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9 Oct 2008

Global Future Analysis Review

I have been reading the somewhat lengthy (aprox.250 pages) Global Future Analysis report by the Planck Foundation, I’ll try to do a short(ish) review.

“It has been said that there are three types of people: Those who make things happen, those who watch things happen and those who wonder what happened,” it says on the cover of the report.

The Global Future Analysis report covers the interfacing/interaction between the energy crisis and credit crisis, which has been making headlines globaly, also analyzed is the water crisis and its effect on food prices.

The energy crisis has two effects, according to the report, energy will become much more expensive and no longer abundantly available. Firstly it will give a reach/distance contraction within the economy (less transport and less mobility, due to high energy prices). Secondly, due the fact that energy is used for everything, expenses will rise.

“You need to understand currency, credit, minerals, energy and water. Watching the news without some basic knowledge of those five is useless.” The report says, “knowledge of those five make the past, present and future clearer.”

The analysis is very up to date, covering the current dynamic credit and energy situation. Also the governmental bail-out fund (which it explains in depth, non-favourably) proposed by US Treasury Secretary Henry Paulson which was turned down on September 29th by the House of Representatives.

”This big figure gambling can only lead to a disconnection with the rest of the world economy for the US, UK/Europe and Japan,” the report says, “due the fact that Euro and the Yen have today the highest possible dollar reserves ever, certainly since their massive support of the dollar of the last month. The Central Banks of Europe and Japan thought that they could fix the US problems overnight in buying lots of dollars since mid July till mid September.”

The report goes on to say, “production gives real payment power, that’s something the US economy is learning the hard way. Increasing production isn’t easy in these times of expensive energy. But combining the bail-out with production increase could do the job.”

One bright spot in all this, it says, “The Energy Crisis certainly will ‘bring the jobs back home’. Long distance travel will also decline (stimulating the national leisure industry) according to the report. Air travel, air transport, road transport and commuting are where we will see the effects of high oil prices instantly. Local is to be king of the 21st century.

The report approves of T. Boone Pickens proposal to re-energize America using peakoil/gas/coal, the benefits of wind energy and the exporting wealth facets (trade deficits and foreign policy) of oil imports. On the other side of the world, it also talks about the Chinese government deciding that sustainable prosperity is the most wanted/economic direction for the 21st century.

”Bail-outs without any structural change it will lead to nothing than more problems. And yes, Obama has a point when he said that mortgage bail-outs during the ‘30ties has proven to be successful. But those were other days: Back then there was no Energy Crisis that put restrictions to growth, something we certainly have now.”

The name of the commercial version is ‘The Perfect Storm: when the energy crisis joins the credit crisis.

Altos Ventures Leads $5.7 Million Mobile Funding

Trilibis Mobilen announced today that it has raised $5.7 million in Series B financing.

Alternative Investor Altos Ventures led the round with participation from ATA Ventures and several early individual investors. Ho Nam, General Partner and Co-Founder of Altos Ventures, has joined the board of Trilibis Mobile. Mike Hodges, Managing Director of ATA Ventures, has joined as a board observer.

"Trilibis has done a great job of establishing relationships with Tier 1 carriers and proving out the SmartPath platform with key content partners," said Ho Nam of Altos Ventures. "With this capital infusion, we look forward to working with the Trilibis team to continue to take market share and grow the business."

The newly raised capital will be used to fund development of the next generation of SmartPath to include support for native applications for BlackBerry, iPhone, Windows Mobile and Android devices. Additionally, Trilibis will devote some of the capital to boost its marketing and sales efforts.

"The tremendous increase in consumer adoption of smart phones has fueled the growth in mobile data services usage," said Alex Panelli, CEO of Trilibis. "Our objective is to capitalize on this emerging trend."

With this funding, Trilibis has raised a total of $8.3 million since inception.

Altos Ventures is a first-stage venture capital firm focused on leading investments in emerging technology companies with the goal of building market leaders. Altos manages $200 million in dedicated first-stage capital on behalf of leading endowment, fund-of-funds, financial and family office investors based in the United States and Asia. Altos Ventures is based in Menlo Park, California. Additional information is available at

Hedge Funds Outperform Equity in September

Hedge funds measured by both the Greenwich Global Hedge Fund Index ("GGHFI") and the Greenwich Composite Investable Index ("GI2") significantly outperformed equity indices despite posting their greatest losses since August 1998 during September.

"It was a perfect storm for both credit/equity markets and hedge funds in September," said Thomas Whelan, Greenwich CEO, "The already deflated values of financial firms provided the perfect trap for value investors while government intervention limited the ability of hedge funds to effectively mitigate their risk. Simultaneously, the continued freezing of credit markets combined with investor redemptions forced fixed-income funds to liquidate or otherwise mark down assets at depressed prices. The results of the market turmoil and unpredictable regulatory environment are evident in their returns this month."

Long/Short Equity managers fared better than both US and foreign equity markets during the month, but still were subject to unpredictable market movements, losing -6.69%. Both Growth and Value funds struggled to find profitable trades, returning -8.16% and -7.05%, respectively. Short Selling managers by contrast enjoyed their most profitable month this year, advancing +9.27% on average. Year-to-date, Short Selling funds have gained 17% and remain the best performing subsector of hedge fund strategies.

Market Neutral funds were not immune to market forces during September, as they felt the effects of dysfunctional credit markets, declining -4.49%.

Despite the marked weakness in hedge funds in September, not all hedge fund strategy groups moved lower for the month. Directional Trading funds advanced by +0.51% on average, led by Futures managers who capitalized on declining commodity values. Macro managers did not fare as well, losing -3.62% on the month.

Specialty Strategy managers were the weakest performing strategy group for the month of September, with funds losing -7.33% on average. Emerging Markets funds were once again the main reason behind the losses as these managers shed nearly 10% during the month.