Yesterday morning, as Bank of America continued “reaping the benefits of what Countrywide hath sowed,” Jim Cramer proposed an idea: get a billionaire to vouch for you. Just as Warren Buffett investing in Goldman Sachs had been a signal that everything was cool with the Masters of the Universe and Prince Alwaleed and his horses’ unflagging love ‘o Citi have at times kept the bank afloat, BofA, Cramer proposed, should get someone to send a message that all is good in the hood. JC suggested Carlos Slim was the guy to take one for the team, while we liked the idea of, among others, Bruce Wayne, Lynn Tilton or Warren Buffett, who enjoys spreading the love. Apparently WB is our man. Continue reading »
Archive for August 2011
Goldman Sachs International has triggered a clause inserted into the employment contracts of a group of its London-based investment bankers in mid-2009 that will result in them having to take a pay cut, Financial News has learned. A number of staff across the investment bank’s European division, which is based in London, have been told this summer that their base salaries will be cut, a source with knowledge of the situation told Financial News. [FN/WSJ]
Apple Management Faces Task Of Keeping Momentum (WSJ)
The executives who will now run Apple without Mr. Jobs will face big tests of whether they can still excel in highly competitive businesses that often have small profit margins. “Can they hit the next home run?” asks Charles O’Reilly, a professor at Stanford University’s Graduate School of Business. “Because if they don’t, they’re in a bunch of bad businesses.” Jobs’…successor, Tim Cook, 50 years old, is the chief operating officer to whom he handed the reins of the company three times—once in 2004 when Mr. Jobs was recuperating from pancreatic cancer surgery, once in early 2009 when he took a six-month medical leave of absence for a liver transplant and again in early 2011 for another unexplained medical leave. Mr. Cook isn’t the showman that Mr. Jobs is, but people who know him call him an “operational genius” who was responsible for crafting Apple’s current supply-chain system and helping to transform the company into one of the most efficient electronics manufacturers today.
Jobs Resignation Erases $52 Billion From S&P (Bloomberg)
The September contract on the Standard & Poor’s 500 Index slumped up to 0.6 percent after Jobs released his statement at 6:34 p.m. in New York yesterday. The measure’s total market value was $9.34 trillion at the close of regular trading at 4 p.m., data compiled by Bloomberg show. Apple fell 5.1 percent.
Bernanke Unlikely To Promise New Action By The Fed (WSJ)
“Bernanke is unlikely to fulfill the markets’ hopes that he will pave the way for a third round of asset purchases (QE3),” economists from Toronto’s Capital Economics wrote in a note Wednesday. “And even if he did, QE3 is unlikely to boost the economy, equity prices or commodity prices by as much as QE1 and QE2 [did].”
Sarkozy Unveils Pre-election Tax On Wealthy (Bloomberg)
Prime Minister Francois Fillon yesterday announced 12 billion euros ($17 billion) of measures in 2011 and 2012 and cut growth forecasts, saying the euro region’s second-largest economy will expand less than 2 percent in each year. The deficit will be 4.5 percent of gross domestic product in 2012, when Sarkozy seeks re-election, beating the target.
John Paulson’s Losing Streak Continues (WSJ)
Mr. Paulson’s Advantage Plus fund has lost 38.7% this year through the end of Friday’s trading, according to someone briefed on the figures. The fund has lost 21.7% for the month through Friday, underscoring how rough August has been for the well-known investor. Another fund, Paulson Partners, has lost 14.4% in August through Friday, according to an investor, and is down 11.8% for the year. This is a merger-arbitrage fund that in the past often hasn’t had the same volatility as other funds.
Citadel Securities Said to Be Firing Two Dozen Employees in Sales, Trading (Bloomberg, earlier)
Ken Griffin is firing the last of the sales people and traders in his securities business as it focuses on electronic trading, according to two people briefed on the dismissals. The firings today of about two dozen employees come two weeks after Griffin’s New York-based Citadel Securities said it was shutting its equity-research group and its investment bank, ending a three-year effort to build a business that the hedge- fund manager said would rival Goldman Sachs Group Inc.
Junior Bankers Feel Disappointed With Pay (Bloomberg)
One investment banker who participated in the survey described a breach of the “tacit understanding” that he or she would be well compensated. Considering “the sacrifice I make in my personal life (100-hour work weeks, canceled vacations, etc.), this business has to be more rewarding,” the person said, according to Capstone.
95-year-old man attacked by bees, stung hundreds of times (LA Times)
“He literally got stung by thousands of bees,” Sgt. Phil Keenan of the Redondo Beach Police Department told The Times. “Most men would have died, but he’s taking it in stride.” Continue reading »
Stick to the talking points! Continue reading »
If You Went Into Gold Mining Because Your Golf/Urban-Health-Spa/Crustacean-Feed Business Didn’t Work Out, Finra Is On To You
By Matt Levine
Yes, we know, the price of gold is kept artificially low by ponzi-scheming central bankers, who conspired with the CME to cost Hugo Chavez $1.2 billion today. And yes, we know that Finra is a fairly industry-friendly regulator of Wall Street banks that have a vested interest in keeping up the paper-asset bubble. Still, you may want to hear them out when they tell you that not everyone on the other side of the trade has your best interests at heart:
Continue reading »
“Some blogs are speculating about rumors of merger talks with J.P. Morgan Chase, which are baseless and don’t even make practical sense,” the bank’s communications department said in a memo to employees yesterday that was obtained by Bloomberg. Jerry Dubrowski, a spokesman at Bank of America, confirmed the contents of the memo. The memo also rebutted a blog’s suggestion that Charlotte, North Carolina-based Bank of America needs to raise as much as $200 billion as “just wrong.” “We have a clear path to meet the new regulatory requirements under Basel III and we intend to meet these standards without having to issue additional common stock,” according to the memo. [Bloomberg, earlier]
The Fed today released a paper in its Finance and Economics Discussion Series that looks into whether the subprime bubble was caused by the Community Reinvestment Act, which requires banks to lend to lower-income borrowers, or by Fannie and Freddie lowering credit standards for low-income borrowers. Short answer: no. Continue reading »
Maybe you’ve spent the summer getting your face ripped off. Maybe you committed some crimes and need to hide out where people can’t find you. Maybe you were pissed off about yesterday’s earthquake in that you wished it’d done more structural damage to your buildings which unfortunately are up to code. Maybe you’re CEO of a bank that will not give you a fucking break, where you’re getting your ass kicked, and every time you drive down the road you wanna jerk the wheel into a Goddamn bridge abutment. Whether you’re hiding from something or searching for it, we’ve think we’ve found it. Continue reading »
More Germans Express Opposition To Financial Speculation; Views On Naked Mud Wrestling Unclear
By Matt Levine
Der Spiegel is nothing if not fair: after letting George Soros talk about dirty little Eurobonds last week, this week they gave space to those who think that people like Soros should be hunted with high powered rifles from airplanes: Continue reading »
The answer to BofA's problems?
Earlier today on CBNC, Jim Cramer pitched an idea that he thinks could end Bank of America’s problems: beg a billionaire to vouch for you. Just like Goldman Sachs got Warren Buffett and Citi has Prince Alwaleed bin Talal, Bank of America needs someone to get out there and say to the markets, “It’s okay, these guys are cool.” Personally, Cramer likes the idea of Carlos Slim, telling his colleagues “You know we forget he’s the world’s richest man…if the guy wants to make a statement that says America is the place to invest, hey, Bank of America…would that not be an interesting match?” Having said that, Slim may not be into the idea and backups should be considered. The following represents a very rough short list of people, whether they be billionaires or individuals who simply inspire confidence either through charm or fear with whom we think Brian Moynihan should consider taking a lunch. Continue reading »
That business he mentioned a few weeks ago about “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? Forget he ever said anything.
From: Richard Bove
Sent: Wednesday, August 24, 2011 10:17 AM
Subject: Buy BanksA month ago on CNBC on two different programs I indicated that bank stocks should be sold. Now they should be bought. They have fallen too much.
Richard X. Bove
A line has been drawn- in the sand! Continue reading »
