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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (176962)	1/14/2009 2:25:12 AM
From: Jim McMannis	Respond to of 306849

Hedge Funds Lost $350 Billion in 2008 Amid Global Market Rout bloomberg.com Jan. 13 (Bloomberg) -- Hedge funds lost $350 billion globally in 2008, the most on record, as the biggest financial crisis since the Great Depression crippled returns and caused investors to pull money out, according to an industry report. About 90 percent of the money was lost in the three months to the end of November, according to a preliminary report published today by Singapore-based data provider Eurekahedge Pte. Funds that invested in North America declined the most, posting a drop of $183 billion for the year, the report said. The hedge-fund industry shrank by about a fifth to $1.5 trillion at the end of the year from a peak of $1.9 trillion, Eurekahedge said. Funds including Citadel Investment Group LLC suffered investment losses and client withdrawals. Some funds were forced to sell assets at fire-sale prices as the credit crisis forced banks that lent money to hedge funds to withdraw their loans. “A coordinated slowdown everywhere has led the hedge-fund industry to shrink,” said Peter Douglas, principal of hedge- fund consulting firm GFIA Pte in Singapore. “Everyone has been caught in a liquidity trap.” Eurekahedge’s figures are estimates based on the 39 percent of the funds that have so far disclosed performance figures to the research firm. Hedge funds posted a 12.3 percent loss over the year, based on the Eurekahedge Hedge Fund Index, which tracks more than 2,000 funds worldwide. That compares with a 13 percent gain in 2007 and is the first decline since Eurekahedge began publishing the figures in 2000. December Gains Hedge funds added 1 percent on average in December, the first increase in seven months. The funds are mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether the price of assets will rise or fall. Decisions by hedge-fund managers including Kenneth Griffin’s Citadel Investment Group LLC and Paul Tudor Jones’s Tudor Investment Corp. to limit redemptions spread to smaller funds in Asia as investors unable to raise cash elsewhere sought to sell out of the funds. The collapse of U.S. investment bank Lehman Brothers Holdings Inc. in September fueled a rout that halved the value of equity markets worldwide to about $30 trillion in 2008. The MSCI World Index, which tracks shares in 23 developed nations, tumbled a record 42 percent last year as credit-related losses at financial firms topped $1 trillion. Lehman’s Demise, Madoff Lehman’s demise rocked hedge funds that relied on investment banks’ prime-brokerage units to make loans, clear trades and handle administrative tasks, forcing more than 80 managers to liquidate hedge funds, segregate assets and limit withdrawals. The industry also suffered when U.S. authorities charged Bernard Madoff with securities fraud for directing an alleged $50 billion Ponzi scheme. “The Madoff scandal has led to investors becoming more suspicious about hedge funds,” said Mitsushige Akino, who oversees about $430 million as chief investment officer at Tokyo-based Ichiyoshi Investment Management Co. “The redemption-spree is going to last for quite some time.” Managers that trade futures, so-called CTAs, and macro-fund managers, who wager on trends in stocks, bonds and currencies, were the best performers, gaining 17 percent and 1.9 percent respectively, according to Eurekahedge. Those investing in distressed debt were the worst performers, declining 27 percent. To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net Last Updated: January 13, 2009 08:34 EST

To: Lizzie Tudor who wrote (176962)	1/14/2009 2:26:25 AM
From: Jim McMannis	Respond to of 306849

Financial Rescue Bill Would Expand FDIC Consumer Aid bloomberg.com Jan. 12 (Bloomberg) -- The Federal Deposit Insurance Corp. will get more authority to protect consumers against bank failures under financial-rescue legislation Congress plans to take up this week. The measure allocating the last $350 billion from the rescue package passed in October would make permanent an increase in the FDIC’s deposit-insurance limit to $250,000 per consumer per bank. It more than triples the amount the FDIC can borrow from the Treasury to replenish its insurance fund. “It gives consumers the confidence that they can continue to do business with banks and safely invest in higher amounts,” John Taylor, president of the National Community Reinvestment Coalition, said today in a telephone interview. Regulators shut 25 banks last year, the fastest pace since 1993, draining $11 billion from the insurance fund through nine months. The collapse of Seattle-based Washington Mutual Inc. in September was the biggest in FDIC history. The insurance fund had $34.6 billion as of Sept. 30. House Financial Services Committee Chairman Barney Frank unveiled the FDIC changes in a plan setting terms for releasing the remaining funds in the $700 billion rescue package. Frank’s legislation, introduced Jan. 9, reflects lawmakers’ criticism that President George W. Bush’s administration failed to set conditions for banks receiving the first half of the funding. Strengthening FDIC The measure would retain the $250,000 deposit-insurance limit, which was raised temporarily from $100,000 in the October law. It also increases to $100 billion from $30 billion the amount the FDIC can borrow from Treasury to support the fund and extends to eight years from five the time the agency has to rebuild the fund once it falls below a certain level. The higher borrowing authority “allows them access to credit should they need it to support a larger bank that either is failing or fails,” said Chip MacDonald, a partner specializing in financial services at law firm Jones Day. The Independent Community Bankers of America, a Washington- based industry group whose members include about 5,000 banks, supports the proposed changes, Ike Jones, a vice president, said in a telephone interview. “For community banks in particular, insured deposits are an important source of liquidity,” Jones said. “This just enhances the ability to acquire deposits that are insured.” The FDIC is reviewing the proposal, agency spokesman Andrew Gray said in an e-mail. Pushing Legislation Frank, a Massachusetts Democrat, said his committee will consider the legislation tomorrow, aiming to send it to the House floor by Jan. 15. Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, told reporters yesterday the Bush administration may request the funds today to leave time for a vote before President-elect Barack Obama is inaugurated Jan. 20. Obama asked Bush earlier today to notify Congress on his behalf that he wants to use the remaining $350 billion in rescue funds. Bush agreed, White House spokeswoman Dana Perino said. The FDIC last month announced it would double the premiums it charges banks as part of a plan to replenish the fund. The regulator is required by law to restore the fund when the reserve ratio, or fund balance divided by insured deposits, falls below 1.15 percent. It stood at 0.76 percent at the end of September, the lowest since 1994. The Washington-based FDIC protects $4.5 trillion in deposits at U.S. banks and reimburses customers for up to $250,000 of deposits in the event of a bank failure. To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net. Last Updated: January 12, 2009 14:59 EST

To: Lizzie Tudor who wrote (176962)	1/14/2009 5:37:37 AM
From: stsimon	Read Replies (1) \| Respond to of 306849

>>Why aren't we concerned about the starving kids?<< Well, hunger in the U.S. exists mostly on the Documentary Channel. The real problem is obesity, both in children and adults. As to the increasing gap between rich and poor, what did you expect after 8 years of the idiot Bush the Younger?

To: Lizzie Tudor who wrote (176962)	1/14/2009 3:55:08 PM
From: XBrit	Respond to of 306849

I happen to agree with you that SS should be means-tested, and that it probably it doesn't make sense for me (for example) to get any. Most likely we're heading that way anyway. I also think that the mortgage interest deduction should be got rid of, Prop 13 should be repealed, and we need a Federal gas tax of $2 per gallon, indexed to inflation. Probably also a 5% national sales tax on all non-essentials to damp down the out of control consumption. None of these changes would be the least bit surprising to anyone living in Western Europe. It has come to my attention, however, that they may encounter some political opposition in the USA.