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Teddy Bear

City Bonuses...

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http://business.guardian.co.uk/story/0,,1851794,00.html

Looks like it might have another devastating effect!

I'm happy with 90% of my life. I have no problem with the parasite rich drinking champers for breakfast or pootling around in diamond-encrusted Bentlys and spending 100s on a haircut a la Cherie Blair. Fine - couldn't care less. No politics of envy here. But could they please stop speculating in residential property?

In wilder moments I think the only answer to societies current predicaments are a few accurately-hurled petrol bombs.

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Will this breath new life once more into the market as it did at the start of the year?

Judging by the long faces of the hedge fund schmucks around Mayfair/St. James since May, I don't think Bentleys are exactly on their mind. More like keeping their job!

Anyway, I'm sceptical whether bonuses make much difference at all, outside C. London.

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Perhaps but the market does appear to be recovering and mergers & aquisitions seem to be on the up again - even if it is British firms being sold to the yanks/germans/chinese etc . The money has to go somewhere and while not all will go into property it is fair to say that a considerable amount will.

As to whether it effects the wider property market or not I'm preety sure it has some effect though to what degree is up for debate. If you ask me its bound to ripple further down the housing chain and out of C. London to the rest of the South East and beyond.

Judging by the long faces of the hedge fund schmucks around Mayfair/St. James since May, I don't think Bentleys are exactly on their mind. More like keeping their job!

Anyway, I'm sceptical whether bonuses make much difference at all, outside C. London.

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In wilder moments I think the only answer to societies current predicaments are a few accurately-hurled petrol bombs.

Right. So apart from the public, property and finance sectors, is there any career path that you find acceptable?

Edited by jonewer

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Will this breath new life once more into the market as it did at the start of the year?

This is the bonus money that was paid at the beginning of the year so it has had it effect we will have to see was happens next year.

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On the subject of hedge funds.

Sell-out: Why hedge funds will destroy the world

http://www.newstatesman.com/Economy/200607310033

"When Dr Ben Bernanke, chairman of the US Federal Reserve, the most important financial supervisor of all, was quizzed by the US Senate banking committee about whether derivatives - complex financial instruments liberally used by hedge funds - should be regulated, he commented: "Derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and use them properly." This statement came pretty close to admitting that regulators don't have a clue what is going on and are therefore powerless to regulate the funds. Given their sheer size and increasing influence, this is stunning - and scary. "

No it doesn't! Shoddy journalism.

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"When Dr Ben Bernanke, chairman of the US Federal Reserve, the most important financial supervisor of all, was quizzed by the US Senate banking committee about whether derivatives - complex financial instruments liberally used by hedge funds - should be regulated, he commented: "Derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and use them properly." This statement came pretty close to admitting that regulators don't have a clue what is going on and are therefore powerless to regulate the funds. Given their sheer size and increasing influence, this is stunning - and scary. "

No it doesn't! Shoddy journalism.

It took 100's of auditors/accountants to pick their way through Fannie Mae's books - that is one company in one market sector. How can they know what is going on and the risk assessed if they are not even regulated?

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Anyway, I'm sceptical whether bonuses make much difference at all, outside C. London.

Not true, shermanator. I put my bone towards buying a house in Yorkshire this year.

Hedge funds used to be market neutral arbitrage plays ("riskless profit"). Now they are little more than mutual long funds with a shorter investment horizon. Does this make them more "evil" than your pension funds being managed in a mutual fund?

Returns have recently been quite shabby because of the market's weakness, but the management fee keeps the Bentley in Super Unleaded.

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It took 100's of auditors/accountants to pick their way through Fannie Mae's books - that is one company in one market sector. How can they know what is going on and the risk assessed if they are not even regulated?

I was not implying that the Fed was fully aware of what was going on in Hedge Funds.

I was implying that this statement by Bernanke

"Derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and use them properly."

does not come "pretty close to admitting that regulators don't have a clue what is going on and are therefore powerless to regulate the funds"

It may well be that regulators don't have a clue what is going on, but it is not because derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and use them properly.

That was the shoddy journalism.

There were other examples in the article.

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Hedge Funds have produced poor returns for the last 18 months to two years -all the smart money was in them 5 years ago. At the moment, their average returns are under 10% [and falling].

Even private equity is seeing declining returns, not only because money is a bit more expensive to borrow, but mainly because there are so many funds out there with so much to spend which is forcing prices and particularly multiples up [and lax credit and easy terms of finance].

yes, there are exceptions, yes, there are miracles, but hedge funds make their money on their management charge as much as their carry..... people have got wise to how good a deal this is and are tightening the screw on them and as more hedge funds are out there, the less lucrative it is.

M&A is up, but the main reason for big bonuses as I see it is retention - they stopped hiring in 2001/2 and now they need decent middle order bankers and they don't have them because they did not take them on - as much that as reward for good performance etc... US IB is up, but that's fee related - not their own investments - many banks have divested of their own investments (or parts of them) - preferring to leave it to PE and other funds to take the risk while they sit there on the debt and convertible debt side.

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Hedge Funds have produced poor returns for the last 18 months to two years -all the smart money was in them 5 years ago. At the moment, their average returns are under 10% [and falling].

Even private equity is seeing declining returns, not only because money is a bit more expensive to borrow, but mainly because there are so many funds out there with so much to spend which is forcing prices and particularly multiples up [and lax credit and easy terms of finance].

yes, there are exceptions, yes, there are miracles, but hedge funds make their money on their management charge as much as their carry..... people have got wise to how good a deal this is and are tightening the screw on them and as more hedge funds are out there, the less lucrative it is.

M&A is up, but the main reason for big bonuses as I see it is retention - they stopped hiring in 2001/2 and now they need decent middle order bankers and they don't have them because they did not take them on - as much that as reward for good performance etc... US IB is up, but that's fee related - not their own investments - many banks have divested of their own investments (or parts of them) - preferring to leave it to PE and other funds to take the risk while they sit there on the debt and convertible debt side.

All true except for the highlighted bit, IMHO. Leverage guys are still throwing big multiples about at low rates.

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All true except for the highlighted bit, IMHO. Leverage guys are still throwing big multiples about at low rates.

they are, but the last couple of termsheets I have had for borrowers have been a bit tighter on mandatory prepayments and more restrictive on revolver uses (and more information to lenders) - the flat response to that from their counsel was, "the market's moved."

AS for expensive, rates have gone up a bit, and I am finding it harder to hold onto lower margins and am also finding banks are trying to get more flexibility to change the interest margin in future...

Still lots of money leant based on models that don't take full account of rising rates or slowdowns though.....

Edited by Rachman

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they are, but the last couple of termsheets I have had for borrowers have been a bit tighter on mandatory prepayments and more restrictive on revolver uses (and more information to lenders) - the flat response to that from their counsel was, "the market's moved."

AS for expensive, rates have gone up a bit, and I am finding it harder to hold onto lower margins and am also finding banks are trying to get more flexibility to change the interest margin in future...

Still lots of money leant based on models that don't take full account of rising rates or slowdowns though.....

Most inappropriate multiple in recent days: 6x EBITDA for a roofing company... and from usually timid European bank.

It's all a bit mad.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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