Investors demand hedge funds show clean hands on Libor

According to Reuters Investors are pushing some of the world's biggest hedge funds to show that their traders played no part in the interest rate rigging scandal plaguing major banks.  These hedge funds have responded with in-depth internal probes which they hope will assure investors that they did not collude with the banks, are completely clean and will not become embroiled in the affair, people familiar with the funds said.

Regulators across the globe are investigating whether banks tried to rig the London interbank offered rate, a benchmark used to set the price of trillions of dollars of financial products.  None has publicly confirmed they are looking into the activity of hedge funds or alleged any wrongdoing by them.  However, some investors are so concerned about the reputational damage and the difficult questions their own clients would pose if hedge funds they had invested in were to be implicated that they are demanding the managers show they have a clean record….

Need to now more?  Check out http://in.reuters.com/article/2012/07/27/uk-banking-libor-hedgefunds-idINLNE86Q00220120727

Sad, Sad, Sad: Former hedge fund boss dies in murder/suicide

From Moneyweb: a letter to investors in a scheme run by Herman Pretorius has confirmed the death of the former hedge fund boss. The unsigned communication has left unanswered questions over what Pretorius's clients are invested in. It lists three investments, only two of which were previously known to Moneyweb. It does little to disclose the nature of the investments or who is left to manage them in the wake of Pretorius's death.

On Thursday night, Pretorius allegedly shot his former business partner Julian Williams dead in his Cape Town offices, then turned the gun on himself.   Pretorius used to be involved with a hedge fund called the Abante Statistical Arbitrage. At the time of his death he ran an unregulated investment scheme called the Relative Value Arbritrage Fund (RVAF), which many investors believed to be a hedge fund.

Pretorius had been due to attend a meeting of investors in Moorreesburg on the evening of his death. Investors were informed that the event had been cancelled because Pretorius was in a meeting with Williams.

Read all about it at http://www.moneyweb.co.za/mw/content/en/moneyweb-special-investigations?oid=577372&sn=2009%20Detail

The New Goldman: Body By Jake

According to the NY Post he’s the man who’s beefing up gold-plated Goldman Sachs’ once-flabby p.r. muscles. Richard “Jake” Siewert — a former press secretary for President Bill Clinton in 2001 — is putting the once-guarded, 144-year-old partnership through its paces as he works to buff up the firm’s tattered image.

The game plan of the 48-year-old Siewert includes pushing Goldman CEO Lloyd Blankfein and other executives, testing his belief that Blankfein has the “Everyman” touch to click with Main Street. In his first 100-plus days, Siewert has convinced Blankfein to schedule more public interviews and pushed the bank honcho to display for the media more of what Siewert feels is an affability and wit usually displayed only when Blankfein is with his peers.

In the spring, with just several weeks at Goldman under his belt, Siewert’s strategy bore fruit.  Blankfein stunned Wall Street by sitting with CNBC and Bloomberg — his first extended public chats in some two years....

Read all about it at: http://www.nypost.com/p/news/business/body_by_jake_GwISL9z7L3lfko00V0u3jL

Crackdown City: Feds weigh retail sweep after Wal-Mart bribery scandal

Fasten your seatbelts, people.  U.S. authorities are considering launching a wide-ranging examination of the retail industry for violations of an anti-foreign bribery law, after Wal-Mart and other retailers have come forth with their own potential offenses, people familiar with the matter told Reuters.

Retailers have been reviewing their international operations in light of a bribery scandal at Wal-Mart Stores Inc's (WMT) operations in Mexico that is the subject of investigations by the Justice Department and the Securities and Exchange Commission.

The conduct was thrown into the public spotlight in April, when a New York Times report said that management at Wal-Mart de Mexico (WALMEXV.MX) orchestrated bribes of $24 million to help it grow quickly in the last decade and that Wal-Mart's top brass tried to cover it up. Other retail companies have also since reported to U.S. agencies suspicions of their own potential violations, which in turn has the Justice Department and SEC considering a sweep of the entire industry, said the sources, who are working with companies who have unearthed potential issues but declined to be identified….

More?  Check out http://finance.yahoo.com/news/exclusive-u-weighs-retail-sweep-005849175.html

Reality Bites: Tech high-fliers make a crash landing

OMG — pop! The N.Y. post opins that may be the sound of the tech bubble bursting. Silicon Valley’s hottest companies — ranging from Apple to Zynga — have turned into investment bummers following a steady drumbeat of disappointing results.

While they run the technology gamut from gaming to gadgets, the companies all fell short after reporting slowing growth instead of skyrocketing trajectories.

Facebook met already lowered expectations yesterday, but Wall Street still punished the stock, sending the shares down nearly 12 percent in late trading. Even before the results, Facebook was taking a pummeling along with partner Zynga, which depends on developing hit games for the social network such as “FarmVille.” In March, Zynga paid $200 million for drawing game Omgpop after its popularity had peaked.  Zynga, which went public at $10 a share in December, plunged 37 percent yesterday to a new low of $3.18 after it badly missed expectations....

Read more: http://www.nypost.com/p/news/business/tech_high_fliers_make_crash_landing_6c14hhIndaTY0ietaowDyL#ixzz21noFgTdK

Who, Me? A One Percenter?

No one wants to be a One Percenter anymore. Including the One Percent.  A new study shows that the vast majority of people earning more than $250,000 a year say they are not in the One Percent. CNBC writes that many of them actually are One Percenters, since the cut-off for the One Percent is $343,000 a year in income.

In the latest Mendelsohn Affluent Barometer, most of the $250,000-plus earners say they’re only in the top 20 percent. In fact, as a group, they’re in the top 3 percent and higher.

It turns out, One Percenters (like many Americans) have a vastly overinflated perception of the American income system and tend to rank themselves much lower than their actual position. They believe there are plenty of Americans who make far more than they do, even though that’s not the case.

Americans who make $250,000 (Mendelsohn calls them “ultra-affluents”) think that it takes at least $1.67 million in annual income to make it into the top one percent of income. That’s nearly five times the actual cutoff point…

Wait…wait…there’s more at http://www.cnbc.com/id/48338035/

Wall Street Is Getting Fooled AGAIN

When companies announces their quarterly financial results, their earnings usually beat estimates made by Wall Street's analysts and strategists.  In fact, companies have been increasingly beating Wall Street's estimates, BusinessInsideer writes.

"This is likely attributable to Investor Relations officers guiding the Street analysts to an earnings number the companies know they can beat," says Rich Bernstein of Richard Bernstein Advisors.

Unfortunately, analysts fall into this trap over and over.  In fact, during the current earnings season, the majority of companies have been beating Wall Street's estimates yet again.

"76% of companies that have reported are beating analysts' EPS estimates despite a stall-speed growth rate of 0.3% – also its slowest pace since Q3 2009," wrote Myles Zyblock, Chief Institutional Strategist for RBC Capital Markets.  "It would appear that management was successful in guiding analyst expectations lower, as earnings have surprised by a factor of 5.1%....."

Find out more at http://www.businessinsider.com/rbc-earnings-fooled-again-2012-7