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Few Americans have heard of credit default swaps, arcane financial instruments invented by Wall Street about a decade ago. But if the economy keeps slowing, credit default swaps, like subprime mortgages, may become a household term. Credit default swaps form a large but obscure market that will be put to its first big test as a looming economic downturn strains companies’ finances. Like a homeowner’s policy that insures against a flood or fire, these instruments are intended to cover losses to banks and bondholders when companies fail to pay their debts. The market for these securities is enormous. Since 2000,...

Citigroup Stops Withdrawals from Hedge Fund: WSJ Citigroup has barred investors in one of its hedge funds from withdrawing their money, and a new leveraged fund lost 52 percent in its first three months, the Wall Street Journal reported Friday. The largest U.S. bank suspended redemptions in CSO Partners, a fund specializing in corporate debt, after investors tried to pull more than 30 percent of its roughly $500 million of assets, the newspaper said. Citigroup injected $100 million to stabilize the fund, which lost 10.9 percent last year, the newspaper said. The fund's manager, John Pickett, left following a dispute...

SAN FRANCISCO (Reuters) - In a career marked by second acts, Al Gore, the former vice president of the United States and co-winner of the Nobel Peace Prize, is becoming a partner at Silicon Valley's most storied venture capital firm. Kleiner Perkins Caufield & Byers said on Monday that Gore, a campaigner for action to slow global climate change, will join the Menlo Park, California-based venture capital firm as a partner focused on alternative energy investments. The venture firm, which since 1972 has backed seminal computer start-ups ranging from Sun Microsystems to Compaq Computer to Amazon.com to Google Inc, has...

DELHI: Top private-equity and hedge fund managers made more in 10 minutes than average-paid US workers earned all of last year, according to a new study from two research groups. The 20 highest-paid fund managers made an average of $657.5 million, or 22,255 times the US average annual salary of $29,500, said the study, released on Wednesday by Institute for Policy Studies and United for a Fair Economy. The study cited data from the US Labor Department and Forbes magazine. “The fact that these pay levels for fund managers are so out-of-sight is going to drive up pay at...

"The rich are different from you and me," wrote Fitzgerald and I suppose they are, but the differences – they wax and wane with the economic tides. Gilded ages come, go, and are reborn on the monsoon cloudbursts of seemingly intangible forces such as globalization, innovation, and favorable tax policy. For the rich to be truly rich and multiply their numbers, they need help. Adept surfers they may be, but like all riders, the wealthy need a seventh wave that allows them to preen their skills and declare themselves masters of their own universe, if only for a moment in...

Two years ago, former senator John Edwards of North Carolina, gearing up for his second run at the Democratic presidential nomination, gave a speech decrying the "two different economies in this country: one for wealthy insiders and then one for everybody else." Four months later, he began working for the kind of firm that to many Wall Street critics embodies the economy of wealthy insiders -- a hedge fund. Edwards became a consultant for Fortress Investment Group, a New York-based firm known mainly for its hedge funds, just as the funds were gaining prominence in the financial world ... run...

ST. CLOUD, Minn. (AP) - Most motorists are feeling the pain as gasoline creeps toward, or over, $3 a gallon - but not Art Altrichter. "This feels pretty good!" Altrichter said as he filled the tank of his Ford F-150 pickup for $2.03 a gallon on Thursday, when the average here was $2.73. "Right now, to be a few pennies over $2, when it's as high as it is? That's a real deal." A year ago, the retired milk truck driver bought 500 gallons of gas at First Fuel Banks, locking it in at the then-current price of $2.03 a...

A family in western Norway was hit by an unusual theft at their home in Sædalen, Hordaland County, this week. A newly planted hedge in their front yard was rudely uprooted and carted away. "After the initial shock, I just felt very sad," Kristin Molvik Botnmark told newspaper Bergens Tidende on Tuesday. Her husband, Børre Botnmark, has a few theories on the disappearance of the 32 plants that made up their new hedge. "It may be a theft ordered by someone wanting a new hedge," he said. "Or it could be a band of thieves who drive around and offer...

IT seemed like an ordinary evening at Crobar, the trendy Manhattan nightclub. Two weeks ago, as Counting Crows performed on stage, young women dressed in expensive jeans pushed toward the front with their khaki-clad, mostly older boyfriends. Few, however, were regulars. On this night, the very rich and the merely rich intermingled on the club's two floors - V.I.P.'s upstairs ($1,000 a ticket) and the rest down below ($250). Most of the 1,250 people gathered for the event, the Robin Hood Foundation charity ball, were part of the city's unlikely new "it" crowd. Richer than Wall Street rich and more...

San Diego — LAST Friday, Carl C. Icahn, one of Wall Street's perennial players, filed a lawsuit against a large hedge fund, accusing it of stock manipulation in a takeover battle. The suit came just a week after the Securities and Exchange Commission posted new rules requiring hedge funds to register with the agency. Should hedge funds be the next frontier for financial regulators? The answer is yes, as long as the oversight isn't overzealous. The most important players in today's financial markets, hedge funds are also the least understood. They are not, as one might suppose, funds that hedge...

ON Wall Street, almost every year has its moniker: 1987 was the "Year of the Crash"; 1999, the "Year of the Dot-Com Bubble"; and 2002: the "Year of the Corporate Scandal." And 2004? It undoubtedly will go down as the "Year of the Hedge Fund." Yes, these once "oh-so-exclusive" investment vehicles have sprouted like weeds of late, to the point where there are now twice as many hedge funds as there are stock mutual funds.

CalPERS isn't afraid to break from the pack. Despite warnings that the risky hedge fund industry is nearing a bubble, the mammoth California Public Employees' Retirement System is forging ahead in the Wild West of the investment world, once the sole domain of the super-rich. CalPERS will double its hedge fund investment to $2 billion, still a sliver of the $177.8 billion in assets held by the pension fund. "Our hedge fund program has been widely outperforming our U.S. index fund, with a quarter of the volatility," said Mark Anson, CalPERS' chief investment officer. "The program has been a success."...

I'm wondering how Senator Kerry has thus far avoided having his flip-flopping, weasely, calculating, and morphing statements during this political campaign labelled "KERRYMANDERING". If this catches on credit my wise father in Atlanta. If Kerry's campaing had a mascot, it would be a weasel wearing flip-flops sitting on a fence near a hedge eating a waffle.

U.K. central bank sounds warning Central bank worries hedge funds taking same strategies LONDON (CBS.MW) -- The Bank of England, one of the world's most closely watched central banks, and Man Group, the largest publicly traded manager of hedge funds, are located not even a mile away in London's financial district, but their views are a galaxy apart. Their varying viewpoints were reinforced Monday, when the Bank of England warned that hedge funds, such as those operated by Man (UK:EMG: news, chart, profile), are a threat to market stability, on the same day the fund manager said it had raised...

In a future remake of "The Graduate," the phrase replacing "plastics" to be whispered in the ear of the title role is "hedge funds." That's where the action is. The number of such unregulated collections of capital has doubled in the last five years to 8,000. Managers make 20 percent of any profits, and if they bet wrong, simply close up the fund, distribute what's left and start a new one; the liquidation rate is about one-fourth every year. That's why so many of the hottest Wall Streeters are joining the stampede into managing these high-end mutual funds. Because hedge...

Car swallowed by hedge Police in Germany had to help a driver find his car after it was swallowed by a hedge. The man, who is 55, told police he had left his Mercedes parked near a filling station in Essen and had gone to buy cigarettes. When he returned, the £35,000 automatic car was gone. He suspected it had been stolen, but police decided it was worth searching the area. They eventually found the car a short distance away, in a thick hedge. It's believed the car rolled down a stretch of road through a hedge, smashed down a...