Links of Interest - 12/3/08

Surprise, surprise. A GAO audit found that more oversight is needed for the $700 billion TARP bailout package (see CNN Money article). Apparently, as a result of lack of oversight, those receiving billions in funds have not been using the money as originally intended. Not only is it amazing that this is a surprise, but it is interesting how as the amount of money increases, the level of monitoring seems to go down.

Time to bailout alternative energy (see Spiegel Online article). Cheaper crude oil is decreasing the demand for clean and efficient energy. The credit crisis is also making it difficult for new renewable energy companies to get the capital they need to expand and continue daily operations. Spain and Germany are already offering incentives, and the European Commission announced a $252 billion recovery plan that included targeted investments for carbon reduction. President-elect Obama is also expected to use some of the $700 billion stimulus package on eco-businesses.

In an effort to survive the current credit crisis, hedge funds are lengthening lockup times in order to reduce the number of redemption requests (see Bloomberg article). In return, and in an attempt to raise more capital, some of the very same hedge funds are lowering management fees from 2 to 1 percent, and further lowering performance fees from 20 to 15 percent, or even as low as 10 percent in some instances.

Goldman Sachs, still adjusting to its new role as a bank holding company, is considering online banking (see WSJ article). The move in being done in part to help increase its deposit base. While a lower-margin business, the increased deposit base will allow Goldman to have a more stable capital base during difficult market conditions, one of the main reasons for changing its status to a bank-holding company.