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Hedge Fund in Which SDCERA Has Money Puts up Barriers to Redemptions

The Composite International Fund of Wall Street's D.E. Shaw has set up so-called "gates" to slow down redemptions as a result of money being withdrawn. The San Diego County Employees Retirement Association has 20 percent of its money in hedge funds, and less than 2 percent of its total funds reposes in the D.E. Shaw Composite International Fund. Investors have been told they can pull out 1/16th of their capital each quarter, confirms Brian White, chief executive of SDCERA. "We have not pulled money out, nor have we an intention to do so at this time," says White. The value of the total SDCERA fund is $6.2 billion as of October 31, down $2.2 billion from June. Two years ago, SDCERA worried that it had lost $175 million from a failed investment in Amaranth Advisors, a hedge fund that it had taken on at the same time it had taken on D.E. Shaw. White says it has gotten back $90 million of the Amaranth losses and is attempting to recover the rest through a lawsuit filed in New York. D.E. Shaw uses quantitative strategies, highly mathematicized, in its various investments. Lawrence Summers, recently named President-elect Obama's assistant for economic policy, was a part-timer at D.E. Shaw. He resigned when he got the appointment.

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The Composite International Fund of Wall Street's D.E. Shaw has set up so-called "gates" to slow down redemptions as a result of money being withdrawn. The San Diego County Employees Retirement Association has 20 percent of its money in hedge funds, and less than 2 percent of its total funds reposes in the D.E. Shaw Composite International Fund. Investors have been told they can pull out 1/16th of their capital each quarter, confirms Brian White, chief executive of SDCERA. "We have not pulled money out, nor have we an intention to do so at this time," says White. The value of the total SDCERA fund is $6.2 billion as of October 31, down $2.2 billion from June. Two years ago, SDCERA worried that it had lost $175 million from a failed investment in Amaranth Advisors, a hedge fund that it had taken on at the same time it had taken on D.E. Shaw. White says it has gotten back $90 million of the Amaranth losses and is attempting to recover the rest through a lawsuit filed in New York. D.E. Shaw uses quantitative strategies, highly mathematicized, in its various investments. Lawrence Summers, recently named President-elect Obama's assistant for economic policy, was a part-timer at D.E. Shaw. He resigned when he got the appointment.

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Comments
10

White says it has gotten back $90 million of the Amaranth losses and is attempting to recover the rest through a lawsuit filed in New York.

LOL... yeah, sure they will get their money back from a lawsuit-because Amaranth is just over flowing with cash right now and the road to their office which has a "for lease" sign on it is paved with gold.

Government has some of the biggest morons in the world working for it.

Next thing you're going to be telling that the Einsteins in Gov. will be appointing a "Car Czar" to workout Detroits problems and that Henry "Hank" Paulson has more brain power than a first semeter Econ major at SDSU.

Dec. 10, 2008

Response to post #1: The car czar will no doubt be as effective as the so-called ballpark czar was in San Diego. Whatever happened to all that development that was to take place in the ballpark district (Pillage Village)? That money was supposed to pay for debt service on the facility. Best, Don Bauder

Dec. 11, 2008

Contract should be reopened since

1

it was negotiated and approved under questionable circumstances(stock and pump/dump scheme with a local Council person who voted on the project(Valerie Stallings?)

If that was a lawsuit, it would have been an automatic mistrial.

Moores should be paying the full note on Petco. If he cannot afford it, then sell the team to some local group that can.

2 No development and/or substantial change

in the development plan after approval by the voters, deal is void unless resubmitted to voters, in my opinion

Dec. 11, 2008

Johnny wrote, "Government has some of the biggest morons in the world working for it."

Interesting. Johnny knocks gov't employees for being dumb, yet also knock gov't employee pay. Maybe if gov't paid more it could attract "smart" people, eh Johnny?

What do you propose as an alternative? Anarchy?

Dec. 11, 2008

Response to post #3: As I said in a prior post, the city got completely outlawyered in the Padres and Chargers deals. The depredations are in concrete in those contracts. Moores has already left town, taking his loot from Peregrine and the ballpark district real estate deals with him. And I'll bet the establishment still loves him. Best, Don Bauder

Dec. 11, 2008

Response to post #5: You have a point. City workers can't be that dumb; they completely conned the pols and presumably the voters. Best, Don Bauder

Dec. 11, 2008

I think this article by Nick Gillespie sums up the national situation nicely: http://reason.com/news/show/130522.html

The author's neologism, National Pants-S***ing Moment, NPSM, should enter our political lexicon.

Heed Gillespie's introductory warning...it's all true!

"Author's note: This column is about politics and hence is filled with profanity and heaping helpings of excretory imagery. The faint of heart should evacuate this page immediately, like patrons at a Golden Corral buffet once the cheese sauce runs out."

Dec. 12, 2008

The news today that yet another hedge fund has collapsed is distinguished only by the truthfulness of its 70 year old founder who admitted it was all a scam.

It seems to have evaporated $50 Billion dollars in what amounted to a Ponzi scheme.

If my analysis of the derivatives and hedge funds is correct, they're ALL ponzi-like structures and NONE of them will pay off.

Yet that is exactly where the big public employee retirement funds parked all their money.

Another NPSM.

Dec. 12, 2008

Response to post #7: Wow! Gillespie hits all the notes. What a writer! Best, Don Bauder

Dec. 12, 2008

Response to post #8: The hedge fund scandal is only coming to the surface. Much more muck lies below. Can our citizenry take any more truth? Both the county pension system and the city's have money in hedge funds -- the city's are in so-called "market neutral" entities which go both long and short, and are very much like hedge funds. The county's are hedge funds by definition. Best, Don Bauder

Dec. 12, 2008

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