And he wants to talk about it. Continue reading »
Archive for October 2011
The Wall Street Journal has a totally maddening article today about insider trading by hedge funds who pay expert-network consultants to give them inside information about congressional deliberations. Which you’d think would have prosecutors demanding that they get 20 years in jail without any concern for their delicate constitutions, except no:
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The Germans are ‘considering’ saying good-bye to 500 non-Germans. Continue reading »
“The Citadel founder’s main hedge funds were up 0.25 percent in September, putting them up by about 15.10 percent for the year, according to sources, making them among the best performers this year.” [II]
“Our fund declined 9.5% in September vs. -7.0% for the S&P 500, -5.9% for the Dow and -6.3% for the Nasdaq. Year to date, it’s down 29.6% vs. -8.7% for the S&P 500, -3.9% for the Dow and -8.4% for the Nasdaq…In the rest of our letter (attached), we discuss a similar period of underperformance in late 2008-early 2009, how we’re in the same boat, our economic outlook and our fund’s positioning, how we approach investment decision making today, our biggest winners and losers this year, and seven stocks.” Continue reading »
As you may have heard, there are protests going on downtown, organized by a group of individuals who’ve got beef with the financial industry. They’ve gone on longer than most would’ve expected (with at least one promise made that no one is leaving “until Wall Street crumbles“) and despite being peaceful so far (on the side of the protestors– the NYPD, not so much), have started making some people a little nervous. Specifically, those who run the banks OccupyWallStreet takes issue with. Luckily, nobody needs to live in fear, because of three simple words: Andrew Ross Sorkin. Little known fact about ARS is that in addition to overseeing Dealbook, writing books and anchoring Squawk Box, the hardest working man in America also runs a part time private security firm. Knowing about Sorkin’s side-gig, one CEO** got him on the horn last week to figure out what’s what.
I had gone down to Zuccotti Park to see the activist movement firsthand after getting a call from the chief executive of a major bank last week, before nearly 700 people were arrested over the weekend during a demonstration on the Brooklyn Bridge. “Is this Occupy Wall Street thing a big deal?” the C.E.O. asked me. I didn’t have an answer. “We’re trying to figure out how much we should be worried about all of this,” he continued, clearly concerned. “Is this going to turn into a personal safety problem?”
Andrew wasn’t sure but knew that a job this big required he check out the scene himself, rather than sending some doe-eyed intern from his team. Continue reading »
Today seems to be the day of banks praising each other with faint damns, what with James Gorman handing out copies of a Credit Suisse report lowering estimates for Morgan Stanley. Goldman equity research is also out with a mammoth and interesting note on French banks, which against this market backdrop actually manages to sound pretty chipper despite warning of increasing risks, reducing earnings estimates and downgrading Soc Gen from buy to neutral. They also think that French banks will need to improve capital ratios, but aren’t sweating it too much. Here’s how they think that goes:
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From: Richard Bove
Date: Tue, 4 Oct 2011
Subject: Dick Bove’s Notes On HysteriaThe American banking system is not on the verge of failure.
Richard X. Bove
To: All Employees From: James Gorman Subject: A Message from James Gorman (Deal Journal)
Over the past few weeks, there has been an enormous amount of confusion and misinformation about Morgan Stanley and others in our peer group. In fragile markets, where fear triumphs over common sense, these things are bound to happen. It is easy to try to respond to the rumor of the day, but that is not usually productive. Instead we should let balanced third parties do their own analysis and let the facts speak. To help you wade through the maze of numbers and information, it might be worth reading two analyst reports that were published this morning. One is from Howard Chen at Credit Suisse that examines Capital, Funding and Liquidity at Morgan Stanley and Goldman Sachs and, in some detail, highlights the dramatic improvement to our financial strength over the last three years. The other is from Matthew Burnell at Wells Fargo, who writes about Eurozone and Derivative exposure for the sector and plainly underscores that our exposure to the Eurozone and France in particular is not a concern. I encourage you to stay focused on your job, remember that we are a client-focused Firm and do what you need to do to help our clients navigate this turbulence. It is in times like these when our professionalism, market wisdom and client focus are truly valued.
Morgan Stanley May Raise $5 Billion In Japanese Bond Sale (BW)
Morgan Stanley said it may raise as much as 385 billion yen ($5 billion) by selling uridashi bonds to Japanese investors sometime in the next two years. The New York-based firm can sell bonds anytime between Oct. 12 this year and Oct. 11, 2013, according to a shelf registration filed to Japan’s Finance Ministry today. Uridashi bonds are debt issued outside of Japan for sale mainly to Japanese retail investors.
Deutsche Bank To Miss Targets (WSJ)
Deutsche Bank said it no longer expects to reach the targeted €10 billion ($13.18 billion) pretax profit from operating businesses this year, as uncertainty caused by the European sovereign-debt crisis ate into volumes and revenue in the third quarter, notably at the investment bank…”Nevertheless, the bank will be profitable in the third quarter and expects a robust earnings level for the full year 2011,” Chief Executive Josef Ackermann told an investor conference in London, according to a company announcement.
UBS Sees Profit Despite Trading Scandal (WSJ)
Kweku Adoboli can’t hold us down!
Wall Street Protester’s Missed Connection: ‘We Got Arrested On the Brooklyn Bridge’ (Gawker)
Cute anarchist(?) protestor arrested at Occupy Wall Street – m4w – 29 (90th precinct house, Williamsburg): I first spotted you at Zuccotti Park/Liberty Square right before the march started. You’re a few years younger than me with short, dark hair and you were wearing all black with leggings and a red handkerchief around your neck. I thought you crushingly attractive but things got moving and I lost track of you before I was able to work up the nerve to say hello. I saw you again a couple hours later when we got arrested on the Brooklyn Bridge, and then we ended up in neighboring cells at the 90th precinct house in Williamsburg. I’m the tall guy with glasses and short, dark hair wearing jeans and a tan t-shirt. I had a gray hoodie with black stripes on the bridge. You made fun of my shoes’ tongues falling out because they’d confiscated our shoelaces! Unfortunately you were released in the first group and I in the last, so I couldn’t find you by the time I got out. Curses! I’ll be looking for you hard the next time I’m down there, and I won’t let the opportunity pass by me a 2nd time! But in case I don’t see you, know that I’d love to buy you a coffee or tea or what-have-you (it’s cold in that park!) and hear what draws you to the demonstration. Say hello! Continue reading »
$$$ Kynikos’ Jim Chanos Sticks By Obama (FINalternatives)
$$$ If Dan Loeb Had A Vote, Chris Christie Would Run For President (WSJ)
$$$ “I’m very concerned of things getting out of control in Europe,” Roubini said in an interview at Bloomberg’s Dubai office yesterday. “You need a huge bazooka of at least 2 trillion euros, but you can’t wait three months. You have to do it in the next few weeks.” (Bloomberg)
$$$ Matthew Goldstein: A “great haircut” to kick-start growth (Reuters)
$$$ “Dow Takes In On The Chin” (WSJ)
$$$ Iguodala shadowed a venture capitalist and visited the New York Stock Exchange as part of a week-long internship with Bank of America Merrill Lynch arranged by his financial planner. If the lockout drags on, he’s also considering taking a separate internship with a hedge fund or an apparel company. “I always had an interest in what was going on in the market,” Iguodala said. “I have a couple of teammates, Jason Kapono(notes) and Spencer Hawes(notes), who are into it. I always read USA Today and the Wall Street Journal, and I have an E-Trade account, so the interest in finance has always been there. (YS)
$$$ Crouching Tiger, Hidden Raj (Vanity Fair) Continue reading »
Only if your flight is under four hours, if you leave the office past ten, and if you’re working and hungry before 9PM but still- this hurts.
To: IBD EMEA
From: Richard Blackburn and Chris Winchenbaugh
Cc: IBD ExCo, IBD COO’s, Talent Management
Date: 3 October 2011
Subject: 4th Quarter Savings InitiativesWe have done a great job this year driving our business forward and delivering on revenue and market share. Importantly, our division has been vigilant on costs and we have been able to manage our overall cost structure aggressively. However, as you are all aware, we continue to operate in a difficult environment, and we have more to do on cost savings.
