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Hedge Funds: The world's top 10 hedge funds earned $28bn for their
clients in the second half of 2010, the Financial Times reported Wednesday.
Data from hedge-fund investor LCH Investments show that the top 10 funds made
$2bn more for their clients than the net profits of Goldman Sachs, JPMorgan,
Citigroup, Morgan Stanley, Barclays and HSBC combined.
The 10 funds have generated a total of $182bn in profit since they were founded,
the newspaper said.
The Wall Street Journal reported in January that hedge-fund manager John Paulson
personally netted more than $5bn in profits in 2010 - - likely the largest
one-year haul in investing history, trumping the nearly $4bn he made with his
"short" bets against subprime mortgages in 2007.
He is reported to have made $32.2bn for his clients since he set up in 1994
while George Soros has made 35bn for his clients since setting up the Quantum
Fund in 1973.
Paulson has 120 employees compared with 32,500 at Goldman Sachs.
The Journal explained that of the $5bn made in 2010 by Paulson, about $1bn came
from the 20% performance fee that Paulson & Co. reaped from the approximately
$5bn the hedge-fund firm generated for clients in 2010, as well as from
management fees charged to clients of his $36bn firm. The remaining $4bn came
from about $10bn of personal investments in his hedge funds, his investors say.
Those holdings rose about 40%, or $4bn.
Fyffes: The Irish fruits importer and property group reported today a profit of
€6.8m in 2010 compared with a loss of €45m in 2009.
Total revenue, including the group’s share of its joint ventures, was 2.1%
higher in 2010 at €742.1m
Adjusted EBITA for 2010 amounted to €21.3m, up 2.8% on the previous year.
Commenting on the results, David McCann, chairman, said: “Fyffes is
pleased to report an increase in its adjusted EBITA (Earnings Before Interest,
Taxes, Depreciation and Amortization) for 2010 to €21.3m, ahead of previous
expectations. Adjusted earnings per share for the year increased by 6%. In the
context of the exceptionally difficult trading conditions which persisted in the
banana category for much of the first half of the year, this result represents a
very satisfactory outcome for 2010. Fyffes is proposing a 9.1% increase in its
final dividend for 2010.
Trading conditions in the first two months of 2011 have been satisfactory. The
Group is maintaining its current target EBITA range for the year of €17m-€22m.”
Discussing the legal ramifications for Goldman in the latest SEC insider trading charges against former director Rajat Gupta, with CNBC's Bertha Coombs, and Tom Curran, Peckar & Abramson:
US: The House of Representatives on Tuesday approved a two-week budget
bill just days ahead of a deadline that could result in many services of the
federal government ceasing unless Congress agrees to a new funding measure. In a
335-91 vote, just six Republicans and 85 Democrats were opposed to the stopgap
measure. It is now up to the Senate to take action.
Stock markets fall on higher oil prices:
Davy economist, Conall
Mac Coille, comments -- "Brent oil prices rose to a high of
$116.5 per barrel yesterday, from around $112 at the beginning of
the day. In early trading this morning, Brent oil prices had fallen
back to $115 per barrel and Asian stock prices had declined by a
further 1%. Yesterday, the S&P 500 fell by 1.6% and the FTSE 100 and
Euro Stoxx 50 by 1%.
The decline in stock prices came despite global purchasing
manufacturing indices for manufacturing coming in above
expectations. The US ISM manufacturing survey rose to 61.4, well
ahead of the market's expectation for a reading of 61, and the
highest level since 2004.
The impact on the global economy will largely depend upon how
central banks respond to the upward impact on consumer price
inflation from higher oil prices. In testimony to the Senate Banking
Committee yesterday, Federal Reserve chairman Ben Bernanke indicated
that monetary policy should not be tightened in response to higher
oil prices. In particular, Bernanke reiterated his view that rising
oil and commodity prices will not cause a permanent rise in
inflation when labour costs remain muted. So at least in the US a
tightening of monetary policy does not look likely in the immediate
However, with inflation already above the 2% target, the ECB
may be more likely to respond. The euro area unemployment rate fell
slightly to 9.9% in January from 10% in the previous month, and the
market expects that output price inflation data released today will
indicate that prices rose by 5.7% in the year to January. And
comments from ECB council members have been less dovish than their
counterparts in the US. So for now stock markets are likely to
remain highly focused on events in the Middle East and global oil
Mohamed El-Erian, of trillion-dollar bond fund manager, PIMCO, where he is CEO & co-CIO, shares his thoughts on the Middle East unrest and its impact on global markets. He was born in Egypt, :
Economic View: Stronger
growth + higher inflation = a more hawkish ECB:
Goodbody chief economist, Dermot O’Leary, comments - -
"Ahead of the ECB Governing Council meeting tomorrow, recent data have
definitively put the bias to the upside for ECB rates. At the first ECB meeting
of the year, President Trichet pointed to the fact that inflation risks may move
to the upside. Despite continued upward prices pressures throughout January, the
market was somewhat surprised that the inflation rhetoric was not strengthened
at the February meeting.
We would be very surprised if
there were not tougher warnings on inflation at tomorrow’s press conference. The
ECB will also have updated staff economic projections to base their opinions.
They will reveal higher growth
and inflation expectations. As a foretaste of this, the European Commission
published its latest projections yesterday; it now expects euro-area economy to
grow by 1.6% in 2011 (up from 1.5% previously), while inflation is expected to
average above the ECB’s target at 2.2% (up from 1.8%).
Data released yesterday only
supports this upward bias: (1) Inflation was confirmed at 2.4% in January
(although core inflation remains low at 1.1%); (2) manufacturing PMIs in
Germany, France and Italy all rose, while growth in manufacturing activity in
the euro-area as a whole is at a ten-year high, and (3) German unemployment fell
to its lowest level since 1991. We recently changed our call on ECB rates in
reflection of the increased inflation concerns. Although we don’t expect the
first increase (of two 25bps hikes this year) until September, there is likely
to be a noticeable change in tone at tomorrow’s briefing."
The Dow fell 168 points or
1.38% in New York Tuesday, to 12,058.
The S&P 500 slid 1.57%
and the Nasdaq slipped 1.61%.
The MSCI Asia Pacific Index of
shares dropped 1.5% Wednesday - - its first loss in four days.
Japan's Nikkei 225 declined 2.43%; the China's Shanghai Composite dipped 0.18%;
Australia's S&P/ASX 200 Index fell 0.48% and the Bombay Stock Exchange was
closed for a public holiday.
BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index
averaged 59% lower in 2009 than a year earlier.
Thursday, July 15, 2010, the index fell for the 35th straight session, by 9
points, or 0.537%, to 1,700 points,
On Friday July16th, the BDI rose 20
points or 1.12% to 1,700 to break the 35-session losing streak.
Tuesday this week, the BDI rose 11 points or 0.88% to 1,262.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is at $15.
said in early February that a surge in oil inventories in Cushing, Oklahoma,
where WTI is delivered into America’s pipeline system, has depressed the value
of the benchmark against other yardsticks. The International Energy Agency said
on Thursday that with “few relief valves”
to cut the stock overhang in Cushing, the price dislocation
“may persist for months [or years] to come”.
spot price of an oz of gold is trading in New York at $1,428.60, down $4.60 from
Irish Financials; Governor comments on
national television: Goodbody's Eamonn Hughes
comments -- "The Central Bank Governor, Patrick
Honohan appeared on one of the main current affairs programmes on local TV last
evening. Besides indicating that default is not an option for Ireland, he
appeared to lay out an argument that the exposure of European banks/ECB to the
Irish banks meant that we all had a shared agenda ahead, without being specific.
In fact, he added that our role in taking on
the liabilities of Anglo Irish meant that we spared Europe of its own 'European
Lehmans' collapse, so that could be a factor for garnering some goodwill in
Brussels. He indicated there could be some progress on the interest rate charged
on our bailout, but that it was up to the incoming government to get its
strategy in order prior to engaging with the EU on these and other matters in
the weeks and months ahead.
On specific issues on the banks, he
highlighted that the stress tests are due by the month end and that there are
risks that the €10bn capital figure estimated to be immediately required for the
banks in the EU/IMF bailout last November could be higher. However, that will be
no surprise to most people. It sounds like the PCAR/PLAR will be run
concurrently with evaluation of the bank’s de-leveraging plans, which is
However, he appeared pretty adamant that there
would be no firesale disposals and it appeared that banks would be given time.
The question is whether the EU/ECB - and just as importantly, the debt markets -
give them the time, but as the scale of the problem mounts, the authorities have
to be more flexible in their approach. However, with existing plans already
quite dilutive, the possibility of higher capital targets through the PCAR - as
we have been highlighting for months - compounds the issue for existing equity
holders. There is still too much uncertainty here to show much interest in