Funds Hub

Money managers under the microscope

Got those Great Recession blues

Given the amount of money central banks have been pumping into the global economy you’d be forgiven for thinking we should be getting a pretty decent recovery right now. And whilst that seems true for emerging markets, market participants and consumers just can’t rid themselves of the feeling that there is another shoe yet to drop.

Citi’s Matt King encapsulated this general nervousness in his presentation at the CFA Institute’s European Investment Conference in Copenhagen on Tuesday. And according to King, there are some very good reasons why corporates and households just can’t bring themselves to load up on more debt.

“We’ve had the worst recession since the 1930s, but it doesn’t feel like it, because we haven’t taken all the pain yet,” he said. “We’ve simply shuffled the debt around – that’s why markets are still so volatile and correlations are so elevated.”

King argued that if this is a normal cycle, corporates will soon come under pressure from shareholders to start borrowing again in order to invest and expand. “The risk is this is not a normal cycle, but something different,” he said. 

Who dares wins

Photo

Everyone is interested in reading about someone making billions of dollars in profit, and the Wall Street Journal’s story about the Appaloosa fund making $7 bln of profit so far this year is certainly eye-catching.

REUTERS/Shannon Stapleton

Rather like London’s Crispin Odey, who earned a handy 30 mln stg this year, the fund, run by David Tepper, made its money buying bargain basement bank shares.

from DealZone:

R.I.P. Salomon Brothers

It's official: Salomon Brothers has been completely picked apart.

Citigroup's agreement to sell Phibro, its profitable but controversial commodity trading business, to Occidental Petroleum today puts the finishing touches on a slow erosion of a once-dominant bond trading and investment banking firm.

When Sandy Weill (pictured left) staged his 1998 coup -- combining Citicorp and Travelers, Salomon Brothers was a strong albeit humbled investment banking and trading force. Yet little by little, a succession of financial crises, Wall Street fashion and regulatory intervention has whittled away at the once-dominant firm.

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