we’ll be waiting for your call
we’ll be waiting for your call
The redemption pipeline looks like it looked prior to all the troubles. Net subscriptions are also back to historical levels…Start-ups really went quiet mid-2007. A lot more clients are not start-ups…During the second half we have added several significant clients and at the same time our existing clients have performed well. We have added 22 new clients so far in the second half of 2009…Performance has been very good for our clients, who have made money every month since last December. That’s translated into improved subscriptions….In the long term, fees might fall, but we’ve not really seen that yet. New funds are more likely to cut deals though, or give up part of the management company to attract capital…I don’t think we’ll get back to 2005 [in terms of new fund starts] – but then there was an unusually high level of new funds.
—Hans Hufschmid, CEO of GlobeOp Financial Services, a hedge fund administrator, serving an aggregate $106b AUM as of December 2009, up 28% from the end of 1H09, when it administered $83b. He went on to emphasize that he was seeing new funds starting up that focus on distressed debt and fixed income: “that’s where the opportunities are. These are the assets the banks have been selling.” Nonetheless, many of these are smaller launches. This is a far cry from the “the ”$1.2 trillion” that Hans and the young professors had supposedly wagered.”
We started getting patchy interest in launching new funds in the summer, which has turned into solid instructions for the end of 2009 and the start of 2010…Strategies are often targeted with a specific set of investors in mind. More managers are prepared to send out draft documents to prominent clients and potential clients to determine if a strategy works for them, and then re-define it depending on the feedback received.
–Ingrid Pierce, head of the Cayman Islands hedge fund practice at Walkers: FT
$50m is the new $500m…They are injecting their own funds while they get back into the game and establish a track record, so if significant money returns next year they can show the strategy works.
–Gray Smith, partner at Appleby, a legal firm in the Cayman Islands. Hufschmid notes that the assets these funds are focused on are illiquid, and “Hedge funds may buy and hold these for between one and three years to extract the value” : FT
Hedge Fund Research recently reported that following $330b in net redemptions in 1H09, hedge funds saw net inflows of $1.1b in 3Q09. Nonetheless, this is far short of the $60b quarterly net inflows prior to the crisis in the first and second quarters of 2007.
I think it has to do with a different world view that we have adopted. We’re much more of an investing culture, all over the world, really, than we were in the past. There’s much more of an expectation of volatility.
People used to look at dividends more than they do now. As the years go by, people are more and more focused on capital gains. So it has become more of a game of predicting the swings. And when you have everyone trying to predict the swings – and the swings are caused by people anyway – it creates a fundamental instability.
High debt levels are a symptom of our speculative culture. It’s a fundamental change in our society. People have reframed their sense of personal identity – they think of themselves now as smart investors.
I suspect this is going to be a long, enduring change – we will have higher volatility. It seems to me that we are more bubbly.
—Robert Shiller, as applied by David Parkinson at the Globe and Mail
Big capitalization, high-quality U.S. stocks are very, very cheap compared to everything else. [commodities are] an investment vehicle for maniacs. I don’t know what’s going to happen in the second half of next year. I’m just saying that in the next three to six months, the economy is going to keep recovering and stocks are going to go up again… I can find a lot of things that I want to buy in the US. I’m still playing the same tune. I’m pretty well loaded up as far as stocks are concerned…It’s a bet on a capital spending boom and it’s also a bet that big corporations around the world have under-spent on technology since 2000. Big-cap tech stocks are still very attractive…
I certainly wish I had understood more in late 2007, early 2008 how serious the credit problem was. The bubble wasn’t in spaces that we knew.
Over the longer run, emerging markets are going to be the place to be, particularly the Asian emerging markets. In the short-run, I’m bullish about the U.S. as well.
—Barton Biggs, investing into the sunset of the stimulus, but unsure of beyond, perhaps in keeping with Krugman’s view of a double-dip
Unemployment is not respecting income boundaries. It’s affecting rich people, poor people and middle-income people and they all have mortgages…That’s taking some of the pressure off. Hopefully in 2010 we’ll see some recovery.
There will be continuing foreclosures, and not just subprime, it will be prime mortgages. This is creating a huge shadow inventory of homes that are still owned, but they’re going to be on the market in the next year or so. I do see some signs of animal spirits, but it’s a mixture…It would be entirely plausible that we would have a weak housing market for many years.
If you have a prime adjustable-rate mortgage resetting in 2010, you probably are going to see your rate go down. Still, prime ARMs are defaulting at a higher rate because these borrowers were the risk-takers who chose the initially lower payments so they could stretch to get into a house…Even if the jobs start coming back, where are they coming back? If it’s in Texas or Oklahoma, it’s not helping people in California or Rhode Island…At the moment a lot of potential buyers are deciding to wait and see. If they do have a job, they may have seen 20 percent of their company laid off and they’re wondering if they’re next.
—Jay Brinkmann, Chief Economist at the Mortgage Bankers Association
Talk to conservatives about the financial crisis and you enter an alternative, bizarro universe in which government bureaucrats, not greedy bankers, caused the meltdown.
It was not for gain that Bacon, Newton, Milton, Locke instructed and delighted the world; it would be unworthy such men to traffic with a dirty bookseller for so much a sheet of a letter-press … Knowledge and science are not things to be bound in such cobweb chains; when once the bird is out of the cage … volat irrevocabile—Ireland, Scotland, America, will afford her shelter.
—Lord Camden arguing against perpetuity in the House of Lords on the question of Literary Property on Feb. 22, 1774
The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat. Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes – those included in the S&P/Case-Shiller Home Price Indices – have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.
—David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s
The worst investment will be U.S. Treasuries and cash, which has no return at present. That money will shift into other assets, and this is the one reason that I am moderately positive about equities.
We’ve started to see the possibility of either a leveling off of prices for a few months or perhaps a double-dip.
—Maureen Maitland, the vice president for index services at S.& P
I just finished watching ‘The Last Dragon.’ I feel sorry for a cop if he think I’m getting into his paddy wagon
Stilltitled 