Monday, October 1, 2007

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 Top Stories


M.Stanley,JP Morgan ex-execs to launch hedge funds
Source: Reuters UK
Recent volatility and slumping returns in the hedge fund industry have not dampened the appetite for new funds founded by former investment bankers from firms such as JPMorgan Chase to Merrill Lynch & Co. More...

Goldman makes $370m after saving its black box hedge fund
Source: Times Online
Goldman Sachs is understood to have made a profit of $370 million (£181 million) from the rescue last month of its imploding “black box” hedge fund Global Equity Opportunities. More...

New Star launches property hedge fund with $50 mln
Source: Reuters UK
British fund firm New Star Asset Management (NSAM.L: Quote, Profile , Research) said on Monday it had equity commitments of $50 million and that it wanted to raise up to $400 million for its new real estate hedge fund. More...

High Performance
Source: Barron's Online
IF YOU DON'T BELIEVE US, just ask Bear Stearns chief James Cayne how tricky hedge-fund performance can be. Because a couple of his firm's funds got blindsided in August's subprime-mortgage panic, he's now spending time fending off speculation about the fate of his venerable investment bank. More...


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

  Term of the Day & Related News

Junk Bonds

In finance, a high-yield bond (non-investment grade bond or junk bond) is a bond that is rated below investment grade, i.e. below BBB- by Standard & Poor's (S&P) or Baa3 by Moody's. These bonds have a higher risk of defaulting, but typically pay high yields in order to make them attractive to investors. More...
 
Related News:

He takes most of his chances on junk
Source
: The Philadelphia Inquirer
Investment manager Andrew Cestone specializes in buying high-yield - or junk - bonds for less than they are really worth.

During the week leading up to the Federal Reserve's meeting Sept. 18 on interest rates, Cestone seized such an opportunity.
More...

Trashed junk bonds making a comeback
Source
: The Los Angeles Times
Investors in corporate junk bonds have recouped about half of their losses from the summer credit crunch.

But some analysts warn that the plunge in high-risk bond prices in June, July and August could be a dress rehearsal for what the popular securities might face next year if the economy weakens substantially and more companies have trouble paying their debts. More...

  Scholarly Article & Related News

Does the Use of Financial Derivatives Affect Earnings Management Decisions?
by Jan Barton
I examine the effects of derivatives use on earnings management behavior. I develop a self-selection simultaneous-equations model that captures managers' incentives to use derivatives and manage discretionary accruals. Empirical results from estimating the model on 1994-1996 data for a sample of 304 Fortune 500 firms indicate that firms with larger derivatives portfolios have lower levels of
discretionary accruals...
More...

 
Related News:

CreditMatch improves derivatives processing
Source: FinancialNews-US.com
Significant advances in straight-through processing in the past year earned GFI Group’s credit derivatives trading platform CreditMatch the title of Best Over-the-Counter Trading Venue.
More...

How Derivatives Give Shelter
Source: The Wall Street Journal Online
Uncertainty over global financial markets and a predicted downturn in commercial property could be the catalyst for a significant increase in property-derivatives trading in the U.S. and the United Kingdom.
More...

  Top Stories by Category
  Book of the Day & Related News

   
Real Estate Backed Securities
by Frank J. Fabozzi, John N. Dunlevy
Price: $37.77
 
 
Book Description
Real Estate-Backed Securities provides today s most concise yet comprehensive understanding of passive real estate investing. Issues discussed include agency passthrough securities and mortgage strips, agency collateralized mortgage obligations, nonagency residential MBS, commercial mortgage-backed securities, and more.

Related News:

Asset-backed debt sales may halve in `08: Lehman
Source: Business Standard
Sales of securities backed by assets, including mortgages, may shrink by as much as 50 per cent in Europe next year because the yields investors demand to buy the debt are too high, according to Lehman Brothers Holdings.
More...

Credit Suisse sheds 150 staff from mortgage-backed securities work
Source
: Times Online
Credit Suisse yesterday became the latest bank to cut jobs in the wake of the global credit crunch when the Swiss bank shed 150 employees working on mortgage-backed securities. More...

 

  Personal Interest


Microsoft Office heads to the Web
Source: CNET
In another clear sign that Microsoft sees the threat posed by its traditional business moving online, the company is readying a rival to Google's Documents and Spreadsheets. More...

Eight states to back suit vs U.S. over kids' health
Source: Reuters
Eight states will back a lawsuit to stop the federal government from imposing new rules which they fear will force them to cut children from a health insurance program, New York Governor Eliot Spitzer said on Monday. More...

 

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   Top Stories (Continued)


Corp. Express review disappoints hedge funds-sources
Source: Reuters UK
Dutch office goods supplier Corporate Express's (CXP.AS: Quote, Profile, Research) decision to continue as a stand-alone disappoints, sources close to hedge fund investors said on Monday. More...

GFI boss defends hedge funds’ access to platforms
Source: eFinancialNews.com
Last week’s decision by MTS, the European government bond trading platform, to allow hedge funds to trade on its systems may have ruffled the feathers of its largest dealing clients. However, the boss of GFI, the interdealer broker that broke ranks and admitted funds last month, believes banks should embrace the change, to resist the challenge from futures exchanges. More...


Hedge fund access to capital dries up, exposing new risk
Source: Financial Week
Just nine months ago, Citadel Investment Group’s issuance of $500 million in five-year bonds led to a spate of reports about other hedge funds considering doing the same to reduce their dependence on bank financing. Raising funds in the bond market would help funds avoid margin calls and perhaps allay bank regulators’ concerns about their charges’ exposure to the unregulated investment vehicles. I-banks and credit rating agencies geared up for the hedgie bonds to come. More...

Hedge Fund Replication Critiques And Responses
Source: SeekingAlpha
At a recent conference, Professor Harry Kat of hedge fund replication fame presented a list of his specific rebuttals to 10 criticisms. He’s since included the audience’s feedback in a new article on distributional replication released this weekend. More...

State Street Receives Top Rankings in Global Custodian Hedge Fund Administration Survey for Fourth Consecutive Year
Source: BusinessWire
State Street Corporation (NYSE: STT), the world’s leading provider of financial services to institutional investors, announced today that its hedge fund administration company, International Fund Services (IFS), achieved top rankings for the fourth consecutive year in Global Custodian magazine’s annual Hedge Fund Administration Survey. The 2007 survey rated 20 service providers, the highest number ever.
More...

US Hedge Funds Set to Talk to Northern Rock -Paper
Source: Reuters UK
The British Treasury has given two U.S. hedge funds permission to start takeover talks with stricken British mortgage lender Northern Rock Plc (NRK.L: Quote, Profile , Research), the Sunday Telegraph newspaper reported. More...

Hedge fund appetite put to test
Source: Financial Times
Investor appetite for hedge funds which weathered this summer’s market storms will be tested by the announcement on Monday of up to £300m ($612m) of new money raising by two listed funds that specialise in investing in the sector. More...

Meet The Hedge Fund Historian
Source: Forbes
"The devastating nuclear exchange of August 2007 represented not only the failure of diplomacy, it marked the end of the oil age. Some even said it marked the twilight of the West."
More...


Today's Stories unabridged on the web
 

 
   Today's Humor
A man who was in a hurry to get to work was pulled over for speeding.

"What am I supposed to do with this?" grumbled a motorist as the policeman handed him the speeding ticket.

"Keep it," the cop said. "When you collect four of them, you get a bicycle."

 

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