Opening Bell: 12.16.08

Author:

Goldman Sachs Reports Earnings Per Common Share of $4.47 for 2008, Fourth Quarter Loss Per Common Share Was $4.97 (Market Watch)

Goldman Sachs today reported net revenues of $22.22 billion and net earnings of $2.32 billion for the year ended November 28, 2008. Diluted earnings per common share were $4.47 compared with $24.73 for the year ended November 30, 2007. Return on average tangible common shareholders' equity (1) (ROTE) was 5.5% and return on average common shareholders' equity (ROE) was 4.9% for 2008.
Goldman Sachs reported fourth quarter negative net revenues of $1.58 billion and a net loss of $2.12 billion. The diluted loss per common share was $4.97 compared with diluted earnings per common share of $7.01 for the fourth quarter of 2007 and $1.81 for the third quarter of 2008.

Full results from GS after the jump.
Heading For Zero (Reuters)
Bald has had a tough couple of months, and it doesn't look like it's getting any easier for the little fella: the Fed is looking to lower interest rates today, which means money is getting dangerously close to free. Free isn't often something the Fed endorses: the last time the discount rate and fed funds rate were this low was 2001/2002 - before that there had been 30 years of numbers considerably higher.
"Economists expect the central bank to lower its target for benchmark overnight rates by at least a half-percentage point, to 0.5 percent, and clearly state it will aggressively use unconventional measures to restore growth."
Bank Of America To $9? (Reuters)
"Bank of America Corp ... was rated underperform by Friedman, Billings, Ramsey Group Inc analyst Paul Miller in a note, citing the bank's "thin tangible common equity" as a chief concern."
Shorting of coming out with the news that Pandit is taking over the Charlotte giant, Bank of America is going to stay stable. Though, in my most humble of opinions, if required to take ownership or possession of anything called a "spirit point" I would suggest rioting.

National Lampoon Chief Faces Charges (NYT)
While the movies of recent have by and large inspired spontaneous suicide, this is the company that helped bring you the "Vacation" movies and "Animal House." For Christ's sake people: Animal House.
Apparently Laikin (CEO) was charged with Securities Fraud on Monday as he and his cronies (in Pennsylvania none the less) sought to artificially inflate equity prices. Trading was halted on Monday at 9:30 @ $.73 a share.
Merrill Oil Analyst Trying To Piss Off OPEC (Bloomberg)
Famed ML analyst Francisco Blanch lets it be known that he's calling for $25 barrels in 2009, but cautions that if shit takes off too fast we'll see prices in the $150's. Blanch is best known for calling the oil high at $147.25, and has since then been revered for his magic powers. Like that little Leprechaun.

Russia Slowly Devalues Currency: Second Announcement This Week (NYT)
This is actually a pretty decent plan, despite its coming from the Soviet Bloc: they're devaluing their currency slowly so as to avoid a flight to safety. What's not working about this is that they're doing it in too many steps, too slowly.
Since connecting all the pieces isn't the strength of many, I'm going to spell this out for you: Russian Hookers *cough* wives are cheaper, people. Order up. Fed Ex away.
GS Annual and Fourth Quarter 2008 Results [PDF]
--William Richards

News

JPMorgan Profit Slips (WSJ) J.P. Morgan reported a profit of $5.38 billion, down from $5.56 billion a year earlier. On a per-share basis, earnings were $1.31, up from $1.28 as the share count outstanding declined. The latest quarter included a net 8-cent per-share loss tied to litigation expenses and changes in the value of the bank's debt. Analysts polled by Thomson Reuters expected a per-share profit of $1.18, excluding debt-related charges. Revenue rose 6.3% to $27.42 billion. Analysts were looking for $24.68 billion. Wells Fargo reports higher first-quarter profit (Reuters) Wells Fargo, the nation's fourth-biggest U.S. bank, said net income was $4.25 billion, or 75 cents a share, in the quarter, compared with $3.76 billion, or 67 cents, a share in the same period a year earlier. The average estimate from analysts was 73 cents per share. JPMorgan Said to Transform Treasury to Prop Trading (Bloomberg) Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said. Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms. Bank Bonus That Tops Salary May Be Banned by EU Lawmakers (Bloomberg) Governments and lawmakers in the 27-nation EU are considering rules for lenders that would go far beyond international agreements approved by the Basel Committee on Banking Supervision. Denmark, which holds the rotating presidency of the EU, has proposed empowering nations to set surcharges of up to 3 percent across their banking systems. Karas yesterday suggested adding language to the legislation that would ban banker bonuses that exceed fixed pay, following calls from other lawmakers to rein in excessive compensation. IMF Lifts Growth Forecast, Cautiously (WSJ) Christine Lagarde, managing director of the International Monetary Fund, said the world economy is marked by "a high degree of instability" even though prospects for global growth are better than they were a few months ago. In an interview with The Wall Street Journal, Ms. Lagarde said the IMF, which marked down its 2012 forecast for global growth in January to 3.3%, has now marked it up to reflect improving conditions in the world economy. But she said the new forecast, to be released next week, remains more pessimistic than the one it made last September, which predicted 4% growth. Europe remains the biggest single risk to the global economy, the former French finance minister said. Hedge Fund Driver Guns DownArmed Robber (NYP) A retired NYPD lieutenant blew away a drugstore bandit yesterday as the suspect tried to gun down three police officers during a foot pursuit, sources said. Thomas Barnes, Barnes — a driver for hedge fund manager Philippe Laffont, was filling his tank at the BP station on East 119th Street and First Avenue at around 11 a.m. when he saw gunman Rudolph Wyatt running from the store, and sprang into action. He crouched behind his hedge-fund boss’ Mercedes SUV and squeezed off three shots, killing Wyatt, 23. The trigger-happy thug — wanted on warrants for two other shootings — lay dead in a pool of blood on the sidewalk wearing a black stocking mask with a wad of stolen cash spilling out of his pocket, witnesses said. “Part of the back of his head was missing. He had a large head wound and there was tons of blood,” said witness John Brecevich, 59, owner of the Original Patsy’s restaurant nearby. “It was a scene straight out of NYPD Blue.” Trustees Aim For MF Execs (NYP) The trustee tasked with clawing back money for burned customers of MF Global is training his sights on the brokerage firm’s executives — a list that likely includes former CEO Jon Corzine. In a statement yesterday, trustee James Giddens said he is considering pursuing claims against “certain responsible individuals” who worked for MF at the time customers’ trading accounts were improperly tapped. Kent Jarrell, a spokesman for Giddens, declined to name names but said the trustee is considering civil suits against “officers, directors or other employees” of both the brokerage firm and the holding company. Fed Officials Differ on Need to Keep Rates Low to 2014 (Bloomberg) William C. Dudley, president of the New York Fed, and Vice Chairman Janet Yellen said the 2014 time-frame is needed to lower unemployment from 8.2 percent. Minneapolis Fed President Narayana Kocherlakota said rising inflation may prompt an interest-rate increase as early as this year, while Philadelphia’s Charles Plosser said policy should hinge on economic performance, not a calendar commitment. Newark Mayor Cory Booker: Race into home fire was a "come to Jesus moment" (CBS) Booker arrived home last night to discover his next-door neighbor's house on fire, and rescued a young woman trapped upstairs by carrying here through the flames, suffering second-degree burns in the process. The mayor's security team discovered the fire and pounded on the door to alert residents, when an elderly woman said that her daughter was trapped upstairs. At first, Newark Police Detective Alex Rodriguez would not let Booker into the burning house. "He basically told me, 'This woman is going to die if we don't help her,' and what can I say to that?," Rodriguez said. "I let him go and without thinking twice, he just ran into the flames and rescued this young lady." Booker said that as he jumped through the kitchen on the second floor, "I actually wasn't thinking. When I got there and couldn't find her in all the smoke, looked behind me and saw the kitchen really erupting with flames all over the ceiling, that's when I had very clear thoughts that I'm not going to get out of this place alive and got ... very religious. He admitted he was "not gentle" with her - "I just sort of threw her over my shoulder and dragged her through the kitchen."

News