U.S. Stock Futures Point to Mixed Open (TheStreet.com)
It’s probably another turbulent day with earnings underway now. S&P futures are 13 points ahead, at 916, while Nasdaq futures are ahead 18 points, at 1247. Dow futures are also up. Reporting before the bell: Citigroup, Merrill, Bank of New York Mellon (Citi and Merrill results within this Opening Bell edition).
Japan’s Nikkei bleeds as recession fears loom (Marketwatch)
Volatile as always, Asian markets sank overnight. The headline above mistakenly implies that the tumble in stock prices was something to do with economic worries: it was, in fact, simply because the Dow plunged nearly 8% yesterday. Either way, the scene in Asia was ugly: the Nikkei dropped 11.4%, to 8,458.45, the Hang Seng tumbled 4.8%, while China fell 4.3%. At one point, Osaka actually halted futures trading in the Nikkei. India held up better after wholesale inflation eased “more than expected” to “just” 11.44%.
Citadel Dispels Rumors But Can’t Mask a Bad Year (WSJ)
According to the Journal, yesterday’s giant selloff is our fault, sort of. It looks like Ken Griffin got fed up with everyone speculating his hedge fund’s demise, and in characteristically aggressive fashion, decided to set the record straight to his investors. Apparently, according to the Journal, those Citadel rumors were “published on a financial website” Tuesday and helped drag down the market yesterday. Anyway, no smoke without fire. The fund is off 26% to 30% after its “worst month ever” in September, but it’s far from going under.
Merrill Lynch Posts Fifth Straight Quarterly Loss on Writedowns (Bloomberg)
And things aren’t looking up for Merrill either. The bank lost $5.15 billion, or $5.58 a share in the most recent quarter, Bloomberg reports, with its writedowns now totaling $9.5 billion, or double the amount of debt needed to shore up Iceland’s banking system.
Switzerland Gives UBS a Bailout; Credit Suisse Raises Funds (Bloomberg)
Now Europe’s most invulnerable hub is finding it’s having to lend a helping hand to its banks in distress. UBS got a $59.2 billion bailout, while the Swiss National Bank has set up a a fund to absorb UBS’s “toxic debt”. Credit Suisse gets 10 billion Swiss Francs from Quatari investors and Israeli Koor Industries. You have to hand it to Credit Suisse, raising money from Arabs and Israelis alike. Typically, the investments are in the form of convertible notes.
Weak Conditions Seen Across U.S., Fed Report Shows (WSJ)
Another classic doom and gloom Journal forecast. The beige book report shows consumer spending easing, although it also shows agriculture, mining and energy holding up well. The report implies recession across the country, coinciding with the Commerce Department’s findings of a 1.2% drop in retail sales. The beige book report is a colloquial term for the Summary of Commentary on Current Economic Conditions, and comprises the views of economists and bank chiefs from around the U.S. It is published eight times a year.
Oil price hits 15-month low under $68 (AFP)
Crude oil has fallen more than 50% from its high early this summer. Given that demand should be on the increase with the cooler season underway in many parts of the world now, demand quotas are obviously spiraling. This thing will most likely bottom out at $45 a barrel.
Way To Go, Wells Fargo (Forbes.com)
You just know things aren’t good when headlines begin congratulating banks for a 27% tumble in profits. But, to be fair, Wells Fargo made $1.6 billion, or 49 cents a share, beating the street’s estimates by around 50%, which is pretty outstanding. It increased its loan base by 3% over the second quarter. Morningstar analyst Jamie Peters says that “writing loans in this type of market with Wells’ underwriting discipline is likely to turn out to be very profitable for shareholders in the long run.” You bet it is.
Coca-Cola Profit Rises 14% on International Sales (Bloomberg)
Amazingly, given the relative strengthening of the dollar recently, Coke is having a ball overseas. Then again, a Coca Cola is perhaps the most recession-proof product there is out there. Sales in China and India accounted for much of the $1.89 billion, or 81 cents a share profit, Coke said. The company beat the street’s estimates by 6 cents a share.
Airlines Set To Take Off If Oil Continues Retreat (Forbes.com)
It’s hard to know for sure whether spiraling oil prices will be a boon for earnings of airlines, or that given that recessionary conditions are reportedly underfoot, Forbes isn’t being a little typically overoptimistic about the prospects for U.S. carriers. Probably budget carriers such as Jet Blue stand the best chance in these conditions. Curiously, American Airlines saw a 9.4% jump in sales during the third quarter. JP Morgan says that because of recent fuel costs, third quarter earnings should be regarded as “irrelevant”.
Citigroup Posts Fourth Consecutive Loss on Mortgage Writedowns (Bloomberg)
Citi lost $2.8 billion, or 60 cents a share, last quarter, taking the bank’s credit losses to $13.2 billion. There’s understandably a little bit of disappointment over Citi’s failure to nab Wachovia’s deposit base here, too.
Transactions in Decline, eBay Cuts Its Forecast (New York Times)
eBay’s supposedly “recession proof” business model may not be quite as resilient to an economic downturn as it previously thought. The company reported third quarter earnings of $492.2 million, or 38 cents a share, but said that it may fall short of the street’s revenue expectations for the year by around $300 million.
Griff is already writing up the contract, I would be looking over both shoulders and having someone start the car if I were you. Not smart to publish anything based solely off of rumor
Too long, didn’t read.
Where did 45 bucks a barrel come from?
The WSJ did cite dealbreaker by name later in the article. Expect more of the yahoo crowd to wind up here.
shout out to bess from gaspo– “I know the kids that run the website…”
haha…Gasparino talking about DB on cnbc…”some kids who write a website, I know them well and they’re usually pretty good”….unless you’re calling him “Gasbagarino”
gasbag wont say the name of site, but did just say in a jovial way, ‘i know the kids that run it…’ re the citadel story which is true! good work DB
Gasbagarino is envious of DB
9th!
-mrp
Funny. Where did the Shamwow and Mayo guys go to?
3 Month Libor – OIS spreads increased markedly overnight across the board for the Dollar, Euro, and Sterling.
Not a good sign that the massive addition of liquidity is yet working as intended.
The South Korean currency fell 9.7% overnight. An encore of the ‘97 Asian crisis is now a real possibility to be added to the mix.
gasparino is trying to get in with citadel; if this were some bank saying “we’re solvent” he’d be like “they CLAIM they’re solvent but my sources tell me otherwise.”
Good. I miss Asian streetfighting. We should have more of that in this country.
Any LME traders here?
Why is it that the contract price for immediate settlement is $300/mt while the physical price is way above that price at $450/mt?
What am i missing? What’s stopping me from asking the contract to be delivered and selling at $450?
http://www.cnbc.com/id/27212091
#14,
Where are you going to store it? In your hipster pad on the lower east? I don’t think so.
gasparino probably should’ve added to the line “i know the kids, they’re good kids” “that i’ve jacked stories from many times in the past.”
I’m afraid #4 is right.
@diablo- i dont think the yahoo crowd reads the wsj.
I know the kids. They’re always with me. Like fluid situation in my pants. Gabagole.
14, you do understand what immediate settlement means, right?
This works best with live cattle.
also, gasparino is wrong. per the wsj article, the post was clearly labeled as a rumor, and the rumor was indeed going around, per the journal, for a week. it’s not like db made it up (unlike his reporting).
#14 How are you going to get it to the black sea from China?
#18 fantastic
I don’t mind more eyeballs on DB, but when those creeps start posting here the joint really goes to the crapper fast.
I love the fact that Citadel, after being down a mere 30% for the year, now tells its clients to expect “significant volatility”. Is that some sort of a secret code for, “If you think we’re fucked now, just wait, because pretty soon we’re gonna be REALLY fucked”?
Oh, and by the way, we’re still taking 20% of something. We don’t care where it comes from. We’ll even tell you that we had to liquidate even more positions, but we’re getting our 20% goddammit.
P.S. Have a nice day.
citadel says wednesday: we’re down 30% andy you should “expect significant volatility.” translation: we’re actually down 40% and the rumors were true.
more yahoos? You make this assertion as if there were more than a few hundred professionals who read the site. A few dozen that comment. Or that they aren’t trying to cultivate that audience with idiot clauses.
@26- are you a fucking idiot? the site is read by hundreds of thousands daily. and the only “idiot” clauses that have popped up ever have been TWO by the daniel kid who I would hardly say speaks for the site, or its intended direction.
Unless another site had the same story on Tues, DB is mentioned in WSJ today-Citadel article on front pg of Money & Investing section.
@15
If i’m a buyer who needs steel billets for my factory production, I would already have my own storage. In that case, all the buyers would buy LME contracts. Why would anyone want to buy from the traders quoting $450? If you are an arb, all you need to do is find a buyer and you settle an LME contract to deliver the goods to the buyer.
@20
My understanding is that if i buy the Black Sea contract at cash seller (http://www.lme.co.uk/Steel_Med_Prices.asp) now and request for it to be delivered, I will be able to collect the billets from one of the LME warehouses within the next 14 days. Please correct me if I’m wrong.
@22
$450 is the FOB prices. You still have to pay for the shipping cost. There are 2 contracts. One is Far East and the other is Black Sea. If I’m a buyer in the Far East, I’ll just buy the Far East contract and collect the billets from one of the LME warehouses in China.
The reason why I’m so perplexed by the disparity between the LME steel + physical spot price is because this seems to be unique to the steel contracts only. For copper, the physical spot price is usually quoted as LME cash seller + a premium.
@29- what’s it like to be 12 hours late to a party?
first. The site isn’t read by hundreds of thousands daily. You don’t know shit about internet traffic.
B. What percentage are in finance. By comments very few.
Go back to monster.com and look for a job.
29 is raising some interesting points, which could be cleared up easily and snarklessly by people who know what they’re doing. And then we could all learn something. Too bad, but looks like he came to the wrong place for that.
@31- first. i’d be interested to hear what you know about internet traffic, and specifically the traffic of a site you presumably don’t work for. B. don’t be an idiot. the number of people that comment on any website is a very small percentage of the actual readers.
go back to clusterstock.com and do…whatever it is they do there.
@32- why don’t you clear it up, big shot?
We need more Jimmy Cayne ‘n McGriddles.
34=just another loser. I rest my case.
@34 its very simply.
By low sell hi.
SPODE
#29 here. Seriously, instead of posting snark comments that doesn’t answer the question but only serves to amplify your own ignorance, why don’t you just stfu and allow those who actually know explain and you can actually learn something and not be so ignorant for once.
Who reads clusterstock? Get over yourself 33. Sorry I offended your precious dealbreaker. I hope your vagina doesn’t hurt to much from it.
i thought it was sell high buy back lower…?
Oh how I love it when the children start fighting with each other. Who knows how many people read this site? But given the fact that they get excellent tips and have broken stories (i.e. Lehman Brothers) before any of the major financial news outlets, let’s assume their readership isn’t small.
@11, they haven’t put any liquidity into the market yet. Saying and doing are two different things.
@30
If people were already arbing, why is the gap so wide? 330 vs 450
Dick Fuld should punch Gasbag at the gym.
@41- not to mention SAC, a week before everyone else.
http://www.quantcast.com/dealbreaker.com
how would quantcast know what the demographic is? the only people who know the demographic are the ones asking the questions and getting the answers (ie db when they do those polls).
@46
That’s hilarious. DB readers have a 99% affinity with volokh.com
@40 todays its get hi and smoke some more’r
Everytimes i gets high Milton comes to me in my dreems like a beautiful angel of menoytary thought and beestows great words upon me. He told me last night… be patient SPODE your other 50 peeps will arrive shortley and i said… butt Milton we’are already have decreaseing GDP growth, rising inflations, and rising unemployment. Are you sure bouts dis fool? And Hollaback Milton spoke some of the mostest beautiful words I have evers heard.
http://www.youtube.com/watch?v=xy4FXhkm6Nw
SPODE
I can’t blog the official numbers but if anyone wants to know the how many visitors come to DB on a daily basis then shoot me an email. I’ll get right on it.
SPODE@dealbreaker.com
Fuck you Spode. That email address bounce.
@51 Bess must have pulled it. We got into disagreement last night, she caught me using her Spiderman toothbrush. Third time was not a charm and now she has restricted my communications on the web with my friendly neighbors.
I’ll let you know when its back up.
In the mean time you can always hit me up with a letter of support.
Bros before hoes, right?
Dealbreaker.com
c/o SPODE
262 Mott Street
Suite 102A
New York, NY 10012
HAHA Quantcast is showing 68k monthly. So much for your hundreds of thousands theory. You lose.
It also shows 10% black and a 26% over 50yrs old..false.