Dealbreaker

so, does anyone have the replay info

A replay will be available starting at 1030am by calling 1-800-642-1687.

However, we need the conference call ID. Does anybody have the conference call ID. John Carney, do you? Thanks!

just tell them you want to hop on the goldman conference call.

"Well we're down round figures 30% for the year and....that was all last week" These people make Tom Hudson's risk-management (none) look like Fort Knox....

"Well we're down round figures 30% for the year and....that was all last week" These people make Tom Hudson's risk-management (none) look like Fort Knox....

I've just begun reading the Intelligent Investor.....Graham's words are as relevant now as they were a half-century ago. Great quote!

Good businesses at good prices, my friends, is now, as always, the order of the day. Invest in people who use computers, not the computers themselves.

Hee Hee.....

Too funny.. I see some folks holed up in a conf room across the street at 85 broad now...

I hope Blankfein remembered to pay the electric bill... gonna get awful hot on the 8th floor :D

As I understand it, the 15th of the month is when things could really get nasty for the hedges as that is when request for withdrawals are due for the quarter. Is this correct?

yup, 45 days before Q-end

ALso the 14th is two weeks past month end when NAVs are to be sent out but probably a lot of customers have already received them early, where calculable

... or have already heard them on conference calls!

what is this whole quant thing? Can anyone sum up what's going on in a paragraph or two?

tons of nerdy hedge fund people program algorithms and let computers do all their trading for them. All of these funds use the same or similar algorithms, and consequently there is a lot of overlap in their long/short positions. when one of them screws up and has to unwind positions, it puts pressure on the other quant funds in the same positions, and consequently they unwind somewhat, etc. this has happened over the past 2 weeks, as the volatility of the market was outside the expectations of these firms' models, and spreads between correlated securities widened instead of tightened, as predicted.

Immanuel Quant was a Geman philosopher. He is probably the most renowned of the modern moral philosphers. He based everything on reason.

As best I understand it, Blunt, here's the story: some hedge funds ran into trouble with their credit portfolios due to subprime troubles and contagion spreading to other credit products. To reduce their risk they sought to delever but couldn't find markets for the credit products at values they considered valuable, so some began to unwind more liquid positions in equities. This caused some stocks to behave in ways not predicted by widely used quantitative models. Stocks the models said should go up went down, and vice versa. When the models fell out of sync with market realities, the funds suffered losses.

Everything from CTA's, trading futures on quantitative models, to Hedge Funds, doing same with all financial instruments, to Statistical Arbitrage funds doing same with equities and the mirror of these businesses on Wall Street prop desks have suffered reversals of fortune. In the last several weeks, as liquidity has dried up and volatility has risen, they've been liquidating positions. Their models are so similar, and so reliant on liquid markets that they've almost started to work in reverse as everyone unwinds the same trades at the same time.

Rising Vol alone can cause them to liquidate some risk.

Margin Calls or tightened standards by the street can cause them to liquidate some risk.

The combination, along with excess leverage at record low vols and record tight credit spreads has been deadly.

Thats not the whole picture by a long shot, but its part of it.

So all these big swingin' dicks have apparently suffered a late-life circumcision, so-to-speak. The question is, who's the moyel(s) left holding onto all their painfully lost assets?

Thats the beauty of it. And the beauty of the SEC investigation of how the banks are marking their books. Its not clear yet that much has cleared in the credit portfolios.

Idiots. Ben Graham blah blah blah I'll take 30% annualized net of fees over the last 20 years, rather than a lecture about why discounted cash flow is the only meaningful way to value equities.

gonna be a fun week!

Blunt, this Quant thing is about picking up pennies. A penny might not seem like a lot, but if you pick up millions upon millions of pennies then it will add up. As the number of pennies increases, the quant population gets fatter and larger as they reproduce through binary fission. The natural predator of the quant is the steamroller. As the population of quants grows, the steamrollers roll over more and more quants. Thus the steamroller population grows. Eventually so many quants are rolled over that most streamrollers are unable to find prey and the steamroller population begins to decline. As the predator population becomes smaller, the quant population grows, starting the cycle all over again.

I heard that Goldman also took a page out of ABC's book, dating back to coverage of Black Monday in '87. They're hiring the Muppets to take over fund management. It seems they want to sign up Kermit and the others before the other firms have a chance. Grover is apparently known for his "iron hand on the tiller".

I guess nothing beats buy low sell high

does anyone else find it ironic there is a guy using the moniker 'Blunt Smoke' to post on this site?

i thought i left behind people like that when i moved out of the frat house!

thanks for "keepin' it real"

Did it ever occur to you it's purely a nom-de-plume? I thought I left hating herbs like you in college.

oh really? i thought it was your real name. thanks for clearing that up.

and thanks for bringing back the term "herb" from 1988. i liked that one.

MORAL HAZARD and HUBRIS!

So GS injects $3bn into the GEO fund which is -30% YTD under the premise that they are seeing compelling investment opportunities given the recent and significant standard deviation moves. They said it was not a rescue, but lets face it - it way.

Meanwhile Global Alpha is -27% YTD...but they arent injecting any capital into that fund...so does that mean they dont see compelling opportunities in Global Alpha right now, therefore implying that there is more downside for that fund? Are they afraid to throw good money after bad into Global Alpha? If I were an investor in Global Alpha I would be PISSED!!