Howard Marks on Managing Penn's Endowment

The latest memo from Howard Marks, chairman of Oaktree Capital Management, is one of the best pieces I’ve seen from him in a while. With agreement from the University of Pennsylvania, Marks opens the kimono and talks about his stewardship of Penn’s $7 billion endowment from 2000-2010. It’s open and honest and includes some real gems about defensive investing and expectations about performance. 

Here it is:

Pensions and Hedge Funds - Ins and Outs

By Zach Kouwe

There’s been a lot of talk recently about pension funds being drastically underfunded. Somestudies peg the funding gap for state and local pensions at more than $1 trillion. To make up the gap, pensions either have to force their members to contribute more, cut back on benefits or make it up by earning returns in the market. (Sounds like social security, doesn’t it?)

Moody's Weekly Credit Report

By Zach Kouwe

Here's Moody's Weekly Credit Outlook for Jan. 30, 2012. Interesting stuff about the sovereign debt crisis in Europe and possible ways forward.


Moody's Weekly Credit Outlook 1-30-2012

Inside Citigroup's $54 million arbitration award

By Zach Kouwe

Gretchen Morgenson had a fantastic column in Sunday's New York Times on a little-followed arbitration suit brought by a group of high-net-worth investors from Denver against Citigroup's Wealth Management division. The amount of the award ($54 million) and the fact that a lot of internal documents are now available piqued my interest. So I dug up some of the documents in the court case mentioned in The Times, which involves Citi's appeal of the arbitration decision. Embedded below is the answer the high-net worth investors filed in response to Citigroup's appeal. 

It's intriguing not so much because of the alleged fraud that took place, but because the suit names Citi's top producing wealth advisor from 2001 to 2008  (who subsequently joined Credit Suisse) and the supporting documents include a letter written to Vikram Pandit and Sallie Krawcheck by a Citi wealth manager begging the bank to make their clients whole on a money-losing fixed-income product they say was misrepresented as a safe investment. It's the same old story from the Financial Crisis - did the bank intentionally misrepresent the risks or was this an unprecedented event no one could have foreseen? You decide. Here are some of the documents.

• Recorded conversation between Citi employees regarding the demise of the fixed income product
• Document outlining targeted investors
• Internal email between Citi employees asking "what if they are indicted? 

Citigroup Arbitration Lawsuit

Carson Block on Bloomberg TV

By Zach Kouwe 

My client, Carson Block of Muddy Waters Research, was on Bloomberg Television this morning speaking about Chinese companies and the outlook for China in general. In 2011, Mr. Block was named to the Bloomberg 50 - the 50 most influential people in finance.

Moody's Weekly Credit Outlook - 12-5-11

Moody's Weekly Credit Outlook 12-5-2011

Everybody Should Be Reading This Weekly Report from Moody's

Moody's Weekly Credit Outlook 10-31-2011