Opening Bell: 04.08.11

Obama Demands Budget Deal To Avert Government Shutdown (Bloomberg)
fter meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid, Obama said issues remained unresolved and he hoped for a breakthrough that would prevent a shutdown, set to begin at midnight tonight. “I’m not yet prepared to express wild optimism but I think we are further along,” he told reporters. “My hope is, is that I’ll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted.”

SEC May Relax Limits On Shares In Private Firms (WSJ)
According to the letter and people familiar with the matter, the likely changes would include raising from 499 the number of shareholders private companies can have without being required to open their books, and also making it easier for such companies to publicize share offerings.

Portugal To Face Strict EU Aid Terms Amid Political Storm (Bloomberg)
In an unprecedented intervention in national politics, euro-area finance ministers said Portugal can win relief by mid- May as long as it makes cuts that go beyond measures that failed to pass parliament in March and led to the government’s downfall.

EU Stress Tests To Examine 90 Banks, 5% Capital Pass Rate (Bloomberg)
“Make no mistake, 5 percent of Core Tier 1 is harder in comparison with last year,” James Babicz, head of risk at SAS, a business analytics company, said in telephone interview in London today. “But I think you have to look at how risky a bank is rather than look at a static capital threshold.”

Marc Faber: Gold Is Still Cheap Despite Record Surge (CNBC)
Faber rejected the notion that gold is in a bubble even as it begins to approach $1,500 an ounce. “If it were a bubble a lot of people would have gold. The whole world would be trading gold 24 hours a day,” he said. “But I don’t think it’s really a bubble. I think gold is maybe cheaper today than it was in 1999, when it was $252.

Why London Can Live Without Its Big Banks (Reuters)
“One or two of them might change their corporate headquarters for tax purposes but if they do go we probably won’t even notice. There won’t be a great outflow of workers and Canary Wharf won’t turn into a ghost town.”

Corporate Jets Often First Thing To Go After Leveraged Buyouts (Bloomberg)
Companies bought by private-equity firms are 32 percent less likely to have a jet in the three years after the deal closes than in the year before, according to a paper written by the Federal Reserve Board’s Jesse Edgerton. The study, published Jan. 21, found that jet fleets at LBO-backed companies are at least 40 percent smaller than at similar publicly traded firms.

Jefferies Expands (Breakingviews)
Jefferies’ lineup now includes municipal bonds and an enlarged investment bank. Staffing has increased by more than a third since the financial crisis struck. Now it’s adding commodities and futures, by buying Prudential Bache for $430 million. Jefferies is still far from joining the big boys. Net profit last year was just $280 million, far less than what Goldman harvested. There’s still scope to grow, however. New hires arguably have not yet settled in enough to crank out their full earnings potential. Shareholders appear to have baked in a better relative performance at Jefferies: the stock trades at about 1.7 times book value, double Morgan Stanley’s multiple and a third better than Goldman’s.

An Aggressive Fed? More Of Street Betting On It (Reuters)
The survey found that about a third of the economists, fund managers and strategists who responded to the survey see the Fed hiking interest rates this year, double the percentage from the March survey. About 27 percent believe the Fed will begin selling assets in the second half of 2011, to reduce the size of its portfolio, up from around 16 percent in the prior survey.

How To Pay No Taxes (BusinessWeek)
Some tips.

Asian Central Banks Intervene As Currencies Rise (WSJ)
Asian currencies rose against the dollar Friday, prompting a number of regional central banks to intervene, as the U.S. currency fell over that nation’s budget woes and a rise in the euro spurred the region’s currencies higher. The move follows Thursday’s rate increase by the European Central Bank, its first tightening since 2008. While the move was widely expected, it suggests world economic growth will continue to improve.

Speed Trading May Be Heading Out To Sea, Literally (CNBC)
In many cases, the best places to maximize chances of buying low in one place and selling high in another (for example between New York and London) were located in the world’s oceans. So could this be the end of traditional fixed stock exchanges in the world’s biggest cities and the rise of floating exchanges in the mid-Atlantic ocean? Wissner-Gross believes that floating trade centers could be a reality of the future.

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49 Responses to “Opening Bell: 04.08.11”

  1. Barney_Frank says:

    So does Congress still get a paycheck if the govt shuts down?

  2. guest says:

    Arguing over $30bb in cuts when the deficit is >$1t is…what?

  3. Dr. Rosenrose says:

    I read the sticking point is funding Planned Parenthood. Let’s have more unwanted pregnancies now – that’ll save money in the long run. These christian republicans remind me of UBS.

  4. You’d think Boehner would have learned his lesson last time.

  5. Supraman says:

    It is actually quite natural that a company which has been taken private would get rid of the corporate jet. Costs aside, a private company has less exposure in the news cycle due to decreased reporting requirements and less need to, ahem, entertain business reporters.

  6. NoPants says:

    No pants?
    No pants.

  7. John Galt says:

    What happens when Ragnar Danneskjöld strikes the offshore exchange?

  8. Readsalot of Dealbreaker says:

    What was up with all the fake “BessLevins” yesterday?

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