Few of my Prop Trading boys called and asked, “So how hard is it to start a hedge fund?” Easy as climbing Everest, I explained. “Fuck that,” they said. So what’s next for the boys? (A) pray the lobbyists sneak in a last minute delay/change, (B) disperse across the trading floor like beaten Taliban fighters, or (C) take a job at Brevan. No joke, big banks are taking the Volker Rule very seriously and choos
Had lunch with one of the big real-money bond PM’s in LA. No, not the part-time CNBC anchor. Brilliant guy. Vigilante. Fascinating convo… Macro View: growth improving with obvious risk factors. The fact we haven’t collapsed yet suggest somehow we’ll survive. Biggest risk factor is overzealous Fin-Reg. Best Trades: short inflation swaps in US and EU (our favorite trade too). Buy Libor blow-out
Lots of conversation in London with wealthy people about (1) how taxes are going higher, (2) how to avoid them, and (3) how the new Lib-Con Gov’t will try but fail to bring drastic austerity measures. “Move to Ireland. Move to Switzerland, Hong Kong, Singapore. How much will taxes go up? What’s my pain threshold before I’d be willing to move? Spending cuts and tax hikes will crush economy, etc
US Energy Secretary, Dr Steven Chu, is a brilliant man (Obama is thankfully not scared of scientists). He funded a $400mm program this year to fund alt energy research and start-ups. One of my Silicon Valley contacts just met with the guy running the program. He showed 2 key slides in his presentation. One was a picture of the planet with graphics showing population density. The second showed the world from space at
Met many very wealthy people this week. Smart, nice, relaxed, successful. Asked many of the foreigners why they’d moved to Switzerland. Taxes came up last. Their children are safe and don’t need body guards in Switz, they have no commute, 10 minute drive to the countryside, life is good and the people in Switzerland are happy. Some had considered NY or London but chose Switzerland. Taxes help too. Damn sh
My friend at one of the biggest real estate families in the US (they have a substantial global footprint) had this perspective to share. The US commercial real estate market has lots of financing issues to work out and it will take a long time still. However, in NYC for instance the cost to buy a building is well below the cost of replacement. If you buy a building in NY for $1000/sqft, you’re buying something
My brother’s an M&A banker in NY and keeps me in touch with US deal flow. $400bln in committed capital has sat idle for the past 18mths in Private Equity funds paying fees (did you realize there was so much idle cash?). Remember that this gets leveraged. And financing is loosening up with the banks. The PE managers are feeling pressured to put money to work (performance anxiety). Deals are getting done at a