Opening Bell: 10.07.10
El-Erian: More Fed Action Coming, But it May Not Help (CNBC)
"The rocket has to achieve escape velocity," he said. "It's not enough for it to go up—it has to go up sharply to achieve escape velocity. The question is: What's the fuel for that escape velocity? There's good fuel, which is private-sector 'animal spirits.' That is what we all should be looking for. There's bad fuel, which is continuous policy injections, because that has consequences—the dollar, gold, etc.—and the judgment becomes whether that characterization is correct. Do we really need escape velocity or not?"
Man Group Jumps On Speculation Of Takeover By US Bank (Bloomberg)
Apparently there as been “vague talk a U.S. bank's possible interest in bidding for them."
Roubini: 40% chance of double-dip recession (MarketWatch)
There is a 40% probability of a double-dip recession, but you don't need one for the global economy to feel like it is in a deep, continuing recession, Nouriel Roubini said Wednesday. He said external shocks, such as another Greek credit crisis, perhaps with problems in Spain, Portugal or Ireland, could trigger the shock needed for a double-dip recession. "You don't need another Lehman story, you don't need a major loss," said Roubini at an American Enterprise Institute event. "You can have death by a thousand cuts."
French Pave Way For EU Hedge Fund Deal (FT)
French officials now say that they are prepared to accept the principle of a passport for third-country funds, subject to strict conditions. In particular, Paris insists that it should be the new European Securities and Markets Authority which issues a passport to a third-country fund and then supervises that fund.
Payment To End Wells Fargo Inquiry (AP)
The bank is paying $24 million to end an investigation by eight states into whether lenders acquired by the bank made risky mortgages to consumers without disclosing their perils.
Ex-Hedge Fund Boss Convicted in NYC in Stock Scam (AP)
A jury in Manhattan federal court on Wednesday found 46-year-old Joseph Contorinis guilty of one count of securities fraud conspiracy and seven counts of securities fraud. Prosecutors said he executed illegal trades from 2004 through June 2006 when he acted on information he received from a close friend who was an investment banker. At the time, he managed a hedge fund at an investment advisory firm. Contorinis could face up to 20 years in prison on the most serious charge and millions of dollars in fines when he is sentenced Feb. 4.
Taxpayers Likely To Turn A Profit On Bailout (CNBC)
So that's exciting.
Citadel Fixed-Income Trading 'Positive' - Source (Dow Jones)
Citadel LLC's securities unit has had positive fixed-income trading revenue this year, and has no massive layoff plans in store for its investment-banking unit, a person familiar with the situation said Wednesday. "There is no plan for mass layoffs," the person said. "Citadel is not shutting down Citadel Securities or its fixed-income operations." But the person said there could be staffing changes as the firm is undertaking its annual business review. Such reviews, which take place in the fourth quarter of each year, will decide what adjustments the firm has to make in preparation for the new year.
Economist: Austerity Will Push Euro to $1.50 By The End Of The Year (CNBC)
Warren Mosler, who predicted that the euro would bounce back towards $1.60 in June, when the single European currency was trading at around $1.19, said there was nothing to stop the euro's appreciation versus the dollar, short of a policy response from the European Central Bank. "If it (the euro) keeps going at the rate it's going, it could go to $1.45-$1.50 by the end of the year," he said.
Men Are Rewarded Financially For Being Overweight (WSJ)
Very thin men, on the other hand, tend to get paid less than male workers of average weight. Men earn more as they pack on the pounds – all the way to the point where they become obese, when the pay trend reverses.
Fink says investing now in fixed income is a mistake (Dow Jones via HNM)
"I think over the next five years, moving money into fixed income will be considered a mistake," Fink said. "Interest rates may go down another 30 basis points, but we have achieved most of the decline in interest rates. You could earn a much better return owning large-cap companies paying reasonably large dividend." Fink said he was disappointed at how slow the momentum of economic recovery has been, and that the modest recovery will continue for another two years before economic growth will pick up..."Housing is going to be a drag for three more years," he said.
Geithner Calls for Currency Cooperation Amid Rush to Weaken (Bloomberg)
“More and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies,” Geithner said in a speech yesterday in Washington. Currencies are “inherently a multilateral issue” that is “much easier to solve if countries come together.”
