Skip to main content

Opening Bell: 12.23.08

  • Author:
  • Updated:

Madoff Investor Sues SEC (Reuters)
"Phyllis Molchatsky, a 61-year-old retiree from Valley Cottage, New York, is seeking $1.7 million in damages from the agency"
It looks like investors may have to return up to six years of withdraws from Madoff's funds. Sadly, I don't think holding the SEC responsible for this would solve anything in the long run. We can't set the precedent that the SEC will be financially responsible for the monitoring of corporations: it would be an effective shift of risk from the investor to the government.
Irregularity Found At IndyMac (NYT)
Tales of palace intrigue at IndyMac, where two months before the collapse of the bank it appears as though a regulator "allowed the bank to backdate a capital infusion and gloss over its deepening problems".
Mortgage Activity Surges At US Banks (FT)
The recent Fed move to buy mortgage bonds has given the companies just enough of a sense of security to start re-fi's, and apparently business is booming. Chief restrictors of access to credit are going to be history and score, it appears - did mortgage companies learn their lesson?
Learning To Re-Count (WSJ)
This is a phenomenal f*ck up. Either FASB admits that the valuation model as was sucked and thus the change is warranted, or they stand behind the model as was and admit that changing it is flat f*cking stupid. Either way, counting by two's may get you to a million quicker, but it doesn't leave you with any more.
Coloradans Hear Noises (AP)
"Noises heard on plane that veered off Colo. runway"
Talks Of CDS Exchange Continue (Reuters)
Both ICE and CME are continuing their efforts in building a CDS platform.
TPG Will Let Clients Trim Cash Pledges by Up to 10% (WSJ)

In a Monday letter to investors -- who include the California Public Employees' Retirement System, General Electric Co.'s pension fund and the government of Singapore -- TPG said it recognizes that "in the current highly challenging environment the global market declines have placed significant stress on many of our limited partners."
The firm, whose portfolio includes luxury retailer Neiman Marcus and gambling outfit Harrah's Entertainment, has offered several concessions. It will cut annual management fees -- ranging from 1% to 1.5% of assets -- by about one-tenth, regardless of whether investors choose to reduce commitments. The firm also said it won't call more than 30% of an investor's total commitment during 2009, unless approved by the firm's advisory committee.

Toyota Warns Of Operating Loss (FT)
For the first time in some 68 years the Japanese manufacturer is showing an Operating Loss, which naturally leads to debate, and the inevitable question: What do they have that we don't? Answer: A stable operating environment and a Balance Sheet that doesn't look like a fourth grader drew it up with Crayons.
--William Richards