The NYSE may be seeking to break-up the cozy relationship between Wall Street brokerage houses and hedge funds, according to a report in Crain’s.
The New York Stock Exchange may begin asking big mutual funds and hedge funds to start trading shares directly with the institution, bypassing the Wall Street brokerage houses that have long handled their orders.
But are hedge funds really interested in trading directly with the exchange? Surely there are some who’d like to cut out the expenses of a middle-man broker but the relationship between brokers and funds is more complex than just placing orders for financial products and paying fees. Hedge funds often borrow money from the institutions they trade through, and this method of levering up their positions might be harder to come by if they were trading directly.
In short, trading directly through the NYSE might sound like an attractive offer but its probably not enough to Angelina Jolie* the relationship between the Brad Pitt hedge funds and the Jenifer Aniston brokers.
NYSE may bypass brokerages for trading [Crain's via Underthecounter]
* Please note: That picture is totally photoshopped.
Bankersball brings us the news that at least one bank has attempted to ban the World Cup.
Word on the Street is that many are unhappy about a certain bank’s move to attempt to block World Cup access from TVs. It appears the change came after the said bank was recently named in a prominent publication as having a good many of their televisions turned to the matches.
It’s too bad Bankersball ran this as a blind item. We want to know which banks and trading floors have the World Cup on and which don’t. Leave your tips or speculations in the comments section or email Tips(at)Dealbreaker(dot)com.
World Cup Woes [Bankersball]
Here at DealBreaker, we’re not just money-grubbing, scandal-reporting, MovableType-preaching hacks. Sure, we’re all of those things, but, as you may or may not know, we’re also skilled anthropologists the likes of which National Geographic could only hope to one day land. Up until recently, we’d thought that our two loves—exposing Gene Plotkin with his pants down, and exploring uncharted territories/people/things, deep within the brushes of Cameroon—were mutually exclusive. We’d start and end every M-F with a healthy dose of Goldman Gossip, some Itty Bitty Dealbook here and some NYSE-mocking there. On the weekends, we’d pack up the Jeep and set out for Nambia with Angie, for some quality time in the wild. And it was a good. For a while. But lately, it just started feeling as though we were leading double lives, hiding one from the other. Hank* didn’t want to hear about the cheetahs we’d befriended in Botswana, and you can bet the feeling was mutual.** We were exploring this in therapy one day when our analyst, Dr. Alden Cass, came up with a brilliant idea: Nat’l Geo-esque shots of Blue Shirts. Nat’l Geo-esque shots of Blue Shirts! Of course! Why hadn’t we thought of that ourselves?
(A photo-essay of our findings, after the jump).
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Okay. Airbus is not a Margritte painting. But following the crisis at Airbus increasing has the same feeling of paranoid unreality. As if some illusion had been lifted and we were discovering that the world is much, much stranger than we thought.
Take the latest report from IAG, the travel and aviation consultancy group, which describes the situation at Airbus as so laced with international intrigue it recalls one of Charles McCarry’s Cold War spy novels. There are cowardly and double-dealing French, crafty Germans and practical English, all maneuvering for advantage.
In the end, with France’s political opposition about to start calling for Mr. Forgeard’s dismissal, Mr. Chirac being a lame duck and France political players getting ready for an election, Mr. Forgeard’s allies are getting weaker every day. The quieter the Anglos and Germans are the more you can expect to hear noise from the French camp. Time is not on France’s side. Isn’t it amazing the man who recently referred to French politicians as “excited monkeys” now depends on them for his job more than ever?
Ouch. Note to self: watch out what you call the people who may someday decide whether or not you get to keep your job.
The internal breakdown within Airbus [IAG Blog]
More details are emerging about the probe into alleged price fixing at British Airways, including possible answers to the obvious question: if BA was fixing prices, who were they fixing them with? Bloomberg runs down the usual suspects and tries to get them to fess up to whether they are being investigated.
Virgin: refuses to say whether it is a subject of the probe.
American Airlines: claims it is not a target of the investigation.
United Airlines: Is cooperating with authorities. No word on whether it is a target.
Air France: Claims it is not under investigation.
Delta: Didn’t answer the phone when Bloomberg’s reporters called.
F.C.C. and deregulation…again [legal]
U.S. and Brit regulators investigate British Airways over ticket pricing and surcharges [inquiries]
Computer Associates’ business development exec pleads guilty obstruction charges [legal]
Canada’s fifth-largest bank denies insider trading charges [legal]
NYSE clerk narks on colleagues Michael Stern and Michael Haywa in illegal trading investigation [legal]
Brit banking trio have one week to appeal against extradition on Enron-related charges [legal]
M&A: [? = not yet closed, problems with the deal, lingering questions, etc.]
Siemens + Nortel Networks?
New York Times Company + [enter name here]?
IMG Artists + International Creative Management’s classical music division?
Green Mountain Power + Northern New England Energy
Careerbuilder.com up for grabs
Univision to it’s sole bidder: HELL NO
Arcelor; stuck in the middle w/ Severstal and Mittal Steel
PCCW–if China Network doesn’t throw in the monkey wrench
Paulson’s GS shares
Michaels Stores; bidders include The Carlyle Group, etc
Lord & Taylor
Bank of China prices its Shanghai IPOS at $2.5 billion $$$$
Morgan Stanley holds it down in Russian IPOs market $$$$
Global Ethanol Holdings to raise $518 million in IPOs $$$
After almost 60 years, Vespa raises $346-440 million for IPOs $$$
RGB Networks closes its $20 million Series C round, making $90 million after new valuations $$
Colorado Group shares surge after Affinity Equity Partners raises stake in company LINK
Heritage Partners rake in 350% return from sale of Castle Rock Industries shares to Alfred Kärcher LINK
José Maria Aznar–then: former Spanish Prime minister; now–News Corp’s newest board member
Pascal Ravery named J.P. Morgan Chase’s European V.P
David M. Platter making his rounds to Credit Suisse
Behinds the scenes of the Chandler family: Thomas Unterman, a man of many hats LINK
Chairman Maurizio Borletti has big plans for department store, I La Rinascente LINK
Tough market for companies looking to take shares public LINK
Intel increases stake in Navini Networks LINK
Harvard to billionaire Larry Ellison: Where’s our I.O.U.? LINK
GS Asset Management launches $200 million offshore Chinese equity fund LINK
It’s a turbulent market–so why are investment banks still pulling in record gains? LINK
Dresdner Bank cuts jobs to remain competitive on Wall Street…surprising. LINK
Money on MySpace for Murdock? LINK
Apollo’s Hexion Specialty Chemicals, again, suspends IPOs LINK
Dresdner Kleinwort Wasserstein, the investment banking unit of Dresdner Bank, which was bought by Dresdner bank in in 2000, will not go public, Dresdner’s chief executive said on Thursday.
CEO Herbert Walter told a conference call that the Dresdner Kleinwort unit was not a “stock-exchange capable unit,” in response to a journalist’s question.
Walter said the bank’s plans were to integrate investment banking more closely with the rest of Dresdner’s operations.
Earlier today Dresdner’s parent company, Allianz, announced it was cutting 7,500 jobs, including 2,500 at Dresdner.
Update: The latest reports say that DKW will lose about 300 jobs and the last name from its masthead.
Dresdner CEO- investment bank arm not IPO candidate [Reuters]
Univision’s auction got dicier this morning on news that KKR and Blackstone were dropping out of the consortium they had formed to bid on the US’s largest Spanish language media company. The official story is that KKR and Blackstone had “valuation differences” with the rest of the group, meaning they couldn’t agree on how much Univision was worth. CNBC is saying that a bid will come today from the rest of Grupo
Univision Sale Set Back as KKR, Blackstone Drop Out
Outgoing Goldman Sachs CEO, Hank Paulson, plans to sell his shares in Goldman Sachs, according to published reports. A March regulatory filing valued Paulson’s shares at $485 million.
The oddest thing about the report is that Paulson’s filings with the government ethics office disclose his total worth at $164 million because the magical accounting of our nation’s capital caps the disclosed value of any single asset at $50 million. A number of assets hit the cap, including his shares and options in Goldman and US Treasury bonds, according to published reports.
Paulson to Sell Goldman Stake, White House Aide Says [Bloomberg]
The penny’s unlikely backer: Britney’s hubby (CNNMoney)
What the… ? At an event sponsored by Virgin Mobile, Kevin Federline has made it official that he stands against any future law that might eliminate the penny. Is Kevin Federline a moron? Doesn’t he realize that rising copper prices (though they’ve eased) is dramatically limiting the seignorage on the minting of $.01 pieces? Does he really want the economy to be shackled by such an inefficient currency unit going forward? What an outrage. Maybe we should start a petition to protest K-Fed’s screwy views on the monetary system. That would show him.
An Insider Trading Policy a Monkey Would Love (Truth On The Market)
Nobody ever likes when we write about this, but we can’t resist a chance to discuss the legalization of fraud. Certainly there are some of you who might directly be affected by this, right? There’s a phenomenon whereby you can convince someone that the legalization of insider trading would make the market more efficient, prove a cheap compensation mechanism for executives, and help price doubt into the market, and they’ll agree with you. But when it comes to down to putting theory into practice, they’ll hesitate and say “but it’s just not fair”. And despite the fact that this isn’t communist Russia (Ok, China), the fairness argument gets embedded into the law. Even former SEC commish Arthur Leavitt wrote that if the system isn’t “fair” then nobody will feel comfortable investing in the markets. But this ignores the fact that there have been periods of less insider-trading restrictions (and the fact that it still happens today) and the markets have always functioned. Besides, if a move to legalize the activity prompts a mass exodus from the market, so be it — sounds like buying time.
Lehman Uncommon Values Portfolio (Ticker Sense)
Per annual tradition Lehman has released its famous 10 Uncommon Values Portfolio — a list of stocks they think will outperform the market over the 12 months. The firm claims that the portfolio significantly outperforms the S&P, though that’s unclear. Last year it lagged the S&P 500 by over 7%. This year, of the ten stocks, only one is a carry over from last year, despite the fact that the stocks sagged. You’d think that these uncommon values would be even more uncommon after a down year, but apparently not. Also, if you’re looking for a trip, check out the portfolio from 2000. Uncommon indeed.
Optimisation of cliché synergies (The Age)
Wall Street loves its obfuscatory language, jargon and cant. It’s not just because that’s what you learn when you get in MBA; no, it’s because people have something to hide according to a study. By quantifying the readability of annual reports, researchers identified a correlation between poor stock returns and the amount of linguistic rubbish. Everybody has their favorite bit of jargon, and we could go on forever citing it. Just to keep it simple, we really like the word “leverage”. It sounds unassuming enough, and it’s used so often that you’d think it was being used the right way, but it’s not. Leverage doesn’t mean “use”. It’s a phenomenon that occurs when a little bit of pressure or force can have dramatic effects — and in real English it’s barely used as a verb. If you speak English, and haven’t been totally steeped in executive BS, it should sound absurd to say, “we’re going to leverage our global workforce”. Ok, rant over.
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$$$ Want to get on the quicker path to financial security? Take this guy’s advice and invest in a flask. [Neville’s Financial Blog]
$$$ Japan to U.S. Exporters: Where’s the beef? No—not the proverbial beef. They actually want to know where it is. [NYTimes]
$$$ Did you know that Howard Stern was more powerful than Paul McCartney? Really, I didn’t [Forbes]
$$$ And, while you’re waiting to see if Facebook’s bubbly valuation banks the $2 billion dollars it wants, here’s their Idiot’s Guide. [FacebookProfile]