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Hedge Fund rant, Part Three:

 

Remember limited partnerships? It was a Sixties and Seventies thing. Tax benefits were available for large-scale investments that were usually inaccessible to individuals: oil drilling; cattle ranching; commercial real estate and apartments. So entrepreneurs rose to the task of breaking these enterprises into bite-sized chunks for small investors (as is being done now with hedge funds), with the tax benefits passed on via a partnership structure.

 

Like hedge funds, limited partnerships were quite illiquid, requiring you to tie up your money for years. And also like hedge funds, the General Partners got first dibs on the money. After sitting down to their seven-course meal of revenue, and paying lavish 'expenses' to their lawyer, accountant and 'manager' cronies, they threw whatever meager table scraps might remain to the mangy Limited Partner puppies, scrabbling and bounding round the table legs.

 

Many limited partnerships were set up with such heavy fees that there was little prospect of profitability. After new tax laws destroyed the writeoffs in the 1980s, various 'pink sheet' style limited partnership exchanges sprung up, where LP victims might get a few cents on the dollar, if there were any bids at all. Obviously, where General Partners had bled the venture dry, the partnership shell was worth nothing.

 

Hedge Funds are the Limited Partnerships of the 21st century: illiquid sucker bets, most of which won't return their original investment. They are specifically designed by Ho Street Hustlers to part fools and their money, especially nouveau riche poseurs, social climbers and wannabes who, in their desperation to appear financially sophisticated, make the easiest marks.

 

Shear 'em, boyz! :lol:

 

 

"Whoa! I can get into the Fibonacci Bunnies Total Return

Fund of Funds for only $5K minimum? Sign me up, Fluffy!"

450EASTER_ILS.jpg

 

source: http://seattlepi.nwsource.com/dayart/20050...0EASTER_ILS.jpg

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Since that is the least painful solution FUR we Yanks, it will, almost certainly, be the preFURRED alternative/chosen path.

 

That all ASS(_)_)umes, of course, that the preceding anticpated dislocation is containable in the method contemplated, which, given the mASS(_)_)ive "gearing" of the pASSt decade or sew, may SNOT materialize, or may ASSume perverse and uncontrollable and wildly unanticipated dimensions. (The Law of Unintended Consequences writ large upon the international financial superstructure, ass'twere.)

 

American financial engineers, in their boundlessly irresponsible if not purely craven creativity, will, no doubt, seek, somehow, to FURst shift as much of? the burden and now-latent crisis engenders onto the backs of UDDERS (read FURRY FURriners) as they can, no matter WHAT parlous scenario(s) transpire(s). A signal question is whether, in such event,? they will ultimately/actually get away with it, and the answer to that lies in what the great German admiral Tirpitz once described, aptly, ass(_)_): "the Darkness of the Future".

 

Pending the emergence of such future drama(s),? they, in the meantime, seek to shift, with the obsequious deference of our national legislature,? the onus of their excesses and banal cupidity of the past quarter century onto the backs of the pliable and? gullible millions, HERE - witness, ass EXHIBIT A, the advent of the incipient bankruptcy "reFURm".

 

 

FURRY FURriners become alarmed ass(_)_): they realize the they will be fleeced by Yankee dollar policies the BAREister described:

 

http://news.yahoo.com/news?tmpl=story2&u=/...o0&e=2&ncid=832

 

 

Igor!!!

 

Yettthhhh, mASS(_)_)ter?

 

Come HITHER, lad!!!

 

Yettthhhh, mASS(_)_)ter.

 

Behold this pictorial TRAVESTY, Igor! They are DEMEANING TIGERS, your mASS(_)_)ter's alma mater's mASS(_)_)cot!

 

Yettthhhh, mASS(_)_)ter!!!!

 

SHADDUP, Igor! HRFF duzn't like the inFLECTion in your VOICE!

 

Yettthhhh, mASS(_)_)ter.

 

THAT'S better, Igor. We have too many SMARTASSES(_)_)(_(_)(_)_) around theze heer partz ASSitIZ, alreddy!!!

 

Yettthhhh, mASS(_)_)ter, ohhhh YETTHHHH!!!!

 

This individual lacks the PROPER quotient of RESPECT and DECORUM and deFURence FUR tiger motifs, Igor!

 

Yettthhhh, mASS(_)_)ter.

 

That's TRULY SHOCKING, Igor.

 

Yettthhhh, mASS(_)_)ter.

 

UDDERly reprehensible.

 

Yettthhhh, mASS(_)_)ter.

 

Deplorable, even.

 

Yettthhhh, mASS(_)_)ter.

 

Put him on the list with Mr TwoScrews, Igor - at ONCE!!!

 

Yettthhhh, mASS(_)_)ter.

 

And that DOWNtheDRANO guy, TOO!!!

 

Yettthhhh, mASS(_)_)ter.

 

That's a good lad, Igor. So agreeable u r.

 

Yettthhhh, mASS(_)_)ter.

 

HRFF unceremoniously removes HB from the exclusive TIGGER Club! :o

 

http://news.yahoo.com/news?tmpl=story2&u=/...54&e=8&ncid=441

post-889-1111970848_thumb.jpg

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"Whoa! I can get into the Fibonacci Bunnies Total Return

Fund of Funds for only $5K minimum? Sign me up, Fluffy!"

 

:D :) :D

 

This kind of setup, 1% to 2% fees plus 20% of the income assumes a low volitility of expected returns. Otherwise if returns are irrattic, the 20% fee paid in good years will actually seem excessive. For example, a 50% gain followed by a 20% loss will leave the investor 20% ahead - less the special fees of 10% in the first year (20% of 50%) plus two 1% yearly fees. Altogether the investor would be up only 8% in this hedge fund, so an index fund investor may possibly do better in these circumstances even without adjusting for risk.

 

For index funds to be good investments then, their overall risk should be less than the total markets. This could be acheived by hedging - going long some stocks while being short somewhat similar investments.

 

Mark tells us that hedge funds are not hedged - therefore taking the advantage of owning them away.

 

Of course, index funds themselves have their flaws too but S & P at least took a step forward recently by having closely held stock removed from its calculations.

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HERE - witness, ass EXHIBIT A, the advent of the incipient bankruptcy "reFURm".

 

 

FURRY FURriners become alarmed ass(_)_): they realize the they will be fleeced by Yankee dollar policies the BAREister described:

 

http://news.yahoo.com/news?tmpl=story2&u=/...o0&e=2&ncid=832

 

 

Igor!!!

 

Yettthhhh, mASS(_)_)ter?

 

Come HITHER, lad!!!

 

Yettthhhh, mASS(_)_)ter.

 

Behold this pictorial TRAVESTY, Igor! They are DEMEANING TIGERS, your mASS(_)_)ter's alma mater's mASS(_)_)cot!

 

Yettthhhh, mASS(_)_)ter!!!!

 

SHADDUP, Igor! HRFF duzn't like the inFLECTion in your VOICE!

 

Yettthhhh, mASS(_)_)ter.

 

THAT'S better, Igor. We have too many SMARTASSES(_)_)(_(_)(_)_) around theze heer partz ASSitIZ, alreddy!!!

 

Yettthhhh, mASS(_)_)ter, ohhhh YETTHHHH!!!!

 

This individual lacks the PROPER quotient of RESPECT and DECORUM and deFURence FUR tiger motifs, Igor!

 

Yettthhhh, mASS(_)_)ter.

 

That's TRULY SHOCKING, Igor.

 

Yettthhhh, mASS(_)_)ter.

 

UDDERly reprehensible.

 

Yettthhhh, mASS(_)_)ter.

 

Deplorable, even.

 

Yettthhhh, mASS(_)_)ter.

 

Put him on the list with Mr TwoScrews, Igor - at ONCE!!!

 

Yettthhhh, mASS(_)_)ter.

 

And that DOWNtheDRANO guy, TOO!!!

 

Yettthhhh, mASS(_)_)ter.

 

That's a good lad, Igor. So agreeable u r.

 

Yettthhhh, mASS(_)_)ter.

 

HRFF unceremoniously removes HB from the exclusive TIGGER Club! :o

 

http://news.yahoo.com/news?tmpl=story2&u=/...54&e=8&ncid=441

 

They look like leopards to me.

 

:ph34r: Or did you mean leppers, AO? :ph34r:

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Condo riches vaporize into thin air...

 

The Krystal Sands was just another Vegas high rise condo project, one of 70 already approved for construction to begin within the year. When the sales office opened with the usual big "reservation party", realtors and eager speculators flocked in to sign up and pre-reserve units before they were all gone. They entered into contracts and wrote deposit checks to the LLC which was doing the development. Few intended to really live there, many were out of state speculators intending to flip for gain even before the units were completed. Many used family members to buy multiple units under different names.

 

Now, only a few weeks later, the sales office has closed. Phones are disconnected. No one seems to know anything. Where did the money go? Will the people get a dime of their deposits back? Are the developers in Brazil? Where is the money? Who is this LLC? Will the condos ever be built? Is this the only one that will disappear into the night?

 

Larger projects abound. Deposits for a decent $1M condo can be $100K. I have heard of people buying 5 in a building, putting down $500K cash to pre-reserve 5 units. Monthly homeowner dues for a high rise start at $500/month. Many have paper gains already where they are locked in at a $1M contract price and the current market price is $1.2M. Will they sell (assign their purchase contract) before they are built? Will they really be built? Will everyone continue to make money selling at ever higher prices to new speculators, again and again? Is there really any need to build them if no one intends to live there?

 

 

Story

 

 

 

PD, Glad see your post

The fatal insignia of an economy in a terminal state--how far away are we from developers pre-selling condominiums underneath a gargantuan canvas tent surounded with signs saying "There's a Flipper born evry minute" and underneath the devlopers name,"Ringling Bros,,Barnum and Bailey----

 

beardrech :ph34r: :ph34r: King Kong where are you now that we need your RE skills in condominimizing the Empire State Building--

====I'm here,BD,in a spiritual zoo,safe and sound--to hell with your New York real estate,Its a jungle out there

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Posted on: Nov 13 2004, 07:58 PM

........ Based on the following two cycle predictions:

(1) OCT 04 is tthe 4 year cycle high and,

(2) 13.7 month cycle high in coming March 05.

Assumes the more domiant 4 year cycle high in OCT 04 will dwarf the 13.7 month cycle high in March/05 (but odd is not 100%), this assumption gives a hint that both a pull back and a high will be observed in between OCT/04-Mar/05, again, ....... the potential high in near term can be calculated by FIB, ...to be 2126, 2151, 2171... If ....the coming March's high is lower than what is going to be observed, the trend will reverse... otherwise, Bears will have a very lengthy hard time in 2005.

03-Jan-05 2,191.60 (intraday)

15-Feb-05 2,103.45

07-Mar-05 2,100.57

so, the March high is lower than January high. which confirms the trend is reversed

chart courtesy Yahoo.com

_ixic.gif

Outlook for the next few months: refer to wave count in the following chart, Nutsduck is in wave a of a-b-c (higher odd), it is also possible that the move since Jan 3 can be treated as a, and b of a-b-c (lower odd). Due to this un-certainty, so, the length (in time) of wave a is hard to predict at this moment; By judging the fast dive action in January, followed by two twin peaks (2103, 2100, flat expansion) it implies the coming decline may extend into May. Near term support at 1970-1980, which is FIB 0.5 [1751-2191], an upward move may hit 2050-2080;

chart - Feb 27 2004, 07:00 PM

post-7-1077926428.jpg

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