Introduction to Regulation of Hedge Funds in Germany

hedge funds companies -

SEC Staff Clarifies that Cash Solicitation Rule
Does Not Apply to Investment Pool Referrals
http://www.dechert.com/library/FS_09_10_08.pdf

China US Trade war begins

Mr. Obama's Trade War

If President Obama thought he could pander to his domestic political base without any consequences abroad, he needs to think again. Beijing's response to the tire tariffs Mr. Obama announced late Friday evening is a warning that America's trading partners won't take protectionism lying down.

China's Ministry of Commerce announced Sunday that it will launch antidumping investigations against imported U.S. auto parts and chickens. The move is being interpreted as retaliation for Mr. Obama's imposition of a 35% tariff on cheap Chinese tires imported into the U.S. (Beijing denies a link.) Apparently Beijing wasn't mollified by the fact the tariff is less than the 55% domestic lobbies in the U.S. had sought. The Commerce Ministry also put out a strongly worded statement denouncing the tire tariffs and not-so-gently reminding Mr. Obama of the Group of 20 statements he has endorsed about the importance of resisting protectionism amid a world-wide slowdown.

On their own these measures won't mark dramatic protectionism. Many imports of U.S. poultry already face stiff limits stemming from a pre-existing trade dispute over a U.S. ban on some Chinese chickens. Beijing had already slapped duties on car parts during an earlier trade dispute, too.

Rather, the Chinese government may want to send a signal to discourage Mr. Obama from future protectionism. They have reason to worry. Unlike in normal antidumping cases, Mr. Obama can't plead that his tire decision was simply made by career bureaucrats following a standard rule book. The trade law he applied, Section 421, gives the President full discretion, and Mr. Obama signaled he's willing to use his discretion to pay back domestic political supporters like the United Steelworkers union that filed the tire case. And because Mr. Obama's decision sets a precedent for similar cases, Beijing has to worry it will face more protectionism in short order if it doesn't nip this trend in the bud now.

This kind of Chinese response was predictable, if the Obama Administration had cared to read the signs. As a political matter, Beijing can't afford to do nothing. The China Rubber Industry Association, a trade group, puts the potential cost to the Chinese economy of the U.S. tariffs at $1 billion and 100,000 lost Chinese jobs. The Commerce Ministry said yesterday it wants to discuss the issue with the U.S. at the World Trade Organization, but a formal WTO challenge would face an uphill climb. Section 421 was specifically allowed as part of China's agreement to join the WTO in 2001.

Plus, China has its own protectionist lobbies at home. "Chinese poultry companies have been struggling over the past couple of years amid bird flu and a flood of imports, and the financial crisis is making that worse," Ma Chuang of the China Animal Agriculture Association, told Bloomberg over the weekend. Tire tariffs from the world's traditional free-trade leader makes it harder for governments like China's to stand up to such pressure from their own domestic interests.

That doesn't make Beijing's apparent retaliation right, of course. Beijing could best claim the global economic leadership role it craves by resisting tit-for-tat protectionism and instead further reducing its own subsidies, trade protections and limits on foreign investment. That might be wishful thinking, but at a minimum it would be wise to drop these antidumping cases as soon as attention has shifted elsewhere.

The bigger lesson here is for Mr. Obama, though. He appears to have thought he could both appease his far-left antitrade supporters in the U.S. and paper over the resulting disagreements with America's trading partners. No such luck. Instead he ceded America's historical leadership on trade when he imposed the tire tariffs. Now China's weekend moves are offering a first sign of where this will end up if he doesn't rediscover the virtues of free trade soon.

http://online.wsj.com/article/SB10001424052970203917304574411810671806286.html?mod=googlenews_wsj#printMode

Is this a looming trade war between the US and the world's largest holder of US debt? Or is it saber-rattling setting up the G-20 meeting in Pittsburgh

http://voices.washingtonpost.com/economy-watch/2009/09/looming_trade_war_with_china_o.html?hpid=topnews

http://online.wsj.com/article/BT-CO-20090914-702705.html
European stock markets traded lower Monday, weighed down by fears of protectionism and a possible US/China trade war.

http://www.marketwatch.com/story/dollar-gives-up-early-gains-after-trade-war-fears-2009-09-14
By marketwatch The US dollar slides against major rivals in late morning, giving up a small lift amid rising US-China trade tensions

New Merk funds offers currencies for all

BOSTON (Reuters) - Money manager Axel Merk has a proposition for average investors: play the currency markets like a hedge fund for a mere $2,500.

Normally the world's foreign exchange markets -- where dollars, euros and yen exchange hands at lightning speed and in enormous sums -- are off limits to people who are saving a few hundred dollars a week for retirement or college tuition.

But on Wednesday, Merk -- a computer scientist turned asset manager with a growing reputation for bringing currencies to Main Street investors -- will launch his third fund that will be stocked with the world's biggest and most liquid currencies.

The Merk Absolute Return Currency Fund will join the four-year-old Merk Hard Currency Fund and the one-year-old Merk Asian Currency Fund as part of the Merk Mutual Funds' lineup.

"This fund will allow the public to have access to the forex markets," Merk said in a telephone interview.

"The main goal is to offer true diversification with a mix of currencies that can go long or short," Merk said, describing the portfolio as something for investors who want to own more than stocks and bonds.

Investors will be able to access the fund through the Internet, brokerages such as Fidelity and Charles Schwab (SCHW.O), and through financial advisors.

The new fund will share characteristics of the two existing funds: it will never use leverage or borrowed money to make returns grow faster and it will make long-term allocations, not minute by minute calls, Merk said. 

http://uk.reuters.com/article/idUKTRE5880NQ20090909

Reuters Hedge Funds Blog

http://blogs.reuters.com/hedgehub/

New Merk funds offer currency for all – Reuters

Barclays Capital launches enhanced FX Algorithmic Trading

http://www.automatedtrader.net/news/algorithmic-trading-news/15924/barclays-capital-launches-enhanced-fx-algorithmic-trading
Barclays Capital, the investment banking division of Barclays Bank PLC, has announced the launch of PowerFill+, a suite of online foreign exchange tools providing clients with order management and access to deeper liquidity. This new functionality on BARX, the firm's electronic trading platform, is free to use, providing execution capability without brokerage fees.

The main feature of PowerFill+ is that it allows clients to anonymously work bids and offers. The best bid/offer forms part of the price that users see, which is intended to enable BARX to provide all clients with tighter spreads and deeper liquidity.

"Traditionally, platforms offering this level of order functionality charge their clients fees, but PowerFill+ is brokerage free," said Tim Cartledge, Head of BARX FX Trading at Barclays Capital. "Zero brokerage plus Barclays Capital's certainty and depth of liquidity, coupled with the extra liquidity resulting from our clients' own orders, means we are providing clients with an optimal trading environment."

"PowerFill+ demonstrates Barclays Capital's commitment to providing clients with outstanding service and reinforces our position as a leader in market innovation," said Nick Howard, Head of Foreign Exchange and Emerging Markets Distribution at Barclays Capital. "This is a great addition to our BARX platform which is recognised globally for its reliability and stability with a proven track record during times of market volatility."

New NFA Forex Regulatory Guide

http://www.nfa.futures.org/NFA-compliance/publication-library/forex-regulatory-guide.pdf
Forex Transactions

Treasuring Thrift: 'In Cheap We Trust'

http://www.npr.org/templates/story/story.php?storyId=112557219
Journalist Lauren Weber knows a little something about being cheap. When she was growing up, her father refused to set the heat above 50 degrees during the winter in New England.

He turned out the lights, even if someone had left a room for just a moment. And for a little while he even tried to ration the family's use of toilet paper. Seriously.

Rather than traumatize Weber, all that — and more — made her the perfect person to explore the roots of frugality in the United States.

Nobody Liking Dollar Deficits Makes Rogoff Favorite

No 'Performance Advantage'

The need for foreign investors may only increase in the final four months of 2009.

After purchases by the Fed, the net supply of long-term U.S. government and agency debt has been about $50 billion a month this year, Dean Maki, head of U.S. economics research at Barclays Capital in New York, wrote in a Sept. 4 report. As the Fed slows its so-called quantitative easing program, net supply may reach $200 billion by year-end, he wrote.

"In the broadest sense, the dollar tends to prosper when a unique U.S. asset attracts foreign buyers," such as high real yields in the early 1980s and the Internet boom in early 2000s, Steven Englander, the chief currency strategist at Barclays, wrote in a research note on Aug. 27. "There is no asset class in which U.S. assets have a clear performance advantage"

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUzQTB9klLmM

High Tech VW Factory in Dresden

Oldest Swiss Bank Tells Clients to Sell U.S. Assets or Leave

Sept. 2 (Bloomberg) -- Wegelin & Co., Switzerland's oldest bank, is telling wealthy clients to sell their U.S. assets, or switch banks, because of concerns new rules will saddle investors with tax obligations in the world's biggest economy.

U.S. proposals to extend reporting requirements for banks whose clients buy American stocks and bonds coupled with estate tax liabilities that may be inherited by the heirs of people who have such holdings prompted the advice from the St. Gallen, Switzerland-based bank, said Managing Partner Konrad Hummler.

"We came to the conclusion that it's a threat to our clients," Hummler, who is also president of the Swiss Private Bankers Association, said in an interview yesterday during a conference in Zurich. "It's also a threat to us as a bank because as a custodian we are an executor to the estate. We find this aspect discomforting, so we recommend selling all American securities whatsoever."

Hummler said he plans to raise the subject today at a meeting of the Private Bankers Association, which counts Pictet & Cie., Lombard Odier & Cie. and Mirabaud & Cie. among its members. Swiss banks, which manage $2 trillion, or 27 percent, of the world's privately held offshore wealth, are struggling to protect bank secrecy after the government agreed to hand over the names of 4,450 UBS AG clients to U.S. tax authorities.

Hummler said he wouldn't ask other association members to follow Wegelin's lead. Wegelin, founded in 1741, manages more than 20 billion Swiss francs ($18.7 billion) in client assets.

"Every member is free to decide and act on their own," he said.

http://www.bloomberg.com/apps/news?pid=20603037&sid=aguVgp1QqgEU

Sept. 3 (Bloomberg) -- HSBC Holdings Plc's Swiss private bank says more rich foreigners are inquiring about moving to Switzerland, spurred by rising taxes at home and concerns about the erosion of banking secrecy for non-residents.

Switzerland's decision to increase cooperation with the U.S. and neighbors such as France and Germany on tax evasion hasn't dulled the Alpine nation's allure for those who are able to take up residence, said Alexandre Zeller, chief executive officer of HSBC's Swiss bank.

"We're not talking about thousands of people because we're talking about people with a certain wealth, but it's significant," Zeller said in an interview in Zurich. "They come above all from countries which have substantially increased taxes. There's a direct correlation between taxes and the desire of a wealthy person to want to establish themselves elsewhere."

Switzerland is home to expatriate millionaires including seven-time Formula 1 racing champion Michael Schumacher, Ikea founder Ingvar Kamprad and singer Tina Turner. Wealthy residents who don't have Swiss income can negotiate individual tax deals with regional authorities in Switzerland.

Zeller said any Swiss banking client with a tax-compliance issue in his home country has three choices: do nothing, make a voluntary disclosure, or, if rich enough, move to Switzerland.

Beginning in April, the U.K. plans to levy a 50 percent income tax on people who make more than 150,000 pounds ($244,000) a year. Julius Baer Holding AG Chairman Raymond Baer said in an interview earlier this year that his bank remains attractive to Germans faced with unpredictable taxes. Most Americans remain liable for U.S. taxes even if they live abroad.

 

http://www.bloomberg.com/apps/news?pid=20601087&sid=ae3NU.gekp.0

The incredible shrinking surplus

Is China deliberately understating the size of its trade surplus?

CHINA'S current-account surplus is seen by some as the root cause of the financial crisis. The good news is that after widening year after year it is now shrinking much faster than expected. In the first half of this year the surplus narrowed to $130 billion, one-third lower than a year earlier, and barely half its level in the second half of 2008. Not only has China's merchandise trade surplus narrowed, but investment income from China's stash of foreign reserves has also dropped. Arthur Kroeber at Dragonomics, an economic-research firm, predicts that the current-account surplus is likely to drop to 5% of China's GDP this year, down from 11% at its peak in 2007. Belatedly, China seems to be doing its bit to rebalance the world economy.

http://www.economist.com/businessfinance/PrinterFriendly.cfm?story_id=14363126

Yen Trades Near 7-Week High

Sept. 3 (Bloomberg) -- The yen traded near a seven-week high against the euro before a European report estimated to show retail sales fell in July from a year ago, adding to signs a recovery in the 16-nation region's economy may be slow.

The yen was also close to its strongest in seven weeks against the dollar as stocks slid for a second day in Tokyo, boosting demand for the relative safety of Japan's currency. The euro traded near its lowest level in two weeks versus the greenback on speculation European Central Bank President Jean- Claude Trichet will signal policy makers will keep interest rates low at today's meeting.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIPpoF5MLqU0

http://marketoracle.co.uk/Article13165.html The Euro dropped from 1.4376 until it reached and tested Fibonacci 61.8% support for the whole move from 1.4045 to 1.4405. The above mentioned Fibonacci support at 1.4183 will be the most important for the short-term, after it survived yesterday's test (yesterday's low 1.4176) , because a break of this specific support will open the door to a trial to find a new bottom below Aug 17th low 1.4045 within this week. Any attempt to go up will have to break through 1.4252 (short-term 38.2% Fibonacci Resistance), and if this attempt is corrective, it should not go higher than 1.4300, as we can surely say that this is the most important resistance for the moment.

Credit Suisse Investment-Bank Chief Calello Treated for Cancer

Calello, 48, "has begun an intensive program of treatment due to the development of a sudden and unexpected illness," the Zurich-based bank said in a statement yesterday. "Paul will remain as involved in the business as the course of treatment process will allow." Calello has cancer, according to a memo sent to employees. http://www.bloomberg.com/apps/news?pid=20601087&sid=aAUIIgVF7Sns

EES posts strategy to MT4 stats day before hack attack

As you might have noticed, MT4stats.com is currently not reachable or VERY slow.

This is because a lot of servers of the datacenter where MT4 Stats is hosted are under attack.

Server/IT specialists are fixing this now as I am writing this. Hopefully these so called people performing DDOS-attacks are gone very soon, or even better.. get caught.

That's it for now, so no need to worry about it!

MT4 Stats should be up and running again this same evening, during asian session or next morning at UK sunrise. I can not promise you this, it depends on all the IT people from the datacenter located in The Netherlands.

I wish you the best with trading tonight!

Cheers,

Hans

Webmaster MT4 Stats

http://eliteeservices.mt4stats.com/

Forex.com announces metals trading

We are pleased to announce that we will be adding spot gold and silver trading to the MetaTrader platform on September 1st, 2009, enabling clients of FOREX.com UK to trade metals alongside global currencies.

We will be sending a client notification email on September 2nd, 2009. A sample of the email has been included below for your reference.

Should you have any questions, please do not hesitate to contact your Relationship Manager or GAIN Capital Partner Services at +1.908.731.0724, or at partnerservices@gaincapital.com.

We're pleased to let you know that spot gold and silver are now available for you to trade on MetaTrader at FOREX.com.

Much like trading currency pairs, spot metals enables traders to take a long or short position in gold (XAU/USD) or silver (XAG/USD) while simultaneously taking the opposite position in the U.S. dollar. The spot metals markets are quoted and traded in a very similar way to currency pairs. Trading is available 24 hours a day from Sunday 11pm GMT through to 10pm Friday GMT.

Spot gold and silver trading is driven by several market factors that currency traders are likely already following, including the strength of the U.S. dollar and the price of oil.

Why trade metals?

		Hedge against inflation - When inflation expectations are high or rising, gold and silver tend to appreciate while other asset classes may see values eroded by inflation. When inflation expectations are low, metals may languish.
		Alternative to USD - Historically, gold and silver are a "safe havens", a country-neutral investment. When the reserve currency comes under pressure, investors seek out other alternatives - like gold and silver.
		Safe haven vehicle - during periods of heightened risk aversion or market turmoil, gold and silver tend to appreciate as investors exit other financial assets (e.g. stocks and bonds) and flock to the traditional role of metals as a store of wealth.