Opening Bell: 01.07.09

Author:
Updated:
Original:

Bank of America Sells China Bank Stake (Reuters)
BAC scored $2.83 billion in exchange for its holding in China Construction Bank.
Main Citadel Hedge Funds Dropped Estimated 53% In '08 (Dow Jones)
Dow Jones tells you what we did a week ago: Citadel's Kensington and Wellington funds lost around 9 percent in the first 24 days of December. DJ is under the impression that adds up (down?) to an approximately 53 percent loss for the year, though we're thinking it's more like 57.5. Either way, that's a job well done.
Madoff Tried to Stave Off Firm's Crash Before Arrest (WSJ)
"Ten days before his arrest, Bernard Madoff received $250 million from a man who helped give him his start on Wall Street, a move that shows how the investment manager tried to raise cash to stave off his firm's collapse.
Mr. Madoff received $250 million around Dec. 1 from Carl Shapiro, a 95-year-old Palm Beach, Fla., philanthropist and entrepreneur who is one of Mr. Madoff's oldest friends and biggest financial backers, according to people familiar with the matter.
It isn't clear whether the sum was a loan or an investment, though people familiar with the matter say Mr. Madoff told Mr. Shapiro that he would be paid back quickly with interest or a gain. But none of the money was repaid, according to the people. Mr. Shapiro has personally lost an estimated $400 million from the Madoff fraud, including the $250 million. His charitable foundation has lost an estimated $100 million or more."


Credit Suisse Urged Investors To Withdraw From Madoff (Bloomberg)
"Credit Suisse Group AG, whose clients lost almost $1 billion in Bernard Madoff's alleged swindle, urged customers more than eight years ago to withdraw cash from his firm because the bank couldn't determine how he made money, said three people familiar with the matter."
It's not even a point of contention anymore: there were people who saw that Madoff was effectively full of shit and they weren't willing to take the risk of exposing their clients to him. What remains to be seen in how certain feeder funds didn't figure it out, and how the SEC remained clueless to the scheme; the latter becomes down right appalling when one considers a letter was sent specifically addressing the subject.
No 'Value' In Van Biema's Multi-Strat Hedge Funds (FINalternatives)
The former Columbia professors funds have been suffering this year, with his newest, "Asia Value Fund" (which debuted in August) already down 18.3%.
"Barclays said emerging markets was the worst-performing strategy in 2008, losing 39.34% through November. It was the best-performing strategy of 2007."
The Barclays sentiment is something that was echoed by PIMCO as they announced their intent to focus on more developed markets:
"PIMCO, the world's largest bond fund manager, is still cutting its exposure to emerging markets and turning to high-grade investments in Europe and the United States, the firm's Asia chief executive said on Wednesday."
ADP Payroll Numbers (Bloomberg)
We're going to see the ADP payroll numbers today at 8:15ET, with government numbers on Friday. The numbers for nonfarm payroll are -750k to -300k (by consensus), there hasn't been a great deal of speculation though on what the ADP numbers are going to look like.
Alcoa Drives Futures Down (MarketWatch)
"Alcoa's production and job cuts announcement came out after the bell last night and that is set to weigh down the market today, in addition to some general edginess ahead of the ADP private sector payrolls report," said Martin Slaney, head of derivatives at London-based GFT."
Alcoa's move will include "the elimination of about 15,000 jobs, more plant closures, plans to sell assets and a 50% cut in capital expenditures to contend with the sustained recession."
Austria's 'Woman on Wall St.' Now Out of Sight (NYT)
Shockingly, the disappearance probably has something to do with starts with a 'M' ends with an 'adoff.'
--William Richards

Related

Opening Bell: 04.05.12

Falcone Says Bankruptcy Is an Option for LightSquared (Bloomberg) Phil Falcone said he may consider voluntary bankruptcy for LightSquared Inc., the broadband wireless venture majority owned by his hedge fund that has been derailed by regulators. “There are arguments that we would be better off in bankruptcy than not,” Falcone said in an interview. “LightSquared, if I have to, I’ll put it into bankruptcy. I don’t care,” adding that he would maintain control of the Reston, Virginia-based company if it filed. Jobless Claims Decline (WSJ) New applications for jobless benefits fell to the lowest level in nearly four years last week, further evidence that U.S. employers likely added a healthy number of workers to their payrolls in March. Initial jobless claims decreased by 6,000 to a seasonally adjusted 357,000 in the week ended March 31, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires predicted that 360,000 new claims would be filed last week. Morgan Stanley Tries to Stave Off Ratings Cut (FT) James Gorman, Morgan Stanley’s chief executive, has been in discussions with Moody’s in an attempt to maintain its credit ratings and stave off a downgrade that could diminish the bank’s ability to buy the rest of Citigroup brokerage Smith Barney, according to people familiar with the matter...Morgan Stanley would most likely have to issue debt to fund the purchase, people say. That would become more expensive if Morgan Stanley is downgraded. Moody’s put Morgan Stanley, along with five other banks, on review for a downgrade in February. The bank could see its rating reduced by as many as three notches to Baa2 - two levels above junk status. A downgrade would also force Morgan Stanley to provide additional collateral to back its vast derivatives business, where it acts as a counterparty. JPMorgan Investment Bank Chief Widens Pay Lead on Rival (Bloomberg) Jes Staley, chief executive officer of JPMorgan’s investment bank, beat his Bank of America counterpart in compensation after boosting earnings amid a market slump. Staley’s $16 million award for 2011 almost held steady from the $17 million he made the previous year as profit at the firm’s investment bank climbed 2.3 percent to $6.8 billion. Bank of America co-chief operating officer Thomas K. Montag’s pay dropped 25 percent to $12 million after profit at the lender’s investment bank plunged by more than half to $2.97 billion. Gorman's Pay Falls (Bloomberg) Morgan Stanley Chief Executive Officer James Gorman’s compensation for 2011 totaled $10.5 million, a 25 percent cut from 2010 as the firm’s shares fell by almost half. Gorman, 53, got $5.04 million in restricted shares, and $1.94 million in shares tied to company performance, according to a proxy filing today from the New York-based investment bank. He also received a deferred cash bonus of $2.72 million that can be clawed back, in addition to his $800,000 salary. He didn’t receive an immediate cash bonus. Mets in Opening Day ticket panic (NYP) The Mets are so terrified by the embarrassing prospect of playing to empty seats at today's opener, they've made an Amazin' "buy one get one free" pitch. Some 15,000 of their fans have been offered one free seat for Saturday's or Sunday's Atlanta game in exchange for every ticket they buy for today’s opener. Plenty of the 41,880 seats for this afternoon’s game at Citi Field against the Braves were still available early today. If the Mets don’t sell out, it will be the first home opener since 1997 that didn’t fill their stadium. Madoff wives to face trustee claims in Ponzi case (Reuters) The trustee seeking money for victims of Bernard Madoff's Ponzi scheme, who lost an estimated $20 billion, may pursue claims against wives of the imprisoned swindler's sons, a U.S. federal court judge said on Wednesday. U.S. Bankruptcy Judge Burton Lifland in Manhattan said the trustee Irving Picard may pursue about $43 million of claims against Deborah Madoff, who married Andrew Madoff; and $33 million of claims against Stephanie Mack, the widow of Mark Madoff. Germany, Switzerland Sign Tax Plan (WSJ) Germany and Switzerland signed a new tax deal which allows wealthy Germans to retain their anonymity, while generating billions of euros in tax revenues for Berlin and ending a bruising dispute between the two neighboring countries over tax evasion and bank secrecy. The deal comes after Berlin and Bern agreed on last-minute amendments to a pact reached last summer in an effort to make it more appealing to German opposition leaders, who said Thursday they plan to veto it. "We believe it would be irresponsible to sign this deal, which is a slap in the face of every honest taxpayer," said Sigmar Gabriel, leader of the Social Democrats. Mega Millions ‘winner’ Mirlande Wilson's lawyer: 'I cannot say with any certainty this ticket exists' (NYDN) McDonald’s worker who claims she has a $218 million-winning Mega Millions ticket called a huge press conference Wednesday - and then arrived late only to tell the press to leave. Her lawyer announced to the mystified journalists packed into his Baltimore law office that the purpose of the press conference was “to ask you all to go home.” Mirlande Wilson, 37, of Maryland, who is said by coworkers to crave attention, hit one jackpot: a chaotic scrum of reporters and camera crews waiting to talk to her. But she never spoke. Asked if this was her plea for 15 minutes of fame, she shook her head. Her lawyer, Edward Smith, said, “no, she doesn't want 15 minutes of fame." Instead, he said, she would "like you all to go home." For the record, Smith says he hasn’t seen the purported ticket either. “I cannot say with any certainty this ticket exists,” he said, unreasurringly. Wilson has told various conflicting stories about how she came by her alleged ducat. She told a TV station she bought it at a 7-Eleven store for herself. Then she said a coworker purchased it for her alone while separately buying tickets for the pool organized at her McDonald’s in Baltimore. “I thought I'd play one dollar by myself,” she told the Daily News. She has said she definitely won; she thinks she won; she has the ticket at home; she stashed the ticket at McDonalds; and she has it in another, unspecified secret “safe” place. On Monday, she told the News that she hasn’t even checked her ticket against the winning numbers.