Free Republic

President Obama's first chief of staff Rahm Emanuel once sat on the board of troubled federal mortgage giant Freddie Mac. Bill Daley, the president's chief of staff whose departure was announced today, was previously a top executive at financial firm J.P. Morgan Chase & Co. So of course there should be little surprise that Obama's latest chief of staff, announced today by the president himself, also has deep ties to the financial industry himself. From 2006-2008, Jack Lew was chief operating officer of Citibank's alternative investments division (snip)that made billions of dollars betting "U.S. homeowners would not be able

NEW YORK (AP) -- Standard & Poor's wild month continues. The president of S&P is stepping down just two weeks after the rating agency stripped the United States of its AAA credit rating. At the same time, an activist hedge fund is calling for S&P's parent to break into four separate companies to unlock more value for shareholders. McGraw-Hill Cos., the parent company, said that the resignation of Deven Sharma was not related to Jana Partners' break-up proposal or to S&P's polarizing decision to downgrade its rating on U.S. debt. McGraw-Hill named Citibank's chief operating officer, Douglas Peterson, to the...

(Reuters) - The recovery of Citigroup and Bank of America provided famed hedge fund managers like Lee Ainslie and Jeff Altman some of their biggest gains last year, but now the smart money is getting out while the getting is good. With Ainslie's Maverick Capital, Altman's Owl Creek Asset Management and other major funds backing away from the banking sector in the first quarter, financials suffered the biggest decrease in sector holdings among the Smart Money 30, a group of some of the largest stock-picking hedge funds. Ainslie, Altman and Stephen Cucchiaro's Windhaven Investment Management dumped their entire holdings in...

On the rare occasion that New Yorkers talk about farming, it's usually something along the lines of what sort of organic kale to plant in the vanity garden at the second house in the Adirondacks. But on a recent afternoon, The Observer had a conversation of a different sort about agricultural pursuits with a hedge fund manager he'd met at one of the many dark-paneled private clubs in midtown a few weeks prior. "A friend of mine is actually the largest owner of agricultural land in Uruguay," said the hedge fund manager. "He's a year older than I am. We're...

Tipping points are funny: for years, decades, even centuries, the conditions for an event to occur may be ripe yet nothing happens. Then, in an instant, a shift occurs, whether its is due a change in conventional wisdom, due to an exogenous event or due to something completely inexplicable. That event, colloquially called a black swan in recent years, changes the prevalent perception of reality in a moment. This past week, we were seeing the effect of a tipping point in process, with gold prices rising to new all time highs day after day, and the price silver literally moving...

#25 Dan Loeb: $210 Million #25 Dan Loeb: $210 Million Image: 1440wallstreet.com Fund: Third Point What you need to know about Dan Loeb: He may be about to have some embarassing emails come out He's betting on energy

A note from Goldman Sachs pees all over gold fever (via Prag Cap). Although Goldman recently named a bullish target for gold, the research note says other investments will offer better returns in 2011: "For our part, we expect a combination of stronger US growth, a strengthening dollar, temperate inflation and generally higher risk-asset prices to raise the opportunity cost of holding gold, particularly as real rates normalize higher. Even so, momentum is a powerful market force, and it’s unclear how long strong investor demand will persist. Given these competing tensions, gold does not screen as a compelling tactical opportunity...

Gold touched a two-month low in Europe on Friday, pressured by a firmer appetite for assets seen as higher risk on expectations the economic recovery was gaining traction, but a retreat in the dollar prevented a steeper drop. The metal is heading for a third consecutive weekly loss and its weakest monthly performance since July as a more optimistic view of global economic growth and stability boosted investment in assets seen as higher risk, like stocks, at gold's expense. Spot gold fell as low as $1,340.80 an ounce and was bid at $1,343.80 an ounce at 1217 GMT, against $1,345.40...

POLITICO's Maggie Haberman emails that she's solved a lingering mystery from the now-nearly-forgotten summer storm around a planned Islamic center in Lower Manhattan. Robert Mercer, the co-CEO of the giant hedge fund manager Renaissance Technologies, appears to have financed the ad campaign entirely himself, through a $1 million contribution on July 26 to the New York State Conservative Party, according to a filing today by the party's housekeeping account. Conservative Party Chairman Mike Long confirmed to Haberman that Mercer was the source of the ad money. Mercer had maxed out to the account of Rick Lazio, but the Conservative Party's...

Andrew Tanzer: Love It The surge in gold prices to about $1,400 an ounce makes perfect sense. Confidence is waning in paper money, such as the dollar, and for good reason. Our monetary and fiscal policies are remarkably lax, debasing our currency as a store of value and raising the specter of inflation down the road. The Federal Reserve Board continues to pump money into the economy, and we will run huge budget deficits as far as the eye can see, dramatically expanding our financial liabilities. Martin Murenbeeld, an economist at Canada's DundeeWealth Economics, shows that over the past decade,...

A question we've heard lately is: why is gold rallying when inflation expectations are nil? First of all gold historically has been a lousy inflation hedge, which should make you question whether its connection to inflation is at all warranted. After all, let's think through what inflation expectations really mean. If investors saw inflation, it would mean they saw a scenario whereby too much cash was flowing into the economy, creating price increases in things like wages, rents, and normal consumer goods. Or to put it another way, it would mean they see very little slack in the economy. But...

It appears that the German Government has just plain had enough of the crap that the banksters have tried to pull, and has decided to do what Barack Obama should have done in early 2009. That is: No more naked credit crap, especially against sovereigns but not only against sovereigns. No insurable interest, no CDS - period. Naked shorting will now be actually stopped in 10 leading financial institutions. Germany has had it with naked shorting of Gold, and specifically noted bank manipulation of gold prices via naked shorts beyond intent or ability to deliver.

Charges against 14 snared in insider-trading probe make for unusually entertaining reading. The insider-trading case outlined by federal prosecutors in New York Thursday has all the elements of a classic television crime drama: wiretaps, clandestine cash handoffs and people with nicknames like "the Greek" and "octopussy." Authorities say a trader known as "the octopussy" is at the center of the ring, which included other traders, a Moody's Investors Service analyst, and hedge fund managers, and two lawyers, one of whom was a young associate who allegedly passed along tips about private-equity deals being done by his big law firm's clients....

NEW YORK (AP) | Two lawyers and Wall Street professionals were among 14 people charged Thursday in a widening $53 million insider trading case that has snared one of America's richest men and accused white-collar suspects of using the cover-up tactics of drug dealers. The actions raise to 20 the number of people who have been charged in the case first disclosed last month with the arrests of Galleon Group founder and hedge-fund operator Raj Rajaratnam and five others. .. Mr. Bharara said the defendants borrowed a "page from the drug dealer's playbook" by using anonymous hard-to-trace prepaid cell phones...

Even a rather wobbly reserve currency is a better asset than gold, whose price again crossed the US$1,000 mark last week.Gold is far less liquid than US Treasury securities,costly to store and insure,and above all far more volatile in price. Gold's price volatility since January 2000(the standard deviation of the daily price divided by the average) is 45%, almost triple that of the US dollar-euro exchange rate. In a functioning world financial system,in which investors trust governments to control extreme instability, even an indifferently managed reserve currency with a broad capital market behind it is better than gold. Strictly speaking,...

SINGAPORE: Gold is rapidly becoming the only welcoming port in a sea of uncertainty as worries rise over other traditional safe havens, including Why invest in Gold now? And with few signs that the world's worst economic crisis since the 1930s is close to bottoming out, wrung-out investors will keep on pumping money into gold-backed securities as insurance against financial Armageddon. "Gold is an investment you hope you never make money on. If you do, it means other markets have lost," said Stephen White, director at Sydney-based treasury advisory firm Noah's Rule. Gold's gains are being powered by two forces...

The hedge-fund business -- among the most reliable fortune-producing machines in recent years -- is going through a shakeout. ...Managers of hedge funds -- private partnerships that cater to wealthy individuals and institutions and are less regulated than, say, mutual funds -- like to think of themselves as a unique breed, capable of racking up big profits from opportunities that ordinary investors overlook. But in fact their profession is tracing the path of other businesses, whether autos or computers, that enjoyed rapid growth, led by aggressive entrepreneurs, before confronting deep challenges. And just as, say, eBay Inc. and Yahoo Inc....

The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How? First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex...

Banks, hedge funds and other financial institutions could find their investment strategies curtailed by the Federal Reserve to reduce the risk to the economy from asset bubbles, the US Treasury said on Tuesday. David Nason, the assistant secretary for financial institutions, said the US central bank should use its proposed new powers as a stability regulator to “lean against the wind” by forcing institutions to change their investment strategy if it judged they threatened the wider economy.

NEW YORK: Peloton Partners, the hedge fund manager that is liquidating a $1.8 billion asset-backed fund, says that it is a victim of Wall Street's reduced lending. "Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls," the Peloton co-founders, Ron Beller and Geoff Grant, said Thursday in a letter to clients. Peloton, based in London, joins Thornburg Mortgage and Sailfish Capital Partners on the growing list of funds and companies that have had to sell securities or shut...