How Hedge Fund Renaissance Makes Money

I've just been reading 'More Money Than God' - a fascinating read. Anyway, there's lots and lots of interesting stories, anectodes about Hedge Fund Managers.

Reading about the secretive nature of Renaissance I would reckon they make some money by

1. scanning of all research reports they get

2. scanning of all important news websites

3. real-time analysis of the data collected in steps 1 and 2 with 'language recognition' algos

4. combining sentiment (what people are reading/writing) with momentum, technical analysis signals

5. trading it

Interesting how they put a lot of emphasis on russian coders...

Would be interesting to read more about what they learn in russia, that we didn't/don't in the west.

Anyone have more information on Renaissance and their techniques, please add a comment with links...

Another day of SNB intervention - Oct 6th 2011

Well, today more intervention on behalf of the SNB, imo.

See this post also:

http://eurusd-fx.blogspot.com/2011/10/eurchf-snb-intervention-ahead-of-news.html

No news from SNB itself, but with the number of people involved in decision to intervene and or fix price level, the market probably gets wind before...

On Oct 4th it was a survey of CFOs that sparked buying: Most ever CFOs were negative on the economy.

Today Oct 6th numbers showed the hotels are seeing less and less foreign tourists, most likely due to strong swiss franc. A drop of between 6-10% was reported yoy.

Thomas Reuters price increases 2012: 10% for popular products

We're heading into disinflation or deflation, banks everywhere cutting, and what's Reuters doing? Increasing prices for most popular products by 10%

"I am writing you to inform you of changes to the price of our products and services that will apply from January 1st 2012 or your first 2012 invoice.

The annual price increase supports our commitment to continually invest in an aggressive agenda of content and technology innovation to ensure that our customers have the most critical tools to meet their business objectives in today's challenging markets. Last year we launched our two major platforms Thomson Reuters Eikon (for the desktop) and Thomson Reuters Elektron (network and trading infracstructure). The launch of these platforms marks the beginning of a signigficant series of investments in advanced capabilities" ...

"Pricing for Thomson Reuters Markets products and services will be increased 5% unless listed below."

"D. an increase of 10% .... : Thomson Reuters Eikon, Thomas Reuters Messaging, Reuters 3000 Xtra ... etc etc"

EURCHF - SNB Intervention ahead of news Wednesday Oct 5th 2011

Considering the negative EURO-News all over the place. The Dexia news. And more... isn't it surprising those jumps we're seeing on EURCHF this evening CET.

I think language tomorrow from SNB could be: We're not happy with 1.20 ! And they're intervening in the market to back the claim.

UBS Rogue Trader loss of USD 2 billion - My thoughts

So this trader hid at least USD 2bn of losses and worked for the London equities division of the bank.

Funny that just the other day, the CEO of the bank, Oswald Grübel was saying they'd increased efficency since 2008/09. Who'd have thought he meant in incuring trading loses.

Got to love this analysts comment: "The pressure to finally downsize this rotten investment banking is rising!"

Not even analysts like the casino arms of these global banks... that says a lot!

Commentator: I wonder if the USD 2bn is including his bonus? Might be 2.1bn or 2.2bn including it!

Why the Swiss Franc CHF won't be a safe haven near or even medium term

Markets have reacted quickly to the Swiss money printing. Safe haven investors have decided to look for currencies that offer the same security. And they've found interesting new places: Norway and Sweden. These two countries currencies have not reached the same overvaluation that Switzerland had seen.

The investors who are really interested in safety in times of a melt down know: the SNB is more likely to push Switzerland into inflation along with the EUR-Zone than back down. The SNB president is a former pro swimmer, who would only bend to most extreme pressures, I reckon.

I picture the situation as follows: The CHF was the fit, strong soldier that everyone wanted to protect their property/assets with. The Captain America of currencies so to speak. Then he shot himself in the leg. He won't and can't be forced into battle anymore.

So if I were a hedge fund manager I'd really think twice about betting against the SNB... Especially as the real safe haven flows have easily found a new home in Norway, Sweden - countries with similar GDPs but less fundamental reason to intervene and floor their currencies....

Proportion of EUR by country based on GDP 2009

This pie chart shows the EURO-Countries GDP as of 2009. I gather that if you know what the GDP of a country is, you can deduct how much of the EURO currency they account for.

So according to my calculations based on IMF data found on Wikipedia Germany was 27%, France 21,5%, Italy 17%, Spain 12%.

If Italy and Spain really follow through on fiscal austerity, they'll probably fall into recession.

What I'm not sure of: If they improve their debt situation but cause consumption to drop, unemployment to rise, how do they get around paying more for their debt? Aren't they in a sort of Catch-22 or vicious circle.

The ECB will have to increase the amount of sovereign debt they buy off them to keep them from the vicious circle. That in turn leads to Germany, the healthiest, to get infected with the debt cancer, in my opinion.

I don't think Greece is of any real relevance except to show what happens when a country fails to comply with rules and guidelines: they get bailed out. But who will bail out the ECB? Their printing press. That's why Gold isn't dropping.

What in heavens name can bring back confidence? Jobs right? But jobs, factories are in China, India, Vietnam and other countries right? Why would they come back?