UBS Recovery Fizzles as Gruebel Sees Less Profit on Lower Risk (Bloomberg)
The firm made more from trading stocks and bonds than the average of its competitors in 2005, before more than $57 billion of writedowns and losses from the credit crisis forced it to shrink the investment bank’s risk-weighted assets 44 percent. A lack of client business, combined with the lowest value-at-risk, meant UBS barely made enough in the third quarter to pay the 17,000 bankers in the unit. “They have to start taking risk again or to pay less,” said JPMorgan Chase & Co. analyst Kian Abouhossein, whose recommendations on UBS produced the second-highest total returns over the past year, according to data compiled by Bloomberg. “The question is do you really need the best people in the market if you’re just running a very flow-oriented business? That’s the dilemma that they need to decide.”
Goldman’s Plan To Repay Berkshire Is Delayed (WSJ)
Buffett to be paid $15/second for a bit longer.
Ireland Talks With EU as Germany Pushes It to Take Bailout (Bloomberg)
“Ongoing contacts continue at official level with international colleagues in light of current market conditions,” a Finance Ministry spokesman said in an email late yesterday. “Ireland has made no application for external support” and the government is “fully funded till well into 2011,” the spokesman said.
Harbinger Being Probed By Authorities (Reuters)
The Securities and Exchange Commission and U.S. Attorney’s office in Manhattan are investigating whether Harbinger misled investors by not disclosing soon enough a $113 million personal loan for founder Philip Falcone from the firm’s funds.
Fed’s Bond Plan Faces Fresh Attack (WSJ)
A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. “The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment,” they say in an open letter to be published as ads this week in The Wall Street Journal and the New York Times.
Options Showing Quantitative Easing Working Before It Begins (Bloomberg)
As the central bank starts a second round of purchases of Treasuries through its so-called quantitative-easing policy, investors are paying eight times more than in April for options on interest-rate swaps that protect against rising yields relative to those that bet on them falling, according to Barclays Plc data. Bonds that compensate for higher consumer prices also show heightened inflation expectations.
Benmosche: ‘This Isn’t Pie In The Sky’ (WSJ)
If you’re a customer, you want to know whether this company is going to make it or not. Many people were saying we’re a ward of the state, that there’s no way we could pay back the taxpayers. But if you do an analysis, this is at least a $70 billion company and we will have about 1.8 billion shares. Our recent quarterly earnings [for core insurance operations] show we can earn $8 billion to $9 billion pretax income annually if other charges and write-downs stop occurring. All the numbers come together and say the government will be able to sell its shares at some price in the future. It’s math; it really isn’t about pie in the sky.
Greenspan: High Deficits Could Spark Bond Crisis (ABC)
“We’ve got to resolve this issue before it gets forced upon us,” Greenspan said of the ballooning U.S. debt levels.
Royal Bank of Scotland Sells Project Book for $6 Billion (Reuters)
Mitsubishi UFJ Financial Group said it will acquire project finance loans and assets from RBS for 3.8 billion pounds ($6.1 billion), expanding its overseas reach as loan demand remains tepid in Japan.
Troubled California begins $14bn bond sale (FT)
Orders begin on Monday for a $10bn, two-part sale of revenue anticipation notes (Rans), an annual event that allows California to bridge the gap to its tax season in the spring. The notes, due in May and June, are targeted mostly at individual investors who benefit from tax breaks on munis.
The Year’s 10 Highest Paid CEO’s (WSJ)
Liberty Media CEO Greg Maffei is number one at $87.1 million.
Bill Clinton Joins The Cast Of Hangover 2 (People)
Clinton, who’ll play himself in the comedy, shot his brief appearance on Saturday in Bangkok, where part of the production takes place.