Supreme Court: SEC Must File Fraud Suits Sooner

The Securities and Exchange Commission must move more quickly in pressing some fraud lawsuits, the U.S. Supreme Court ruled in a decision that may affect agencies across the government, Bloomberg reports.

The justices today unanimously ruled in favor of two Gabelli Funds LLC officials seeking to block SEC claims that they improperly let a client engage in market timing, a practice of making frequent, short-term trades at the expense of other investors. They contend the SEC missed the five-year deadline to file the lawsuit.

The case raised issues similar to those addressed by the Supreme Court in 2010, when it ruled that the two-year period for shareholder fraud suits doesn’t begin until investors have indications of intentional company wrongdoing. The new case concerned SEC enforcement actions, rather than private suits….

More?  Check out http://www.bloomberg.com/news/2013-02-27/sec-must-file-fraud-suits-sooner-u-s-supreme-court-rules-1-.html

Tenacious fund joins fight over MF Global plan

From ThomsonReuters: According to Reuters a hedge fund known for its determined pursuit of legal claims has joined JPMorgan Chase & Co's $928 million fight against the proposed liquidation plan for MF Global Holdings Ltd.  Aurelius Capital Management, known for its drawn-out battles with Argentina and in the bankruptcy of Tribune Co, has backed JPMorgan's bid to essentially step into the shoes of MF Global's finance unit and pursue claims against the holding company.

JPMorgan had been largely alone in its fight against the liquidation plan, which has the backing of roughly two-thirds of MF Global's creditors and the estate's trustee, former FBI director Louis Freeh.

At the center of the dispute is JPMorgan's allegation that a liability of MF Global Finance USA Inc is being counted twice, which is depressing the repayment to creditors of the finance unit to the benefit of creditors of the holding company.  The dispute stems from a $1.2 billion liquidity facility that JPMorgan arranged for MF Global Holdings. 

- See more at: http://newsandinsight.thomsonreuters.com/Legal/News/2013/02_-_February/Tenacious_hedge_fund_joins_fight_over_MF_Global_plan/#sthash.Ev5Cfoar.dpuf

Another NY ‘insider,’ Goes to the Slammer

Federal prosecutors charged a Long Island, New York  man with insider trading yesterday after he supposedly sold an advance earnings report to an undercover FBI agent for $7,000.  Damian Perna, 30, who works at Merrill Lynch, obtained draft earnings reports for several publicly traded firms before they were released, according to charges.

Perna, who lives in Oceanside NY,  joined forces with unidentified cohorts and used the illegal information to make a series of trades from June 2011 through last October, said US Attorney Loretta Lynch.  Officials emphasized that Perna’s alleged misconduct took place before he worked at Merrill Lynch.

http://www.nypost.com/p/news/business/li_man_insider_arrested_3PQ5M5vyxgge9x83gU9GvI

The Mostly Fabulous Life Of The Hedge Fund Manager Who Made The Most Money In 2012

David Tepper, the founder of $12 billion-distressed-debt hedge fund Appaloosa Management, is one of the most successful hedge fund managers in the world.   The billionaire fund manager had a great year with his flagship fund finishing up about 30 percent, according to Forbes.

Last year, Tepper was the highest-earning hedge fund manager, taking home $2.2 billion, according to Forbes.

Tepper grew up a shy, math-whiz-kid who went from a class clown/ theater star to, ultimately, one of the biggest names on the Street……

http://www.businessinsider.com/life-of-david-tepper-2013-2

Connecticut hedge fund managers arrested on fraud charges

Three senior executives of New Stream Capital, a Connecticut hedge fund, were arrested and charged on Tuesday for allegedly lying about the fund's structure and financial condition in 2008 before it failed, Reuters reports.

A grand jury indicted Managing Partners David Bryson and Bart Gutekunst and Chief Financial Officer Richard Pereira on charges of conspiracy, securities fraud and wire fraud, the U.S. Justice Department said.  The executives pleaded not guilty and were released on bail, the department said.

The U.S. Securities and Exchange Commission filed related charges against the three executives and settled a related case against the fund's head of investor relations, Tara Bryson, who is David Bryson's sister...

http://www.reuters.com/article/2013/02/26/us-hedgefund-newstream-fraud-idUSBRE91P0ZU20130226

Calpers to Boost Allocations to Event-Driven, Macro Funds

The California Public Employees’ Retirement System plans to boost its allocations to event-driven and global macro hedge funds to help reduce the impact of fluctuations in the stock market.

The biggest U.S. pension fund aims to invest 5 percent of its hedge-fund portfolio with event-driven managers, up from zero in its current weighting, and increase investments in global macro funds to 10 percent from 2 percent, according to a presentation posted on the system’s website.

Calpers, with $254.5 billion in assets, has about 2 percent, or $5 billion, in hedge funds, according to Ed Robertiello, senior portfolio manager of the fund’s Absolute Return Strategies Program...

Read all about it at http://www.bloomberg.com/news/2013-02-26/calpers-to-boost-allocations-to-event-driven-macro-funds.html

New Hedge Fund Deposits to Triple

New allocations to hedge funds may more than triple this year, pushing the global industry’s assets to a new high, Deutsche Bank told Bloomberg in its annual survey.

Hedge fund assets worldwide may increase 11 percent to $2.5 trillion by year-end, according to the survey by the Germany’s largest bank. Investors indicated they will add $123 billion of capital to the industry, in addition to investment returns that are expected to boost assets by $169 billion, the Frankfurt- based bank said.

Hedge funds are forecast to draw more net deposits as investors, especially institutions, pursue more stable returns with low correlation with other assets such as stocks and bonds, the report showed. The $2.3 trillion global industry gained an average 6 percent last year, taking in $34.4 billion of net inflows, according to Chicago-based data provider Hedge Fund Research Inc....

Wait...wait..there's more at http://www.bloomberg.com/news/2013-02-25/new-hedge-fund-deposits-to-triple-in-2013-deutsche-bank-says.html

Goldman managing director in insider trading probe exits

A Goldman Sachs salesman who has been under investigation for possibly passing confidential information about technology companies to hedge funds has left the bank, a spokesman told Reuters on Monday.

David Loeb, 42, who was a managing director based in New York, has never been charged with wrongdoing. But his name surfaced among a small group of Goldman bankers under scrutiny in connection with an insider trading probe conducted by the FBI.

During last year's trial of Rajat Gupta, a former Goldman board member who was convicted of passing nonpublic information about Goldman's financial state to hedge fund manager Raj Rajaratnam, defense lawyers said it was Loeb, not Gupta, who gave Rajaratnam the secret information...

Read all about it at http://www.reuters.com/article/2013/02/25/us-goldman-insidertrading-loeb-idUSBRE91O0SQ20130225

Final Clash: Argentina and ‘holdout hedge funds’ prepare

The long-awaited showdown in a US appeals court this week pits Argentina against a group of investors who refused to swap their debt after the country's historic 2002 default.

Argentina risks defaulting again, this time on 24 billion in restructured debt if it sticks to a vow never to comply with orders to pay so-called “holdouts” but still tries to pay the vast majority of investors who exchanged their bonds in 2005 and 2010.

Buenos Aires calls the holdouts vultures for buying the debt at a steep discount and then demanding full payment in the aftermath of the country's crippling economic crisis. The holdouts, led by NML Capital Ltd, an affiliate of hedge fund Elliott Management, and Aurelius Capital Management, counter that they're just trying to hold Argentina to its obligations and that the country has plenty of reserves to pay them….

Read all about it at http://en.mercopress.com/2013/02/25/argentina-and-holdout-hedge-funds-prepare-for-the-final-clash-this-week

Heinz Traders Stay in Hiding

According to the WSJ: The investors who turned a "highly suspicious" $90,000 investment in H.J. Heinz & Co. options into a $1.7 million profit after last week's announcement of the ketchup-maker's sale failed to show up at a key court hearing on Friday, clearing the way for a judge's order freezing the investors' assets to stand.

The four-minute hearing was the latest development in the Securities and Exchange Commission's pursuit of the traders, who conducted the big options bet through a Goldman Sachs Group Inc. GS +2.13% account in Zurich. A week after the SEC first took legal action against the traders, their identity remains unknown to the regulator. The defendants' table in the federal courtroom in Manhattan was vacant at Friday's hearing….

Read all about it at http://online.wsj.com/article/SB10001424127887324503204578319953414467108.html

Apple Loses to Einhorn; Pressure for Investor Payout

U.S. District Judge Richard Sullivan in Manhattan yesterday granted Greenlight’s request to stop a Feb. 27 vote that would require shareholder approval before the company could issue a new class of preferred shares. Following the ruling, Apple told Bloomberg it would pull the proposal from its shareholder meeting.

Einhorn has used the lawsuit to drum up support among fellow investors to get Apple to return some of its $137.1 billion in cash and investments back to shareholders. The push comes as Apple’s stock has declined 36 percent from a record in September on concern that growth is slowing.

“It’s a shame that you have to go through the legal system, but we’re happy that there is a real message being sent to management that they should consider an alternative strategy” for the cash, said Keith Goddard, president of Capital Advisors Inc., an Apple investor who supported Einhorn’s lawsuit....

More?  Check out http://www.bloomberg.com/news/2013-02-22/apple-shareholder-vote-blocked-at-greenlight-s-request-1-.html

The Shift From Apple To Google Is Part Of A Much Larger Economic Development

From BI: Google is the new Apple. Well, not necessarily, but while Apple's stock continues to grind lower, Google's stock is on a tear.  And now analysts are jumping over themselves to get more bullish on Google.  Just yesterday, two separate analysts put $1,000 price targets on the stock.

What gives? Well, of course people can make up all kinds of stories about the momentum of either company, and their products and so forth.

But there's a bigger macro-market story as well. Throughout recent years, Apple has basically been an asset class on its own: Gold, commodities, stocks, bonds, and Apple.  If you were in Apple, your portfolio did great. If you weren't, you almost certainly lagged the market. End of story.

At a time when people were uncertain about markets, Apple was a solid store of value. A company growing at abnormal speeds at a good price. Even if the economy were to slow, there was Apple, which you know would still be crushing it.  But things have shifted in recent months…..

Read more: http://www.businessinsider.com/why-the-big-shift-from-apple-to-google-is-part-of-a-huge-economic-development-2013-2#ixzz2Le9LFG6K

Corzine Slips out of noose

Jon Corzine’s comeuppance will have to wait.  The National Futures Association, the industry’s self-regulatory body, shelved a proposal to ban the ex-chief of MF Global from the multi-billion futures trading industry after a nearly four-hour board meeting yesterday.

A vote in favor of the proposal would have prompted the NFA to set up an independent panel to weigh the lifetime ban and give Corzine a chance to defend himself.  Instead, the NFA’s board tabled the proposal, citing “ongoing investigations concerning Mr. Corzine’s activities at MF Global,” according to a statement from Chairman Christopher Hehmeyer….

More?  Check out http://www.nypost.com/p/news/business/slips_out_of_noose_rqIhDTRi68YXG5lJeHEaBJ

Buffett’s Ketchup Fancy Plies Heinz With Junk

Billionaire Warren Buffett’s love of ketchup and hash browns is transforming H.J. Heinz Co. (HNZ) into the most-leveraged food maker in America, the good folks at Bloomberg say.

Buffett’s Berkshire Hathaway Inc. (BRK/A) and 3G Capital Inc.’s $23 billion acquisition of Heinz may double the company’s total debt to five times earnings before interest, taxes, depreciation and amortization, according to Fitch Ratings, the highest of any comparable food company. The cost to protect Heinz’s debt from losses soared to a record after the announcement.

While Buffett has used takeovers to build Berkshire into a $249 billion company and burnish his reputation as the world’s most successful investor, financing the deal with $14.1 billion in debt threatens to strip Heinz of the investment-grade rating that it’s had for four decades. Fitch cut Heinz to junk on Feb. 15 and credit-default swaps imply a Ba1 rating, according to Moody’s Corp.’s capital markets research group. That’s two steps lower than its Baa2 rating from Moody’s Investors Service and three below its BBB+ grade from Standard & Poor’s…

Read all about it at http://www.bloomberg.com/news/2013-02-21/buffett-s-ketchup-fancy-plies-heinz-with-junk-corporate-finance.html

Dr. Doom: Don’t Underestimate the Economic and Financial Effects of the Sequester

Economist Nouriel Roubini of NYU’s Stern School of Business tells The Daily Ticker that In the fourth quarter, the major economies of the U.S., U.K, Japan and the Eurozone all contracted and they could slow even more because of spending cuts, says Roubini. “The core of the Eurozone has to do it, the U.S. has to do it…and when you have synchronized fiscal contraction the negative effects on economic growth are worse."

He’s forecasting 1.6% GDP growth in the U.S. this year, which would be the slowest pace in three years. On the positive side he sees growth in housing manufacturing and energy production, primarily the “shale gas revolution.” On the negative side: big government budget cuts.

Roubini says the market should not underestimate the impact of the sequester cuts. “It doesn’t look like there will be a last minute deal on the sequester ….the question will be how long the sequester will last.” If it continues to many months, says Roubini. “The fiscal drag will be another 0.7% or 0.8% of economy” which could lead to another shock in the financial markets and another rating agency downgrade….

Find out more at http://finance.yahoo.com/blogs/daily-ticker/don-t-underestimate-economic-financial-effects-sequester-nouriel-152832809.html

Credit-Trader Exodus Squeeezes Wall Street Firm

Gleacher & Co. confirmed the departure of 20 people from its credit-trading group and said the moves would hurt near-term revenue.

Credit trading was Gleacher's biggest business last year, with $74.4 million in revenue, dwarfing the $27 million of 2012 revenue from investment banking and more than the $40.6 million in 2012 revenue from trading mortgage-backed and interest-rate products.

The people made up Gleacher's high-yield bond trading group, a person familiar with the group said. Some are joining Milwaukee-based brokerage Robert W. Baird & Co., this person told the WSJ….

More?  Check out http://online.wsj.com/article/SB10001424127887324503204578316030530185220.html

The New New Thing: California's Monterey Shale, the Next Oil Boom?

Thousands of feet below some of the nation's most fertile farm land could be 15.4 billion barrels of crude oil.  Billion, with a "B".

The federal government believes the Monterey Shale, which lies under more than 1,750 square miles of central and southern California, has far more shale oil than anywhere else in the lower 48 states — nearly four times the amount of the Bakken Shale in North Dakota.   But this is California. Nothing is easy. Accessing the oil will require hydraulic fracturing, better known as fracking, and even then it may be too expensive to be economical. Oil companies are quietly buying up mineral rights and drilling holes in the earth northwest of Bakersfield to see if they can get lucky….

Wait...wait...there's more at http://www.cnbc.com/id/100480051

Feds Split Over When To Close Cash Spigot

According to the WSJ: Minutes released Wednesday from the Fed’s January policy meeting show officials concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets. The Fed is buying $85 billion in mortgage and U.S. Treasury securities a month to drive down long-term rates and has promised to keep short-term rates near zero until unemployment improves….

Check out http://online.wsj.com/article/SB10001424127887323511804578298121033876536.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Commodities Dive on Speculation Hedge Fund Selling Positions

Commodities fell, capping the biggest loss in more than two months, as metals and energy tumbled amid speculation that a hedge fund was selling, Bloomberg reports. The Standard & Poor’s GSCI Spot Index of 24 raw materials declined 1.1 percent to settle at 668.28 at 3:49 p.m. New York time, the largest drop since Dec. 6. Silver futures led the losses, retreating as much as 4 percent. Crude oil fell the most since November, and gold slumped to $1,558.10 an ounce, the lowest since July.

“You have a sort of mini perfect storm hitting commodities today,” Dave Lutz, the head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said in a telephone interview. “There’s market chatter that a fund is blowing up, gold has fallen below $1,600, and oil storage tanks in Cushing are near all-time records.” Cushing, Oklahoma, is the delivery point for New York oil futures and the main U.S. stockpile site….

Read all about it at http://www.bloomberg.com/news/2013-02-20/commodities-tumble-on-speculation-hedge-fund-selling-positions.html

Hedge fund manager Einhorn takes Apple campaign to shareholders

From Reuters: Hedge fund manager David Einhorn, who is battling Apple Inc in court as part of a wider effort to get the iPhone-maker to share more of its cash pile, will now make a direct appeal to the company's shareholders.

He will host a conference call on Thursday to argue the merits of distributing perpetual preferred stock -- his favored way of rewarding shareholders.

Einhorn's $8 billion Greenlight Capital is seeking an injunction to block a February 27 shareholders' vote on "Proposal 2" in Apple's proxy statement, which would abolish a system for issuing preferred stock at its discretion….

http://uk.reuters.com/article/2013/02/21/us-apple-einhorn-idUKBRE91K02920130221

Cross Your Fingers, Cross Your Toes: Obama’s Forecast on Cuts Is Dire, Timing Is Disputed

From CNBC: President Obama on Tuesday painted a dire picture of federal government operations across the United States should automatic budget cuts hit on March 1: F.B.I. agents furloughed, criminals released, flights delayed, teachers and police officers laid off and parents frantic to find a place for children locked out of day care centers.

"Federal prosecutors will have to close cases and let criminals go," Mr. Obama said, flanked by law enforcement officers at the White House. "Tens of thousands of parents will have to scramble to find child care for their kids."

While the effects may ultimately be significant, many are unlikely to be felt immediately, officials said Tuesday after the president's remarks. Rather, they will ripple gradually across the federal government as agencies come to grips in the months ahead with across-the-board cuts to all their programs.  That’s if people don’t panic.  And there isn’t more bad news just around the corner..

Read all about it at http://www.cnbc.com/id/100473763

Are Hedge funds setting the stage for a gold price recovery?

From Futuresmag: “…Speculators reduced their bets on rising commodities prices by 15% in the week ending Feb. 12, the largest weekly reduction since mid-November. In particular, the net long combined gold speculators' positions calculated by Bloomberg tumbled 11% for the week, reaching a six-month low at 128,581 contracts. Better retail sales and consumer confidence in the U.S. have led to poorer gold sentiments because of traders' concerns of an earlier termination of the "QE infinity" in 2013. The market will scrutinize the minutes of the January FOMC meeting to be released on Feb. 20 for the timing and conditions for halting the QE programs. However, the cleaner positioning can prepare the stage for a gold price rebound. The gold-backed ETP holdings were 2,602.3 tons last week, about 1.1% below the peak reached on Dec. 20…”

More?  Check out http://www.futuresmag.com/2013/02/20/hedge-funds-setting-the-stage-for-a-gold-price-rec?t=commodities

Paulson Leads Funds to Bermuda Tax Dodge

According to Bloomberg last year, about $450 million belonging to top executives at billionaire hedge fund manager John Paulson’s New York firm took a quick round trip to Bermuda.

In April, the executives sent the money to a reinsurance company that they’d set up on the island 650 miles off the North Carolina coast. By June, the Bermuda company, which has no employees and sells far less reinsurance than the industry norm, had sent all the cash back to New York, to be invested in Paulson & Co. funds.

By recycling the funds through Bermuda-based Pacre Ltd., the Paulson executives are positioned to legally exploit a little-known tax loophole, reduce their personal income taxes and delay paying the bill for years….

More?  Check out http://www.bloomberg.com/news/2013-02-19/paulson-leads-funds-to-bermuda-tax-dodge-aiding-billionaires.html

SAC’s Cohen May Face SEC Suit as Deposition Hurts Case

From Bloomberg: U.S. investigators have subpoenaed a 2011 deposition of SAC Capital Advisors LP founder Steven Cohen, whose sworn statements on insider-trading compliance may hurt him as he tries to persuade regulators not to file a lawsuit with the potential to shut his $14 billion firm.

The SEC told the hedge fund Nov. 20 that it planned to sue SAC for securities fraud and so-called control-person liability for failing to supervise employees. The same day, the agency accused an ex-SAC portfolio manager and his hedge-fund unit of insider trading for persuading Cohen, 56, to make $700 million in illegal trades. Prosecutors also indicted the manager.

Cohen’s testimony, reviewed by Bloomberg News, establishes his personal control over the unit, CR Intrinsic, and records his unfamiliarity with his firm’s compliance and ethics policies on insider trading.“I’ve read the compliance manual, but I don’t remember exactly what it says,” Cohen said.

Anyone in blogland surprised?  We thought not….

Another Wall Street Titan about to fall.  Read all aboujt it at http://www.bloomberg.com/news/2013-02-19/sac-s-cohen-may-face-sec-suit-as-deposition-hurts-case.html

Soros Is Going After The World’s Two Most Hated Currencies

From BI: The two most hated currencies in the world right now are: The Japanese Yen and The British Pound.

In the case of the yen, the new Prime Minister Shinzo Abe has come into power with an aggressive easing agenda (both monetary and fiscal). The yen has been getting slaughtered since November.

In the case of the British pound (which has been getting hammered all year) the currency is weakening on a combination of weak economic prospects, a worsening balance of trade, and the expectation that newly incoming Bank of England chief Mark Carney will be inclined to ease policy further.

.....And George Soros is apparently going after both currencies.

Read more: http://www.businessinsider.com/soros-profiting-from-decline-in-pound-yen-2013-2#ixzz2LKLyxLd8

NYC pension funds near goal of $3.5 billion in hedge fund investments

From pionline: The New York City Retirement Systems is transitioning from fund of funds to direct hedge fund investments …The New York City Retirement Systems is two-thirds of the way toward completing investment of a $3.5 billion hedge fund portfolio on behalf of three of the city's five pension plans.

Once the remaining $1.2 billion is invested directly in single-strategy hedge funds — likely by the end of this year — the four-person hedge fund investment team in New York City Comptroller John C. Liu's office will tackle dismantling the $450 million in a commingled hedge fund of funds managed by New York-based Permal Group and reinvesting that money directly in hedge fund strategies….

http://www.pionline.com/article/20130218/PRINTSUB/302189968/nyc-pension-funds-near-goal-of-35-billion-in-hedge-fund-investments#

Man Group All Shook Up!

Man Group Plc, the biggest publicly traded hedge fund manager, combined two computer-driven hedge fund units and made management changes in recent weeks before Emmanuel Roman takes over as CEO next week, Bloomberg reports.

Luke Ellis, who has been head of the FRM fund of hedge funds unit, was named president of London-based Man Group, David Waller, a company spokesman, said today. Ellis has oversight of the investment operations of Man’s three main investment divisions -- FRM, GLG Partners and ALM, which runs the firm’s largest hedge fund, AHL.

AHL, which has underperformed its peers and lost assets to client withdrawals, is being combined with the Man Systematic Strategies group, Waller said. AHL’s assets under management fell to $16.3 billion in the third quarter of last year, from $16.7 billion three months earlier and from $19.5 billion as of March 31….

More?  Check out http://www.bloomberg.com/news/2013-02-18/man-group-combines-hedge-fund-units-names-ellis-as-president.html

A Final Fling for Treasurys?

The U.S. Treasury market's heyday of soaring prices is likely over, but some bond managers say there could be one more run, according to a WSJ report.

Treasury prices surged after the 2008 financial crisis, dragging yields to an all-time low of 1.4% at one point from more than 4%, as the Federal Reserve has bought trillions of dollars in Treasurys to help prop up the economy. But with the economy showing signs of life, a pullback in the central bank's bond purchases that could mark the end of the bull run is now a possibility.

Until the Fed stops purchasing, bond investors say, Treasurys have room for some short-term rallies. In the near term, an impending debate over U.S. government spending could be the trigger for gains.  U.S. Treasury prices fell last month as investors felt optimistic about the economy, pushing 10-year yields as high as 2.06%, from 1.75% at the start of the year. Bond yields rise when prices fall. The 10-year note yielded 2.009% late Friday….

Find out more at http://online.wsj.com/article/SB10001424127887323949404578309783738458520.html

The Secret Trading Strategy From The 1930s That Hedge Funders Don't Want You To Know About

From BI: "The large operator does not, as a rule, go into a campaign unless he sees in prospect a movement of from 10 to 50 points. Livermore once told me he never touched anything unless there were at least 10 points in it according to his calculations."  So writes Richard Wyckoff, the legendary trader who in the 1930s wrote a manifesto that gained him a cult following on Wall Street.

His 1931 book, "The Richard D. Wyckoff Method of Trading and Investing in Stocks – A Course of Instruction in Stock Market Science and Technique," is out of print and somewhat difficult to find these days (not impossible), but even in 2013, hedge fund managers still swear by it...

Read more: http://www.businessinsider.com/the-richard-wyckoff-stock-trading-method-2013-2

Bulls eyeing Dow 16K

It’s the running of the bulls — again.  The Dow Jones industrial index is having its biggest rip-roaring ascent in decades — an upside propelling it to record 2013 highs, market pros have told the Post.

One vet on the New York Stock Exchange floor last week saw the Dow being catapulted well above its record close set in October 2007. It reached 14,164 back then.

By year-end the bulls will take the Dow past 15,000 and, hey, possibly to 16,000, says veteran Big Board floor trader Peter Doyle.  That view has gained plenty of currency lately. The Dow has had its best January in some two decades. And the bull run is gaining steam — despite warnings from bears on the sidelines. On Tuesday, for example, the Dow tantalizingly closed within 1 percent of its record 2007 high…

More?  Check out http://www.nypost.com/p/news/business/bulls_eyeing_dow_RT9Xp4fn0CM8NljxfOAOAK

The Hedge Funds’ New Number #1 Stock

From MarketWatch: At Insider Monkey, we track 450 hedge funds, and our research has shown that retail investors can be rewarded by following the smart money…. Four times a year, we rank hedge funds' top consensus picks, and Apple AAPL -1.38% has been the most popular stock among hedge funds for a very long time. Times changed and the balance of power has shifted. The latest filings show that hedge funds are dumping their top tech picks in favor of financials, particularly those trading at steep discounts to book.

Still, it is a mild surprise to see who's the new No. 1.  With 142 hedge funds holding long positions in the latest round of 13F filings from the SEC, American International Group AIG -2.19%  takes this crown, and the back half of 2012 was truly a comeback story. Hedgies' interest in the insurer spiked by 80% in Q3 and after 21 of the funds we track bought shares in Q4, 142 are now bullish on AIG…..

Read more at http://www.marketwatch.com/story/hedge-funds-dumped-apple-aig-is-the-new-king-2013-02-15?link=MW_latest_news

Soros dumps gold as prices sink

Billionaire investor George Soros is increasingly bearish on gold.

Soros cut his investment in the SPDR Gold Trust (GLD) in half during the fourth quarter, according to a regulatory filing according to a money.cnn report.  The $8.5 billion Soros Fund Management now owns 600,000 shares of the gold ETF, worth an estimated $97 million. That's down from 1.3 million shares, worth more than $227 million, in the third quarter. The ETF is one of the most widely held gold-backed ETFs.

Soros also sold his stake in gold miner Kinross Gold Corp., which was worth about $18 million, but held onto 1.7 million shares of Freeport-McMoran (FCX, Fortune 500), worth about $46 million....

http://money.cnn.com/2013/02/15/investing/soros-gold/?cnn=yes&hpt=hp_t3

The Big Pitch: How Tom Serres Raised $8 Million In 12 Days

Tom Serres faced a choice. The 30-year-old CEO of Rally.org–a three-year-old fundraising website for nonprofits, political campaigns and other causes–had just raised $3.5 million in Series A financing from some serious Silicon Valley investors: LinkedIn founder Reid Hoffman from Greylock Partners, Mike Maples of Floodgate and Lean Startup author Eric Ries. But he needed more dough.

With such endorsement Serres could’ve raised money in a drawn-out road show that would distract him from Rally for months. Or the crowdfunding evangelist could do something completely unprecedented: “Eat his own dog food” and raise cash–for a multimillion-dollar venture round–from the Internet in one manic flash. By opening the round to investors around the world, Serres theorized, he could capitalize on the attraction of his brand-name investors, set a definite time line and condense the fundraising process into a matter of days.

Dog food it was. On May 15 he broadcast Rally’s venture round over AngelList, a social network for startups and investors, and watched as the offers poured in … and kept coming. Over 12 days the single father embarked on a voyage that would have felled a lesser man: fielding nearly 3,000 e-mails; traveling to Texas, Louisiana and Washington, D.C.; and pitching to 70-plus investors, often with his 4-year-old daughter, Madison, in tow. By the end he’d reeled in 18 new backers and put another $4.4 million in the bank–all without a call to social services…..

Wait…wait…there’s more at http://www.forbes.com/sites/jjcolao/2013/02/13/8m-in-two-weeks-the-inside-story-of-the-largest-crowdfunded-series-a-round-of-all-time/

SAC Capital Increases Holdings in Facebook as Shares Rise

SAC Capital Advisors LP, the $14 billion hedge fund run by Steven A. Cohen, joined other investors in boosting stakes in Facebook Inc. during the fourth quarter, as the company took steps to bring in more revenue, Bloomberg told us..

SAC Capital increased its holding in Facebook by 7.99 million shares, bringing its stake to 8.5 million shares, worth $242.1 million, according to a filing yesterday. D.E. Shaw & Co., the New York-based hedge fund that uses computer models to pick trades, increased its stake by 7.58 million to 7.8 million, or $222.3 million.

Facebook has climbed more than 50 percent from a record low in September, as the company assuaged concerns over revenue growth and weak mobile advertising that sent the shares to half of their May initial offering price of $38 apiece. Mobile-ad sales made up 23 percent of ad revenue during the fourth quarter, up from 14 percent in the previous period.

Read all about it at http://www.bloomberg.com/news/2013-02-15/sac-capital-increases-holdings-in-facebook-as-shares-rise.html

Tiger Global Fourth-Biggest Groupon Holder After Shares

From Bloomberg: Tiger Global Management LLC, the hedge fund founded by Chase Coleman, become the fourth-largest holder of Groupon Inc. after adding 63.7 million shares in the last quarter, according to a regulatory filing today.

Tiger Global holds 9.95 percent of the shares, a position valued at $316 million at the end of the year, according to data compiled by Bloomberg.

Groupon shares have surged 12 percent in the past two days amid optimism that its new e-commerce service may expand to more cities, bolstering sales. The operator of the largest daily- deals website has tumbled 70 percent since its November 2011 initial public offering....

Find out more at http://www.bloomberg.com/news/2013-02-14/tiger-global-fourth-biggest-groupon-holder-after-shares.html

Soros, Pimco Turned Bearish on Gold

Prominent hedge fund manager John Paulson continued to hold significant gold investments in the fourth quarter of 2012, even as other investors pulled out.  Notable institutional investors, including George Soros, Julian Robertson and Allianz's PIMCO reduced their bets on gold during the quarter, when bullion posted its biggest quarterly loss in more than four years.

Paulson & Co owned 21.8 million shares in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, at the end of December, unchanged from Sept. 30, a filing with the U.S. Securities & Exchange Commission showed on Thursday..

Paulson is by far the biggest shareholder of the SPDR gold ETF. He has often advocated gold to offset risks related to currency exposure and U.S. dollar depreciation…..

Read all about it at http://www.cnbc.com/id/100462720

Gangster Bankers: Too Big to Jail (or How HSBC hooked up with drug traffickers and terrorists. And got away with it)

  

According to Rollingstone's Matt Taibbi: The deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice. Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever. Yes, they issued a fine – $1.9 billion, or about five weeks' profit – but they didn't extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.

People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.....

Read more: http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214#ixzz2KxE6Gc3K 

Apple’s Price Cut On Macs Shows What’s Going Wrong at the Company

From Henry Blodget | Daily Ticker: Only four months after launching a new laptop with a high-resolution "retina" screen, Apple has chopped $200 off the price. Apple's 13-inch "Retina" MacBook Pro will now sell for $1,499 instead of the $1,699 original price.  This is a small move, but it's symptomatic of the broader challenges that Apple is facing.

The most likely reason for a price-cut so soon after launch is that the product wasn't selling well at the original price. And with the 13-inch MacBook, this would not be a surprise: Reviewers were underwhelmed with the laptop when it was released, arguing that, at $1,699, it was not a good value. Based on the price cut, it appears that Apple laptop buyers agreed.

The price cut reveals that consumers won't rush to buy the latest greatest Apple product just because Apple made it. The price-value tradeoff has to be reasonable. And in the case of the MacBook Pro, it apparently wasn't.  This problem--the price-value tradeoff--has become an issue for Apple far beyond laptops…

Read all about it at http://finance.yahoo.com/blogs/daily-ticker/apple-price-cut-macs-shows-going-wrong-company-161029283.html

Another Hedge Fund Has Completely Dumped Apple

From BI: Barry Rosenstein's JANA Partners has completely divested its stake in Apple, according to a 13F filing for the fourth quarter ended 12/31/2012 with the Securities and Exchange Commission.

At the end of Q3, the hedge fund held 143,148 shares of the tech giant, the Q3 13F filing shows.

Omega Advisors' Leon Cooperman also sold all his Apple shares in the last quarter.

Apple is known for being a hedge fund favorite.  We now have two big names who have dumped it completely....

Read more: http://www.businessinsider.com/jana-partners-dumps-apple-2013-2#ixzz2KtPTSjHK

Heinz bought by Warren Buffett's Berkshire Hathaway for $28bn

From the BBC: US billionaire Warren Buffett is set to buy food giant Heinz in a deal worth $28bn (£18bn).  Mr Buffett's Berkshire Hathaway company and private equity firm 3G have agreed to take over the food company, famous for its ketchup and baked beans.

In a statement, Heinz called the deal "historic", and the largest to date in the food industry.  Shares in Heinz soared in early trading in New York. They rose nearly 20% to more than $72 a share.  The takeover has been approved by the company's board, but still needs to be voted on by shareholders....

More?  Go to http://www.bbc.co.uk/news/business-21461779

Look who is halting agriculture trading with hedges

Barclays is halting agricultural trading with hedge funds in a move to burnish its reputation amid a major overhaul, but will still market index-linked investment products in the sector.  The British bank is among several financial institutions to have come under fire for speculating on grain and other agriculture products, which critics say has pushed up food prices and fuelled unrest in some poor countries.

CEO Antony Jenkins told a news conference on Tuesday the bank was exiting speculative trading in softs and agriculture due to "reputational reasons", but was sticking with the overall commodities sector.  A source close to the situation later clarified that the bank was only stopping softs and agricultural trading with hedge funds….

Read all about it at http://www.reuters.com/article/2013/02/13/uk-barclays-review-commodities-idUSLNE91C02A20130213

Soros Does It Again: bets against yen, makes $1 billion

 U.S. hedge fund investor George Soros has gained about $1 billion since November betting against the yen, the Wall Street Journal reported, citing people with knowledge of the firm's position.

The yen lost nearly 20 percent against the dollar between November and early February, picking up speed as Japan's new government put pressure on the Bank of Japan to ease monetary policy more aggressively to defeat deflation.

Soros Fund Management's internal portfolio, which has been led by Scott Bessent since last summer, holds about 10 percent Japanese shares, the paper reported, citing people close to the firm.

Read all about it at http://finance.yahoo.com/news/soros-fund-bets-against-yen-063548676.html

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U.S. insider trading informant Fortuna gets two years probation

A federal judge in Manhattan on Wednesday sentenced former hedge fund manager Steven Fortuna, who was among several informants in the government's broad insider trading crackdown, to two years of probation for insider trading, according to Reuters.

Fortuna pleaded guilty in October 2009 to four counts of securities fraud and conspiracy to commit securities fraud, according to a sentencing memorandum that Manhattan U.S. Attorney Preet Bharara filed on February 4th.  U.S. District Judge Sidney Stein also ordered Fortuna, 50, to forfeit $200,000.

Find out more at http://www.reuters.com/article/2013/02/13/us-insidertrading-fortuna-idUSBRE91C1N420130213

Best Buy boner

Best Buy won’t be coming home to daddy, after all.  Dick Schulze, the Minnesota entrepreneur who created the nation’s biggest electronics chain 30 years ago, has all but given up his bid to take the company private, sources told The Post.  The 71-year-old former chairman of the chain has been scrambling since last summer to corral a team of buyout firms to acquire Best Buy in a deal valued at upwards of $8 billion.

Private-equity firms, however, have been on the fence about a full-fledged takeover, concerned about the risks of piling as much as $6 billion of debt atop an already struggling retailer.  PE players are instead considering the purchase of a minority stake, a sign, people close to the situation said, of optimism about the company’s turnaround prospects….

Read more at http://www.nypost.com/p/news/business/best_buy_boner_Ioi6AVoy3fkncePsPa8xFN

Investors yank $1 billion from hedge fund giant

Reuters reports: Winton Capital, one of the world's most successful hedge fund firms, has seen clients pull $1 billion of cash out of its portfolios amid falling returns from computer-driven fund managers.

The firm set up by Cambridge physicist David Harding, one of Britain's richest financiers, said that assets had dropped to about $26 billion at the end of 2012, from $29 billion in May.

While part of the drop was down to performance losses, about $1 billion had been withdrawn by clients, a spokesman told Reuters.

The heavy outflow is likely to have stemmed from Winton's decision during the credit crisis to cut risk levels - a move that makes it attractive to more conservative investors such as pension funds but does not always suit investors chasing higher returns.,...

Wait…wait…there’s more at http://uk.reuters.com/article/2013/02/13/uk-winton-investors-outflows-idUKBRE91C1BX20130213

High-Speed Trader Reveals 82% Dive in Profits

From Fox: Offering a rare glimpse inside the world of high-speed trading, Getco disclosed an 82% plunge in earnings on Wednesday through the first three quarters of 2012 amid tumbling trading volume and greater competition.

The results offered from the privately held Chicago company come ahead of its pending takeover of Knight Capital Group (KCG), which the two sides anticipate will be completed in the second quarter.

According to a Securities and Exchange Commission filing, Getco generated $24.6 million in net income during the first three months of 2012, down from $134.8 million the year before.  Revenue tumbled 40.8% to $425.3 million, largely due to a decrease in trading revenue to $413.6 million from $722.2 million….

Read more: http://www.foxbusiness.com/industries/2013/02/13/high-speed-trader-getco-reveals-82-dive-in-profits/#ixzz2KoDlJVVc

German Banks Could Drop Hedge Funds

From finalternartives: German plans to enforce a strict separation of retail banking and investment operations, including hedge funds, could lead German banks to simply abandon the latter.

Germany's proposed new bank rules would require that both secured and unsecured investment activities be ring-fenced from customer assets. By contrast, France, which is working with Germany on the new rules, plans only to force the separation of unsecured activities from customer assets.

The full impact of the German bill remains unclear, including which activities precisely will be prohibited. But whatever form they take, banks may simply choose to forego proprietary trading, high-frequency trading and hedge funds entirely, Fitch Ratings suggests….

More?  Turn to http://www.finalternatives.com/node/22883

Foreclosure City: The Banks Always Win

From Dealbook: Washington is seeking help from an unlikely group in its effort to distribute billions of dollars to struggling homeowners in foreclosure: the same banks accused of abusing homeowners with shoddy foreclosure practices.

In doing so, the regulators are trying to speed the process after a flawed, independent foreclosure review delayed relief for millions of borrowers, according to people briefed on the matter. But housing advocates worry that the banks, eager to end the costly process, could take shortcuts as they comb through loan files for potential errors, in some cases diverting aid from the neediest homeowners.

Regulators say they will check the work. And banks have already agreed to pay a fixed amount to troubled homeowners, creating another backstop.  According to officials involved in the process, who spoke anonymously because the matter is not public, the regulators had few alternatives...

Read more at http://dealbook.nytimes.com/2013/02/12/big-banks-are-told-to-review-their-own-foreclosures/

SAC Capital’s Outlook Settings May Save It From Doom

According to NY Magazine’s Kevin Roose: Federal investigators have been circling SAC Capital and its founder, Greenwich billionaire Steve Cohen, for years, over suspicions that Cohen's hedge fund has been a nest of illegal insider trading. Their investigative tactics have been aggressive — wire-tapping Cohen at his home, busting one of his lieutenants and prodding him to flip on the boss — but have not thus far produced enough evidence to charge Cohen with anything.

Now the feds have hit another roadblock. They don't have any e-mail evidence from SAC during the time period they're investigating, owing to the firm's policy of automatically deleting e-mails after a month or two.

According to Bloomberg, SAC e-mails "were deleted from employee electronic mailboxes every 30 or 60 days" in 2008, the time period at the heart of the government's investigation. That sounds kind of sketchy, but it was probably just business as usual….

http://nymag.com/daily/intelligencer/2013/02/sac-capitals-outlook-settings-may-save-it.html

Dr Doom and Gloom: The Fed Party Is Over, Invest Overseas

From Yahoo Finance: For four years the FOMC has been printing money to keep interest rates low in order to stimulate the economy. For just as long investors have been hand-wringing over the long-term dire implications of such quantitative easing. The basic idea is that the Fed will eventually stop printing and all assets would tumble, priced as they are relative to risk-free money. With the Bank of Japan, Europe, China and seemingly every other major economy now doing variants on this form of stimulus, the "race to debase" currency has become a national phenomenon.

Marc Faber, the editor of the popular Gloom, Boom, Doom Report has been among those critical of central bank stimulus. Now he says the party is REALLY over.

Joining Breakout by phone from Thailand, Faber says the Fed has painted itself into a corner. The Fed can’t keep printing, he says. If and when they stop, asset prices will fall. If the stimulus doesn’t stop it means there is a weak economy for the foreseeable future. In such a scenario the sickness afflicting the world will never be allowed to run its course....

Read more at http://finance.yahoo.com/blogs/breakout/fed-party-over-invest-overseas-marc-faber-140453716.html

CEO vs. hedgie in Apple smackdown

From today's NY Post: The fight over Apple’s cash pile is starting to take its toll.  Apple CEO Tim Cook yesterday characterized a lawsuit brought by hedge-fund honcho David Einhorn as a “silly sideshow” and a “waste of shareholder money.”

While Cook said Apple is in “active discussions” about spending some of its $137 billion cash hoard, investors were disappointed that he didn’t elaborate. Shares fell 2.5 percent yesterday to close at $467.84.

Einhorn, the founder of $8 billion Greenlight Capital, wants Apple to return more cash to shareholders.  As part of that effort, he sued last week to thwart Apple’s plan to eliminate its ability to issue preferred stock without shareholder approval, so-called blank check preferred stock….

http://www.nypost.com/p/news/business/ceo_vs_hedgie_in_apple_smackdown_7hvr90Mt6S40xZAys4IYoM

GLD And Gold Shaking Up Hedge Fund Drag

Fasten those seat belts people.  Make sure your you=know=what is in the upright position. From Forbes: Following a decade-long rally, gold prices have slumped for much of the past 18 months. Long championed as a source of both capital protection and upside appreciation (especially during the financial crisis and resulting recession), the price of gold has declined while equity markets surged to five-year highs.

Might this foreshadow the end of a bull market in gold that has seen prices more than double in the last four years, and nearly quadruple since 2004?

At first glance it may seem investors are acting sensibly by increasing their equity exposure while eschewing more defensive asset classes. Upon closer inspection, however, gold appears due for another strong upswing.

Read all about it at http://www.forbes.com/sites/greatspeculations/2013/02/12/gld-and-gold-shaking-hedge-fund-drag/