Wall Street Manna

An irreverent look at Wall Street

Friday, May 22, 2009

Temasek attempts to justify a stupid sale


About time some one calls them on the carpet. These sovereign wealth funds had so much money, we thought they were like Thurston Howell III!

Now we have someone else to go with Cramer's renaming of Nouriel Roubini "The Professor" and Meredith Whitney "MaryAnne." Change their names, and then their views really start looking silly.

When Singapore's Sovereign wealth fund invested in Merrill, they said they were long term investors unaffected by short-term swings in the market. They dumped BAC at over a $4 billion loss at an average price of $7.

Two weeks ago, they said they sold BAC at 7, because there was little potential.
http://aaronandmoses.blogspot.com/2009/05/temasek-sells-entire-bofa-stake.html

Now they say this:

"We may choose to divest an investment, even at a loss, to optimise our risk or portfolio exposures, or if there are better opportunities elsewhere or later."

Where are the better opportunities? Selling BAC is so completely stupid, it is almost incomprehensible. If BAC is a sell, they might as well put their entire portfolio into cash.

Their strategy is just more gobbleygook:

"Ultimately, the aim is to ensure that our portfolio delivers returns that are higher than the cost of capital employed on a risk-adjusted basis, or what we call Wealth-Added."

You can read the entire nauseating letter here:
http://www.straitstimes.com/ST%2BForum/Story/STIStory_379983.html

And yesterday, we heard that he has company. Whitney Tilson (since the Professor and Maryanne seem to be in hiding), who of course, is pumping a bearish book, said he is also short BAC.

The "Savant of sub-prime" doesn't know Jack!
http://aaronandmoses.blogspot.com/2009/05/yesterdays-selloff.html


But it looks like we have now found Gilligan!

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