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Paycheck Program Ends With $130 Billion Unspent, and Uncertainty Ahead [NYT]
After a rush of early demand — the initial $349 billion set aside for the program was gone in 13 days — borrowing slowed significantly…. Lenders cited two main reasons there was money left over. First, most eligible companies that wanted a loan were ultimately able to obtain one. (The program limited each applicant to only one loan.) Also, the program’s complicated and shifting requirements dissuaded some qualified borrowers, who feared they would be unable to get their loan forgiven.

Bailout or Backstop? Lawmakers May Focus on Fed’s Corporate Bond Buying [NYT]
Accusations that the central bank bailed out big companies started even before it had actually spent a penny on the efforts. Fed officials say they just are trying to encourage smooth market functioning without giving any individual firm a boost, and that by helping big employers, the policies safeguard the overall economy. The Fed is taking a formulaic approach to its buying, which could help to defend itself against any accusations of favoritism.

Wall Street holds dividends steady after stress tests — except for Wells Fargo [FN]
The fourth-largest US bank by assets said Monday it would cut its dividend from the 51 cents it paid in each of the four most-recent quarters…. The other big US banks — JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley — said they intend to hold their dividends steady. Still, this would be the first time any of the major banks reduced its per-share payout since the second quarter of 2009, when they faced an existential threat from the housing crisis.

Hedge Funds Score Big Gains on Dividend Bets That Hurt Banks [Bloomberg]
One of the most heavily traded contracts in Europe tumbled almost 60% in March as a spate of dividend cuts spooked investors and banks dumped futures to hedge exposures at their structured product units…. Ovata Capital Management, Oasis Management Co., York Capital Management and AM Squared Ltd. all scored double-digit returns on dividend futures as the securities snapped back from the March rout, buoyed by unprecedented government stimulus.

Uber Is Said to Be in Talks to Buy Delivery Rival Postmates [Bloomberg]
Postmates is alternatively exploring various paths to go public, said the person, who asked not to be identified because the discussions are private. One option it’s considering would involve merging with a special purpose acquisition company, the person said…. Founded in 2011, Postmates was one of the first to let customers in the U.S. order meal delivery using a smartphone app. However, competition has grown intense in recent years, and Postmates is a distant fourth.

Business Embraces Hong Kong’s Security Law. The Money Helps. [NYT]
Beijing twisted some arms to win that support, hinting that it could use its huge clout to punish any global company or local tycoon who crosses it. But China has also won over some business hearts and minds — and a big new inflow of Chinese money into the territory has helped it make its case.
The money, totaling billions of dollars in new stock offerings and property deals by blue-chip Chinese companies in the past few weeks alone, have bolstered perceptions in the business world that Hong Kong will remain a deeply profitable place to do business for years to come.

SEC Charges BNP Paribas with Violations of Regulation SHO [SEC]
For each of those "long" sales, the customer did not have sufficient shares in its prime brokerage account at BNPP on the morning of the settlement date to cover the sale order. When the customer failed to deliver the shares by the settlement date, BNPP loaned the customer shares to cover the sale…. BNPP agreed to be censured, to cease-and-desist from violating Rule 203(a)(1) of Regulation SHO, and to pay a penalty of $250,000.

The hedge fund manager behind a long-shot coronavirus pill [FT]
An experimental drug being developed by a tiny biotech company offers a glimpse of hope at a time of crisis: a twice-a-day pill that could be prescribed to someone as soon as they test positive for coronavirus, attacking the disease before they become seriously sick…. If the medicine, codenamed EIDD-2801, does end up working, it would be a crowning achievement for Wayne and Wendy Holman, the husband and wife team behind Miami-based Ridgeback Biotherapeutics….
[Mathew] Martoma alleged, unsuccessfully, that the trades at the centre of the government’s case had been made on the basis of Dr Holman’s expert advice, rather than inside information. Dr Holman had already left the division of SAC by the time of the trades in question but continued to advise the hedge fund on its healthcare holdings.

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powell

Opening Bell: 5.13.20

More money, (for) more (pandemic) problems; more negative oil prices; more power to Paul Singer; more steps for Tesla; more strip club bailouts; and more generally!

powell

Opening Bell: 7.13.20

Alien invasions; Main Street mess; chief disappointment officers; Ghosn’s saviors unsaved; and more!

Opening Bell: 03.14.12

Why I Am Leaving Goldman Sachs (NYT) It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact. Stress Tests Buoy US Banks (WSJ) Stock prices reacted positively amid a spate of other upbeat economic news, including a robust retail-sales report and optimistic comments by Fed officials on the overall state of the U.S. economy. The Dow Jones Industrial Average ended the day up 1.7%, its highest close since December 2007. Asian markets opened trading on Wednesday higher, with Tokyo up 1.9%. The Fed's stress tests were designed to see whether banks would have enough capital on hand to keep lending even if another deep economic slump or financial crisis were to strike. It's the third round of stress tests: The first took place in 2009, in the immediate aftermath of the financial crisis. At that time, banks fared much more poorly. JPMorgan Dividend Surprises Investors, Irks Fed (Bloomberg) The bank’s disclosure prompted other lenders, including Wells Fargo & Co. (WFC), U.S. Bancorp and PNC Financial Services Group Inc. (PNC), to accelerate the disclosure of their dividend plans. It also irritated some staff at the Fed, which had planned to release the test results ahead of the industry, said one person familiar with the central bank’s operations who declined to be identified because the discussions were private. Pandit Repeats Moynihan’s Misstep as Citigroup Request Backfires (Bloomberg) Citigroup was the biggest U.S. lender yesterday to fail the regulator’s exam of capital levels in a hypothetical economic downturn because of the New York-based firm’s plan to boost dividends or stock repurchases. Bank of America, which had its payout request rejected last year, passed the 2012 test after Moynihan decided to keep his company’s dividend at 1 cent. “Pandit misread the situation badly, you just don’t ask for something if you don’t know you can get it,” said Greg Donaldson, chairman of Evansville, Indiana-based Donaldson Capital Management LLC, which oversees $540 million including Bank of America shares. “Moynihan was chastened by what happened last year, he absolutely wasn’t going to take any chances of getting rebuffed again.” Stress Tests Results Can't Be Trusted, Says Strategist (CNBC) "I think a lot of banks are still overstating assets and they haven't recognized problem loans, to the extent that they should have done and it's very difficult to trust numbers," Peter Elston, Asia Strategist at Aberdeen Asset Management told CNBC on Wednesday. Merkel Says Europe Is ‘Good Way’ Up Mountain, Not Over Yet (Bloomberg) “We’ve come a good way along the mountain path, but we’re not completely over the mountain,” Merkel told reporters in Rome late yesterday after talks with Italian Prime Minister Mario Monti. “I suspect that in the next few years there will continue to be new mountains -- there won’t be a celebratory event in which we say we’re over the mountain and now we can sit among the trees and say that we’ve done it.” Eurogroup Approves Second Greek Bailout (WSJ) The euro-zone countries Wednesday finally signed off on Greece's second bailout program, ending a protracted and dramatic negotiating process that started last July. The hope is that the €130 billion ($170.1 billion) package—funded mostly by euro-zone countries and the International Monetary Fund—will be enough to keep Greece funded until 2014-2015. But talk of a third Greek bailout has already started with the ink still wet on the second one, especially following a report by European Union experts highlighting the risks to structural-reform implementation and predicting "at best stagnation" for 2013. Greece has been in a recession for five consecutive years. Ex-Lehman Executive Jack’s $35 Million Estate Faces Tax Auction (BW) The $35 million estate of Bradley H. Jack, the former Lehman Brothers Holdings Inc. (LEHMQ) managing director who was arrested twice for allegedly forging drug prescriptions, may be sold at a municipal auction after he failed to pay property taxes since July. Jack owes $271,923 on his 20-acre (8-hectare), waterfront compound in Fairfield, Connecticut, according to town tax collector Stanley Gorzelany. It’s the town’s biggest overdue tax bill on a residence. A Public Exit From Goldman Sachs Hits at a Wounded Wall Street (NYT) To be sure, longtime bankers say it is not like short-term greed was absent in the past. It has been around since traders gathered under a buttonwood tree and founded the New York Stock Exchange in 1792. But the astounding size of Wall Street’s biggest firms — and the fortunes to be made — have altered the calculus. “I think there was plenty of skullduggery going on,” said Jerome Kohlberg Jr., who worked at Bear Stearns for 21 years before leaving to found Kohlberg Kravis Roberts in 1976 with Henry R. Kravis and George R. Roberts. Still, the trend has accelerated in recent years, according to Mr. Kohlberg. “When I first started on Wall Street, it was a small group and everyone knew everyone else,” he said. “If you stepped out of line, people would not do business with you.”

Opening Bell: 8.13.15

Dean Foods/Phil Mickelson probe; Greece woes; Citigroup's bad bank makes good; "Man Assaults Brother For Not Sharing Big Macs, Police Say"; and more.

Opening Bell: 03.13.13

Ackman Applauds Call For Herbalife Investigation (AP) The National Consumers League said that it wants the FTC to investigate the claims against Herbalife as well as the vitamin and supplement products company's responses. Ackman alleged in December that Herbalife was a pyramid scheme and made a bet the stock would fall, arguing that the company makes most of its money by recruiting new salespeople rather than on the products they sell. Herbalife disputes that. In a statement late Tuesday, Pershing Square Capital Management's Ackman said that he was pleased that the NCL was requesting an FTC investigation and believes it will show that the company is a pyramid scheme. On Wednesday, Herbalife said in a statement that "We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife." Troika, Cyprus In Talks To Shrink Bailout Package (WSJ) Officials from the troika of lenders—the European Commission, the European Central Bank and the International Monetary Fund—are working with the Cypriot government to bring the headline figure for the bailout package to about €10 billion ($13.03 billion), two officials said. The aid package had been earlier expected to be as much as €17 billion—with just shy €10 billion of that going for bank recapitalizations. Big Sugar Set For Sweet Bailout (WSJ) The U.S. Department of Agriculture is considering buying 400,000 tons of sugar—enough for 142 billion Hershey's Kisses—to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The action aims to prop up tumbling U.S. sugar prices, which have fallen 18% since the USDA made the nine-month operations-financing loans beginning in October. The purchases could leave the price-support program with an $80 million loss, its biggest in 13 years, said Barbara Fecso, an economist at the USDA, in an interview. U.S. Tax Cheats Picked Off After Adviser Mails It In (Bloomberg) Everybody knows the danger of sending things inadvertently in an e-mail. Beda Singenberger’s case shows you also have to be pretty careful when you mail things the old-fashioned way. Over an 11-year period, federal prosecutors charge, Swiss financial adviser Singenberger helped 60 people in the U.S. hide $184 million in secret offshore accounts bearing colorful names like Real Cool Investments Ltd. and Wanderlust Foundation. Then, according to a prosecutor, Singenberger inadvertently mailed a list of his U.S. clients, including their names and incriminating details, which somehow wound up in the hands of federal authorities. Now, U.S. authorities appear to be picking off the clients on that list one by one. Singenberger’s goof has already ensnared Jacques Wajsfelner, an 83-year-old exile from Nazi Germany, and Michael Canale, a retired U.S. Army surgeon, court records show. Another customer, cancer researcher Michael Reiss, pleaded guilty, though his court records don’t mention the list. White Pressed On Past Representing Banks (WSJ) Since 2002, President Barack Obama's pick to become chairman of the Securities and Exchange Commission has worked for the law firm Debevoise & Plimpton LLC, where she often represented large corporations and banks. Members of the Senate Banking Committee, often from the president's own party, pressed her to guarantee that her law-firm work wouldn't stop her from taking on Wall Street's wrongdoers. "What have you done [in] the last decade that ordinary investors can look at and be assured that you will advocate for them?" Sen. Sherrod Brown (D., Ohio) asked Ms. White. Wearing a bright red jacket, her hands neatly folded on the table before her, Ms. White said her work at Debevoise "hasn't changed me as a person." Killer Ukrainian dolphins on the loose (JustinGregg) After rebooting the Soviet Union’s marine mammal program just last year with the goal of teaching dolphins to find underwater mines and kill enemy divers, three of the Ukrainian military’s new recruits have gone AWOL. Apparently they swam away from their trainers this morning ostensibly in search of a “mate” out in open waters. It might not be such a big deal except that these dolphins have been trained to “attack enemy combat swimmers using special knives or pistols fixed to their heads.” Dimon’s Extra $1.4 Million Payout Hangs on Fed Decision (Bloomberg) That’s how much extra income Dimon could get from his stake of about 6 million shares if his New York-based bank raises its payout as much as analysts predict. The sum dwarfs the combined $73,300 of new annual dividends at stake for his CEO peers at Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co., based on forecasts compiled by Bloomberg. Bankers will find out whether they get any boost tomorrow when the Fed announces which capital plans at the 18 largest U.S. lenders won approval. Regulators have pressed firms since the 2008 credit crisis to give executives more stock and less cash to align their interests with those of shareholders. CEOs are poised to get a windfall if payouts increase and shares rise -- or to suffer with their investors if results sputter. BofA Ordered to Pay Ex-Merrill Banker Jailed in Brazil (Bloomberg) Sao Paulo’s 26th labor court said it was “incontrovertible” that the imprisonment was because of his position as a junior financial consultant at Merrill Lynch, now a division of Charlotte, North Carolina-based Bank of America, according to a document published in the nation’s official Gazette earlier this month. Caiado wasn’t convicted of any wrongdoing. Caiado, 42, was jailed in June 2006 in a Curitiba federal prison over allegations he helped Merrill’s clients make illegal overseas money transfers. His arrest was part of an investigation that resulted in indictments of 18 bankers at Credit Suisse AG and UBS AG in Brazil. Merrill fired Caiado nine months later, saying the dismissal was part of a restructuring. Carlyle Group Lowers Velvet Rope (WSJ) In the latest effort by private-equity firms to broaden their customer base, Carlyle Group is letting some people invest in its buyout funds with as little as $50,000. The move comes as other large firms—known for offering exclusivity to big-money clients—have broadened their investment offerings in search of fresh sources of funds. KKR, for example, recently began offering mutual funds investing in bonds, with minimum investments set at $2,500. Blackstone Group launched a fund last year that for the first time lets affluent individuals invest in hedge funds and has told regulators it plans to offer another fund, though it hasn't disclosed many details about the forthcoming offering. Greenland Votes for Tougher Rules for Foreign Investors (WSJ) Voters in Greenland have elected a new ruling party that has pledged to toughen up on foreign investors looking to take advantage of the nation's wealth of natural resources. The Social Democratic Siumut party collected 43% of the votes in an election held Tuesday, enabling the party to leapfrog the ruling Inuit Ataqatigiit, which over the past four years has worked to open up the secluded country to mining companies and others capable of advancing industry. Greenland is believed to have a vast supply of untapped rare-earth minerals, oil, gas and other resources. Blankfein On Trader Talent Hunt At Morgan Stanley (NYP) The Goldman Sachs CEO is taking dead aim at Morgan Stanley’s most prized assets — its best and brightest employees — after his rival decided to defer pay for senior bankers. Blankfein, as a big game hunter, recently landed 13-year Morgan Stanley veteran Kate Richdale, head of its Asia Pacific investment banking business. The CEO’s talent hunt is continuing, sources said. Goldman currently is in selective talks with other Morgan Stanley bankers and has also lured a handful of traders from the bank. Golfer Survives Fall Into Course Sinkhole (AP) Mark Mihal was having a good opening day on the links when he noticed an unusual depression on the 14th fairway at Annbriar Golf Club in southern Illinois. Remarking to his friends how awkward it would be to have to hit out of it, he went over for a closer look. One step onto the pocked section and the 43-year-old mortgage broker plunged into a sinkhole. He landed 18 feet down with a painful thud, and his friends managed to hoist him to safety with a rope after about 20 minutes. But Friday's experience gave Mihal quite a fright, particularly after the recent death of a Florida man whose body hasn't been found since a sinkhole swallowed him and his bedroom. "I feel lucky just to come out of it with a shoulder injury, falling that far and not knowing what I was going to hit," Mihal, from the St. Louis suburb of Creve Coeur, told The Associated Press before heading off to learn whether he'll need surgery. "It was absolutely crazy."

machete

Opening Bell: 6.4.20

More flexibility; moral hazards; SoftBank finds money for minority-owned businesses; Brady Dougan’s (Bob Diamond-backed) dreams; someone else’s (machete-based) dreams; and more!

By joho345 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Opening Bell: 3.10.21

Jamie Dimon punks Leon Black; GE sells something to get rid of something else; more corrupt Congressional stock trading; and more!

powell

Opening Bell: 5.20.20

No one in charge knows what they’re doing; trade Luckin Coffee while you can; hedge funds did not, uh, have a good month; maybe Tesla owners should take a page from Elon’s new friends and burn their cars; and more!