Archive for June 2011

  • 30 Jun 2011 at 6:34 PM

Write-Offs: 06.30.11

By Sam Ro

$$$ Greek vote lifts European shares to near 4 wk high (Reuters)

$$$ German Banks Agree to Roll Over Greek Debt (NYT)

$$$ SEC lax in monitoring firms’ compliance, inspector general report says (WaPo)

$$$ Paulson says he welcomes Bank of America settlement (Reuters)

$$$ Japan’s MUFG converts Morgan Stanley shares (Reuters)

$$$ Lehman Gets Goldman, Paulson Consent on Liquidation Plan (Businessweek)

$$$ Another Guilty Plea Expected In Insider Trading Case (DealBook)

$$$ Grunt control device lets Wimbledon fans turn down the volume of shrieking Sharapova and Co. (Daily Mail) Read more »

  • 30 Jun 2011 at 3:43 PM

Tim Geithner “Needs A Break,” May Leave After Debt Deal

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Bloomberg reports TG may soon be riding off into the (Larchmont) sunset. Read more »

  • 30 Jun 2011 at 3:33 PM

Dick Bové: Lost Finance Jobs Are Gonna Stay That Way…FOREVER

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As you may have heard, various banks will be laying off a handful of employees in the coming weeks and months. Barclays, UBS, and Credit Suisse have already gotten started, and Goldman let go of some staff yesterday with plans to cut more in the future. While the news is surely distressing to those it directly affects, there are probably some people, who remained gainfully employed, that believe it’s no big deal. What does Rochdale analyst Dick Bové think? Spoiler alert: he’s not gonna mince words.

From: Richard Bove
Date: Thu, 30 Jun 2011
Subject: Dick Bove’s Notes: Job Loss

The jobs being lost in New York’s financial industry will never come back.

Richard X. Bove

Sorry if you thought he was going to sugarcoat, which, if you know anything about Dick, you know he would never, under any circumstances, do. People come to him for no nonsense no frills exchanges of information and that’s what they get. Read more »

  • 30 Jun 2011 at 1:22 PM

Muddy Waters’ Carson Block Is Not Impressed With S&P, Would Prefer Not To Be Thought Of As A “Ninja Assassin”

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Earlier this month, Muddy Waters founder Carson Block published a report describing Sino-Forest as “a Ponzi scheme…investing for the 23rd century.” The note did not have a positive effect on the company’s stock price and major shareholder John Paulson ended up pulling his entire investment. Appearing on Bloomberg TV earlier today for a little post-mortem, Block wanted to get a couple things straight.

1. The S&P downgrade of Sino-Forest bonds? Bull shit.

“I’d think that it’s a bit of a cop out on the part of S&P. We published this almost a month ago. The company has had a microphone and a platform to respond. When it has opened its mouth, the company, the stocks and bonds have gone lower. Rather than having anything confidence inspiring to say, they have continued to spook investors. S&P may want to hang this on us, but I have a feeling that is really a cover for, at least in part, their own assessment that there are significant risks that are company specific not related to market perception and Muddy Waters.”

2. The mistaken impression some people have that he’s a ninja assassin? Also bull shit.

“I am getting uncomfortable, actually, with this idea that we are ninja assassins that are going to take this stock price down a huge percentage within minutes or days. What I would like to do to protect investors is that I would like to point out the issues and start a dialogue and get people thinking about these red flags before we come out with a report that sends the stock down 70%, 80%.”

Read more »

  • 30 Jun 2011 at 12:37 PM

Who Wants To Be President Of Morgan Stanley?

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As was reported earlier this week by Charlie Gasparino, John Mack plans to step down as Chairman of Morgan Stanley at the end of the year, at which time CEO James Gorman will inherit the gig. Will he share the wealth by appointing an underling president when he’s done with the title? For anyone hoping they’d get the call (such as rumored candidates like Colm Kelleher, Paul Taubman and Gregory Fleming), don’t hold your breath ’cause it ain’t happening. James Gorman don’t need no stinking wingman and even if he did, no one’s demonstrated that they’re ready for that kind of responsibility yet. Read more »

Harbinger-Backed LightSquared Plans To Not Cause ‘Devastating’ GPS Interference Moving Forward

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Not letting Phil Falcone’s LightSquared proceed using its authorized spectrum “would doom an innovative American start-up company,” LightSquared said in its FCC filing. “The commercial GPS device industry wants the commission to shut down an unprecedented effort to establish a nationwide wireless broadband network.” LightSquared’s plan to limit its initial operation to its airwaves furthest from GPS uses would pose no risk to more than 99 percent of GPS users, and the company is offering to underwrite “a workable solution for the small number” of GPS devices “that may be at risk,” the company said in its filing…“This issue will be resolved by good data, smart engineers and good-faith problem-solving dialog,” Sanjiv Ahuja, the company’s chief executive officer, said in a news release. [Bloomberg]

Related: Harbinger Capital Will Pay Redemptions…In Illiquid LightSquared Equity

  • 30 Jun 2011 at 9:53 AM

Citigroup Debt Collectors Of The Opinion The Customer Who Collapsed After They ‘Tapped’ Him On The Shoulder Died Of Natural Causes

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Remember Irzen Octa? He’s the Citigroup customer who was allegedly killed by three debt collectors after they got angry when he contested his bill. Octa’s widow is now suing the bank for $348 million and while the trio admit they may have laid a few hands on him, claim they weren’t responsible for his death. Read more »

  • 30 Jun 2011 at 9:27 AM

Important Reminder: Crumbs Has Gone Public

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To commemorate the listing on the Nasdaq (ticker symbol: CRMB), consider going head to head with “six and a half inches high of deliciousness and love” today. [Crains, earlier]

Opening Bell: 06.30.11

By Sam Ro

As QE2 Sets Sail, Bond Rally Sinks (WSJ)
For the third consecutive session, Treasury investors on Wednesday balked at buying new bonds at a large government-debt auction, sending prices lower and yields higher. The yield on the benchmark 10-year note reached 3.11%, its highest since May 25. Yields on the 10-year note have risen every day this week, adding about 0.24 percentage point since Friday and sparking speculation that the bull run in the bond market may have passed its peak.

Greece to Vote on Austerity Details (WSJ)
Greece’s parliament is expected to approve legislation implementing a crucial five-year austerity plan later Thursday, analysts said, one day after a closely fought parliamentary vote approved the overall outlines of the plan. A single roll-call vote on the implementing legislation is expected at around 1100 GMT, but with deputies also being allowed to express their support or dissent for individual articles in the legislation.

Institutions Pull Most From Prime Money Funds Since March 2010 on Greece (Bloomberg)
Institutions pulled out of U.S. prime money-market funds at the fastest pace in 15 months, shifting to funds that invest only in U.S. government-backed securities out of concern the European debt crisis would worsen.

Austerity Aside, E.U. Plans to Spend More (NYT)
With the European Union’s 27 nations facing years of austerity, and Greece nearly bankrupt, now might be a good time for the bloc to prepare to spend less. Instead, top E.U. officials went into battle Wednesday for an increase in spending under a seven-year funding plan worth about €1 trillion, or $1.4 trillion.

Moody’s: may cut US state ratings if sovereign downgrade (Reuters)
Moody’s on Wednesday warned it may downgrade the credit ratings of U.S. states and municipalities with strong credit links to the federal government in the event of a downgrade of U.S. sovereign ratings.

Chinese Largesse Supports Euro, But For How Long? (DJ Newswires via WSJ)
China’s secretive financial dealings and the FX market’s own opacity make exact figures for China’s affinity for euro-denominated assets hard to come by. Yet analysts point to official data showing that Chinese U.S. Treasurys holdings have fallen by at least $300 billion recently. Analysis of flows by Bank of America-Merrill Lynch shows that monetary authorities have been net sellers of dollars over the past four weeks, translating them into euros.

SEC Civil Action Against Ex-Goldman Director ‘Postponed Indefinitely’ (Law Blog)
A civil action against a former Goldman Sachs Group Inc. director who allegedly gave Galleon hedge fund founder Raj Rajaratnam inside tips about the investment bank has been “postponed indefinitely,” according to a notice posted by the Securities and Exchange Commission.

Summers Joins Andreessen Horowitz (DealBook)
Late Wednesday, Andreessen Horowitz, the venture capital firm led by the entrepreneur Marc Andreessen, announced that Mr. Summers was joining the team as a part-time special adviser. The announcement comes just one week after Square added Mr. Summers to its board of directors.

I.D. Could Get IMF Chief Off Rape Hook (Fox)
Dominique Strauss-Kahn’s lawyers could exploit a possible flaw in the identification procedure to get the former International Monetary Fund head off the hook for suspected rape, the French daily Liberation reported Thursday…She identified Strauss-Kahn in an identity parade the afternoon of May 15. But according to the disclosure form, the 32-year-old Guinean woman had already seen images of the silver-haired Frenchman twice beforehand.

Biography Gives Strauss-Kahn’s Allies a Forum (NYT)
Dominique Strauss-Kahn’s wife said she was “very worried” about the sexual-assault charges against her husband in New York, but predicted the couple would emerge from the ordeal “dignified and standing tall,” and with their marriage intact. The comments by the wife, Anne Sinclair, appear in a revised version of “Le Roman Vrai de Dominique Strauss-Kahn” (“The True Story of Dominique Strauss-Kahn”), which will be released in France on Thursday.

Justin Timberlake Takes Stake In Myspace (THR)
Justin Timberlake is taking a minority stake in MySpace after its acquisition by online advertising network Specific Media and will help the company develop its new strategy and creative direction. Under its new owner, which finalized an acquisition for $35 million on Wednesday, MySpace is expected to focus on music. Read more »

  • 29 Jun 2011 at 6:30 PM

Write-Offs: 06.29.11

By Sam Ro

$$$ S&P to deeply cut U.S. ratings if debt payment missed (Reuters)

$$$ Investors Follow Kynikos’ Jim Chanos In Bet Against China (Fortune)

$$$ NY Labor Dept: Goldman Sachs To Lay Off 230 Employees (WSJ via BI, earlier)

$$$ The DSK Files: Sorting Out the Evidence and Rumors About Dominique Strauss-Kahn (Daily Intel)

$$$ There’s still time to sign up to compete in this year’s Wall Street Decathlon (which benefits the Memorial Sloan-Kettering Cancer Center) or just donate (so far UBS is the top fundraiser)! (The Decathalon)

$$$ IMF warns US about its ‘fragile’ economy (BBC)

$$$ For Many Greeks, Here’s What Austerity Will Look Like (NetNet)

$$$ Oil rallies on reappraisal of IEA move (FT)

$$$ S.E.C. Proposes Ethics Rules on Derivatives (DealBook)

$$$ Former Nathan’s champ Takeru Kobayashi discusses life as a competitive-eating outlaw, plus his Fourth of July plan. (TONY) Read more »

John Paulson Saves An Art Gallery

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The fund run by Paulson & Co. has purchased a loan to American-art specialist Berry-Hill Galleries for about $10 million, as well as the mortgage on the gallery’s property in an elegant townhouse near the Frick Collection, according to public records and people familiar with the matter…The involvement of the fund, Paulson Credit Opportunities Master Ltd., has in effect rescued the gallery from a precarious position. [WSJ]