Opening Bell: 12.16.10

Author:
Updated:
Original:

Jobless Claims In US Unexpectedly Fell To 420,000 Last Week (Bloomberg)
Applications for jobless insurance payments decreased by 3,000 to 420,000, the lowest in three weeks, Labor Department figures showed today...Fewer firings signal employers may be gearing up to add to their payrolls and help reduce a jobless rate hovering near a 26-year high. While the economy is gaining momentum heading into 2011, Federal Reserve policy makers said this week it isn’t strong enough to reduce unemployment.

Goldman’s Sze raises money for hedge fund (FT)
Morgan Sze, the global head of Goldman Sachs’ biggest proprietary trading desk and one of the bank’s most highly paid employees, has begun raising money for what is expected to be the largest hedge fund launch since the financial crisis began. Mr Sze’s new hedge fund – eagerly anticipated by many in the industry – is to be called Azentus Capital and will based in Hong Kong. Marketers for the flagship fund expect it to start trading with between $1bn and $1.5bn, people familiar with the launch told the Financial Times.

NYT reporter says U.S. also faces 'lost decade' (JT)
There is likely to be another financial crisis like the Lehman shock in the future, Andrew Ross Sorkin said. "I don't want to write a sequel, but I think there will be one. "The saddest reality of doing all these interviews was that I don't think there was remorse," Sorkin said. "A lot of them now call themselves survivors, like cancer survivors or something. But it's such a misplaced idea."

Obama ‘Optimistic’ CEO Talk Will Foster Cooperation (Bloomberg)
“Things were said on both sides that shouldn’t have been and did not further the opportunity to work together,” Cote said as he arrived at Blair House this morning. “This is our chance to do that. I give the president a lot of credit for being the man big enough to say, ‘Let’s restart, let’s work on how do we create a more vibrant economy.’”

Julian Assange Freed On Bail (Guardian)
Justice Duncan Ouseley agreed with a decision by the City of Westminister earlier in the week to release Assange on strict conditions: £200,000 cash deposit, with a further £40,000 guaranteed in two sureties of £20,000 and strict conditions on his movement.

Facebook 2010 Sales Likely To Reach $2 Billion (Bloomberg)
Sales will more than double from 2009, said the people, who declined to be identified because the privately held company doesn’t disclose revenue. Facebook had $700 million to $800 million in sales last year, and the 2010 figure was previously expected to be closer to $1.5 billion, according to two other people familiar with the matter earlier this year.

UAE hotel boasts 'most expensive Christmas tree ever' (BBC)
While the tree alone is worth a mere $10,000, the jewellery adds more than $11m to the value, said the hotel's general manager Hans Olbertz.

Goldman Sachs Won't Face Negligence Suit By Madoff Investor (Bloomberg)
Jerome Goodman, who invested in Madoff’s fund through a company that Goldman bought, can’t pursue a claim that the bank owed him a duty to give reasonable financial advice and failed to warn that he put too much money in the scheme, U.S. District Judge Freda Wolfson ruled Dec. 14 in Trenton, New Jersey.

Foreclosures Show Biggest 5-Year Drop As Process Slows (CNBC)
Foreclosures fell 21 percent in November from the previous month and 14.4 percent from the year before, according to foreclosure tracking web site RealtyTrac.

Banks Falling Short Of Basel Requirements (WSJ)
In a survey published alongside the official texts of its new rules on capital and liquidity standards, the BIS concluded that "Group 1" banks across the world—that is those with over €3 billion in capital—would need a total of €177 billion in additional common equity just to meet the new absolute minimum ratio of 4.5% of risk-weighted assets. This figure rises to €577 billion when the need for a "capital conservation buffer" of another 2.5%—another mandatory part of the new rules—is taken into account.

Spain Pays High Yield To Sell Bonds (WSJ)
The debt agency offered a lower-than-usual €2 billion to €3 billion of the two bonds, 4.85% October 2020 and 4.65% July 2025, a move aimed at limiting the negative impact stemming from higher funding costs and adjusting to lower liquidity towards the year-end. Spain will have one more auction next Tuesday, offering three- and six-month Treasury bills—debt representing the shortest end of the yield curve.

Wall Street Blame Rift May Blunt Impact of U.S. Crisis Panel (Bloomberg)
Democrats and Republicans on the Financial Crisis Inquiry Commission, struggling for months to find consensus behind the scenes, haven’t even been able to agree on whether to include the phrases “Wall Street” and “shadow banking” in the final report. The report is now scheduled to be published in January and is likely to include dissents, FCIC members said yesterday.

Related

Getty Images

Opening Bell: 9.1.16

Banks hack into traders' emotions; EU denies Apple tax is "total political crap"; Goldman Sachs Algorithm is coming for your jobs; Professor denied tenure embarks on hunger strike; and more.

Opening Bell: 05.04.12

BofA Sees $5 Billion Collateral Need in Credit Downgrade (Bloomberg) A two-level downgrade of long-term senior debt ratings would have prompted the bank to post about $5.1 billion of collateral tied to derivatives contracts and other trading agreements as of March 31, the Charlotte, North Carolina-based firm said yesterday in a regulatory filing. It would have had to post an additional $1.1 billion of collateral if trading partners opted to tear up contracts in a two-level cut. RBS claims 'pleasing progress' though loss triples (AP) RBS, 82-percent owned by the British government after a massive bailout in the global the financial crisis, posted a 2011 first quarter net loss of £528 million. The lender said losses soared owing to an increase in the value of its outstanding debt to £2.46 billion. "As RBS's credit spreads tightened during the quarter, a charge of £2,456 million was booked for (our) own credit adjustments," RBS said in a statement. But the bank's underlying performance was brighter, with RBS posting a first quarter operating profit of £1.18 billion. RBS also confirmed that it would repay the last of emergency state loans totalling £163 billion but the British government will still own almost all of the bank after a £45.5 billion bailout following the 2008 financial crisis. "The start of 2012 has shown pleasing progress at RBS within the context of a flat economic environment," chief executive Stephen Hester said in the statement. Employers in U.S. Added Fewer Jobs Than Forecast in April (Bloomberg) Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated. Facebook Targets $96 Billion Value (WSJ) With the pricing, Facebook is anticipated to raise as much as $13.6 billion, above earlier expectations of $10 billion. In a regulatory filing, Facebook said the company would seek to sell 337.4 million shares, with about half of those being sold by founders, employees and investors. The only U.S. issuers that have raised more money in an IPO were Visa Inc. at $19.7 billion in 2008 and General Motors Co. at $18.1 billion in 2010. Zuckerberg Facebook IPO to Make Him Richer Than Ballmer (Bloomberg) So that's exciting. Warren Buffett Has 'No Plans To Invest In Facebook IPO' (CNBC) When asked whether the current attention surrounding Internet IPOs reminded him of the tech stock bubble of the late 1990s, the Oracle of Omaha said, “It is not a bubble ... this is not what we were seeing in late 1999 all the way into 2001. We aren’t in any bubble phase of anything.” Inmates Dance, Deputy Fired (OBJ) Some inmates did the worm, others chose the old school robot. Each dance was performed to the beat of hip-hop artist Usher on command from a now-fired Summit County deputy. The inmate prize: use of a jail microwave. The charges are revealed in an internal affairs report released Wednesday. Deputy Dominic Martucci, 35, was fired for violating the department’s policies, including a mandate that inmates be treated humanely. Martucci is accused of ordering five inmates dance to Usher’s Yeah! song and then inviting other deputies to watch during an early evening shift on April 11. The inmates danced their way to regaining use of a microwave that they had lost earlier that day. Fitch CEO: US Downgrade Not Likely Before Election (CNBC) "We currently have the U.S. on a negative outlook, which actually suggests we think there is the potential for a downgrade," Taylor said in an interview. "It's too early to tell whether that will turn into an actual downgrade or not,” he said. “We think we still need to see what's going to happen through the elections and what actions are put in place subsequent to the elections. I think it's very clear that the U.S. does need to do something to deal with the debt problems built up since the financial crisis," he added. New Ripples For Gupta Case (WSJ) Mr. Gupta's criminal trial for securities fraud and conspiracy is scheduled to begin May 21 and expected to last about three weeks. Mr. Gupta has pleaded not guilty. His lawyer, Gary Naftalis, declined to comment for this article but previously has called the accusations "totally baseless." The Manhattan U.S. attorney's office also declined to comment. Federal prosecutors in Manhattan have taken note of the spike in trading in Goldman, which began as the firm's board concluded a special meeting to approve the deal that afternoon, according to people familiar with the matter. Galleon traders also noticed the climbing stock, conversations recorded on government wiretaps show. "Someone had this before us, someone, whatever went on, something happened," Galleon trader Ian Horowitz told Mr. Rajaratnam in a phone call the next morning, caught on tape by the Federal Bureau of Investigation. Goldman Readies Low-Cost Bond PLatform (WSJ) Goldman is preparing to roll out a bond-trading platform on which it will charge lower fees than on typical bond trades, according to people familiar with the matter, a move that could help retain customers tempted by rival trading venues being set up by BlackRock Inc. and others. AIG Invests $7.4 Billion at 5.3% to Boost Returns, Adds RMBS (Bloomberg) “We continue to be opportunistic with our investments in structured securities in order to improve yields, increase net investment income and offset the impact of a lower interest rate environment,” Wintrob said. BofA Talks Deal On Ex-Broker Pay (WSJ) The former Merrill brokers left the firm after the 2009 takeover by Bank of America and claim they are owed deferred compensation as a result of the deal. They were emboldened last month by an arbitration ruling ordering the Charlotte, N.C., company to pay more than $11 million to two former brokers with related complaints.