TABLE OF CONTENTS May 2008

Risk Junkies, Unite!

The Fed decision? So passé. Not to be outdone, the Bank of England today is heralding a new era of overpriced risk in the market relative to its fundamentals. Think of it as the unstoppable force against the immovable object. In the summer, the price of risk clocked in at an unsustainable low. These days, it’s just the opposite. By now, we assume you’ve already ravenously devoured today’s superexciting “semi-annual financial stability report” out from the B of E. But did you know this?: Embedded in its bone-dry contents are a coded message, exhorting the risk addicts of Europe who breathlessly thronged to the market this time last year (and have since scattered to parts unknown, probably Spain) to get their sweet cheeks back to Old Blighty. More on the meaning behind the message. > read more

Déjà Vu All Over Again

Leave it to billionaire investor Carl Icahn to leverage a) a threat to gut Yahoo’s board and b) support from the likes of hedge funds Paulson & Co. and Eton Park Capital Management to bring Microsoft back swinging. Read on for more about whether anyone actually thinks this is headed anywhere. And if you’re trading the stock of either Yahoo or Microsoft (or their competitors) today, fasten your seatbelt. It’s going to be a bumpy ride. > read more

Food Fight: This Time, It’s Serious

For months, we’ve rolled our eyes at every “food fight” headline. Every time we’ve excitedly clicked on a story with this heading, we were bitterly disappointed to find there had been no unkind exchange of words, no actual throwing of food. But today, we resignedly clicked once more and found that, yes, the war has taken a nasty turn. It’s now officially a fight. But will there be food? Some hucking of rice – even corn? We’re not sure if Condoleezza Rice plays like that, but we suspect her surname isn’t for nothing. In any case, the whole thing has debilitated into a name-calling spat between India and the U.S. You can guess who we’re rooting for. Everyone knows the Americans need to go on a diet. > read more

Breaking Of Dollar Peg Nigh?

That nauseating buckling sound you’ve been hearing is not just the dulcet tones of our death-giving credit crunch, but also the dollar peg that’s straining against the overheating economies of the Middle East – which are, no doubt, beginning to wonder why they ever linked their currencies to the weak greenback. Now hedge funds and currency traders are wondering too – and they are actively placing their bets. Here, a primer on where they think prices are headed, and why. > read more

A Good Kind Of Bad?

The good news: HSBC is setting aside $3.2 billion for cruddy loans it made in the U.S. The bad news: HSBC is setting aside $3.2 billion for cruddy loans it made in the U.S. Truth be told, this amount is less than what many had feared and expected, so we’re going to just go out on a limb here and say it’s a good kind of bad (you know…rather than the bad kind). Also, this duality of good/bad news happens to be arriving with a silver lining that, coming from Europe’s biggest bank, may bring hope back to all. Except, for course, for the U.S., which, HSBC notes, is doomed. > read more

UBS: Nothing’s Shocking

C’mon! This is getting ridiculous. You cannot hoard the headlines every day, UBS. Give some other hotshot global institution a chance to take a spectacular fall on a banking banana peel for a change. For those of you who have been taking a bath in Siberia for the past 12 hours, the world’s biggest bank for the wealthy (or at least, we think it still holds this title) is being investigated by U.S. authorities for possibly helping its ultra-rich clients evade taxes. (We’d like to take a moment here to reflect on the ugliness of the word “evade.” Might we suggest, you know, maybe “defer”?) And there’s more. A senior bank employee is now being raked over the coals by the U.S. Justice Department. He’s already been dragged across the pond and is being detained at this very moment. And names are being named. > read more

GLG Results ‘Disappointing’ – Soap Still Doing Fine

Not surprisingly, all that dirty business on Wall Street has really helped companies like Unilever sell a lot more soap in the latest quarter (though we really thought soap was more of a lagging indicator, the Dove-purveyor has just come out with sales results that are topping analyst estimates for the first time in six years). Too bad GLG Partners does not sell Dove soap. The hedge fund – one of the biggest in Europe – was man enough to admit to “disappointing” results in the latest quarter, but could not resist tossing out some choice comments about its recently departed kingpin trader. > read more

Tales Of A ‘Hedge Fund Hippie’

Think you know Arpad Busson, 44-year-old financier, chairman of hedge-fund outfit EIM and boyfriend to Hollywood actress Uma Thurman? Think again, piker. True or false: Did he turn his first profit selling toothpicks door-to-door? Did he date former Charlie’s Angel Farrah Fawcett? Did he masquerade as an Italian prince on the French Rivièra? The answers to all this and much, much more are just a voyeuristic click away. > read more

Brevan Howard’s $1 Billion Float

Brevan is going THERE. Remember the days when hedge funds didn’t want to go anywhere – let alone public? Whaaat happened? Could this be the end of hedgefundom as we know it? For now, we’ll just have to content ourselves with the fact that the promotional Web site for the district of Mayfair still lists nary a hedge fund under its lame “finance” section – despite the fact there are hundreds of you over there. Clearly, there is still some modicum of modesty left in this business. Until you all become the next Microsoft Corp. In any case, here are the details of this latest, greatest unveiling. > read more

Blame The Speculators!

U.K. retail sales fell for a second month in a row in April as ailing housing prices, quick-time inflation and an all-around credit shortage crimped budgets. But oil is suffering no such fate. As consumers and government officials make themselves dizzy from the resultant flurry of infighting and finger-pointing, one news report crops up today claiming this is all because oil traders are covering shorts after wrongheaded bets. Of course. Why didn’t we think of that? > read more

Ringgiting The Register

As fuel and food prices spiral ever higher, Malaysian bonds are attracting a record amount of foreign investment from investors such as Franklin Templeton (manager of the $10 billion Templeton Global Bond Fund), Pacific Investment Management and State Street Global Advisors, sending the ringgit to its highest level in a decade. Meanwhile, a different kind of fund with the name Templeton in it is getting hot and heavy for this year’s worst-performing currency. Time to place your bets. > read more

Taking Aim Where It Hurts

You knew that the party was over when the Bank of England started practically giving away sweaty wads of bills – but attacking your salary too? Heartless. Despite the excessive build-up of credit-creation and risk-taking that eventually snowballed into what we now call, in oh so tremulous tones, the subprime crisis, for years the U.K.’s Financial Services Authority didn’t give much of a rat’s arse about how sky-high City paychecks affected a bank’s capital structure. That’s all beginning to change – and in a fashion we presume likely won’t bode so well for London’s hard-working traders and bankers. > read more

Credit Crisis: Closer To Closing In On A Near-End

Lo, a brighter crunch picture awaits! Whatever that is. We know it; we feel it…it’s coming. We are not carrying on. You clearly don’t have our keen grasp of the complex, interlocking financial mechanics at work here. When UBS sells $15 billion of mortgage assets to BlackRock and announces job cuts of 5,500 by mid-2009 (as detailed in the following piece) that’s merely the sweet remedying of a gangrenous one-off. This is the rise of the fall. Legends of the rise. It is almost upon us. The definitive (possible) near-ending of the end. You heard it here first. But first, a word from one of our sponsors. > read more

As Kerviel Smirks, SocGen Stammers

What happens when investors boo and you’re left to walk the plank as chairman? Elementary, just show them a calming slide show. Unfortunately, as Societe Generale’s chief found out this week, that doesn’t quite work when faced with an angry, rotten-fruit-throwing mob. An amusing account of what transpired when Daniel Bouton finally found the spleen to go toe-to-toe with the bank’s shareholders (many of them traders) only to wind up with egg on his face. Oh, yeah, and rotten fruit. For added bonus: the following story comes with what appears to be a little slideshow of Kerviel featuring the so-called rogue trader (repeatedly and errantly called “rouge trader” by the dunderheaded mainstream media) seemingly chortling over a newspaper. Kind of weird, but we like it. > read more

Silverjet: Felled By Fuel?

Of course, that is the simple version. But isn’t it curious that a U.K. business airline discloses it’s going under due to skyrocketing fuel costs just as U.S. regulators announce a sweeping, nationwide probe into the energy markets that control the global price of oil? A look at what’s being done, whether it’s already too late and why everybody always wants to blame the speculators. (As one big time oil trader recently told Trader Daily, “When oil prices tanked in the 1980s, they blamed that on us, too.”) > read more

On Being A Billionaire: Membership Has Its Privileges

We always suspected that if you were a billionaire you could call up a major bank and ask it to falsify documents, set up shell companies and destroy financial records for you. We just didn’t think we’d ever see the details of such schemes aired for us so obligingly and so publicly. The unsealing of an indictment against two bankers did just that – and we could hardly bear to look. But we managed to get over that. Read on for the lowdown of the showdown. If you’ve got the spleen for it. > read more

LI-BORING

Ooooh, a big, bad broker in the U.S. is reportedly cooking up an all-new Libor: the New York Funding Rate, or NYFR, a Frankenstein that could be unleashed upon the world as soon as today. While we submit that perhaps the U.S. should be a bit more concerned about its widows and orphans getting slammed by the nation’s inflation-indexed savings bond paying out 0% for the first time ever, and not about banks nonplussed by Libor, we digress. The broking firm launching “nyfer” assures us that it isn’t looking to replace Libor (yeah, like it wouldn’t if it could) but we’re pretty sure no one is about to start pegging their trillions of dollars of loans off something by this dubious moniker. (Thanks for the laughs, anyway.) And now, here’s exactly how this odd concoction will work. > read more

Superclass: This Could Be You

History is brimming with tales of how the world’s movers and shakers rise up, over-reach, get reined in and, finally, are supplanted by a new elite. Recent developments in the financial crisis suggest that this could be happening now. How to know enough about yourself – and where you’re headed – to stay out of the way of this immortal freight train. > read more

Globe Trot: World’s Top Trading Cities

Also (probably) the top trading cities of the universe. Whether you buy into globalization or just want to rule the world, where you trade matters less than what you trade. These days, you don't need to be sitting in a Midtown Manhattan office to short, long or squeeze anything. Scouring the planet and talking to traders from Dubai to Shanghai, we’ve pulled together, for your edification, our second annual ranking of the best trading cities on earth. (Plus, how London clinched top ratings, again beating out Wall Street.) > read more

Gravy Train: Astoundingly, Still Chugging

Particularly, if you’re a top-notch hedge fund. Read on for the amount of cash investors are expected to fork over this year (last year’s meltdown notwithstanding). And that’s not all: According to Deutsche Bank’s annual Alternative Investment Survey – a tectonic shift is afoot in how investors are weighing which funds will get their cash. Obviously, “risk management” is in (so if you’re a start-up, you need to repeat these two words like they’re going out of style) and “leverage” (officially the loaded gun of modern-day markets) is out. Now, for a word on which emerging markets investors are fancying the most. What’s excluded is even more interesting than what’s included. > read more

Brian Hunter, Comeback Kid?

How the 33-year-old trader blamed for the multibillion-dollar collapse of monster energy hedge fund Amaranth came roaring back in the latest quarter on the same kind of gas bet that proved his catastrophic undoing in 2006. (How does that not take unspeakable gall?) Find out why, this time, things turned out different. > read more

Top Centaurus Trader Heads South

What happens when trading for one of the world’s best-performing hedge funds just isn’t enough anymore? You do what Bill Perkins, 39, did: Jump a plane for parts unknown and start taking much bigger, scarier bets. > read more

Curiouser And Curiouser...

Just as the caterwauling din of economists, banks and regulators insisting that financial markets are perfectly potty and the worst of the subprime crisis is over reaches a fever pitch, France's largest bank, the biggest Dutch financial-services company and the world's largest lender to local governments, on cue, post lower first-quarter earnings as their loan losses INCREASE. Is this yet another sign that economists, banks and regulators must be listened to only as contrarian indicators? You tell us. > read more

It Figures

Though it’s still too early for hedge-fund honchos to celebrate, the top winners so far this year seem to be some of the funds that suffered the worst losses of the excruciating summer of 2007. An inspiring look-see at those who have managed to bounce back after being torn asunder. > read more

Can’t An Old Guy Go Shopping In Europe Anymore In Peace?

Apparently not, now that everybody knows Warren Buffett’s on the prowl for investments anywhere but in the U.S. A peek at how the Oracle of Omaha’s news conference in Frankfurt yesterday ended up looking a lot more like a rock concert – replete with reporters, photographers and television news crews. > read more

UK Inflation: ‘Cat Among The Pigeons’?

Financial journalists and datameisters love measuring numbers a few different ways a) in terms of the fastest or biggest jump, b) in terms of a jump to a highest level, or c) if neither applies, finding the smallest time frame to apply them within and recrunching for maximum white noise. (Basically, if there isn’t a superlative, then make a superlative.) However, in the case of the U.K.’s inflation numbers today, no such effort was needed. > read more

China: Indefatigable Inflation, Earthquake

What next, will someone pour sugar into every new Chinese car buyer’s gas tank? As the nation boosted its bank reserves for the fourth time this year, a massive earthquake rocked cities as far away as Bangkok, prompting evacuations of office buildings in Beijing and throughout the land. With phone lines jammed up, little is known of the fallout, but here’s the best of the initial reports we’ve seen trickling in. > read more

Food Fight, Part II: Over Already?

Rice tanked for a fifth straight day, heading for its steepest weekly decline in nearly four years, as the prospect of exports from Pakistan and Japan assuaged concerns that a global food shortage is deepening. Well, that sure was anticlimactic. After all the international screaming and chest-thumping…this is it? > read more

Yahoo Ambush, A.K.A. HedgiePalooza

Those hedgie Yahoos jumping onto the bandwagon of billionaire investor Carl Icahn are really starting to pile up: In addition to John Paulson’s Paulson & Co. hedge fund, which is now the sixth-largest shareholder of Yahoo, Texas oil billionaire T. Boone Pickens is throwing his cowboy hat in the ring. Even Daniel Loeb of activist hedge fund Third Point can’t help himself, scooping up more than four million shares. Behold, the Who’s Who of this burgeoning Yahoo gang. > read more

SAC Capital: Freak Story Almost Dead

After interviewing scads of miniskirted, male employees at monster hedge fund SAC Capital, the U.S. Equal Employment Opportunity Commission has decided it will not champion the cause of a trader there who’s alleging his boss forced him to take female hormones, causing him to wear flouncy dresses (which, as we understand it, had the unintended, though not entirely surprising, effect of putting a strain on his marriage) on the grounds that the charges were…well, just too weird. OK, that last part’s not true. But the bit about the hormones and the dresses is real. A bizarre tale of the lengths hedge funds (may or may not) go to in search of ever-elusive alpha. > read more

Libor (Magically) Ticks Up

Wow, whoever guessed that could happen after one little Wall Street Journal study? Funny how once everyone notices the emperor has no clothes, he somehow instantly gets himself a membership to Laura Ashley. Here, a closer look at the biggest Libor move in more than two weeks. > read more

Is It OK We Failed, If We Charge You Less?

This is the question failed and struggling hedge funds are increasingly asking their investors as they slash fees in exchange for – hopefully – getting financial backers to stay on board. A lineup of the latest funds offering this mea culpa. > read more

Profits Up 60% At Man

Not only did the world’s biggest hedge fund manager again raise the roof, some of its most impressive gains came from AHL, a fund long ago abandoned by its founders after Man initially neglected it, believing it could not go the distance. Ah, the sweet pleasure of being proven wrong... > read more

Another Washed-Update: European Stocks

People told you you were a pessimist. But being a pessimist is OK when being right makes you rich – right? A peek at the prognosis for stocks in Europe over the next 12 months. And it’s been rubber-stamped by Morgan Stanley. (Whatever that’s worth.) > read more

Goldman: Oil ‘Superspike’ Going To $200?

The two things that have always been key circuit-breakers of high oil prices have been a) demand destruction – essentially, when pain at the pump forces consumers reduce their fuel consumption, cooling off prices – and b) a global increase in supply, driven by producers looking to exploit lofty prices that ease as they flood the market with more oil. Guess what? For the first time ever, neither seems to be happening. Which is exactly why oil popped above $120 a barrel yesterday, occasioning the resurfacing of the dire prognostications of one Mr. Arjun N. Murti. Here, his predictions for the turbulent months to come. > read more

TCI: Busting More Chops

As usual, the death grip of the Children's Investment Fund Management cannot be denied, defied (or belied by its wholly innocent name). If you’re a company lucky enough to be protected by your local government against the $10 billion hedge fund’s ambitious overtures, don’t be so quick to breathe easy: TCI has other recourse for getting its way. > read more

What’s Hot: The UK Economy

No, that’s a big, fat lie. Obviously. Had you going there for a second, though, didn’t we? We have to admit, it was nice, just for one glorious moment, to be able to write the words “hot” and “UK economy” in the same sentence. Now, back to life. And we’re afraid we’re going to have to give this to you straight up: Europe’s service and manufacturing industries aren’t doing so well. Yes, they’re still expanding, but at their slowest pace in 5 years. The U.K. economic growth situation isn’t doing so fabulous, either. But this is something you really should read for yourself. With smelling salts handy, just in case. > read more

B of E: Holding Up Its End?

So, word on both sides of the pond is that everybody now wants to see the dollar strengthen against, well, anything, at this point. Not because anyone cares much for it per se, but because, as things are, the world is calibrated to expect certain things from certain currencies and the greenback has been woefully negligent in its duties of late. Luckily, it seems to be showing some signs of life, rousing itself long enough yesterday to notch a six-week high against the euro. That’s a good start. Now if only the Bank of England could get it together. (Hats off the ECB for, thus far, keeping its powder dry.) Here, a sneak preview of what’s expected when both announce their interest-rate decisions today. > read more

World’s Top 100 Hedge Funds

The latest ranking of the very biggest and baddest of the planet’s hedge funds, again proving that once you are huge, chances are you’ll only be getting huger. This year’s all-stars include the fund empires of a number of global banks, with three plunking themselves down in the top 10 – and one in absolute pole position. > read more

‘Consumer Confidence’ Now An Oxymoron

U.K. consumer confidence fell to its lowest level in at least four years in April, according to the Nationwide Building Society, as our regulatory buffoons find themselves hamstrung by inflationary pressures (read: unable to do anything even remotely useful) while confronting problems that ail the housing market and keep the cost of living sky-high. Does shopper depression ensue? You bet it does. And we got the details… > read more

Looking Who’s Going All Private Equity On Us…

What, just being a hedge fund isn’t good enough anymore? Apparently not for this fund hell-bent on diversification based way out in the south London suburbs. (Hey, at least it’s not doing a float.) Instead, it’s casting about for $500 million to fill the coffers of its spanking-new private-equity fund. But where does it plan on spending all the dough? > read more

Knight: HSBC’s Worst Nightmare?

Not content with his paper profits and livid over what he holds to be the utter mismanagement of pay schemes and strategies at the bank, Eric Knight, CEO of fund manager Knight Vinke, is vowing to undertake a long-term battle. Inside the face off that promises to become a veritable breeding ground for fresh activist-investor tactics. > read more

Invincible Germany

European economic growth picked up in the first quarter, handily outstripping analyst expectations, led by Germany and France and leaving Spain and Italy in the dust. Germany is at the forefront of this move, which saw growth quintuple for Europe's largest economy from the prior quarter thanks to streamlined production and higher emerging-markets demand. Take that, U.S. credit crunch! So, what else lies in store for the economy that’s now basking in its third soft landing since 1960? Read on to find out. > read more

Hot And Hot: Brazil

These days, Brazil is so confident about its economic standing in the world that its leftist president, Luiz Inacio Lula da Silva, joked to an audience of Latin American businesspeople recently that he lectured President Bush on cleaning up the U.S. credit crisis (according to The Wall Street Journal). "Here's the problem, son," Mr. da Silva said he told Bush. "We've had 26 years without growing. And now that we're growing, you come along and complicate things? Settle your crisis!" White House officials said the two had discussed the economy but not exactly in those words… > read more

House Prices Fall At Fastest Pace In 17 Years

Considering that records only started being kept 17 years ago, the situation could even be a great deal worse than that. With house-purchase approvals already at their lowest level on record and executive/consumer confidence in Europe still at a three-year low, the average price of a house has again slipped, marking seven full months of declines and the longest downward slope since the housing recession of 1992. So, do you know how much an average home in the U.K. now costs? > read more

Time For A New Kind Of ‘Surgical Strike’

Having done such a good job with its pre-emptive maneuvers in the theater of war (insert guffaw) the U.S. is now considering employing the same tactic to a variety of other applications: like market bubbles. Feast your eyes on the results of a study Fed Reserve chief Ben Bernanke commissioned from a bunch of Princeton scholars that clearly show how even the smartest money sometimes finds itself powerless to stop the onset of investor mania. > read more

Inside The Beari Kari

Part two of a series by The Wall Street Journal on just what happened behind closed doors at Bear Stearns during its final days, revealing exactly what we always suspected: It was traders who called the shots on the bank and traders who ultimately decided its fate. Here, how a mighty Bear was felled. > read more

Soros: ‘Acute Phase’ Supposedly Over

Does that mean chances of a recession in the U.K. can now obediently recede? Not so fast, says George Soros, renowned billionaire, hedge funder and free-thinker. In fact, in the following story, we daresay he hints at the U.K. having farther to fall than the U.S., because its housing bubble led to much higher prices. But don’t take our word for it. > read more

If Oil’s A Witch – Burn Her!

Just as word hits today that the Paris-based International Energy Agency, the world’s premier energy monitor, plans to forecast future crude oil supplies as much tighter than even the doomsayers expected (this, in a report due out this November based on its assessment of 400 of the world’s top oil fields) we bring you this bit of much-needed fresh air. > read more

Libor War: Not Over By A Long Shot

While the greenback gets its flak, the U.K. has its own problems. For example, why is it that a top bank everyone and their mother knew was exposed to crippling subprime losses was supposedly able to borrow massive amounts of money on the market at lower interest rates than its competitors? No one seems to know for sure, but they do know what it means for Libor: very bahhhd things. > read more

Jump-Start Your Brain

Controversy has bubbled up over one mainstream magazine’s rigorous analysis of how to keep your brain on full-tilt, whether it be by thinking positive thoughts or employing, more questionable methods. A must-read for traders perpetually searching for that extra edge. (Disclaimer: We don’t advocate one scintilla of this and urge readers to proceed with caution.) > read more

Next Taxable Asset...Your BlackBerry?

C’mon HM Revenue and Customs! You are really reaching, here! The method behind the madness that, on the one hand, won’t let you use your work gadgets for personal stuff, and yet, on the other hand, seeks to tax you to the hilt for extracting so-called “personal benefits.” What gives? > read more

And Now, A Word From The Back Office...

Signaling the rash of job cuts stalking the financial community is beginning to singe even the most devout workers – you know, the ones who got up early, kept their heads down, never fussed, put their backs uncomplainingly to the grind (not to mention refraining from brown-nosing, water-cooler gossip and all office-politicking, and are beginning now to think the better of it) – this open letter from one fallen Bartleby stands as an ominous warning of what happens to those who come to the City with stars in their eyes. > read more

Hedge Fund Regulation: Messier Than Ever

The Financial Times has a crack today at this increasingly complicated subject. What is clear is that there’s no shortage of Nervous Nellies looking to pull the reins on traders, as pension funds and other more conventional types pour cash their into just about anything (their fault, we’d say). But we wonder if all this fussing won’t ultimately keep hedge funds from being able to experiment freely (with the blessings of their investors). And if that happens, doesn’t it just negate the whole point of the thing? > read more

He’s So Money

Wall Street’s wave of carnage means that some traders are, sadly, getting canned. It doesn’t help any that a growing reliance on electronic trading systems and technology also has reduced the need for the ever-underappreciated human touch. And yet...and yet...some folks are still getting the gravy. Like this guy, offered take-home of up to $90 million – and not even from a monster hedge fund. > read more

Good Thing You Can Always Trust The Government

> read more

Sharp Shooters

When the grim reaper of trading comes to take away your hedge fund, don’t quit – fight back. How four former employees of Shooter Fund Management, the London investment manager that lost 40 percent last year, have spat in the eye of fate, starting up their own currency-trading outfit. > read more

Pssst: Corn Is Good; Especially For Housing

The great and the good need to start doing with corn what George Washington Carver did with peanuts. That’s what we said. Carver made peanut milk. He mashed peanuts into a viscousy solution the poor used to paint their homes. (We don’t see the B of E mashing peanuts for anybody. Unless you count mashing that which need not be mashed.) If the U.K. truly cares about its unwashed masses, it needs to take a page from the peanut genius and get cracking. Thankfully, Long or Short Capital is on the case. They note people are finally getting the corn message. If people can make sugar out of corn and ethanol out of corn – why not housing? > read more

Word Problems For Hedgies

Mind-benders? Always great. But mind-benders that entertain with scabrous class ennui? Totally awesome. And we’ve got a mess of them for you here. (One not-even-cream-of-the-crop example: If a hedge-fund manager makes $900 million and is taxed at a rate of 15 percent, how many factory workers making $32,500 and being taxed at a rate of 25 percent does that make a sucker of? Show your work, piker.) > read more

Continental’s British Concubine

Could it be that even as it engaged in merger talks with United last week, Continental Airlines secretly knew all along it would jilt her in a heartbeat for a run behind the barn with British Airways? Naughty, naughty. That said, BA’s hardly complaining. Take a look at what it’s doing to the air carrier’s shares today. Even so, with all the chest-beating antitrust evangelists running amok, what are the chances a rendezvous between these two might actually result in a long-term relationship? > read more

Saatchi Gets In Touch With His Inner Hedgie

After being approached by ad mogul and contemporary art collector Charles Saatchi to become corporate patrons, founders of the Art Trading Fund Chris Carlson and Justin Williams (being self-described “cheeky boys”) wanted something back. Here’s what they got. > read more

Africa: Conquering A New Frontier

Why Michael Spencer, founder of inter-dealer broker ICAP, is funneling tens of millions of dollars into a spanking-new hedge fund that aims to profit from frontier markets in Africa and the Middle East before you do. > read more

‘Agflation’ As A Weapon

Just what the commodities market needed, a cyclone in Myanmar. Rice gained for a fifth day, as the storm’s floodwaters continued to cut their path of destruction through 5,000 square kilometers of once-bountiful farmland. Now that stockpiles of many commodities have sunk to a record low, we thought we’d put out some hints from Morgan Stanley on what strategies might work best in weathering this near-Biblical plague. > read more

Meet The $200 Oil Guy

As oil prices hover near $140 a barrel for deliveries slated for 2016 – causing even the hardest-boiled traders to balk at what is now being called the steepest run-up in oil in years – The New York Times boldly unmasks the “green” Goldman analyst who first predicted $200 a barrel. Apparently, he’s taking this whole global fame thing in stride. > read more

LSE’s Hegemony Threatened?

Just as the news hits today that trading at the New York Stock Exchange has plummeted to its lowest level since 2001 – thanks to alternative venues capturing market its share – the London Stock Exchange also is sending up distress signals. More about what’s going on with all these erstwhile “pillars” of the global marketplace. And where the liquidity is headed. > read more

On Chopping Block: 20,000 Trading Jobs

So says one big-name consultant that’s projecting trading roles in both Western Europe and North America will soon be targeted. That said, new jobs are on the verge of cropping up in some interesting new places. Read on for our cheat sheet of the freewheeling trader’s most likely migration pattern over the next three years. > read more

Greenspan: Still 50% Chance Of US Recession

Clearly not getting the hint yet that he is no longer Fed chief (and, we think, likely won’t until the newspapers stop printing his every idle utterance) former head-of-Fed Alan Greenspan augurs what he expects will become of the U.S. over the next several months, blasting the predictions of many economists. > read more

Hedgies: Putting The Screws On Russia

How a relic from Russia's debt default a decade ago threatens to throw a wrench in the works of the country's economic resurgence by forcing hundreds of companies to boost the interest paid on debt to as much as 16 percent. > read more

‘Emerging’ Vs ‘Frontier’ Markets

Investing in one of them is now so lucrative, you simply cannot afford to treat it as a mere option anymore. Investing in the other is fraught with tricks, traps and potholes. But if you know what to look out for, you might make a mint. Let this tutorial be your guide. > read more

OIS – The Next Libor?

Fed up with the Libor dog-and-pony show, traders are beginning to turn to other methods of ascertaining bank borrowing costs. Mostly by using twigs, string and chewing gum. Nah. Lo and behold, the latest on the next-generation Libor. (Also, please see “Five Ways To Monkey Around With Libor’s Defects” out on Bloomberg today. We’re not even kidding.) > read more

Great Drake

After a vote of no confidence from its investors – in the form of a flurry of redemptions totaling $1 billion – Drake Management has decided to wind down its $2.5 billion flagship fund. Still, if anyone wants to keep on sending its traders checks, they have an address where you can send them. Their follow-on fund. > read more

New Star Swings For Fences

Perhaps it’s not exactly the best time for John Duffield’s well-funded brainchild to be issuing new shares (seeing as U.K. consumer confidence is now at its lowest level since Margaret Thatcher got thrown out on her ear in 1990) but, in this case, that’s not the point. > read more

Tenacious – Or Toothless?

Of course, we could only be talking about the august and hallowed Bank of England, which, investors are now beginning to realize, stands about as much of a chance of successfully tackling inflation as Amy Winehouse has of not going back into rehab. Find out why the spread between the yields on index-linked government bonds and conventional gilts (yeah, it sounds dry, but it’s important) is increasingly causing alarm. > read more

British Bankers Association: Not As Dry As You Might Think

Things are really spicing up over at the BBA, what with Libor on trial for its misbehavior and global banks being taken to task by the London-based trade group for, perhaps, encouraging it. Has manipulation now become so rampant that the benchmark interest rate for $62 trillion of credit derivatives and mortgages requires an overhaul? One examination of the key questions – and their likely answers. > read more

Silence, Scholes Speaketh

Nobel Laureate Myron Scholes, chairman of Platinum Grove Asset Management, says there’s no reason to believe the credit crisis is now entering its denouement. Instead, he suggests a different, slightly more alarming scenario. > read more

Eighty-Sixing It

Speaking of sixes, it looks like the Bank of England may have been wise to deep-six a rate cut, as U.K. producer prices skyrocket at their fastest rate since at least 1986. Three guesses and the first two don’t count what the main driver of this speedy upward trend is. > read more

Horses: Own Your Own

Unless you are extremely wealthy, the traditional way of investing in bloodstock has been through a syndicate. But where, exactly, to start? And what to do if you don’t care much about watching horses per se, but just want to make a pile of money off them? Glad you asked. > read more

Wherefore The Bubble?

When it comes to energy and food prices, economists are increasingly answering with one voice: quite possibly, nowhere. What to do when a global market used to always blaming inflation on the speculator loses rights to its favorite whipping boy? > read more

The Darwin Effect: Why Do You Trade?

How evolution explains your desire for a fatter wallet. > read more

Still Utterly Clueless: UK Homeowners

Looks like those trying to offload their homes are still trapped in La-La Land, not only refusing to lower their asking prices, but, in many cases, INCREASING them. Clearly, denial is not just a river in Egypt. Some sobering statistics from Britain's most-used property Web site on the state of the housing – and what it all means for how long the subprime crisis may linger before it finally washes out of the market. > read more

India To Ban Food Futures?

Nothing says happy Monday like a proposal from your finance minister to scuttle a nationwide food-futures market (in India’s case, begun only five years ago). Judging by the fin min’s following remark, we are guessing he is not the mildest of men: “To put it mildly, [converting food crops to biofuels] is foolish; to put it strongly, it is a crime against humanity,” he says. Why empty rice bowls does not a contented market make. > read more

Speedo Alert!

Nothing says ‘I have nothing to hide – literally,’ like one of these. Sadly, those typically sporting codpiece swimwear are the same blokes who should be running for the cover of a merciful cabana, lest they frighten the children. So wearing the Speedo is generally more of an admission of utter self-delusion than anything else. That said, nothing also says summer’s here like a Speedo. Too bad this year there’s a wet towel threatening to complicate things. > read more

Friday Levity: When Spinners Attack

Confidential to hedge fund manager Stuart Sugarman: Shouting “You go girl!” to yourself, in front of others, while on a stationary bike is not, and never will be, macho. We’re not justifying your being beaten up by a broker. We’re just sayin’. > read more

Rules Of The Chase: Is It All Over?

This has been making the rounds for days. A satirical, scrumptious simulacrum of what fired traders and bankers are now going through, having found themselves plagued by the same old appetites – only, suddenly, without a job. > read more

The Off-Off-Balance Sheet

With certain financial firms covetous of (read: being forced to find) new ways to offload debt from their balance sheets, Long or Short Capital, increasingly our favorite Web site for coverage on these ticklish matters, notes the wary numbers guy should keep in mind how off-balance sheet maneuvers are now being subjected to a growing – nay, near-abusive – amount of scrutiny, whether they come in the form of SIVs, super-SIVs, or ultra-megawide–thisonewillwork-SIVs. We don’t need to go over this again, right? But under the carpet is where everyone’s already stuffed trillions of derivatives exposure. So, that’s out. What to do? Allow us to introduce the OUTSOURCED off-balance sheet. > read more

Steel Yourself

The price of steel is spiraling out of control. You can either dodge this bucking bronco or ride it. Doing the latter, if you so choose, will require a steady hand. So best to get a grip on the lay of the land before placing your bets, piker. Here’s your tutorial. > read more

Sick Of ‘Paradigm Shift’ Psychobabble? Us, Too.

Better to just know the facts. And these are some goodies: Petroleum shipments from the world's top oil exporters dropped 2.5% last year. During that time, oil prices soared 57%. Those two things used to be mutually exclusive. Now they are happening at the same time. And no one thinks it’s going to stop. Any questions? Read on. > read more

Friday Levity: Rise Of The SuperGeek

What do traders have in common with Tina Fey, who was once on the cover of Geek Monthly magazine? Well, many of them were once geeks who, after no dearth of travails, managed to turn themselves into swans. And by that we mean the same upper-crust snobs who wouldn’t date them in high school are now begging to eat out of their hands. Behold, we step back to appreciate just how far the august and hallowed geek has truly come. > read more

Friday Levity: ‘Remember When Banking Was Sexy?...’

Uh...for us, that would be a definitive no. However, Bank of America begs to differ. In this latest promotion, writer, comedian and political satirist Mo Rocco “wants to talk to you about your banking fantasies.” Think mobile phone alerts while on dates. Think balance-transfers from bed. And now, are you properly warmed up for this? > read more

On The Rocks: Still More European Marriages

But is it a retention problem or a selection problem? “Of the two, I suspect the selection problem is the most lethal,” muses columnist Lucy Kellaway of the FT, adding, “Luckily, it is the easier to fix...” Still wouldn’t it be nice if there was some agreed-upon due diligence process for picking your spouse? Kellaway lays out what this might look like. > read more

Reality Check: For Traders Only

Maybe you’re a whiz at nailing the market, but can you ace this quiz on real-world finance? (Admit it, many of you haven’t even been on the Tube in, like, a decade.) All that privilege tends to rot out your brain, wethinks. Here, a safety net from us to you. Take it before you wake up one day and realize you’re Gordon Brown. > read more

World’s Sixth-Richest Man Flogs His Wares

And where does he go to do it? London, of course. Interestingly, he’s selling a raft of his prized paintings and sculptures to support a foundation (run – surprise, surprise – by his wife) for emerging artists. It’s kind of like a pie-eating contest where the award is...more pie. > read more

Almost Famous

We scoured the Trader Monthly “archives" to unearth this celeb-tastic 2007 spin-off — and excerpted just a few of its many timeless insights. > read more

Return Of The Jams

Some traders stick with trading. Others rule the trading world – then take some time to rock out. Trading honcho Steve Bernstein, who spent 23 years in fixed-income and sales trading at Salomon-cum-Citigroup (in Japan and New York) before leaving in 2005, now co-organizes The Jammys – yep, that monster jamfest/awards ceremony hosted each year in Madison Square Garden. (If you happen to be in NYC tonight, you can snatch your tickets now at jammys.com; the line-up is fresh – as in Doug E. Fresh.) And if you’re really lucky, maybe you’ll manage to snag an invite to Bernstein’s pre-party party, which offers an interesting mash-up for finance folks. Think Pete Sears and Jack Cassidy (from Hot Tuna) G.E. Smith (from the Saturday Night Live band of yore) and Roger McNamee (yes, that McNamee from Elevation Partners). And, oh yeah, did we mention the 8-year-old Japanese guitar prodigy that puts Clapton and Osbourne to shame? He’ll be there too. But if you can’t catch him live, do yourself a favor and check him out here. > read more

Quoth Of Noth: Former Finance Minister Of Thailand

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Market Makers: Romancing The Stone

For decades, Martin Rapaport tried to create diamond futures, running afoul of the industry. How he is looking to come out on top through sheer tenacity. > read more

Retreats: Rich Harvest

Why, at Kealanani, making the most of your investment means getting your hands a little dirty. > read more

Trading Edge: Of Human Capital

How reaching the upper echelon of the hedge-fund industry has far more to do with picking the right people than picking the right stocks. > read more

Double Bubble?

We loved that Double Bubble watermelon bubble gum back in the 1980s. But now when we think of double bubble, we think of oil. As Naked Shorts aptly points out, “Almost 1,500 stories on the theme were published in the last 0.12 seconds…Greenspan added that spikes in world commodity bubble coverage were also partly due to fundamental factors, including a decline in demand for news of natural disasters in Myanmar and China…” Here, a look at how surging petrol prices aren’t the only thing getting out of hand. > read more

Casting Call: Citizen Kerviel

You’ve marveled at his $7 billion trading loss — now enjoy it on the silver screen. Our CRITICAL verdict? Deux thumbs up! Cast your eyes on a montage you won’t soon forget. > read more

Risk/Reward: Dating Web Sites Sure Come In Handy

Perry Capital product David Sackler avoids peril by following the advice of his famous former boss: drill down deep – and we mean really deep. > read more

The Trade: Dead Man’s Curve

Be it steep or inverted, traders enjoy a good yield-curve bet. But with the long bond taking on a life of its own and credit markets gone haywire, playing rate spreads can be one dangerous game. > read more

Card Shark: Research Advantage

A cursory look at any opportunity will lead to cursory opportunities. How it’s the deep, time-consuming data that will bring you serious profits. > read more

Cojones Q&A: Branch Manager

High-altitude lumberjack Mark Standley risks his life to keep your penthouse in fine cabinetry. > read more

The Play: Initial Public Offering

Hear that St. Andrews’s astonishing new Castle Course is the year’s most highly anticipated debut? No? Don’t tell anyone. Good thing you saw this in time. It’s going to be all right. > read more

State Of The Bailout: Coming Full Circle

Are hedge funds bailing out banks this week – or is it just the Fed? It’s the private-equity funds turn? Hm. But who’s bailing out the private-equity firms? Hedge funds? Oh. But then who’s bailing out the hedge funds?...Or, perhaps we should ask, who isn’t? For those of you feeling like you’re watching a messy game of three-dimensional chess, paying attention to who’s doing what could pay hefty dividends. And we have your primer. > read more

Speed Dialer & They Feel Fine

Why Porsche’s sleek new cellphone is a trader’s in-the-money call. > read more

Road Show: Faster, Pussycat

We take the 2009 XF to the streets of Monaco and find out why it’s hailed as the vehicle that will save Jaguar. > read more

My Charity: Redemption Central

How Josh Tarasoff’s Wall Street Volunteers helps traders give a little something back. > read more

Tombstone: Wall Street Meets Main Street

It seemed like a great idea at the time. The dot-com explosion of the late 1990s was just beginning to percolate, and individual investors were snapping up IPOs as fast as Wall Street could churn them out. > read more

Worst-Laid Plans

Saving the bond insurers was the last noble cause of now-disgraced former New York state governor Eliot Spitzer. But like Spitzer, here’s how the plan, at its core, wasn’t all that noble. > read more

Deferred Futures: Ask The Dream Doctor

One forgetful quant neglects his dogs — and discovers that his biological clock might be ticking. > read more

Venture: Emerging Market

Think Vietnam, and you might not think of luxe resorts and sublime eateries. But winning the hearts and minds of the well-financed traveler is this nation’s new revolution. A primer that will have you booking your next trip before the holidays. > read more

Not Your Father’s Financial District

We know we just told you yesterday (in Trader Monthly’s cover story on the world’s best trading cities) that London tops New York by one notch. But that was sooo yesterday. Today, we are going to tell you where you need to live, should you ever happen to throw down the gauntlet and head for the city that never sleeps. > read more

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