Stress Tests Show Banks On The Mend (WSJ)
The central bank said 17 of the 18 largest U.S. banks have enough capital to keep lending in a hypothetical sharp economic downturn, a sign the financial system is better prepared to weather a shock without resorting to a large, 2008-style infusion of government support. But the “stress test” figures released Thursday also showed that the Fed is paying special attention to the capital strength of companies with large trading operations, a group that includes Goldman Sachs, Morgan Stanley, and JP Morgan. That scrutiny could make it harder for those firms to win regulatory approval to increase dividends and buybacks, and could bruise the companies’ recovering reputations with investors. Shares of Goldman and J.P. Morgan have been trading at their highest levels in a year, but both companies dropped more than 1% in after-hours trading following the Fed release.
Citi Bests Stress Tests, Discloses Buyback Plan (CNBC)
Where stress tests are concerned, call Citigroup “most improved.” The bank posted an 8.3 percent tier 1 common capital ratio – the highest of its peers – under the Federal Reserve’s annual stress tests.
Unemployment Falls To 7.7% (WSJ)
U.S. job growth jumped ahead in February, a sign of a steadily improving labor market and stronger economic gains. Employers added 236,000 jobs last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, fell two-tenths of a percentage point to 7.7%, the lowest level since the end of 2008. Economists surveyed by Dow Jones Newswires had forecast that nonfarm payrolls would rise by 160,000 and the unemployment rate would fall to 7.8%.
Chanos Has Ackman’s Back On Herbalife Bet (NYP)
Famed short seller Jim Chanos yesterday voiced his support for Ackman’s short position — and revealed he made money from shorting the Los Angeles-based company last year. “I think Bill Ackman is correct in his analysis” of Herbalife, Chanos said in a TV interview. “I’m not crazy for this multi-level-marketing business,” Chanos added…Chanos said on CNBC yesterday morning that he had shorted Herbalife last year, when it was around $50 — but got out when the price fell by half after Ackman went public with his short bet.
Firms Send Record Cash Back To Investors (WSJ)
Companies in the S&P 500 index are expected to pay at least $300 billion in dividends in 2013, according to S&P Dow Jones Indices, which would top last year’s $282 billion.
Goldman Symbol Gets More Elusive (WSJ)
Upending a closely watched ritual in place since 1996, the New York securities firm told employees Thursday it now plans to promote a new crop of managing directors every two years, instead of each year. The change will start with the group selected later this year. The coveted title, which comes with a base salary of $500,000, elevates the chosen few at Goldman one step closer to the even higher rank of partner. In the memo, Goldman Chairman and Chief Executive Lloyd C. Blankfein and President and Chief Operating Officer Gary D. Cohn said the move would help the firm devote more time to the selection process. “A biennial process will allow us to invest more in the managing director selection process so that it will continue to be a disciplined and rigorous exercise,” they wrote. “This will help to ensure that the managing director title remains as aspirational as it should be for our top performers.”
Hooters Is Chasing Women — as Customers (CNBC)
The chain’s waitresses are as buxom as ever but its sales have “flattened out,” said Darren Tristano, executive vice president at research firm Technomic. Revenue peaked in 2007 at nearly $1 billion but had fallen to around $850 million last year, he estimated. (The privately-held company doesn’t release sales figures.) The brand recently announced an overhaul aimed at making Hooters more mainstream than man-cave, adding more salads to its menu, remodeling stores and rolling out a series of ads last week to tout the changes.
Icahn Bid Rattles Dell Plan (WSJ)
Activist investor Carl Icahn said he would push to replace Dell’s board and pursue “years of litigation” if the computer maker refused to accept his demand for a refinancing that would pay a hefty dividend to shareholders. Prodding the company to reject a $24.4 billion buyout offer that it agreed to last month and endorse his alternative, Mr. Icahn disclosed he owns a “substantial” stake in Dell and unleashed his trademark attack on directors and on the management-backed offer. “We see no reason that the future value of Dell should not accrue to all the existing Dell shareholders,” Mr. Icahn wrote to a Dell special board committee, insisting it agree to his conditions or hold a vote for a replacement board that would.
Ferrari $1.3 Million Hybrid Hits Resurgent Luxury Market (Bloomberg)
At the Geneva Motor Show this week, Ferrari showed a 1 million-euro ($1.3 million) hybrid called LaFerrari. Bentley exhibited a revamped four-door Continental Flying Spur. Jaguar debuted the XFR-S, its fastest sedan ever. Rolls-Royce is adding a 245,000-euro coupe called the Wraith to its lineup.
Companies Expand Offshore Cash Hoard By $183 Billion (Bloomberg)
Microsoft, Apple, And Google each added to their non-U.S. holdings by more than 34 percent as they reaped the benefits of past maneuvers to earn and park profits in low- tax countries. Combined, those three companies alone plan to keep $134.5 billion outside the U.S. government’s reach, more than double the $59.3 billion they held two years earlier.
Broker who managed money for NFL players bootled from securities industry after big loss (NYP)
A Florida broker who managed money for dozens of prominent National Football League players — including Santana Moss and Plaxico Burress — has been banned from the securities industry after putting the group into a high-risk investment that lost them a total of $40 million. Jeff Rubin, 38, directed some 31 NFL players into an illegal gambling operation in Alabama — which went bust two years later, a Wall Street regulator said yesterday. One of the players, Samari Toure Rolle, a former cornerback with the Baltimore Ravens, lost $3.2 million, the bulk of his liquid assets, to Rubin, according to the Financial Industry Regulatory Authority, which imposed the ban.
City’s New Drink Rules Add Wrinkle to Coffee Orders (NYT)
While the regulations stipulate that servers can add a limited amount of sugar to coffee, Dunkin’ Donuts and McDonald’s will no longer do so. Customers will have to add the sugar themselves, from a condiment stand in Dunkin’ locations and with packets on the side at McDonald’s. “Our focus is on customer service and making sure that our crew know exactly what to do to comply with the ban,” said Cheryll Forsatz, a McDonald’s spokeswoman. A Dunkin’ spokeswoman, Michelle King, said the company had developed its policy after consulting with the city’s Board of Health. Dunkin’ has tried to reduce the inevitable confusion by handing out small fliers at cash registers. Titled “New N.Y.C. Regulations — What They Mean for You,” the fliers explain that while lattes and small coffees are protected, drinks like hot chocolate, frozen Coolattas and larger coffees will be downsized or desugared. Workers at the chain have also been trained to answer questions about the ban and gently inform regulars that their favorite drinks will be unavailable by Tuesday. Shock and dismay are not uncommon reactions, said Jared Feldman, a Bedford-Stuyvesant resident who has witnessed many similar exchanges over the past week at his local Dunkin’. “They go through all the stages of grief,” Mr. Feldman said.