What’s news around the hedge fund industry for Friday, Dec. 30, 2011:

Happy New Year!

Around the web

Steven A. Cohen’s SAC Capital acquires 5.7% holding in LNG-operator Cheniere Energy. (Bloomberg)

Washington’s uneasy dance with Wall Street – 2011 in financial regulation. (Washington Post ’s Wonkblog)

Is Jon Corzine the worst CEO of 2011? (Fox Business)

Cumberland Advisers’ David Kotok on MF Global, chutzpah and the New York Fed, parts 1 and 2. (ZeroHedge)

David Kotok on MF Global and the New York Fed, part 3. (ZeroHedge)

9th Circuit Court of Appeals OKs immunity for telecoms in wiretap case. (Associated Press, via Physorg.com)

Does wealth equal power? (Marginal Revolution)

Commodities poised for first annual decline since 2008 on European crisis. (Bloomberg)

The burden of debt. (Greg Mankiw’s blog)

Global macro “Newcits’ expected to be best performers in 2012. (Hedgeweek)

Exchange mergers in limbo as $37 billion of takeovers fail. (Bloomberg)

Flash crash threatens to return with a vengeance. (Financial Times)

Commodities decline after strong start to year. (WSJ.com)

Legal eagles for the small guy. (HedgeFund.net)

ADV crackdown on, as SEC claims Calhoun Asset Management claimed $200 million in AUM when it actually had $3 million. (InvestmentNews)

Tribune Co. bankruptcy case on hold until May at the earliest. (Chicago Tribune)

Madoff son Andrew must face lawsuit. (New York Post)

What’s news around the hedge fund industry for Thursday, Dec. 29, 2011:

Around the web

Hedge fund strategy makes major difference in performance. (Insider Monkey)

Top 5 places to land a hedge fund job in 2011. (HFObserver)

Hedge funds suffer losses after Molycorp was downgraded by JPM. (Insider Monkey)

Hedge fudging: A margin for error in hedge fund filings. “… the results, which they’ll present at the American Finance Association’s annual meeting in Chicago next week, suggest hedge funds ‘take advantage of lax regulation by strategically fudging equity position valuations to impress…potential or existing clients.’” (WSJ.com)

Big hedge funds build case for housing. (WSJ.com)

Federated Investors acquires Prime Rate Capital Management. (HedgeCo.net)

Simon Lack spills the beans in ‘Hedge Fund Mirage’. (InvestmentNews)

Fed says dealers tighten terms on hedge fund securities trades. (Bloomberg Businessweek)

Key wealth management concerns for 2012. (Reuters)

What, exactly, is the argument against gold? (Marginal Revolution)

Recessions are costly. (Economic Logic blog)

JPMorgan fires James Koutoulas before he leaves. (Futures Magazine)

UK pension schemes pile into hedge funds. (Financial News)

Jürgen Schmidhuber: simplicity drives algorithmic performance. (Opalesque)

Sears Holdings liquidation sale. (Bronte Capital)

MF Global scrutinized on money move. (DealBook)

How the 1 percent live, and give. (Chicago Tribune)

Comment period extension will help address ‘complex’ Volcker rule: SIFMA. (The Trade News)

Financial terrorism: the war on terrabytes. (The Economist)

Enercare rejects Octavian Advisors’ special meeting request. (HedgeFund.net)

Glenview Capital’s Larry Robbins gets go-ahead for indoor hockey rink. (Bergen County (N.J.) Record)

Privet Fund Management holds 9% stake in J. Alexander’s. (HedgeFund.net)

James Koutoulas is chief executive of Typhon Capital Management, a commodity trading adviser and commodity pool operator and also the co-founder and attorney at the Commodity Customer Coalition, an organization representing many MF Global clients. He spoke with CNBC’s Rick Santelli on Thursday about MF Global, JPMorgan and about the CME Group’s role in the bankruptcy. He praised CME executive chairman Terry Duffy for his testimony before Congress that MF Global chief Jon Corzine knew about the transfer of customer funds.

“The darker side (to the CME’s involvement in the MF Global bankruptcy) is the CME is both a publicly traded company and a regulatory organization, and there’s inherent conflicts there,” Koutoulas said. “One of the things I think the CME might want to look at going forward is spinning off that regulatory function.”

What’s news around the hedge fund industry for Wednesday, Dec. 28, 2011:

Around the web

Tough markets: Punishing hedge funds since 2003. (WSJ’s MarketBeat blog)

Hedge fund movies coming soon. (HedgeFund.net)

‘Financial amnesia’ a factor behind crisis. (Financial Times)

Vulpes Investment Management’s Stephen Diggle bets on farmland. (Bloomberg)

Steven A. Cohen is bidding for the Dodgers. (Los Angeles Times)

Crispin Odey talks ‘crystal ball’ and ‘opportunities’. (Financial News, via HedgeFund.net)

Don’t give up on the sensible ideas of the Dodd-Frank act: Editorial. (Bloomberg)

Asia’s hedge fund industry becoming more mature, says SAIL Advisors. (Hedgeweek)

Hedge fund managers miss biggest commodity rally in 10 weeks. (Bloomberg Businessweek)

Prepare for the year of the commodity quandry. (The Australian)

Bridgewater, AQR take aim at defined contribution assets. (InvestmentNews)

Paulson gold fund said to lose 10.5% in 2011, even as metal heads for gain. (Bloomberg)

Small hedge funds gain large favor. (New York Post)

Jim O’Neill, chairman of Goldman Sachs Asset Management, says 2012 poses exciting investment opportunities. That’s because of, rather than despite, the euro being near the brink of collapse.

“I don’t believe EMU can survive without Italy and I don’t think Italy can survive with 7% bond yields, so something would have to give and it looks like we’re going to get a stronger euro and commitment from the ECB,” O’Neill tells Reuters Insider. “And you know, who knows what happens tomorrow in these markets, but it seems to me Italian bond yields so far have been a good buy above 7%, and I suspect that will be the case.”

We’ve come a long way since the days when futures exchanges were marketplaces for negotiating formal contracts between sellers and buyers of commodities, haven’t we? Wheat Farmer A wants to lock in a price for his crop next fall while flour mill B wants to ensure it has a supply of wheat and also lock in a price. Presto, there’s the Chicago Board of Trade, and later the Butter and Egg Board, which became the Chicago Mercantile Exchange. Simple, efficient.

Nowadays, futures exchanges like the combined CBOT-CME entity—CME Group Inc.—trade so much more than commodities. And their sophistication in the form of high-speed electronic trading has far exceeded the old open-outcry trading pits. Better price discovery, more transparency, less inefficiency. Everyone should be happy.

Except, since MF Global collapsed and $1.2 billion or so in supposedly segregated and protected customer margin funds went missing, it seems nobody is happy. Not the farmers. Not the brokers. Certainly not the exchanges.

In everything I have read about MF Global’s collapse and the fallout from that, it’s the plight of the farmers, and their perspective, that has intrigued me the most. They are, after all, the primary reason these futures exchanges exist in the first place. Or they were. During the rise of what I’ll call the “speculative culture” some exchanges seem to have become preoccupied with providing products to suit and access for traders whose only interest is exploiting price moves and profiting from those exploitations. Up to a point, such interest can create better price discovery and reduce market inefficiencies. Beyond that point, however, the markets become hugely distorted and wildly inefficient. We seem to be there now. MF Global is just an example.

“CME—all the exchanges have focused on contracts, more growth, all these hedge funds, private equity funds that are getting into these markets. They are focused on that instead of their base business,” said Lance Holden, senior vice president with Wells Fargo Bank, the largest private lender to agribusiness that had customers who lost funds in the MF Global Collapse, in a story on how upset exchange customers are over the lack of oversight they see the CME exercising in the MF Global fiasco.

How have speculators, and the futures exchanges’ efforts to cater to them, hurt or helped the futures markets? Discuss.

What’s news around the hedge fund industry for Tuesday, Dec. 27, 2011:

Around the web

SEC ups its game to identify rogue firms. (WSJ.com)

Hedge funds hammered in one of the worst years on record. (The Telegraph)

Once-lofty Owl Creek falls 13%. (DealBook)

MF Global customers target JPMorgan. (Forbes)

Single Canadian securities regulator shot down by country’s high court. (Pensions & Investments)

Americans Elect political organization shows hedge fund influence. (HedgeFund.net)

The big lie: Wall Street has destroyed the wonder that was America. (The Daily Beast)

German FinMin Schaeuble vows to push for financial transaction tax. (Reuters)

Where are the financial whistleblowers? (The Guardian)

Judge dismisses Fairfax Financial Holdings lawsuit against Daniel Loeb, James Chanos and their firms. (WSJ.com)

SEC backs Lehman brokerage in $3 billion Barclays dispute after shortfall. (Bloomberg)

Infinium Capital Management’s Neil Brookes fined $50K for runaway oil trades. (Reuters)

New Year tests for faith of the commodities congregation. (WSJ.com)

The eVestment-HFN look back at 2011. (HedgeFund.net)

Rep. Marcy Kaptur (D-Ohio) confronts MF Global and Wall Street. (Janet Tavakoli on HuffPo)

Edward Lampert’s hit-or-miss portfolio. (DealBook)

Don Steinbrugge, managing partner of Agecroft Partners LLC, spoke last week about the best performing hedge fund strategies in 2011 and his out look for 2012. He was interviewed by Lisa Murphy of Bloomberg TV.

“It’s been a very difficult year for hedge fund managers for two reasons,” Steinbrugge says. “The first is most hedge fund managers are bottom-up, fundamentally-driven … they’re looking for undervalued securities to go long and they’re looking to go short overvalued securities, whatever asset class they’re focusing on. And this year has been all about macro, and a lot of hedge fund managers have had a very difficult time navigating through all of the macro events that we’ve had. In addition, hedge funds are going to have some beta to the marketplace, and if all the capital markets are down … which if you look across capital markets most of them are down, which is going to affect hedge fund performance.”

What’s news around the hedge fund industry for Friday, Dec. 23, 2011:

Around the web

The lure of the hedge fund – despite poor performance. (Reuters Breakingviews, via The New York Times)

Instant history bias. (PerTrac)

Five hedge fund managers to watch in 2012. (MarketWatch)

Top 10 hedge fund trends and events of 2011. (AR)

Hedge funds bid for burned MF Global investors’ claims. (New York Post)

Hedge funds insist congressional information isn’t insider trading. (LearnVest)

Diverging fortunes predicted for hedge and private equity secondary markets. (Investment Europe)

Former Galleon manager Peter Swartz to start technology fund for Fortress. (Bloomberg)

Brevan Howard’s $201.3 million payout to partners down 79% from last year. (Bloomberg)

2011 was a year of horrors for hedge funds. (MarketWatch)

The HFA’s Ron Geffner: U.S. regulators ‘being set up for failure. (Global Financial Strategy News)

Forbes’ 2011 Lump of Coal Awards – the worst people and moments in fiscal policy. (Forbes)

MF Global trustee seeks money from British arm. (DealBook)

The euro: still in casualty. (BBC News)

North Korean bonds? Now could be the time. (WSJ.com)

Illinois representative Cross wants to examine Illinois Teachers’ Retirement System change to riskier investment strategy. (Daily Herald)

Drought may cause next year’s commodity prices to fluctuate. (Jerry Lackey in the Abilene (Texas) Reporter-News)

John Thomas: Parlaying experience into ‘mad’ success. (Futures Magazine)

Dutch government may veto Deutsche Boerse-NYSE merger concession: source. (Dow Jones Newswires, via Nasdaq)

Regulators expected to extend Volcker rule comment. (Reuters)

Impact of CFTC swaps reporting delay overstated. (The Trade News)

MF Global trustee reviewing firm’s practice of repledging collateral. (Thomson Reuters News & Insight)

High-speed trading rules loom. (Financial Times)

Emerging markets represent the future for high-frequency traders. (Advanced Trading)

‘Twas the week after layoffs…. (DealBook)

Muni bonds: The disaster that wasn’t. (WSJ.com)

Interview with Jeff Jennings, global head of prime services listed derivatives at Credit Suisse, on futures clearing post-MF Global. (COOConnect)

The (99%) funny side of hedge funds. (Simon Lack on Business Insider)

New Star boss John Duffield hits back at bullying claims in job case. (The Independent)

MF Global Holdings creditors and CFTC dispute customer funds. (Bloomberg Businessweek)

The eVestment/HFN outlook for 2012. (HedgeFund.net)

The sweet charity of hedge funds. (HedgeFund.net)

BlueMountain Capital Management Chief Executive Andrew Feldstein talks about the role of credit derivatives in financial markets with Bloomberg TV’s Lisa Murphy BlueMountain Capital co-founder and president Stephen Siderow also appears in the segment.

“I think credit derivatives are an incredibly valuable tool to the financial markets,” Feldstein says. “And I think the financial markets would be much worse off without them.”