Investors pulled a net $32bn from hedge funds last month, making 2008 the first year in their recorded history that the funds have had significant outflows and ending the industry’s 18 years of asset growth.
http://www.ft.com/cms/s/0/7b886520-d6a2-11dd-9bf7-000077b07658.html
Reval is the leading derivatives risk management solution provider delivered under the “Saas”, or Software-as-a-Service model, for companies hedging foreign exchange, interest rate, energy, and commodity risk. Designed for financial professionals by financial professionals, Reval’s fully hosted Web-based solutions help companies follow the requirements of derivative hedge accounting (FAS 133/157, IAS 39, IFRS 7, etc) and gain better controls to support Sarbanes-Oxley compliance. The benchmark for treasury best practices, Reval’s products can be rapidly deployed and are easily integrated with other systems. Its flagship product is a thin client, easy to deploy Web-based solution being used by Global 2000 companies such as General Motors, ABB, Anheuser-Busch, AIG, Starbucks, Capital One, ABN AMRO, Morgan Stanley, Coach, and GlaxoSmithKline. Reval is the recognized industry leader in providing Global 2000 corporations with best practices solutions for derivative valuation and hedge accounting.
Headquartered in New York since its founding in 1999, Reval has expanded its global presence and also maintains offices in Chicago, Toronto, London, Sydney, and Gurgaon, India. Reval maintains a global client base of over 200 corporations, insurance companies and financial institutions. With backing from two prominent venture capital firms, Commonwealth Capital and North Bridge Ventures, Reval is an entrepreneurial and aggressive company with over 130 employees and has a solid reputation in the industry as a leader in this space.
reval.com
Siegel:
You have to keep the reserves on the books or there will be inflation.
We do have capacity to borrow, although we don’t like to see more borrowing.
We don’t have a high national debt to GDP ratio.
Shiller:
I wouldn’t call it a Treasury bubble.
I am thankful that we have a Fed that is experimenting.
We are not alarmed by the lending that the Fed is doing.
Overshooting to the downside is a big risk. So even fair market value is not safe.
This asymmetric character of the global crisis – the fact that the shocks were even bigger on the periphery than at the epicentre – had its disadvantages for the US, to be sure. Any hope that America could depreciate its way out from under its external debt burden faded as 10-year yields and the dollar held firm. Nor did American manufacturers get a second wind from reviving exports, as they would have done had the dollar sagged. The Fed’s achievement was to keep inflation in positive territory – just. Those who had feared galloping inflation and the end of the dollar as a reserve currency were confounded.
http://www.ft.com/cms/s/0/1be84cc4-cc0d-11dd-9c43-000077b07658.html?nclick_check=1
Overall, I don’t recommend this article– not very well researched at all.
“So … who’s on the brink?”
“Carlyle,” he responded darkly. Indeed, Carlyle Capital Corporation, the arm of the Carlyle Group that invests in mortgage-backed securities, had defaulted last spring on more than $16 billion.
The question is HOW do private equity firms go out of business? What are the steps that happen? The same can be asked about VC firms. It’s not as easy as hedge funds, where redemptions can shut a firm down.
The writer also fails to recognize that fair value has indeed entered the realm of private equity. While some firms are reporting their holdings at fair value, the deadline to comply is the end of ‘08.
The precariousness of it all is obvious to every private-equity manager—which is why they see their competitors imminently going down. One big front-page bankruptcy of a P.E.-owned company—say, Hilton, or the commercial-property company Blackstone bought from Sam Zell (enabling him to buy the Chicago Tribune, which has gone bust)—will create new demands for, and congressional oversight committees insisting on, fair accounting treatment for portfolio value. If the value of the private-equity market is re-stated like the value of the stock market (its mirror image), a reasonable panic ensues—Carlyle loses its $40 billion and everybody else can’t get at what they themselves have got on call.
http://www.vanityfair.com/politics/features/2009/02/wolff200902
Mr. Madigan, 27, is the guy who manages the tech guy — he’s the client services director at Chelsea Technologies, a small operation that specializes in providing information technology services to hedge funds and small investment funds around the city.
In December, he got a flurry of calls saying the same thing, enough that last week, his firm started aggressively marketing “robust, versatile solutions for the home office known as Chelsea Home Office Solutions.”
http://www.nytimes.com/2008/12/29/nyregion/29bigcity.html?_r=1
Some countries, notably indebted emerging market countries in eastern Europe and elsewhere , have resisted stimulative policies that might produce a falling exchange rate, just as central banks in the 1930s were restrained by the gold standard. “Their reluctance is not irrational: Sharp depreciation can mean bankruptcy for firms and banks with debts denominated in dollars and for household with mortgages and car loans in euros and Swiss francs,” Eichengreen writes. “But the result is that policy is hamstrung.”
http://blogs.wsj.com/economics/2008/12/29/the-global-credit-crisis-as-history/
“It was Howard Sosin who said, ‘You know, we’re not going to do trades that we can’t correctly model, value, provide hedges for and account for.’ ”
Though the language of caution was the same, the firm’s drive toward novel and ever more lucrative deals led down the path of greater risk. The beautiful machine was about to crack.
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916.html
from fat wallet forums:
posted: Dec. 29, 2008 @ 6:15p [link to this post]
Just got a mailing with the (usual) balance transfer checks from CapOne. The unusual part: 0% for 18 months, NO transaction fee, even if using a check to myself. Haven’t seen those in ages.
It states, though, that finance charges will accrue until the balance is paid off in full. Since there’s no interest, what are the charges here? Am I missing something?
The alleged fraud is likely to lead to a crackdown on due diligence by fund of funds – which hold more than 40 per cent of hedge fund money
http://www.ft.com/cms/s/0/3eeb2286-d5dc-11dd-a9cc-000077b07658.html