Bigger Is Better for Retaining Junior Analysts, Report Says (WSJ)
The study found that one-third of investment-banking analysts who started working at the biggest U.S. banks in 2012 remained with the same firm this year. At smaller boutique banks, only about half that percentage—17%—stayed on after two years. Many top boutiques have a disproportionate presence in mergers and acquisitions, promising analysts more exposure to deal making. That often appeals to the buy-side firms. After two years, 63% of bankers who worked in the M&A group, at both big and small banks, left to join buy-side firms, predominantly private equity and hedge funds. “The deal-making skill set is highly valued by buy-side recruiters,” said Alex Orn, director of analytics at Vettery.
Meet the SEC’s Brainy New Crime Fighters (WSJ)
While SEC investigators have been using computer models for several years to detect fraud, the approach has gained added steam under Ms. White, agency officials say. The regulator, known for its platoons of lawyers with little experience in math or coding, is hiring more employees versed in computer programing and mathematics and pressing the old guard to get up to speed with the new methods, these officials say.
A Stuyvesant Senior Made $72 Million Trading Stocks on His Lunch Break (NYM)
Over late nights out and dinners at Morimoto, the three hatched a plan to start a hedge fund. “There are a lot of steps we have to follow through,” said Patrick, calling to mind a more serious Chuck Bass. “But we’re on the right track.” They plan to launch in June, after Mo turns 18 and can get his broker-dealer license. “Mo’s our maestro,” Patrick said. “He’s going to be earning the big bucks. We’re just going to try to fill his needs.” All three plan to attend college next year, but they’re not concerned about classes getting in the way of their goal: “A billion dollars!” Damir said. “By next year!” Mo affirmed the number with a nod. “But it’s not just about money,” he added. “We want to create a brotherhood. Like, all of us who are connected, who are in something together, who have influence, like the Koch brothers …”
Fed considers time to end free money pledge (Reuters)
The U.S. Federal Reserve would give the clearest signal next week that its easy money stance is ending if, as some expect, it drops its two-year long pledge to keep interest rates close to zero for a "considerable time". The Fed, which meets on Tuesday and Wednesday, first inserted that wording in its post-meeting statements in December 2012, promising then to maintain its highly accommodative monetary stance for a considerable time after its asset purchase program ends and the economic recovery strengthens. Both have occurred.
Amid Crisis, Pimco Steadies Itself (WSJ)
In November, three of Mr. Gross’s former lieutenants delivered by one measurement the best monthly performance in more than a decade by the Total Return bond fund, where he became one of the world’s most famous investors. Prices for some of the investments held by Pimco fell right after Mr. Gross, the firm’s co-founder and chief investment officer, walked out the door of Pimco’s headquarters here for the last time. As investors left, rival traders expected Pimco to be forced to sell some bonds to raise cash. Instead, Pimco executives decided to buy more of certain hard-hit investments, including Mexican, Italian and Spanish debt, according to people at the company. Prices on those securities soon began to rebound—and have grown into a profit of more than $200 million so far. That isn’t much money for Pimco, which manages $1.9 trillion, but it boosted the confidence of executives as they continue a sprawling strategy to end the outflow of cash.
Bungled Marriage Proposal Forces Evacuation (AP)
A Dutchman's attempt at a romantic wedding proposal was simply smashing. The unidentified lover in the central town of Ijsselstein rented a crane, planning to descend in front of his girlfriend's bedroom window first thing Saturday morning, play her a song and then pop the question. Instead the crane toppled over, smashing a large hole in the neighbors' roof...According to the Algemeen Dagblad newspaper, the girlfriend said "yes" anyway. After speaking with police, the pair traveled to Paris to celebrate. Then the crane fell again during attempts to right it with a larger crane, bashing in the rest of the neighbors' roof. The town's mayor is on the spot after the building was declared unsafe. Six apartments were evacuated.
Sony Demands News Outlets Stop Using Hacked Documents (Bloomberg)
Sony Pictures Entertainment (SNE)’s lawyers sent letters asking news organizations to stop writing articles based on stolen documents released by hackers seeking to interrupt the release of the comedy “The Interview.” The letter, dated Dec. 14, was sent by attorney David Boies to news organizations including Bloomberg News and the New York Times. Media outlets should destroy the stolen data and will be held responsible for damages from publication of the information, which includes salaries, intellectual property and communications protected by attorney-client privilege, he wrote. “If you do not comply with this request, and the stolen material is used or disseminated by you in any manner, SPE will have no choice but to hold you responsible for any damage or loss,” Boies wrote, using the acronym for Sony Pictures Entertainment, a division of Sony Corp. (6758) Sony is trying to stem the damage from an unprecedented cyberattack that its investigators have linked to “The Interview,” a film that depicts the assassination of North Korean leader Kim Jong Un and is set for release on Christmas Day. Thousands of studio documents have spilled onto the Internet, including the fees of the picture’s stars, Seth Rogen and James Franco, employee health records and e-mails showing studio chief Amy Pascal and producer Scott Rudin making racial jokes about President Barack Obama’s taste in films.
PetSmart Agrees to Be Bought by BC Partners for $8.3 Billion (Bloomberg)
PetSmart Inc. (PETM) agreed to be bought by a group led by BC Partners for about $8.3 billion in the largest leveraged deal for a U.S. company this year. The group will pay $83 a share, or about 39 percent more than the company’s price on July 2, before activist investor Jana Partners began pushing for the sale, according to a statement today. Including debt, the total value of the deal is about $8.7 billion, the statement shows.
Hurdles Appear Higher for Next Stock Market Bounce (WSJ)
“Overall, the performance of the markets is very worrisome,” said Krishna Memani, chief investment officer at OppenheimerFunds Inc., which oversees $245 billion in New York. He is particularly concerned about heavy selling of junk bonds, also called high-yield bonds, which has spread beyond energy companies. He and many other money managers, however, think that the economy is strong enough and the Federal Reserve is supportive enough to keep financial markets out of serious trouble. So despite his concerns, Mr. Memani isn’t selling. He is buying. Last week’s selloff “may end up being a Christmas gift for investors,” he said, meaning people can buy beaten-down stocks and junk bonds at low prices. He said he is buying junk bonds and corporate loans that he believes have been wrongly caught up in the rush to sell.
Short sellers are making a beary big comeback on Wall Street (NYP)
Short sellers are back with a vengeance. The five-year bull market has inflicted nothing but pain on short sellers as many of the stocks they bet against just kept soaring. But with investors much more skeptical of the markets testing all-time highs this year, short sellers are bouncing back as their most heavily shorted stocks suffer steep losses. The 112 companies publicly targeted by those who make money when the stocks fall are down an average of 17 percent this year, compared with a gain of 8 percent for the 102 targeted in 2013, according to Activist Shorts Research, a new database of short seller activity. The analysis looked at companies with a market cap greater than $300 million.
Dealbreaker Dramatic Reading Night Part IV Is December 17th (DB)
Buy your ticket here now.
South Dakota pulls ‘Don’t Jerk and Drive’ public safety campaign (NYDN)
South Dakota officials shuttered a "Don't Jerk and Drive" campaign after complaints that the public safety push was too inappropriate. Officials created the risqué campaign in early December to raise awareness about the dangers of jerking the steering wheel on icy roads. "The message is that we'd prefer drivers keep their cars out of the ditch and their minds out of the gutter," Lee Axdahl, director of the Office of Highway Safety, told the Argus Leader. But the double entendre, referring to a euphemism for masturbat!on, took attention away from the real issue, public officials complained. "This is an important safety message and I don't want this innuendo to distract from our goal to save lives on the road," said Trevor Jones, the secretary of the state Department of Public Safety in a statement.