Tag Archive | "financial"

Opening Bell: 06.01.11


S.E.C. Case Stands Out Because It Stands Alone (NYT)
But [Fabrice] Tourre’s world would soon be turned upside down. In fall 2009, the S.E.C. issued him a Wells notice, a formal warning that he was likely to be named in a civil fraud suit for his role in the mortgage deals. Mr. Egol also received such a notice in 2010. In their Oct. 10 response to the S.E.C., Mr. Tourre’s lawyers, including Pamela Chepiga of Allen & Overy, made an argument that they have not emphasized publicly. They contended that “singling Mr. Tourre out for criticism regarding the content of this clearly collaborative effort is unreasonable.” These legal replies, which are not public, were provided to The New York Times by Nancy Cohen, an artist and filmmaker in New York also known as Nancy Koan, who says she found the materials in a laptop she had been given by a friend in 2006.  The friend told her he had happened upon the laptop discarded in a garbage area in a downtown apartment building. E-mail messages for Mr. Tourre continued streaming into the device, but Ms. Cohen said she had ignored them until she heard Mr. Tourre’s name in news reports about the S.E.C. case.  She then provided the material to The Times. Mr. Tourre’s lawyer did not respond to an inquiry for comment.

Did the NYT hack Fabrice Tourre’s email? (Reuters)
Felix Salmon: “Louise Story and Gretchen Morgenson have a long and rambling story about the court case against Goldman’s Fabrice Tourre, which is mainly interesting for how it was sourced…I’m sure this was extremely carefully formulated, but it does raise a lot of questions without answering them. Tourre’s name was splashed over the newspapers in April 2010, so it stands to reason that the NYT has had some kind of access to Tourre’s private, password-protected email account — not to mention archives going back at least to 2006 — for a good year at this point. I’d also guess that the NYT is going public with its source now because Tourre finally got around to changing his password, and the stream of emails then dried up.”

SAC Faces Probe of Biotech Trading (WSJ)
MedImmune shares jumped 18% on April 23, 2007, the day its takeover was announced. Trading was heavy before the announcement, driving shares up more than 50% over six weeks, suggesting that rumors of a deal may have reached traders ahead of the announcement. SAC significantly increased its holdings of MedImmune during the quarter prior to the one in which the deal was announced, according to public filings. SAC increased its holdings from 151,000 shares in the fourth quarter of 2006 to 796,000 shares in first quarter of 2007. It cut its holdings to 30,000 shares at the end of 2007′s second quarter, then reported that it sold the position completely, according to filings.

Greece nears IMF/EU deal, dismisses drachma talk (Reuters)
Greece should complete talks by the end of the week with inspectors from the EU and IMF on a medium-term budget plan plus a vital next slice of international aid, sources close to the negotiations said on Wednesday.

EU warns US to speed up bank reform (FT)
In a letter sent last week to US Treasury secretary Tim Geithner, Michel Barnier, the European commissioner in charge of financial markets, argued that Brussels was ahead of the US in several areas – including capital requirements for banks and limits on bonuses for financial executives. Mr Barnier urged the US to match European efforts. “The level playing field must be a reality, not an empty slogan,” he wrote in the May 27 letter, which was obtained by the Financial Times.

Irish lenders outline loss plans for bondholders (FT)
Three of Ireland’s lenders revealed plans to impose losses of up to 90 per cent on bondholders in attempts to make them shoulder some of the cost of recapitalising the country’s banks. Bank of Ireland said it would shortly announce a cash offer for €2.6bn ($3.7bn) of its subordinated debt, with discounts of either 80 per cent or 90 per cent depending on the type of bond. Two smaller lenders, Irish Life & Permanent and EBS, planned to impose similar losses on holders of about €1bn of debt.

UBS May Move Stamford Investment Bank to World Trade Center (Businessweek)
UBS AG, Switzerland’s biggest lender, may move the staff of its U.S. investment bank from Stamford, Connecticut, to the World Trade Center in Manhattan by 2015, a person with direct knowledge of the plan said.

Attorney General orders more episodes of the “The Wire”, or a movie (Reuters)
“I want to speak directly to Mr. Burns and Mr. Simon: Do another season of ‘The Wire’,” Holder said, drawing laughter and applause from the audience. “That’s actually at a minimum. … If you don’t do a season, do a movie.  We’ve done HBO movies, this is a series that deserves a movie. I want another season or I want a movie. I have a lot of power Mr. Burns and Mr. Simon.”

‘Expert Networker’ Jiau Faces Trial in U.S. Insider-Trading Investigation (Bloomberg)
Winifred Jiau, a former consultant with so-called expert networking firm Primary Global Research LLC, faces jury selection as her insider trading trial begins today, the third tied to a nationwide probe of illegal stock- tipping.

Citigroup Close to China Securities Partnership Deal (WSJ)
Citigroup Inc. is close to an agreement with a partner in China to set up a joint-venture securities business that would give the New York bank a long-sought foothold in China’s domestic capital markets, according to people familiar with the situation. Citigroup is expected to sign a memorandum of understanding with Shanghai-based Orient Securities Company Ltd. as soon as Thursday morning China time.

EIB halts Glencore lending on governance concerns (Reuters)
The EIB, the European Union’s lending institution, provided in 2005 a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, to help pay for the modernisation of a copper smelter. But Mopani has since been accused by some non-governmental organisations — most recently by campaign groups in an open letter signed by a group of European parliamentarians — of tax evasion and of causing widespread pollution.

Morgan Stanley Invests in Short-Sale Target Yongye International of China (Bloomberg)
Morgan Stanley agreed to invest $50 million in Yongye International Inc. (YONG), the U.S.-traded producer of plant nutrients in China that is the target of a short seller who says the company has misrepresented its business.

South Korea Probes Foreign Banks (WSJ)
Financial Supervisory Service Deputy Gov. Kim Yung-dae said at a briefing Tuesday that some foreign-bank branches in South Korea were handing over day-to-day trading operations involving money held in local accounts to a larger foreign branch or regional headquarters in places like Hong Kong and Singapore. Such outsourcing is illegal in South Korea…Mr. Kim said HSBC Holdings PLC and Crédit Agricole SA have already been sanctioned for improper outsourcing of operations involving derivatives…A person familiar with the situation said Royal Bank of Scotland Group PLC may also be sanctioned for engaging in similar activity, with the FSS likely to decide on the matter in June or July.

Sovereign ratings still relevant – but mostly when they go negative (FT Alphaville)
Bond markets still react to sovereign ratings announcements, though they tend to react more when the rating agencies say something negative. That’s the conclusion of a new working paper from the European Central Bank, which looked at changes in yields and CDS spreads after rating actions from Standard & Poor’s, Moody’s and Fitch on two dozen European Union countries from 1995 on.

Lehman Veteran Is Back in Game (WSJ)
Mark Walsh is best known for the gigantic real-estate deals that backfired on Lehman Brothers Holdings Inc. before it collapsed in 2008. As the financial crisis recedes, the 52-year-old Mr. Walsh is mounting a low-key comeback at a new real-estate firm by leaning on connections made before the real-estate bubble burst. “Unfortunately, Mark has to live with the talk of having done a couple of bad deals, rather than people focusing on the overwhelming amount of good ones,” says New York real-estate developer Steven Witkoff.

Accuser was maid to wait (NYP)
A female manager at the ritzy Pierre hotel was suspended yesterday for shrugging off a room attendant who reported that an Egyptian business big shot had just sexually assaulted her in his room, the hotel revealed yesterday. The manager, whose name was not released, merely noted the maid’s shocking claims in a logbook — and never reported them to Pierre security, her own bosses or police, officials said.

Sarah Palin, Donald Trump split a pepperoni pizza at Famous Famiglia in Times Square (NYDN)
“She didn’t ask me (to run with her) but I’ll tell you, she’s a terrific woman,” Trump said as he ushered Palin into a branch of Famous Famiglia pizza on Broadway at 50th St.

ACLU wants porn to be allowed for South Carolina inmates (ABC)
The American Civil Liberties Union is pushing for porn at a detention center in Moncks Corner, South Carolina. The move came after reports surfaced that the facility only allowed inmates to read the Bible. But prison officials said that isn’t true and inmates have a wide variety of reading material at their disposal.



Article courtesy of Dealbreaker

LinkedIn: IPO Pop Was Undewriters’ Mistake, Says FT


And you thought LinkedIn (LNKD) was fantastically overpriced?

The Financial Times’s April Dembosky yesterday wrote that Facebook investor and PayPal co-founder Peter Thiel thinks LinkedIn’s underwriters, Morgan Stanley, Merrill Lynch, and JP Morgan drastically underpriced the company’s IPO two weeks ago, which seems plainly evident given the stock price today is at $85.80, 91% above the $45 IPO price the banks set.

That means LinkedIn left a lot of money on the table for the rich clients of the banks to scoop up in the after-market.

Thiel predicts Facebook, and others, when and if they go public, will drive a much harder bargain to prevent the Street from such terrible under-valuation of their shares.

Granted, there’s a complaint here — no one likes to leave money on the table — but who’s to say the shares are worth what they trade for today — about 20 times this year’s likely revenue?

Article courtesy of Tech Trader Daily

Opening Bell: 05.23.11


Options Trading in SAC Probe (WSJ, earlier)
Congressional investigators are broadening an early-stage stock-trading probe into SAC Capital Advisors, with plans to examine any suspicious trading by the hedge-fund giant in the options market, another arena where investors wager on the prospects of companies and deals, according to people familiar with the matter. The Wall Street Journal reported Friday night that Iowa Sen. Charles Grassley, the top Republican on the Senate Judiciary Committee, is investigating roughly 20 instances over the past decade when the Financial Industry Regulatory Authority, a Wall Street regulator, suspected SAC could have bought and sold stocks based on inside information.

Fitch cuts Greek rating, warns over restructuring (Reuters)
“An extension of the maturity of existing bonds would be considered by Fitch to be a default event and Greece and its obligations would be rated accordingly,” the rating agency said. If private sector ‘burden sharing’ is coercive, the credibility of EU/IMF policy commitments not just for Greece but also Ireland and Portugal would be severely diminished and affect financial stability across the euro area, it said.

Lagarde Is Front-Runner To Head IMF (Bloomberg)
“Lagarde might be front-runner,” New Zealand Prime Minister John Key said in an interview with TVNZ television today. “She’s super impressive I’ve got to say,” he said, while echoing officials outside of Europe in calling for a selection “on merit.”

Singapore to Create Most Bank Jobs in the Next Year, London Recruiter Says (Bloomberg)
Singapore will create more jobs in financial services during the next 12 months than any other city, beating London and New York, said recruiter Astbury Marsden, which advises companies in Europe and Asia.

Biggs Buying as S&P 500 Profit Estimates Climb (Bloomberg)
“Investors are overreacting,” said Biggs, citing concerns about the European debt crisis, housing and reduced stimulus from the U.S. Federal Reserve. “All those worries are true, but I can see a number of them will be resolved in the next two months, and I do not think the global economy will slow down significantly. Stocks are very reasonably priced on earnings for next year.”

Zapatero’s Socialists Routed in Backlash Over Austerity (Bloomberg)
Spanish Prime Minister Jose Luis Rodriguez Zapatero’s Socialist party had its worst electoral setback in more than 30 years, prompting a shift in regional governments that risks reviving concern over public finances…The transfer of power in the regions may spark doubts over Spain’s ability to contain its budget deficit, and Spanish bonds declined today.

S&P warning heralds tough times ahead for Italy (Reuters)
Standard & Poor’s surprising decision to revise downward its outlook for Italy could mark the start of increased market scrutiny on the euro zone’s third-largest economy, which faces tough challenges that it is probably unable to meet.

Times Columnist, Wife, Charged In Domestic Argument (Hartford Courant)
New York Times technology columnist David Pogue and his wife were charged with disorderly conduct earlier this week following a domestic argument at a Woody Lane house, part of which she recorded on her iPhone, police said…He told police his wife had bitten his left arm and that she had been filming the altercation with her iPhone camera. Arciola said David Pogue followed Jennifer Pogue into a bedroom and allegedly jumped on top of her and hit her in the head with a phone…In addition to his column, Pogue writes a monthly column in Scientific American. He also appears weekly on CNBC’s “Power Lunch” and on “CBS News Sunday Morning.”

JP Morgan and Morgan Stanley keep barbarians at the gate (eF)
Companies seeking to fight off a hostile takeover approach should consider hiring JP Morgan to defend them, according to new rankings compiled by Financial News.

Emerging market bond fund flows signal shift (FT)
Eight consecutive weeks of net inflows have taken the total invested in these funds this year to $7.9bn, according to EPFR, the fund data provider…Robust inflows into emerging market bonds stand in contrast to nervousness over potentially overheating equity markets in developing countries, and the debt crisis in western Europe’s periphery. Investors have pulled $12.9bn out of European bond funds this year, and more than $7bn was withdrawn from global equity funds last week, of which $1.6bn came from emerging market equity funds, according to EPFR.

Buyers Battle for Europe’s Bad Loans (WSJ)
As banks across Europe clean up their balance sheets, it is causing a feeding frenzy among hedge funds and private-equity firms hungry for their troubled assets…Among the buyers is Marathon Asset Management LP… Other buyers include Fortress Investment Group LLC, OakTree Capital Management, York Capital Management, and Och-Ziff Capital Management, according to industry officials.

Utah making gold and silver coins legal currency, pushing debate about national gold standard (AP via WaPo)
Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.

NY senators bat with banks on rule change (NYP)
The Senate agricultural committee is set to host hearings as early as mid-June to discuss new derivatives rules, which have become a hot-button issue on Wall Street, The Post has learned. US legislators, including Sens. Chuck Schumer and Kirsten Gillibrand, have been fighting on behalf of firms like JPMorgan Chase, Goldman Sachs and Morgan Stanley, arguing that new rules on complex derivatives securities being hammered out under the Dodd-Frank regulatory reforms put domestic banks at a “competitive disadvantage.”

Inside a Battle Over Forex (WSJ)
Bank of New York Mellon Corp. has been fighting accusations that it took advantage of clients while trading currencies…BNY Mellon priced 58% of the currency trades within the 10% of each day’s trading range that was least favorable to the fund, the analysis shows. As a result, the trades cost the pension fund, the Los Angeles County Employees Retirement Association, $4.5 million more than if the average trade occurred at the middle of the trading range for each day, the analysis showed.

Yuan Funds May Be More Illusion Than Oasis (WSJ)
But already, firms that manage dollar funds and are setting up yuan funds, too, are grappling with a conundrum: How do you convince your foreign investors—referred to as limited partners, or “LPs,” in the private-equity world—that you are keeping their best interests at heart while you scour China for deals to invest in with renminbi? Foreign LPs already had reason to worry that things weren’t going in their favor. When it involves foreigners, approval for an investment in China can take 18 months or longer. Also, more and more companies in China are reluctant to take foreign money because doing so complicates their ability to go public in Shanghai or Shenzhen, thanks to arcane Chinese listing regulations.

CDB seeks to join TPG stake purchase (FT)
China Development Bank, one of the country’s largest state-owned banks, has applied to regulators for permission to join a group of sovereign wealth funds buying a minority stake in buy-out firm TPG, according to people familiar with the matter. CDB’s request is the latest indication of the private equity fever sweeping China as local dealmakers leave the major buy-out firms and banks to set up their own investment firms.

KKR to Buy Ipreo, a Capital-Markets Data Firm (WSJ)
KKR is acquiring Ipreo from another buyout firm, Veronis Suhler Stevenson LLC. Ipreo, based in New York, provides a range of financial data, deal-related information and investor-communication tools to investment banks and companies. It also has software that assists banks and companies in marketing new stock to potential buyers. One of its databases, called Bigdough, contains contact information for thousands of institutional investors that Ipreo clients can use to pitch hedge funds and other types of investors.

Cassette tapes make a comeback (WaPo)
Four years ago, cassette tapes were headed toward their funeral. In 2007, British tabloid The Sun declared the death of the cassette, after the announcement that a major electronics retailer in the United Kingdom would cease selling cassette tapes…Then, last year, cassettes began to rise from the dead. In the fall, NPR reported that cassettes were having a “kind of” revival, with at least 25 labels in the United States putting out new music exclusively on tape. In a lengthy essay in Pitchfork, contributor Marc Hogan detailed examples of the “broader underground resurgence” of cassettes.



Article courtesy of Dealbreaker

Jamie Dimon: Debt Default Would “Dwarf Lehman”


It would be a “moral disaster” if the United States were to default on its debts and become unable to pay its obligations, Jamie Dimon said at an appearance in Colorado Thursday evening. The U.S. is the financial linchpin of the world, and the economic effects of the U.S. defaulting could be “potentially catastrophic,” he said at a dinner for the University of Colorado Denver Business School. “It will dwarf Lehman,” Dimon said. [HP]



Article courtesy of Dealbreaker

What Was Former RBS CEO Fred Goodwin Doing While The Bank Was Burning To The Ground?


A senior staffer, allegedly, which he preferred no one know about. Making this slightly awkward.

Former Royal Bank of Scotland Group Plc Chief Executive Officer Fred Goodwin obtained an injunction to keep the media from reporting allegations that he had a “relationship” with a senior colleague, a U.K. lawmaker said during a public hearing in Parliament today.

“Every tax payer has a direct public interest in the events leading up to the collapse of the Royal Bank of Scotland, so how can it be right for a super-injunction to hide the alleged relationship between Sir Fred Goodwin and a senior colleague?” Ben Stoneham asked. “If true, it would be a serious breach of corporate governance and not even the Financial Services Authority would be allowed to know about it.”

[Bloomberg]



Article courtesy of Dealbreaker

Opening Bell: 05.17.11


IMF chief claims consent in hotel ‘attack’ (NY Post)
“The evidence, we believe, will not be consistent with a forcible encounter,” said Ben Brafman, the high-powered lawyer of IMF chief Dominique Strauss-Kahn, at the suspect’s sensational arraignment in a packed criminal courtroom. A source close to the defense later told The Post, “There may well have been consent.”

New York Investigates Banks’ Role in Fiscal Crisis (NYT)
The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses. Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly.

How Big Investors Are Betting (WSJ)
Mr. Cohen, whose SAC Capital reported a 9.3% increase in securities holdings in the quarter ended March 31, increased a stake in consumer electronics retailer Best Buy Co. to 2.3 million shares from 53,306 at the end of the previous quarter. SAC also more than doubled its stake in BJ’s Wholesale Club Inc. to 2.8 million shares from 1.1 million.

John Paulson Loves Hewlett-Packard (Deal Journal)
The $5 Billion Man, hedge fund manager John Paulson, reported plowing $1 billion into Hewlett-Packard, pared his stake in Citigroup and is standing pat with his big investment in a gold ETF…Paulson & Co. also disclosed owning 123.6 million shares of Bank of America, down by 226,522 from the end of 2010. And one interesting new holding showing up on Paulson’s radar: Lubrizol.

Soros Fund Cuts Gold, BofA, J.P. Morgan Stakes; Adds to Citi, Wells (Deal Journal)
Soros decreased his holdings of the SPDR Gold Trust, a gold-backed exchanged-traded fund, by 4.7 million shares to 49,400 shares, valued at $6.9 million at March 31…The fund lowered its Bank of America holding by 1.2 million shares and now owns 29,400 shares. Soros sold 378,050 shares of J.P. Morgan, leaving him with 624,600 shares. In contrast, his firm tripled its stake in Citigroup to 29.4 million shares. Soros’ stake in Wells Fargo climbed six-fold to 3.5 million shares.

Bill Ackman Throws in the Towel on Target (Deal Journal)
Pershing Square reported owning 7.4 million Target shares as of Dec. 31, but there is no whisper of the Target investment in Pershing’s latest snapshot of its stock holdings as of March 31.

David Einhorn Buys…General Motors (DJ)
David Einhorn’s Greenlight Capital investment fund reported new ownership stakes in two newly public companies, hospital operator HCA Holdings and General Motors, a.k.a. Government Motors.

Falcone’s Harbinger Holdings Adds Bunge Shares, Trims Gold Stake (Bloomberg)
Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company Bunge Ltd. (BG) in the first quarter and sold shares of SPDR Gold Trust, according to a regulatory filing.

Schwarzenegger fathered a child with longtime member of household staff (LA Times)
Former California Gov. Arnold Schwarzenegger and his wife, Maria Shriver, separated after she learned he had fathered a child more than a decade ago — before his first run for office — with a longtime member of their household staff.

Jump in Revenue Helps Halve California Deficit (NYT)
After months of doomsday scenarios and apocalyptic warnings about cuts to California schools, parks and the police, the news from Gov. Jerry Brown on Monday was nothing short of startling: California is now expected to see $6.6 billion more in revenue over the next two years than had been expected.

U.K. Inflation Quickens More Than Forecast (Bloomberg)l
Consumer prices rose 4.5 percent in April after a 4 percent increase in March, data today showed. The median forecast of 32 economists in a Bloomberg News survey was 4.1 percent. Core inflation quickened to the fastest in at least 14 years. King said in a letter to Chancellor of the Exchequer George Osborne that the surge is being driven by higher sales tax and increases in energy and import prices.

London Finance Job Openings Climbed 15% in April (Bloomberg)
The number of openings in the City, London’s main financial district, and elsewhere in the capital rose to 6,426 last month from 5,569 in April 2010, executive search firm Morgan McKinley said today. The figure was flat compared with the previous month.

President, first lady’s assets valued at $1.8 million to nearly $12 million (WaPo)
Financial disclosure documents released Monday showed the assets for last year…Assets are listed in wide ranges on the disclosure forms — for example, between $1 million and $5 million — making it difficult to determine their value with precision. Royalties from Obama’s books, “Dreams From My Father” and “Audacity of Hope,” totaled between about $1 million and $6 million.

Man To Eat 25,000th Big Mac (HP)
Wisconsin-based Don Gorske plans to eat his 25,000th Big Mac on May 17, 2011, 39 years after his first Big Mac bite on May 17, 1972. He averages two Big Macs per day and has 10,000 Big Mac cartons still in his possession. He keeps two Big Macs in his luggage in case he cannot find a McDonald’s when he travels. Gorske believes he has drank over 200,000 Cokes along with his burgers.



Article courtesy of Dealbreaker

Live-Blogging The Steve Cohen SALT Chat: Risk Management, Fathers, 2012, Compliance, Art, Hitting The Gym


[The music playing while we wait is a mix of Duran Duran, Journey and U2.]

Anthony Scaramucci: I know this man needs no introduction. Steve and I have gotten to know each other over the years, but most recently in Davos where we had some fun. Steve, SAC has been in the news recently, is there anything you’d like to address on this topic?
Steve Cohen: I’d like to thank you for that softball question–nice way to start the interview.

SC: Listen, we take compliance very seriously, and the reality is we’re going to cooperate with the investigations.

AS: How did you first get into all this?
SC: I started when I was 12 years old; used to sit at the dinner table and I’d read the sports page of the Post first then right to the financial page. I’d hang out at the local brokerage firm when I was a little older and just watched the tape.

AS: Did you have anyone you looked up to, who really influenced you?
SC: My father was big in my life. A larger than life type person. I’ll tell you a story about my dad, he’s 91 years old, to give you a sense of what he’s about/meant to me. They used to call him the Sheriff on the golf course. If you played with him and cheated, he’d walk off the course and never talk to you again. If you play with me and cheat I won’t walk but I’ll definitely call off the bet. Read the full story

Opening Bell: 05.11.11


Commodity hedge funds upbeat after mauling (FT)
Last week saw the largest daily trading volume in Brent crude’s history as investors – a large proportion of them hedge funds – began to liquidate positions in a stampede to reduce risk. It was a rush to the exits that was seemingly without cause, however. Many fund managers are at a loss to explain what triggered the panic, dismissing the explanations that have been proffered – weak US economic data, a hike in commodities trading costs or even hedging upcoming equity exposure to the giant Glencore listing…But crucially such losses – unattractive though they are – have done little, if anything, to dent managers’ confidence in the long commodities play.

AIG Offering Near Low End of Range (WSJ)
American International Group Inc. and the Treasury decided to move ahead with a stock offering this month for about $9 billion, far less than what officials had once hoped to fetch, people familiar with the decision said…[AIG's board] decided to proceed with plans for an offering near the low end of a range envisioned by people familiar with the plan of $7 billion to $25 billion, depending on investor demand and market conditions.

Banks Float $5 Billion Deal to End Foreclosure Probe (WSJ)
Such an offer is considerably less than the amounts sought by state and federal officials, some of whom are asking for more than $20 billion in penalties. The banks’ figure comes as mortgage companies and state and federal officials continue their efforts to strike a settlement of investigations sparked by allegations of “robo-signing” and other questionable foreclosure practices that came to light last fall.

Preemptive strike against high prices may be needed, Fed official says (WaPo)
The Federal Reserve needs to be prepared to take preemptive action against even the possibility of a surge of higher prices, a senior official of the central bank said Tuesday. Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, added in an interview that he doesn’t think the recent rises in the price of fuel and other commodities will spiral into a broader inflation, but he cautioned that the central bank needs to remain vigilant.

Dodd-Frank Dissenters Sound Off (Dealbook)
And Ken Griffin, founder of the $15 billion hedge fund Citadel Investment Group, went the furthest by proclaiming that not only would the legislation not work as proposed, but it is “going to deeply entrench crony capitalism into the very fabric of our financial system, which I am terrified about.”

Ex-Galleon Trader Kimelman Wants Jury Told He Rejected Plea Deal With U.S. (Bloomberg)
Former Galleon Group LLC trader Michael Kimelman said he wants jurors at his upcoming insider- trading trial to be told that he could have avoided jail by admitting guilt and rejected a plea deal because he’s innocent. Kimelman is scheduled for trial on May 16… The government’s offer would have had Kimelman plead guilty to conspiracy to commit securities fraud and “was still available last week,” according to the filing.

FDIC warns on moral hazard for money market funds (Reuters)
[Sheila] Bair, outgoing chairman of the Federal Deposit Insurance Corp, said regulators needed to be mindful of so-called moral hazard in creating a backstop for the $2.7 trillion industry. During the financial crisis, the federal government was forced to backstop the market after the collapse of Lehman Brothers pushed the value of the Reserve Fund money market fund below $1 a share, wreaking havoc on the industry.

China Inflation Signals More Tightening to Come (Bloomberg)
China’s inflation held above 5 percent in April and lending exceeded analysts’ estimates, signaling that further monetary tightening may be needed to cool the fastest-growing major economy…Today’s data showed that inflation has exceeded Premier Wen Jiabao’s 4 percent target each month this year.

German Inflation Accelerated More Than Estimated (Bloomberg)
The inflation rate, calculated using a harmonized European Union method, jumped to 2.7 percent from 2.3 percent in March, the Federal Statistics Office in Wiesbaden said today. That’s an upward revision from the first estimate of 2.6 percent on April 27. From March, consumer prices rose 0.3 percent, more than the 0.2 percent initially reported.

Bank of England cuts growth forecasts (FT)
The Bank’s central forecast now predicts growth of about 2.7 per cent in the four quarters to the end of this year, down from its February forecast of growth of 2.9 per cent, assuming no change in monetary policy. Growth in the year to the end of 2012 is expected to be about 2.8 per cent rather than 3.2 per cent. Inflation is forecast to peak this year at about 5 per cent in the fourth quarter, rather than at about 4.5 per cent. By the end of next year, inflation is expected to reach 2.4 per cent, compared with an earlier forecast of 1.7 per cent.

Greek unions hold new general strike, plan demonstrations, to protest harsh austerity (WaPo)
A 24-hour general strike in Greece Wednesday brought most public services to a halt, while thousands marched through Athens to protest the government’s introduction of harsh austerity measures intended to keep the debt-ridden country solvent. This month, the Socialist government is planning to pass further cutbacks aimed at saving an estimated €23 billion ($33 billion) through 2015.

Google Sets Aside $500 Million for Probe (Bloomberg)
Google set aside $500 million related to the possible resolution of a U.S. Justice Department investigation of its advertising business, resulting in lower first-quarter profit. The expense trimmed net income to $1.8 billion, or $5.51 a share, in the period, Google said yesterday in a regulatory filing.

Stanford Trial Set for September (WSJ)
Jailed money manager R. Allen Stanford will go to trial on wire-fraud and other charges in September, a federal judge in Houston has ruled. Jury selection will begin Sept. 12 in the trial of Mr. Stanford, who has been accused of running a $7 billion fraud, according to an order issued by U.S. District Judge David Hittner in Houston on Tuesday.

‘Mack’ the life (NYP)
Mark Madoff’s widow, Stephanie, filed two name change petitions to distance herself and her children from her husband’s notorious last name. After the couple received numerous threats, Mark gave Stephanie his blessing to change her last name to “Morgan” in February 2010, and since then she’s been called Stephanie Morgan. When the name change request was reported, sources say Morgan filed a second petition to change her family name to “Mack.”

Female peacock escapes from Bronx Zoo, still on the loose on NYC streets (NYDN)
The Bronx Zoo cobra may be back in captivity, but a female peacock is on the loose. Three zoo workers wielding nets made a failed attempt to recapture the green peahen about noon on Tuesday…Zoo workers crawling stealthily through the grass got within a few feet of the feisty fowl before she flew off again. She hasn’t been seen since…”We’ll get her eventually,” vowed Nancy Clum, the zoo’s curator of ornithology.



Article courtesy of Dealbreaker

Opening Bell: 05.09.11


Commodity hedge fund loses $400m in oil slide (FT)
Clive Capital, the world’s largest commodity hedge fund, has been left nursing losses of more than $400m as a result of the collapse in the price of oil last week…Others, including Astenbeck Capital, the Phibro-owned fund run by Andrew Hall, are thought to have taken double-digit percentage point losses to their portfolios, according to investors…In a letter sent to investors on Friday and seen by the Financial Times, Clive said it was down 8.9 per cent on the week after what it called “extraordinary” price movements on Thursday. Clive’s management said it was at a loss to explain what had caused crude oil markets to be “annihilated”.

Silver-Mad Small Investors Fueled an Epic Rise and Fall (WSJ)
Behind silver’s historic collapse is a market that came loose of its moorings, fueled by speculative traders, many of them small investors who may have jumped in at just the wrong moment. “If gold is a Monte Carlo casino, silver is a slot machine in Las Vegas,” says Andy Smith, a senior metals strategist at Bache Commodities.

Euro Nations Divided Over Greek Debt (WSJ)
Finance chiefs from the most important euro nations discussed Greece’s problems—and other issues, including Portugal’s imminent aid package—at informal talks in Luxembourg on Friday. The gathering, one of many informal meetings of select European officials since the financial crisis began, turned into a media circus after Germany’s Spiegel Online reported its existence Friday—and claimed it had been called because Greece was thinking of leaving the euro zone. The report sent the euro tumbling…”We are not discussing the exit of Greece from the euro area. This is a stupid idea and an avenue we would never take,” said the host of Friday’s meeting, Luxembourg Premier Jean-Claude Juncker.

EU eyes lower rates for Greece, Ireland amid chaos (Reuters)
The European Union is looking to lower interest rates on bailout loans to Greece and Ireland and is working on a second rescue for Athens in a chaotic effort to prevent a disorderly debt restructuring. The executive European Commission said on Monday it hoped to see a decision within weeks on reducing the rate charged to Ireland to make Dublin’s debt more sustainable.

Irish to Avoid ‘Doomsday,’ Honohan Says as Rescheduling Mooted (Bloomberg)
Irish central bank Governor Patrick Honohan said the country will avoid economic “doomsday,” as a government minister and prominent professor suggested the nation should reschedule debts from its as much as 85 billion-euro ($121 billion) bailout. Honohan was responding to Morgan Kelly, an economics professor dubbed Ireland’s Doctor Doom, who wrote in the Irish Times newspaper that Ireland faces a “prolonged and chaotic national bankruptcy.”

U.S. Will Urge China to Boost Interest Rates in Washington Talks (Bloomberg)
Treasury Secretary Timothy F. Geithner will urge China to allow higher interest rates when he meets with Chinese leaders this week, as the U.S. extends its push for a stronger yuan.

Private Equity Has A Horse In This Race (Dealbook)
Carl Pascarella, an executive at TPG, the private equity firm, owns a piece of the the colt that shocked the horse racing world on Saturday with a come-from-behind victory. Animal Kingdom, who had never run on dirt and only had four races under his belt, covered the mile and a quarter in 2:02.04.

AIG Fall Blunts Talk Of Taxpayer Gain (WSJ)
What Treasury chooses to do with its AIG shares “is essentially a political decision,” says Jay Ritter, a finance professor at the University of Florida. “Government officials and politicians would like to say we broke even and didn’t lose any taxpayer money” in the AIG bailout, he says. “But as a taxpayer, I would be happy if we got out close to whole, and losing a little would ultimately be a good outcome” given the amount that was committed to the AIG bailout, Mr. Ritter says.

Fee Pitched for Fast Firms (WSJ)
Sen. Charles Schumer told regulators that sophisticated electronic traders should bear the cost of monitoring their dealings, with special fees assessed to firms that issue and then rapidly cancel securities orders.

UBS fears missing ambitious targets (FT)
Oswald Grübel, chief executive, surprised analysts last month by maintaining his medium-term goals of SFr20bn (€16bn) in annual revenues and SFr6bn in pre-tax profits for the group’s recovering investment bank. UBS’s performance targets were set in late 2009, before the new Basel III framework was finalised and before regulators in Switzerland proposed their own additional capital requirements for the group…However, according to senior UBS bankers, there is a growing acceptance that the targets are aspirational and will be extremely difficult to achieve over the next two years.

Moody’s: Expiring of US muni backstops going well (Reuters)
An expected flood of expirations of liquidity facilities on U.S. municipal debt this year is so far going well, Moody’s Investors Service reported on Monday.

SEC reform proposal threatens ‘dark pools’ (FT)
The US Securities and Exchange Commission is considering a proposal to move more trading back on to exchanges from alternative venues such as “dark pools”, which has drawn sharp criticism from banks and many trading firms. David Shillman, associate director of the SEC’s division of trading and markets, told the Financial Times that a so-called “trade at” rule is “very much in play. There’s interest in it”. The “trade at” rule, which would require non-exchange venues to improve on the displayed market price, is a response to concerns among some academics and market participants that a rising share of trading happening outside of exchanges is making trading more expensive and difficult.

US Q1 home values see biggest drop since 2008–Zillow (Reuters)
Zillow said its home value index fell 3 percent in the first three months of the year from the previous quarter, and was down 8.2 percent year-over-year.

Seeking Business, States Loosen Insurance Rules (NYT)
Vermont, and a handful of other states including Utah, South Carolina, Delaware and Hawaii, are aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard.

Berkshire Hathaway profit falls on Japan (Reuters)
Berkshire reported a net profit of $1.51 billion, or $917 per Class A share, compared with a profit of $3.63 billion, or $2,272 per Class A share, a year earlier. The company took a provision of $1.7 billion in the first quarter for catastrophe losses, primarily for the Japan earthquake but also from a quake in New Zealand and flooding in Australia…Berkshire also recorded losses of $506 million in the first quarter for stocks where the company’s investment was in a loss position and that loss was not considered temporary. The biggest share of the loss was an impairment on part of Berkshire’s stake in Wells Fargo, and the rest came from an impairment on the stake in Kraft Foods.

HSBC Costs Rise on New Hires and Customer Compensation (Bloomberg)
Costs as a proportion of income rose to 60.9 percent from 49.6 percent, the London-based bank said today in a statement. Net income rose 58 percent to $4.15 billion compared with $2.63 billion in the year-earlier period, the bank said in its first detailed quarterly earnings report. The shares fell.

U.S. gas prices hit $4 a gallon, but may retreat (Reuters)
The national average for self-serve, regular unleaded gas was $4 per gallon on May 6, up 11.98 cents from April 22, according to the nationwide Lundberg Survey. This was still below the all-time high of $4.11 on July, 11, 2008, and last week’s fall in crude oil prices may lead to a 8- to 12-cent drop in prices at the pump over the next few weeks, according to Trilby Lundberg, the survey’s editor.

Sweep is an ugly ending for Lakers and a bittersweet one for Phil Jackson (LA Times)
The Mavericks’ 122-86 blowout victory in Game 4, which completed their 4-0 sweep of the Western Conference semifinal series, perhaps came at the right time for the Lakers. They appeared to be teetering, perhaps because this was the 77th postseason game they had played since 2008, nearly an extra 82-game regular season in a four-year span. “I was talking to Kobe [after the game] and we both agreed it was better to lose now than to get to the [NBA] Finals and lose,” Jackson said. “Going all the way and losing in the Finals, now that’s really tough.”

What was in medicine chests at bin Laden compound? (MSNBC)
Either Osama bin Laden or those who lived with him at the Pakistan compound where he was killed apparently suffered from stomach ulcers, high blood pressure and nerve pain — plus the normal ailments that affect a family with children, according to a pharmacist’s analysis of medications reportedly found at the site. In addition, the medicine cache was said to contain Avena syrup, a botanical product that has at least two uses: as an artificial sweetener often used for a sour stomach and as “natural Viagra” that could be used to increase sexual desire and potency.



Article courtesy of Dealbreaker

Write-Offs: 05.04.11


$$$ Lawmakers told $2 trillion debt cap raise needed: sources (Reuters)

$$$ Obama will not release bin Laden photos, White House says (WaPo)

$$$ Value Investing Congress Summary: Marks, Romick, Tilson, Leonard & More (MarketFolly)

$$$ UBS Financial Services Inc. lost a jury verdict of almost $10.6 million in a case brought by a former sales assistant who said she was sexually harassed by a supervisor…[who] “repeatedly made inappropriate comments about Ingraham’s breast size,” called her into his office “to view sexually offensive e-mails on his computer,” and repeatedly talked about the size of his genitals,” she said. He also asked her about her sexual fantasies, she said in the lawsuit. (Bloomberg)

$$$ More Power Over Wall Street, but Little Chance to Discuss It (ProPublica)

$$$ Dems To Force Vote On Oil Subsidies (HuffPo)

$$$ Madoff trustee Irving Picard wants to start repaying victims (NYP)

$$$ PIMCO rolls out floating-rate fund ahead of rates (Reuters)

$$$ Carlos Slim Actively Selling Silver Futures (CNBC)

$$$ Bank Stocks Shunned by Money Managers Over Derivatives (Bloomberg)

$$$ LinkedIn Chooses NYSE Over Nasdaq, Following Renren and Pandora (Bloomberg)

$$$ NASA Gravity Probe Confirms Two Einstein Theories (Space)



Article courtesy of Dealbreaker