Indian hackers indicted in US for fraud (Times of India)
There's a new scheme going around that's bound to make you feel violated. Hackers are breaking into online trading accounts and using your cash to manipulate shares, making them go up and down to their liking. And then in a master stroke, they leave your money there, so that they haven't stolen anything. That's nice of them, but it's still illegal. Three hackers from Chennai, India have recently been charged in such a scheme, and from what we know, we expect there to be a lot more coming down the road. So take some advice, monitor your accounts closely, and regularly change your passwords. Alphanumeric usernames and passwords are a good idea. Completely random passwords are good too. And, yes, we put this story on top because we have a certain personal connection to the events here.
Citigroup Raises Nikko Takeover Bid to $13.4 Billion (Bloomberg)
After the Nikkei announced that Nikko was no longer under a delisting threat, it became pretty clear that Citigroup would have to raise its offer for the beleaguered Japanese brokerage. It's just that the brokerage became slightly less beleaguered, and its shareholders knew they could demand more. So, Citigroup has raised its offer to $13.4 billion, which is 26% higher than the original bid.
SEC charges ex-Nortel executives with fraud (Computerworld)
This story has a certain "what, they're just getting around to that now?" feel to it. We have no opinion, one way or the other, on whether Nortel executives committed fraud or not. We will say that there does appear to have been a lot of messed up stuff with the company's accounting over several years. And if you're going to criminalize faulty accounting as well as criminalize failure, then you've gotta throw the book at these guys. Still, we're really surprised that this didn't happen sooner.
Big Money Still Learning to Lobby (NYT)
We were going to write up this story about how the hedge fund industry is getting into the lobbying game, and we were going to point out that we could expect hedge funds to lobby for certain regulations that appear to hurt them but slyly protect the industry. But you could guess all that. And we're tired of playing the Times' game here. It's pretty obvious that the hedge fund industry has now achieved Wal-Mart status at the Times, meaning that whenever it stubs its toe, washes the dishes, takes a shower or flosses, it merits a story. In reality, they could probably cut down their hedge fund content by 75%, and nobody would really miss much. Writing up that hedge fund charity story? What were we thinking?
Ranbaxy Makes Bid for Merck Drug Unit (AP)
This looked like a really big deal for a second until we realize that they're not talking about that Merck. They're talking about Merck KGaA, which is based in Germany. The Indian pharmaceutical firm Ranbaxy is looking to purchase its generics unit for $6 billion, which is obviously a significant amount. Meanwhile, yesterday, Schering-Plough (not Germany's Schering AG) announced it would buy out Dutch pharmaceutical firm Akzo Nobel for $14.4 billion, which bolsters its offerings for women and animals (yes, really). Plenty of industries talk a good game when it comes to consolidation, but nothing seems to happen. Pharmaceuticals seems like one of the few that actually gets the deals done.
Big Banks May Be Chum (Forbes)
We already know that a number of hedge funds have taken it on the chin during this whole subprime fallout. Now which banks have the most exposure? According to one analyst, Bear Stearns stands to lose up to 19.6% of its earnings this year, while Lehman could lose 12.7%. Goldman Sachs, always the lucky one, has the least exposure, and may only get hit 4.3%. Of course, Goldman Sachs may feel pain in some other areas, which we'll find out about shortly.
Taleb has a new book out! (Alpha & Omega)
Unfortunately, the Opening Bell side of the 'Breaker has the same slightly embarrassed love for Nassim Taleb as the other staff. And yes, we're really excited about the release of his new book, The Black Swan, which comes out on April, 17th (tax day, ominously). Of course, not everyone else is so into him. Some argue that he's pompous, and that his pomposity doesn't allow him from hearing legitimate criticism. First of all, there's no doubt that he's pompous, if you've ever read Fooled By Randomness. He'd probably plead guilty on that one. And he definitely doesn't like outside input. We once read something he wrote about how a publisher to his book wanted to book a picture of dice at the top of each chapter of Fooled by Randomness. Of course he freaked out -- can you guess why? Because dice games represent an idiot's concept of randomness. But to Taleb, their completely predictable distribution of 1s through 6s (each number will come up about, oh, one sixth of the time) is the antithesis of randomness. He certainly has a point.
JPMorgan to launch death-rate index (FT Alphaville)
A lot of people like to participate in so-called death pools. That is, everyone picks 20 famous people they expect to die in the coming year, and whoever gets the mos right wins. Extra points if you pick people who aren't already elderly or infirm. Now, JPMorgan looks to be developing a serious version of this game. The firm is trying to launch a death-rate index, a way of measuring longevity in the US and the UK. Of course, for many firms, like insurers, this is extremely valuable data. And the creation of an index means the creation of hedging and derivatives around the index, which could be really useful. So if you're really good at picking deaths, you can try your hand at predicting deaths on the macro level, and make some money helping the insurers hedge.