Zachery Kouwe

Posts by Zachery Kouwe

  • 20 May 2010 at 3:10 PM

Ben Nelson Clueless About ATMs

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Ok, so we can sort of understand the utter ignorance of many lawmakers about markets and modern finance in general. We can’t expect all of them to possess the kind of Maxine Watersesque encyclopedic knowledge of swap credit defaults and other complex derivatives.

But never using, and therefore by extension, not knowing how to use an ATM machine is just beyond dumb. I mean, how out of touch with reality do you need to be to still drive up to the bank teller, fill out a withdrawal slip and wait for the cash?

Just ask Democratic Sen. Ben Nelson. Continue reading »

Tax on Carried Interest Moving Closer to Reality

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A new proposal to tax carried interest as ordinary income was just attached to a larger tax and spending bill that could be voted on by the House as early as tomorrow.

The bill would have a huge impact on private equity, venture capital and other private partnerships that rely on carried interest as their main source of income. The move would also impact some hedge funds that pay significant long-term capital gains. Washington has been toying with the tax increase for nearly three years, but the the current bill, sponsored by Sen. Max Baucus and Rep. Sander Levin, marks the first time the Senate and the House have come together on the issue. Continue reading »

  • 20 May 2010 at 12:22 PM

Will the Swiss Stabilize the Euro?

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The euro keeps diving to new lows and currency traders are hoping someone, (perhaps the Swiss) will step in to stop the bleeding.

Rumors that the Swiss will move to stabilize the currency have stemmed the tide for now. The euro dropped to $1.2176 against the dollar yesterday, a new low, but has bounced back to around $1.2342 in today’s trading. Continue reading »

  • 20 May 2010 at 10:46 AM

Is Japan the Next Greece?

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The IMF recently released a worrisome report about Japan’s growing fiscal deficits. The nation’s second-biggest economy has injected several hundred billion dollars in stimulus money into its economy in the hope of avoiding recession.

That seems to be working as Japan’s recovery is gaining strength. The IMF believes GDP will grow by about 2 percent in 2010 and 2011. But, the risk is that tax revenues are dropping and the government is racking up huge deficits. That could be a big problem down the road. Continue reading »

  • 20 May 2010 at 10:31 AM

Jon Corzine is already starting to Jersey up MF Global.

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Hedge funds take notice. There’s probably going to be a flood of futures and options traders out there from MF Global looking for a job. In response to five straight quarters of losses, Jon Corzine, the firm’s new CEO, said he plans to slash the workforce by up to 15 percent, reduce compensation and freeze hiring.

“We are taking decisive action to fundamentally improve the earnings profile of this company,” Corzine said in a statement. MF Global reported a loss of $96.5 million in the quarter compared to a loss of $119.3 million a year earlier.

  • 19 May 2010 at 5:23 PM

UBS Trader Pleads Guilty in Massive Bid Rigging Scandal

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Mark Zaino, a former UBS trader who worked on the firm’s derivatives and municipal securities desk, pleaded guilty to fraud and conspiracy charges today in the wide-ranging investigation into sham auctions and bid rigging in financial products sold to municipalities.

Zaino is the first banker to plead guilty to charges and he has agreed to cooperate with investigators. Another banker at Bank of America, who participated in the massive bid-rigging scheme, is also providing information to the Feds about the scam. Continue reading »

  • 19 May 2010 at 4:01 PM

Highbridge, York Capital Cutting Risk Dramatically

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“The best course of action is to take risk off,” said Highbridge Capital’s Glenn Dubin at SkyBridge Capital’s hedge fund confab in Las Vegas. Dubin thinks there is a lot of risk in the market now, and Highbridge is reducing its balance sheet dramatically, moving to a defensive position.

“We are seeing massive de-risking and de-leveraging,” Dubin’s told CNBC’s David Faber. He also called Germany’s move to ban bearish bets on certain European debt and financial stocks “ill-advised.” As for the Volcker rule, which would affect the JPMorgan-owned Highbridge, Dubin said he disagreed with its premise because financial the business is not too big to fail and, therefore, not in jeopardy being bailed out by taxpayers.

Continue reading »

  • 19 May 2010 at 2:46 PM

May Proving to Be a Tough Month for Tiger Cubs

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Following a “disappointing” first-quarter, an investor in Andreas Halvorsen’s Viking Global Investors tells us the firm’s main fund is down 5 percent for the month. It appears the departure David Ott, Viking’s co-founder and CIO, is not helping matters. Continue reading »