Opening Bell: 11.06.08

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European Markets All Out Of That Special European Flair, May Turn To Snorting Zoloft. (Reuters)
Markets across Europe were down overnight on continued credit worries and fear that the incoming administration may not be able to move quickly enough. In an attempt to allay panic it looks as though the EU CB is going to posture for rate cuts; we should be looking for a 50bps announcement sometime in the near future.
The FTSE was down 2.8% (at print), primarily on Commodities and Banks. As Oil prices have fallen, so goes those who sell - we saw BP, Royal Dutch Shell, Cairn Energy and Tullow Oil all fall back between 1% and 3%. Also of note, the mining sector saw a pull back overnight as metal prices fell in response to Vedanta Resources posting a 24.7% drop in first-half profit.
Bank of England Makes Rate Cut. (WSJ)
BOE cut their rate to 3% overnight; conservative numbers had it at 4%, liberal 3.5%.
Cerberus May Be Separating GMAC, Looking At Bank Formation (Bloomberg)
The idea is to spin off control of GMAC to investors, and allow it to blossom into a bank so as to take advantage of Government money. The move would keep Cerberus falling under Banking Regs, and possibly save GMAC. GM would have to give up its 49% stake in the company to avoid regulations, but one wonders if there's not a super-secret master plan there.
Barclays To Buy Italian Mortgage Lender. (AP)
"The purchase increases the value of Barclays mortgage book by 1.1 billion euros ($1.4 billion) -- or nearly 10 percent. Before this deal, Barclays mortgage book was worth roughly 12 billion euros ($15 billion)."
IEA Projecting $100 Barrels. (FT)
"The developed world's energy watchdog has doubled its long-term price expectation from last year's $108 a barrel for 2030 and assumes oil prices will rebound from today's $60-$70 a barrel to trade, in real terms adjusted by inflation, at an average of more than $100 a barrel from 2008 to 2015."
This is still optimistic, $200 barrels in 2030? The way things are going a bottle of Aspirin is going to cost $200 in 2030.
If all it takes to call energy prices 20 years from now is a flair for the ridiculous, I'm well qualified make calls on Economic Policy in 2030: I have it on good authority that in the near future we're going to learn how to clone hotdogs. They're going to be so abundant they're going to become our currency: 20 hotdogs would equal roughly a Nickel, depending on the strength of the Yen. A barrel of Oil will cost between 60,000HD and 80,000HD.
Nikkei slides 6.5 pct as Toyota, Isuzu hammered. (Reuters)
I'm not upset that Japan failed miserably at picking itself up off the floor, I'm pissed that they made everyone watch. It's one thing to admit you suck, take Emo kids for example: you know better than to look at them, you certainly don't talk to them, and you couldn't give a shit about their Grandmother. I feel like we've been made to care about Japan's Grandmother, and we should all be pissed.
That being said, the Nikkei closed down 6.5% as Japanese automakers announce people aren't buying their shit. Also of note in the story: they too are looking to the new US administration to quell economic fears.
Table of Projected Bonus Cuts. (Bloomberg)
Bloomberg has put together a table of bonus cuts they see coming down the road after talking with a consulting compensation firm. I want to emphasize here that this came from a consulting firm, which we all know is in the sales business.
It looks like anyone ever mentioned in a proxy statement is going to take it the hardest (60 - 70% reduction) with PE and IB following suit (at 30 - 45%).
As we love to compile our own data, anyone with concrete/rumored numbers for their firm are encouraged to email them to tips (AT) dealbreaker (DOT) com or text them to 973-495-0177.
--William Richards

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