Hva det fuck skjedd for alle meg pengene?*

KreditTilsynet, The Financial Supervisory Authority of Norway, has suspended Terra Securities’ (Terra Gruppen AS) right to operate after four towns near the Arctic Circle recently discovered that they had unwittingly guaranteed loan packages offered by Citibank, which have collapsed.

The investments in loans made by the towns ran some $81 million US, however, as Nordic News, put it: “it was surprising news to the four municipalities that they simultaneously guaranteed a $600 million loan to a hedge fund managed by Citibank.” “Guaranteed” as in are now responsible for securing. The first call was for some $15 million.

Manager Ola Sundt Ravnestad, pictured above in the Norwegian magazine E24, has been fired. The KreditTilsynet’s press release, here, has yet to be translated, but one phrase has no Norwegian substitute, and remains in English: “Collateralized Debt Obligations.”

Takk en meget Citibank. (Bastards)**

*What the fuck happened to all my money?

**Thanks a lot, Citibank. (Bastards.)

It Has Something to do with Liquidity, Maybe…

Vice Chairman of the Federal Reserve Donald L. Kohn addressed the Council on Foreign Relations in New York yesterday. His remarks, though short, included a hint that rates might be eased, which goosed the markets. Less emphasized, however, was the introduction, which included a Rumsfeldian list of known, unknown and only partially known unknowns, and the factors that would obscure them. For example:

The repricing of assets is centered on relatively new instruments with limited histories–especially under conditions of stress; many of them are complex and have reacted to changing circumstances in unanticipated ways; and those newer instruments have been held by a variety of investors and intermediaries and traded in increasingly integrated global markets, thereby complicating the difficulty of seeing where risk is coming to rest.

He also admitted a fair degree of uncertainty about the current conditions, and added that central banks must make decisions “based on analyses made with incomplete information and partial understanding” and that “the extent to which institutions face liquidity constraints, as opposed to capital constraints, or the moral-hazard consequences of policy actions, are inherently ambiguous in real time.”

But, yeah, never mind the fact the Vice Chairman of the Fed admits that he is as befuddled as a dog in a funhouse… the rates might ease!

Read here, with questions from banks and funds

Listen here

Absolute Capital Volunteers to Have a Voluntary Administrator

Sydney-based Absolute Capital, whose cheery website quaintly advertises themselves as, “The Structured Credit Specialists for… Generating Income,” has announced the appointment of a voluntary administrator to oversee the Absolute Capital Group’s dissolution. Absolute had aimed “to deliver attractive returns in all market conditions,” but what they really meant was all market conditions except the present one. Creditors of the AUS$400+ million fund will meet to discuss the bad news on Monday, December Third.

pdf of the announcement here

As for the volunteers, they are corporate meltdown specialists McGrathNicol, and they must be busy.

Turn Key Hedge Funds, Incorporated

The last excuse for not starting a hedge fund has vanished. Turn Key Hedge Funds, Incorporated, will take care of the paperwork for you, so you can concentrate on getting people to give you a million dollars.

Turn Key Hedge Funds, Incorporated, is incorporated in Coral Springs, Florida.

It’s Not Boring Being a Lawyer, It’s Not!

The Toronto law firm Thornton Grout and Finnigan has proudly posted to its site the Financial Post’s recounting of its “wildest ride” on the trail of 33-year-old Boaz Manor, former head of failed hedge fund Portus Alternative Asset Management. The “ride” included diamonds, dozens of offshore accounts and shell companies, and much “forensic” accounting.

Meanwhile, Back in Reality

On the other end of the complicated products tied to the feet of sinking funds are actual homes. Small-town blog Foreclosing Cleveland is keeping track of foreclosures in Cleveland, and notes in a wonderful post the role 4111 Archwood Street is playing in Deutsche Bank’s troubles. The central question is: If a large company owns just a slice of a mortgage, can they foreclose? Judge Christopher Boyko, who ruled on a related case recently, thinks not.

But Everyone Seems So Nice in Canada

The CBC reports that Portus co-founder Michael Mendelson was sentenced to two years in jail for his role in the fraudulent management of a $765 million Canadian fund. That’s Canadian dollars, which are actually worth something.

Among other things, according to the report, Mendelson was charged with money-laundering and possession of property obtained via crime. His cohort, Boaz Manor, was arrested at the airport last week, and Mendelson will likely testify against him.

Portus’ bankruptcy info here

Charges, including a description of a crazy night reformatting 90 computers, here

Gisele Bundchen Dumps the Dollar

Bloomberg reports that Gisele would like to be paid in anything but U.S. currency.

When supermodels won’t take greenbacks, the end is near… probably in the rear-view mirror, actually….

link

Just asking: Why is her twin sister her manager, and not a supermodel, too? Or is she?

2 and 20 and Greens Fees

From the Commodity Futures Trading Commission’s Injuction against Cornerstone Capital, and its manager, the unbelievably aptly-named Joseph Profit II.

“…Specifically, the order finds that Profit falsely represented that the Icon Fund had generated exceptional annual returns of 42.18 percent in 2005 and 20.74 percent in 2006. However, the order finds that the Icon Fund was never profitable, and that Profit lost in excess of $1 million due to trading losses and personal withdrawals, which Profit spent on personal items such as meals, greens fees, airline tickets, and lodging….”

CFTC Injunction here

Rest In Peace, Cornerstone

Those Who Know, Do Not Say…

Timothy Sykes, boy wonder and former hedge fund manager, giving advice to the viewers of ABC.

Note: He single-handedly turned $12,000 into $1,000,000 over three years. and then turned it back into $12,000 again. (Not quite, see his comment below.) He is currently managing $12,797.84

Sykes is documenting his efforts to get back to $1,000,000 here