* KC Asia fund returned about 12 percent in 2008 (Adds details, quotes, background)By Nishant Kumar and Kevin LimHONG KONG/SINGAPORE, Oct 18 (Reuters) - Singapore-based hedge fund Komodo Capital Management Pte Ltd is liquidating its flagship global macro fund KC Asia, its founder and Chief Investment Officer Angus Cameron told Reuters on Tuesday.Cameron, who founded the firm in 2006, said the fund had returned money to investors and was moving operations to Australia for “personal reasons”.The hedge fund manager, who earlier worked at Millennium Capital Management and Bank of America Corp , said he hoped to start managing money for clients from mid-2012.”I will continue to manage my own money, which I have been doing since I started the fund, and I will be managing money on a number of platforms and also for several clients,” he said.Komodo Capital managed about $40 million before it started returning money to investors. In 2008, it managed $120 million.”When we get up and start running again, I think the capital will be similar ($40 million),” he said.A former second lieutenant in the Australian Army Reserve, Cameron said Komodo Capital would remain in Singapore but he would be running money from Australia using the same strategy as the KC Asia fund.KC Asia Fund was a macro-directional and relative value absolute return hedge fund with its main focus on the Asia-Pacific region. It targeted a 12 percent annual return with volatility of less than 10 percent.Macro hedge funds focus on major economic trends and events and bet anywhere they see value, including in stocks, bonds, currencies, commodities and derivatives markets.KC Asia Fund produced a return of about 12 percent in 2008 when the global financial crisis wiped out trillions of dollars of wealth. Last year, the fund was down about 3.5 percent, said a source with access to the fund’s return.About 80 hedge funds in Asia have closed down this year, according to Singapore-based the industry Eurekahedge, as investors shy away from allocating fresh capital to the region given nagging concerns about the global economy and the European debt crisis.Regional hedge fund assets contracted 5 percent in the first half of 2011 to $145 billion, $47 billion below the peak in December 2007, according to data from industry tracker AsiaHedge.By contrast, the global industry regained pre-crisis asset levels last year and subsequently scaled new highs above $2 trillion, according to data from Hedge Fund Research.

* French PM says Socialist manifesto totally out of dateBy Brian LovePARIS, Oct 17 (Reuters) - Francois Hollande will try to unseat France’s conservative President Nicolas Sarkozy and return a Socialist to the Elysee Palace for the first time in 17 years in an election just over six months from now.Hollande, a moderate who says France must balance its books without sacrificing the welfare state or shrinking the number of state-employed school teachers, won a U.S.-style primary ballot on Sunday to designate the Socialist Party’s presidential challenger.He scored a victory over his more old-school rival Martine Aubry, a former labour minister, with 56.6 percent of the 2.9 million votes cast.Although he has never held a national government post and is little known outside France, the notoriously witty Hollande, 57, says he expects and is ready for a “fierce battle” against the right and far-right in the months ahead.”The right has nothing to lose,” said the man who could be the first Socialist to win a presidential contest since the late Francois Mitterrand was re-elected in 1988.Sarkozy has yet to declare but is widely expected to run for re-election after five years in office, where he has had to deal with the worst global economic downturn since World War Two and alienated many voters by cutting tax for the wealthy in tough times.Prime Minister Francois Fillon said any Socialist candidate was likely to be a strong opponent in an election, in a country where the vote is narrowly split.”The question now is whether he is a candidate with his own personal project or whether he’s simply the candidate for the Socialist project,” Fillon said on France 2 television, adding that the Socialist manifesto was totally out of date.’MR NORMAL’Hollande, tipped by pollsters to beat Sarkozy comfortably, rides to work on a scooter and sells himself as “Mr Normal” who will put a stop to the frenetic showbiz style that won Sarkozy the nickname of the “bling-bling” president.The latest poll, published on Monday, showed six out of ten French voters think Hollande would beat Sarkozy in the second round of next year’s presidential election, with 14 percent saying they were absolutely certain.”I measure the scale of the task awaiting me. It is vast. It is grave. I must rise to meet the aspirations of a French people who are sick and tired of the policies of Nicolas Sarkozy,” Hollande told supporters on Sunday night.For months, the opinion polls have suggested French voters are ready to put the left back in the Elysee Palace and oust the unpopular Sarkozy.The left’s runaway favourite to become president had been former International Monetary Fund chief Dominique Strauss-Kahn but his IMF career and presidential hopes foundered when he was arrested in New York in May on charges of sexually assaulting a hotel maid. The charges have since been dropped.The ease with which Hollande and Aubry filled Strauss-Kahn’s shoes as popular alternatives suggests many voters are simply weary of Sarkozy and his economic policies.The Socialist Party had organised a two-round contest where anyone who paid a euro and declared allegiance to left-wing values could vote.What remains to be seen now is whether or not Hollande reverses out of the more hardline stand he adopted in the closing stages of the Socialist primary as he sought to cater to people who had voted in large numbers in the opening round for anti-bank, anti-globalisation contender Arnaud Montebourg.Hollande, who promised in the final days of campaigning to crack down on banks and financial market excess, consolidated his position by securing the support of the four contenders knocked out in round one, including Montebourg.The main tenet of the Socialist manifesto which will provide the backbone of Hollande’s campaign is that some 50 billion euros ($67 billion) of tax breaks and other concessions made by Sarkozy can be scrapped, with half of the proceeds funding more proactive policies for jobs and growth and the other half going into public deficit reduction.

The Fed should ease monetary policy further only if the economy worsens, Minneapolis Federal Reserve Bank President Narayana Kocherlakota said at a lunch held at the County Fairgrounds in Sidney, Montana.Easing policy even as inflation returns to near the Fed’s target and unemployment falls is “inconsistent with a systematic pursuit of its communicated objectives,” he told the group, which included bankers and workers in the area’s booming oil industry.”It follows that these actions diminish the Committee’s credibility and so reduce the effectiveness of future Committee actions and communications,” he said.The Fed has kept interest rates near zero since December 2008 and bought $2.3 trillion in long-term securities to boost the economy further, moves that Kocherlakota said helped keep the economy from stumbling even worse than it did.Last month, citing “significant downside risks” to the economy, the Fed’s policy-setting Federal Open Market Committee took a further step, deciding to rebalance the Fed’s portfolio by selling short-term securities and buying longer-term ones in an effort to push down longer-term borrowing costs and spur spending.That move followed a decision in August to keep interest rates low through at least mid-2013.Kocherlakota was one of three Fed officials who dissented at the last two meetings.Unlike fellow dissenter Dallas Fed President Richard Fisher, who said he voted against the move because he thought it would have little impact, Kocherlakota did not quibble with the effectiveness of the policy, known as “Operation Twist.”“It’s not a game changer by any means,” he said in response to an audience question. But just like outright Fed bond-buying, the “Twist” lowers interest rates, in this case by the equivalent of a cut in the Fed’s policy rate by about 50 basis points, he said.Minutes from the most recent meeting, released on Wednesday, show two policymakers advocated for even stronger easing measures.But Kocherlakota said that was the wrong approach.Unemployment, while still at a “disturbingly high” 9.1 percent, has come down since the Fed began a second round of bond buying last November, he said.Meanwhile inflation, which last November was uncomfortably low, has risen — to 1.6 percent, as measured by the Fed’s preferred gauge.Given improvements on both the inflation and jobs fronts, Kocherlakota said, “the Committee should have lowered the level of monetary accommodation over the course of the year,” he said.Doing the opposite hurts the central bank’s credibility, which is key to its ability to meet its goals of keeping prices stable and unemployment low, he said,Since the Great Recession, the Fed has done remarkably well on its price stability mandate, Kocherlakota said. And while the jobless rate is still high, the Fed could not have lowered it any further without pushing inflation above its 2-percent target.Although the recovery has been slower than expected, that in itself is not enough to justify further easing, he said.”The FOMC should only increase accommodation if the economy’s performance, relative to the dual mandate, actually worsens over time,” he said.

By David Callahan The opinions expressed are his own. Pop quiz: What’s so bad about the financialization of the U.S. economy over recent decades? If you’re like most people who are uneasy with the outsized power of finance, chances are you can’t boil down your concerns to a pithy sound bite. So why is there such ridicule of the protesters “occupying” Wall Street for lacking a coherent message? Three years after the 2008 financial crisis, it is still hard to neatly encapsulate the problem with letting bankers and traders dominate American economic life. Once Congress passed the Dodd-Frank reform law last year, most political leaders and commentators moved on to other issues, leaving behind an unfinished debate about Wall Street’s influence. Now, thanks to protests in New York and a growing list of other cities, this debate is percolating once more. And guess what: the supposedly incoherent protesters actually have a pretty strong critique of what is wrong with America’s financialized economy. Angus Johnson, one of the most astute bloggers following the protests, wrote recently that if you think that the protesters have “no message, you’re not paying attention.” They clearly believe that there is “something seriously broken” in America’s economy and politics and that “an accelerating concentration of wealth and power in the hands of a small minority” is to blame. That reading jives with my own visits to Zuccotti Park – aka, “Liberty Square” – just blocks from the New York Stock Exchange. The clear thread linking a mish-mash of grievances – on everything from education to healthcare to corporate campaign cash – is that the wealthy are running America at the expense of ordinary people. If this sounds radical, the hyperbolic blathering of dreadlocked twentysomethings, consider that a slew of top political scientists have been saying the same thing for nearly a decade. For example, one of the most authoritative recent studies of democracy and inequality, by the Princeton political scientist Larry Bartels, found that “the preferences of people at the bottom third of the income distribution appear to have no apparent impact on the behavior of their elected officials.” The protesters are not just on the right track with their sweeping critique of inequality, they are also in the right place. The financialization of the U.S. economy is closely linked to America’s drift toward plutocracy. The triumph of “shareholder value” over all other goals for the modern corporation was brought to us, starting in the 1980s, by Wall Street’s leveraged buyout kings and private equity sharks, as well as by bonus hungry traders obsessed with near-term gains. In turn, a narrow focus on the bottom line has undermined American workers – and the middle class writ large – by justifying any and all cost-cutting measures that can boost quarterly earnings, from foreign outsourcing to slashing benefits to busting unions. Nearly all the forces typically blamed for rising inequality – globalization, new technologies, declining unionization – have had a more devastating impact on U.S. living standards thanks to Wall Street greed. Meanwhile, as one of the biggest sources of campaign money for both parties, and a major bankroller of the U.S. Chamber of Commerce, the financial industry has sought to both block restraints on its own risky behavior and kill policies that could redress rising inequality – such as tax hikes on high earners. A 2009 study estimated that the finance and insurance industries spent $5 billion between 1998 and 2008 on political donations and lobbying. Wall Street’s unchecked power explains why it was free to blow up the economy with over-leveraged bets on shady mortgage-backed securities. And its enduring power helps explain why not a single top banker or trader has faced criminal charges for this catastrophe. Instead, unionized school teachers and lazy food stamp recipients have somehow become the main problem facing America. What the protesters understand – more than the commentators ridiculing them – is that the United States is still on the path to plutocracy. Dodd-Frank may curb some of Wall Street’s worst excesses, but the greedheads who took down the U.S. economy remain all-powerful and inequality is actually getting worse amid soaring corporate profits, near-record unemployment rates, and deep cuts to government spending. One seemingly weird thing about these protests, among many, is that the bid to “shut down” Wall Street is coming three years after the financial crisis. But this, too, actually makes sense: people turn to protest when the political system fails to deliver change or accountability. That is certainly the case here, with Obama’s presidency in tatters and all signs pointing to a return to business as usual. Just maybe, though, the protests will open up a new debate on how to reform – or better yet, replace – an economic system that is failing so many ordinary Americans. David Callahan is a Senior Fellow at Demos and editor of Policyshop.net, the Demos blog. Photo: A protest sign lays beside a sleeping Occupy Wall Street protester in Zuccotti Park in New York October 1, 2011.