patrick.net

Typically, a hedge fund needs to have at least $25 million in assets to generate sufficient fees to sustain itself. For regulatory and practical reasons, you'll never reach $25 million by relying on a thousand people investing $25,000. You need investors who can write checks of at least $250,000 -- and, in reality, much higher amounts. This effectively screens out the average Joe regardless of how sophisticated he claims to be. Also, keep in mind that the $250,000 number is a practical minimum for a small hedge fund, and the small funds are not your typical players in the MBS/CDO market. The larger hedge funds typically will not consider you as an investor unless you can write at least a $1 million check. You can lie about your credentials, but if you don't have the cash to back it up, you'll never be able to invest.

Shanghai real estate goes bust.

http://www.lestwarog.com/newsArticle-2010.html

sorry - just noticed that it is an old article - march 2006

Sandibe,

Any decent boiler room worth it's salt w/50 or so brokers can raise that in under a month ( I should know). Done it on several occasions. You ARE right though, w/lower min. the expenses WILL be through the roof (but do you want a HF manager or don't you!) We can always tout a non-AIMR compliant return and leverage our "track record" down the road w/bigger fish.

One HF states clearly in their "red herring" that their min. NW for clients is 150K OR! a NW of 45K IF you have an income of 45K! (So basically everybody). Minimum investment of 5K (and subsequent inv. a min. of 1K).

I'm not saying they're aren't guys that belong in HF's (or the HF biz) but it's gotten out of hand. WAY out of hand.

DinOR, HARM/X Industries is please to announce a 5 billion dollar issue of LBS payable to said principles. For brokering (floating the paper downstream?) we are please to offer you as much as 90% of the face value provided the co-founders of HARM/X Industries LLC, GmbH, OTSY* are denominated to the tune of 5% of face value. Note, each LBS is denominated with black marker pin by LBS professionals working in King City.

*Out to screw you.

crap

-pin
+pen

DinOR,

Any hedge fund that uses the boiler room tactic you describe is running afoul of a number of federal securities laws. If the investors in those funds lose their shirts, it's not because of their exposure to MBS/CDOs. Its because they are handling their money over to a scam. I would hesitate to call the funds you describe hedge funds at all.

My point is that it is very difficult for the average Joe to invest in a legitimate hedge fund because of the barriers to entry. Most hedge funds rely on one of two exemptions to avoid regulation as a mutual fund. Under the first exemption, all investors need to be "qualified purchasers" which, in the case of an individual, is someone with at least $5 million in investments (that's investments and not just net worth). Funds relying on this exemption have more important fish to fry than the average Joe (or even the above average Joe). The second exemption is available only if the fund has 100 or fewer investors. If you have to target small fry, you have no choice but to rely on this exemption. But it is hard to see how you can legally raise a meaningful amount of money if you only have 100 investors putting in a few thousand each.

Sandibe,

Well I was actually covering a few issues at the same time w/ a broad swath but there is absolutely nothing illegal about soliciting securities transactions over the phone and legit firms do it everyday, I assure you.

Right now Christian Baha is taking investors down to 5K. I know, I know that's not a "real" HF. SFWoman's husband is innundated w/guys basically off the street wanting to start HF's under whichever exemption they can shoe horn themselves into but he isn't taking on any new clients. I imagine for a reason.

I'm not an expert in securities litigation (and I don't want to be) but it was that aura of "no guarantees here" that opened the door to a largely unregulated, unaudited and unmitigated disaster. For each HF that opens, one just went bust. In the meantime the "managers" carved out a nice living for themselves. Why are you defending these guys?

newsfreak Says:
I would like to be there when a home buyer asks the robot to move 2 walls, install 3 extra wires and replace the poorly installed shingles that are curling.

Yeah, I think that engineer is dreaming. Some guys in England want to make a machine that makes machines of any sort in your own living room too. Just give it 100,000 years of dedicated research and it will be there...

On the other hand, maybe robots can land on other planets and make it habitable, inject oxygen into the air and build whole cities in time for the humans to arrive -- there's an idea for a screenplay or sci-fi story...

I'm still interested in developing the unattended rendering robot tho...

Person,

Unless I am misunderstanding you, the process you describe has existed for some time...it's called rapid prototyping and it is used extensively in industries such as consumer product design.

There are many variations out there, one of the more well known being the SLA (Stereolithography) process.

http://en.wikipedia.org/wiki/Rapid_prototyping

The cost of products made using these techniques scale with volume. If you wanted a solid plastic replica of your cell phone it would cost maybe $100. Of your Laptop...well over $1000. And the rapid-prototyping machines only go so big. So the robotic house-builder is basically taking an existing concept and trying to scale it to a different application (and using a much different material.)

Oh, and a rapid protoyping machine can cost anywhere from tens to hundreds of thousands of dollars...

For example...

http://www.zcorp.com/products/printersdetail.asp?ID=1

If you guys are bored, there's been a mildly interesting thread about just how good/bad san jose is:

http://www.burbed.com/2007/02/11/grow-up-in-the-bay-area-do-you-agree/#comment-6818

Or if you're even more bored, you can join in on the discussion here:

http://www.yelp.com/topic/rDp0r5MtesBaUfS6ee1TpQ

Sample quote:

"dangerous loans"... let me know guess, you've been reading popular media warning against exotic loans and their readjustments. guess what... it's not happening. (btw, i work in the industry). will it happen? probably, but not nearly to the degree that you or the media wish it to. The US economy continues to remain strong, people have jobs, and guess what... they're paying there bills. Will these exotic readjustments put some families on the street? sure. a lot? maybe. enough so that we taxpayers will have to bail them out? good one. that is "unprecedented" my friend.

my fundamental problem with you persective is A) it's based on non-expert opinion and B) you are the cosumate dooms day advocate and C) you speak so surely about the future.

HARM,

I would like to commend you on your ability to consider new information and revise your position / thread. Your actions speak volumes about your integrity and intelligence!

Sincerely,
Paul

They might be borrowing in Yen or Euros at a lower rate.

... and then hedging the currency risk.

It has begun...

(02-13) 17:57 PST PHILADELPHIA (AP) --
An investor who killed three people and himself at a marketing company was upset about losing money in a failed real-estate venture and told his victims to "say your prayers" before he opened fire, police said Tuesday.

http://www.sfgate.com/cgi-bin/article.cgi?file=/n/a/2007/02/13/national/a133744S42.DTL&type=printable

stuckinthecity,

But but bu.... I thought Roman "the Candle" retired and is living the quiet life in Las Vegas? Please remind me from time to time to stop by Second City Bubble! Is that embarrassing or what?

eburbed,

Is this the right "Vu"?

infomercial.tvheaven.com/tomvu.htm

Uh, I don't know if anyone else noticed but somehow Patrick.net has "slipped" in Google rankings from #1! to (#6?). How is this possible?

Dean Baker and Mike Whitney haven't done updates (on the bubble anyway) in MONTHS!

Helicopter Ben on the hot seat this morning. Again total jibber jabber he's so in the pockets of the Investment Bankers. He briefly mentioned risk on the sub-prime implosion. He also said there is no way to assess whether it will spread to other sectors and prime. I think he knows what's coming and knows he's too late to stop it. But I am enjoying watching the Senate grill his ass.

OT - Pro's and Con's of renting - the rats in the garage that the landlord won't do anything about have now started living in out car engines! So now we have to get them inspected for damage at $125 each! Maybe we can get the landlord to pay?

Uh, I don’t know if anyone else noticed but somehow Patrick.net has “slipped” in Google rankings from #1! to (#6?). How is this possible?

Don't we have our friend as an insider there ? Maybe he can fix it.

Or maybe it's time for a "Huh ? 2.0" and "Duh ! 2.0" thread.

Claire,

First, look on the "bright" side. (It could have been skunks?)

Provided you'd notified them previously, I'd say it's their problem. However rats don't know your personal financial situation so they probably would have moved in even if you were paying 2-3X on a mortgage!

Oh and get a cat! :)

Helicopter Ben on the hot seat this morning. Again total jibber jabber he’s so in the pockets of the Investment Bankers. He briefly mentioned risk on the sub-prime implosion. He also said there is no way to assess whether it will spread to other sectors and prime. I think he knows what’s coming and knows he’s too late to stop it. But I am enjoying watching the Senate grill his ass.

Speaking of Ben, I am sick of hearing him say the same damn bullshit month after month, "duh, Inflation seems like it's getting a bit high, duh, I may soon have to raise rates."

Why doesn't he just come out and say, inflation got the best of us; we cannot raise rates anymore and we are all screwed!

Sylvie,

I was frankly a little surprised the subprime MELTDOWN was even mentioned. By Heli-Ben bringing it up first I took it as something of a "pre-emptive" move in an attempt to divert attention elsewhere. Evidently it's just too big to sweep under the carpet? :)

Sigh...a girl in my office is buying a place with her boyfriend. They are planning to spend $550k - their combined income is probably $80k, and I'm being generous. And they aren't trust fund kids either.

When will this madness end?

When will this madness end?

On the courthouse steps in a few months. :lol:

StuckinBA,

I don't want to say 'conspiracy' just yet but most of those placed above Patrick are really just "one time rants". Hell we rant ALL day EVERY day around here!

"It d o e s n ' t m a k e s e n s e!" :(

Claire,

I'd say it's health department time. You can't have rats getting into your stuff and eating your cars' wiring.

SFWoman - I'd say it's time to move the minute one gets in the house, till then I am hoping my other half gets a payrise so we can use it to move to our neighboring school district - but rentals are a bit thin on the ground at the minute and I was reluctant to move schools and go through the "I miss my friends". My daughter's school is okay, and she's doing well, but I do wonder if she would be doing even better eslewhere.

And no we can't afford a private school.

I'd have to say this is karma! Realtor's being cheated; my how the tables have turned.

HeliBen seems to be covering his A**, he seems to almost contradict himself so that he can weasel out of it all one way or the other - there is "noise" in the data - we think inflation is okay, but........core inflation is high - yep - just turn up that noise a bit more and we won't have to worry about anything. The housing market is stabilizing, but it could be worse than the Fed anticipates......no s...t sherlock!

Claire,

(And SFWoman PLEASE don't take this the wrong way) I will *not take atty's as clients. Period. Claire, did you know it was an atty. when you signed the lease?

allah,

We should never wish bad things on other people, even if they are realtwhores! (In Peter P's absence) :)

No, thought he worked at Stanford Uni, on the bright side he rarely raises the rent and doesn't bother us and we've been here 4 years now. The house has been owned by them for years, so unless they've HELOC'ed it, and we don't have to worry (too much) that they are going to sell it out from under us.

Claire,

Oh I see. Don't get me wrong, I have friends that are atty's and I refer bus. to them when appropriate but I make an effort not to enter into bus. arrangements w/them if I can help it.

spike66 - when I say rats - they are commonly described as roof or fruit tree rats, so I do not think they are the same as sewer rats, but maybe that's just people making it sound better. If we reported it our LL would know it was us.

Re DinOR's take on attorneys as clients ...

Right on, brother. In my short life, I have tried to advise two attorneys about their financial affairs and it didn't work out well either time. Every conversation was a very thinly disguised deposition. In the end, I told them both that I wasn't the person for them and walked away.

Re justme's how is this getting them more than the 5% they can get in the bank or US treasuries?

Leverage. The hedge funds are excellent credits and are in some cases willing to post collateral to secure their borrowing in order to reduce funding costs further. They can lever their funds to the eyeballs and, as long as their models correspond to the real world, they coin money.