Opening Bell: 11.26.08 - Dealbreaker

Opening Bell: 11.26.08


AIG's Cassano Under Investigation (Reuters)
The ex-head of AIG Financial Products is under Federal investigation for his role in the loss of Billions of dollars, which many see as the catalyst leading AIG to financial ruin.
The announcement comes on the heels of AIG's announcing that they had completed the $40B sale of preferred stock to the US Treasury under the terms of the TARP. Also newsworthy of AIG: FT is reporting that AIG's Edward Liddy has agreed to accept a $1 salary as some symbolic move.
"This gesture by AIG is appropriate and I encourage other firms to wake up to the new reality on Wall Street and follow AIG's step quickly," Mr Cuomo said in a statement."
I'm sure you meant "quickly follow AIG's step" Mr. Cuomo, but that aside, what's the rush?
Porsche backs away from buying VW majority this year (Reuters)
Something about "ridiculous prices."
EU Stimulus Plan Proposal (DJNewswires)
"The European Commission proposed Wednesday a sweeping stimulus package worth EUR200 billion, European Union sources said.
The sum, the equivalent of 1.5% of the European Union's gross domestic product, was more than the EUR130 billion that commission chief Jose Manuel Barroso had said previously that he was looking for."
Russia Threatens To Step Down Oil Production, Prices Respond (BBC)
While the Price reaction was minimal, there's the off chance that this could have a lasting effect. Russia has been rogue to the policies of OPEC in recent years, acting effectively as it saw its own best interests. We're seeing a stepping in line, however, as Russia is positioning itself with OPEC in Oil production cuts.
Some issues here to pay attention to: they're not actually aligning themselves with OPEC, merely following OPEC's most recent move. Also: they're probably drunk.
108bps Drop In China Key Rate (Bloomberg)
I've always been a fan of odd-lot cuts, as they seem remarkably arbitrary. I don't, for instance, see how one comes to the 108 number: why not 109 or 110?
"The cuts are aimed "at ensuring sufficient liquidity in the banking system and to promote steady loan growth so that monetary policy can play an active role in supporting economic growth," the bank said in a statement."
Inbursa buys 26MM share block of C (CNBC)
The big question here is whether or not this signals Carlos Slim's tacit nod of approval for Citi.
Why CNN Can't Cover The Credit Crisis (Infectious Greed)
IG is covering what amounts to an organized rant on how MSM is botching the coverage of the liquidity crunch, and as a bonus there's a Suze Orman bashing.

Goldman's FDIC Backed Bond Issue (DJNewswires)
For those of you without access:
"Demand for the bonds was strong, with 300 investors placing orders for the deal that is likely to serve as a benchmark for other banks lining up to raise funds under the Temporary Liquidity Guarantee Program, or TLGP.
The program aims to ease the process of refinancing bank debt, and in turn possibly free up lenders to extend new loans to customers and businesses again. It's only one weapon in the government's arsenal to battle frozen debt markets that threaten to make a recession in the U.S. economy much deeper.
Goldman sold $5 billion of three-and-a-half year notes at a risk premium of 200 basis points over the 1.75% Treasury due November 2011. This put the interest rate at just 3.367%, significantly lower than the bank's outstanding debt that isn't backed by the government. Goldman's 5.7% notes due 2012, for example, are currently trading at a yield of 8.5%, according to one bond trader.
Some 40% of the issue was placed outside of the U.S., according to a spokesman at Goldman Sachs."
Toyota's Credit Rating Cut By Fitch (Bloomberg)
The move by Fitch drops Toyota from AAA to AA, which increases the cost of Debt. Wait.. People still trust ratings companies? How have they not been put out of business?
--William Richards


Opening Bell: 02.11.13

Two Firms, One Trail, In Probe Of Ratings (WSJ) The Justice Department last week went after Standard & Poor's Ratings Services—not rival Moody's Investors Service —with a $5 billion fraud lawsuit. Some former Moody's employees think they know why. The Moody's Corp. unit took careful steps to avoid creating a trove of potentially embarrassing employee messages like those that came back to haunt S&P in the U.S.'s lawsuit, the former employees say. Moody's analysts in recent years had limited access to instant-message programs and were directed by executives to discuss sensitive matters face to face, according to former employees. The crackdown on communications came after a 2005 investigation by then New York Attorney General Eliot Spitzer into Moody's ratings on some mortgage-backed deals, the former employees say. Former employees also point to an April 2001 settlement between Moody's and the Justice Department's antitrust division over the destruction of documents amid a civil inquiry by the agency. Moody's pleaded to one count of obstruction of justice and paid a fine of $195,000. Moody's called that situation "an isolated incident" and said it cooperated with the Justice Department's investigation. That settlement helped lay the groundwork for heightened concerns about sensitive documents, former Moody's employees say. Credit Rating Victims Didn’t Know S&P’s Toxic AAA Born of Greed (Bloomberg) When Charles O. Prince III was chief executive officer of Citigroup Inc. from 2003 to 2007, he didn’t know about a surge in mortgage risk that his own investment bankers loaded on to its bank’s books. Because such debt carried top credit ratings from firms such as Standard & Poor’s, few financial executives paid attention to the potential dangers. When Charles O. Prince III was chief executive officer of Citigroup Inc. from 2003 to 2007, he didn’t know about a surge in mortgage risk that his own investment bankers loaded on to its bank’s books. Because such debt carried top credit ratings from firms such as Standard & Poor’s, few financial executives paid attention to the potential dangers. Makeover At Barclays Won't Be Extreme (WSJ) Mr. Jenkins's cuts are likely to be focused on areas where Barclays lags far behind competitors, executives say. That could include parts of the equities sales-and-trading businesses in Asia and continental Europe, according to analysts and people at other banks. Those are businesses in which Mr. Diamond spearheaded an ambitious expansion but where Barclays remains a second-tier player. But other changes are driven more by polishing the bank's tarnished image than they are by the need to boost profits. A few business lines that don't seem "socially useful" are likely to end up on the chopping block, executives say. For example, Barclays plans to retreat at least in part from the lucrative trading of "soft commodities" such as coffee, executives say. That is a concession to mounting criticism that speculative trading in those commodities contributes to food-price inflation. "We're a big player, but does it pass the smell test of what society would think of this?" a senior executive said. Mr. Jenkins is also expected to trumpet plans to dramaticallyscale back Barclays's tax-planning business, in which it advises clients on how to minimize their tax burdens. The bank will no longer help clients put together transactions that have no businesspurpose other than reducing taxes. "Such activity is incompatible with our purpose," Mr. Jenkins will say on Tuesday, according to the extract of his speech. But the bank isn't expected to exit the business altogether. It will continue to offer tax-minimizing advice. People familiar with the matter say the business has been hiring employees recently. Putin Turns Black Gold Into Bullion as Russia Out-Buys World (Bloomberg) Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty. White House Warns Coming Austerity Will Hit Economy Hard (Reuters) Automatic government spending cuts due to go into effect March 1 unless Congress acts to prevent them would bite deeply into programs affecting many Americans, such as law enforcement, small business assistance, food safety and tax collection, the White House said on Friday. The administration urged Congress to blunt the effect of the reductions, which the White House said would slash non-defense programs by 9 percent across the board and defense programs by 13 percent, the White House said. "These large and arbitrary cuts will have severe impacts across the government," the administration said in a statement. World's most prolific stripper calls it a day (DM) For two decades, the Liverpudlian father-of-three has been the Usain Bolt of the naked dash. In 1995, he leapt naked on to Fred Talbot’s weather map on daytime TV show This Morning, and a year later he appeared nude on the green during the Open at Royal Lytham. Then, in 2004, he was fined £550 for trespassing after streaking across the pitch at the Super Bowl in Texas – a match watched by 130 million people in 87 countries. For good measure, Mark has also stripped off at Wembley, Wimbledon and Ascot. ‘There’s no major venue or event I haven’t done,’ he says proudly. ‘But I’m nearly 49 now and my children have begged me to stop. It’s time. I’m not ready for my slippers just yet, but gravity’s against me.’ Treasury Pick Lew Faces Grilling on Citi Bonus, Cayman Account (Reuters) Jack Lew, President Barack Obama's pick to be U.S. treasury secretary, is expected to come under fire for the administration's budget policies and a nearly $1 million bonus he received from bailed-out bank Citigroup when he testifies on Wednesday before a Senate panel vetting him for the job. The hearing will briefly become ground zero in the pitched political battle over the federal budget, with Republicans set to attack over what they contend is Lew's devil-may-care attitude to reducing the U.S. budget deficit. "He'll be used as a political ping-pong ball," said Ted Truman, a senior fellow at the Peterson Institute for InternationalEconomics who served briefly as an adviser to Obama's former treasury secretary, Timothy Geithner. Treasury Eases Off On Bank Rules (WSJ) The proposal, which will be subject to comment before becoming a final rule, is likely to insist that financial institutions gather beneficial ownership information—who is in charge and who profits—on new corporate accounts, officials said. But in a move that could assuage some industry concerns, financial institutions wouldn't have to vet that ownership data for accuracy. Instead, they would rely on the customer to vouch for the information. With a Focus on Its Future, Financial Times Turns 125 (NYT) On Wednesday, The F.T. is celebrating its 125th birthday. The newspaper’s London headquarters along the south bank of the Thames will be lit up in pink, the color of the paper on which it has been printed since shortly after it was founded. There will be a few parties — understated, of course, for these are straitened times in the City of London, and challenging ones for the newspaper industry. Waxing Our Way To The ER (Salon) A new study from the University of California-San Diego reveals that “Emergency room visits due to pubic hair grooming mishaps,” including “lacerations,” increased fivefold between 2002 and 2010, sending an impressive 11,704 pube-scapers to the E.R. The culprits? Scissors and hot wax did some of the damage, but plain-old non-electric-razors accounted for the lion’s share, at 83 percent...The study also revealed that below-the-belt grooming isn’t just for adult ladies anymore – men accounted for 43.3 percent of the injuries, and almost 30 percent of them were girls under the age of 18. To avoid becoming yet another harrowing grooming gone bad statistic, the researchers advise hair removal aficionados to “Pay attention to where you’re placing that razor. Invest in a non-slip bath mat. And don’t shave while under the influence of drugs or alcohol.”

Opening Bell: 12.7.15

Samsung insider trading probe; Martin Shkreli; SocGen says buy oil; "Man Caught Trying To Have Sex With Campervan"; and more.