Investors rush to cash as economic turmoil worsens
NEW YORK, Aug 5 (Reuters) – It was the week of the
defensive crouch. In the face of wrenching global economic and
political events, many traders, corporate treasurers and
pension managers decided that cash and U.S. Treasuries were the
safest places to be.
The S&P 500 .SPX absorbed its worst one week decline
since November 2008 as concerns grew about the inability of
world political leaders to deal with the European debt crisis
or the faltering U.S. economic recovery.
John Paulson’s lost advantage
By Matthew Goldstein
Hedge fund titan John Paulson has a shrinkage problem.
The billionaire manager’s flagship Paulson Advantage funds are quickly losing altitude after peaking with $19.1 billion in assets under management in March. As of the other day, the combined AUM of the Paulson Advantage and Advantage Plus funds had fallen to $15.7 billion, according to investor sources.
The Advantage funds account for roughly 44 percent of the $35. 2 billon in assets under management at Paulson. The two so-called event driven funds long have been the manager’s largest.
Steve Cohen’s forbidden transcript
By Matthew Goldstein
Hedge fund titan Steve Cohen is taking steps to appear more open these days. Over the past year or so, he’s been showing up at industry conferences, charity events–even allowing himself to be photographed with his wife for a glossy spread in Vanity Fair magazine.
But there are some things the SAC Capital founder is drawing a line in the sand over when it comes to greater transparency, including some of his own words.
Hedge fund leaders duck for cover
By Matthew Goldstein
Top hedge fund managers are great at enriching themselves through savvy trades that presumably come from a keen insight into the markets and economic trends. But all too often these titans of Wall Street come up small when asked for their opinions on the pressing economic questions of the day.
That’s what happened when three Reuters reporters recently asked 30 of the top U.S. hedge fund managers to respond to a quick email survey about the political morass in Washington and the potential for a double dip recession. Less than a handful of managers offered any thoughts on the subject. The overwhelming majority either didn’t respond, or had a representative reply that the manager was either too busy to comment, or didn’t want to participate.
SEC builds new tips machine to catch the next Madoff
WASHINGTON/NEW YORK (Reuters) – For more than three years, U.S. securities regulators investigated allegations of accounting fraud at a small telecom firm called China Voice Holding Corp, but could not make a case.
Then last November, they got an unexpected break. A Texas-based tax consultant doing work for a firm affiliated with China Voice contacted the U.S. Securities and Exchange Commission with information about suspicious money transfers she’d detected.
Can the SEC learn from its mistakes?
All too often, the U.S. Securities and Exchange Commission gives its critics plenty of ammunition to complain about.
The SEC’s spectacular failure to detect the massive Ponzi scheme being run by Bernie Madoff is only the most high-profile miss by the agency. Over the years, the nation’s top securities cops have been slow to police abusive trading by hedge funds and spread of complex structured products–including subprime ones–churned out by Wall Street banks.
Exclusive: SEC builds new tips machine to catch the next Madoff
WASHINGTON/NEW YORK (Reuters) – For more than three years, U.S. securities regulators investigated allegations of accounting fraud at a small telecom firm called China Voice Holding Corp, but could not make a case.
Then last November, they got an unexpected break. A Texas-based tax consultant doing work for a firm affiliated with China Voice contacted the U.S. Securities and Exchange Commission with information about suspicious money transfers she’d detected.
As US lawmakers fiddle, investors primed to profit
NEW YORK, July 25 (Reuters) – U.S. money managers sitting
on piles of cash are sniffing out opportunities to make a
killing on the political circus in Washington over raising the
nation’s debt ceiling.
Just eight days before the critical deadline to raise the
debt ceiling before the United States would default on its debt
obligations, Republicans and Democrats were still locked in a
stalemate on Monday. The prospect of U.S. politicians failing
to reach a deal before the Aug. 2 deadline is finally rattling
some investors’ nerves, judging by Monday’s declines in global
equity markets.
A bank account free from political posturing?
By Matthew Goldstein
A measure aimed at protecting companies from community bank failures may be finding new life as a way to guard against the fallout from the political squabbling in Washington, D.C. over raising the debt ceiling.
Even though much of Wall Street believes that sanity will prevail in the end and the nation’s politicians will not allow a U.S. debt default to occur next week, the level of anxiety in the financial world has risen in the past few days. And that unease has led some money managers to begin looking at a post-financial crisis measure aimed at protecting non-interest bearing bank accounts as a potential safe haven.
S&P as the decider?
By Matthew Goldstein
Derivatives guru Janet Tavakoli is a long-time critic of the rating agencies and in particular the role the raters played in the subprime debt crisis. And she says given the shabby job the rating agencies did in giving the green light to the subprime debt boom, it’s odd to think of firms like Standards & Poor’s playing such a big role in the ongoing US debt ceiling negotiations.
“Standard & Poor’s lost its credibility due to a long history of misrating financial products,” says Tavakoli.
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