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Showing posts from May, 2008

Where the Financial Crisis Is Headed Next

by Lawrence C. Strauss

Three years ago, hedge-fund manager Sy Jacobs told Barron's that serious trouble was brewing in the housing market, predicting that "the bursting of the housing bubble [would] be a dominant theme for investing in financial stocks in the next decade." He was right. Jacobs, 47, is the founder of New York's JAM Asset Management, which runs two funds, both focused on financial stocks and closed to new investors. The larger entity, JAM Partners, follows a market-neutral, long-short strategy and has close to $300 million in assets. As of May 21, the fund's year-to-date total return, net of fees, was 9.6%, versus a 4.5% loss for the S&P 500. Its annualized return since inception in 1995 (through April 30) was 16.6%, compared with 9.9% for the S&P. The $45 million JAM Special Opportunities Fund invests in illiquid private-equity holdings. Jacobs' familiarity with financial stocks dates to the 1980s, when he worked as an analyst at firms …

Oil surge could trim 1.5 points off US economic growth

WASHINGTON - A TOP White House economic aide to President George Bush said that the surge in oil prices could cut at least 1.5 percentage points off US economic growth if it continues.
'The high price of oil has already cost us a significant amount in terms of economic growth,' Mr Edward Lazear, the chairman of the president's Council of Economic Advisers, said in a speech to the Hudson Institute, a Washington-based think tank.

Mr Lazear estimated that each US$10 (S$13) rise in the price of oil per barrel over the course of the year reduces gross domestic product (GDP) growth by about a quarter of a point.

Oil prices have skyrocketed since crossing US$100 for the first time on Jan 2. Prices hit record highs above US$135 last week before easing back on concerns about demand from the sluggish US economy.

The New York benchmark contract rebounded on Wednesday to above US$130.

'If you think about the amount by which oil has gone up in price over the past year, you're t…

Investing Like an Oracle

By Tom Gentile, Profit Strategies.com

Of all the longer-term investors out there, Warren Buffett is probably the most notable. It’s hard not to like this guy. Other than being an astute investor, he is also a notable contributor to various charities. Let's dive into the Oracle of Omaha's investing style and how to trade options using Warren Buffett stocks.

So, why you are reading this article? What you really want to know about Warren Buffett is his criteria for picking value stocks. Okay, here is a breakdown on what we have discovered in the search for Warren Buffett picks:
Warren Buffett is a value investor. That means he doesn’t participate in wildly running growth stocks—in fact, he was ridiculed for staying out of the tech boom in the late '90s. Of course, we all know how right he was just after the year 2000, when everything DotCom collapsed. Warren Buffett has a unique style when it comes to investing, so without writing a novel on the subject, let me get to the point …

Meet Your New Recruits: They Want to Eat Your Lunch

by Aili McConnon and Jessica Silver-Greenberg

Thirteen young men and one woman meet in a drafty medieval-style room in a campus residence hall at Yale University. Thick exposed beams cross the ceiling above a large fireplace. A stained-glass panel in the heavy wooden door is decorated with a cobalt "Y." "Anyone interested in finance wants to join the Globalfund," says Philip Uhde, 22, the group's founder and president. "And the smartest of those people are here."

A cross between Yale's secretive Skull & Bones society and a young tycoons club, the Globalfund is one of a growing number of exclusive business groups cropping up at elite colleges across the country. The organizations, fueled by a mix of youthful ambition and careerist anxiety, have become an increasingly important part of the competition for the most lucrative jobs at investment banks, hedge funds, and consulting firms. For many students, it's a race for money and prestige that&#…

Soros: 'We face the most serious recession of our lifetime

George Soros, 'the man who broke the Bank of England', tells Edmund Conway of his fears for the economy

'This is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made." When George Soros - the phenomenally successful hedge fund manager - says this, you know something is wrong, very wrong. And indeed it is. The 77-year-old billionaire sinks back into the sofa in his Chelsea townhouse and exhales.

He has managed to make money almost consistently for over half a century - from his early days as one of the world's first major hedge fund traders to his involvement in Black Wednesday as the man who "broke the Bank of England", and in the latter years generating multi-billion-dollar annual profits throughout the 1990s. The conditions today are almost uniquely dismal, however.


Telegraph TV: George Soros on the Bank of England


"I think this is probably more serious than anything i…

Evolution of flu strains points to higher risk of pandemic

CHICAGO - SOME strains of bird flu are coming ever closer to developing the traits they need to cause a human pandemic, a study released on Monday said.
Researchers who analysed samples of recent avian flu viruses found that a few H7 strains of the virus that have caused minor, untransmissible infections in people in North America between 2002 and 2004 have increased their affinity for the sugars found on human tracheal cells.

Subsequent tests in ferrets suggested that these viral strains were not readily transmissible.

But one strain of the H7N2 virus, a low pathogenic avian flu strain isolated from a man in New York in 2003, replicated in the ferret's respiratory tract and was passed between infected and uninfected ferrets suggesting it could be transmissible in humans.

The investigators said the evidence suggests that the virus could be evolving towards the same strong sugar-binding properties of the three worldwide viral pandemics in 1918, 1957 and 1968.

'These findings su…

US recession still probable: Greenspan

LONDON - A RECESSION in the United States remains a probability, former Federal Reserve chairman Alan Greenspan said in an interview published on Tuesday.
Speaking to the Financial Times from Washington, Mr Greenspan said he believed 'there is a greater than 50 per cent probability of recession'. He noted, however, that 'that probability has receded a little'.

The likelihood of a severe recession had 'come down markedly', he added: but it was too soon to tell whether the worst was already over.

According to the Financial Times, Mr Greenspan estimated that house prices in the United States would drop by a further 10 per cent from their levels in February, which comes to a 25 per cent drop from their peak.

'Such house price declines imply a major contraction in the level of equity in owner-occupied homes, the ultimate collateral for mortgage-backed securities,' he said.

United States economic growth has slowed dramatically in recent months and a growing n…

It was not Bear Stearns but JPMorgan that was bankrupt

Courtesy of Johnlaw2012 from CNA forum

The Highly Suspicious Out-of-the-Money Puts

That was one of many questions raised by John Olagues, an authority on stock options, in a March 23 article boldly titled “Bear Stearns Buy-out . . . 100% Fraud.” Olagues maintains that the Bear Stearns collapse was artificially created to allow JPMorgan to be paid $55 billion of taxpayer money to cover its own insolvency and acquire its rival Bear Stearns, while at the same time allowing insiders to take large “short” positions in Bear Stearns stock and collect massive profits. For evidence, Olagues points to a very suspicious series of events, which will be detailed here after some definitions for anyone not familiar with stock options:

A put is an option to sell a stock at an agreed-upon price, called the strike price or exercise price, at any time up to an agreed-upon date. The option is priced and bought that day based upon the current stock price, on the presumption that the stock will decline in v…

It was not Bear Stearns but JPMorgan that was bankrupt

Courtesy of Johnlaw2012 from CNA forum

The Highly Suspicious Out-of-the-Money Puts

That was one of many questions raised by John Olagues, an authority on stock options, in a March 23 article boldly titled “Bear Stearns Buy-out . . . 100% Fraud.” Olagues maintains that the Bear Stearns collapse was artificially created to allow JPMorgan to be paid $55 billion of taxpayer money to cover its own insolvency and acquire its rival Bear Stearns, while at the same time allowing insiders to take large “short” positions in Bear Stearns stock and collect massive profits. For evidence, Olagues points to a very suspicious series of events, which will be detailed here after some definitions for anyone not familiar with stock options:

A put is an option to sell a stock at an agreed-upon price, called the strike price or exercise price, at any time up to an agreed-upon date. The option is priced and bought that day based upon the current stock price, on the presumption that the stock will decline in v…

US already in recession, says world's richest man Buffet

BERLIN (AFP) - - While economists quibble, the world's richest man has decided: the United States is already in recession. So Warren Buffett tells German magazine Der Spiegel in an interview to be published on Monday.

"It is perhaps not a recession in the way that economists would understand it... but people are already feeling the effects and it will be deeper and longer than people think," Buffett said on a visit to Frankfurt.

Buffett, the 77-year-old chief of the Berkshire Hathaway holding company, blamed financial institutions for introducing instruments "they can no longer control" and said the "genie can no longer be put back in the bottle."

Buffett, who overtook Bill Gates this year as the world's richest man, said he believed the financial markets should be more tightly regulated.

According to the Forbes annual billionaire's list published in March, Buffett saw his wealth jump from 52 billion dollars last year to 62 billion, pushing Micros…

The Fund Mgt Activities in Singapore", by Valerie Wu

EXECUTIVE SUMMARY

Singapore's booming asset management industry saw its sixth consecutive year of double-digit growth in 2006, boosted by continuing worldwide interest in Asia's rapid economic.

According to the Monetary Authority of Singapore’s (MAS) latest survey of the asset management industry, the amount of assets managed by Singapore-based fund managers swelled by 24 per cent last year, reaching $891 billion at end-2006, compared to $720 billion a year earlier. Since the mid-nineties, the Singapore Government has identified the investment management industry as one of the key financial sectors to develop. With this in mind, the MAS has introduced a variety of incentives and reforms to encourage the growth of the investment management industry.

 The MAS and the Government of Singapore Investment Corporation (GIC) have committed to place out a total of S$35 billion of funds to external fund managers over the next few years. This will serve as seed money to grow the Singapore…

What's Next for Commodities

By Katy Marquardt

How much juice is left in this commodity boom? The managers of the RS Global Natural Resources fund--which has shot up an annualized 34 percent over the past five years--contend that we're still in the early stages of a bull run, yet the easy money has been made. According to MacKenzie Davis and Ken Settles, who manage the $2.2 billion fund along with Andy Pilara, the best deals now aren't in the commodities themselves but in the stocks of commodity producers. U.S. News spoke recently with Davis and Settles about bubbles, "advantaged" companies, and why they don't invest in $125-a-barrel oil. Excerpts:

What's your outlook for commodities? Settles: We believe that we are in the early stages of a 10-to-20-year uptrend for commodities, driven largely by the rising costs to add new supply. As such, we don't see commodities as a speculative bubble. However, we do believe that the natural resource stocks are much more attractively priced than th…