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Showing posts from December, 2014

The Myth of Greek Democracy?

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Renee Maltezou and Lefteris Papadimas of Reuters report, Greece faces early election after PM loses vote on president:
Greece heads to an early general election next month after parliament rejected Prime Minister Antonis Samaras's nominee for president on Monday, throwing the country into a new period of political turmoil just as it emerges from economic crisis.

Greek 10-year bond yields surged to a 15-month high and stocks tumbled after former European Commissioner Stavros Dimas fell short of the 180 votes needed to become president in the decisive third round of voting, triggering the dissolution of parliament.

Samaras set Jan. 25 as the date for a parliamentary election.

Opinion polls point to a victory by the radical leftist Syriza party, which wants to wipe out a big part of the national debt, and cancel the austerity terms of a 240-billion euro ($290 billion) bailout from the European Union and International Monetary Fund that Greece still needs to pay its bills.

While most Gr…

Andurand Capital's Outlook on Oil

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Kelly Bit and Sabrina Willmer of Bloomberg recently reported, Turmoil Boosts Hedge Funds That Bet Against Russia, Oil: Randy Smith’s Alden Global Capital has been betting against the ruble for the past month and a half. Yesterday, it paid off when Russia’s currency fell as much as 19 percent.

Alden, a $1.8 billion New York-based hedge fund firm, is emerging as one of the winners from a recent spike in geopolitical turmoil.

Pierre Andurand, who foresaw the oil market’s peak in 2008, made an 18 percent gain for his hedge fund in November by predicting OPEC’s refusal to cut crude production and how that would strengthen the U.S. dollar against other currencies, including the Japanese yen, according to a letter to clients, a copy of which was obtained by Bloomberg News. Warren Naphtal’s $3.9 billion currency fund is up about 24 percent this year after recent bets on a stronger dollar, according to an investor report.

The hedge funds are making money from the trades at a time when many com…

China to Overhaul Its Pension System?

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CCTV reports, China to overhaul dual pension system:
China will reform its public sector pension system to reduce disparity between the public and private sectors, Vice-Premier Ma Kai said Tuesday at the bi-monthly session of the National People’s Congress Standing Committee.

Under China’s dual pension system, civil servants and employees in state agencies do not need to pay for their pensions — the government provides full support for them. But employees of private enterprises have to pay 8 percent of their salary to a pension account.

After retirement, private urban employees usually get a pension equal to about half of their final salary, but civil servants get much more without making any financial contribution.

"Some civil servants retire around the age of 50 but can get a pension of 5,000 or 6,000 yuan per month. I’m 70 years old now and I get 3,000 yuan per month. This is unfair," says a retiree in Guangzhou.

"My mother in law only has a monthly pension of 2,100 y…

OTPP and PSP Bet on Clean Energy?

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The Ontario Teachers' Pension Plan just put out a press release, Ontario Teachers’, PSP Investments and Santander partner on global renewable energy and water portfolio:
Ontario Teachers' Pension Plan (Teachers') and the Public Sector Pension Investment Board (PSP Investments), two of Canada's largest pension funds, today announced an agreement with Banco Santander, S.A. (Santander) to jointly acquire a portfolio of renewable energy and water infrastructure assets. The assets, currently owned solely by Santander, will be transferred to a new company owned equally by all three parties.

The transaction, which is expected to close within the first half of 2015 subject to receipt of customary regulatory approvals, values the assets in excess of US$2.0 billion. Santander, PSP Investments and Teachers' intend to invest significant additional amounts in the new company over the next five years.

The portfolio includes wind, solar and water infrastructure assets located in s…

Oil Crash Slams Buyout Funds?

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Devin Banerjee and David Carey of Bloomberg report, Oil Crash Wipes $11.7 Billion From Buyout Firms’ Holdings:
Oil’s plunge makes energy a great investment for the coming years, according to Blackstone Group LP (BX)’s Stephen Schwarzman and Carlyle (CG) Group LP’s David Rubenstein. For private equity firms, it’s also been painful.

More than a dozen firms -- including Apollo Global Management LLC (APO), Carlyle, Warburg Pincus and Blackstone -- have lost a combined $11.7 billion in 27 publicly traded oil producers since June, when crude prices reached this year’s peak before beginning their six-month slide, according to data compiled by Bloomberg. Stocks of buyout firms with exposure to energy have slumped, and bond prices suggest some closely held oil producers may struggle to pay for their debt.

“It’s been a really volatile period, and frankly that’s how Saudi Arabia wants it,” said Francisco Blanch, head of global commodity research at Bank of America Corp. “This is a battle of endu…

The $800 Billion Leveraged Loan Blacklist?

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Nabila Ahmed and Kristen Haunss of Bloomberg report, There's a Blacklist in the $800 Billion U.S. Loan Market and It's Not Illegal (h/t, Johnny Quigley):
What do Highland Capital Management, Fortress Investment Group LLC (FIG) and Cerberus Capital Management have in common? The firms, which manage some $110 billion among them, are on a list that says they can never invest in a $155 million loan that’s trading in U.S. markets.

RBS Holding Co., the owner of direct marketer Quadriga Art, banned the three firms and seven others last year from buying parts of the loan, according to two people with knowledge of the matter who asked not to be named because the decision was private. They were deemed, the people said, to be too demanding in debt restructurings, a fate that executives at RBS -- which has no relationship to the Scottish bank -- considered as Quadriga’s business faltered.

Unlike any other market in the U.S., the blacklist rules in leveraged loans. No regulator polices tradi…