PrefBlog

I mentioned the current exodus of hedge funds from London to Switzerland on July 27. Now (hat tip: Dealbreaker) there’s more:

The advent of the 50% tax rate appears to be the final straw for many hedge funds and other money firms who are being actively lobbied by the Swiss authorities to decamp to Zug, Zurich or Geneva.

They are being promised that in Switzerland they can hide from increasing European Union regulation or the intervention of watchdog agencies like Britain’s Financial Services Authority.

Richard Jordan a partner at law firm Thomas Eggar told Financial News: “Around 40% of my work involves advising people on ways to leave the country. We have reached a tipping point in terms of hostility to the UK tax system.” Financial News estimates that hedge funds managing nearly £10 billion of assets have moved to the tax haven of Switzerland in the past year.

Another Senator has come out against flash orders:

[Delaware Democrat Senator Ted] Kaufman said the SEC also should examine the co-location of servers at the exchanges, liquidity rebates paid on the basis of order flow, possible conflicts of interest arising from the disclosure of retail order flow, and how much trading occurs without the involvement of a brokerage firm.
…
James Angel, a finance professor at Georgetown University in Washington who studies market structure and regulation, says that lawmakers’ concerns over flash orders are misplaced.

“This notion that somebody else is getting a secret peek at Aunt Sally’s order is just wrong,” Angel said. “The people using flash orders are sophisticated investors who are very comfortable with the fact they can wait half a second for a better price.”

A US mortgage originator has gone bust:

Taylor, Bean & Whitaker Mortgage Corp., the 12th largest U.S. mortgage lender, filed for bankruptcy protection from creditors as regulators question its involvement with Colonial BancGroup Inc.
…
The announcement comes after Taylor Bean, based on Ocala, Florida, was expelled from the ranks of mortgage lenders approved to do business with government-sponsored mortgage agencies earlier this month. The government cited concerns about possible fraud.

Taylor Bean said today it believes the decisions were related to its involvement with Colonial and that it has, or will soon, appeal the action. The government actions led Taylor Bean to fire about 2,000 employees on Aug. 5, the company said.

The terminations followed a failed attempt by Taylor Bean to lead an investor group that would pay $300 million for a controlling stake in Colonial, one of its lenders that has since failed and been taken over by BB&T Corp.

Taylor Bean said it is in talks with the Federal Deposit Insurance Corp., the receiver for Colonial, on getting access to about 100 accounts frozen by Colonial.

KER-RUNCH! The Great PerpetualDiscount Rally of 2009 came to a close today, with the class down 62bp in total return, erasing all of its gains since, er, last Tuesday. Had to happen some time! Straights again dominated the volume table. Volume continued to be elevated, with RBC having a good client-service day.

This entry was posted on Monday, August 24th, 2009 at 7:55 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.