UBS to Sell Stakes After $10 Billion in Writedowns (Bloomberg)
Zing. You knew we weren't done with these UBS peeled of a cool $10 billion in writedowns and is selling $11.5 billion in bonds to the government of Singapore and Mid-East investors in a bid to recapitalize. Up until recently, it had been forecasting a Q4 profit, which is obviously not in the cards anymore. And it's not clear whether it'll see a full year loss, although that hardly seems significant at this point. Anyway, kudos to the bank for having the funding announcement all ready to go.
Black Monday (Sun-Times)
Other than a few notable cases, this hasn't been a big year for white collar prosecutions, at least by our reckoning. All the wonderful promise of backdating fizzled out, as we've noted several times. Perhaps subprime will produce a flurry of fraud charges -- we'll have to wait and see. But for you junkies out there, take note that it's sentencing day for Lord Black, Conrad Black that is, and it's expected that he may get 30 years. Think he'll get less? Put in a guess.
ArcelorMittal to raise long steel prices in Mideast, Mediterranean, Black Sea (Thomson)
The multi-year bull market in steel that some thought would end in 2003 isn't coming to an end. ArcelorMittal plans to raise steel prices, er, prices on "long steel" in key markets, including the Mideast, come Jan 1 2008. The company is citing raw material costs as well as "unprecedented demand" for the move. If you're curious what some of this steel might go to, check out this collection of nine extraordinary buildings currently under construction around the world. Seriously mindblowing stuff. Not surprisingly, a good many are in the Mideast.
Did Authorities Miss a Chance To Ease Crunch? (WSJ)
The Journal asks whether regulators missed a chance to head off the credit crunch back in 2005, when Eliot Spitzer & Co. started an investigation into CDO pricing at Bear. You can read the article for yourself and make a decision on whether you think there's any merit to this, but suffice to say, we don't think so. Here's what's funny though, apparently both the SEC and Eliot Spitzer dropped the matter after an initial investigation, though the reason is unclear. In other words, of all of the big things that Spitzer was looking at, mis-priced CDOs might have been the biggest, by far (whether it's criminal is another matter, but certainly it's turned out to be a big story). So of all the crusades that Spitzer went on during his time as AG, it looks very likely that he took his eyes off the ball the one time he was on to something significant.
U.S. conciliatory on safety ahead of China summit (Reuters)
Just because they've put lead in toys one too many times, it doesn't make sense to start a trade war. Seriously. Rational minds can step back from the precipice and work in a spirit of mutual understanding and cooperation. Ahead of trade talks with China, US authorities are trying to make things go smooth. Nobody wants to see US-Sino trade dry up (well, some people do, but not most), so time to cut it out with the fighting words and figure out a way to solve these issues.
Investment pool created to help Indiana schools (IndyStar)
The state of Indiana plans to launch a fund whose proceeds will be used to fund local schools. And the good news is that they're taking measures to avoid a repeat of what we've seen in Florida. For example, it will only invest in safe, conservative investments (you know, like it has to carry a AAA rating). And no structured investment vehicles. Of course not.
Slot Machines for the Young and Active (NYT)
As much as we love to gamble, you couldn't get us to play a slot machine if our life depended on it. Seriously, what's the point? Apparently, a lot of young people feel the same way, which is not surprising, cause they're mind-killing. Unfortunately, they're the lifeblood of many casinos. So a new generation of machines are cropping up that involve competition (between players) and hand-eye coordination. Now this sounds fun. We're still not quite sure how the competitive aspect will work, but if there's any chance to use skill to increase return, it should get people playing.
Yahoo to Start Internet Program for Technology Investors (NYT)
This was first reported on some blogs last week, but Yahoo is reprising its old online investing show. Not really a reprise, since this is a new thing, but the site will offer original video content in the area of tech investing. The full lineup isn't yet known, but among the reported hosts will be Henry Blodget, BusinessWeek reporter Sarah Lacy and friend-of-Dealbreaker Paul Kedrosky. Apparently, there are some others as well, who are currently unknown. The show, to be called TechTicker, will start next month.
Oil Prices Slip, Extending Decline (AP)
Half jokingly, we've been calling for oil $30, but we know that's not going to happen soon. Still, we're $7 closer than we were just a few days ago, as the price of a barrel of crude has slipped below $88. Also, the Dollar has been strong for the past week weeks, which has probably helped the decline. Now all we need is a good, stiff 50 bp rate cut this week, and we'll re-reverse both of these trends.