Banks Need New Capital on Housing Dip, Whitney Says (Bloomberg)
Banks aren’t prepared for a “double-dip” in housing, which “it looks like we are having,” Whitney said Bloomberg Radio’s The Hays Advantage. “They need higher capital,” said Whitney. Whitney said the economy is reacting from “chronic structural problems” including high unemployment that are unlikely to be addressed through monetary policy. “There’s nothing more important to the economy than unemployment,” said added. “You have to make structural changes in the economy to address that problem. They’re not monetary issues.”
Former Citi Exec Got $10M to Advise Barclays on Lehman Deal (WSJ)
In September 2008, Michael Klein got a killer gig just two months after leaving Citigroup: advising Barclays Group PLC on its acquisition of freefalling Lehman Brothers Holdings Inc.’s broker-dealer business. He also got a killer fee. Klein got $10 million for his work, a job opportunity made possible only after Citi agreed to waive a non-compete agreement he had signed as part of leaving his job as head of the bank’s institutional clients group.
Merrill Mauls Morgan Stanley in Clash of U.S. Brokerage Titans (Bloomberg)
Merrill Lynch produced $315 million more profit from its brokerage in the first half than Morgan Stanley with 2,900 fewer financial advisers, according to company filings. Its pretax profit margin, 16.7 percent for the same period, is more than double Morgan Stanley Smith Barney’s 7.8 percent.
Investors Head for Bunkers, Driving Up 'Shelter Shares' (WSJ)
Amid the market tumult, a handful of stocks have seen their share prices ratchet up to record highs in recent weeks. And many of them are connected by a curious, if disconcerting, thread: Between them, they provide an investor with essentials for any respectable fallout shelter—makers of bottled water, canned goods, dehydrated broth, gas masks and auxiliary generators. A portfolio of the 18 companies that reached their peaks in the past month would be up about 24% this year, compared with the broader market's 4.5% decline, a sign some investors may be taking the prospects of financial Armageddon more seriously than one might think.
AXA cuts Goldman stake by half (AFP)
French insurer Axa has cut its holdings in Goldman Sachs by roughly one half, according to documents filed with the Securities and Exchange Commission. Axa, which had been Goldman's largest shareholder, sold more than 14 million shares between January and June, reducing its stake to 2.8 percent from 4.8 percent, the documents showed. BlackRock and T Rowe Price have also cut their holdings in Goldman Sachs.
'Spiderman' arrested for scaling Sydney skyscraper (NYP)
A French skyscraper climber nicknamed "Spiderman" was arrested Monday after scaling a 57-story building in Sydney with his bare hands. He climbed the building in about 20 minutes, as dozens of people watched from below. "I'm sad he's been arrested, but hopefully he'll get out soon and we can have some champagne," said his agent, Max Markson.
German Officials Blast Banker's Remarks as Racist (AP)
Thilo Sarrazin of the Bundesbank came under fire for telling the weekly newspaper Welt am Sonntag that "all Jews share the same gene." He also said Muslim immigrants across Europe were not willing or capable of integrating into western societies. Top German officials and immigrant leaders on Sunday condemned remarks by a board member of Germany's federal bank as racist and anti-Semitic. Chancellor Angela Merkel said the Bundesbank should discuss dismissing the banker.
Druckenmiller Sends Millions to Children, Robin Hood, New York University (Bloomberg)
Last year, Druckenmiller shifted $700 million of his own money to his family foundation. Before the transfer, the foundation had assets of about $6.5 million. Transferring a quarter of his reported net worth to the nonprofit earned Druckenmiller the Chronicle of Philanthropy’s No. 1 ranking of largest individual charitable contributions in 2009. That year, he and his wife, Fiona, gave $100 million to New York University’s Langone Medical Center to create a neuroscience institute.