FPM Moot-Points:

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Saturday, 3 October 2015

FPM's Exchange Traded Products Performance $ETF

FPM Sectoral and Select Exchange Traded Products Performance - 3-Years to Sept'15
1) We'd cautiously like consumer and healthcare / biotech sectors $XLY, $XLP, $XLV and $FBT:

Both consumer discretionary and  less so consumer durable / staples, of the sector ETF SPDRs (Spider) have not suffered a negative 12 month return. So respectively the worst year long drawdown was +9.2% between Oct'13 and Sept'14; and for the durable / one-off purchases sector, up 4.2% between between Oct'14 and Sept'15.

Consumer sectors are defensive sectors, where-ever in the business cycle we are in on Sept 2015. However, we identify transition firms: less liking Coca-Cola Company - $KO and Pepsico - $PEP type conglomerates and preferring Vita-Coco (privately-held producers of coconut water drink). The Top 10 Holdings of these consumer sector proxy below.See other analysis here.


2) Our least favoured sectors are on a secular downward trend. The unravelling of the  energy-scam perpetrated by inventor Alva T. Edison, J.P. Morgan and cabal a century earlier is now upon us. These protagonists effected a capitalist-motive and over-rode potential human social progress and an innovative one. A result of this short-termism enterprise ambition is that capitalism and fossil-fuel activities are now endangered from the sovereign debt-bombs and fretful climate change premise. Mr Edison, famed as inventor of the light-bulb and electric current was favoured over alternative free-at-source energy-solution as proposed by Nikolai Tesla. 

Due to global climate warming, right now the global economy, which contributes to  anthroprogenic global warming needs to be in a "freeze" mode to contain CO2-emission  i.e. economic stagnation VERITABLY needs to be the authorative accommodating policy order of the day. If indeed matter-factly, we are SERIOUSLY concerned about the state of humanity and its effect on our mother planet. A planet where almost every natural resource is securitised / monetised towards economic consumption and indebtedness to balance books. A world gorged by ever increasing populations and degrees of prosperity in a globalised capitalism. The Orwellian horrors to mind needs no rocket-scientist, simply extrapolate the effects of BRICs nations joining 20th century plutocratic economic model. Remember that economics was about the scarcity or finiteness of resources within limitless demands for it. And how politically that is balanced. But now in the 21st Century a global paradigm is upon us: as opposed to few western countries (viz. from G7 to G20 countries meeting Nov’15), in the 20th Century competing for the limited resources, there are “Three Billion New Capitalists”[1] competing or creating substitute resources, for SUSTAINABILE harmony with the environment. 

Sector SPDR ETFs as per Crude Oil - $OIL and Natural Gas - $FCG. These two are down 60% and 65% respectively over the last three years to end-September 2015 - which is our window of analysis period. Wider energy ETF SPDR - $XLE presumably constitutes  horizontal and vertical industries of oil and gas assets, and fared negatively depreciated by 9% over the 3-years.

Since stored energy reserves (carbon fossil fuels in the main) outweigh the safe capacity before climate change impact ensues, we think these large oil-gas based industries face secular decline, as their reserves become "STRANDED ASSETS". Fracking and Carbon-Capture-and-Storage ventures are mistaken or diversionary offshoots that will undergo the creative-destruction process from misallocated capital and vested competition (viz. Opec lowering price to force out new entrants to the energy game). These enterprises marketed in the name of "energy security" is more public relations flannel in view of long-known carbon-emission reduction goals. More fool the sponsoring entrepreneurs and duped investors having bought into it!Take a look at performance metrics of a medium-term oil proxy below:

FPM Sector Proxy ETF - $OIL. Source: Yahoo.com

3) Following on from FPM’S primacy of geopolitics themes, based on socio-political-environmental driven economic forces, and with oil and carbon-fossil industries as a bellwether sector in vogue transition, we base our macro and markets recommendations. We have medium-term sideways-trading cycle with long-term secular lows views, based on prospects for macro economic fundamentals i.e. selective geopolitical vision.

Gold at the bottom of its 52-week range is cyclically about...

Qualitative Analysis - To Be Completed - $

[1] Reference to “Three Billion New Capitalists” is a book by Clyde Prestowitz about “the great shift of wealth and power to the East”. FPM’s contect is similarly about a wider sense of new BRICs nations.

Wednesday, 29 July 2015

FPM's Macro Economic Fundamental View

FPM awarded disingenuous or mistaken journalists of the mainstream financial press "MSM Murdoch Muppets" degree and incumbent self-serving politicians pandering paymasters as reputedly "politiciansRcriminals" degree. The political economy we find now, at the turn of another new milieu, has given free field to anti-capitalism, trade unions activism and left-wing political radicalism. While we may have generalised about the character of politicians, financiers and media people - we naturally believe that their utilitarianism in an aged mature organisation of socio-economic order, ultimately carved out by politicians and legislators, calls for social and economic revolutions.

Similar to drug-testing of professional cyclists, such as at the recent Tour d'France, where the winning Sky Team (sponsored by Rupert Murdoch's media empire) are avowing full transparency to vindicate that their sponsored winner (Chris Froome) and team ARE probably drug-free; not withstanding lies of statistics! Most of the public and ex-professionals are cynical that anyone in the top-order of cyclist race finishers are NOT on drugs team (unless presumably he was Superman). Onus of proof has shifted: in cycling it is assumed you're a professional vested drug-cheat unless otherwise proven.  

Hence FPM predominantly turn to other sources for fundamental FPM's macro and markets analysis. In the “new alternative media” – NAM, which we contrast with traditional media-mogul owned / funded main stream media - MSM, we like innovative technology enabled internet sources and their breaking-the-set commentators.

Below we feature one such truth-buster, Dr Paul Craig Roberts, originally on NAM “USAWatchdog.com”. FPM discovered this alternative news media via “InvestmentWatchBlog.com”. Other NAM sources we found en route was OpenSecrets.com and PaulCraigRoberts.org. FPM have NOT exhaustively researched the independence of any of these information sources; maybe they are registered with the “Institute for Nonprofit News”. Dr Roberts’s credentials in career as a political economist are impeccable. As Assistant Treasury Secretary under President Ronald Reagan between 1981-82 he has the best perspective on World developments over the last 30 odd years to the present year 2015. Cover picture of his book below:

The public or professionals' informative value from the views of executive financiers "banksters" (or in wider industry of  CEOs and Presidents opinion) are of even less merit: as they generally are the paymasters and orchestrators of a self-serving corrupt crony capitalism. Their common interest is clearly unaligned with the proportionally bigger public at large. Yet using slick highly-paid under-the-radar PR-firms / media strategists / communications in the "dark arts"; and government lobbying to exact their bribed will in industry deregulation etc, towards ultimately lining their pockets, with trickle-down to their sycophantic cronies at expense of unsuspecting and yet trusting gullible public, we are.

FPM are not talking of systemic-wide corruption through their proverbial hats as gibberish rant! FPM principals have understood a similar broken state of capitalism leading up to and after The Great Crash 1929[1]. To validate our crony capitalism of bribes to politicians, in graphic table below we cite ONLY the bribes by the financial sector in the United States of America, referred to as Wall Street, over a roughly 10-year measurement period[2]. The financial sector invested more than US$5 bn in political influence purchasing in the United States over the last decade to 2008. Now just imagine what multiple of US$ dollars that was returned or begotten to the financial sector as payback! Absolutely a backhander or illegal payments for favours.


The Scale of Wall Street and Washinton Crony Capitalism
And now the interview discussing how the world economics and politics really does works, especially in the last 30 years or so, by someone who ought to know have been there at its instigation and observed the playout of that cycle, which is nearing its end, but not with old fashioned market volatility as we've had but with end of fossil fuels and United States Dollar debt:


[1] “The Great Crash 1929” 1954 by John Kenneth Galbraith
[2] "Sold Out - How Wall Street and Washington Betrayed America" March 2009, by Essential Information, Consumer Education Foundation, www.wallstreetwatch.org

Tuesday, 21 July 2015

Is Neuberger Bergman The New Blackstone Group?



FPM’s ‘NoSmokeWithoutFire:Reputation’ propagating enterprise is researching prospective ring leader Neuberger Berman Group LLC (an independent employee-owned investment firm established in 1939) and its investment affiliates for signs of illegal capitalism. Since our illuminating investigation into insider trading by Steven A. Cohen’s eponymous SAC Capital, and involvement of Blackstone Group as its biggest investor, we have compiled public domain surveys, and presented privately commissioned ratings of an entity’s reputation by degrees. This monitoring survey is mockingly entitled 'Potential Rogues And Affiliates Trading' - as below.
The rationale for organising and connecting Neuberger Bergman – "NB" affiliate map are manifold. One rationale we look at here in depth derives from the nature and contradiction of a class of investment funds known as ‘liquid alternatives’. Namely, “Neuberger Berman Absolute Return Multi-Manager Fund” , is an approximately US$2 bn mutual fund listed on the NASDAQ stock exchange in New York. 

This NB thematic hybrid fund depicts FPM convergence demystification in the asset management industry; where returns of constituent fund managers are being arbitrated as more NB profit rather than  full investment returns, even though the stake for investment is mostly the client's money. In fact the key appeal and popularity of the liquid alternative category is for American pension savers or 401K plans. Hedge funds are not intended by nature to be liquid, but this mutual fund version is structured so; which for the next contrived manipulated market panic selling due to idiosyncratic or systemic risk, will intrinsically show appropriate losses. Woe to the pensioners and the feeding trough they really represent under crony corrupt capitalism!

Indeed like the mentioned early days of Blackstone Group, there is a private equity division of Neuberger Bergman known as Dyal Capital Partners which sponsors emerging and existing hedge funds via stakeholding. As far as we can tell there are no cross-over holdings between Dyal and the NB liquid alternative mutual fund. FPM is familiar with the co-heads of that business having worked with the team in their former guise as a Lehman Brother division. This is food for monitoring ‘Alt M&A’ transactions. This corporate finance / rain-maker / deal activity is expected to be invigorated during the cyclical ‘shake-out’ from the next capital market turbulence [of a nature and type never seen before].

Our third proposition for citing NB is their long established heraldry in US finance and industrialism, through its CEO, George H. Walker the fourth. Who is the second cousin of George W. Bush, the last US president from that American dynastic family. FPM believe there are bound to be scrutable executive connections to feed through our ©NSWF:Reputation rating of corruption in crony capitalism.

Under FPM’s trident mission statement this US$251 bn asset manager NB ticked all the boxes; with its divisions’ activities in hedge funds and private equity comprising FPM’s triumvirate application primarily in alternative investments headed simply ‘Convergence’, ‘Alt M&A’ and ‘NSWF:Reputation’. The relatively new Blackstone Group Inc was formed only 30 years ago in 1985 yet has greater assets under management - AuM, closer to US$333 bn. This juxtaposition of Blackstone with Neuberger raises question of business strategy with the meteoric growth of the former compared with the age venerable latter. 

FPM have a stuff and nonsense view of liquid alternative investments. A category with an estimated US$234 bn[1] of monies invested must have an investment rational merely for its existence. However, the terms ‘absolute return’ fused with ‘mutual fund’ is a misnomer and contradictory by their original natures, which FPM invoke as simply ‘convergence’ of traditional long-only investments with edgier fandangled branded alternative investment category i.e. hedge funds. This confusion with nomenclature is asserted to investors as liquid alternatives.

Nothing about this NB multi-manager fund is reminiscent of a fund of hedge funds and the implied premise of absolute returns. It is at first glance merely an appeasement offering, like water for chocolate, as far as investors are concerned. Don’t take our word for it, look at the price action in Yahoo chart below since launch. And if you believe the smarter investors should be institutions rather than individuals then it was reported that only 20% of the fund’s investors are institutions.

NB Absolute Return Multi-Manager Fund Performance
Additionally, the real proof of a vehicle with ‘Absolute Return’ in its name should be stellar hedge fund performance. Yet average annualized returns of 5% over its three years existence is not a significant or remarkable track record, even in an era of zero cost-of-money, and beating the average hedge fund benchmark - See table above. Veritably the tell tale signs of the multi-manager vehicle is the convergence of active management alpha-seeking strategies with passively managed beta-tracking. The real raison d’etre for this fund is the way Neuberger Bergman allocates the fund investor’s money between its hand-picked hedge fund affiliates. NB has segregated account with each of its portfolio constituent manager, and therefore has look-through potency at the portfolio companies. This has many potential alternate alpha-return interpretations, least of all of them being to reduce investors’ operational risk!


[1] Strategic Insight – New York based mutual fund research
 

Tuesday, 30 June 2015

The ‘C’ Word in Capitalism: Crash!

On dismissing financial analysis behind, due to ‘GIGO’ principles based on corrupted manipulated statistics, and spotlighting policy makers’ move we hit on Greece. Yes, Greece is one of the pertinent factors to markets’ animal ‘spirits’ as is Climate Change issues (gargantuan impact on energy, airline and consumer industries). The saga is dragging on and unsettling the predictive market participants, whom are both directionless and intuitively awaiting the big catalyst for secular economic progression. From FPM’s last post “By Whatever Name Geopolitics Is Still Market Risk” we are underpinning Greece as the big ideological catalyst for the much heralded economic fundamental shifts, that happens in 25-30 years cycles[1].

Yet another date, Tuesday June 30, is due for Greece to repay IMF’s stranglehold debts. Make no mistake, it is “stranglehold” by the scrotum or neck! As ‘troika’ threatens Greece with dire financial / bankruptcy consequences if it does not cooperate with modus operandi of the last thirty years[2] of runaway excessive capitalism by the moneylender / financier classes organising, in effect our daily lives. And through ever-pervasive globalist trade pacts (GATT, CETA, TTIP and TTP), these powerful pullers of the strings behind the scene, which are corporations and their billionaire entrepreneurs, aim to shore up status quo and control money, hence the world.

Greece represents a more than the proverbial spanner in the works to the last 30 years of deregulated business climate – remember ‘openskies agreements’. In a way, The Reagan / Thatcher era shift has left nation-states without identities and suckered into a mode of capitalism, which as its sickly insidious terminal side-effect, is causing climate change, great wealth inequalities and essentially re-organising humanity and society run by stealth global plutocracy. Not democracy at all – wake up people! Hence, back to Greece being an epochal and pivotal policy maker in the global theatre of socio-economic politics, once again 3000 years or so later. If you don't believe our interpretation, look at the market indicator of volatility spike, ^VIX.
Volatility S&P 500 (^VIX) -June 30th at Open
For example, we mentioned the ‘Open-Skies Agreements’ which degregulated nationalistic ‘flag-carrier’ airlines starting in the 1980s and henceforth; well we can see the consequences of that towards international tourism, where holiday-makers and other various travellers are merrily zig-zagging the planet as ‘strangers R us’ pulling along their wheelie luggage, and ferrying around by taxi, plane, boat etcetra. Happy days one may think – yet more burning of carbon fossil fuels, in this mass people transport business dubbed tourism, has well-known dire ecological consequences. Those inconsiderate enough to not bear, or take responsible mitigation for the chain of climate catastrophe events that is impending, are selfishly ignorant. Yet the corporations and media communicators peddling this and other type of ‘consumerism’, are and were always ruthlessly and exploitative. Similarly tobacco giants were long-ago aware that selling cigarettes causes harm and death.

The secular economic progression or investment theme / trend FPM espouses reverses or roles back the last 30 or so years of greed-capitalism. An enterprise crafted and forge lovingly patiently towards evolving a more humane ethical equitable and sustainable enterprise ecology. The business climate is changing undoubtedly and perpetually through a healthy process of creative-destruction. New age entrepreneurs should NOT accept being like the blinkered content horse that was portrayed by human liberationist George Orwell in his satirical comment on humanity via “Animal Farm”. Small- and Mid-sized Enterprise (SME) proprietors should understand that the global and regional trade pacts only serve to preserve the higher-up capitalists’ status quo of big business executive profitability with lure of trickle-down impression.

For example, if you’re an entrepreneur who bought into the idea of fracking for fossil fuels as alternative energy source to supplement dwindling oil / gas reserves, then you’ve been manipulatively had! The reality-check is that if we use JUST USE 20% of the OPEC and big-oil cartel reported EXISTING reserves of oil / gas, or other forms of fossil fuels, we will irreversibly exacerbate the ecological balance of planet Earth. Average global temperatures have risen by one Celsius degree since the industrial revolution, with “democracy” levels of consumption of the Earth’s resources, by just a few western nations[3]. One does not need to be a ‘rocket-scientist’ or fortune-teller to imagine and extrapolate the future impact from the current Western brand of democracy and capitalism. Aside of weighed-up benefits of travel, a model of wasteful and excessive consumption, increasingly foisted on the new and developing countries and, sponsored by self-vested oil-rich countries, which can ultimately and willfully lead to a scorched Earth or few habitable parts of planet earth. This dire  doomsday ecological predication is evidently possible within 50 years henceforth.

Enough doom merchant forecasting let us see what we can do with the the next 10-20 years, of ecological foresight. In order to make an omelet you have to break some eggs, so we believe some bad old habits of Western way of life has to be broken and entirely abandoned. The prospect of these similar habits being continued by the 3 to 4 billion new capitalists of the BRIC nations i.e. capitalistic consumption via fridges, air conditioners, heater, cars, travel etc is the game changer. Pretext of globalisation in trade has resulted in this widespread consumption malaise. A cross-fertilization through global television and media, supported by multilateral agency oversight is the underpinning of our cross-fertilised culture.  Unsustainable lifestyle habits will inevitably have to be disregarded, sooner or later. The sooner the global transition to sustainable living standards the better for everyone! Naturally, the status quo of big oil and big retail etc will not necessarily relinquish their prominent position built nationally and expanded overseas in their respective industries easily. Instigated by American hegemony billionaire status quo class, who are scrambling to do secret deals inter-regionally around the globe via positive-sounding international trade agreements, such as “Trans-Atlantic Trade and Investment Partnership” (TTIP) aligning USA and European Union legislation to favour corporatism over statesmanship. Trade agreements or pacts are designed to shore up countries from operating as independent jurisdiction of law. And therefore bought under some multilateral agency supervisory control. Done as altruism but effectively to enrich the already rich and preserve status quo global wealth inequalities – sheer satanic evil! Otherwise IMF, World Bank, WTO, GATT, NAFTA, UN etcetra would have eradicated world food hunger by now – duh! To see this vivid and blatant harm done, with auspices of doing good, enquire in microcosm at your local food supermarket chain about the daily wastage of food stuff casually thrown away by migrant worker from poor countries – fostering Western hypocrisy globally.

The will for this great change in the face of impending raping of the planet earth should expectedly come from western politicians. Sadly these and other politicians have become blatant captive audience of the “greed-is-good” corporate capitalists, and to their lobbying / pressure-group arms towards cosy employment prospects or ‘revolving-door’ relationships. Asserting 'politicians are criminals' who are corrupted from their noble and elected ideals of representing the people – see Dame Vivienne Westwood's campaign slogan here.

In terms of FPM’s secular economic progressive investment themes, these transitions will result in Western public policy alignment in many sectors of business and lifestyles, at least in these following sectors:

Oil and coal divestment

Carbon Capture and Storage

Nuclear and Solar Technologies

Tourism and Migration

Generational Lifestyle Changes

GMO Foods

International Trade and Transport

As we digress on the exposition about ‘C’ in Capitalism is for ‘Crash’, we have joined-up what a Greek exit from the European Union would be in terms of impact for reversing globalist economic capitalistic trends. Economic inertia and impact, as much as the break-up of 300 years-old uncomfortable union of Scotland and England forming United Kingdom, would have likely had. Their Union divestment ideal was narrowly defeated in the September 2014 Referandum. So no need for Scottish people now to be mockingly re-dubbed “Brave Farts”, as play on traditional heroic reputation of “Brave Hearts”.
So FPM hope the Greeks play-out a drama which is ultimately to their benefit.

“This is not about politics, it’s about math.” Puerto Rico’s governor, Alejandro Garcia Padilla on June 29th, 2015 on pondering about his American Commonwealth country’s $72 billion debt default with a population of 3.5 million people.

Puerto Rico and the bigger nation Argentina have defaulted on their sovereign debts. Iceland also faced braved decision and decided NOT to bail-out capitalism – see here  Cyprus had ‘bail-in’ to the detriment of mostly Russian savers in its country’s bank via ‘hair-cuts’ from deposits. So on and so on is expected of sovereign debt default in the Great Crash of Capitalism, as anticipated by FPM’s polemic assertion. This worsening of the current Great Recession into a something as grotesque as the Great Depression of the 1930s was sensationally peddled in financial circles by economist, authour and ex-banker Satyajit Das a few years back: where he suggested individual and corporate debt default and insolvency was expected to spread into sovereign debt problems and so on. So while Greece and Puerto Rico sovereign debt problems maybe small-change, the contagion effects of debt default on France and Italy would be significantly monumental.

To reiterate, making an omelette requires ‘crashing’ some eggs: we think Greece and its proud people, as a historically veritable proud nation, can re-assert it epoch making touch-paper. We are talking about that catalyst event in the Referendum on 5th July 2015, on how to respond to EU’s terms of debt stranglehold. Any such default has significant market impact – see above Pre-Open US Market price of Greece proxy ETF and intraday, 29th June, down from US$11.78 to US$9.93 at FPM’s data capture plays. The Greece investment fund proxy closed the day US$9.42, down more than 20%. FPM bought stock as panic selling from Greek exit from EU, but realising that in the intermediate term that exit is which will structurally and fundamentally fix the ailing basket-case economy of Greece.


[1] Kondratieff Cycle
[2] FPM have been validated by Iceland President
[3] See Bill McKibben “Do the Maths” and Naomi Klein “This Changes Everthing”

Friday, 5 June 2015

By Whatever Name "Geopolitics" Is Still A Market Risk



While informing select clients about FPM’s idiosyncratic-risk vested three vehicles, as introduced here, we are constantly assessing systemic-wide risks. In general we understand that the global pump-and-prime mechanism of the U.S.-government led policies, are driving the liquidity, and in some cases the solvency, of capital markets referencing underlying economic companies. The new-norm of low productivity economies, especially in the mature developed countries; from public and private entities continuing to de-leverage from stifling debt levels, while job and profit growth remains mediocre, is veritably characteristic and wholly acceptable of Great Recessions.

Yet what is incongruous is the gloss and polish airbrushing policies of the sick and ailing fundamentals of stalled mercantile economies. The last vestige of the current mode of capitalism, characterised by lethargic corporate activity and near zero cost of capital, has uncanny parallels with the duration of 1929-started Great Depression. More recently, Japan long described as a zombie economy during the 1990s is now not a lone status. FPM understand that the intrinsic corruption of capitalism from its founding ideals, through blatant cronyism and self-vested pursuits in office by public administrators / politicians and other public-serving functionaries is the ultimate ingrained societal malaise. Those supposedly overseeing imbalances and excesses of a system, such as the regulators as enforcement, and courts as justice, have been absentia, worse still complicit bedfellows of economic financiers. 

The demised state of capitalism will only be resuscitated by the meaningful alignment of neglected public interests with long pampered corporate ones. Reform of the socio-economic balance, which is so out of kilter after 30-years of full throttle free market capitalism. And longer beyond, of creating wealth inequalities and social imbalances, with only a pretense at harmonizing forces for economic value. This would shift focus away from legislators’ subservience to the corporate-vitality mantra. A political mantra which is deceptively kowtowing to the deep-wallated “big pharma” or “big oil” etc, at expense of wider social ecological concerns. 

Multinational companies cynically organized for a select cabal of owners and executives, driven only by vested-interests, rather than long-term socially mutual goals, MUST end - “es muss sein”! We believe the impending market risks forcing stock or bond corrections greater than 10%-20% is imminent. Further, we believe the new cause for concern / risks, since the last collapse, where economies were quick-fix resuscitated with money-printing monetarist policies, is in the form of GEOPOLITICAL ones. The fundamental underpinning for this is connected with monetarist globalist government policies which created and sustains the Great Financial Crash – GFC.

Wealth and income inequality, public spending austerity, mass populous migration, catalytic climate change and broken socio-economic infrastructure could should and will lead to escalated geopolitical tensions internally between regions and countries internationally. This is dangerously true if plutocratic capitalists and their on-string puppets insist on forcing through their status-quo preserving secretive regional trade agreements in the form of USA-Asia’s Trans-Pacific Partnership (TPP), and USA-EU’s TransAtlantic Trade and Investment Partnership (TTIP). Do NOT be fooled by PR / lobby propaganda, nothing about these trans-national deals is in our public interest – read more here! As a case in point of clashing economic and social interests from the recent past, which averted such geopolitical risk manifestation, we mention the Scottish Independence Referendum in September 2014.

This narrow democratic defeat of basically revolutionary proportional ideology reflects the level of discontent in the socio-economic status quo. That the Scottish people voted narrowly to maintain its uncomfortable 300-years old union with the seat of national power in London Westminister is merely a testament to strategic demographic voting; effected by an increasingly larger elderly population not wishing to upset the apple cart in their twilight years. Even that Scotchmen’ separatist or secessionist movement has emboldened itself for the next round, through their unanimous decision to identify with local political party, the Scottish National Party in 2015 General Elections – watch this space!

From the past to the present and similar ongoing concern is the “Greek Tragedy”. A vogue basket-case economy in the midst of the largest economic bloc in the world is arguably just one geopolitical uncertainty producing a drag on ‘normalised’ capital markets functioning. Moving from discussing the United Kingdom union in microsm to deciphering the consequences for the European Union mess is not a leap too far in terms of geopolitics. As with US-coordinated global policy solutions to date, the plaster-fixes to deal with real deep seated structural problems is not going to eradicate them, only alleviate them.

Eventually, Greece and the EU will have to be realistically radical about its economic health, than its rhetorical appeasement. An public relations appeasement that preserves stratified social status quo, with rich getting richer exploiting their poorer brethren, and the poor getting poorer – despite the duped burgeoning middle-classes; A world wide phenominon. So far the Syriza Party with Tsipiras and Varoufakis are holding to their voter elected manifesto of 1) end to austerity 2) anti EU stance and 3) resisting privatisation reforms. All these stances are socially beneficial ambitions and are fundamentally worthy, for the wider public interest. 

Comparably, while the City of London, as an oligarchs’ seat of capitalist financial power, becomes a mercantile whore to the highest bidder, selling or monetising its taxpayer-paid real assets into private ownership (see below pictures of South West London police stations); Greece ought to be bold and spearhead independent socialist democratic values, while bucking the corrupt global capitalist takeover. In insidious global capital markets fashion, even the said taxpayers themselves are indentured through capitalists’ bedfellows misallocated and wasteful ballooning national  debts. Should other nations follow suit for being in the thrall of current mode of global capitalist? Clearly not – we should be one for all and all for one in holistic evolution of civilization.




A New Police Station in S.W. London

An Old Police Station (now sold to private developers) in S.W. London

Where the people of Scotland failed in breaking an umbilical cord maybe Greece can succeed, and thereby become a catalyst for real global change. Rather than change for change-sake, the monumental trigger would be an inflexion point for reeling back some of the excesses of the last 30-years or so of capitalist exploitation. Appropriate it would be then, that the Greeks were once before heralded as the “Cradle of Western Civilisation”. Greek’s preminent prominence can once again be that, rather than the “Begging-Bowl in Hand Basket-Case” of the rashly convened European Union structure.

Thursday, 21 May 2015

In Fund Portfolio We Trust

Fund Portfolio Management - FPM have incubated relationship and interest in 3 investment vehicles, evolving our enterprise emerging out of the ashes of the 2007-08 U.S.-stemmed global financial crisis. In regards to these vehicles, simple web browser search will connect you to its founders.


Michael Wexler led Maple Leaf Capital Fund
David Tawil's Maglan Capital Fund
Andrew Downie's Zipabout.com

We are proud affliated third-party marketeers in a crowded space of investment funds and tech ventures. For forging FPM's indepedent institutional broking / advisory capacity with integrity of management and alignment of purposes, these three vehicles are from highly select associates.

Two are London City incepted investment-stage vehicles and the other founded and based in the USA. FPM principals' relationship with two of the three vehicles' leaders are historic and meaningful, and Maglan Capital's inception performance speaks volumes for itself too. So with that depth of relationship awareness we seek to facilitate further investment introductions. The future of these essentially "restart vehicles" from their veteran founding entrepreneurs is exciting for FPM's marketing in this epochal socio-digital reformed-capitalist era.



TO DIRECT YOUR ENQUIRIES TO OUR ENDORSED AFFILIATES PLEASE CREDIT FPM AS SOURCE, ALTERNATIVELY CONTACT FPM'S K. Kristian Siva or call +44 (0)79126 178734.










Tuesday, 7 April 2015

The Second Coming: No Smoke Without Fire (NSWF)



The best lack all conviction, while the worst
Are full of passionate intensity.
W.B.Yeats, (1865-1939) The Second Coming


In deliberated and procrastinated fashion FPM are implementing "©NSWF:Reputation", as a patented coinage of financial and corporate vocabulary; of assigning historical reputations to conduct. NSWF stands for “No Smoke Without Fire” principle of an entitiy’s reputation and source of that having some definitive to tenuous truth. And since libel laws exist, our reputation rating of entities derives partly from mosaic research of past wrong-doings and relationships. The enterprise emphasis is investigative truth-telling and setting records straight by shamefully and disgracefully highlighting rogues or perpetrators in financial industry larceny. This reputation-mongering is aligned with FPM’s “Convergence” and “M&A Alternative Kind” enterprises. 

One’s future status is somewhat dependent on our past and present ones. FPM independence and lack of conflict of interest permits pronouncements of financial miscreants. Whereas other sources, such as brokerage research or industry adherents like mainstream media, maybe reluctant to spite the hand that feeds them. In less measure as well, FPM will be signalling singled-out flagships and heroes of progressive good and fair professional financial conduct. This last propriety of financial conduct is our standard expectation of professionals and operations, therefore of less concern for us.

We irrevocably taint the 'bad people and their actions', which is too often dismissed or buried as media strategy in publications terms like conspiracies or in judiciary terms "acquitted". We commercially investigate indeed if there is a source of “fire to the smoke”. Partnering new-advent media ("NAM") as opposed to main-stream media MSM, FPM propounds reputation for “wrong-doings”. This financial truth-telling or revelations, as purveyed by such examplars as  NakedCapitalism, ZeroHedge PensionPulse, ValueWalk etc are our collaborative heroes. For example, ex-pension guardian turned blogosphere pension-angel, Leo Kovalis. That's not a P.R. push message to be a sychophantic reach-out! We kowtow to the leaders and betters in this field of capital markets enterprise, which inspired the FPM ©NSWF:Reputation. Hattip! as the jargon goes. 

April is the second anniversary of “No Smoke Without Fire”, initially a blog exposition. See here.  Then FPM principals echoed “What To Do!” disaffection or disillusionment about the pernicious status quo of investment management and banking in general. From FPM principals being not little unaffected by the wrought global financial crisis. As prototype case study our enterprise raison d’etre was made vivid by the association between Blackstone Group and SAC Capital (now private corner-shop "Point72 Asset Management"). That mild reporter termed “insider trading scandal” is more telling than mere smoke and mirror PR, about corruption in corporate banking life over the past 35, at least, years. 

A Diary and Degree Recommendation

With this missive, Kristian, as a founding principal of FPM, flowers into the Spring of Joys on Easter Day, after an "Icarus Type of Year in 2014". Like the myth of Icarus, FPM in aggregation of meditating and endeavour with our enterprise, reach excessive heights, and yet sadistically our self / ego does not let our feet touch the ground! Icarus was the Greek mythological protagonist of complacency and hubris. Making an escape with wings made of feather and wax, and therefore warned not to fly too high close to the sun since it would melt the wax, or fly close to the sea as the salt degrade. Therefore Icarus was heedless and crashed into the sea, flying too high. Also, in equal measure of philosophical antithesis is 'Phoenix Rising From the Ashes'. But of course, before Spring arrives the season of Winter descends. This holistic approach is relevant in FPM reputation model of financial perpetrators having 'priors'.
FPM’s Kristian on Christmas Day gutting road-kill deer near Cornwall.
So on Christmas Day, I was gutting and skinning my first ever road-kill deer with friends in Cornwall (see picture above). As a diary there is also a tenuous link to the FPM premise. Between Cornwall and London the car party passed a premier hedge fund related name of a place, "Bridgwater" in the county of Somerset, England. Bridgwater is actually spelt without an ‘e’ in ‘bridge’ on the road signs. Oh, my dear Lord! We have made punt for one of our prospective FPM enterprise partners, and a pun on the word "deer", respectively; hopefully noted by the aficionados of my joined-up verbiage.


Bridgewater Associates is nominated as FPM's ©NSWF: Reputation ‘halo-wearing’ degree hedge fund enterprise. If you are in finance and you do not know Bridgewater: currently they have some US$165 bn of saver’s money under management, from a sector capital base of some US$2.8 trillion, as at end 2014. If indeed any practice can be of such ‘halo-wearing’ virtuosity, in an arguably scurrilous money siphoning-off business, as is a range of investment banking and related activities. Hence why FPM’s ©NSWF:Reputation rating is based by degrees of reputation.

Mr Dalio’s ©NSWF:Reputation  - ‘Halo-Wearing Degree’ (Source: FPM, Bloomberg)
Through preliminary feasibility observations, we have yet to uncover any financial improprieties, misdeeds and misdemeanours of this leading, yet somewhat unknown money management company. Since the corporate historical reputation of Bridgewater is inextricably tied to its leader, we present Ray Dalio, who founded in 1975 and retired as its chairman in 2011. Mr Dalio is still chief investment officer sharing the role with Robert Prince and Greg Jensen.  Of course an FPM principal has investor experience of Bridgewater and, discovered media-depth knowledge about them. For the full ‘halo-wearing’ rating research recommendation please feels free to engage us. Or indeed, please contact us to contradict our promotion of Bridgewater Associates in our praiseworthy ©NSWF:Reputation, for whom we are still going over data with the proverbial “fine comb”.

As Easter, in one original sense, was a pagan Goddess of Spring, as a symbol of fertility we liken our ‘think-do in-time ideas’ as a new birth: of assigning reputation not only through a 'financial hate list' as some describe it, but with praiseworthy exemplifications too. With our groundbreaking exemplar case studies involving Blackstone Group, as largest investor in insider-trading scandalised SAC Capital, FPM implement corporate and principals' reputation in vogue. FPM permanently crystallises the negative taints and rumoured impression from associations in financial malfeasance of the measured past. Even whether the entity in legality or prejudiced law was ever convicted and / or acquitted is necessarily irrelevant to one having garnered a good or bad reputation. Not too much unlike what financial ratings agencies and auditors are responsibly supposed to do in earnest fiduciary professionalism.

Unfortunately the fiduciary tier of financial responsibility from institutionalisation has bought them into collusive conflict of interest relationships verging on cronyism. Thereby evoking incidences of collaboration corruption corroboration and other deceitful tricks and traits which FPM manifests into a reputation i.e. no smoke with fire. A light allusion or hint to a financial misdemenour is like stating "mud sticks". While this counter-PR, setting the record straight, is a virtuous enterprise. In an old fashion sense, battling lies and truth-telling as a commercial enterprise has sought a backer to sponsor these esteemed value-set with pride. Who better to uphold integrity than the purveyors of it! Bridgewater Associates’ highly reputable profile serves as a counter-point to  financial roguery. Also, while the NSWF:Reputation garnered firms’ or principals’ may having rising and ebbing ratings over time, the reasons, at least in the mind of FPM’s principles, is clear. At a time when unprecedented and rife financial malfeasance has contributed to the deepest economic recession since 1930’s, our mission no less is to follows a checking mechanism. An FPM progressive stop-check rationale here is echoing a public comment published in the LA Times, about how to treat insider-trader trading cheats, from the now demised Drexel Burnham Lambert’s scandals: 

As the courts and legal system are so lenient on so-called first-time offenders… may I suggest an appropriate punishment in the form of public humiliation?” 
Carol Roper, Redondo Beach, LA Times  - Humiliation Is the Cure, March 15, 1987


"Are You ????????, I's Just Like to Know What's What and Who's Who, You Know?!" BBC 1, "Holby City", 14th April, 2015







Thursday, 19 February 2015

No Smoke Without Fire: Cerberus Capital Swap-Betting



Q.How did you go bankrupt?
 A. “Two ways, gradually then suddenly!” 
Ernest Hemingway, The Sun Also Rises.


Executive Summary:
As an insider in financing RadioShack’s troubled operations it has been alleged that Cerberus Capital and others sold / wrote credit default swaps, which ensures contingency payments on RadioShack debt for its buyers, in the event of a debt default event. RadioShack is currently in bankruptcy proceedings. And Cerberus et al of course didn't payout on the insurance which they deny having sold / wrote!   It is insinuated that RadioShack was allowed to survive until the expiry of the credit default swaps written by the hedge funds, to the detriment of normal business strategy to close some of its loss-making retail stores. Premise of lawsuit was that Cerberus and others were engaging in exploitation of troubled companies for insider financial trading profit at the expense of main street RadioShack and its stakeholders. Some may say “wow!”, others succumbing to what-was-and-is say “so what?”   FPM say about it in consternation astonishment and bewilderment “What the deuce!”

 No Smoke Without Fire: Cerberus Capital Insider Swap-Betting

For exemplification of FPM Reputation Risk we have locked onto Stephen A. Feinberg and his founded investment management Cerberus Capital Management (Cerberus). He and his hybrid investment firm, capable of private equity and hedge fund strategies such as  distressed investments are represented today in a Delaware bankruptcy court against allegations that it breached its fiduciary duty[1]. The electrical retailer group, RadioShack Corporation (now delisted from public exchange), is demised antagonist of its financiers. The 76-year old electrical stores firm made a well publicized Chapter 11 bankruptcy filing on 5th February 2015, evoking capital markets corruption via “conflict of interest”. The collusive fiduciary conduct of RadioShack’s distressed debt investors, namely Standard General, Salus Capital Partners, Litespeed Management and FPM-targeted, Cerberus Capital Management, is being questioned of hedge fund activism. Distressed investing and corporate activist strategies of hedge funds are often as destructively controversial as their nearby cousins the private equity buyout strategies.

While Standard General with nearly 10% stock in Radioshack and other mentioned and as yet unnamed hedge funds are perhaps exploitatively contributory to RadioShack's demise, FPM turn the spotlight on Cerberus Capital for its implied corrupt capitalism shenanigans. Our NSWF:Reputation© spotlight came to rest on Stephen Feinberg and Cerberus due to the historical joined-up enterprise via “Reputation Risk and Guilt by Association (RRGA)”, "Spreading Like Wildfire (SLW)" and "Reading Smoke Signals (RSS)". From basic research of Mr Feinberg, his absent without leave reputation map suggests roguery in his professional DNA. Here we apply our enterprise model to form the basis of FPM’s side-carting regulatory enforcement:
1) RRGA: Mr Feinberg joined Drexel Burnham Lambert, the brokerage investment bank, in 1982 after graduating from politics (while creditably a tennis captain at college). Drexel filed for bankruptcy on February 13, 1990 after years of Federal regulatory scrutiny and souring capital markets. Drexel are the infamously storied innovators of ‘junk-bond’ offerings. Risky types of loan liability because in bankruptcy the repayment priority is lower down in the capital structure of the issuing company, often with a low credit rating. A loan investment respectably referred to as leveraged loans and high yield bonds used by corporate financiers. FPM’s ‘reputation and guilt by association’ presumption of Mr Feinberg was flagged through our rogues gallery links with the Drexel. Drexel being the Madoff of its day by being “too-good-to-be-true” fraudsters of the 1980s; clearly with caveat that not all Drexel activities and deals were based on securities fraud.

2) SLW: Dennis B. Levine pleaded guilty to insider trading while at Drexel in May 1986. In his wake he also brought down other notable headline crooks of that era for insider trading, among other financial frauds. Namely Ivan Boesky, Michael Milken and Martin A. Siegel. Mr Siegel was co-head of Drexel's mergers and acquisitions department, and Mr Levine was an M&A specialist in the office next door. This brief “Den of Thieves”[1] essential ‘history lesson’, so discouraged by senior bankers, of course puts Mr Feinberg in the frame as an impressionable youngster in the exorbitant wealth creation yet amid maelstrom of naughty illegality. His tenure at Drexel overlapped with Mr Milken’s bond-desk stewardship exhibiting excessive capitalism of the 1980s. Mr Milken’s prototype lending is attributed partly to causing the savings and loans crisis and for the many business failures. Similarly, did Cerberus and the collective financier firms machinate RadioShack’s bankruptcy proceeding? Countering distracting propaganda is a truer image of vultures circling, then feeding off the carrion. This is akin to the bestial nature conveyed of immoral corporate financiers / capitalists. As financial history has tended to repeat itself, perhaps the financial class are steeped in madness, expecting a different outcome in the stale relationship between bankers lending and businesses borrowing.

3) RSS: FPM liken Drexel practices to the 1880-established Gruntal and Co, when  in its latter days before its bankruptcy-filed demise 25 years ago in February. Gruntal was a boutique investment banking and brokerage firm was a spawning ground for financial cheats including as yet unindicted Steven A. Cohen. Similarly, we draw a hypothetical parallel between Mr Cohen's SAC Capital (now a family office Point72 Asset Management) and Mr Feinberg’s Cerberus. Here’s the thing, SAC and Cerberus both formed as hedge fund strategies in 1992; just as other now established and dominant hedge fund sponsors Blackstone Group and other specialist private equity firms were established earlier between mid-1980s and early 1990s. For instance, Leon Black’s Apollo Management started business in 1990 out of the ashes of Drexel, and Blackstone five years earlier. There has often been much made of the kowtowing cheats-club members whom were by degrees connected through their ethnic creed backgrounds. Drexel diasporas also spawned Mr Black’s Apollo, as well as numerous others of the financial elite class, all of whom are registered in FPM’s ©NSWF:Reputation database. In the name of financial and corporate creative-destruction these investment bankers collude and coerce unsuspecting “empty-suit” investors and savings fiduciaries into building risky asset bubbles and then bursting them to act as white knight, corporate raider or financier? We like the DeepCapture.com term ‘bust out’ meaning ‘loot and destroy’.

4) Anecdotally, we notice UK’s prominent right-wing U.K. Independence Party (UKIP) political leader Nigel Farage, as having done a City of London tenure at Drexel Burnham Lambert between 1982 and 1986, after he left school to make money instead of choosing university. His credentials as party of dissent and distraction is not our remit.

5) While we may dismiss some industries by describing then as made of cliques cronies or of incestuous relationships the Drexel diaspora has indeed become a behemoth of secret collective conglomeration contentiously independent and seemingly in competition with each other. However, we note from attendees at Milken Institute conferences and the extravagant 60th birthday party of billionaire Mr Black that their collective identity is significant, and we don’t understate that cohesion by referring this club as exhibiting cordial relationships. Since Martin Siegel was co-head of Drexel's M&A department with Mr Black, it stands to reason that Mr Black might have known about illegal activity. While Mr Black was subpoenaed with Mr Siegel at the time of the investigation in 1986, the latter was never was charged. FPM believe this omission of complete and full justice was due to resource-constrained priorities of DoJ, such as pursuing Michael Milken as the big scalp.
6) The academic evidence of ‘corrupt capitalism shenanigans’ via the Drexel Diaspora is astounding, while overwhelming FPM research endeavours:


Companies owned by Apollo Global Management LLC and Cerberus Capital Management LP defaulted on their debt more than those owned by 12 of the other largest private-equity firms, according to Moody’s Investors Service.” Bloomberg via Newsmax 7/06/2014
...

[1] Den of Thieves is a book by Wall St journalist and Pulitzer prize winner James B. Stewart detailing the “Greed Decades” of the 1980s in investment banking.