Wednesday, March 2, 2016

Using Science To Improve the Lives of the Rich (alt-headline: Ms Kaminska cares, cares deeply, about the travails of the wealthiest among us)

The first part of the headline is based on the mission statement of LoS Capital:
At Long or Short Capital LLC, we leverage our superior intellect and extensive investing experience to recommend explicit Long or Short positions and related abstract trades, which may or may not be possible with real world financial derivatives. We use science to improve the lives of the rich....
I was reminded of LoS when I saw this piece on the plight of the Ultra High Net Worth denizens of ce mond.
From FT Alphaville:

UHNWI contraction *alert*
 We’re calling it an upcoming billionaire crisis. And we’re linking it to the reversal of global capital flows, tax-haven agreements and the drawdown of the world’s mega surpluses on the back of the petrodollar slump.
We’re on watch, as a result, for all indications of crisis in billionaire and UHNWI land.
Exhibit two to suggest something is definitely up, Knight Frank’s 2016 Wealth Report, as released on Wednesday:
One of the most interesting findings is that a significant proportion of respondents – leading wealth advisors and private bankers from around the world – expect their clients’ wealth to increase at a slower rate over the next 10 years than the past decade. Succession and inheritance issues, wealth taxes and the global economy were identified as the main threats to future growth.
And with respect to 2015:
Despite this long-term growth trend, data from 2015 shows the first annual dip in ultra-wealthy populations since the global financial crisis began in 2008. Last year only 34 of the 91 countries for which individual data is compiled saw a rise in UHNWIs. Almost 6,000 people dropped out of the UHNWI wealth bracket in 2015 – a 3% slide....

On Sunday you may have seen this at the Financial Times:
Saudi Arabia seeks US investment to plug gap in oil revenues
Truth be told, things are even tighter in the Gulf than the proud Saudis are willing to let on.

This morning the Emirates did the walk of shame in this Bloomberg story: 
Biggest U.A.E. Bank Says Dollar Supply Tight After Oil Drop
Do you understand? They...don't...have...enough...dollars.
And their need is being broadcast for all the world to see.

As if to mock the fallen even further, the Hurun Rich List 2016 announced (24Feb'16) that the very pinnacle of the UHNW hierarchy is still growing:
Finally, for folks interested in learning more about LoS, this is as good a place to start as any.
During the 2008 debacle of the ratings agencies we featured some LoS improvements to the less-than-nuanced approach favored by the fraudsters.
And a few months after the market turned and the survivors had staggered out into the sunlight, we passed on some LoS tips on fortune recovery.