Knock Out: CNBC Confirms Lehman CEO Punched at Gym
Network verifies reports Richard Fuld was attacked for financial institution’s bankruptcy.

It seems anxiety from the financial crisis is reaching new highs, but the tipping point for one individual came at the Lehman Brothers gym in the midst of the company’s collapse.

     While former Lehman CEO Richard Fuld was testifying before the House Oversight Committee Oct. 6, CNBC reported he had been punched in the face at the Lehman Brothers gym after it was announced the firm was going bankrupt. CNBC and Vanity Fair contributor Vicki Ward said Fuld was attacked at the gym on a Sunday following the bankruptcy.

 

     “Frankly, I sat there and listened and I’m with the guy who apparently, the day before Barclays announced they were coming in and Lehman had already filed for bankruptcy, went over to him in the gym and punched him because that’s how I feel when I, you know, when I watched that,” Ward said on the Oct. 6 “Power Lunch.” “I didn’t think he was contrite at all, I thought he was arrogant.”

 

     Ward confirmed previous reports about the incident that reportedly occurred Sept. 21 and said the information came from “two very senior sources.”

 

     “From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.”

 

    Ward determined Fuld deserved the beating based on his testimony before the committee.

 

     “I thought he was shameless,” Ward said. “I thought it was appalling. He blamed everyone. He blamed, as you say, ‘naked short sellers’ over and over in case we didn’t get the point, when in fact hedge funds like Harbinger had money locked up in Lehman and was shorting it to try and make the most of the money that they already had. He blamed everybody but himself.”

 

     Lehman Brothers filed for bankruptcy in September 2008 and its assets were later snatched up by the British bank Barclays for $1.35 billion, which included Lehman’s Midtown Manhattan office tower with a $960 million price tag.

If only, for once in a while, we’d have some of the pundits relativize market’s activity, we’d all be much better off.

Hedge funds gloomy on oil, CFTC data show

By Moming Zhou, MarketWatch

Last update: 1:21 p.m. EDT Aug. 4, 2008

SAN FRANCISCO (MarketWatch) — For the first time in 17 months, hedge funds in July made more bets on oil prices falling than rising, according to the latest government data.

Short positions from noncommercial investors, hedge funds and other large investors that don’t actually take delivery of oil, surpassed long positions in July for the first month since February 2007, data from the U.S. Commodity Futures Trading Commission showed. Short positions are bets on falling prices while long positions bet on rising prices.

“We are seeing a significant retrenchment of bullish appetite among funds,” said Edward Meir, an analyst at futures brokerage MF Global. “The price bias still favors the downside.”

‘We are seeing a significant retrenchment of bullish appetite among funds. The price bias still favors the downside.’ — Edward Meir, MF Global

Short positions surpassed long positions by 660 contracts in the week ended July 29, the CFTC reported late Friday. For the previous week, net short positions were 3,640 contracts. One contract equals 1,000 barrels of crude oil.

At the end of July 2007, when investors were betting that rising demand and limited supplies would push up oil prices, long positions had surpassed short positions by as much as 127,000 contracts. Crude jumped nearly 90% since then to a record high of $147.27 a barrel earlier this month.

Recent gloomy bets from noncommercial investors, however, helped send crude lower. Overall in July, oil fell $16 — the biggest monthly loss on dollar terms since crude futures started trading on the New York Mercantile Exchange in 1984.

On Monday, crude futures for September delivery slumped more than $4 to below $120 a barrel for the first time in three months.

Investors increasingly are concerned that slow economic growth will cut into oil demand. The Energy Information Administration reported Wednesday that over the past four weeks, U.S. motor-gasoline demand has averaged 9.4 million barrels per day, down by 2.4% from the same period last year.

New York’s Top 100 hedge-fund titans are getting flattened in the credit crunch.

The high-flying traders – who were touted around the globe for their killer 2007 returns and $100 million paychecks – can’t get out of the red in the first half of 2008, according to hedge-fund performance records obtained by The Post.

And unless they pull a dramatic turnaround in the second half, the traders can kiss good-by to those massive paydays of 2007 because hedge funds rake in their income from taking 20 percent of the profits.

In good years, a sizeable hedge fund can pocket $100 million or more, with most of that going to the principal. In lean times, the fund has to get by on its 2 percent management fee – which has to go to pay everyone’s salary.

For most of these hedge-fund gurus, 2008 could be the first year since 2000 that they lose money.

Even notable players not on the losers’ list – like super-secretive Steve Feinberg – are not exactly hitting home runs.

Feinberg is basically flat this year on his $5 billion Cerberus International fund. Bond-insurer antagonist Bill Ackman has not even cleared 2 percent on his $6 billion bucket of cash.

Jeffery Gendell, one of the biggest losers, bet wrongly on companies that make wind power towers. The companies have not turned a profit yet and their shares have fallen. Larry Robins has made bad best on financials and tech stocks.

Philip Falcone has been able to post a 40 percent plus increase by staying with his short positions on financials. In addition, Falcone invested heavily in the iron ore sector.

Elan Corp. hit a 52 week-high 3 weeks ago, and hit a 52 week-low 2 days ago.

The facts are clear. 2 major news hit the stock this week:

1. On Wednesday, Elan Corp. PLC(ELN) and Wyeth(WYE) presented data from the mid-stage trial of their experimental drug for Alzheimer’s disease, but the full findings for the drug remain inconclusive and may underwhelm many scientific experts and investors.  Stock down 40%.
2. On Friday, investors battered Biogen Idec Inc. and Elan Corp. after two new cases of a dangerous brain disease were linked to their multiple-sclerosis drug Tysabri, but a number of doctors and patients said they were sticking with the drug and believed its benefits outweigh the risk. Stock down 50%.

In the world of biotechnology companies, Wednesday’s market reaction is warranted. However, Friday’s move represents a buying opportunity. Tysabri is a monster seller and 1 out of every 1000 patients is expected to get PML.

The Wall Street Journal notes:

So far, doctors and patients appear unfazed by the latest development, saying PML cases are still rare, and they need the drug to combat the debilitating effects of MS, a central-nervous-system disease that slowly eats away at motor function. A spokeswoman for the National Multiple Sclerosis Society, a patient group in New York, said that “we are not sensing a mass product defection.”

“I will likely continue to prescribe it for the same reasons we have to date,” he said, noting that “the other therapies are not without their own risks.” Dr. Margolin said the one-in-1,000 risk of PML “has to be put in the perspective of the other 999 patients who, without this drug or another drug like it, are going to continue to suffer brain damage from their MS.”

There is no cure for MS, and existing treatments often offer only partial relief for patients or become ineffective with prolonged use. Many Tysabri users turn to the drug as a last resort.

Suzanne Carroll-Witherell, a Toledo, Ohio, radio host, said she was “a little disappointed and unsettled” by the news of new PML cases but nonetheless plans to get her next monthly infusion of the drug. “I am more scared of the disability than the drug’s risk.”

I had no intention of going up 450 points the past 2 days. Yet I did. Now, if NFP numbers are bad tomorrow morning, expect the worst. Cause that’s the only way to survive.