KDB Chief Says Banks Are Seeking Lehman Deal
It looks like its for real this time. No more unnamed sources or suspicions of bungled translations. This time we have it straight from a named source, Min Euoo-sung, the governor of state-owned Korean Development Bank. He has said that discussions were under way ''to form a consortium with private banks as (we) believe it is more desirable to acquire Lehman Brothers jointly rather than alone.'' There's still a big gap on pricing, he added.
Retail investors in US equities hits low (FT)
The holdings of retail investors continue to decline relative to institutional holders. The latest data available is from 2006, when retail investors held just 34% of all stocks and just 24% of the top 1000 companies. That's a steep fall of from earlier periods. In the fifties, retail counted for 94% of stock holdings. In 1980, it was 63%. It's got to make you wonder about how well the SEC, which was built to protect individual investors (or at least to bolster the confidence of those investors), fits with the reality of a world dominated by large investment funds.
You Must Remember This? KKR Hopes Not (WSJ)
KKR, which has now filed the prospectus for its initial public offering, already has two publicly traded investment vehicles. Neither is a a pretty sight, and both need restructuring. KKR Private Equity investors may be bailed out by the parent. KKR Financial Holdings, which was formed to buy mortgage products in an attempt to show that KKR could do more than buyouts, had to change strategies to buying top-rated corporate debt and still trades below blook value. Last year KFN last $100 million while its managers took home $17.5 million in "incentive fees" and millions more in other fees.
Hedge Funds Are Caught in a Tight Spot (WSJ)
Although the big letters above this story tout bad times for hedge funds, the real story here is performance divergence. Market volatility has created some huge winners in the hedge fund market and some huge losers, and investors are fleeing the latter for the former. Fear of investor flight is prompting many hedge funds to adopt a more conservative strategy, and to hold more liquid investments to made redemptions easier to handle.
Oil Falls as Companies Prepare to Resume Output After Hurricane (Bloomberg)
Oil dropped off a cliff in European trading, dropping more than 8 percent. The decline is attributed to the lack of structural damage from hurricane Gustav. Hannah and Ike, the next two big storms now brewing out over the Atlantic, are expected to avoid the Gulf of Mexico altogether.
(Joe Weisenthal is on vacation.)
Posted by guest , Sep 02, 2008 9:12AM
First..
Not quite such a spectacular blow job down in New Orleans then huh...
Where will the markets take us now I wonder?
Good week all.
Posted by guest , Sep 02, 2008 9:23AM
The Koreans just don't learn do they?
First they hold a big chunk of their foreign reserves in Fannie and Freddie bonds. Now, they want to "diversify" into arguably even crappier asset in the form of Lehman Brothers............
Oh Brother Kim, where are thou? Get off that bottle of Jinro you have on your desk!
Maybe the Koreans are the new Japanese.
Posted by guest , Sep 02, 2008 9:32AM
Kudlow and Burnett are totally unwatchable this morning.
Posted by guest , Sep 02, 2008 9:33AM
Wow.....no one has visually seen offshore production platforms except maybe the Coast Guard, but energy "traders" know there hasn't ben any damage......Hmmmmmmmm.........
Posted by arthurcutten , Sep 02, 2008 10:21AM
KDB and the Artifice of the Deal, Part 2
http://jessescrossroadscafe.blogspot.com/2008/09/kdb-and-artifice-of-deal-part-2.html
Posted by Anal_yst , Sep 02, 2008 10:24AM
@ 3
Agreed, Kudlow seems to think that because fuel prices decrease $0.75/gallon, the average family will have significantly more $ to pay their mortgage AND increase their discretionary spending. Yea, Larry, that must be it...
Posted by guest , Sep 02, 2008 10:53AM
retail investors dont diversify their portfolios as much as institutions, dont hold as much alternative assets, due to regulations on selling (or mis selling) to retail... hence when the broad market tanks like it has in the last 1 year (13% in the US and 24% in Europe) then the retail investor takes the brunt of the hit....
Much like marine grunts in war...
Posted by guest , Sep 02, 2008 11:04AM
Its totally simplistic to say that retail investors have recently been hurt more than institutions because of an inability to own alternatives. Depends of course on what alternatives you owned (or didn't own).
Posted by guest , Sep 02, 2008 11:18AM
JPM downgrades ESV to underweight because...
"...In our view, the use of excess cash each quarter to repurchase shares is questionable as (1) we find it unlikely that the company has a better long-term view of the [offshore rig] market than investors, (2) using peak cash flows to repurchase shares does not favor the long-term shareholder, and (3) dividends paid can’t be taken back (but an aggressive stock compensation plan can dilute the repurchase)...."
So let me get this straight, the fucking Analyst is saying that NYC Bankers (Investors) understand the off shore drilling sector better then a profitable company with long term contracts and free cash flow operating in the sector.
The use of free cash flow for dividends and share buy backs is bad for long term investors and the money should not be used to grow its business. So WTF is the free cash flow supposed to be used on if not growing the company, dividends or share buy backs? I have heard to stupid comments before, but if I was this guys MD, I would have security escort him out of the building ASAP as he is a danger to the whole department.
JPM needs to transfer this idiot to the wall mart greeting location at the lobby...
Posted by guest , Sep 02, 2008 11:18AM
What about the rumours that Lehman is selling its asset management business to P/E funds? Is that deal dead already?
You can only put so much lipstick onto a pig I suppose...................