Opening Bell: 11.11.08 - Dealbreaker

Opening Bell: 11.11.08

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UBS Execs Could See Jail Time (NYT)
UBS, after advising top tier clients on how to funnel money into offshore accounts so as to restructure their holdings and minimize their tax burden, have turned their clients over to the Justice Department and IRS for possible tax fraud. I can only see this as weak and thus believe they should spend time in the pokey.
Grow a pair.
AMEX Approved As Bank Holding Company (CNBC)
As you probably heard, American Express's recent woes have led them to file for Bank Holding Company status, under which they'll qualify for TARP money and can issue debt to cover defaulting credit card customers and a rising cost structure.
Fannie Posts 3Q Loss (CNNMoney)
"Troubled mortgage-finance giant Fannie Mae reported on Monday that it lost $29 billion in the most recent quarter, putting the firm closer to having to draw on the $100 billion in taxpayer dollars committed to it in September"
I was under the impression that Fannie Mae was already under the hammer and sickle of sweet mother America?
If you're going to federalize the Mae's, at least turn them into Sovereign Wealth Funds (or one fund, your choice), take a hands off approach, and let it make some money for you. Who knows, you might just be able to save Social Security with the earnings (you'll fuck this up too, I have faith).
Super Bowl Commercials In Trouble, Need Government Assistance (WSJ)
I don't know what people did before awesome Super Bowl commercials, but I can only imagine a world of drab, boring people talking about nothing but football for 4 hours. I love football, don't get me wrong. But venture into the den of some 5 guys sitting around watching the game on any given Sunday and you'll hear, well, next to nothing, except for the occasional statistic and maybe a comment about how we'd bang a cheerleader here or there; nothing of real merit. We like it that way: a void of all intelligence and open permission to drink as much as we want -- that's all in we're looking for out of life for 4 sweet, sweet hours. Oh, and maybe Hot Wings.
The Super Bowl is supposed to be better though: it has hot girls all the time (not just cheerleaders) and dancers, and fireworks, and Commercials. And while we'll forget the Girls' face/body/everything about ten minutes after she's off screen, the better commercials get quoted for the better part of the year, and that's what matters, America.
Don't let the terrorists/mortgage brokers/real estate agents win: Keep the ads.


This Had Me Terrified, But It's Okay: The Radiation Only Hides In The Keg, It Doesn't Live There. (Bloomberg)
It turns out scrap metal radioactivity is a huge problem, but we don't really give a shit. What was worrisome about this was the headline intimating that Radiation was infiltrating our Beer Supply (Bs), which isn't true, but rather a crude marketing scheme by Bloomberg that possibly scared thousands and may have led to at least one suicide.
O Cubed Eyeing Next Purchase (Reuters)
The Majestic himself is eyeing another possible acquisition, this time in Belgian-French Bank Dexia.
"De Tijd said insurers Berkshire Hathaway Assurance and Assured Guaranty were particularly interested in the "healthy" part of FSA -- guaranteeing municipal bonds -- but there were also talks about its riskier activities."
China's Trade Surplus Hits New Record (BBC)
"China's trade surplus rose to $35.2bn (£22.48bn) in October, hitting a record for a third month in a row, data shows."
Regardless, the data released would suggest that China has a waning economy, to the point of economic growth slowing to 9% over the term of the recession. If this is true, it likely means absolutely nothing for American consumers, but my have in impact on our placing Treasuries.
Markets Down Overnight (Bloomberg)
Money shots:
"More than $28 trillion has been erased from the value of global equity markets as credit losses and writedowns topped $920 billion" (since the start of the downturn)
"Futures on the Standard & Poor's 500 Index slid 0.9 percent. Europe's Dow Jones Stoxx 600 Index declined 2.2 percent."... "The MSCI Asia Pacific Index dropped 3.5 percent as Australian business confidence fell to a record low."
"Profits for the 428 companies in the S&P 500 that have reported, including Boeing Co. and AT&T Inc., have shrunk 17 percent, while missing predictions by 4.7 percent."
"Growth in the U.S. economy will slow to 1.1 percent next year, down from 1.6 percent predicted for 2008"
"The International Energy Agency may cut its 2009 oil demand forecast for a third month."
--William Richards

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Opening Bell: 03.26.12

Ex-Goldman Worker Said to Seek Book Deal (NYT) Greg Smith has met with publishers this week, including imprints at several prominent houses. According to several people who were present, Mr. Smith described his book as a coming-of-age story, the tale of someone who came into the business with good intentions and sky-high ideals that were ultimately pierced by Goldman’s obsessive focus on making money. It would also be a story of the history of Goldman Sachs and the perceived change in the culture of the firm that left Mr. Smith, a native of South Africa who lived in London, disillusioned and eager to leave after spending nearly 12 years there. JPMorgan Wins Case Against Trader Over Decimal Point Dispute (Bloomberg) JPMorgan doesn’t have to pay a trader 580,000 pounds ($921,000) after a missing decimal point in an employment contract led him to believe his salary would be 10 times what was offered, a London court ruled. Kai Herbert, a Switzerland-based currency trader, sued JPMorgan for lost earnings claiming he signed a contract to relocate to Johannesburg for a salary of 24 million rand ($3.1 million). JPMorgan said there was a typographical error and the figure should have been 2.4 million rand. “Herbert took the commercial risk of accepting the offer, knowing full well that the figure was an error,” Judge Henry Globe said in today’s judgment. E-Mail to Corzine Said Transfer Was Not Customer Money (Dealbook) But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn...The e-mail suggests that Mr. Corzine, a former governor of New Jersey, was unaware that the money had been transferred from a customer account. Germany Backs Boost To Bailout Fund (WSJ) Germany has been staunchly opposed to raising the planned €500 billion ($664 billion) ceiling on the ESM, but has left the question of the EFSF open until now. It was widely believed that the EFSF would be retired as soon as the ESM is launched and that the EFSF loans already awarded would be assumed by the ESM, reducing its future lending capacity. But now Berlin is suggesting allowing the EFSF to run longer and by doing so ensure that the ESM can use its full lending capacity, effectively boosting the firewall to about €700 billion. "We are saying that the ESM should permanently have €500 billion," Ms. Merkel told a news conference in Berlin on Monday. BATS Faced Revolt Over IPO (WSJ) "The fact that our own stock was out there to be traded for the first time, and we showed systems problems, eroded customer confidence," Joe Ratterman, BATS's chief executive, said Sunday in an interview. "Of course investors are going to say, 'Hey, wait a second.'" Some traders and investors considered the offering pricey. At $16 a share, BATS would have traded at about 10 times analysts' 2013 earnings estimates. That is roughly on par with New York Stock Exchange owner NYSE Euronext and a premium to the Nasdaq OMX Group Inc., which trades at 8.6 times 2013 estimates. Even before the glitches appeared, the offering was off to a rocky start. When trading in BATS shares opened at 10:45 a.m., they were down 75 cents, to $15.25. From there, things only got worse. Hedge Funds Capitulating Buy Most Stocks Since 2010 (Bloomberg) A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points. Banks Set to Cut $1 Trillion From Balance Sheets (FT) Investment banks are to shrink their balance sheets by another $1 trillion or up to 7 percent globally within the next two years, says a report that foresees a shake-up of market share in the industry. Higher funding costs and increased regulatory pressure to bolster capital will force wholesale banks also to cut 15 percent, or up to $0.9 trillion, of assets that are weighted by risk, a joint report by Morgan Stanley and consultants Oliver Wyman predicts. In addition, banks are expected take out $10 billion to $12 billion in costs by reducing pay, firing employees and paring back investments in areas that are no longer considered core. Larry Summers: Strong Recovery A "Substantial Possibility" (FT) According to Summers, the biggest risk to the recovery in the next few years is that policy will move away too quickly from its emphasis on boosting demand. "A lurch back this year towards the kind of policies that are appropriate in normal times would be quite premature," he added. Bernanke Notes Labor Market Concerns (WSJ) "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Mr. Bernanke said in prepared remarks to the annual conference of the National Association for Business Economics. Bad fliers get boot – & bill (NYP) Fed up with disruptive fliers, the Port Authority plans to go after them for the money they cost their airline and the PA. “We’re going to use every lever at our disposal,” said PA chief Pat Foye. “These delays cost thousands of dollars — maybe tens of thousands — each. One Alec Baldwin incident can delay a whole airport for a day with cascading delays.” (Baldwin, the “30 Rock” star, made international headlines in December when he got booted by American Airlines at LAX after refusing to turn off his phone.) The PA is going to “aggressively’’ remind passengers to keep cool and listen to instructions from airline crews — even if they think they’re stupid, Foye said.