Credit crisis diary: 16/02/2009

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The Independent Online

The hedge funds always win in the end

The collapse of Lloyds' share price on Friday afternoon was deeply upsetting – and not just for shareholders in the bank.

Two weeks ago, those annoying folk at Paulson & Co, the hedge fund that has made a fortune from the credit crunch, took a sizeable short position in the bank. It looked like a duff bet: having sold Lloyds short at about 65p, the fund watched as the bank's share price climbed to about 125p. And then the HBOS loss was disclosed and Lloyds plunged to 61p on Friday. That calamitous drop will have earned Paulson tens of millions of pounds. Darn it.

Nomura breaks down cultural boundaries

Bankers at the Japanese investment bank Nomura are cock-a-hoop at having earned fat fees advising Chinalco on its £200bn investment in the mining giant Rio Tinto. For various cultural and historical reasons, it is pretty unusual for Japanese companies to win work from China, so this was a breakthrough deal for Nomura. It was secured by the mining team that Nomura acquired when it bought bits of Lehman last year. In every cloud there's a silver lining.

There may be a short delay with your dinner

Poor old Domino's Pizza. The company, which reports results later this week, should have been buoyed by all the bad weather we have had so far this year. People stay at home and eat pizza if it is too miserable to venture out. Snow, on the other hand, makes delivering pizzas a little tricky, as analysts at KBC point out, in a lovely piece of understatement, in their latest note on Domino's. "We expect sales growth... with bad weather boosting demand, but counteracted slightly by access problems."

Madoff doesn't worry us, say investors

Some things never change. A survey by market analyst Prequin, out today, suggests that hedge-fund investors are unmoved by the Bernie Madoff affair. Just 15 per cent of investors surveyed said they had changed their views about what they looked for in a fund manager in the light of the Madoff scandal. Let's hope they don't live to regret such complacency.

A smile to start the week

Heard this one? Why are Icelandic bankers like polar bears? They both have frozen assets. Keep smiling.

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