Archive

from Unstructured Finance:

UF Weekend Reads

A beautiful spring day in the NYC metro area. Let's Go Mets! Here's this weekend's stories courtesy of Sam Forgione.

From The New York Times: 

Jennifer Medina reports that California's economy is either booming and busting, depending on which city you're in.

From The Nation: 

William Greider has some suggestions on how the Federal Reserve can work with politicians to improve the housing crisis.

From Foreign Affairs:

from FaithWorld:

Pope slams selfish food speculators, urges curbs on world commodity markets

(Traders in the Corn options pit at the CME Group signal orders shortly before the closing bell in Chicago, February 11, 2011/Frank Polich )

Pope Benedict said on Friday financial trading based on "selfish attitudes" is spreading poverty and hunger and called for more regulation of food commodity markets to guarantee everyone's right to life. "Poverty, underdevelopment and hunger are often the result of selfish attitudes which, coming from the heart of man, show themselves in social behaviour and economic exchange," the pope told a U.N. food agency conference.

"How can we ignore the fact that food has become an object of speculation or is connected to movements in a financial market that, lacking in clear rules and moral principles, seems anchored on the sole objective of profit?" he asked.

The Rome-based Food and Agriculture Organisation's (FAO) food price index hit a record high earlier this year, reviving memories of soaring prices in 2007-08 that sparked riots in developing countries. That gave fresh urgency to the debate about how to improve a global food system that leaves some 925 million people hungry.

There is controversy over how much a new wave of investments by funds into commodities has contributed to pushing up prices. The issue has pitted French President Nicolas Sarkozy, who blames speculators for surging food prices and unrest in some countries, against other countries who see little interest in more market regulation.

In June, G20 farm ministers struck a deal that paved the way to more global cooperation on agricultural issues but steered clear of concrete regulatory measures.

from MacroScope:

Frustrated Greeks

The Greek debt crisis appears to be entering a new phase, in which the country is no longer just waiting to get needed help but getting concerned that others -- including euro zone powerhouse Germany -- may actually be making it hard for them to recover.

First, there is Prime Minister George Papandreou (right in photo). His concern is that speculators are pushing  the cost of borrowing so high that it is undermining the plans he has put in place  for deficit reduction.  Papandreou is known for being a mild-mannered sort, so any kind of irritability is worth noting.

But Theodoros Pangalos (left), the deputy prime minister and once foreign minister, has no such reputation to hold him back.   He has launched an attack on Germany, saying that a) it is allowing its banks to mess around with Greek bonds and b) that it suits Berlin in any case to let the euro fall.

Pangalos is famous for his undiplomatic outbursts. He once referred to Germany as a giant with a child's brain. Another time he suggested that the then -French president was essentially belly-dancing in front of the Turks to get their business.

So perhaps a pinch of salt should be taken re Pangalos. But put together, the two bouts of finger-pointing do suggest that at the very least the Greeks are getting frustrated with the substance-less expressions of support they keep getting.

from Global Investing:

When is a speculator not a speculator?

A lot of fuss is made about the dangers of speculators in commodity markets. But who is a speculator and who isn't is based on a definition drawn up in the early part of the last century in the United States. The definition is no longer valid and anybody looking at those reports should be wary of drawing any firm conclusions.

For a start the word "speculator" with negative connotations is applied to pension funds, which invest over the long term to provide retirement income for many people around the world. Hedge funds are normally speculators but if they have hold the physical commodity then they can say they are commercial hedgers. Taking this theme a little further many natural resource companies run their Treasuries as profit making centres, which encourages them to trade the commodities they produce.

The London Metal Exchange has said it won't go down the route the CFTC has and publish a weekly report detailing speculative long and short positions because there is no clear definition.

The CFTC bowing to popular pressure has continued to provide these weekly reports detailing long and short speculative positions, which ultimately could be misleading and make scapegoats of all investors whatever their ilk.

from Funds Hub:

Sowing seeds for a healthy hedge fund investment

Further signs that, for those with cash to invest, there could be some great opportunities to invest in hedge funds.

Man Group's RMF Global Emerging Managers portfolio has invested $50 million in 5:15 Capital Management's* flagship fund and says the opportunity set has never been better.

The reason, according to Hans Hurschler, head of hedge fund ventures at Man, is twofold.

Firstly, many speculators such as hedge funds and bank prop trading desks have simply been wiped out or seen their firepower curtailed as a result of the credit crisis. This means less competition for those remaining funds.

Secondly, there are still few investors willing to commit capital, so hedge funds are often fighting over seed capital.

At last month's GAIM conference in Monaco, FRM Capital Advisors chief operating officer Patric de Gentile-Williams told me a whole new opportunity set was opening up -- funds that previously had seed capital but had seen it withdrawn.

There are still plenty of pitfalls in hedge fund investing, but there seem plenty of opportunities for those who can pick the right managers.

from Global News Journal:

Tsunami of anger over financial crisis

Today's European edition of the International Herald Tribune is fronted by a photo montage of the presidents of Senegal, Afghanistan, Bolivia, Argentina, France and Brazil.

They have two things in common - all are attending this week's United Nations General Assembly in New York and all see a global threat from the financial crisis that began on Wall Street and, in the words of President Gloria Macapagal Arroyo of the Philippines, has moved "like a terrible tsunami around the globe".

Some of the strongest words were directed at Washington lawmakers, Wall Street speculators and market regulators.

French President Nicolas Sarkozy has called for those responsible for the crisis to be punished. Chancellor Angela Merkel of Germany has said to the United States and Britain: "I told you so".

Her finance minister, Peer Steinbrueck, believes the United States has lost its financial superpower status.

Bolivia's President Evo Morales has been quoted as saying: "There is an uprising against an economic model, a capitalistic system that is the worst enemy of humanity."

How does this fit with Secretary of State Condoleezza Rice's assurance that the world still has confidence in the United States?