Marc Faber: investors were too optimistic about Asia (Opalesque)
Last week was a turbulent week in some Asian countries as the sell-off intensified. And this turbulence is set to continue, says Marc Faber. Indeed, investors have been exiting the Indian and Indonesian currencies following months of decline and a sharp drop last Thursday. The currencies of Malaysia, the Philippines and Thailand also declined, although by less than 1%, says the New York Times. Stock markets across most of the region fell on Thursday, but share prices rebounded slightly in India. However, China and Japan’s were unaffected by this general waning.
New Reasons to Fear Leverage (InstitutionalInvestorsAlpha)
Steven Cohen’s SAC Capital Advisors has nearly $51 billion in leverage—more than 3.5 times its current assets of $14 billion. Even so, no one expects a lasting market crisis if at some point Cohen has to unwind the firm, which the U.S. government has accused of insider trading. Markets might panic for a few days or even a few weeks, but SAC’s assets, even with the leverage, pale beside the estimated $2.4 trillion in global hedge fund assets. At the present size of the hedge fund industry, no one fund has the power to shatter the markets if its portfolio managers suddenly have to pay back borrowed assets…
Eric Rosenfeld’s Activism Comes with Lyrics (InstitutionalInvestorsAlpha)
It’s a cold morning in Boston, and another dry hedge fund conference panel is wrapping up. Suddenly Eric S. Rosenfeld, founder and CEO of New York–based Crescendo Partners, steps down from the speaker’s platform and strolls out front to face the audience. Music that sounds vaguely like a Broadway show tune starts blaring from the room’s speakers. Rosenfeld’s voice begins to fill the room. In a big, earnest tenor, he sings what could be the Barbra Streisand number “Don’t Rain on My Parade” from Funny Girl, except Rosenfeld has substituted his own lyrics, titled “Don’t Mess with My Charade,” about CEOs trying to hide their company’s problems…
Hedge Funds Down 0.57% MTD (Finalternatives)
The Bank of America Corp (NYSE:BAC) Merrill Lynch investable hedge fund composite index was down 0.57% for the month, as of August 21, bettering the S&P 500 which was down 3.6%. Convertible arbitrage was the best performing strategy, adding 0.16% in the monitored period while equity long/short performed the worst, falling 0.93%. BofAML analyst MacNeil Curry said their models indicated that market neutral funds had decreased market exposure to 9% net long from 15% net long as of August 21 and equity long/short funds had reduced market exposure to 34% from 42% net long, slightly below the 35-40% benchmark level.
Simon Lack Releases ‘Bonds Are Not Forever’ (BroadwayWorld)
In his international bestseller “The Hedge Fund Mirage,” Simon Lack blew the lid off of the hedge fund industry, revealing why, despite their grandiose claims of record-breaking returns, the industry’s chief beneficiaries have been hedge fund managers themselves. Now, in his second book, Lack shifts his focus to the fixed income markets to explain why investing in bonds is hazardous to your financial health.
Hedge Fund Association Forms New Academic Advisory Board (BusinessWire)
The Hedge Fund Association (“HFA”) today announced that it has formed a new academic advisory board to empower and educate students and others about the hedge fund industry. The board will hold HFA symposiums on campuses nationwide featuring well-known hedge fund managers and investors as guest speakers, along with hosting online webinars to teach the next generation of professionals not only about the industry, but also finance and ethics.
