Dr Boom, Doom and Gloom: I'm Bearish On Stocks, Gold And Everything Else

According to BI Marc Faber is still convinced that there's a 100 percent chance of a global recession and that stocks are due for a big sell-off.  While Faber favors gold, he thinks that it too is due for a correction after staging a huge rally. 

It has a huge rally from around – the low was at $1,522 last December and we are now over $1,700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.

However, Faber's bearish stance isn't so bearish that he has dumped everything.

I’m not 100% in cash, for the simple reason that I could be wrong, but in general I think that people that have a heavy exposure to assets being that equities, or gold, or other commodities. I think they will face some profit taking here.

Read more: http://www.businessinsider.com/marc-faber-bearish-on-practically-all-assets-2012-10

Fasten Your Seatbelts: : More Wall St. layoffs coming

Yes folks, now that the holidays are approaching, more layoffs are on the way for the big banks, according to prominent bank analyst Glenn Schorr. The Nomura analyst in a recent report warns that many banks, which are still overstaffed, need a more liberal wielding of the ax to squeeze out more profits in the coming years, amid a global market that continues to look sluggish.

“While overcapacity is weighing on returns under the current environment, most bank managements have been in the camp that the industry is currently experiencing a cyclical rather than secular downturn,” Schorr writes. “So they’ve been slow to do too much on the head-count front,” the bank analyst said regarding layoffs.  According to Schorr’s research, big banks like JPMorgan, Credit Suisse, UBS and Barclays have actually added jobs over the past three years. Goldman Sachs and Morgan Stanley have only slashed about 1 and 2 percent of their work forces, respectively……

Find out more at http://www.nypost.com/p/news/business/more_wall_st_layoffs_coming_report_iNZw1SIytwMue21e767cfK

1,175 Rich People Reveal How They See What's Happening In The Economy

Clusterstock writes that there's a collection of new surveys out revealing how wealthy people see the economy, so we've put it together here for you in a quick rundown.  The takeaway we came to was this — rich people are really worried about the overall economy, but most are confident they'll be okay through the storm, or "the new normal" depending on what you want to call it.

Now for the data. Let's start with Merrill Lynch's Affluent Insights Survey. They polled 1,000 Americans over the age of 18 with over $250,000 of investable assets. They especially targeted people in Atlanta, Chicago, Dallas, Detroit, and South Florida. The most interesting thing about Merrill's findings was that:

44 percent of people think that our current economy malaise is a "new normal."  Of those 44 percent, a whopping 94 percent think they have what it takes to come out of it ahead.

Don't stop now.  Find out more at

http://www.businessinsider.com/the-wealthy-on-todays-the-economy-2012-9

New.News - College Students Launch Hedge Fund...

From HedgeCo.Net – North Carolina registered Lumina Investments, LLC, founded and managed by three North Carolina college students, has opened its first hedge fund that seeks to capitalize on the growing influence of “macro events” on the behavior of global financial markets.

“Globalization has increased correlation and volatility among international financial markets. We believe there is upside investment opportunity through a strategy founded on understanding international developments and their global impact,” said Elliot Carol, Chairman and Principal Managing Partner of Lumina Investments.

Lumina’s new fund will invest directly and indirectly into markets that are affected by international political and economic volatility using equities, commodities, fixed-income and currency trading, he said….

Read all about it at http://www.hedgeco.net/news/09/2012/college-students-launch-hedge-fund.html

The many (nine?) lives of Goldman's partners

From efinancialnews: In the world of banking, being made a partner at Goldman Sachs is the "golden ticket". But what happens when these gilded roosters decide to fly the coop and join the wider world?

The title harks back to the halcyon days of Wall Street, when partners were also owners of their firms. This meant making money in the good times, and putting up money when things were not going so well.  After Goldman's IPO in 1999, partners still had to worry about making money, but less about losing it (at least not personally), and being made a partner lost some of its lustre. The chief executive of one headhunting firm said: “It certainly isn’t what it was before the IPO, but it is still a golden ticket.”

Today, being made partner is more like a form of Masai initiation ritual, albeit it in a Brooks Brothers button down. Goldman staffers with roughly 10 years at the firm under their belt will, every two years, hope to become one of approximately 90 freshly-minted partners joining the 350 to 400 existing partners. Those lucky few can expect immediate increases in pay, bonus and career prospects.  But what happens after that?

http://www.efinancialnews.com/story/2012-09-26/goldman-sachs-partners-careers?mod=mostread-hedge-funds

Hedge funds forced to play catch-up

According to FierceFinance it's getting to that time of the year when it's easy to panic if you're an underperforming hedge fund.

Credit Suisse, as noted by Reuters, says there are plenty of signs that hedge funds are ramping up risk in an effort to reverse their lagging returns. Through the end of August, hedge funds were up about 4.5 percent, compared with a 13.5 percent total return for the S&P 500 and 8.2 percent for the MSCI World Index. Hedge funds focused on credit strategies have been the best performers, with returns of more than 7 percent this year, thanks perhaps in part to a surge from European sovereign debt just recently.

Most hedge funds have benchmarks other than the stock market, you never want to admit being outperformed by broad market indexes. There's still time to recover. Credit Suisse's prime brokerage says hedge fund exposure to higher-risk stocks has reached levels not seen since the spring. Holdings in such stocks rose 40 percent in August and now represent about one third of hedge funds' net U.S. exposure….

Read more: http://www.fiercefinance.com/story/hedge-funds-forced-play-catch/2012-09-27?utm_medium=nl&utm_source=internal#ixzz27m803MIa

Hedgie’s $$$$ goes poof!

Long Island hedge-fund manager Howard Brett Berger has agreed to fork over more than $6.8 million to settle regulatory charges he stuck investors with losing trades — while transferring the proceeds from winning trades into his wife’s account according to a NY Post report.

Berger performed the financial sleight-of-hand while running the Professional Offshore Opportunity Fund, or POOF, and a second fund, according to the charges filed by the Securities and Exchange Commission.  The 41-year-old money man used an elaborate “cherry-picking” scheme while day trading to cheat investors, the SEC said.

Berger “utilized a direct-access trading platform to delay final allocation of the trades until the end of the day, frequently after the market close, so he could determine whether the trades were profitable,’’ the court papers say.  The trading platform Meeting Street allowed Berger to make market exchanges and place buy orders into a second fund’s “allocation’’ or “suspension’’ account.

The SEC concluded he put “most of the unprofitable trades into the POOF account and left many of the profitable trades in the second account…

Wait...wait...there's more at http://www.nypost.com/p/news/business/hedgie_goes_poof_uR5dxVMnKhaBmUqIppSAPM

Billionaire Cash Helps Obama Campaign

Billionaire financier George Soros has committed $1.5 million to "Super PACs" backing President Barack Obama and Democrats running for Congress in the November 6 election, officials with those groups told CNBC Thursday.

Soros — a prominent donor to liberal political causes — has pledged $1 million to Priorities USA Action, which is running ads to help the Democratic president's re-election bid, and $500,000 to Majority PAC and House Majority PAC, which help Democratic congressional candidates, the officials said.

The move by Soros, who had remained largely on the sidelines of this year's Super PAC fundraising barrage, could trigger more big checks from wealthy Democrats who previously avoided giving to the groups, citing dismay over the growing role of money in politics…

More?  Check out http://www.cnbc.com/id/49206603

Goldman’s Pay-to-Play Probe

Goldman Sachs Group will pay $14.4 million to resolve regulatory claims that a former banker made improper campaign contributions to the treasurer of Massachusetts while seeking underwriting business, tghe good folks at Bloomberg told us.

Neil Morrison, who was a vice president in Goldman Sachs’s Boston office, worked for Treasurer Timothy P. Cahill’s unsuccessful gubernatorial campaign from November 2008 to October 2010, sometimes during his office hours, the U.S. Securities and Exchange Commission said in a statement yesterday. That constituted in-kind contributions and broke pay- to-play rules, the SEC said.

The settlement, which includes $4.6 million paid to Massachusetts, is the SEC’s first involving noncash contributions and is the latest since the agency began bolstering oversight of the $3.7 trillion municipal-bond market in 2010…..

Find out more at http://www.bloomberg.com/news/2012-09-28/goldman-pay-to-play-libor-probe-u-a-e-bank-compliance.html

Former Programmer Demands That Goldman Cover His Legal Fees

From New York Times’ Dealbook: A former Goldman Sachs programmer charged a second time with stealing valuable computer code from the investment bank is fighting back, demanding that his former employer cover his mounting legal fees.

On Tuesday, the programmer, Sergey Aleynikov, sued Goldman in Federal District Court in New Jersey. He wants the financial firm to pay for the nearly $2.4 million in costs he has racked up defending himself in both an overturned federal case and a pending state proceeding by the Manhattan district attorney.

Those costs are likely to grow as the case by the district attorney, Cyrus R. Vance Jr., progresses. A grand jury has handed up an indictment, and Mr. Aleynikov is expected to be arraigned on Thursday, according to a person with direct knowledge of the matter, who spoke on condition of anonymity because the grand jury’s actions are private until the arraignment.

Mr. Aleynikov’s lawyer, Kevin H. Marino, has requested a $500,000 retainer fee as he and his partners at Marino, Tortorella & Boyle in Chatham, N.J., prepare Mr. Aleynikov’s defense….

Read all about it at http://dealbook.nytimes.com/2012/09/25/former-programmer-demands-that-goldman-cover-his-legal-fees/

God Of The Dead Hedge Fund Mummified By Feds

What’s the Osiris Fund? For one thing, according to the good people at Forbes, it appears to have been named after the ancient Egyptian god of the dead, often depicted as holding a crook and flail in his crossed arms.  Come to think of it, not a bad choice of names or images.  For one thing, the investment would prove more dead than alive and, for another thing, there seems to have been more than one crook at work here and far too many folks flailing about with the truth.

In any event, if you fell under the spell of the Osiris Fund Limited Partnership and its soothsayers, you were told that it was a hedge fund management company.  Yeah, sure…

http://www.forbes.com/sites/billsinger/2012/09/27/god-of-the-dead-hedge-fund-mummified-by-feds/

5 Stocks Hedge Billionaires Are Crazy About

Apple  is the most popular stock among hedge funds and billionaires, and it is performing spectacularly. Despite Apple's successful performance hedge funds are underperforming the market third year in a row. The reason is simple. Equity hedge funds usually hedge around 50% of their long exposure. It just doesn't make sense to compare them to the S&P 500 index which is 100% long.

 So we came up with a better way of illustrating hedge funds' true stock picking ability and constructed an index that is 100% long. We launched the Insider Monkey Billionaire Hedge Fund Index at the beginning of this year. The index is based on the 13F disclosures of billionaire hedge fund managers and prominent investors:

1. Apple is the most popular stock among billionaire fund managers. More than 40% of the billionaires had a large position in Apple at the end of June. Apple is also the most popular stock among other hedge fund managers….

2. Google (GOOG) is the second most popular stock among billionaire hedge fund managers. The stock gained 13.6% so far this year. We are optimistic about Google as well. The stock's 2013 forward PE ratio is less than 15. It is slightly more expensive than Apple but the stock is the undisputed leader of the search business. It is expected to increase its earnings by nearly 20% per year over the next few years. We expect that Google will outperform the market over the next five years..

Find out more at http://seekingalpha.com/article/890511-5-stocks-billionaires-are-crazy-about

Goldman Settles Charges It Worked Illegally With Mass. Official

Goldman Sachs has agreed to pay $11.9 million to settle civil charges accusing one of its executives of providing campaign services to a Massachusetts official in return for bond business, the AP reports.

The Securities and Exchange Commission also charged former Goldman Sachs vice president Neil M.M. Morrison with trying to influence the awarding of state contracts through campaign work for former Massachusetts Treasurer Timothy Cahill.

Morrison campaigned for Cahill from his Goldman Sachs office using company phones and email between November 2008 and October 2010, the SEC said. The services weren't reported by Goldman Sachs, the SEC said. The company earned more than $7.5 million in fees from underwriting Massachusetts bond sales after Morrison's activities, the agency noted...

More?  Check out http://www.huffingtonpost.com/2012/09/27/goldman-settlement-sec_n_1919296.html?utm_hp_ref=business

'Hedge Fund' Madam Strikes Deal

A New York madam with a client list full of "hedge funders" and other millionaires and billionaires has pleaded guilty to promoting prostitution, according to the NY Post report

Anna Gristina accepted a plea deal from prosecutors that will keep her from serving any more time in jail. Gristina, who ran her prostitution business from her suburban Monroe, N.Y., home to stay close to her four children, spent four months on Rikers Island after her arrest in April before being freed when her bail was lowered.

When the 45-year-old was arrested, the New York Post reported that her business catered only to those with at least $1 million in the bank, including "hedge funders" and at least "two billionaires." She also reportedly met with employees of Morgan Stanley at the bank's offices, but no names of clients have trickled out….

Want to know more?  Of course you do.  Go to http://www.nypost.com/p/news/business/hard_up_hedgies_NITnuuB1lLqw0O0RctkOgL

A Hedge Fund Manager Is Building An Ultra-Lavish Mansion For His Chickens

No, seriously folks. London-based hedge fund manger Crispin Odey, the founder of Odey Asset Management, is planning to build a 775 square-foot Palladian-style chicken coop, the Telegraph's Harriet Dennys reports.

Here's how the Telegraph describes it...

The temple’s roof – adorned with an Anthemia statuette – will be fashioned in grey zinc; the pediments, cornice, architrave and frieze are in English oak; and the columns, pilasters and rusticated stone plinth are being hewn from finest grey Forest of Dean sandstone.

Naturally, the doors will be painted in the Odey Asset Management founder’s favourite Hague Blue – “to match the doors around Eastbach Court”, according to the plans.  What's more is the stone for the project costs an estmated £130,000 (~$210,000), the report said…

Read more: http://www.businessinsider.com/crispin-odeys-chicken-house-2012-9

Wall Street to Cut Pay Instead of Jobs

Wall Street firms will reduce bonuses rather than cut jobs to control expenses this year, Betsy Graseck, a  Morgan Stanley analyst in New York told Bloomberg.  Compensation will probably drop from a year ago as banks attempt to avoid further headcount reductions, Graseck said today in an interview on Bloomberg Television’s “Surveillance” with Tom Keene and Scarlet Fu. Cuts will come from bonuses rather than base salaries, Graseck said.

Citigroup  and Credit Suisse Group were among lenders that lowered some bonuses by at least 30 percent last year amid a second-half slump in revenue, and firms such as Barclays and Morgan Stanley capped cash payments. Revenue from investment banking and trading in the first half of 2012 at the 10 largest investment banks dropped 7.5 percent from the same period in 2011…..Banks are also advertising fewer openings amid the cuts. Job postings for the sector dropped 21 percent to 7,540 in September from a year earlier, according to Bloomberg Industries.

Read more at http://www.bloomberg.com/news/2012-09-26/banks-to-cut-pay-instead-of-jobs-graseck-says-tom-keene.html

Trader Whose Instant Messages Clearly Show Him (Allegedly) Engaging In Libor Manipulation Not Going Down Without A Fight

Dealbreaker’s Bess Levin writes: One thing that most people probably agree on is that having their instant messages, e-mails, and phone call transcripts end up court would be cause for at least a little embarrassment….. Of course, the humiliation gets ratcheted up a notch in the case of people who ‘haha’ (and in extreme circumstances “hahahah’) their own jokes* which, just for example, involve habitual Libor manipulation. RBS’ trader Tan Chi Min knows what we’re talking about:

“Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.”

And while having such an exchange become public would be tremendously awkward for most, you know what’s really ‘hahaha’ about this whole thing? That 1) Tan was the one who wanted people to read the above, which was submitted as part of a 231-page affidavit earlier this month and 2) He’s trying to use it as evidence that he didn’t deserve to be fired….

More?  Check out http://dealbreaker.com/2012/09/rbs-trader-whose-instant-messages-clearly-show-him-allegedly-engaging-in-libor-manipulation-not-going-down-without-a-fight/#more-88593

Too Smart: A Hedge Fund's Complex Scheme May Cost It Millions

According to the NY Times hedge funds are supposed to be the smart money, but sometimes even they can be outsmarted.  Take the case of Mason Capital Management and the Telus Corporation, a large Canadian telecommunications company. Mason Capital, a New York and London hedge fund with about $8 billion in assets under management, has made a complex bet in Telus stock that looked shrewd at first, but that may now lose tens of millions of dollars.

Telus has two classes of shares, one that is voting and trades only in Canada and another that is nonvoting and trades in Canada and the United States. The nonvoting shares traditionally trade at a discount to the voting shares, but Telus is proposing to convert the shares on a one-for-one basis, giving a windfall to the holders of nonvoting shares.

Mason has taken a complex trading position in opposition to the proposal. In April, the hedge fund announced that it had acquired 19 percent of Telus’s voting stock, worth 1.9 billion Canadian dollars, or $1.8 billion….

More?  Go to http://www.cnbc.com/id/49174312

Did He or Didn't He? SAC Capital Fund Manager Uncharged Conspirator

A hedge fund manager at Steven Cohen’s SAC Capital Advisors LP is an unindicted co-conspirator in a $62 million insider trading scheme tied to technology stocks, two people familiar with the matter said.

The role allegedly played by Michael Steinberg emerged in court papers filed by the U.S. in the securities-fraud case of Jon Horvath, a former technology analyst at Cohen’s $14 billion hedge fund who Steinberg supervised. Steinberg, who hasn’t been charged with a crime, is the fifth person to be tied to insider trading while employed at SAC.

Horvath faces trial Oct. 29 in Manhattan federal court along with two other portfolio managers for his part in what Manhattan U.S. Attorney Preet Bharara called a “criminal club:” a conspiracy of hedge fund managers, co-workers and company insiders who reaped millions of dollars on illegal tips about Dell Inc.  and Nvidia Corp….

Read all about it at http://www.bloomberg.com/news/2012-09-25/sac-capital-fund-manager-said-to-be-uncharged-conspirator.html

German High-Frequency Bill to Hit Hedge Funds

Chancellor Angela Merkel’s Cabinet will vote on a bill tomorrow that limits high-frequency trading even for market participants outside Germany and requires automated orders to be marked as such, a government official told Bloomberg.

High-frequency traders will have to seek authorization and will be supervised under the legislation proposal, the official told reporters in Berlin today on condition of anonymity because the bill has not yet been published. High-frequency trade will be curbed and market abuse will be punished, he said in Berlin.

Own-account high-frequency traders such as hedge funds, which don’t need authorization at present, will be covered by the new legislation, the official said. That would affect market participants borrowing access to electronic trading systems from others….

Find out more at http://www.bloomberg.com/news/2012-09-25/german-high-frequency-bill-to-affect-hedge-funds-official-says.html

Romney 2011 Tax Returns Reveal No Hedge Fund Secrets

According to the good folks at HedgeCo.Net, after months of debate as to what is in Republican Presidential Candidate Mitt Romney’s 2011 tax returns, they were made public on the campaign website. Expecting a bevy of hedge fund secrets, journalists and blogers were disappointed with the fact that the returns showed nothing out of the ordinary.

The hedge fund giant who made his fortune with Bain Capital, paid a 14.1% in taxes. Also disclosed was that the Romney’s donated about $4 million to charity in 2011.

The Romney’s voluntarily took a smaller deduction than he was entitled to for his charitable deductions. This was so that he could stay above the 13% point that he stated earlier….

Read all about it at http://www.hedgeco.net/news/09/2012/mitt-romney-2011-tax-returns-reveal-no-hedge-fund-secrets.html

Fraudster Stockbroker faces time in the Slammer

From thejc: City stockbroker Nicholas Levene faces a “substantial” jail term after he pleaded guilty, at Southwark Crown Court on Monday, to cheating investors out of £32m.

The financier’s clients, who believed they were investing in shares in major multinational companies, were in fact were victims of a Ponzi scheme. This fraudulent mechanism is the same type as operated by Bernard Madoff, who is currently serving a 150-year jail sentence in the US. It operates by new investors’ money going to pay off debts to previous investors….

Read more at http://www.thejc.com/news/uk-news/83585/stockbroker-nicholas-levene-faces-jail

Asia’s Lame Hedges Can’t Match GDP Growth

The world’s fastest economic growth isn’t helping Asia’s hedge funds. The Eurekahedge Asian index tracking 395 hedge funds returned 1.6 percent this year through August, the worst performer among regions and about half the 3.2 percent gain by the global benchmark, Bloomberg says.

Funds have been hampered by a concentration on Asian equities, which have been driven more by Europe’s debt crisis and China’s slowdown than by company fundamentals such as earnings. The MSCI Asia Pacific Index (MXAP) has climbed 8.2 percent in 2012, compared with the 13 percent gain by the MSCI World Index.

“Most Asian funds have been focused on the equity space and that hasn’t done well,” said Dhawal Mehta, head of India equity investments at Reliance Asset Management (Singapore) Pte. “In the U.S. and Europe, you have more variety in terms of the kind of funds....”

More?  Check out http://www.bloomberg.com/news/2012-09-24/asia-s-hedge-funds-find-gdp-growth-doesn-t-help-returns.html

Crucial Witness in Rajaratnam Trial Receives Probation

Holy Hannah!  NY Times’ Deqalbook reports that a former Intel exec who leaked secret information about his employer to Raj Rajaratnam, the fallen hedge fund billionaire, avoided prison on Monday when a judge sentenced him to two years’ probation.

The former executive, Rajiv Goel, provided prosecutors with extensive assistance in prosecuting Mr. Rajaratnam. During the hedge fund titan’s trial in 2011, Mr. Goel was one of the three crucial government witnesses who testified against him.

The other two witnesses — Anil Kumar, a former McKinsey & Company executive, and Adam Smith, a Harvard-educated former Galleon Group trader — also received probationary sentences. 

Mr. Rajaratnam is now serving an 11-year sentence at a federal prison in Massachusetts.,,,,

Read the rest at http://dealbook.nytimes.com/2012/09/24/a-key-witness-in-rajaratnam-trial-receives-probation

Blankfein: I’m No Socialist

From the WSJ Blogs: Goldman Sachs' CEO is a socialist, Gordon Nixon, the CEO of Royal Bank of Canada, said on Wednesday. Mr. Nixon was imagining newspaper headlines after Lloyd Blankfein told an audience in Toronto that he was, in fact, not a socialist.

The exchange began after Mr. Blankfein launched into a passionate discourse over how the U.S. has become good at creating wealth but not redistributing it.

“The two goals of a financial system and an economic system … should be to expand the wealth of the world and to distribute it fairly,” he said during a question-and-answer session with Mr. Nixon. ”In the United States, over the last generation or two, we have been much better at generating wealth and much less good at distributing  it.”

At that point, Mr. Blankfein, who coined some $16.1 million last year, felt the need to tell his audience he isn’t a socialist.  “I am not saying… I am a socialist. I am not,” he said, stressing he doesn’t believe in wealth distribution over production.

Mr. Blankfein, who’d been answering a question from Mr. Nixon on recent social dissatisfaction, such as the Occupy movement, said that when the wealthiest country in the world has unfair wealth distribution, “you won’t have a stable society.”  He added that bankers must play their part…..

Wait…wait…there’s more at   Check out http://blogs.wsj.com/canadarealtime/2012/09/19/rbcs-ceo-says-blankfein-is-a-socialist/

‘Facebook’s IPO Was Not a Flop: Barry Diller

The Facebook initial public offering was not the failure it’s been made out to be, Barry Diller, chairman of IAC/Interactive told CNBC’s “Squawk Box” on Tuesday. Diller said it made sense for Facebook to get as high a price for the stock as possible.

“If you're going to sell stock and somebody wants to buy it at a price and that price is not a price you dictate, but demand dictates, sell it to them now,” he said of Facebook’s $38 offering price.

Diller said that most of the investors who bought at the IPO were probably speculating and not in the stock for the long-term. “In which case, they deserve whatever they get, good or bad,” he said. Facebook now needs to focus on future growth, Diller said, adding that Mark Zuckerberg is only running the company for the long-term.,,,

More?  Go to http://www.cnbc.com/id/49163984