Obama To Test Wall Street Ties (WSJ)
Both of tonight’s New York City fundraisers are both sold out, planners said. But antipathy toward the Democrats will limit the number of events in New York, said one long-time Democratic fund-raiser. This person said he tried to recruit Wall Street figures to attend one of this week’s events and found that many were uninterested or wanted to go so they could complain to the president.
Citigroup May Move Prop Traders to Hedge Funds for Volcker Rule (Bloomberg)
Traders in the Citi Principal Strategies unit, led by Sutesh Sharma, would be reassigned to Citi Capital Advisors, which mostly oversees money for outside investors, said the people, speaking anonymously because the talks are preliminary. The bank would set up the traders as hedge-fund managers and seed their funds, then raise money from outside investors to redeem its stakes, the people said.
In Study, 2 Economists Say Intervention Helped Avert a 2nd Depression (NYT)
In a new paper, by Alan S. Blinder, a Princeton professor and former vice chairman of the Fed, and Mark Zandi, chief economist at Moody’s Analytics, the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation.
Goldman Already Step Ahead Of FinReg (FBN)
The bank has moved about half of its prop trading operations into its asset management division, where these traders can talk to Goldman clients and then place their market bets. Other Wall Street firms are watching Goldman’s moves closely and are considering similar measures. “If these traders become more client focused they can survive,” said a senior executive at one of the big banks.
Tiger Club’s U.S. Millionaires Pounce on Berkshire’s 19% Return (Bloomberg)
Members of New York-based Tiger 21 picked Berkshire as their top stock in a survey of preferred investments because they like Buffett’s strategy of buying companies, according to Michael Sonnenfeldt, a founder of Tiger 21, which is an investment club of 140 members, most of whom have a net worth of at least $10 million, totaling more than $10 billion in collective assets. “No one wants to be a stock picker, but if they are, they’re going to back someone who has essentially created his wealth through buying stock,” said Sonnenfeldt.
Moody’s: BofA, Citi, Wells Fargo Outlook Negative (Reuters)
“Over the next 12 to 24 months … we expect that our support assumptions for systemically important banks will likely revert to pre-crisis, or even lower, levels—though we do not anticipate that we would completely eliminate support from these firms’ senior debt and deposit ratings,” Moody’s said.
Soros set to buy stake in Bombay exchange (FT)
Soros Fund Management is planning to pay about $40m for its stake, valuing Asia’s oldest bourse at about $1bn, said a person involved in the negotiations. Read more »