Nouriel Roubini provides an a link to this FT.com Alphaville article which is a review to a Paper basically consisting of everything you didn’t really want to know about Hedge Funds. Those of you, like myself, who find even the article daunting can just accept my probable wrong interpretation of it all: Hedge Funds need a 20% Profit to pay off as advertized, but can only manage about a 8-9% Return for an assortment of Reasons; the greatest being the shortage of Spread Bets of high yield. The Upshot of it all is the likelihood that Santa will not show up for Christmas this year, especially for Hedge Fund managers. A real trouble arises for all of Us, though, when people start pulling their money out of the Hedge Funds, an aggregate of around $1.3 trillion by Alphaville measurement. Markets will shake like the San Francisco earthquake, unless prudence is used in gradual Withdrawal of funds.
Fortress Investment Group has a subsidiary, GateHouse Media Inc., which is buying up small town newspapers, currently holding in excess of 400 Publications. The basic idea is that the real Advertising dollars come from local businesses, who want saturation of a specific area which the Internet Web browsers cannot provide now or possibly ever with the ease of a small town newspaper. Gatehouse is using conglomeration (effective Surround-Read) to saturate local-Drive distance areas for local businesses. It is an excellent business format, and troubled only by a high Debt ratio because of the purchase pricing of the newspapers.
This NYTimes article explains exactly what is wrong with the American Health Care industry, if One wishes to read the entire, lengthy thing. Xoma Ltd. is the Company reviewed, and one which has never shown an Operating Profit or marketed any Drug, but has burned up $700 million raised by Investors or other pharmaceutical companies. The major Players stay the same, and researchers are laid-off when funds draw down. The Whole is better than a Chain Letter, both because it is legal, and due to the fact that it raises more money; performance not required. Investors simply buy High, and sell Low. This is the purported justification for high Royalty Costs on new Drugs. Can I sell you some land in Florida? It is actually 8 miles from a road, but We are developing plans to put in a Golf Course. lgl
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