Archive for July 2011

Ken Langone popped by CNBC earlier this morning to guest host Squawk Box with Becky, Joe and Andrew Ross Sorkin. Is he worried about the debt ceiling? No. “It’s a done deal,” Langone told the gang. “They don’t know it yet, but it’s taken care of.” There is something Ken is losing sleep over, however, and it’s the fact that President Obama doesn’t always wear a jacket in the Oval Office. Read more »

  • 28 Jul 2011 at 8:27 AM

Opening Bell: 07.28.11

Credit Suisse Q2 profit falls by more than half (MarketWatch)
The Swiss bank’s April-June net profit fell to 768 million Swiss francs ($958 million) from 1.6 million francs in the year-earlier quarter, with the lender citing poor trading results and a strong Swiss currency. The profit result missed an median forecast of 1 billion Swiss francs in a Reuters survey.

Treasury to Weigh Which Bills to Pay (NYT)
Officials said Wednesday that the department would address the issue later this week unless it became clear that Congress would vote by Aug. 2 to let the government borrow more money… Officials have said repeatedly that Treasury does not have the legal authority to pay bills based on political, moral or economic considerations…The implication is that the government will need to pay bills in the order that they come due.

Fed under fire over default talks (FT)
With days until the Treasury’s August 2 deadline to raise the debt ceiling, bankers say they are not getting a response to efforts to discuss the market impact of a failure to reach a deal in Washington or if credit ratings agencies cut the US triple A rating. They want to address contingency planning for a run on money market funds that hold Treasury bonds, the impact on capital and liquidity ratios if there are large inflows or outflows of deposits and the potential effect on short-term financing from any problems in the repurchase, or “repo”, market.

TV’s ‘West Wing’ Explains the Debt Ceiling (YouTube via MorningMoney)
“So this debt ceiling thing is routine or the end of the world?” Toby Ziegler: “Both.”

Roach Says China ‘Appalled’ by U.S. Debt Impasse, May Curb Treasury Buying (Bloomberg)
“Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw” for China, Roach said in an e-mailed note today. He said his assessment was based on visits to Beijing, Shanghai, Chongqing and Hong Kong. In another sign of concern within the nation that is the biggest foreign owner of Treasuries, the official China Securities Journal said today that the U.S. stand-off signals long-term dollar weakness that will push up commodity prices and pose inflation risks for the world.

Credit Suisse cuts 2,000 jobs as poor trading hurts results (Reuters)
Switzerland’s second biggest bank said it planned to cut about 4 percent of its staff of 50,700, about the same number it added in a post-crisis hiring spree focused on fixed income, the area hit most by current sluggish markets.

Traders and financiers expect coffee crash (FT)
In a new report, Rabobank says that Brazil, the world’s largest coffee producer, could boost its output by around 27 per cent by the 2014-15 crop year. If that happens, the cost of the commodity could plunge, as was the case after previous rallies in the 1980s and 1990s. The bank estimates that the 50 per cent increase in the average price received by Brazilian growers in the crop year 2010-11 over 2009-10 could cause a rise in Brazil’s total area harvested from 2.09m hectares to as much as 2.45m hectares in four years. Read more »

  • 27 Jul 2011 at 7:03 PM

Write-Offs: 07.27.11

$$$ House GOP revolts against Boehner plan (Washington Times)

$$$ The Greenwich Mountain Lion Was Really From South Dakota (Daily Intel)

$$$ Chris Whalen: Why the US debt crisis is a good thing (Reuters)

$$$ After a Rocky Start, Semprae’s Female Arousal Oil Gains Traction (Bloomberg)

$$$ Alex Trebek injured after chasing burglar at SF hotel (ABC)

$$$ Moody’s Profit Jumps 56% (WSJ)

$$$ No Shrinkage At 15CPW (The Real Deal) Read more »

She recommends “suspending investing since all stocks are likely to fall now,” getting liquid, and finding a “safe haven” where you can draw the blinds and lay low until things blow over. Read more »

  • 27 Jul 2011 at 5:57 PM

Bonus Watch ’11: Deutsche Bank, RBC, Barclays

A few numbers trickling in for Wall Street’s junior mistmakers. Read more »

In case you missed it, some terrible people in a swamp south of here have spent the last few weeks yelling at each other about the debt ceiling. Don’t worry if you haven’t been following this – lots of people on Wall Street apparently haven’t been, either because it just obviously has to get worked out, or because a U.S. default or downgrade is actually not a big deal.

But the days of ignoring the debt ceiling fight appear to be over, since it’s starting to have real-world implications for Wall Street. For starters, it looks like some people are going to lose their deposits on Hamptons chopper charters: Read more »

  • 27 Jul 2011 at 5:14 PM

Step Into Lucas Van Praag’s Office

On the shelf in his office, there are no visible Polaroids, but Lucas van Praag does have a rubber squid that someone gave him as a gift. It is perched on top of a small toy boat. [NYMag, earlier]

The SEC is well aware that everyone thinks its failure to stop Bernie Madoff’s ponzi scheme was pretty weak. After all, Harry Markopolos told them about it for years and they did nothing. But it turns out there’s a pretty innocent explanation: when Markopolos would call the SEC, they didn’t have a pen handy so they couldn’t write down what he told them. This happened all the time and was generally viewed within the agency as not a big deal.

Tips used to come via phone calls, e-mails, faxes and even handwritten letters into the SEC’s 11 regional offices and Washington headquarters. Before the Madoff case, the SEC’s Los Angeles office might receive a written complaint about a bad broker, for instance, and stuff the letter into a filing cabinet if it was deemed without merit. So, if later on a complaint about the same broker was sent to the SEC’s Chicago office, staff there would have no easy way of knowing about the earlier tip and connecting the dots.

Now? They’ve got a shiny new database. And their treatment of people who do their job for them has never been better: Read more »