Corzine Races To Save MF Global (WSJ)
MF Global was nearing a deal late Sunday night to file for Chapter 11 bankruptcy protection as soon as Monday and sell assets to Interactive Brokers Group, said a person familiar with the matter. The tentative agreement, reached after a marathon weekend of negotiations, could end the short tenure for Mr. Corzine at MF Global...Under the tentative plan, MF Global's holding company would file for bankruptcy protection, the person familiar with the matter said. Interactive Brokers would then likely make an initial bid of about $1 billion during a court-supervised auction, the person said, though the deal was described as complicated and that number could change. The sale would need to be approved by a bankruptcy judge. While the boards of both companies approved the tentative deal on Sunday, there are still other snags that could slow it down, according to participants in the deal. None of MF Global's regulated entities would seek bankruptcy protection, the person said. "There is a handshake, but it [isn 't] done yet," the person said. The odds are high the plan gets executed, but it is "very far from a done deal," the person said.
MF Global Faces Pivotal Days As Firm Mulls Sale (Bloomberg)
“While the pieces are attractive, figuring out potential buyers is a lot harder,” Robert Rutschow, an analyst with CLSA Credit Agricole Securities in New York, said in an Oct. 28 note to clients. “In the current environment, banks can’t even go to the bathroom without permission from their regulator, let alone buy a brokerage firm that was looking to grow proprietary trading and expand risk-taking activities.”
Barclays Third-Quarter Profit Climbs (BW)
Barclays said third-quarter profit increased by 5 percent, beating estimates, even as the sovereign debt crisis hurt investment banking revenue. Pretax profit before debt valuation adjustments in the three months to Sept. 30 increased to 1.3 billion pounds ($2.1 billion) from 1.27 billion pounds a year earlier, the London- based company said in a statement today. That beat the 1.24 billion-pound median estimate of 10 analysts surveyed by Bloomberg. Revenue at the Barclays Capital investment banking unit fell 15 percent to 2.25 billion pounds in the period.
Japan Intervenes To Tame Yen Ahead Of G20 (Reuters)
"We started currency intervention this morning in order to take every measure against speculative and disorderly moves and to prevent risks to the Japanese economy from materializing," Prime Minister Yoshihiko Noda told parliament. The intervention came after the dollar touched a record low of 75.31 yen and pushed the world's main reserve currency up past 79 yen.
Berlusconi Defiant as EU’s Focus Shifts to Italy (Bloomberg)
Berlusconi ruled out early elections and said the current legislature in Rome will last until 2013, according to an interview published yesterday in Corriere della Sera. He said the European Central Bank’s support will only be maintained if his administration follows through on the pledged measures. “Only I and my government can achieve this reform program for 18 months, which is why there is no way for me to stand aside,” the Italian leader told the newspaper.
Kris Humphries among victims of $1.7 million hedge fund fraud (NYP)
Andrey C. Hicks, a 27-year-old hedge fund manager who was invited to the celebrity couple's August wedding, was charged with wire fraud following his arrest Friday in Canada, during a reported attempt to flee to Switzerland. He is accused of misleading investors, which included NBA player and Kim Kardashian husband Humphries, with a fictitious Harvard degree and investment banking job, while diverting cash to his personal bank account.
Sarkozy Criticized For Seeking China's Help (Bloomberg)
Sarkozy reached out last week to his Chinese counterpart Hu Jintao to build support for an enlarged rescue fund designed to solve the region’s sovereign-debt crisis. The leaders talked just hours after a euro-region summit on Oct. 27 ended with an agreement to boost the European Financial Stability Facility to about 1 trillion euros ($1.4 trillion), leveraging existing guarantees by as much as five times. “It’s shocking,” Martine Aubry, the general secretary of the Socialist Party, said in the Sunday newspaper, Journal du Dimanche. “The Europeans, by turning to the Chinese, are showing their weakness. How will Europe be able to ask China to stop undervaluing its currency or to accept reciprocal commercial accords?”
Economist: EU Debt Deal a 'Construct of Madoffian Proportions' (CNBC)
“Now they (EU Leaders) are keen to tap into resources that are not their own to fund this crazy scheme of guarantees, leveraged off guarantees to sell bonds and bank shares that no one may want to buy, (in order) to restore value in the banking system destroyed by other bonds that no one wants to own right now. This is a construct of Madoffian proportions,” said Carl Weinberg, chief economist at High Frequency Economics.
US Weighs Waiting On AIG Sale (WSJ)
The Treasury Department is likely to put off its second sale of shares in American International Group Inc., the insurer bailed out by the U.S. government during the financial crisis, because of unfavorable market conditions, according to people familiar with the situation.
$100 Million for Nabors CEO in Rich Adieu (WSJ)
Eugene M. Isenberg, 81 years old, had been chairman and chief executive of the oil-drilling company since 1987. Late Friday afternoon, Nabors said it was promoting his longtime lieutenant, 57-year-old Anthony G. Petrello, to CEO, but that Mr. Isenberg would keep his job as chairman. The shift triggered a clause in Mr. Isenberg's employment contract, entitling him to a payment of $100 million "as a result of this change in responsibility," Nabors said in a regulatory filing.
Iceland Faces Final Hurdle In $11.4 Payout
The decision by Iceland’s Supreme Court to rule in favor of a crisis bill enacted three years ago “marks the endpoint” to a dispute with the U.K. and the Netherlands triggered by the island’s 2008 financial collapse, Economy Minister Arni Pall Arnason said. The ruling will help repair relations with the two countries, whose depositors risked losing their savings when Iceland’s second-biggest bank collapsed, he said. “It’s clear from these rulings that all depositors, regardless of nationality, residency, nature or amount of their deposit, will get their money back in full,” Arnason said in an interview in Reykjavik. Repayment may start within weeks, he said.
What The Costumes Reveal (NYT)
On Friday, the law firm of Steven J. Baum threw a Halloween party. The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo...a former employee of Steven J. Baum recently sent me snapshots of last year’s party. In an e-mail, she said that she wanted me to see them because they showed an appalling lack of compassion toward the homeowners — invariably poor and down on their luck — that the Baum firm had brought foreclosure proceedings against. In one, two Baum employees are dressed like homeless people. One is holding a bottle of liquor. The other has a sign around her neck that reads: “3rd party squatter. I lost my home and I was never served.” My source said that “I was never served” is meant to mock “the typical excuse” of the homeowner trying to evade a foreclosure proceeding.
Slow-Paced Recovery Feels Like A Recession (WSJ)
No recession since the Great Depression was deeper or longer than the most recent. It has taken two years for the nation's total output of goods and services to return to pre-recession levels, longer than after any recession since World War II. And on a per-capita basis, the Commerce Department said Thursday, output remains 3% lower than it was at the end of 2007. Since the recession's end in mid-2009, the economy has been expanding but it isn't adding jobs at a fast-enough pace—at least 150,000 a month—to absorb the growing population. The unemployment rate stands at 9.1%, and nearly half the unemployed have been out of work for six months or more. Housing, the most fragile sector, has yet to rebound. As of June, home prices were 10.1% below mid-2009 levels. One in five mortgage borrowers has a loan bigger than the value of the underlying home.
Man In Smurf Costume Shot Leaving Halloween Party (LA Times)
A man in a Smurf costume was shot in the leg while leaving a Halloween party Sunday morning. The man left a party on 6th Avenue and 30th Street at about 2:30 a.m., said Sgt. Mayberry at the LAPD Southwest station, who would not give his first name. He encountered a group of gang members and was shot once in the calf, Mayberry said. He was transported to a local hospital and was in stable condition.