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Tuesday, 23 September 2014

European Independence By The Bravehearts

FPM envision European countries liberated and disbanded from recent 'monetarist' union towards forming re-newed independent national identities, and eventually forming newly grouped nation blocs, viz BRIC Bank

Witness Crimea liberated from Ukraine towards rejoining a Russian block alliance. Also, consider possibility in September 2014 of Scotland breaking away from England and that historical complex union known as the United Kingdom. This probable break-up scenario and redrawing of political and/or  socio-economic divides is perhaps reversing the recent trends towards fostered through globalisation. FPM initially provide partial anecdotal joined-up evidence to conclude that: under certain conditions de-centralisation of socio-economic  political powers is inevitable and perhaps a positive end at the turn of this milieu. The time frame for these speculated national defragmentation outcomes varies. The very quick decisive unchecked invasion and consensus formed by Russian land-grabs such as Crimea and Chechnya differs from that of  long-drawn regime-change in Afghanistan, Libya, Iraq, etc

Relevantly, capitalistic imperialism is under review in socio-economic-political regimes all over the world. Not least in the U.S.A., home of global hegemony, but where populist protests have been quashed but not as yet rescinded in human memory. Take a multi-nationally sourced cross-section of news websites or television channels to see populist or agent provocateur stirred strife bubbling over into vivid street demonstrations and protest regarding status quo factors. Protests happening all over the globe no less! More importantly, how these events are slanted as serving some national interest and literally serving an agenda with platitude propaganda to some as yet unknown Black Swan future. So the unsuspecting public are the last to understand the truth behind world events and politics affecting them and their progeny. The mismatch between reality and rhetoric via mainstream media is an intriguing political science.

FPM asks to what end are these pockets of people protests and upheavals aimed at. Protests which seemingly have coincided with the onset and ongoing global financial crisis started in 2007-08. In the not too distant past, economic crisis  has been the main catalyst for dissenting revolt against status quo establishment. Witness the grand exemplar The French Revolution of 1789-99. In a trend of globalization through  economic democracy the international grab for land and its resources is the Earth's competitive political hot kitchen of today! 

These national situations featuring military intervention is uncomfortably verging on civil wars, so not merely hot kitchen but war-torn lands.  As this this is a financial investments blog, geopolitical risks are the game-changer events for capital markets to chew over. For instance, Deutsche Bank has a team to research and analyse theses geopolitical impact on capital markets and investment strategy. Current news featuring Ukraine politics embodies geopolitical risks on a global scale affecting national interests in regards to former super-power led by Russia. FPM has propounded the capital market volatility in reading between the lines of the situation in macro strategic posts. This Ukraine crisis on the back of the European Union's financial crisis and that of its existentialism in 2011 follows too quick in human memory. That crisis was ignited through Greece's national insolvency problems. 

To be clear socio-political economics motivated protests are happening globally. Which ultimately impacts on country's economic prospects and therefore produces capital market bouts of stagnation and volatility from uncertainty and instability regarding the future. Added to the  heady mix of turbulence mentioned, FPM identify a real and pressing concern about the global ecology and climate change...

The above article was written before the Scotland Independence Referendum and is incomplete due to FPM active involvement in the YES campaign.

Posted as reflection of YES POSITIVISM and after the truly democratic yet politicised referendum of 18 Sept 2014 with a 55% to 45% win for the "NO" campaign.

Tuesday, 9 September 2014

Somethings got to give: Mr Martoma’s Family Cannot Bear Burden Alone

In all sense of U.S. Justice Mathew Martoma CANNOT BE SERIOUSLY given nine years prison sentence for his insider trading securities fraud when the man Steven A. Cohen and his eponymous firm S.A.C. Capital that he committed these crimes for walks free after grease-palming the justice system of the Americas! “Something surely gotta give!”, seems an appropriate declaration to suggest that this is NOT THE END of the SAC-saga. A saga very much degraded as much as it was chronicled by institutionally pandering mainstream financial press; but veritably recorded and actively disseminated by Fund Portfolio Management –FPM. Principals at FPM have focused on insider trading protagonists at SAC Capital, and its reputationally smeared investor Blackstone Group under our “No Smoke Without Fire: Of Reputation Risk”. See our first blog post “No Smoke Without Fire!”. 

Mr Martoma must be utterly devastated and wholly indignant with the penultimate outcome (he is naturally appealing the sentence!), after multi-years judicial proceedings. And it is that bitter emotion and pervasive discontent feeling that should consume him inside-out through the sentence appeal and ultimately towards righteous and natural justice prevailing in the end. No! FPM are not evangelical preachers, but as an aspiring and integral high priest class of financial investments.

For integral justice to prevail and for restoration of real ‘animal spirits’ i.e. confidence (as opposed to smokescreen and mirror tricks of pump-&-priming from QE et al) in the crooked financial and judicial systems are vivid evidence of enforcement and punishment for wrongdoing. Mr Martoma should cut a deal with prosecutors towards humbling beyond-everyday-justice billionaire Mr Cohen. FPM are heeded from our previous announcement in early June via a post entitled “The Calm Before The Storm: SAC Takeaways – Part 1”:

…Mathew Martoma’s sentencing could yet herald a fault line of tremors for Mr Cohen personally and set a precedent for the hedge fund industry…

…FPM expects the severity of the formulaic and deterrent-message in the sentencing to be significantly monumental

…additionally, to induce Mr Martoma to co-operate with US prosecutors given the 6-8 years sentencing we expect...

Mr Martoma would proffer the main cull for the baying public anger and show some moral rectitude rather than be the sacrificial lamb for Mr Cohen.”

That Judge Paul G. Gardephe exceeded sentencing guidelines of the U.S. Government’s probation department DOES INDEED send a signal to would-be corrupters of the capital market integrity. However, the message is largely diluted because the head of “web-of-securities-fraud” Mr Cohen has evaded ANY sort of punishment. Americans used to say the “The Buck stops here!”; if blame is not laid at the helm of S.A.C. Capital then the message of the severe sentence, full confiscation and its exemplification suggests “don’t get caught if you cheat” or worse still, “don’t cheat unless you can afford it”. The old English adage that has gotten corrupted by revisionist colonists reacting to “chip-on-shoulder” syndrome, with incorrigible migration from developing nations, is “If you can’t do the time don’t do the crime!

The risk of getting caught is increasingly seen as “cost of doing business”, yet hedge funds and banks do not set aside capital for ‘risqué practices’, though executive heads knowingly and publically take “the three-wise-monkeys” attitude. In FPM’s “NSWF: Of Reputation Risk” enterprise this is one of the hedge fund due diligence aspects of operational affairs. Judge Gardephe aptly sensing that any financial confiscation from Mr Martoma via forfeitures would be reimbursed by Mr Cohen, has accordingly set a high watermark in sentencing. Philosophically speaking, can Mr Cohen compensate Mr Martoma, his beautiful wife Rosemary (one for Mr Martoma's wall!), and their three children for a father and his 9 years’ absence from family?   

Mathew's Martoma Beautiful Wife
This above article is FPM integral views on capital market for the new millennia. Please contact kks@fundportfoliomanagement.com for advisory services on our “NSWF: Of Reputation Risk” enterprise.