| Smiles disappearing in hedge fund land
You think you've got bad timing with your investments? Spare a thought, and maybe a prayer, for hedge fund manager Jim Allan. Back in the rosy hope of summer, which feels like a hundred years ago, Mr. Allan invited friends and business acquaintances to a party. The scene was the Rosedale Golf Club in Toronto and the occasion was a birthday: His firm, Roundtable Capital, was one year old. Paul Beeston, who once ran the Toronto Blue Jays, was there. So was former RJR Nabisco boss Ross Johnson, a man who will live on forever as the antagonist in Barbarians at the Gate, one of the best business books ever written. The guests noshed on tuna sashimi and coconut shrimp. Mr. Allan dished out some thoughts on the stock market. A society photographer captured the event and the National Post published a short item on it.
Richonomics 101 in Post-Bush America
All except Goldman Sachs, which largely avoided the risky loans, have been battered by the financial crisis. While the seven firms earned $US39 billion ($45 billion) in profits during the first half of 2007, a 41 per cent gain over the prior year, they lost $US28 billion ($32 billion) in the third and fourth financial quarters, DiNapoli said. Total pretax profits for the seven firms totalled $US11 billion ($12.6 billion) in 2007, less than one-fifth of the $US60 billion ($68.5 billion) record set in 2006, the comptroller said. Employee compensation, which includes bonuses, consumed 61 per cent of the firms' revenues in 2007, up from 45 per cent 2006. DiNapoli said this reflected the firms' efforts to keep high-performing employees. Those working in mergers and acquisitions and in equities should be rewarded with bigger bonuses but employees in the fixed-income units that handle mortgages will be "dramatically lower", the comptroller said.
Legislature proposes bills to protect consumers
State lawmakers want to regulate lead and toxic chemicals in children's products, create a bill of rights for airline passengers and allow homeowners to sue for shoddy home construction. Two weeks into the session, legislators have rolled out more than a dozen bills aimed at protecting customers after last year's product fiascos, including lead found in millions of toys, the subprime lending debacle and airline passengers stranded for hours on the tarmac without adequate food or water. A bill backed by Attorney General Rob McKenna would prevent homeowners from losing their homes in so-called "foreclosure rescue" scams. Under the measure, a homeowner must get at least 82 percent of the difference between the home's fair market value and the underlying mortgage when the home is sold.
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