Monday, August 6, 2007

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 Top Stories


Hedge fund industry set to ride out credit crisis
 Source: Reuters
Hedge fund investors are bracing themselves for poor July performance data as the credit crisis begins to bite, but the versatile industry is set to ride out the turmoil this autumn as it looks to new opportunities. More...

Bear Stearns hedge-fund exec resigns
 Source: The Seattle Times
Bear Stearns Cos. said Sunday that co-President and co-Chief Operating Officer Warren Spector has resigned after the meltdown of two hedge funds that invested in risky mortgage-backed securities. More...

Hedge Funds To the Rescue
 Source: The Washington Post
A decade ago, financial globalization seemed terrifying. Crises swept from East Asia to Russia and Brazil; the implosion of a globe-spanning hedge fund, Long-Term Capital Management, forced the Fed to orchestrate a bailout. But this decade may be remembered for the opposite lesson. More...

 Aima appoints Baker to fight UK hedge fund clampdown
 Source: The Independent
The hedge fund trade body AIMA has lured a high-level executive from the industry to take up the newly created role of deputy chief executive, in a move to head off a threatened regulatory and tax clampdown of the $1.6trillion sector. More...


More of Today's Stories continued below...  or  Today's Stories unabridged on the web

  Term of the Day & Related News

Risk Arbitrage
This strategy involves transaction-specific analysis seeking to profit by acquiring securities which are discounted from the value to be paid for them in a proposed merger or acquisition due to the uncertainty of transaction timing and completion. The difficulty is in analyzing the risk of delay or non-completion and determining when during the period from the commencement of a proposed merger or acquisition to the conclusion (successful or unsuccessful) of the transaction it is most efficient — on a present value basis — to take a position. Risk/merger arbitrage Portfolio Managers typically seek speculative profits from the purchase of shares in forecasted acquisition targets, while maintaining defensive positions through hedges in acquiring companies and disciplined risk management. More...
 
Related News:

Business comment: Hedge funds are the new kingmakers of M&A
 Source: Telegraph.co.uk
The small Dutch town of Utrecht tomorrow afternoon takes centre stage in the world's biggest-ever deal in the financial-services sector. Over the past few months, a consortium led by Royal Bank of Scotland has been squaring up against Barclays in the battle to win ABN Amro, the Dutch Bank. More...

Six Attractive Risk Arbitrage Situations
 Source: SeekingAlpha
On the heels of the difficulty banks are having placing the debt being used to fund M&A activity, and the apparent start of a buyout dry-up, currently announced but not yet completed deals have seen spreads (the discrepancy between the purchase price of the company and the market value of the stock) widen. More...
  Scholarly Article & Related News

The Collapse of First Executive Corporation: Junk Bonds, Adverse Publicity, and the 'Run on the Bank' Phenomenon
 by Harry Deangelo, Linda Deangelo, & Stuart C. Gilson
In April 1991, regulators seized the major subsidiaries of First Executive Corporation (FE), an insurer that invested heavily in junk bonds. During the junk bond market turmoil of 1989-1990, adverse publicity fueled a bank run at FE, forcing a $4 billion portfolio liquidation before the market rose 50-60 percent in 1991-1992. More traditional insurers did not receive commensurate press coverage, despite their substantial exposure to real estate declines, which were roughly 2.5 times the junk bond decline... More...
 
Related News:

S&P, Fitch cut Boston Scientific's debt to junk
 Source: Reuters
Standard & Poor's and Fitch Ratings on Friday cut their ratings on Boston Scientific Corp. (BSX.N: Quote, Profile , Research) into junk territory, citing the company's decision to retain its endosurgery business after looking into selling a minority stake through an initial public offering. More...

 Junk bonds became majority in Q2
 Source: CNNMoney.com
The corporate bond market tipped to junk in the second quarter of 2007, with speculative-grade issues in the majority for the first time in 25 years, Standard & Poor's (NYSE:MHP) said in a report distributed Thursday. More...
  Top Stories by Category
  Book of the Day & Related News

   
Fixed-Income Arbitrage
by M. Anthony Wong
Price: $62.36
 
Book Description
An exposition to the world of relative-value trading in the fixed-income markets written by a leading-edge thinker and scientific analyst of global financial markets. Using concrete examples, he details profit opportunities--treasury bills, bonds, notes, interest-rate futures and options--explaining how to obtain virtually risk-free rewards if the proper knowledge and skills are applied. Discusses the critical success factors of relative-value trading and highlights the important role of technology, capital requirements and considerations in order to set up a fixed-income arbitrage system.

Related News:

UBS Names Esteves to Run Fixed-Income; Bunce to Leave (Update1)
Source: Bloomberg
UBS AG, which ousted its chief executive officer last month after three quarters of declining earnings, named Latin America Chief Andre Esteves to run global fixed-income sales and trading. More...

AIG Investments appoints Sandeep Bagla as CIO-Fixed Income
 Source: Moneycontrol.com
AIG Investments today announced the appointment of Sandeep Bagla as Chief Investment Officer - Fixed Income. Based in Mumbai, Sandeep will be responsible for overseeing the investment and research of various fixed income related funds of the asset management business. Sridhar Narayan, the existing CIO - Fixed Income is moving internally to take on new responsibilities at AIG Investments - Private Equities Division. More...
 
  Personal Interest


Woods Wins Bridgestone Invitational
 Source: ABC News
Tiger Woods looked as unbeatable as ever Sunday at Firestone. Woods erased a one-shot deficit in two holes, then buried Rory Sabbatini and the rest of the field to win the Bridgestone Invitational for the third straight year and send him to the PGA Championship with his game in good shape. More...

'Bourne Ultimatum' gives 'The Simpsons' the boot
 Source: Boston.com
The amnesiac assassin Jason Bourne is back, and this time he clobbered Homer Simpson on his way to scoring the biggest film opening ever for the month of August. More...
 

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   Top Stories (Continued)


CLSA, Triple A team up to seed Asia hedge funds
 Source: Yahoo! News
Credit Agricole's Asian investment banking arm, is teaming up with an alternative fund specialist to raise $300 million for investing in start-up hedge funds in the hope of tapping future star managers. More...

Best risk mgmt practices needed for hedge funds
Source: The Economic Times
There’s a bull in the china shop that is the over-leveraged and debt-ridden financial marketplace in the US, and it has led globally to stock market-indices falling like nine pins. Troubled hedge funds seem to pose systemic credit risks across the board. The fact is that skyrocketing default rates in the US sub-prime mortgage market have left hedge funds heavily exposed to home-loan securities, much susceptible to bankruptcy — a few biggies have already gone bust — and have begun to affect capital markets negatively, like last week. More...

 Calpers sets benchmark
 Source: FinancialNews-US.com
When Richard Breeden, the former Securities and Exchange Commission chairman who heads Breeden Capital Management, stirred up the directors of US restaurant chain Applebee’s and tax adviser H&R Block, his $1bn (€730m) fund wasn’t tilting at windmills. More...

Hennessee Is Cleared in Hedge-Fund Loss
 Source: The Wall Street Journal
A federal judge has dismissed a lawsuit against Hennessee Group LLC, filed by a client who lost money in now-defunct hedge fund Bayou LLC.

"We are ecstatic," said Charles Gradante, who runs the company with his wife, Lee Hennessee. "Both Lee and I believed all along that the allegations were without merit." More...

New hedge fund framework created
 Source: Global Pensions
A framework for a new type of self-regulated hedge fund has been created aimed at achieving hedge fund returns in a more controlled investment environment.

The LiquidFunds Program, from Morgan Stanley, includes 15 funds that will differ from conventional hedge funds in offering investors the flexibility to purchase or sell their positions on a weekly basis and will also agree to comply with specific investment guidelines and common corporate governance standards. More...

F1 debt is $3bn but returns are so good, hedge funds want in
 Source: The Independent
The Royal Bank of Scotland (RBS) and Lehman Brothers are believed to be in discussion with several major hedge funds to syndicate the $2.9bn (£1.4bn) debt owed to them by Formula One motor racing. More...

Hedge fund chicanery is threatening deals
 Source: Times Online
HEDGE FUNDS love market volatility. They feed on it like a Great White chomps Cornish bathers. They like it because they can do what traditional City institutions cannot – make money whether a share price goes up or down. As long as it is moving, and frequently, they are happy. More...

U.S. Senate report faults SEC on hedge fund probe
 Source: Reuters
 The Securities and Exchange Commission mishandled an investigation of suspicious hedge fund trading that led to the 2005 firing of an SEC attorney, a U.S. Senate report says. More...


 Today's Stories unabridged on the web
 
 
   Today's Humor

While working as a radiology technician in a hospital emergency room, I took X-rays of a trauma patient. I brought the films to our radiologist, who studied the multiple fractures of the femurs and pelvis.

"What happened to this patient?" he asked in astonishment.

"He fell out of a tree," I reported.

The radiologist wanted to know what the patient was doing up a tree.

"I'm not sure, but his paperwork states he works for Bob's Expert Tree Service."

Gazing intently at the X-rays, the radiologist blinked and said, "Cross out 'expert.'"
 

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