Research Papers

3rd Quarter 2008

October 16, 2008

It would be difficult these days to be unaware of the dislocation in the economy and in financial markets.   Stocks are down sharply this year, as are bonds issued by companies with even the slightest hint of financial stress.  We view this period as the culmination of decades of poor management by business and government leaders, excessive consumer borrowing, and increasingly lax regulation.  Derivative markets and off-balance sheet financing created opacity that, even now-eighteen months after the implosion of the two Bear Stearns hedge funds that launched the crisis-exacerbated the illiquidity and lack of confidence in the financial markets.  There is ample evidence that the financial crisis has now spread to the broader economy.

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High Grade Core Intermediate 3rd Quarter 2008

October 24, 2008

In the financial maelstrom that engulfed the U.S. markets during the 3rd quarter, no sector was immune.  Even conservative, intermediate maturity fixed income instruments were buffeted by severe dislocations and bouts of illiquidity.

For the first nine months of the year ending September 30th, the Lehman Intermediate Aggregate Index posted a 1.24% return.  While the benchmark’s positive return may seem a soothing number in the context of severely negative returns from equities, commodities, and many formerly absolute return strategies, there was severe turbulence beneath the surface.

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Samson Multicurrency Plus Strategy 3rd Quarter 2008

October 30, 2008
A financial storm swept through world markets during the 3rd quarter and major foreign currencies were buffeted along with global equity, commodity, and bond markets.  In one of the great ironies of this period, the dollar rose sharply as the U.S. financial system neared collapse, the economy slumped, and fears of another Great Depression inspired the greatest equity market collapse in decades.  While it will be some time before historians are able to place these events in their proper perspective, it seams reasonable to conclude that the recent sharp dollar rally was less a reflection of U.S. economic strength, than a seizure – the forced repatriation of funds as global investors de-levered, brought their dollars home, and closed out foreign carry related positions that were either no longer profitable, or tenable.

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