(BN) Hedge-Fund Millionaire Diggle to Offer Farms, Introduce Life Sciences Fund

30.5m, with 30m of partners money => 500k of Other Peoples Money....the 3bn days are over..

Bloomberg News, sent from my iPad.

Hedge-Fund Millionaire Diggle Bets on Farms, Life Sciences

Dec. 28 (Bloomberg) -- Stephen Diggle, who co-founded a hedge fund that made $2.7 billion in 2007 and 2008, plans to open his personal farmland portfolio to investors and start a fund that will trade life-sciences companies.

Diggle will transfer the farm assets from his family office to Singapore-based Vulpes Investment Management, which he set up in April after liquidating his previous firm's volatility funds. Diggle's family also holds "significant stakes" in life sciences, including biotechnology companies, which will be moved to a fund he plans to set up next year, the 47-year-old said.

"Everything that we are investing in personally is available to investors," Diggle said in an interview. "We have got capital committed, we are focused on a number of things where we think there's a compelling opportunity to make money."

Diggle is widening his new firm's investments after starting a volatility fund in May and taking over the Russian Opportunities Fund and Testudo Fund from Artradis Fund Management Pte, which he and co-founder Richard Magides closed in March. Once Singapore's biggest hedge-fund manager, Artradis's funds, which sought to profit from price swings, lost $700 million as volatility declined in 2009 and 2010.

"The one thing I didn't want to do was to spend the rest of my life talking about how great 2008 was," Diggle said. "You have to move on and find new challenges. That's what gets you up in the morning."

Volatility Cost

Vulpes, which focuses on alternative investments, started its long Asian volatility and arbitrage fund, LAVA, on May 1 with $30.5 million, of which $30 million was the founding partners' money. The fund size has increased to about $50 million after some of Artradis's former clients returned to invest Diggle. The fund has gained 6 percent since May, he said.

LAVA seeks to produce returns that aren't correlated with the market by trading instruments that thrive on volatility, such as options, warrants, and convertible bonds. The fund uses strategies such as arbitraging or profiting from disparities in the price of similar securities simultaneously traded on more than one market, and tends to work well when markets go down.

"The cost of being long volatility on a daily basis as a buy and hold strategy is not going to make money in the next few years," Diggle said. "You have to be more deft in your timing and more selective in what you own."

Farmland Transfer

Diggle plans to transfer ownership of his farmland into a holding company, in which outside investors can hold shares, he said. Vulpes, which currently manages about $200 million, will own and operate the company. After buying farms in Uruguay and Illinois, as well as a kiwi-and-avocado orchard in New Zealand, he plans to pour money into Africa and eastern Europe as global food prices soar.

The value of farmland in the U.S. has probably gained 20 percent to 30 percent in the last two years, while Diggle's investments in Uruguay may have risen 50 percent as sheep and cattle prices almost doubled in Latin America this year, he said.

Agriculture would be the "single most interest opportunity over the next 10 to 20 years," Diggle said.

Vulpes favors investments in metals, energy and food, and "dislikes" government bonds, he said.

"Being long stuff in the ground is going to be a better place to be than holding pieces of paper," Diggle said.

The firm's Testudo Fund, which is heavily invested in precious metals and the mining industry, has gained 2.5 percent this year. The Russian Opportunities Fund has declined about 10 percent in the same period.

'Biggest Risk'

Governments and their policies represent the biggest threat to investors, he said. "The biggest risk will come from governments: government interference in markets, government debt and government manufacturing of paper money to pay off the debt," he said.

Diggle said he's focusing on "new exciting commercially viable technology" in the life sciences industry that will find cures for illnesses including cancer and Parkinson's disease.

"We certainly see a lot of interest by big pharma in small innovative biotechnology," Diggle said. "If we can find those small new exciting biotechnology companies before big pharma gets to them, there's a big uptick in terms of valuation if they can prove their work."

To contact the reporter on this story: Netty Ismail in Singapore nismail3@bloomberg.net .

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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One of the stupidest articles around.

What can you do? these people could turn to geniuses if you would pay them more instead of paying them like monkeys. 

THE INNOVATION ENGINE November 08, 2011, 2:28 PM EST

Three Types of People to Fire Immediately

Want a more innovative company? Get rid of these folks. Today

By G. Michael Maddock and Raphael Louis Vitón

“I wanted a happy culture. So I fired all the unhappy people.”
—A very successful CEO (who asked not to be named)

We (your authors) teach our children to work hard and never, ever give up. We teach them to be grateful, to be full of wonder, to expect good things to happen, and to search for literal and figurative treasure on every beach, in every room, and in every person.

But some day, when the treasure hunt is over, we’ll also teach them to fire people. Why? After working with the most inventive people in the world for two decades, we’ve discovered the value of a certain item in the leadership toolbox: the pink slip.

Show of hands: How many of you out there in Innovationland have gotten the “what took you so long?” question from your staff when you finally said goodbye to a teammate who was seemingly always part of problems instead of solutions?

We imagine a whole bunch of hands. (Yep, ours went up, too.)

These people—and we going to talk about three specific types in a minute—passive-aggressively block innovation from happening and will suck the energy out of any organization.

When confronted with any of the following three people—and you have found it impossible to change their ways, say goodbye.

1. The Victims
“Can you believe what they want us to do now? And of course we have no time to do it. I don’t get paid enough for this. The boss is clueless.”

Victims are people who see problems as occasions for persecution rather than challenges to overcome. We all play the role of victim occasionally, but for some, it has turned into a way of life. These people feel persecuted by humans, processes, and inanimate objects with equal ease—they almost seem to enjoy it. They are often angry, usually annoyed, and almost always complaining. Just when you think everything is humming along perfectly, they find something, anything, to complain about. At Halloween parties, they’re Eeyore, the gloomy, pessimistic donkey from the Winnie the Pooh stories—regardless of the costume they choose.

Victims aren’t looking for opportunities; they are looking for problems. Victims can’t innovate.

So if you want an innovative team, you simply can’t include victims. Fire the victims. (Note to the HR department: Victims are also the most likely to feel the company has maliciously terminated them regardless of cause. They will often go looking for someone—anyone—who will agree that you have treated them unjustly. Lawyers are often left to play this role. So have your documentation in order before you let victims go, because chances are you will hear from their attorneys.

2. The Nonbelievers
“Why should we work so hard on this? Even if we come up with a good idea, the boss will probably kill it. If she doesn’t, the market will. I’ve seen this a hundred times before.”

We love the Henry Ford quote: “If you think you can or think you cannot, you are correct.” The difference between the winning team that makes industry-changing innovation happen and the losing one that comes up short is a lack of willpower. Said differently, the winners really believed they could do it, while the losers doubted it was possible.

In our experience, we’ve found the link between believing and succeeding incredibly powerful and real. Great leaders understand this. They find and promote believers within their organizations. They also understand the cancerous effect that nonbelievers have on a team and will cut them out of the organization quickly and without regret.

If you are a leader who says your mission is to innovate, but you have a staff that houses nonbelievers, you are either a lousy leader or in denial. Which is it? You deserve the staff you get. Terminate the nonbelievers.

3. The Know-It-Alls
“You people obviously don’t understand the business we are in. The regulations will not allow an idea like this, and our stakeholders won’t embrace it. Don’t even get me started on our IT infrastructure’s inability to support it. And then there is the problem of ….”

The best innovators are learners, not knowers. The same can be said about innovative cultures; they are learning cultures. The leaders who have built these cultures, either through intuition or experience, know that in order to discover, they must eagerly seek out things they don’t understand and jump right into the deep end of the pool. They must fail fearlessly and quickly and then learn and share their lessons with the team. When they behave this way, they empower others around them to follow suit—and presto, a culture of discovery is born and nurtured.

In school, the one who knows the most gets the best grades, goes to the best college, and gets the best salary. On the job, the person who can figure things out the quickest is often celebrated. And unfortunately, it is often this smartest, most-seasoned employee who eventually becomes expert in using his or her knowledge to explain why things are impossible rather than possible.

This employee should be challenged, retrained, and compensated for failing forward. But if this person’s habits are too deeply ingrained to change, you must let him or her go. Otherwise, this individual will unwittingly keep your team from seeing opportunity right under your noses. The folks at Blockbuster didn’t see Netflix (NFLX)‘s ascendancy. The encyclopedia companies didn’t see Google (GOOG) coming. But the problem of expert blindness existed well before the Internet.

Two of our favorites from rinkworks.com: “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” —Western Union internal memo, 1876.

And “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” —David Sarnoff’s associates in response to his urgings for investment in the radio in the 1920s.

At one point in his career, Thomas A. Edison had dozens of inventors working for him at the same time. He charged each with the task of failing forward and sharing the learning from each discovery. All of them needed to believe that they were part of something big. You want the same sort of people.

You don’t want the victims, nonbelievers, or know-it-alls. It is up to you to make sure they take their anti-innovative outlooks elsewhere.

G. Michael Maddock is chief executive, and Raphael Louis Vitón is president of Maddock Douglas, an innovation consultancy that helps clients invent, brand, and launch new products, services, and business models. Maddock is author of the upcoming book Brand New: Solving the Innovation Paradox—How Great Brands Invent and Launch New Products, Services, and Business Models (Wiley, April 2011).

(BN) Paulson Gold Fund Said to Lose 10.5% in 2011 Even as Metal Heads for Gain

Bloomberg News, sent from my iPad.

Paulson's Gold Fund Said to Fall 10.5% in 2011 as Metal Rises

Dec. 23 (Bloomberg) -- John Paulson, the billionaire money manager mired in the worst slump of his career, lost 10.5 percent in his Gold Fund this year even as the metal heads for its 11th straight annual gain, according to people familiar with the fund's performance.

The fund, which invests in mining stocks and other gold- related securities, remains the best performer in Paulson's $28 billion fund family this year. His Paulson Advantage Fund, which seeks to profit from corporate events such as takeovers and bankruptcies, has fallen about 35 percent. The performance numbers for the two funds are from Dec. 28, 2010, through Dec. 20, 2011, and may not reflect returns for all shareholders, said the people, who asked not to be identified because the information is private.

Armel Leslie, a spokesman for Paulson, declined to comment on the firm's returns.

Paulson & Co., based in New York, has lost money this year on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp., the Chinese forestry company accused by short-seller Carson Block of overstating timberland holdings. Paulson, 56, cut the so-called net exposure in his main hedge funds to 30 percent last month and reduced bullish bets across all his funds.

Net exposure is calculated by subtracting the percentage of a hedge fund's short positions, or bets on falling securities, from its longs, or wagers on rising stocks and bonds.

Gold BUGS Index

Gold has climbed 13 percent this year, holding onto gains after peaking at $1,891 an ounce on Aug. 22. The 17-company NYSE Arca Gold BUGS Index fell 11 percent as investors fled equities amid the turmoil caused by the European sovereign-debt crisis.

Paulson was the largest holder of American depositary receipts in AngloGold Ashanti Ltd., the third-biggest gold producer. Paulson also owned shares or ADRs of Gold Fields Ltd., NovaGold Resources Inc., Randgold Resources Ltd., Agnico-Eagle Mines Ltd., Iamgold Corp., Barrick Gold Corp. and International Tower Hill Mines Ltd.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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(BN) IPad Beat on Power, Speed by New Non-Clones: Rich Jaroslovsky

Ive no idea what he is trying to say. 

Bloomberg News, sent from my iPad.

IPad Beat on Power, Speed by New Non-Clones: Rich Jaroslovsky

Dec. 22 (Bloomberg) -- We're finally beginning to see some distinctive 10-inch Android tablets that are more than iPad knockoffs.

Earlier this year, Sony released its wedge-shaped Tablet. Now, two more entries provide features and functionality beyond Apple Inc.'s offerings: Asustek Computer Inc.'s Eee Pad Transformer Prime and the Droid Xyboard 10.1 from Motorola Mobility Holdings Inc. and Verizon Wireless.

Granted, every Android tablet comes at an automatic disadvantage to the iPad: Unlike in wireless phones, where the Google Inc. operating system is attracting a rapidly growing number of applications, the marketplace for tablet apps remains thin. Meanwhile, the iPad has more than 140,000 apps, and they tend to be higher-quality.

A prerequisite for luring developers is getting more Android tablets into users' hands. And that means giving customers more reasons to buy them.

The Transformer Prime offers several. It is as pretty a tablet as you're likely to find anywhere. It weighs about 1.3 pounds and measures less than a third of an inch thick, making it marginally thinner and lighter than the iPad 2. The metallic back has a cool, spun finish marred only by the ill fit of the Apple-style multipin cable used for charging the device. The tablet's angled edges leave even more of the connector's metal exposed than does the iPad's, which has a similar issue.

Paperclip Rescue

My time with the Transformer Prime didn't start auspiciously. The unit from Asus appeared to charge normally but refused to boot. Eventually, with the help of a handy paperclip, I was able to reset it.

Under the hood, the Prime is powered by Nvidia Corp.'s Tegra 3 quad-core microprocessor. A chip that powerful is overkill for many tablet tasks, like reading e-books. But if you play games, you'll quickly gain an appreciation, as I did through many sets of Zen Pinball and frantic races in Riptide GP. The play was fast and fluid and graphics on the 10.1-inch screen were little short of stunning.

All that, of course, requires battery power and a lot of it. The Transformer does pretty well on that score. I got more than seven hours on a charge, using it to surf the Web, check e- mail and watch a movie. While that's considerably less than on an iPad, the Transformer also offers an option to downshift the computer into two lower-power modes to extend battery life.

Transforming the Transformer

There's one other way to keep things going: buying and attaching the optional $150 metallic keyboard that gives the Transformer Prime its name, converting it into a netbook-PC replacement. The keyboard has its own six-hour battery, plus an SD expansion-card slot and a USB port. Using the keyboard and intense battery management, Asus claims you can coax up to 18 hours of use between charges.

The Transformer Prime comes in two Wi-Fi-only models, one with 32 gigabytes of storage for $500, the other with 64 gigabytes for $600 -- both $100 cheaper than the comparable iPads. They run "Honeycomb," Google's first-generation tablet operating system. An upgrade to the new version of Android, "Ice Cream Sandwich," is promised. If you're looking for an iPad alternative, you can't do much better.

Speed Demon

Unless, that is, your most important criterion for a tablet is how fast it connects to the Internet when you're on the move or don't have a Wi-Fi connection. In that case, the Droid Xyboard 10.1 -- known outside the U.S. as the Xoom 2 -- is the way to go.

The Droid Xyboard runs on Verizon's LTE 4G network, the fastest wireless data network out there, and it is mighty swift: Using Ookla's SpeedTest app, I regularly registered download speeds of 10 to 20 megabits per second in the San Francisco Bay Area.

That's faster than many home broadband connections, and it makes the Xyboard roar when it's engaged in Internet-intensive tasks like surfing the Web, downloading apps or streaming movies and videos. Unlike some LTE phones, battery life isn't terrible.

I got about six hours of continuous use on the high-speed Verizon network. You can expect to do better in normal use, since I was deliberately trying to stress the battery by doing things like streaming videos and not taking advantage of Wi-Fi networks. And at 1.3 pounds, the Xyboard is right in line with the Transformer Prime and iPad 2.

Unfortunately, several other aspects of the Xyboard are less satisfying. Although it also runs the Honeycomb operating system (and will be upgradeable), it feels noticeably more sluggish than the Transformer when it comes to things like scrolling through apps or even waiting for the screen to reorient itself when you turn the unit sideways.

Tacky to Touch

Perhaps some of the difference stems from its less powerful dual-core processor -- but I've used plenty of tablets with dual-core processors that felt zippier than this.

Matters aren't helped by a water-repellent coating Motorola has added to the Xyboard's touchscreen. It's supposed to help protect against accidental spills, but I found it a little tacky to the touch.

Then there's the price. The Xyboard starts at $530 for a 16-gigabyte version, up to $730 for 64 gigabytes. At first glance, that seems to be $100 cheaper than the comparable iPad 2 models. But there's a big difference: While Verizon and AT&T Inc. allow users of 3G-equipped iPads to decide month by month whether they want service, Verizon requires Xyboard buyers to sign a two-year contract. Otherwise, the price zooms to an uncompetitive $700 for even the least expensive model.

At those prices, the Droid Xyboard's appeal may be limited to those with a real need for speed. Still, being the fastest tablet -- or in the case of the Transformer Prime, the most powerful -- counts for something.

(Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the reporter on this story: Rich Jaroslovsky in San Francisco at rjaroslovsky@bloomberg.net .

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net .

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(BN) BlueCrest’s Platt Says Most European Banks Insolvent, Debt Crisis Growing

If he talks less maybe he will make more than his 5%..

Bloomberg News, sent from my iPad.

BlueCrest's Platt Says European Banks Insolvent, Crisis Growing

Dec. 15 (Bloomberg) -- Michael Platt, the founder of the $30 billion hedge fund BlueCrest Capital Management LLP, said most of the banks in Europe are insolvent and the situation will worsen in 2012 as the region's debt crisis accelerates.

"I do not take any exposure to banks at all if I can avoid it," Platt said in an interview on Bloomberg Television today. If European lenders had to mark their books to markets every day in the same way hedge funds do, most would be proven "insolvent," he said.

BlueCrest is pouring money into U.S. Treasuries and short- term German debt because of concerns about market volatility and counterparty risk, Platt said. BlueCrest Capital International, the fund he personally manages in Geneva, has risen about 5.6 percent in 2011, posting gains when hedge funds broadly are on pace to have their second-worst year ever.

Platt said he's disappointed in the measures that came out of last week's meeting of European leaders, saying they were too focused on budget cuts. Austerity will ultimately lead to slower growth in Europe, making the region's debt woes even worse, he said. A solution will come when the European Central Bank pumps significant amounts of money into economies, something it lacks a mandate to do, Platt said.

"We need much more radical measures," he said. The continuing crisis will make European nations look "more like Greece," he said.

Brussels Agreement

The debt crisis began two years ago in Greece and has spread to Ireland, Portugal, Italy and Spain. At last week's meeting in Brussels, European leaders proposed their fifth attempt at a solution since May 2010, agreeing on a closer fiscal union and a willingness to add 200 billion euros ($260 billion) to International Monetary Fund coffers.

While hedge funds have had bearish views on Europe, they've struggled to make money on the crisis. Global market volatility has prompted hedge funds to decline 4.4 percent on average this year through November, according to Chicago-based Hedge Fund Research. The industry lost a record 19 percent in 2008.

Hedge funds have struggled because there hasn't been an obvious trend and there have been periods of bullishness that have confused traders, Platt said.

"The process has been unfolding over two years," he said. "It has been extremely gradual and there's been a lot of optimism that a solution will be found."

To contact the reporters on this story: Stephanie Ruhle in New York at sruhle2@bloomberg.net Jesse Westbrook in 東京 at jwestbrook1@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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(BN) Paulson’s Bright Spot Amid Slump May Fade as Gold Drops to Five-Month Low

Bloomberg News, sent from my iPad.

Paulson's Bright Spot May Fade as Gold Plunges to Five-Month Low

Dec. 15 (Bloomberg) -- John Paulson, the hedge-fund manager enduring the worst year in his career, may be facing a final blow from this month's selloff in gold, an investment that mitigated losses at his $28 billion firm earlier in 2011.

The SPDR Gold Trust exchange-traded fund, of which Paulson was the largest shareholder as of Sept. 30, fell 10 percent from the end of last month, and all eight of his gold stocks slumped with a 9.6 percent decline for bullion. The declines would translate into a $672.1 million paper loss on those securities for Paulson & Co., assuming his holdings haven't changed since the end of the third quarter, when the firm reported its equity stakes in a regulatory filing.

Until this month, gold had been the bright spot for Paulson & Co. clients, who can choose to invest in gold-denominated shares of the hedge funds. Gains in bullion had alleviated losses of 46 percent, in the dollar share class, for one of the firm's biggest funds this year through November. Paulson also offers a dedicated Gold Fund, its best performer this year.

"With the dramatic moves of gold and the recent decline from its peak, I think some investors will be deciding whether they want to continue to invest in that share class," said Don Steinbrugge, managing partner of Agecroft Partners LLC, a Richmond, Virginia-based firm that advises hedge funds and investors.

Scaling Back

Paulson, who turned 56 yesterday, has lost money this year on investments including Citigroup Inc., Bank of America Corp. and Sino-Forest Corp., the Chinese forestry company accused by short-seller Carson Block of overstating timberland holdings. Paulson cut the so-called net exposure in his main funds to 30 percent last month and reduced bullish bets across all his funds on stocks including gold companies.

Net exposure is calculated by subtracting the percentage of a fund's short positions, or bets on falling securities, from its longs, or wagers on rising stocks and bonds.

Armel Leslie, a spokesman for Paulson, declined to comment on the firm's potential gold-related losses.

Paulson & Co. held shares of SPDR Gold Trust and eight gold companies in the third quarter, according to its 13F filing. The firm, which uses the ETF to denominate the gold share classes of his funds, pared its stake in the gold trust to 20.3 million shares from 31.5 million as of June 30.

The firm was the largest holder of American depositary receipts in AngloGold Ashanti Ltd., the third-biggest gold producer. Paulson also owned shares or ADRs of Gold Fields Ltd., NovaGold Resources Inc., Randgold Resources Ltd., Agnico-Eagle Mines Ltd., Iamgold Corp., Barrick Gold Corp. and International Tower Hill Mines Ltd.

200-Day Average

Gold's plunge to a five-month low sent it below its 200-day moving average for the first time in almost three years, signaling more declines to traders who follow technical analysis. Bullion fell below $1,600 an ounce yesterday to settle at the lowest level in five months as a stronger dollar curbed demand for the metal as an alternative asset. Gold futures for February delivery dropped 4.6 percent to settle at $1,586.90 at 1:44 p.m. on the Comex in New York, the lowest closing level since July 13. The 200-day moving average was near $1,613.

The metal was up about 12 percent in 2011 and still heading for an 11th straight annual gain, the longest winning streak in at least nine decades. It has outperformed commodities, global equities and Treasuries.

11% Gain

The Paulson Gold Fund, which can buy derivatives and other gold-related investments, rose 11 percent in this year's first 11 months.

Paulson's biggest funds, Advantage Plus and Advantage, seek to profit from corporate events such as takeovers and bankruptcies and have $11 billion in combined assets. The Advantage Plus Fund fell 46 percent in 2011 in its dollar shares and 29 percent in its gold shares. The Advantage Fund lost 32 percent in its dollar class and 13 percent in its gold class.

The Paulson Partners Enhanced Fund, which invests in the shares of merging companies, decreased 18 percent in its dollar class and 0.9 percent in its gold class.

The Recovery Fund, which invests in assets Paulson believes will benefit from a long-term economic upturn, declined 28 percent in its dollar shares and 12 percent in its gold class. Paulson has been betting on a U.S. economic recovery by the end of 2012.

Paulson's Credit Opportunities Fund dropped 18 percent in its dollar shares and gained 0.3 percent in its gold shares.

To contact the reporter on this story: Kelly Bit in New York at kbit@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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(BN) Credit Agricole to Report a Loss for Full Year, Eliminate 2,350 Positions

Bloomberg News, sent from my iPad.

Credit Agricole to Report a Loss for 2011, Cut 2,350 Jobs

Dec. 14 (Bloomberg) -- Credit Agricole SA, France's second- largest bank by assets, said it expects to report a loss for 2011 and will eliminate 2,350 jobs at its investment-banking and consumer finance units.

Credit Agricole will book about 2.5 billion euros ($3.24 billion) in writedowns on investments, including its stake in Spain's Bankinter SA and Banco Espirito Santo SA of Portugal, the bank, based outside Paris, said in an e-mailed statement today.

The company scrapped its dividend for 2011 and said it can't confirm its 2014 goals because of "the lack of visibility on the economic and financial climate." The lender joins BNP Paribas SA and Societe Generale SA in reducing corporate- and investment-banking staff.

Moody's Investors Service cut the credit ratings of Credit Agricole, BNP Paribas and Societe Generale last week, citing funding constraints and deteriorating economic conditions amid Europe's two-year-old debt crisis. Moody's lowered the long-term debt ratings of Credit Agricole and BNP Paribas by one level to Aa3, the fourth-highest investment grade.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at

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(BN) Leslie’s James Caird Will Liquidate Main Hedge Fund, Investor Letter Shows

Bloomberg News, sent from my iPad.

Ex-Moore Trader Leslie to Liquidate $1.6 Billion Hedge Fund

Dec. 14 (Bloomberg) -- James Caird Asset Management LP, the London-based firm run by former Moore Capital Management LLC trader Tim Leslie, plans to liquidate a $1.6 billion credit hedge fund after eight years.

"I have been frustrated by our performance during the current year," Leslie wrote today in a client letter, a copy of which was obtained by Bloomberg News. He said he plans to start giving money back to investors in the JCAM Global Fund in January.

The JCAM fund lost 8.9 percent for 2011 through November, according to a person familiar with the matter, who asked not to be identified because the information is private. Hedge funds have lost an average 3.8 percent this year, according to data compiled by Bloomberg.

Leslie joins an increasing number of money managers who've shuttered hedge funds in recent months after Europe's debt crisis roiled markets and limited investment opportunities. The number of funds liquidating in the third quarter rose to 213, the worst three-month period for the industry since the first quarter of 2010, according to Chicago-based Hedge Fund Research. In the second quarter, 191 hedge funds shut.

Leslie attributed the losses to "poor liquidity and the unfolding crisis in financial markets." He said the lack of market liquidity is "structural" and not something that will go away any time soon. As a result, he plans to start a smaller hedge fund with a "narrower trading focus," according to the letter.

New Hedge Fund

The new fund will start next year and be managed by Robert Miller, who has worked with Leslie since 2003, according to the letter. Leslie seeks to raise $500 million for the new fund and cap assets at about that level, the person said.

Leslie wasn't available to comment, according to a spokesman for James Caird.

Leslie started the JCAM Global fund in 2003 while trading for Moore, the New York-based firm founded by Louis M. Bacon. He left Moore in 2008 and continued managing the JCAM fund at his new firm. Moore is an investor in the JCAM fund.

James Caird also manages two other hedge funds, the $150 million Vintage II fund and the $70 million Mortgage Opportunities fund. The firm will continue running those two funds, the person said.

To contact the reporters on this story: Jesse Westbrook in london at jwestbrook1@bloomberg.net Saijel Kishan in New York at skishan@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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(BN) Clinton Offers Path to Ease Myanmar Sanctions, Hails Opposition’s Suu Ky

A joke isn't it? Blessed by US and lift sanctions and get aid of 1.2m from US and investments from (bankrupt ) western countries.  Currently $25bn invested by china Thai and others.....

Clinton Offers Path to Ease Myanmar Sanctions, Hails Suu Kyi

Dec. 3 (Bloomberg) -- U.S. Secretary of State Hillary Clinton laid out a path to ease sanctions during a trip to Myanmar as she aimed to embolden reformers trying to roll back five decades of military rule.

Clinton met separately with Myanmar's president, Thein Sein, and its most prominent dissident and democracy icon, Aung San Suu Kyi, during her three-day visit, telling both that the U.S. stands ready to lift punitive measures if the government builds upon moves to grant greater political freedoms. Suu Kyi, who Clinton called an "inspiration," said the visit may pave the way for a "new future" in Myanmar.

"I am cautiously hopeful," Clinton told reporters in Yangon yesterday before departing. "Reformers both inside and outside the government have our support, and it will increase as we see actions taken that will further the hopes and aspirations of the people."

Clinton's visit may help ease the international isolation of Myanmar, one of Asia's poorest countries, where Internet and phone usage is sparse and cash is required for most transactions. Thein Sein has released hundreds of political prisoners, eased censorship and started a dialogue with Suu Kyi since his junta-backed party won an election last year to end five decades of military rule.

"This will be the beginning of a new future for all of us provided we can maintain it," Suu Kyi said before embracing Clinton yesterday on the veranda of the lakeside home, where she spent 15 years under house arrest. "Because of this engagement, our way ahead will be clearer and we will be able to trust that the process of democratization will move forward."

U.S. Assistance

Clinton said the U.S. would provide assistance to groups providing microcredit, health care, English-language training and help for land-mine victims. The programs will cost the U.S. $1.2 million, according to an administration official who briefed reporters on condition of anonymity.

Clinton's "confidence-building measures" may help reformers come forward, said Derek Tonkin, a former U.K. ambassador to Vietnam, Thailand and Laos and now chairman of Network Myanmar, a U.K.-based group that promotes reconciliation.

"There are probably many people sitting on the fence, wondering what they ought to be doing," Tonkin said of reform- minded members of the government. "What she has done is very important. The longer this process is maintained the more likely that the changes that we've seen will be sustained and in due course be irreversible."

Market Access

A political breakthrough would allow U.S. and European companies greater access to a market of 62 million people who are dependent on neighbors China, India and Thailand to grow one of Asia's smallest economies. Those countries poured more than $25 billion into ports, power plants and pipelines to capitalize on Myanmar's rich natural resources and strategic location on the Indian Ocean.

U.S. sanctions against Myanmar, formerly known as Burma, have been tightening since 1988, when President Ronald Reagan suspended aid and banned arms sales after soldiers killed about 3,000 student protesters, according to an estimate by Human Rights Watch. A series of congressional acts and presidential orders since then have banned imports, restricted money transfers, curbed aid money, frozen assets, prevented engagement by the World Bank and other agencies and targeted jewelry with gemstones originating in Myanmar.

Easing Sanctions

Before President Bill Clinton banned new investment in 1997, boycott threats prompted U.S. companies such as PepsiCo Inc., Levi-Strauss & Co. and Apple Inc. to leave Myanmar. Chevron Corp., based in San Ramon, California, is one of the few U.S. businesses operating in the country, having obtained a 28.3 percent stake in a gas field and pipeline that stretches to Thailand through its 2005 purchase of Unocal Corp., which made its investment prior to the 1997 ban.

Clinton told Thein Sein that the U.S. would loosen restrictions on engagement by the World Bank and the United Nations, she told reporters on Dec. 1. Other measures leading toward an end to sanctions, including an upgrade in diplomatic relations, would occur if Myanmar takes additional steps, such as releasing more than 1,000 political prisoners still behind bars, she said.

"We agreed that an important test of the government's stated commitment to reform and change will be the unconditional release of all prisoners of conscience," Clinton said after meeting with Suu Kyi.

Thein Sein told Clinton that his government would release more political prisoners, sever military ties with North Korea and seek new ways to ease violence with ethnic groups seeking more autonomy, according to a U.S. official speaking on condition of anonymity.

Political Freedom

At a Dec. 1 dinner with Clinton, Suu Kyi said the U.S. should support reformers in Myanmar's government and encourage officials who are still unsure to join them in fighting hardliners opposed to more political freedom, the official said.

Yesterday, Clinton and Suu Kyi strolled through the yard in front of her two-story paint-chipped house, where dozens of local and foreign journalists had gathered. During their meeting, Suu Kyi acknowledged opposition in some parts of the U.S. to engagement with Myanmar, and made the point that it was important to listen to voices inside the country, the U.S. official said.

Suu Kyi, 66, will run in an election for the first time after her party voted to rejoin the political process on Nov. 18. Last month, she said Thein Sein was "very genuine in his desire for the process of democratization."

The Nobel laureate called for international agencies to help improve health and education in Myanmar. She also said her country aims to maintain "good, friendly" relations with China.

"If we go forward together, I'm confident that there will be no turning back from the road towards democracy," Suu Kyi told reporters in a 10-minute joint appearance with Clinton. "We are not on that road yet, but we hope to get there as soon as possible with the help and understanding of our friends."

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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(BN) Legg Mason’s Bill Miller Will Exit Main Fund After It Falls Behind Peers

Fall of a Titan...it could happen to anyone. 

Bloomberg News, sent from my iPad.

Legg Mason's Miller to Exit Main Fund After Falling Behind Peers

Nov. 17 (Bloomberg) -- Bill Miller, the Legg Mason Inc. manager known for beating the Standard & Poor's 500 Index for a record 15 years through 2005, will step down from his main fund after trailing the index for four of the past five years.

Miller, 61, will be succeeded by Sam Peters as manager of Legg Mason Capital Management Value Trust on April 30, the Baltimore-based firm said today in an e-mailed statement. Miller will remain chairman of the Legg Mason Capital Management unit while Peters will assume the role of chief investment officer.

Miller, known for picking stocks he deems cheap based on financial yardsticks such as earnings, became mired in the worst slump of his career as he wagered heavily on financial stocks during the 2008 credit crisis. Value Trust lost 55 percent that year as the S&P 500 dropped 37 percent, including dividends, prompting a wave of withdrawals. The fund's assets have plunged from a peak of $21 billion in 2007 to $2.8 billion as of Nov. 15, according to data compiled by Bloomberg.

Miller, who has been a manager of Value Trust since its 1982 inception, in 2010 named Peters, a former Fidelity Investments stockpicker who joined the firm in 2005, to become his co-manager and eventually his successor. Miller initially co-managed Value Trust with Ernie Kiehne, then took sole responsibility in 1990, the year before his winning streak started. Research firm Morningstar Inc. named him fund manager of the decade for his performance in the 1990s.

Betting on Recovery

As markets rebounded in 2009 and 2010, Miller bet the U.S. economy would return to its old strength by investing in financial stocks and consumer-oriented companies. The fund topped peers and the S&P 500 with a 41 percent return in 2009 as markets rebounded, only to fall behind benchmarks again last year with a 6.7 percent gain. Value Trust declined 5.5 percent this year through Nov. 16, trailing 60 percent of similar funds, according to data compiled by Bloomberg.

Over the past five years, the fund has fallen at an average annual pace of 9.6 percent, ranking near the bottom of his peer group.

The inability of famed stock pickers such as Miller to protect investors from the market declines has spurred withdrawals from actively managed equity funds as clients shift money into bonds and index products.

Rival firms have revamped their portfolio-management teams this year in an effort to improve returns and win back customers. In September, Boston-based Fidelity named Jeffrey Feingold to run the Magellan Fund, replacing Harry Lange after the stock fund trailed 85 percent of competitors over the previous five years.

Miller worked in the research unit of Legg Mason before being named portfolio manager of Value Trust. He earned an economics degree from Washington & Lee University, where he graduated in 1972. After graduating, Miller served as a military intelligence officer overseas and then pursued graduate studies in philosophy in the Ph.D. program at Johns Hopkins University.

To contact the reporter on this story: Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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(BN) Biggest Oil Find in Decades, Kashagan Becomes $39 Billion Cautionary Tale

Will mongolia go this way too?

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Biggest Find in Decades Becomes $39 Billion Cautionary Tale

Nov. 17 (Bloomberg) -- After 11 years and $39 billion of investment, Exxon Mobil Corp., Royal Dutch Shell Plc and their partners have yet to sell a drop of oil from what was touted as the world's biggest discovery in four decades.

Centered on a man-made island 70 kilometers (44 miles) from Kazakhstan's coast, the Kashagan project is just months away from completion, $15 billion over budget and 8 years behind schedule. As the milestone of first oil nears, the Kazakh government is pressuring the group for a commitment on an even- bigger second phase, a project the oil companies are undecided on and one analyst says may not make money.

"The biggest worry is whether the project can ever be profitable given the huge cost escalation and start-up delays," said Julian Lee, a senior analyst for the Centre for Global Energy Studies in London. It may be "impossible for investors to earn a return on any investment in a second phase before their contract for the field expires" in 2041.

Kashagan, which may hold enough oil to supply the world for six months, has become a cautionary tale for oil companies worldwide as they spend an estimated $20 trillion through 2035 finding supplies in ever more difficult places. Expenses mounted as engineers underestimated the complexity of drilling under a region of the Caspian Sea that's frozen almost half the year. The government accused the partners, which are allowed to recoup spending before sharing the oil, of inflating costs.

'Colossal' Work

Nursultan Nazarbayev, Kazakhstan's leader-for-life, toured Kashagan in September and declared it a "colossal" work defining his 20-year rule since the Soviet Union's collapse, which included building a new capital city in the middle of the country's steppe. When the oil project starts production it will be a milestone for the Central Asian republic of 16.5 million that's four times the size of Texas.

The project is vital to Nazarbayev because the country relies on oil for 18 percent of gross domestic product and is rebuilding the economy after a devastating banking crisis. Kazakhstan's national oil company believes expansion can be achieved by 2017. The partners in the project aren't so ready to rush in.

"We will finish phase one and then we will look at phase two afterwards," Peter Voser, chief executive officer of The Hague-based Shell, said in an interview at the Group of 20 Summit in Cannes, France. "It's not immediate."

Christophe de Margerie, CEO of France's Total SA, echoed his sentiments, saying "let's start Kashagan one" when asked about prospects for the second phase.

Lethal Concentration

Kashagan has proved potentially lethal as well as complicated. The crude oil, locked 4,200 meters (2.6 miles) below the seabed in a highly pressurized reservoir, has a high concentration of poisonous "sour gas," according to North Caspian Operating Co., or NCOC, the venture formed to manage the project.

Gas sensors dot the island, scanning for any leaks of the vapor, which has a 15 percent concentration of flammable hydrogen sulfide. Weekly emergency drills are carried out with the 5,500 people living and working on the biggest of five islands. That number will drop to about 250 when the first phase becomes operational.

The project's structures are wrapped in impermeable membranes to keep contamination from the Caspian, home to seals and caviar-bearing sturgeon, and surrounded by barriers to fend off ice. The water at the site is only 3 to 6 meters deep and with low salinity and winter temperatures below minus 30 degrees Celsius (minus 22 Fahrenheit), the northern Caspian Sea freezes for almost five months of the year.

Main Partners

The geology, islands and ice and have inflated costs for the first phase to $39 billion from $24 billion estimated by the government in 2008.

The prize for the five main partners is as much as 252,000 barrels of crude a day each from peak output once the second phase is running. That kind of production is growing harder to find worldwide as existing fields age and governments in the Middle East, Russia and Latin America reserve control for state companies.

Exxon, Shell, Total, Rome-based Eni SpA and KazMunaiGaz National Co., the state oil company, hold 16.8 percent of NCOC each. Houston-based ConocoPhillips has 8.4 percent and Japan's Inpex Corp. 7.6 percent.

'Big Beasts'

"The fact you had big beasts with equal shares in the project who were thus able to slow down areas where they had different views shows the Kazakh model hasn't been an optimal one," Stuart Joyner, an oil industry analyst at Investec Securities Ltd. in London, said. "The cost, complexity and delays have significantly impacted the economics."

The partners aim to find a "preferred" expansion plan by the end of this year that can be sent to the government for approval, according to NCOC.

"We don't have clarity either about the time-frame and cost or about the planned production volumes at the second stage," Kazakh Oil and Gas Minister Sauat Mynbayev said last month.

One option is building more islands, similar to the existing 1.9 square-kilometer (0.7 square mile) manned collection hub and four surrounding structures, NCOC said. The cluster was built from 7 million metric tons of rock carried 300 kilometers from an ice-free port to the south.

Makes Sense

Expanding Kashagan makes more sense economically than halting at the first phase, KazMunaiGaz's former Chief Executive Officer Kairgeldy Kabyldin said on Oct. 4, before he stepped down from the post. Still, there are signs that some partners may be willing to cut their losses.

ConocoPhillips Chief Financial Officer Jeff Sheets said on an Oct. 26 conference call that Kashagan is in the "general category of looking around our portfolio in places where we have maybe not long-term strategic good opportunities."

Oil & Natural Gas Corp., India's largest energy explorer, and GAIL India Ltd., the nation's biggest natural-gas distributor, have made a non-binding offer for Exxon Mobil's 16.8 percent stake in Kashagan, two people with direct knowledge of the matter said in June.

The stake may cost $6 billion, the Financial Chronicle said Oct. 17, citing an unidentified official involved in talks. D.K. Sarraf, managing director of ONGC Videsh Ltd., ONGC's overseas unit, declined to comment on Kashagan.

Exxon 'Speculation'

Exxon plans to remain a major investor in Kazakhstan and reports of a Kashagan exit are "speculation," Charlie Engelmann, a Houston-based spokesman for the Irving, Texas-based company said in a statement.

There are no talks about any partners leaving the project, Andrey Sukhov, Shell's regional head of taxation in Russia and the Caspian region, said Oct. 21.

Kashagan's delays already forced one reorganization of the project. In 2008, Rome-based Eni gave up operatorship of the project to the newly formed NCOC, which agreed to pay higher royalties to Kazakhstan.

"After many difficulties and setbacks, and in the face of ballooning costs and much acrimony and debate, the companies had to start over and reallocate roles," oil industry historian Daniel Yergin said in his book The Quest, published in September. "All of this has infuriated the Kazakh government, which is having to wait years longer that anticipated for Kashagan revenues to flow."

Double Production

Kashagan may initially produce 370,000 barrels a day, which will rise to 450,000 barrels a day by 2016, Kazakhstan's Mynbayev said Oct. 4. The expansion would more than triple that to 1.5 million barrels a day, according to President Nazarbayev. That's almost double Kazakhstan's current production of about 1.6 million barrels a day, about the same as Libya produced before the revolt against Muammar Qaddafi.

Completing the expansion as early as 2017 is only possible if the partners choose a plan by early next year, KazMunaiGaz National CEO Bolat Akchulakov said in an interview in Astana, the capital, on Oct. 25.

"Phase two won't move ahead simply, it will be later than people anticipate," Investec's Joyner said. "Kashagan will be a million-barrel-a-day field, but from a value perspective it's been disappointing."

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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(BN) Corzine Lived Up to Risk-Taking Reputation at MF Global Before Bankruptcy

Risk taking with OTHER PEOPLES MONEY, thats the difference between being a trader and A BLOODY CHEAT!!

Bloomberg News, sent from my iPad.

Corzine Lived Up to Risk-Taking Reputation at Helm of MF Global

Nov. 3 (Bloomberg) -- In his 24-year career at Goldman Sachs Group Inc., Jon Corzine made a name for himself as an intrepid trader who pushed the limits of risk.

So it makes sense that when Corzine, after almost a decade as a U.S. senator and governor, was named chairman and chief executive officer of MF Global Holdings Ltd. in March, 2010, his plan for expanding the futures and commodities trader involved taking more risk, Bloomberg Businessweek reports in its Nov. 7 issue. Less than 20 months later, the company is bankrupt, days after posting a $192 million quarterly loss and disclosing $6.3 billion in bets on European government bonds.

"This goes back to the myth of Goldman people being the best risk takers," says Janet Tavakoli, who once worked at Goldman Sachs and is now president of Tavakoli Structured Finance, a Chicago-based firm that advises institutional investors.

Wall Street applauded Corzine's appointment. MF Global shares rose 15 percent the week his hiring was announced.

"It was like, 'Here's Jon Corzine: very connected, very successful ex-Goldman guy. Take him at his word that he's going to build a world-class, full-service investment bank,'" said Rob Rutschow, an analyst at investment bank CLSA.

And Corzine struck a statesman-like chord on taking the job. "MF Global is a firm with tremendous potential and excellent talent," he said. "Profitability and responsibility must go hand in hand with growing our franchise."

Yet the bankruptcy exposed a lack of internal controls. The day it filed for Chapter 11 protection, New York-based MF Global disclosed a shortfall in customer accounts that people with knowledge of the matter said may be about $700 million.

Customers' Money

On Nov. 1, a lawyer for MF Global told a bankruptcy judge that all customer money has been accounted for. That same day, Craig Donohue, CEO of CME Group, which has regulatory authority over MF Global, said the company violated requirements that it keep clients' collateral separate from its own accounts.

"We are investigating the circumstances of the firm's failure," he said. Corzine didn't respond to requests for comment.

While Corzine is known for making aggressive bets, at Goldman Sachs he had to operate within a larger, more cautious corporate culture because partners' own capital was on the line. At MF Global, Corzine had fewer people looking over his shoulder.

"MF Global was a case of, 'Ratchet up the risk. Let us Goldman guys fix this,'" said William D. Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World" and a contributor to Bloomberg View.

Stuck With Trades

At Goldman Sachs, Corzine was known for having the nerve to stick with his trades even when they seemed doomed. In 1986, he was responsible for a bet on Treasuries that was losing $150 million, according to several published reports. For five months he refused to cut his losses and ultimately made the firm $10 million when the market changed course.

In 1994, traders working for Corzine were losing $100 million a month on bad interest-rate wagers, according to Cohan's book, prompting several partners to depart. Corzine again resisted calls to stanch the losses, which contributed to pretax profit plunging 80 percent that year. Even so, by Christmas he was running all of Goldman Sachs.

"I could never figure out why out of that he became senior partner," said Cohan. "He's the only guy who became head of Goldman who makes me scratch my head."

In January 1995, at a management meeting, Corzine challenged fellow partners to take more risk with the firm's own capital and to lift Goldman Sachs's profits to $2 billion a year for the next five years, according to Cohan.

Achieving Returns

"You can't achieve the kinds of returns we want just by buying on the bid and selling on the offer," Corzine told Institutional Investor magazine in September 1995.

Goldman Sachs rode a lucrative wave of mergers and acquisitions and winning trades in the '90s bull market. Then in mid-1998 came Russia's financial crisis.

The bank suffered $1 billion in trading losses in the ensuing global stock and bond sell-off and failure of hedge fund Long-Term Capital Management. By the end of the year, Corzine was pushed out of Goldman Sachs by Henry Paulson, who had been co-CEO for six months and later served as Treasury secretary.

Risk taking is not confined to Corzine's financial career. At least $400 million richer from Goldman Sachs's 1999 initial public offering, he spent $60 million of his own money on a successful bid for a U.S. Senate seat in New Jersey, which he then parlayed into his 2005 election as governor.

'Should Be Dead'

In April 2007, he was critically injured in a car crash north of Atlantic City while being driven in an SUV going 90 mph. He wasn't wearing a seat belt. In a public service announcement recorded after the accident, he said, "I'm New Jersey Governor Jon Corzine, and I should be dead."

After losing his 2009 gubernatorial re-election bid to Chris Christie, Corzine returned to Wall Street.

J. Christopher Flowers, a friend and former Goldman Sachs banker who had a stake in MF Global, recruited Corzine to transform the small futures and commodities dealer into a full- service broker. That would mean taking greater risks by having the company make more and bigger bets with its own capital.

As recently as May, a company announcement touted "significant sales and trading hires" from rival banks, including new heads of mortgage-backed and asset-backed securities sales and a head of equity derivatives sales.

Taking Risks

Risk taking began to account for a greater share of the company's revenue. In reporting results for the quarter ended in June 2011, MF Global said that revenue from trading with the firm's own money and from taking the other side of client trades rose to 42 percent of sales, from 23 percent a year earlier.

Rutschow, the CLSA analyst, not convinced the brokerage was moving in the right direction, put a "sell" rating on the shares when they traded at $8 a year ago.

"You were looking at a company with so little capital taking on billions in risks," he said.

Sean Egan, managing director of credit rating-firm Egan- Jones Ratings, said MF Global had put itself in a perilous position: It was using so much borrowed money to make investments that a mere 2.5 percent fall in the value of its assets could bankrupt the company. The day before announcing its record quarterly loss, MF disclosed it owned $6.3 billion of bonds issued by Ireland, Italy, Spain, Belgium, and Portugal.

After MF Global's announcement, other banks, hedge funds, and even its own clients stopped dealing with the company. MF Global's board met through the weekend of Oct. 30 to consider options including a sale, a person with direct knowledge of the situation said.

Seeking Buyers

The firm was in discussions with five potential buyers for all or parts of the company, including banks, private-equity firms, and brokers. Discrepancies over the client funds sent Interactive Brokers Group fleeing from a potential acquisition.

"The board certainly considered that purchase and stepped away from it at a point where it became clear there were lots of uncertainties about the accounts and segregated funds," said Hans R. Stoll, an Interactive Brokers director and professor of finance at Vanderbilt University.

With Corzine unable to find a buyer, MF Global filed for protection from creditors on Oct. 31. With $41 billion in assets, it was the eighth-largest U.S. bankruptcy ever and may well mark the end of Corzine's investing career.

"Ironically, it was his misjudgments of major trades which have been highly costly to both Goldman and now MF," said Egan. "We have seen this before: Traders fall in love with their trades and have little ability to take a measured, dispassionate view."

To contact the reporters on this story: Roben Farzad in New York at rfarzad@bloomberg.net Matthew Leising in New York at mleising@bloomberg.net

To contact the editors responsible for this story: Eric Gelman at egelman3@bloomberg.net Alan Goldstein at agoldstein5@bloomberg.net .

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(BN) Top Gold Forecasters See Bullion Rallying to Record by March: Commodities

Bloomerg calls the top forecasters based on 2 fuxking years?? What about 2 decades, if any has still survived?

Bloomberg News, sent from my iPad.

Top Gold Forecasters See Rally to Record by March: Commodities

Nov. 2 (Bloomberg) -- The most accurate forecasters say gold will rebound from its biggest monthly plunge since 2008 and reach a record by March because economic growth is stagnating and Europe's debt crisis is unresolved.

Futures traded in New York may rise 12 percent to $1,950 an ounce by the end of the first quarter, according to the median of estimates compiled by Bloomberg. The predictions are from eight of the top 10 analysts tracked by Bloomberg over the past eight quarters. Two declined to give forecasts.

Holdings in exchange-traded products backed by bullion rose the most in three months in October, and the most-widely held option gives owners the right to buy gold at $2,000 by Nov. 22. Demand for the metal accelerated since May as slowing growth and mounting concern that European leaders will fail to contain the region's debt crisis caused $7.5 trillion to be erased from the value of global equities.

"There is a loss of trust in the entire financial system and urgent need for safe-haven investment," said Ronald Stoeferle at Erste Group Bank AG in Vienna, the second most- accurate forecaster in the past three months. "The environment for gold is just perfect."

ETP holdings expanded 1 percent to 2,271.2 metric tons last month, a pile now valued at $126.6 billion and greater than the reserves of all but four central banks, data compiled by Bloomberg show. Bullion bought for investment accounted for 38 percent of total demand in 2010, compared with about 4 percent a decade earlier, the London-based World Gold Council estimates.

Paulson Buys Gold

Paulson & Co., founded by John Paulson, remains the largest shareholder in the SPDR Gold Trust, the biggest ETP backed by gold, according to an Aug. 15 filing with the U.S. Securities and Exchange Commission. Paulson, who made $15 billion betting against subprime mortgages, bought the 31.5 million shares in the first three months of 2009. Their value increased to $5.3 billion from $2.84 billion since then.

Gold has risen 22 percent this year, beating the 2.2 percent advance in the Standard & Poor's GSCI gauge of 24 commodities, the 9.3 percent decline in the MSCI All-Country World Index of equities and the 8.8 percent return on Treasuries calculated by Bank of America Corp. indexes. The metal has appreciated more than sixfold in its 11-year run of annual gains.

Prices climbed 6.3 percent in October, rebounding from the bear market in September after dropping more than 20 percent from the record $1,923.70 reached Sept. 6. Gold futures for December delivery rose 1.4 percent to $1,735.90 as of 12:51 p.m. in New York. A close at that level would be the biggest advance since Oct. 25.

Hedge Funds

Hedge funds and other speculators increased their bets on higher prices by 8.7 percent to 138,846 futures and options in the week ended Oct. 25, Commodity Futures Trading Commission data show. It was the biggest gain in almost three months.

The rally may fade because the swings in prices undermined the perception of gold as a haven, said Dean Junkans, an analyst at Wells Fargo & Co. in Minneapolis. In an Aug. 16 report, three weeks before the plunge began, he characterized the market as a "bubble that is poised to burst."

"It's not risk free and is not a currency, even though too many people think of it that way," Junkans said in an interview. "It can go down to $1,300, and could also rise to $2,000, but there is definitely a downside potential."

Gold also retreated in September as the Dollar Index, a measure against the currencies of six trading partners, jumped 6 percent, the most in almost three years. The 30-day correlation coefficient between gold and the index is now at -0.45, compared with 0.23 in March, data compiled by Bloomberg show. A figure of -1 means the two move in opposite directions, and 1 means they move in lockstep.

Financial System

The Dollar Index rose 3.3 percent in the past three sessions on mounting concern that European leaders will fail to contain the debt crisis, spurring demand for what are perceived to be the safest assets, including the dollar and Treasuries.

Some forecasters expect the dollar's rally to fade because of concern that a slowing global economy may force the Federal Reserve to pump more money into the financial system. The U.S. currency will end next year at $1.40 a euro, compared with $1.3703 now, according to the median of 30 economists surveyed by Bloomberg.

Fed Vice Chairman Janet Yellen said on Oct. 21 that a third round of large-scale securities purchases may become warranted to boost the economy. The central bank bought $2.3 trillion of housing and government debt during two rounds of so-called quantitative easing from December 2008 to June 2011, spurring a 70 percent jump in the price of gold.

Bear Markets

The metal's plunge in September may signal it is poised to keep rising. The last time bullion had a bigger drop was in October 2008, when prices tumbled 18 percent as the worst global recession since World War II drove equities and commodities into bear markets. The metal rose 23 percent in the next two months.

Investors aren't the only ones buying bullion. Thailand, Bolivia, Kazakhstan and Tajikistan were among nations adding gold to their reserves in September, International Monetary Fund data show. Central banks are expanding reserves for the first time in a generation. Switzerland's central bank said Oct. 31 it returned to a profit in the first nine months as gold holdings helped counter losses on currency reserves.

"There's huge potential for gold in the coming years," said Jochen Hitzfeld, the analyst at UniCredit SpA in Munich who was the most accurate tracked by Bloomberg in the past two years. "Investors are buying gold. That's reinforced by buying from central banks. Prices did run up a little bit too fast, but the drop was just a breather."

Fourth Quarter

Hitzfeld forecast on Oct. 12 that gold would average a record $1,900 in the fourth quarter of next year.

A measure of the combined earnings of the 16-member Philadelphia Stock Exchange Gold and Silver Index will rise 8.3 percent this year and almost 27 percent in 2012, according to analyst estimates compiled by Bloomberg.

Barrick Gold Corp., the world's biggest producer and the largest member of the index, will report net income of almost $4.8 billion this year, compared with $3.27 billion in 2010, the mean of 12 estimates shows. Shares of the Toronto-based company declined 5.3 percent this year.

"When we look at gold five years from now, we will say gold was wildly cheap," said Jason Schenker, the president of Prestige Economics LLC in Austin, Texas, and the fifth-best forecaster tracked by Bloomberg. "What happens to gold is going to hinge on what happens to the dollar, and that is going to be influenced by what happens in Europe and monetary policy."

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net .

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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(BN) Corzine Steak Dinner Speech to Traders Gave No Hint of MF Global’s ‘Doom’

I cant believe the rubbish David shiels just said...people go through bad times and he is a member of the community??

No wonder people find wall street bankers sickening. 

Bloomberg News, sent from my iPad.

Corzine Steak Dinner Speech Gave No Hint of MF Global's 'Doom'

Nov. 2 (Bloomberg) -- The night before MF Global Holdings Ltd. posted its biggest quarterly loss, triggering a 48 percent stock plunge, Chairman and Chief Executive Officer Jon Corzine appeared at a steak dinner at New York's Helmsley Park Lane Hotel for a speech to a group of bankers and traders.

"There was no sense at all that there was impending doom," Kenneth Polcari, a managing director of ICAP Corporates, said of Corzine's Oct. 24 address to the National Organization of Investment Professionals. "He gave a spectacular speech" about his decades at Goldman Sachs Group Inc., life as a U.S. senator and New Jersey governor and his return to the private sector. "He's had a full life, up until now."

Corzine, 64, excused himself before the main course was served, saying he had to prepare for an earnings call the next day, said David Shields, vice chairman of New York-based brokerage Wellington Shields & Co. and a former chairman of the organization. The group seeks to foster "a favorable regulatory environment," according to its website.

Timothy Mahoney, CEO of New York-based Bids Trading LP, said Corzine's speech was "delightful."

The next day, MF Global reported a $191.6 million net loss tied to its $6.3 billion wager on European sovereign debt. On Oct. 27, after the company's bonds dropped to 63.75 cents on the dollar, Moody's Investors Service and Fitch Ratings cut the firm to below investment grade, or junk. Unable to find a buyer, the company filed for bankruptcy on Oct. 31, the first major U.S. casualty of the European debt crisis.

'Serve the Public'

At least two dozen U.S. lawmakers and regulators, including Representative Joe Barton, a Texas Republican, Carolyn Maloney, Democrat of New York, and former Securities and Exchange Commission Chairman Harvey Pitt have addressed the group, according to its website.

"There are many people in the group that do lobby and talk to regulators," Shields said. "You talk to regulators, you talk to lawmakers and you try to get the points forward, things that will help the marketplace, that will serve the public."

The group's board includes head traders at firms such as Waddell & Reed Financial Inc., whose futures trade triggered the flash crash of May 6, 2010, according to a study by the SEC and the U.S. Commodity Futures Trading Commission.

Its members' firms "trade approximately 70 percent of the institutional volume transacted daily in the New York and Nasdaq markets," according to the website.

'Difficult' Day

The group's current chairman, Dan Hannafin of Boston-based investment manager Wellington Management Co., declined to comment on the dinner. Corzine and Diana DeSocio, an MF Global spokeswoman, didn't reply to an e-mailed request for comment.

Mahoney said he appreciated Corzine's ability "to compartmentalize" and speak engagingly last week. Mahoney's firm, Bids, runs a private trading venue known as a dark pool, and is a joint venture of banks including Goldman Sachs.

Before the speech, Moody's cut MF Global's credit ratings to the lowest investment grade. Polcari said there was one reference to Corzine's "difficult" day.

While he was "cordial" and "positive," the MF Global chief lacked his typical "sharp bounce," Shields said. Corzine is "a member of the community," and could be invited back after the bankruptcy, he said. "People go through bad times."

To contact the reporter on this story: Max Abelson in New York at mabelson@bloomberg.net .

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net .

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