Opening Bell: 11.16.10
General Motors Raises IPO Price to $32-$33 a Share (CNBC)
Previously, the company had estimated the price range for the offering of 365 million shares of common stock within the range of $26.00 to $29.00 per share. The company also increased the size of its Series B mandatory convertible junior preferred stock offering to $4 billion from $3 billion...A source familiar with the matter told CNBC Monday that after ten days of investor presentations and a growing sense of optimism about the offering, the underwriters opted to raise the price range high above its original level.
Fed officials defend $600bn stimulus (FT)
The Federal Reserve has deployed two of its most senior officials to defend its new $600bn round of quantitative easing in rare on-the-record interviews that reveal the bank’s concern over domestic and international criticism of the policy. Janet Yellen, Fed vice-chair, and William Dudley, president of the New York Fed, dismissed concerns that quantitative easing was aimed at weakening the dollar or that it could ignite inflation. Mr Dudley dismissed concerns that the Fed’s policy could lead to inflation, saying that the central bank has the tools to withdraw the additional stimulus if it needs to. “We are very, very confident that those tools will be completely effective at keeping inflation in check,” Mr Dudley told the New York Times. “We are completely willing to use those tools, when the time comes, to prevent an inflation problem. Higher inflation is not a way out. It is not a solution.” Ms Yellen also said the Fed was not trying to generate above-target inflation. “I am not happy to see us caught up in a political debate. But Congress has assigned us tasks which we need to carry out as best we can. To fail to take action that is in our power that we, in our best judgment, believe to be helpful to the economy – that would be political,” she told the Wall Street Journal.
China's 'State Capitalism' Sparks Global Backlash (WSJ)
Charlene Barshefsky, who as U.S. trade representative under President Bill Clinton helped negotiate China's 2001 entry into the World Trade Organization, says the rise of powerful state-led economies like China and Russia is undermining the established post-World War II trading system. When these economies decide that "entire new industries should be created by the government," says Ms. Barshefsky, it tilts the playing field against the private sector.
Paulson Trims Bank Of America, Entire Goldman Stake (Bloomberg)
Paulson sold 30 million Bank of America shares in the quarter, or about 18 percent of his stake, according to a regulatory filing yesterday. The billionaire’s position in the Charlotte, North Carolina-based bank was valued at $1.8 billion as of Sept. 30. Bank of America shares fell 8.8 percent in the quarter...Paulson’s fund also cut its Citigroup stake by 16 percent, yesterday’s filing showed. The firm still owned $1.7 billion in shares of the New York-based bank. Paulson trimmed his Wells Fargo stake by 11 percent, holding 15.5 million shares in the San Francisco-based bank valued at $389 million as of Sept. 30. He cut his position in JPMorgan Chase & Co. by 29 percent, keeping a $190 million stake in the New York company, and sold his entire holding in New York-based Goldman Sachs, valued at about $144.4 million at midyear.
Morgan Stanley's Net `Queen' Meeker Predicts Mobile-Web Boom (Bloomberg)
Mary Meeker will predict a $50 billion online advertising boom in an address at the annual Web 2.0 Summit in San Francisco today. The Morgan Stanley analyst will say as well that mobile commerce may gain market share faster than traditional online retailing.
UBS May Lose $41 Billion Deposits Over Tax Deals (AP)
UBS says customers from Germany, France, Italy, Austria and Britain made net withdrawals worth 20 billion francs over the past years. The bank said Tuesday that "15-40 billion francs are still at risk as a result of changes in the tax regulations."
Prince William To Marry Girlfriend Kate Middelton (Reuters)
William, 28, the elder son of heir-to-the-throne Prince Charles and the late Princess Diana, and Middleton, 28, daughter of self-made entrepreneurs, became engaged while on holiday in Kenya last month. The wedding will take place in the spring or summer of 2011, in London...William, who is currently serving as a helicopter search-and-rescue pilot in the Royal Air Force, met Middleton when they shared a house at university in Scotland in 2001. They split up in 2007 because, newspapers said, Middleton, who has been dubbed "waity Katie" by the British tabloid press, was getting fed up of waiting for William to propose, but they soon got back together.
Bailout Panel Warns of Bank Mortgage Losses, Urges Stress Tests (Bloomberg)
“If document irregularities prove to be pervasive and, more importantly, throw into question ownership of not only foreclosed properties but also pooled mortgages, the result could be significant harm to the financial stability,” the Congressional Oversight Panel for the Troubled Asset Relief Program said in a report today. “Bank regulators should also conduct new stress tests on Wall Street banks to measure their ability to deal with a potential crisis,” the report continued.
Securitization Industry Set To Defend Practices (WSJ)
The American Securitization Forum, a trade group for the securitization industry, is set to release on Tuesday a 28-page defense of widely used practices for bundling mortgages into securities. The securitization process and foreclosure-documentation practices are likely to face criticism from lawmakers at a Senate Banking Committee hearing Tuesday.
Bond Market Defies Fed (WSJ)
"The recent run-up in bond yields is worrying to many," said Dan Greenhaus, chief economic strategist at Miller Tabak, a New York trading firm, but "you need to keep it in context of what happened before the Fed moved."
