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Stearns USA analysts triggered a huge market downturn by admitting that market conditions were worse than they admitted.

Now is an excellent time to buy CONDOS in Thailand. The good news is that Thailand never followed the USA craze of the property subprime splurge & greediness which has now lead to USA borrowing $US2b a day just to keep the lights on. They are in fact broke but can print more $$$ at will as the $$$ seems Ok as at Nov 2008. Thailand controls their lands from foreign speculation and well done. One of the few countries that owns their lands left and they must be congratulated to protect their people as they have done.

LISTING OF FINANCE COMPANIES WHO HAVE GONE BUST DUE TO PROPERTY SPECULATION AROUND THE WORLD. THE SAME CAN HAPPEN IN THAILAND IF YOU CHOOSE THE WRONG COMPANY TO INVEST IN

 


 

THE PROBLEM WILL BE CAN THAILAND STAY ON THE SAME WAVELENGTH OR WILL FINANCE COMPANIES CRASH ONCE AGAIN ESPECIALLY THOSE WITH USA AFFILIATIONS. BANKS ARE MUCH BETTER AT LENDING BUT THE RAMPANT CORRUPTION BY THE EX GOVERNMENT IS STILL APPARENT AND SOME BUIILDING AND INVESTMENT COMPANIES HAVE OVER BORROWED. COMPOUNDING THIS IS THE FLUCTUATION OF STEEL, CEMENT AND CONTRACT PRICES NOT BUDGETED FOR. ALSO MANY THAI DEVELOPMENTS RELY ON DEPOSITS FROM BUYERS WITH LARGE LOANS THEY MAY NOT BE ABLE TO SERVICE. THAI CENTRAL BANK ARE NOT LENDING TO USA COMPANIES WHO MAY HAVE PROBLEMS WITH THEIR MOTHER BANKS. AGAIN GOOD FOR THAILAND FOR TAKING THIS STANCE

HEDGE FUND MANAGEMENT IN THAILAND & THE WORLD

WHAT ARE HEDGE FUNDS

There are over 9,000 hedge funds operating globally, mainly in the USA, UK and now Asia and they offer their investment capabilities primarily to very wealthy individuals or to professional investors such as insurance companies and pension funds but not the average man on the street. But they are moving out to the Eu and Asia now as although they are not regulated and do what they want the USA is starting to change all this.  Finance companies got a jolt when George Soros made $$$ and started the Hedge Fund game betting on the pound being ejected from the European exchange rate back in 1992. So these finance companies set up their own firms instead of working under the banks etc, where they can run their own business and generate more of the profits for themselves rather than with banks or other finance institutions and therefore have more control over where they invest. Hence the Stock market trade has actually gained in strength with these high finance batters but if it tumbles it will affect the whole financial world and the stock market as well due to the amount of money people invest.  Thus a hedge fund is a fund that can take both long and short term equity, use arbitrage, buy and sell undervalued securities like property mortgages, trade options or bonds, and invest in almost any opportunity in any market where it foresees impressive gains; then spit it out when it wants to move on or when the interest rates start moving upwards. They can bid for takeovers but the biggest challenge is will they work for the investors eg. Bears & Stearns crash so the fund manager must have good instincts and an eye to be able to make money not lose it as their punters outlay min of $US1m each to be a part of it all. Here . Bears & Stearns bet heavily on bonds backed by subprime mortgages, or home loans to consumers with shaky credit histories.  Bear Stearns suspended redemptions because the "investment manager believes the company will not have sufficient liquid assets to pay investors. The onetime $642 million fund—means investors have no choice but to sit on their losses. The Hedge fund companies have the swing to be able to make major takeovers and then sell them down the line as they use there funds as collateral but watch out if something goes wrong. However like Bear Stearns collapse with hedge funds they provide no comfort for those who invested. You therefore are playing roulette to eithe win in this high stake game or gamble and lose.

THAILAND & HEDGE FUNDS

 But what about Thailand. Not the best bet since the new interim government wants to impose taxes on foreigners living here but in Asia alone theres around $250b invested with these fund management schemes. There are small players in the vehicle manufacturing. Although the baht is strong one must be very wary of what they are investing in here.

FEES

FEES: A hedge fund manager will receive both a management fee and a performance fee. As with other investment funds, the management fee is computed as a percentage of assets under management. Management fees might typically be 1.5% or 2.0%. hedge funds charge 20% of gross returns as a performance fee, but again the range is wide, with highly regarded managers demanding higher fees

RAGS TO RICHES OR ABOUT TURN

Hedge funds are private investment funds, primarily organised as limited partnerships and are really betting syndicates for the very rich. The amount of money they handle, in so far as anyone can estimate this, is very large around $1- 2trn; industry professionals reckon $1.5trn. If hedge funds were a country, it would be the eighth-largest in the world. To invest in one of these funds, you have to put in a minimum of $1m, although that initial investment is very small compared with what can be earned – so in effect Hedge funds are a global-scale gambling racket.  Hedge funds poured money into emerging markets in the search for high returns, they are able to borrow billions at cheap interest rates. But as soon as the cost of borrowing increased they tend to bail out pretty quickly, leaving the developing economies to clean up the mess.

If hedge-fund investors take the risk, and they reap the rewards? If they live by risk, they also can crash with it,  - in January the Eifuku Fund, based in Japan, lost $300m in a week and of course what about Enron who lost 4500 jobs, and pensions worth $1b. I call it paper money.


 

 

HEDGE FUND CRISES

The bursting of a debt bubble has had three very important consequences for alternatives: First, borrowing is hard to do and more expensive. The more you need it, the worse off you will be. Second, everyone is trying to sell assets at the same time. This drives prices down and murders forced sellers. Third, the real economy is taking the strain. That is hurting demand for commodities, real estate and the things and services provided by companies owned by private equity.

"We are going through a massive, never-seen-before deleveraging across the financial system, which will push us into a total meltdown" said Jan Loeys, head of global asset allocation at J.P. Morgan Securities in London. "We already have a partial meltdown.""Hedge funds are getting hurt," Loeys said. "They are leveraged organizations like the banks.""We are going through a massive, never-seen-before deleveraging across the financial system, which will push us into a total meltdown" said Jan Loeys, head of global asset allocation at J.P. Morgan Securities in London. "We already have a partial meltdown.""Hedge funds are getting hurt," Loeys said. "They are leveraged organizations like the banks.""Private equity is going through their own funding problems - they don't get runs on private equity like the banks, but you'll see a large number of private equity deals go bankrupt." In the event of a deep recession, Loeys sees a blended portfolio of private equity, hedge funds, real estate shares and commodities losing 8 percent of its value in the coming year, against a positive return of 1 percent for a typical mixture of equity, bonds and cash.The growth of alternative investments has been phenomenal in recent years, and it has been highly correlated with the overall growth of debt in the global economy. It has produced some outsized returns for investors and huge paydays for practitioners, and it has been a big source of revenue for banks and the entities formerly known as investment banks.
More than $5.6 trillion is committed to alternative strategies, according to J.P. Morgan estimates, a growth of more than 50 percent in a little more than two years. But that is now coming unstuck.Hedge funds are down 12 percent so far this year, according to J.P. Morgan, and though transparent data is not available for private equity, returns will have been worse, if anything. Real estate is obviously a disaster and commodities, which were flying high at midyear, are now down 4 percent for 2008. The key is the great deleveraging now under way. And stung by a truly awful year, hedge fund investors are asking for their money back at an extremely uncomfortable time.

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