Later next month, Glencore will go public in an IPO that is expected to raise as much as $11-12 billion, giving the commodities firm a potential market value of between $55-73 billion. It’s multiple exclamation point exciting, not unlike Fortress’s hernia-inducing IPO of 2007. As part of the buildup to the big event, there’s been a demand for insight into how Glencore, founded in 1974 by Marc Rich and currently run by Ivan Glasenberg, got to where it is today and what it looks like on the inside. One theory currently being floated is that it’s a cult. Continue reading »
Archive for April 2011
“It’s a kick in the pants for authorities to now get their act together in terms of a coherent long-term deficit/debt plan,” said Alan Ruskin, global head of Group of 10 foreign- exchange strategy at Deutsche Bank AG in New York. “It’s given a little bit of a lifeline to euro-dollar.” [BusinessWeek]
Sayeth the ratings agency:
Standard & Poor’s Ratings Services said today that it affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the U.S. Standard & Poor’s also said that it revised its outlook on the long-term rating of the U.S. sovereign to negative from stable. Our ratings on the U.S. rest on its high-income, highly diversified, and flexible economy. It is backed by a strong track record of prudent and credible monetary policy, evidenced to us by its ability to support growth while containing inflationary pressures. The ratings also reflect our view of the unique advantages stemming from the dollar’s preeminent place among world currencies.
“Although we believe these strengths currently outweigh what we consider to be the U.S.’s meaningful economic and fiscal risks and large external debtor position, we now believe that they might not fully offset the credit risks over the next two years at the ‘AAA’ level,” said Standard & Poor’s credit analyst Nikola G. Swann. “More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” Mr. Swann added.
Citi Profit Falls 32 Percent (Reuters, Citi)
Citigroup’s first-quarter profit fell 32 percent as the bank lost less money on bad loans but struggled to grow its business. The bank said this morning it earned $3.0 billion, or 10 cents per share. That compared with $4.4 billion, or 15 cents per share, a year earlier.
Geithner Says GOP Prepared To Lift Debt Limit (WSJ)
In interviews aired on the Sunday talk shows, Mr. Geithner said House Speaker John Boehner and other senior Republicans told President Barack Obama in discussions last week that they were aware of the risk of a credit default and were open to lifting the limit even in the absence of a comprehensive deal to slash the country’s debt load.
Greenspan Says US Should Let Bush-Era Tax Cuts Expire (Bloomberg)
We should “allow the Bush tax cuts to expire,” Greenspan said on NBC’s “Meet the Press” today, calling the economic crisis “imminent and dire.” We should “put the rates back to where they were during the Clinton administration,” he said.
Hedge Funds Bounce Back (WSJ)
Total hedge-fund assets are approaching $2 trillion and are soon expected to surpass their peak in early 2008, according to industry analysts. Even start-ups and smaller funds, which were shunned by many investors in the wake of the crisis, are benefiting.
Emerging Nations Reject Capital Plan (WSJ)
The IMF’s plan would have encouraged nations to treat capital controls as a last resort, after they had first tried use other tools, such as policies on interest rates, currency values and government budgets. But ministers of developing economies resisted vehemently, viewing the proposal as an effort by advanced economies to hamstring their policies. Brazil, Turkey, South Korea and several other developing countries have adopted capital controls over the past year to limit surging inflows. “We oppose any guidelines, frameworks or ‘codes of conduct’ that attempt to constrain, directly or indirectly, policy responses of countries facing surges in volatile capital inflows,” Brazil’s finance minister, Guido Mantega, told the IMF’s steering-committee meeting.
Robot Does Hazardous Duty At Nuclear Plant (WSJ)
The plant’s operator, Tokyo Electric Power Co., said Sunday that the PackBot, a small robot that scoots around on tank-like treads, would monitor radiation and oxygen levels to find out whether conditions were safe enough to allow human workers to go in to try to bring the nuclear crisis at the plant under control.
FDIC Eyes Tougher Rules For Big Banks (FT)
Sheila Bair warned that regulators now had the authority to demand that US banks break themselves into smaller parts — and it “could and should be used.”
Is Sitting Lethal? (NYT)
Over a lifetime, the unhealthful effects of sitting add up. Alpa Patel, an epidemiologist at the American Cancer Society, tracked the health of 123,000 Americans between 1992 and 2006. The men in the study who spent six hours or more per day of their leisure time sitting had an overall death rate that was about 20 percent higher than the men who sat for three hours or less. The death rate for women who sat for more than six hours a day was about 40 percent higher. Patel estimates that on average, people who sit too much shave a few years off of their lives…Sitting, it would seem, is an independent pathology. Being sedentary for nine hours a day at the office is bad for your health whether you go home and watch television afterward or hit the gym. It is bad whether you are morbidly obese or marathon-runner thin. “Excessive sitting,” Dr. Levine says, “is a lethal activity.” Continue reading »
$$$ Bill Gross Alone Beating Stocks as Bears Fail to Profit From Crashes [Bloomberg]
$$$ Red Flags Popping Up All Over Bank of America [NetNet]
$$$ Why This Tech Bubble Is Different [BusinessWeek]
$$$ IRS hands Nicolas Cage pocket full of kryptonite [TW]
$$$ Michael Burry: “Inside the Doomsday Machine with the Outsider who Predicted and Profited from America’s Financial Armageddon” [Vanderbilt News] Continue reading »
Legendary Investor Lenny Dykstra Charged With Fraud, Arrested On “Unrelated Charges” (Update)
By Bess Levin
Lenny Dykstra, described by his ex-best friend Jim Cramer as one of “the greats” in the investing industry, has reportedly been charged with with bankruptcy fraud for “selling items from his $18 million California mansion.” Continue reading »
Raj Rajaratnam *Could* Have Made Trades Without Inside Information Says Business School Professor
By Bess LevinOn Friday, Gregg A. Jarrell, a finance professor at the University of Rochester’s graduate business school, took jurors through a variety of Mr. Rajaratnam’s trades, showing chart after chart of information he said he was publicly available before any alleged tips to Mr. Rajaratnam. “In your view, is that information consistent with a reasonably sophisticated investor buying shares of Clearwire in this period?” asked Terence Lynam, one of Mr. Rajaratnam’s lawyers, referring to one of the trades at issue. “Yes,” Mr. Jarrell said. [WSJ, verdict poll]
Gang, we’re not going to mince words here- this has been the worst month of Warren Buffett’s life. Anything that could have gone wrong did. The Sokol business, the Dilly Bar he dropped on his shirt before going into a big meeting, the Squawk Box redesign, the unwrapped Sees Candy Munger left on his dash in the hot sun. If all that wasn’t enough, now comes word that in one fell swoop, his favorite show, the launchpad for his acting career, and his shot at a date with Susan Lucci are gone. Continue reading »
Who’s Got One “I Heart Ayn Rand” Neck Tattoo And A Good Chance Of Being Dragged Out Of The Theater Pee Wee Herman Style Tonight?
By Bess LevinGive you two guesses but you’ll only need one. Continue reading »
The following excerpt is from Fatal Risk: A Cautionary Tale Of AIG’s Corporate Suicide, a new book by investigative reporter Roddy Boyd.
The role of Goldman Sachs in AIG’s saga had its roots in a little- remarked-upon series of promotions involving a pair of managers known as the “J. Aron guys” taking control of Goldman’s Fixed- Income, Commodities, and Currency unit in the late 1990s. Gary Cohn and Lloyd Blankfein, veterans of Goldman’s sharp-elbowed commodities trading operation, saw a need to do things differently. Continue reading »
Poll: Will A Jury Be Impressed By Raj Rajaratnam’s $15 Million Gift To His Star Witness?
By Bess Levin
Thursday afternoon marked a turning point in the Raj Rajaratnam trial. While jurors had already been played tapes of Raj complimenting Danielle Chiesi on how she “played” a tech exec into giving her material non-public information and one of him telling a friend he knew to buy shares of a company because “one of our guys is on the board,” been told that his brother felt the need to destroy his “private notebooks,” and heard testimony from a former McKinsey exec that Raj paid him $1 million for his tip about AMD’s acquisition of ATI, they’d yet to be shown evidence of the Galleon founder’s massive pair. Until yesterday. Continue reading »
