAY OCTOBER 31
At Your Fingertips: Ben-In-A-Box
Can’t wait anymore for that Fed statement? No problem. Behold, your very own Fed statement generator. We’re not even kidding. All you need to do is start clicking. Guaranteed to be almost as good as being able to barge into Benny’s office.
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WEDNESDAY OCTOBER 31
Bernanke: Man With A Plan?
We sure hope so. On the one hand, we like a guy who’s open to listening to the wise counsel of others. But on the other hand, we’re not sure if we like it so much when we hear that just about anyone with a big enough stick or deep enough pockets can tramp through Benny’s “war room” spouting off willy-nilly. More on the man behind the mystery.
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WEDNESDAY OCTOBER 31
A Fed Kind Of Mood
And that mood would be…bored. Speaking on the dead market ahead of the Fed decision, the ever-distinguished Edward Meir of MF Global sums up the prevailing anima thusly: “No one wants to put their head into a buzzsaw.” Kind of gross, but we buy it.
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WEDNESDAY OCTOBER 31
Eating Your Own
We find it hilarious that no sooner did New York Magazine start naming names in its article on “The Wall Streeters That Lost It” in 2007 (mostly hedge fund managers, we note) than a hedgie catfight erupted in the comments portion of its Web page. Of course, since no hair can fly without an appearance from the ubiquitous Timothy Sykes, he was the very first to pop up. Witness the awesome verbal lynching that followed.
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WEDNESDAY OCTOBER 31
The Dollar Is Screwed
The dollar is screwed. Today, the Fed weighs in and it doesn’t look good. Maybe it’d be kind of funny if 1) we didn’t mind the puny Malaysian ringgit trouncing our greenback with record highs (embarrassing!) and 2) it didn’t mean Canada can eat our lunch because its Loonie is now worth more in a buyout than our cruddy Chinese paper. More on how another rate cut could affect the banking system.
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TUESDAY OCTOBER 30
Super Bowl Showdown 2007
It’s that time again – ready to see where you stack up in our weekly Pick ‘Em and Survival games? Who knows, you just may be that much closer to winning a pair of Super Bowl tickets.
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TUESDAY OCTOBER 30
High Flyer: Singular Sensations
The next revolution: affordable, private, single-engine jets. Do you dare to be the first on the block to put one in your garage?
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TUESDAY OCTOBER 30
Another 300…And Counting
According to an internal memo, Bear Stearns has slashed a few hundred jobs in addition to the 600 it already cut from its mortgage-origination unit. This time, it’s unleashing its wrath on a global scale, concentrating on some key divisions.
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TUESDAY OCTOBER 30
Apropos Of Nothing…
Except our devout love of video games, which, to our way of thinking, is always apropos. (Besides, what else to do when not writing Trader Daily?) This holiday season’s video-game battle boils down to one time-honored question: who can rock out the most?
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TUESDAY OCTOBER 30
Hedgies Feel Sports Stars’ Pain
Diehard sports fans are crying foul over Alex Rodriguez’s decision to turn his back on the Yankees in search of greater riches elsewhere. But few of them are hedge fund managers, who often make much more than the top athletes, even when they fail. Some reflections on the hedgie-sports star connection.
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TUESDAY OCTOBER 30
Not Fun Anymore
No matter how bad you think your hedge fund had it during the latest credit crisis, at least your own investors aren’t trying to take over your fund so that they can seize your books and then sue you. Alas and alack, Bear Stearns does not have it so well. But just how does such a high-and-mighty bank end up being thrown to the wolves?
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TUESDAY OCTOBER 30
Self-Fulfilling Prophecy?
By roundly expecting a rate cut, will the market strong-arm Ben Bernanke this week? Or, to put it another way, can a big, strong Federal Reserve chairman be pilloried into doing whatever traders want him to do? Break out the popcorn, your fuzzy bunny rabbit slippers and favorite La-Z-Boy armchair for the two-day, one-time-only show: we’re about to find out who’s really in charge.
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MONDAY OCTOBER 29
Watch List: Stone-Faced
With dials distinguished by precious pebbles and rare minerals, these timepieces are absolute gems.
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MONDAY OCTOBER 29
Yuan: A Breakthrough?
The yuan staged its greatest rally of the past two years after China's central bank signaled it would let the currency to rise faster than previously expected to help narrow its record trade surplus and slow inflation. Alrighty then. Where’s it going next?
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MONDAY OCTOBER 29
Cult Of Murdoch
Why is it that for the very same reasons the East Coast elites spurn septuagenarian billionaire Rupert Murdoch, the West Coast renegades flock to his side?
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MONDAY OCTOBER 29
Absolute Bailout?
Looks like Absolute Capital has come up with a salvage plan that most of its shareholders can stomach. But what’s the story with Florian Homm, the fund’s manager who rabbited after assuring investors everything was all right…right up until it wasn’t?
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MONDAY OCTOBER 29
Get Your Fed On
This is THE week, and it’s already shaping up to be a rollicking ride. Here, your sneak preview of the machinations of the Federal Reserve in the run-up to what may be one of its last chances to grab the subprime disaster by the throat and give that yokel a drubbing.
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MONDAY OCTOBER 29
Oil Shoots Past $93 A Barrel
Yep, just what the Western world needed. No sooner does oil top $92, than a storm barrels through Mexico, prompting the shut-down of one-fifth of its crude production. This nightmare scenario is what oil evangelists have been screeching about for years: a situation where supply and demand dog each other indefinitely. Ready for $100? If oil gets to $110, it will have broken its all-time record in real terms. A quick survey of what oil pundits think may happen next.
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MONDAY OCTOBER 29
ESO = Equipment Superior To Operator?
The fate of E. Stanley O’Neal is expected to be revealed today following a weekend of heated negotiations between ESO and Merrill Lynch over the financial terms of his departure, reports The Wall Street Journal, The New York Times and The Financial Times, which have busily commenced in composing soulful requiems to the man who worked his way up from the cotton fields of the Deep South to rule the boardroom of one of Wall Street’s biggest banks. So, in addition to the multibillion-dollar write-down Merrill already will be shouldering, just how much will an ESO exit cost – and what will change among its trading teams?
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FRIDAY OCTOBER 26
Niche Market: Wheels
We put a London-based trader in the exceptional new Invicta S1-600. Could he stand apart from the riffraff in their pedestrian Porsches?
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FRIDAY OCTOBER 26
Friday Levity II: Dear Greenie
Many Fridays find us tremulously searching among the bleak and humorless news for just a scrap of earth-defying levity. It is often a lonely and desperate affair. But today, for whatever reason, levity was everywhere. Piles of levity, even now, remain strewn messily across our desk. And we want to share the best if it with you. Here, our favorite love letter to Alan Greenspan for the week. Prepare to look cracked, sitting alone at your cubicle laughing like a loon, because this one is good.
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FRIDAY OCTOBER 26
Friday Levity: Divorce Fair!
Ride the merry-go-round of broken romance, find the top detective to root around in your spouse’s skeleton-rife closet, discover the handy-dandy beauty of the DNA test and, in short, have a gay-all time. It’s not too late to fly to Vienna now for the weekend…Just tell your mate what you always tell them: it’s only business (heh, heh, divorce business).
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FRIDAY OCTOBER 26
Dollar’s Swan Dive
The greenback’s plummet to a record low against the euro spells out plainly what the market is expecting come the Fed meeting next week. So is a rate cut now fully priced in? Or is there still more to go?
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FRIDAY OCTOBER 26
A Sad Sack
Mike Savvides thought he was a rising star at JPMorgan – until a single bond sale brought his whole world crashing down.
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FRIDAY OCTOBER 26
Still Going…
The latest readings on the U.S. economy show continuing signs of weakness: Sales of newly built homes over the summer were weaker than previously estimated, September manufacturing was subdued, business inventories are mounting and the job market is displaying worrying signs of erosion…Wanna’ hear more? We swear there’s a silver lining.
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FRIDAY OCTOBER 26
On Hedge Funds, Sports Bets
The U.K.’s Southampton soccer team has finally named the mystery bidder involved in its early takeover negotiations – and it’s not the much-rumored co-founder of Microsoft, Paul Allen.
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FRIDAY OCTOBER 26
Holy S@&%, Is This It?
Crude oil futures punch above $92 a barrel in after-hours trading for the first time, edging ever closer to the mythic $100 watermark. This time, the reason being given for the jump is the emergence of a new battery of terrorism charges being leveled at Iran’s military by the U.S. Whatever, that’s supposed to be the big “news” that’s goosing oil prices higher? Give us a break. Still, the blow by blow on oil versus terrorism versus inflation cannot be ignored.
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FRIDAY OCTOBER 26
Lies, Damn Lies And Statistics
When Wall Street values anything from a plain-vanilla bond to an asset-backed bond, how…exactly…does it decide to do it? Is there some kind of acknowledged GAAP for pricing things – specifically, illiquid securities? Because we have a sneaky feeling there isn’t. In fact, we’re pretty sure every bank, every trader is probably doing something a little different when it comes to their mark to market. And with all that wiggle room, tricky stuff is bound to happen, nez pas? Not on purpose, you understand. Only by mistake. And other times, people may actually get fired for squealing about it. To The Wall Street Journal, for example. As in this case.
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THURSDAY OCTOBER 25
Killer Instinct
Tromping around the English countryside to engage in a spot of the hunt? It will hardly do to bedeck yourself in Wellingtons and a trucker hat. Display your class — and your love of the chase — in this high-caliber haberdashery. If you think you can pull it off.
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THURSDAY OCTOBER 25
China: Too Much Is Never Enough
China's economy, the largest contributor right now to global growth, expanded 11.5% in the third quarter, adding pressure for faster currency appreciation and higher borrowing costs to curb inflation. What? Just 11.5%?
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THURSDAY OCTOBER 25
He Said, She Said
Of course, in this case, the he and the she are the same person, but you know, maybe they’ll start arguing. As a footnote to the Maximilia née Maximilian Cordero story we posted yesterday, it appears “her” ambush of hedge fund billionaire Jeffrey Epstein comes on the heels of a similar attempt “she” made to squeeze $10 million from another supposedly deep-pocketed man. More on the latest twist in this sordid tale.
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THURSDAY OCTOBER 25
Goodbye To Cloak, Dagger?
Long known for befuddling the market with its Jabberwocky-esque burblings (not in the least during the ongoing credit crunch) the Fed may soon unveil a number of measures for clarifying its coruscating positions. Among potential solutions: four economic forecasts a year, instead of two, and the disclosure of an inflation target. But after years of stumbling around in the Fed-imposed dark, is this all too much for traders to hope for?
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THURSDAY OCTOBER 25
Dust Off That Drug Kit
The phone lines at bulge brackets are abuzz with rumors that banks are scrounging for any excuse to commit more sackings – hello, Bank of America? – including through such pernicious tactics as drug tests. Yes, the THC-detection movement is back, if you believe the gossip flying around. Funny how when the hiring heats up, it quietly goes away, but as soon as the fiat money machine starts to wind down, it’s back. While not necessarily surprising, it certainly is a measure of how desperate the situation is on Wall Street. Which brings us to today’s big news – indeed, another high point in the carnage.
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THURSDAY OCTOBER 25
A Case Of The Merrills
Some people go for the classic pump and dump. Others, perhaps more the contrarian investor type, like to turn it on its head. Or so it seems with a bizarre maneuver that appeared to be plaguing the stock of Lehman Brothers yesterday after a very Merrill-like rumor began to dog it.
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THURSDAY OCTOBER 25
Myth Of The `Top 1%’
As the witch hunt begins to part the so-called top 1% of all earners in the U.S. with their hard-earned cash through a process of government-backed, legalized rape (a.k.a. tax hikes) The Wall Street Journal takes a closer look the hard data, with some surprising results.
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THURSDAY OCTOBER 25
CIA: Everyone Else Is Doing It, So Why Can’t They?
You think you and your college buddies are the only ones starting up neato funds these days sporting wacky names and even wackier investing plans? Well, do any of you work for the Central Intelligence Agency? Yeah, we didn’t think so. Find out where the G-men are sinking their money – and no, piker, it’s not in yellow cake.
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WEDNESDAY OCTOBER 24
Par Goes The Neighborhood
Here’s a little-known secret about high-end residence resorts, landscaping and Arnold Palmer (among other golfing greats)…
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WEDNESDAY OCTOBER 24
Superfund: A Race Against Time
A passel of SIVs…$100 billion in debt coming due in the next six to nine months…And ratings firms doling out the downgrades by the dozen…What’s a humble monster bank to do?
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WEDNESDAY OCTOBER 24
China’s Best Buy?
Beating up the greenback, the yuan shot past 7.5 to the dollar for the first time in more than a decade on a widening trade surplus and a wave of foreign investment. What top traders are saying about where the currency is now headed (you know what direction, but do you know by how much?).
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WEDNESDAY OCTOBER 24
Anyone Who’s Anyone
…Was at the American Museum of Natural History Monday (apparently, the de rigeur place to hold wine-soaked bashes for the highfalutin). So what could possibly bring together a motley crew like Michael Milken, Henry Kravis, Jean-Claude Trichet and James D. Wolfensohn – among other financial luminaries? Yeah, we couldn’t believe it, either.
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WEDNESDAY OCTOBER 24
Buffett Gets Explicit
Read his lips: overheating Chinese stocks are telegraphing potential disaster. The seer of Omaha also gets specific on the timing of when he likes to strike – and when he does not.
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WEDNESDAY OCTOBER 24
Merrill Virile – Or Sterile?
Remember, you got the heads-up from us, here at Trader Daily, about this on Monday. The laggard mainstream media is now chiming in that the gargantuan bank could post up to an additional $2.5 billion of losses for the third quarter. That’s on top of the $5 billion write-down already expected by the bank. OK, paper bag over mouth, breathe slowly. Calming down now. But $2.5 bil? How does THAT happen? `Oh, sorry, we didn’t notice that extra $2.5 billion lying around. We also lost that.’ What the final loss tally might be, no one seems to know, but we suspect if Merrill’s walls were see-through, we’d descry an army of accountants sweating through their Brooks Brothers shirts tonight and burning up the midnight oil. Click here for the latest details.
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WEDNESDAY OCTOBER 24
No End To Circus Freaks
If you thought the whole SAC - Capital - traders - taking - female- hormones - thing was off the hook, here’s one we daresay tops even that: it seems that Maximila Codera, the woman accusing hedge fund billionaire Jeffrey Epstein of “bizarre and unnatural sex acts” with under-aged girls may actually be, ahem, Maximilian. It gets even stranger, with her live-in boyfriend (incidentally, a few decades her senior) posing as her lawyer, in addition to being her modeling agent, a mentor and a blogger of bleeding-heart proportions. The latest notes on a scandal.
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TUESDAY OCTOBER 23
Super Bowl Showdown 2007
As the honor roll in our Pick ‘Em and Survival games gets ever more crowded, the overall number of traders with a shot at winning Super Bowl tickets is fast shrinking. The situation is now reaching a critical mass. Read on to see if you’ve distinguished yourself yet in the throng. (If not, don’t fret: you’re still a contender for our weekly prize.)
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TUESDAY OCTOBER 23
Screen Play
What happens when one global-macro trader reluctantly gets mixed up with the Hollywood Stock Exchange.
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TUESDAY OCTOBER 23
The New New Thing
America is sometimes known for its amber waves of grain (especially with the ethanol craze in full swing). But right now, it’s better known for its newfound waves of bankruptcy filings. Desperate to keep their families from being thrown out in the street, homeowners are discovering a clever way to fight back: a little something called Chapter 13. But what will the impact on everyone else?
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TUESDAY OCTOBER 23
Still In The Shadow Of The Sword
After thousands of layoffs, surely Wall Street is done with putting its staff on the chopping block. Right? Wrong. Not content with the mere axing of a hundred or so individuals here and there, word has it that entire departments, whole lines of business, may now be at stake. As bonus time looms (and we all know that stuff happens before cash is dispensed) some tips on how to survive the next several weeks.
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TUESDAY OCTOBER 23
How To Handle A Fake Hedgie
Phony hedge fund manager and convicted felon Hakan Yalincak apparently had a softer side: a charitable streak. Before his dressing down, he donated $200,000 of the cash he’d swiped from investors to New York University. After his fall from grace, NYU was faced with a conundrum. Keep the money? (Of course.) But what to do about Yalincak’s name splashed all over a lecture hall? (Elementary, ignore the problem and it would go away.) Yeah, fat chance.
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TUESDAY OCTOBER 23
Fed Bank: Housing Slump Really Stinks
As housing starts fall to a 14-year low and consumer bankruptcies skyrocket, Chicago Fed Bank President Charles L. Evans, is urging rigorous risk-management of the U.S. economy, heightening investor expectations of another rate cut on All Hallows Eve. More from the key man involved in calling the shots.
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MONDAY OCTOBER 22
Hall Of Fame: Human Portfolio
Why hedge-fund pioneer George Weiss eschewed undervalued securities for undervalued children, guaranteeing college tuition to hundreds of inner-city kids. Twenty years on, has he made a difference (or any money)?
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MONDAY OCTOBER 22
No More Softball
How one Congressman’s “mother of all tax proposals” may soon become the carnage-laden mother of all lobbying frenzies – with a war chest being erected to sluice the green-hued spoils of Wall Street directly to friends in Washington. A sneak preview of what is shaping up to be the mother of all pi$$ing contests.
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MONDAY OCTOBER 22
Out Of Road?
As humdrum as they seem, the secret to dodging the credit-market bullet may just be infrastructure plays. But when it comes to the boring (but undeniably hot) assets of water companies and utilities, is there really enough to go around?
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MONDAY OCTOBER 22
Enjoy Your Wealth Already
In a world where money is, well, king, can there be any doubt that excess discretionary cash, to a great degree, will buy you happiness? Alarmingly, the answer is yes. This is annoying to us. Can’t people just have fun spending their hard-earned dough? Happily Spending Your Money: it can’t be that complicated. If wealth means more choices and a better quality of life then what, exactly, is the problem?
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MONDAY OCTOBER 22
Hitting The Right `Note’
How the not-so-mysterious alchemy of record U.S. home foreclosures, rising defaults and simmering inflation has transformed the modest two-year Treasury note – and its equivalents – into unbeatable bond market bets.
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MONDAY OCTOBER 22
Trader Daily Exclusive: Merrill – Even Worse Than It Seems?
Merrill Lynch held an emergency board meeting Sunday night, where it was expected to discuss incremental substantial losses on top of the $5 billion write-down it augured in an earnings preview less than two weeks ago, sources familiar with the situation told Trader Daily. The revelation hints at even more troubles for the bank just days ahead of the release of its third-quarter financial results. Are even more heads about to roll?
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FRIDAY OCTOBER 19
Quant Quest: The Gathering
For those who scratched their heads as banks’ quantitative desks got pummeled during the height of the credit crunch, consider this your last chance to find out what really happened. Algo Trading 2007 is just around the corner, and this is your last chance to pick up your tickets. Interest piqued? Then read on.
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FRIDAY OCTOBER 19
The Beat Of The Street: Little Big Man
Why four years after Dick Grasso left the NYSE, his legacy — and the pay scandal that felled him — still casts a shadow over Wall Street.
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FRIDAY OCTOBER 19
Friday Levity: The Answer Is No
If you throw some cash at a Hollywood flick starring oh, say, Lindsay Lohan, is it incumbent on you to also meet her? You know, just to kick the tires a little bit? Maybe go drunk-driving with her? Deal Journal seems to think so, poking fun at mucho-moneyed private-equity manager Tom Gores for taking on an executive producer role in Lohan flop “I Know Who Killed Me” and yet – gasp – admitting to never having met the wild and wooly starlet. For shame.
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FRIDAY OCTOBER 19
Steamed Up Over Sallie
While the legal battle rages on between Sallie Mae and a J.C. Flowers-led consortium over plans for Sallie’s $25 billion buyout, heated arguments among Sallie investors, beneficiaries and haters boil over online. We dare say some of these remarks even look to be personal attacks between perfect strangers. We had no idea that student loans got so many people’s panties in a bunch. Some choice salvos.
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FRIDAY OCTOBER 19
Another Bear Scare
Poor Bear Stearns. Can’t it just have one week go by without ending up as somebody’s scratching post? This time, Massachusetts securities regulators are circling back on its two failed hedge funds, investigating whether the monster bank conducted improper trades with them before stuffing the losses down unwitting investors’ throats.
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FRIDAY OCTOBER 19
Buried Treasure – But None For You
At least that’s what it looks like the Spanish government is telling Odyssey Marine Exploration and hedge fund backers GLG Partners and the Fortress Investment Group after the treasure hunters found an estimated $500 million in silver coins and gold treasures in the eastern Atlantic last spring. Here’s the rub: were the riches indeed found in international waters? The latest in the convolutions of this Goonies-like escapade.
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FRIDAY OCTOBER 19
Oil’s A-Boil
Overnight, the price of crude oil streaked above $90 a barrel for the first time ever, signaling the possibility of another tumultuous day – despite it being Friday, typically a day of rest for traders. While it’s likely a lot of this has to do with the weakness of the greenback, there’s the distinct possibility of some fresh, so-called “geopolitical” issues. (Like maybe a dog fight in Baghdad.) Click here for more on the score.
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FRIDAY OCTOBER 19
The Mighty Crash: Touring The Ruins
Even if you are sick unto death of hearing about the 20th anniversary of Black Monday (which we are and which, incidentally, happens to be today) we are going to beat you about the head with it anyway. Because if we have to hear about it, you do, too. And because we are sadistic like that. But you like it. All innuendo aside, in a global market where no one ever seems to learn much of anything, were any lessons learned that fateful day? And, historically, does buying on the dips really work when things go pear-shaped?
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THURSDAY OCTOBER 18
Last Call: The Great Duke-Out
If Wall Street is all about guts and glory (and it is) what better corollary than boxing? Throw in the Hammerstein Ballroom, some free-flowing alcohol and a bevy of slippered and gowned women and you got yourself one kicking night. The catch: available tables for this event are almost full and time is running out to get your tickets...
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THURSDAY OCTOBER 18
The Head Coach: Preempting Panic
When fear becomes hysteria and the skies go black, how to keep your head when no one else is.
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THURSDAY OCTOBER 18
A Word About Dirt
``It's an old adage that the guys making money in the gold fields are the shovel sellers,'' says one sagely money manager. "Mining-services companies get paid on the volume of dirt moved, whereas the miners get paid on the value of the dirt itself." And just what does that have to do with Carlyle Group and Australia’s richest man? Well, we’ll tell you what.
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THURSDAY OCTOBER 18
Yes, Another Delegation To Discuss The Yuan…
Surely this time it will work. China doesn’t want the yuan to appreciate in fast-track fashion. The ECB will go to China to chit-chat anyway. France is furious at the strength of the euro. And meanwhile, Europe’s trade deficit skyrockets 25% to another, near-meaningless, seven-month record. As Elvis would say, “a little less conversation, a little more action please.” But will Europe get it?
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THURSDAY OCTOBER 18
Bonds Pop On Another R-Scare
More herd mentality over fears of a U.S. recession sparked the steepest decline in bond yields in over a month. We think we’ve already ridden this roller coaster a couple times already this year, but is it actually going anywhere?
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THURSDAY OCTOBER 18
The Dollar (Insert Plunge-Like Verb Here)
Gah, if we hear any more news about the plunging dollar we are going to, uh, complain about it some more. Japan’s top currency maven, Eisuke Sakakibara (if you can say it, we’ll get you a free car wash) is auguring that the greenback’s downward spiral is only beginning. What he expects the U.S., Europe and Asia will have to do to break its fall.
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THURSDAY OCTOBER 18
SAC: Curiouser And Curiouser
Charges being levied against SAC Capital and at least one of its traders have now gotten so bizarre a judge has now sealed off the details, deeming them “not in the public interest.” (We, of course, humbly beg to differ.) So far as we understand it, the allegations paint a picture of a hedge fund where male traders were asked to take female hormones, even as the firm resisted hiring female traders. Apparently, the ideal trader is more of a she-man. Or a he-her. Whatever. More on this tale of the sick and twisted.
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THURSDAY OCTOBER 18
A Very Scary Hallowe’en?
All Hallows Eve may be frightening, indeed, if the read on interest rates remains this foggy in the run-up to the Fed meeting at that time. With the housing slump getting worse and worries about its knock-on effects only deepening, a look at what economists and futures markets have to say about which way Benny & Friends are leaning.
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WEDNESDAY OCTOBER 17
The Card Shark: Wolf Among Sheep
How market volatility offers the same kinds of opportunities for savvy traders as a loose amateur at my poker table.
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WEDNESDAY OCTOBER 17
TCI: Back On The War Path
The ever-acerbic Children’s Investment Fund has found its next windmill to tilt at. But like so many of its other overwrought investees, we have a sneaky suspicion this enterprise is none too pleased about its new dalliance.
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WEDNESDAY OCTOBER 17
Superchumps?
The barn-raising of the famed and massive Treasury-backed, $80 billion-ish “superfund” is now in full swing, but who will be its willing victims – cough, cough – we mean, its sponsors? Turns out some big names are cropping up.
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WEDNESDAY OCTOBER 17
Getting Out Of Dodge
Official data is now trickling in that foreign investors liquidated billions parked in U.S. securities in August, marking the biggest monthly decline on record – and one that more than tripled the last record set in 1990. And that’s not even the worst of it.
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WEDNESDAY OCTOBER 17
Transparency Trap
Will the global push for hedge fund transparency threaten to undo exactly what makes hedge funds so great?
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WEDNESDAY OCTOBER 17
Hotter Than The Devil
In the great scheme of things, you could say commodities traders now fall somewhere between Chernobyl and Dante’s inferno in terms of their Wall-Street-hotness factor. Without bringing up the Dutch tulip bulb craze, we’ll just say this: when even the credit crunch can’t touch you, you know you’re a god among men. The latest scuttlebutt on the commodities craze – and the eye-popping figures to prove it.
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TUESDAY OCTOBER 16
Super Bowl Showdown 2007
More prescient football fans make their mark in our Pick ‘Em and Survival games this week – find out if you’re one of them. Remember, prizes are still up for grabs for all rabid contenders.
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TUESDAY OCTOBER 16
Three Rules: Trader Without Borders
In an increasingly global marketplace, Ryan Kwiatkowski is making his mark as a cross-border king.
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TUESDAY OCTOBER 16
Career Myopic, Tudor-Style
As the walls came down on Wall Street during the 1987 market crash, many traders lost their heads. How billionaire hedge fund manager, Paul Tudor Jones II, not only defied the odds, but nailed a 200 percent gain for his investors that year, drawing a personal payday of an estimated $100 million – an almost unheard-of sum at the time.
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TUESDAY OCTOBER 16
Junk’s Greatest Hits
Guess what the best bonds in the market for high-yield debt are financing? Some hints: Oil rigs, Malacca Strait, Yellow Sea. Read on for how these diamonds in the rough are raking in top profit.
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TUESDAY OCTOBER 16
Sweet Relief
For now, it looks like the Fed’s rate cut has eased pressure on the financial markets, but Ben Bernanke reveals what would make him consider slashing rates again.
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TUESDAY OCTOBER 16
Moral Hazard II: Back With A Vengeance
Could be a great movie title, if it wasn’t utterly ruined by the fact that it’s getting so painfully tedious. Rather than the stuff of Hollywood films, this, sadly, is the stuff of the bleating peanut gallery, which, for all its righteousness, isn’t above trotting out its “moral hazard” argument again in honor of one very special target: U.S. Treasury Secretary Henry Paulson. Sheesh, Pauly-baby just can’t catch a break lately.
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TUESDAY OCTOBER 16
Weird Shades Of Gray
Oh how we love those characterizations by the press about how growth “slowed faster” or losses “fell slower.” Like, why should anything just rise or fall, right? Boring. By that standard, it appears today’s expectations for industrial production will not disappoint.
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TUESDAY OCTOBER 16
Goldman’s Rabbit Trick?
No sooner had Goldman reported its third-quarter earnings than the furious chin-stroking and tongue-wagging commenced all up and down Wall Street. As one investment bank trader remarked to Dealmaker, “Look, no one knows what exactly they did – but no one’s buying it, either.” How is it that nearly every other bank gets spanked, and yet the G-men come out smelling like a rose? As it turns out, it may have a little something to do what those in the biz like to call “unrealized” gains.
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MONDAY OCTOBER 15
My Best/Worst Trade: Tankers Away
So what if I didn’t know anything about ships? How I stowed away some alpha courtesy of the oft-overlooked energy-transportation sector.
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MONDAY OCTOBER 15
Staying In The Black
What were you doing during the 1987 stock-market crash, which will be 20 years ago this week? Some hints on how to blissfully weather systemic financial meltdowns like Black Monday by way of abject ignorance. No, seriously.
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MONDAY OCTOBER 15
Brakes On Bond Rally?
What’s safe, albeit boring, and poised to start selling much like the hotcakes credit-default swaps are not?
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MONDAY OCTOBER 15
The Rest Of The Story
The FT’s case for why Paulson may be right to continue being cavalier about a weak dollar. (After all, if the U.S. can swallow its pride, along with its trade deficit, the whole thing just might not be so bad.)
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MONDAY OCTOBER 15
But What’s Paulson Done For Us Lately?
As the euro trounces the greenback, European exporters are feeling the pain – and they have some choice words for U.S. Treasury Secretary Henry Paulson about that. A look at what may be in store for the dollar, whose sharp swoon has galvanized forex trades.
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MONDAY OCTOBER 15
And Now For Some Probity…
So, if you’ve read any of the story above (and you should, if you don’t want to look like you’ve been under a rock for the past 48 hours) you already know Treasury’s role in Wall Street’s latest scheme to revive the beleaguered credit markets. But when does “improving liquidity” become, er, a “bailout”?
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MONDAY OCTOBER 15
Fixing What’s Broken
What? No one wants to buy anything really ratty in a seized-up credit market anymore? Oh yeah, right…no one was buying in the first place. That said, no one on Wall Street (or in Washington) is out of ideas yet. In fact, while you were hanging out poolside in your Bahama breeze deck chair sipping cocktails and eating frozen grapes this weekend, the U.S. government was formulating a new, high-stakes plan with monster banks that definitely, most definitely will work this time. We think.
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MONDAY OCTOBER 15
Déjà Vu All Over Again
We don’t know about you, but if crude oil futures are minting yet another record on Middle East tensions – and, far as we can see, those tensions are not only ever-present but, well, endless – that means oil is basically going to rally on just about anything now. But will it hit $100 before the end of the year?
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FRIDAY OCTOBER 12
My Charity: Class-Action Suits
Why Bear’s Brent Giese is bullish on the well-tailored youngsters of Project Pinstripe.
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FRIDAY OCTOBER 12
Friday Levity: Money Vs…
As Web address Wallstreet.com goes up for auction, speculation has been fast and furious over whether it will beat out the mammoth amount paid for another much-sought-after domain name: Porn.com (which went for $9.5 million). So, Bloomberg breathlessly asks, “Is money hotter than sex?” Dumb question, Bloomberg. Money IS sex.
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FRIDAY OCTOBER 12
Rock Fight!
Ever since Northern Rock started going down, everyone but everyone – from funds to private-equity firms – have been champing for a piece of it. Details on the newest hedge fund to emerge with a stake in the limping bank after picking up the sweet scent of blood on the water.
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FRIDAY OCTOBER 12
R-Word: Redux
The good news: Economists are finally piping down about prospects for a recession. Looks like this Wall Street hobgoblin has been chased off – for now. The bad news: Retail sales look none too rosy, which means even chump consumers are reining in. Read on for highlights of the upshot.
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FRIDAY OCTOBER 12
Final Fantasy: Mark To Market
PlayStation should add this to the popular FF series. The objective: Guess the prices of the world’s most bizarro, patently unwanted, thinly (or never) traded financial products. Ten points for every answer – whether it’s right or wrong. Twenty-five points if you can get anyone to buy it from you. Fifty points if you can offload it for a profit. One hundred points if you can force your entire book of losses down another player’s throat. Boo-yaw! Now for some even deeper thoughts on the subject…
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FRIDAY OCTOBER 12
Happy Fun Surplus
We were having dim sum at the Happy Fun Kitchen this morning when we caught wind of the Chinese surplus. It was a really zen moment. (It also helps that any story on China’s economy invariably comes with a preponderance of earnest, pie-eyed quotes like this one: "All the money flooding in is a phenomenal problem.") Click here for full quotage. We cannot get enough of it.
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FRIDAY OCTOBER 12
America’s Richest 1%
…Earned 21.2% of the nation’s wealth in 2005, according today’s rich-obsessed survey, marking a new post-war record. (Wow, big shocker there.) But guess what percentage the bottom 50% earned? Now that number really is kind of scary.
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THURSDAY OCTOBER 11
Test Drive: Booster Shot
Will a fizzy new energy drink provide rocket fuel to your P&L? Celebrities think it will, so it must be true. But we kicked the tires, just to be sure.
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THURSDAY OCTOBER 11
On Foxes And Henhouses
Europe’s top hedge fund manager have a propitious idea: Instead of letting independent forces regulate them, why don’t they just regulate themselves? Hey, it worked for U.S. futures exchanges. (Ever hear of an SRO? It stands for self-regulatory organization. No kidding.) More on whether this is crazy concept might fly.
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THURSDAY OCTOBER 11
Ethanol Stall?
As corn prices skyrocket, Washington’s erstwhile Friends of Ethanol have started to turn against it. Why the so-called barnyard lobby – those providing the nation’s meat, livestock and poultry – will be exercising enormous clout in determining what happens next.
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THURSDAY OCTOBER 11
Risky Business
The Wall Street Journal is stating the obvious again, but this story is sure be e-mailed around today, so we are forced to hail its momentous arrival. The big conclusion: The subprime disaster isn’t just a problem for the poor. (No duh…) It’s touched nearly every part of the nation from the lowest hamlet to the highest ivory tower. That said, there’s some hard data in here that’s worth a read.
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THURSDAY OCTOBER 11
Dog Day
Many hedge funds foundered in August when the subprime mortgage market decided to make like a tree and leave. But one bank’s quantitative-strategies desk took a massive drubbing during the course of a single DAY.
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THURSDAY OCTOBER 11
Ganging Up
It’s official: Nine Wall Street firms have agreed to plunk down $280 million for a minority stake in bond-trading firm TradeWeb LLC. The move, which should be announced today, will help consolidate fragmented markets and allow a select group of dealmakers to sink their talons ever deeper into the trillion-dollar bond business. Read on who stands to gain and who stands to lose.
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THURSDAY OCTOBER 11
SAC Dress Code: Fact Or Fiction?
OK, we readily admit we really don’t know what is up with the requisite haberdashery over at SAC Capital. Has it taken a turn for the worse? Is it super-weird? Is it even – gasp – homoerotic? This latest report seems to imply all three. (Er, and by imply, we really mean state outright.) Just like that Richard Gere-gerbil rumor, you can only hear the story so many times before you start to believe it.
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THURSDAY OCTOBER 11
Another Home Run
Another Home Run
Fresh from the trenches: Interdealer broker ICAP is tightening its stranglehold on currencies by inking an agreement to snap up independent foreign-exchange-processing firm Traiana for $238 million. How this deal will set into motion more shiftings of the tectonic plates of the $3.2 trillion global currency market.
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WEDNESDAY OCTOBER 10
Buy This Island: Key Acquisition
How can a picturesque South Florida idyll offer peace, quiet. . .and ’90s college-rock nostalgia? We’re glad you asked.
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WEDNESDAY OCTOBER 10
Wall Street, Vonnegut-Style
Vonnegut may be dead, but one of his relatives is alive and kicking – and may even be penning his own version of Slaughterhouse.
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WEDNESDAY OCTOBER 10
Hung Up On Fine Print
Should investors be allowed to go after third parties that help a public company mislead them? How the Supreme Court may ultimately handle this extremely delicate matter has far-reaching implications for the market.
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WEDNESDAY OCTOBER 10
Rates To Again Face Guillotine?
Will it or won’t it? True, people would have absolutely nothing to talk about on Wall Street if they couldn’t madly speculate on Fed moves. But, for now, it may all be for naught, as a number of market seers say the writing is already on the wall.
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WEDNESDAY OCTOBER 10
Not Out Of The Woods Yet
Everyone who was anyone was at the loan powwow at the W Hotel last week in midtown Manhattan. The ballroom was so packed that an anteroom with a TV set had to be opened to accommodate the overflow of guests and gawkers. But somehow, banks remain on the hook for roughly 90% of the leveraged buyout loans still in the U.S. pipeline. What will finally bring sweet relief?
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WEDNESDAY OCTOBER 10
Killing The Golden Goose?
Calyon blames him for $353 million in losses from alleged unauthorized trades. He says he was the “golden child” of the trading desk, his trades were cleared by superiors and he’s being set up. What is this world coming to when a trader can’t take a little risk without fretting over the possibility of a company-backed, face-saving heave-ho?
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WEDNESDAY OCTOBER 10
The Other Shoe Drops
Last Thursday, Trader Daily posted the famous, over-the-top, sugardaddy-seeking Craigslist blurb that’s been making the rounds on Wall Street of late. We kind of saw it as a novelty, a bright amusement for our overworked traders, a sign of the times, even. But The New York Times apparently saw it as fodder for some very serious, investigative journalism. (What is up with the Times anyway? Wave a dollar bill at them and watch them start drooling like day-old Basset hounds.) In any case, here are the spoils of their hard-nosed probe.
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WEDNESDAY OCTOBER 10
Mayday: Trader Down!
The long and storied career of Victor Niederhoffer, man of the colorful trousers and extreme office temperatures, has taken another turn for the worse. But don’t bet this Phoenix won’t rise from the ashes again.
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TUESDAY OCTOBER 09
Super Bowl Showdown 2007
The carnage is reaching an apex in our Pick ‘Em and Survival games, but if you don’t know where you stand, you don’t know who you need to beat. Click here for your ranking in our latest weekly standings.
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TUESDAY OCTOBER 09
Doctor’s Orders: The Bar Exam
You have everything else your way, so why not your food, too? But does a new create-your-own health food justify the hype?
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TUESDAY OCTOBER 09
Shudder To Think
A recent Bush t-shirt says, “If you can read this, you’re not our president.” Another: “Bad Bush! No Banana!” Stuff like this – not to mention a hideously unpopular war – has gotten Republican presidential hopefuls a little down in the mouth lately. The clincher may soon be yet to come, however...
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TUESDAY OCTOBER 09
Parade Of The Petrodollars
The most impressive quarterly rally for U.S. government securities in five years is getting a leg-up from the burgeoning reinvestment of petrodollars by a certain usual suspect. But where’s this trend heading?
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TUESDAY OCTOBER 09
Muddled And Befuddled
But what did you expect? Not able to make hide nor tail of the euro's rally to a record high against the dollar (or hash out any kind of common position on the situation) European finance ministers decide to pass the buck to China. Find out more on when this spineless game of hot potato might end.
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TUESDAY OCTOBER 09
Washed Update: The Dollar...And Everything Else
Total G-10 cross-border assets and liabilities now amount to over $100 trillion, and the risk-appetite of currency traders is on the upswing. As summer temperance runs its course and losses quickly retrace, we offer this cheat sheet on which trades are in – and out – for your feverish fall betting.
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TUESDAY OCTOBER 09
Having Your Cherries – And Eating Them Too
(And maybe even buying a Saleen S7 with them. But we digress.) New academic research is suggesting that hedge funds (not your hedge fund, of course, but, you know, some of the naughtier ones) appear to be cherry-picking the best prices when valuing securities that don't actively trade. We really don’t know why they’d be doing that, but it’s all good, since the press has, per usual, generated some rapid-fire answers.
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MONDAY OCTOBER 08
Tunes: Vee-Jay
An influential record label gets a much-deserved second look, unearthing some of the best blues, pop, doo-wop and jazz of the past century. Read on for how a single collection of music can redeem your utter ignorance of anything pre-Jesus Jones.
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MONDAY OCTOBER 08
Hedge Fund? – Securities Firm? – Hedge Fund?
It’s chameleonic. It’s like Ruby Tuesday. And when it gets smacked down by the subprime disaster, it just yanks a pile of bills out of its other pocket. It’s always the hunter and never the hunted. But how does this bank do it? And what exactly is it, at this point – a securities firm or a hedge fund?
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MONDAY OCTOBER 08
Watch Wars
When a 1950s Omega platinum watch sold for $351,000 in April, Omega trumpeted the sale as a new high watermark, announcing a "Swiss bidder" had offered "the highest price ever paid for an Omega watch at an auction." What Omega did not say: the buyer was Omega itself. More on the little games watchmakers play in the luxury market.
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MONDAY OCTOBER 08
Hedgies: Ready To Rumble
Appaloosa Management is looking to one-up a major deal Centerbridge Capital Partners has pulled together with auto-parts maker Dana – but, as a sign it might not be doing so well, the hedge fund is engaging in that one cardinal sin we find unforgivable: whining.
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MONDAY OCTOBER 08
Stocks: Calm Before The Storm?
