The Latest

  • 04 Sep 2014 at 11:55 AM
  • Banks

It Won’t Be 2007 Again Until 2024 (And Not Really Even Then)

Deutsche Bank has gone back and re-crunched some numbers and found a couple of things about the line of business it is in. For one, it may have, well, let’s say misspoke when it suggested in December that the Goldmans of the world would inherit the banking industry. Seems that may have been at best a touch optimistic and at worst completely wrong. The Germans have also found that investment banking may not be an industry that one wants to inherit at all. Read more »

On Opening Bell: 09.04.14

It’s a mystery to me why people don’t have the hypothetical “If I’m having a threesome on my birthday and it gets a little loud, how would that make you feel?” chat BEFORE they become roommates.

UBS, Deutsche Bank Join Team Ackman

Bill Ackman has been talking about freeing himself from the vagaries of investors always asking for their money back at the most inopportune times for years now. Sure, that permanent-capital IPO didn’t happen in late 2011, but this time, Bill is serious. Read more »

Opening Bell: 09.04.14

Trader Brings NFL Algorithms Back to Defend Betting Title (Bloomberg)
By day, David Frohardt-Lane puts his math skills to use as an algorithmic trader for 3Red Group in Chicago. Away from work, he uses them to cash in on the National Football League. Frohardt-Lane is seeking a repeat title in the Las Vegas Hotel SuperBook’s SuperContest, a season-long NFL betting competition that drew about 1,200 entrants this season. The winner earns more than $600,000, and the total prize pool approaches $2 million. The tournament begins with the NFL opener tonight, when the Green Bay Packers visit the champion Seattle Seahawks. “I enjoy my job quite a bit, but nothing compares to an unexpected breakaway touchdown just when you’ve given up on a game,” Frohardt-Lane said in a telephone interview. “For that rush, nothing compares to sports gambling.”

Apple Celebrity Nude-Photo Hack Shows Risk in Security Questions (Bloomberg)
Apple yesterday said that a spate of nude photos from actresses including Jennifer Lawrence that were recently posted online were individually stolen from Apple accounts. The celebrity accounts were “compromised by a very targeted attack on user names, passwords and security questions, a practice that is all too common on the Internet,” the Cupertino, California-based company said in a statement. The incident underscores how techniques adopted by companies to step up security are far from foolproof, exposing a risk for everyday Internet users. As people post more sensitive information to social networks, it has become easier for criminals to obtain the answers to security questions. That means consumers can rarely rely on just one set of defenses and have to add more layers, even if it makes online accounts less convenient. That’s especially true for famous people, who have long been ripe hacking targets because security questions protecting their online accounts from intruders are trivial to answer. Based on the public information available about them, basic questions such as where somebody went to high school or what their birthday is can be easily figured out — and don’t end up being much of a security barrier.

Investment Technology Group to Launch Dark Pool for Bond Trading (WSJ)
The New York-based brokerage and technology firm said Wednesday that it is planning to launch a trading venue known as a dark pool, a private platform in which buyers and sellers remain anonymous. While most bond trading takes place over the telephone between dealer banks and customers, ITG and a host of others are trying to tap into increasing demand from fixed-income investors to trade more cheaply and through electronic networks. The credit market has, until recently, resisted the incursion of fully electronic trading more so than markets for currencies, stocks and some derivatives. Similar efforts by firms such as Goldman Sachs Group Inc. and BlackRock Inc. have faltered, but ITG is betting it can leverage its track record in stock trading and technology to make inroads into credit markets. One of its chief rivals, Liquidnet Holdings Inc., announced in March it would open its own credit-trading network in the fall.

Regulators Propose Rule to Reduce Risk of Derivatives (Dealbook)
The Federal Reserve and the Office of the Comptroller of the Currency, as well as three other agencies, proposed a rule that would apply to over-the-counter derivatives, the financial instruments that banks and other financial entities use to speculate or hedge their risks. American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them. But the 2008 crisis revealed how flaws in the market had allowed for dangerous buildups of risk at large Wall Street firms and worsened the run on the banking system. Since then, regulators have been trying to make the derivatives market less risky. The rule proposed on Wednesday focuses on margin payments, which traders in derivatives make to each other to protect against the risk that they don’t get paid what they are owed. Such margin payments add discipline to a high-octane trading activity and make it more likely that derivatives traders can bear losses if one large entity collapses. But the industry, seeking to minimize its costs, has not applied margin requirements evenly across the system. The proposed rule aims to change that.

Police: Roommate stabbed birthday boy for loud threesome (MSA)
Antonio Flores Narcisso, 42, was arrested Tuesday and charged with burglary of a habitation with the intent to commit felony force, according to an arrest warrant affidavit. On May 8, Narcisso allegedly kicked down his roommate’s door while the roommate was having sex with two women and told them they were being too loud, according to the affidavit. When the roommate told Narcisso to get out, Narcisso allegedly grabbed a knife from the kitchen and stabbed the roommate a number of times in the head, back and hands, the affidavit states. The roommate, who turned 35 that day, was taken to University Hospital with non-life threatening injuries, according to the affidavit. Read more »

Write-Offs: 09.03.14

$$$ Exclusive: Icahn sells entire stake in Family Dollar [Reuters]

$$$ Secret Network Connects Harvard Money to Payday Loans [Bloomberg]

$$$ Och-Ziff attracts billions despite tepid performance, legal concerns [NetNet]

$$$ U.S. regulators adopt tighter rules for banks’ cash needs [Reuters]

$$$ Suspect Stops in Middle of Police Chase to Pet Cats [DI] Read more »

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Bill Ackman’s Magical Year Continues

By no means has everything gone right for the Pershing Square Capital Management chief in 2014. His whole Herbalife-destroying performance actually lost him money, for one. But it’s pretty much the only thing that has lost him money this year. Sure, Allergan told him to piss off. But then the courts told Allergan to piss off itself and told Bill they’d be happy to hear what he had to say when he wanted to say it. Oh yea and he’s still way up on that whole mess, anyway. And just when he got to suing the government for refusing to do what he wants with Fannie Mae and Freddie Mac (and then suing them again), Burger King decided to buy a Canadian icon for tax purposes, making him a whole bunch more money. So, yea, Bill’s feeling pretty good right now. Read more »

  • 03 Sep 2014 at 4:27 PM

Spruced-Up NYSE Getting Exactly What It Didn’t Need

The Big Board is sprucing up its garage, getting rid of that damned eyesore it hangs monitors off of and consolidating its coffee-delivery system, all in the name of winning back some of the 60% in market share it’s lost over the last 10 years. Unfortunately, it’s also getting some more of the last thing in the world it needs: Competition. And from Michael Lewis’ favorite stock-trading arena. Read more »

On Judge Rules Statements To Your Mother About Your Expected Bonus Don’t Equal A Legally Binding Contract With The Company Paying Your Bonus

What about statements from your mother? Because she used to constantly praise me and tell me what a beautiful unique snowflake I am, and if that’s not legally binding I might just kill myself.