Opening Bell: 02.06.09

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Madoff Hits Where It Hurts Most: Swiss Bankers (Bloomberg)
"The waitlist at Geneva's Michelin two-star restaurant Domaine de Chateauvieux evaporated after Bernard Madoff's Dec. 11 arrest, along with about 10 billion Swiss francs ($8.5 billion) the city's banks and funds had invested with him.
Bankers canceled six-month-old reservations for holiday parties of a dozen or more, said restaurant manager Esteban Valle. Sales of 5,900-franc aluminum-titanium Zai Spada skis have slumped, and a decline in landings by private jetliners at Geneva International Airport accelerated last month."
Nothing For Something (Reuters)
The US Government got hosed from an investment perspective on AIG and Citi, but both were necessary. Without intervention on behalf of the two banks liquidity would have completely evaporated such that there wouldn't be a need for a stimulus plan at all: there's some things you just can't crawl back from. But, there's always going to be a downside, and there's always going to be people who bitch, moan and yawl about the downside (mostly because their intelligence is such that that's where their capacity ends.)
"The Congressional Oversight Panel report said the Treasury overpaid financial institutions by about $78 billion in its capital injections last year through the Troubled Asset Relief Program.
It paid $254 billion in 2008 in return for stocks and warrants worth $176 billion under the Troubled Asset Relief Program.
[...]
The report showed that the Treasury got the worst deal on second-round investments in American International Group for $40 billion and Citigroup for $20 billion under special aid programs tailored for the two institutions.
For each $100 spent on these two companies. the Treasury received securities worth $41, the report concluded."
Deutsche Bank Sees Cap As Recruiting Plus (FT)
There's going to be a keep your head down mentality in the American banking culture for the next 2/3 years which the Deutsche are seeing as a plus:
"If you are only going to be able to pay a $500,000 bonus, I think talent will be happy to work for us. At the end of the day, this is a people business, about who has the best talent," Ackermann said.


Payroll Numbers at 8:30 (Bloomberg)
Consensus has the loss at 524,000 which would put the unemployment rate at 7.5%.
US Hires Bankruptcy Firms For Autos (FT)
Bankruptcy is really the only viable option for the auto industry right now; I've long been an advocate of a restructure such that the UAW benefits/negotiations get pulled off the table including pensions and continuing health benefits. Both are phenomenal to the employee, granted - but completely toxic to a balance sheet.
"New York law firm Cadwalader, Wickersham & Taft LLP was hired by the US Treasury last month and will consider a range of possibilities for the struggling automakers including the prospect of a bankruptcy funded by the US government, the person said.
Cadwalader is joined by Chicago-based law firm Sonnenschein, Nath & Rosenthal and Rothschild in working with US officials as they prepare to review turnaround plans being readied by the two struggling automakers, the person said."
Number Of Women Could Surpass Men In Work Force (NYT)
"In recessions, the percentage of families supported by women tends to rise slightly, and it is expected to do so when this year's numbers are tallied. As of November, women held 49.1 percent of the nation's jobs, according to nonfarm payroll data collected by the Bureau of Labor Statistics. By another measure, including farm workers and the self-employed, women constituted 47.1 percent of the work force."
RBS Cleans House (Reuters)
"Royal Bank of Scotland ousted seven directors in a boardroom cull Friday to leave the government-backed bank better positioned for its restructuring.
The seven non-executive directors will retire immediately, RBS said, just three days after Philip Hampton replaced Tom McKillop as chairman."

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