Links of Interest - 12/2/08

Interesting article about John Paulson and some other hedge fund winners this year (see Bloomberg article). The article is long, but worth the read. There is some variety in the strategies and approaches, but funds betting against subprime and housing did the best, not surprisingly. Even a quant fund did well.

It looks like the commodity crash is taking its toll on salaries and bonuses. The top paid metal and energy traders may "only" earn $1-1.5 million in salary and bonus this year, down from $5-8 million in 2007 (see Bloomberg article). Difficult times indeed. I guess there will be no more $1,000 ice cream sundaes and pizza for a while (see blog post).

According to Treasury Secretary Paulson, there is a need for a new regulatory system that will look "at the entire financial system." See Financial Week article. "Entire" in this case applies to countries, in addition to asset classes. So the plan is to have each country overseeing the regulation of another country's financial system - this should produce some interest debate.

Man Group says that banks, and not hedge funds, are more levered, and as a result are the main cause of asset price declines (see Reuters article). Man also puts hedge fund leverage at about one-third its levels in 2007. Expect future returns to also show similar trends.