Friday, June 29, 2007

What's Hot & What's Not (v.2007)

Nearly a decade after LTCM some reflection is in order, and so Cassandra presents the “What’s Hot & What’s Not” of International Finance (and the people and tastes of those who live it and make it what it is) Compiled and commentary by guest correspondent Ima Pratt.

Hot Trade? - Short Yen v. Long BRL ("Singing Polly Wolly Doodle all-the-day.....". Have you any idea how completely totally and utterly humiliating and soul-destroying it is to wake up each morning and NOT be short yen? No matter how much you think you can, you cannot..))
Not! – Long GKOs (GKOs? GKOs!??! We don't need no stinking GKOs ....[we are now strong Russia!])

Hot Stock Ramp! – CROCs (CROX) - (Make mine matching day-glo pink please, for the whole family)
Not – JDS-Uniphase (JDSU) - WHAT!!?? (You still own it? Ha ha ha ha......)

Hot EM - Any BRIC (sans the ‘R’) (Remember Slim Pickens on the nuke at the end of Dr Stranglove?? Yeeeehaw...Ride 'em cowboy!)
Not –Japan's MOTHERs market (Yak-pooh is seemingly more attractive. At least THAT burns.)

Hot Blowhard! – Dan Loeb (if you're into that sort of thing)
Not – Sandy Weill (Did anyone actually read his book?

Hot Hedgefund! – Amaranth (quickly "gunned", and rapidly incinerated)
Not – Long Term Capital Mgmt (nefariously "gunned", tortured, made to suffer inexorably before being piled on by the scrum)

Hot Operator! - Carl Icahn (Apparently he's a better negotiator than Hafez al-Assad)
Not - Nelson Peltz (You know the party's really going downhill when he's making the front pages of the business section and moving prices)

Hot Psycho! - Jim Cramer (Some have remarked it's Tourette's, but that's insulting to actual sufferers of the syndrome)
Not - Jim Cramer (You KNOW you haven't gotta life when you're reduced to watching Kudlow&Cramer)

Hot Hottie! – WallStrip's Lindsay Campbell (She's smart, and sarcastic. She must be Canadian....)
Not – Maria Bartiromo (Latest and most famous member of Citigroup's "Mile High Club")

Hot Icarus! - Nick Maounis (C'mon, double or nothing...what you say....?)
Not: John Merriweather (LTCM was "Water off a duck's back")

Hot Wings1! – Flying Private (Whatever one's shortcomings, never feel sorry for a guy with his own plane)
Not – “Gold” Frequent Flyer Card(Membership in that club spells: "Works too hard [for someone else] - Ain't gotta life")

Really Hot Wings! – Anything Boeing with room to drive-on, drive-off your Aston or Bentley (motto: If it ain't Boeing - I ain't going!)
Not – Gulf-IV, Citation (too small for the entire entourage and pets)

Hot Willy-Extender! – Bespoke built Swan 125’ with a “Wally” Tender (Exclusivity has no upper boundary on price)
Not – Ferrari (yuck!) or worse, a Porsche (Still a wide-boy's dream)

Hot Skiing! – Private Members-Only Ski Mountain (urbane skiers dream: No boarders!)
Not – Aspen, Verbier or Courchavel (Time-shares, condos, Russians...which is worse for the neighborhood?!?)

Hot Digs! – SW3 US $20mm for a freehold (before knockdown) to make way for a new Palace in the Romanov style.)
Not – New York (With the SEC, IRS, AML, AIPAC, & Department of Homeland Security endoscopically inspecting your ummm, well you know what I mean...)

Hot Job! – Private Equity (Damn!! How f-ing stupid could I have been to concentrate on arbitrage?!!?)
Not – Venture Capital (How f-ing stupid to pour money down a sinkhole, holding the hands of kids that make my daughter looked middle-aged for the hope and prayer of floatation, when one can buy it (with a wink & nod from mgmt), loot it, book fees, gear it up, book more fees, and then toss it back with negative EV to the retail and index-fund sods)

Hot School for Jr! – Le Rosey ("Hey guys! Dad left me the keys to the Gulf IV, we're off to Marrakech to p-a-r-t-a-y!!)
Not – Any US “prep” school (Sadly, even for the privileged, post 9-11 US immigration regulations means one actually has to attend classes to maintain an educational Visa)

Hot Deal! – Being a Seller of a LARGE HFM to an IB, Commercial Bank or SAFE for Billions (Indeed, there is nothing left to do after such a coup de grace except hire a private army, or, like Chuck Feeney, just give it all away before it poisons the very essence of your being and turns your kids into grateful role models such as Paris Hilton)
Not – Starting a Hedge Fund (over-educated, under-stress-tested, over-confident under 30s buying the equivalent of lottery tickets while spending entirely too much time surfin' MySpace or Facebook for a hook-up)

Hot Kleptocrat! – Vladimir Putin (A true man of the people, right?)
Not – Thaksin Shinawatra (A true man of the people, right? 'Eere we go, Blues!))

Hot Strategy! – “Doing what works” (Damn! Why didn't I think of THAT ?!?!)
Not – “Doing what used to work” (Errr...have YOU ever tried to drive forward while looking through the rear-view mirror??)

Hot Investment Property! – East European Real Estate (Thank goodness the Russians were so intent on beating the others to Berlin, most of the fine imperial towns were NOT directly in their path were spared)
Not – Spanish Real Estate (Japanese and Germans have been cursing the 1980s for more than a decade-and-a-half. So too will the Spaniards, and silly foreigners who bought it from them. Sorry Charles...)

Hot Tips! – Financial Blogging for Free (Ayn Rand makes me puke. Altruism lives)
Not – Financial Blogging for “Adsense” revenue (It is not so much a Faustian bargain as it is a huge scree-field through which gravity exerts its force in one direction only)

Hot Money! – Trading on Inside Information (Good research is Sooooo hard to come by these days)
Not – Catching the Falling Knife (If you don't know who the sucker is, it's probably you)

Hot Water! – “Paying” for Broker Recommendations BEFORE they are released (Hot Damn MW! Can you believe THIS is LEGAL??)
Not – Using Buy-side Fundamental Analysts (Might as well use darts or a Ouiija Board)

Hot Factor! – Break-up or Private-Equity value ("I know what boys like, I know what girls want, I know what boys like, boys like...)
Not – Stern-Stewart EVA (Positive feedback loops do eventually kill the goose or the dodo)

Hot Dog! – Merrill Lynch (See! Nice guys don't always finish last)
Not – Bear Stearns (Someone has to get caught with the Old Maid)

Hot Commodity! – ED&F Man (Apparently people DO buy guaranteed notes. The trick is not to try to sell them to the same person TWICE....!)
Not – REFCO (There was a crooked man, who walked a crooked mile....)

Hot Encore! – High-level Political Appointment (....for the love of country, civic duty, and sense of responsibility [to my former Limited Partners])
Not – Public Service (you mean, like, volunteering or giving money to some place WITHOUT having it named after me?!?)

Hot Potato! – Cash-for-honours (Surely that doesn't happen in England....does it?)
Not – Cash for a Good Lawyer (at 50 quid-a-fax, it adds up quick)

Hot Bottle! – “Le Pin” for Investment (Can you imagine what The Oligarchs will pay for that which you've judiciously tucked away once they've made some high-end sangria with theirs??)
Not – “Haut Brion” for Drinking (Merlot? What could be more naff...)

Hot Inflation Hedge! – Owning Physical Infrastructure (Will it throw off cash in a depression? Can it be nationalised? Will MacQuarie buy it from me for "a double"?? )
Not – “Asset Backed” (All assets are not, pray-tell, created equally. Just go ask The Bear..)

Hot Liquidity! – Dark pools (John Thain's worst nightmare)
Not – Being a specialist (Vinny don't work here no more. Him & Sal went an' opened a pizza joint in Rockaway...)

Hot Asset Class! – Agricultural Commodities (Pardon me, but asides from US subsidies for manufacture of Corn Ethanol, can you think of anything more absurd for something as fundamental ""Food", than letting hordes of narcissistic hedge fund managers loose with a trillion dollars to speculate upon foodstuffs, and, for the most part, not be taxed upon profits derived therefrom? I am certainly not proposing collectivization, but is this really in everyone's best interest??!?
Not – Municipal Bonds (It's a bond. It's demoinated in USD. And the constituents, whose good faith stands behind them, have negative savings, and negative equity)

Hot Cards! – Texas Hold ‘em (Bring 'em on Sparky...the only thing bigger than my pockets are my balls and my ego!)
Not - Bridge (A four-hour card game with a bunch of value investors and arbs....oh jeeez, shoot me now)


Macro Man said...

Hot Blogger! - Cassandra, who's been hitting the ball out of the park, scoring a try/touchdown with every touch, eagling every hole, and scoring a hat trick with every post recently.

Not- Everyone else, really.

* Engages in Wayne and Garth style "we're not worthy" proskynesis, then shuffles off into the blogosphere mumbling about trendlines, VIX, and other inanities... *

Charles Butler said...

I'd respond, but it's a tall order having to be both smart and sarcastic whilst long a personal bet on Spanish RE (I mean they are diversifying, albeit into Canary Wharf - or perhaps, coalmine, again). And, to be honest, you're not much of a target - well, except for the short yen oversight. But, hell...

We second MM's comment.

Anonymous said...

Like Charles, I don't have much witty to say.

Bloomberg with the headline "S&P, Moody's Mask $200 Billion of Subprime Bond Risk". Trade of the moment: MCO (Moodys) and MHP (parent of S&P). Who will re-rate the raters?


PS trade in DRYS has been hedged and despite the puts being underwater, the longs have outperformed the loses in delta.