Goldman Eyes Its Buffett Tab (WSJ)
The bank is considering paying back a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc. that bolstered the securities firm during the worst of the financial crisis, according to people familiar with the situation...One reason for the potential move: Hefty dividend payments of 10% a year on Berkshire's "perpetual" preferred shares have cost Goldman about $1 billion so far. The payout is equivalent to more than $1.3 million a day—or $15 a second.
Profit At Credit Suisse Slumps (MarketWatch)
The bank reported a 74% drop in third-quarter net profit, falling short of market expectations as its investment-banking arm was hit by lower client activity. The group reported a net profit of 609 million Swiss francs ($633 million) in the latest quarter, compared to 2.35 billion francs a year earlier, while core net revenue dropped 30% to 6.28 billion francs. On a pretax basis, profit fell at all three of its divisions — private banking, investment banking and asset management.
Geithner's Goal: Rebalanced World Economy (WSJ)
Geithner said he would use weekend meetings of G-20 finance ministers to advance efforts to "rebalance" the world economy so it is less reliant on U.S. consumers, to move toward establishing "norms" on exchange-rate policy, and to persuade others the U.S. doesn't aim to devalue its way to prosperity.
Guinness Heiress Sued By Hedge Fund Neighbor For Flooding Apartment (NYP)
British brewery heiress Daphne Guinness is being sued by her downstairs neighbors at 995 Fifth Avenue for repeatedly sudsing their $12 million apartment with her bath water. Karim and Tina Samii say since Guinness moved into her $15 million, 4100 square foot apartment in the former Stanhope Hotel in 2008, she's flooded their apartment four times. The first flooding incident was the fault of Guinness's contractors, the suit says, but the other three all happened after the skunk-haired style maven left the bath running and forgot to turn it off. Now hedge fund honcho Samii and his wife want a court order barring Guinness from taking baths - as well as over $1 million in damages.
Avenue Capital Group to Raise Fund to Invest in High-Yield Debt (Bloomberg)
The firm has hired Randy Takian from Morgan Stanley to oversee the fund as Avenue looks to diversify its product offerings and potentially raise more portfolios by selling shares to the public, according to people familiar with the decision.
HFT's Don't Front-Run Institutional Clients, Study Says (TM)
FYI.
Banks Face Two-Front War On Bad Mortgages, Foreclosures (Bloomberg)
“It’s going to be trench warfare with years of lawyering,” Christopher Whalen said. “The banks can’t afford to lose.”
French Union Calls For 'Massive' Strike Next Week (CNBC)
Union leaders meet on Thursday evening to plan their next move. Speaking on RMC radio, Bernard Thibault, head of the powerful CGT union, called for a new day of protests next week. "The government remains intransigent. We need to continue with massive action as soon as next week," he said. "We will ask the unions for strong action that will allow people to stop work and go on to the streets."
Buy-Outs Look Set To Divide Private Equity (FT)
David Rubenstein, co-founder of the Carlyle Group, has predicted the private equity industry will be split between the hunters and hunted, as the big global groups diversify by acquiring smaller niche investment companies. “I think more and more of the big firms will become broader alternative asset managers,” said Mr Rubenstein, who declined to comment on the AlpInvest auction. “We’ll see more deals where private equity firms buy companies to bolt on, and start new ones to become broader asset management firms.”
Bair: US Bank Rules To Be Stricter Than Basel (Reuters)
"I have fairly high confidence there will be higher capitalization requirements for systemic institutions," or large U.S. banks, said Sheila Bair, head of the Federal Deposit Insurance Corp, speaking at Harvard University on Wednesday evening. "The standards aren't as high as many of us would have liked, but they are a big, big improvement," she said. She added that "I do not agree the new requirements will reduce the availability of credit or raise borrowing costs," as some critics have charged.
