UBS Posts A Profit (MarketWatch)
The bank posted a net profit of 1.66 billion Swiss francs ($1.71 billion) as it halted the outflow of cash from its private-banking arm, though shares in the group dropped on Tuesday as its investment-banking unit disappointed investors. The profit in the latest quarter compared with a loss of 564 million francs a year earlier. UBS’s profit was ahead of the 1.17 billion franc consensus forecast but was flattered by one-off items, including an 825 million franc net tax credit.
Warren Buffett Flags A Successor (WSJ)
Berkshire named Todd Combs, manager of a small hedge fund from Connecticut, to oversee a portion of Berkshire’s roughly $100 billion investment portfolio. The surprise appointment will be a challenge for Mr. Combs, 39 years old, whose fund recently had only about $400 million in assets and primarily invested in the shares of financial-services companies.
A Look At Combs’ “Longs” (Fortune)
All told, he had long positions in more than 80 different stocks in that 30-month period. A buy-and-hold man he was not: Among his stocks, only one stayed in the portfolio for the entire period, that was United America Indemnity, a Nasdaq insurance and reinsurance company registered in the Cayman Islands until recently and now renamed Global Indemnity (GBLI) and registered in Ireland. From the end of 2007 until the end of June this year, this company’s stock fell by 58%.
George Soros: Why I Support Legalizing Marijuana (WSJ)
“Like many parents and grandparents, I am worried about young people getting into trouble with marijuana and other drugs. The best solution, however, is honest and effective drug education. One survey after another indicates that teenagers have better access than most adults to marijuana—and often other drugs as well—and find it easier to buy marijuana than alcohol. Legalizing marijuana may make it easier for adults to buy marijuana, but it can hardly make it any more accessible to young people. I’d much rather invest in effective education than ineffective arrest and incarceration.”
Volcker Sees No Short-Term Inflation Problem For US (Reuters)
“Inflation is not a problem right now. It won’t be a problem next year, it won’t be a problem for several years,” said Volcker, who is now chairman of the Obama administration’s Economic Recovery Board. “I see no possibility, frankly, that a deflation will take place,” Volcker said during a panel discussion on financial reform at Boston College.
Fed’s Deflation Terror to Spur Easing, Inflation, El-Erian Says (Bloomberg)
“One thing that the Fed cannot do is stand still, it is terrified of deflation,” El-Erian said. “QE on its own means we’ll have the same issues in six to nine months time with the rest of the world being inflated.”
Paul The Octopus Dies (Guardian)
Death’s inescapable tentacles have curled themselves around Paul the octopus, the cephalopod sage who won worldwide fame over the summer by correctly predicting the results of a host of World Cup matches. Stefan Porwoll, the manager of the Oberhausen Sea Life Centre in Germany that the tentacled psychic called home, said Paul appeared to have died peacefully of natural causes during the night.
Treasury Hid AIG Losses, Report Says (NYT)
“In our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.
Fed’s `Pit Bull’ Takes on Bank of America in BuyBack Battle (Bloomberg)
Kathy D. Patrick is a Houston lawyer who spends her Sundays teaching children about God. The rest of the week, according to one attorney who knows her, she can be “as frightening as a pit bull on steroids.” That’s bad news for issuers of mortgage-backed securities like Bank of America. Patrick represents bond investors including the Federal Reserve Bank of New York and BlackRock Inc. who are seeking to force the bank to buy back bad home loans, claiming the debt failed to match contractual promises about its quality.
FSB Proposes Limiting Some Derivatives Trades (Reuters)
The G-20 has tasked the FSB with looking at ways of standardising the derivatives market and having the bulk of transactions centrally cleared in order to improve transparency. In a progress report released late on Monday the FSB said policymakers should determine which derivatives should be subject to a mandatory clearing obligation, and then take action if they continue to be traded over-the-counter.