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2. Ideas for hedge funds mascots

The gold market has been on a 13-year winning streak, prompting some of the biggest names in the hedge fund business to pile in. But that could all come to a close this year, as prices remain mired in bear market territory.

As of now, there's a massive bulls vs. bears fight going on, with monetary policy looming as the key determinant in how all this shakes out. The bearish view is represented by Goldman Sachs, which argues that gold prices will decline as the economy improves enough to prompt less accommodative monetary policy, according to the bank's analysts, as noted by Bloomberg. They predict the price of gold will drop to $1,050 by the end of next year from about $1,320 level currently.

Hedge funds however are betting that Goldman Sachs is woefully wrong. Gold futures have been rallying in July, "heading for the largest monthly gain since January 2012," as more embrace the view that the Fed will not ease up anytime soon.

"Money managers increased their net-long position by 26 percent to 70,067 futures and options as of July 23, U.S. Commodity Futures Trading Commission data show. The fourth consecutive weekly gain is the longest streak since October."

For more:
- here's the article

Read more about: commodities, Gold
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By Jim Kim

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3. Bad timing? Steven Cohen throws a lavish party

Now that the SEC has authorized mass market advertising by sellers of private securities, per the JOBS Act, are we in for an onslaught of hedge funds advertisements?

The conventional wisdom holds that the industry will take a go-slow approach to such broad advertising. Just because it can do something, doesn't mean it should. One might argue that it makes more sense to advertise broadly only when they have a product aimed at the masses. Hedge funds can still only sell to accredited investors, though we might see more launch "hedge fund mutual fund"-like products.

In any case, Bloomberg has seen fit to discuss a marketing essential: mascots. "The usual suspects – the wise owl, the noble lion, the soaring eagle – are all taken. So we've come up with a few suggestions, with help from readers," it notes.

My favorites include the naked mole rate. "Yes, it sounds creepy at first and the visuals aren't great. But the naked mole rat's physical traits allow it to thrive in an otherwise harsh underground environment. It lacks pain sensation in its skin and has low metabolic and respiratory rates, making it an ideal trader." In the end, a mole rat may be exactly who you want handling your money.

And then there's the Mink. "A little obvious, but it's an animal with cachet, at least when it's dead. Those hedge-funders with wives and girlfriends have expensive experience with this. According to Wikipedia, 'the American mink is the only extant member of the genus Neovison.' This is a plus -- Neovison sounds like a Google Glass competitor and could appeal to both Gen X and boomers."

Any other ideas?

For more:
- here's the slideshow

Read more about: marketing, advertising
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By Jim Kim

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4. Tourre trial to head to jury

When it comes to conspicuous consumption, timing is paramount. Steven Cohen has raised the art to a new level, sending strong messages with timely purchases. The most infamous example: About the time he was agreeing to pay $616 million to settle civil charges with the SEC, without admitting or denying wrongdoing, he was also negotiating to pay $155 million for Pablo Picasso's "Le Rêve".

Some interpreted that move as a finger in the eye of prosecutors, a statement that such a puny settlement is no sweat off his back. One can only speculate if that incident offered any incentive for prosecutors to seek more aggressive financial penalties. They are seeking to put him out of business as an advisor and the penalties might eat into his vast personal wealth.

Is Cohen at it again? Reuters report, "Cohen did not let the filing of criminal charges against his $14 billion SAC Capital Advisors get in the way of a party this weekend at his vacation estate in tony East Hampton, New York.

"The Saturday night party at Cohen's 10-bedroom home on Further Lane took place two days after federal prosecutors in New York announced a five-count criminal indictment against SAC Capital that portrayed the 21-year-old Stamford, Conn.-based fund as a breeding ground for unlawful insider trading." The party apparently called for the delivery of $2,000 worth of tuna to Cohen's home in Conn.

In Cohen's defense, the party was planned before the most recent SEC and DOJ charges were filed. And one person "familiar with the event" said the party, attended by a few dozen people, was intended "to show support for ovarian cancer research, though it was not a fundraiser." He has indeed been a prodigious philanthropist, as billionaires tend to be.

For more:
- here's the article

Read more about: SAC Capital, Steven Cohen
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By Jim Kim

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5. JPMorgan settles energy charges for $410 million

Is Fabrice Tourre on the verge of a big court win?

His team of lawyers seem quite confident. They called no witnesses to the stand. Not a single one. Apparently, they are convinced that the SEC's legal team, which got off to a rocky start, did their work for them, starting with the counterproductive testimony of a former Paulson & Co. executive.

"Defense lawyers deliberated changing up their strategy in recent days, with the final decision having been made as late as Monday morning, people briefed on the matter said. The team was encouraged by the last piece of evidence that the S.E.C. submitted in its case: the videotaped deposition of Michael Nartey, a former salesman in Goldman's London office who worked on the mortgage investment at the heart of Mr. Tourre's case," according to DealBook.

"During the deposition, parts of which were played for the jury, Mr. Nartey testified that his colleague never told him that the hedge fund Paulson & Company — which was betting against the mortgage deal — had a hand in selecting the securities that ended up in the security. That left Mr. Nartey with no opportunity to inform his client, IKB, a German bank that decided to invest in the trade."

He went on to testify that "had he been told of Paulson & Company's investment, he likely would not have disclosed it anyway." He also said he wasn't sure if he saw Paulson & Co. as actually selecting the securities in the CDO at issue.

In the end, it's unsure how all of this bears on Tourre and his alleged attempt to mislead investors. The strongest evidence for the SEC came from an ACA Management executive, who said that she was left with a strong impression that Paulson & Co. was an equity investor not a short investor. The defense apparently likes its chances enough that it did not seek to call anyone to counter that testimony in any way. Deliberations will likely start on Wednesday.

For more:
- here's the article
- SEC presses Tourre about salary on paid leave

Read more about: Goldman Sachs, Fabrice Tourre
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By Jim Kim

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