$$$ Bernanke Defends Record On Lehman
[WSJ]
$$$ Obama’s Too Small Steps On The Economy [TDB]
$$$ Paolo Pelligrini: The US Continues To Dig Its Hole Deeper [BI]
$$$ Bedbugs Make Selves Home In Greenwich [GT]
$$$ Russian Girls Invade Hamptons In Hopes Of Becoming Trophy Wives [TDB]
Article courtesy of Dealbreaker
$$$ Short-Sellers Take Long Vacation [WSJ]
$$$ Citigroup Will Meet With Mayo After Analyst Complains in Report [Bloomberg]
$$$ 12 Unconventional Ways To Save The Economy [NYO]
$$$ Tiger In The City [NYP]
Article courtesy of Dealbreaker
Banks Need New Capital on Housing Dip, Whitney Says (Bloomberg)
Banks aren’t prepared for a “double-dip” in housing, which “it looks like we are having,” Whitney said Bloomberg Radio’s The Hays Advantage. “They need higher capital,” said Whitney. Whitney said the economy is reacting from “chronic structural problems” including high unemployment that are unlikely to be addressed through monetary policy. “There’s nothing more important to the economy than unemployment,” said added. “You have to make structural changes in the economy to address that problem. They’re not monetary issues.”
Former Citi Exec Got $10M to Advise Barclays on Lehman Deal (WSJ)
In September 2008, Michael Klein got a killer gig just two months after leaving Citigroup: advising Barclays Group PLC on its acquisition of freefalling Lehman Brothers Holdings Inc.’s broker-dealer business. He also got a killer fee. Klein got $10 million for his work, a job opportunity made possible only after Citi agreed to waive a non-compete agreement he had signed as part of leaving his job as head of the bank’s institutional clients group.
Merrill Mauls Morgan Stanley in Clash of U.S. Brokerage Titans (Bloomberg)
Merrill Lynch produced $315 million more profit from its brokerage in the first half than Morgan Stanley with 2,900 fewer financial advisers, according to company filings. Its pretax profit margin, 16.7 percent for the same period, is more than double Morgan Stanley Smith Barney’s 7.8 percent.
Investors Head for Bunkers, Driving Up ‘Shelter Shares’ (WSJ)
Amid the market tumult, a handful of stocks have seen their share prices ratchet up to record highs in recent weeks. And many of them are connected by a curious, if disconcerting, thread: Between them, they provide an investor with essentials for any respectable fallout shelter—makers of bottled water, canned goods, dehydrated broth, gas masks and auxiliary generators. A portfolio of the 18 companies that reached their peaks in the past month would be up about 24% this year, compared with the broader market’s 4.5% decline, a sign some investors may be taking the prospects of financial Armageddon more seriously than one might think.
AXA cuts Goldman stake by half (AFP)
French insurer Axa has cut its holdings in Goldman Sachs by roughly one half, according to documents filed with the Securities and Exchange Commission. Axa, which had been Goldman’s largest shareholder, sold more than 14 million shares between January and June, reducing its stake to 2.8 percent from 4.8 percent, the documents showed. BlackRock and T Rowe Price have also cut their holdings in Goldman Sachs.
‘Spiderman’ arrested for scaling Sydney skyscraper (NYP)
A French skyscraper climber nicknamed “Spiderman” was arrested Monday after scaling a 57-story building in Sydney with his bare hands. He climbed the building in about 20 minutes, as dozens of people watched from below. “I’m sad he’s been arrested, but hopefully he’ll get out soon and we can have some champagne,” said his agent, Max Markson.
German Officials Blast Banker’s Remarks as Racist (AP)
Thilo Sarrazin of the Bundesbank came under fire for telling the weekly newspaper Welt am Sonntag that “all Jews share the same gene.” He also said Muslim immigrants across Europe were not willing or capable of integrating into western societies. Top German officials and immigrant leaders on Sunday condemned remarks by a board member of Germany’s federal bank as racist and anti-Semitic. Chancellor Angela Merkel said the Bundesbank should discuss dismissing the banker.
Druckenmiller Sends Millions to Children, Robin Hood, New York University (Bloomberg)
Last year, Druckenmiller shifted $700 million of his own money to his family foundation. Before the transfer, the foundation had assets of about $6.5 million. Transferring a quarter of his reported net worth to the nonprofit earned Druckenmiller the Chronicle of Philanthropy’s No. 1 ranking of largest individual charitable contributions in 2009. That year, he and his wife, Fiona, gave $100 million to New York University’s Langone Medical Center to create a neuroscience institute.
Article courtesy of Dealbreaker
Credit Suisse, Barclays May Be Start Of Bank Hiring Freeze (Bloomberg)
“Now that trading revenues are dropping there’s a hiring freeze on,” said John Purcell, managing director at executive search firm Purcell & Co. in London. “I wouldn’t be surprised to see people shedding traders again.”
Papandreou’s Summer Pay Cuts Keep Cash-Strapped Greeks at Home (Bloomberg)
Eleni Alexiou says she can’t afford to take her two children to a Greek island on vacation this year after the government axed her summer bonus and reduced her pay. “We’re not going anywhere, just any place that friends and family can put us up,” said Alexiou, 38, a state employee at a citizens’ advice bureau in Athens. “The crisis is the reason. The summer bonus has been cut. Everything’s gone up in price.”
Wall Street Bonuses To Rise This Year: Report (Reuters)
Incentives at financial firms should rise from 2009 levels but remain below the record payouts of 2007, according to compensation consultant Johnson Associates. Average compensation at investment and commercial banks is set to rise for the second straight year, while payouts at asset managers should rebound from a 2009 trough, the report said. While some corners of Wall Street are likely to see bonuses rise by up to 15 percent this year, others could see a 15 percent drop, the report said. Businesses that will likely see the biggest increases include prime brokerage; equities-based asset management; and high net worth units. Areas set for the steepest bonus drops are fixed-income units at both investment and commercial banks and equities.
New GM Chief Known As Pragmatic Leader (NYT)
FYI: “The world is divided into defenders and attackers, and G.M. has been a defender,” Mr. Anderson said. “Akerson has run attackers. He is going to essentially turn General Motors into a next-generation attacker.”
Maxine Waters to Face Reporters Friday to Address Ethics Charges (ABC)
Waters will be joined by her chief of staff Mikael Moore, who is also her grandson. Waters is expected to read a prepared statement in front of cameras, followed by a presentation conducted by Moore refuting the statement of alleged violations issued by the Ethics Committee earlier this month. After the presentation concludes, television cameras will be asked to leave for an on-the-record, but off-camera Q & A session with Waters and Moore.
Economists Want Policy Makers To Back Off (WSJ)
53 surveyed economists offered a bleak picture of tepid growth and high unemployment. On average, they still don’t see the unemployment rate dropping below 9% through at least June 2011. They expect the economy to add just 136,000 jobs a month over the next 12 months, down from a forecast of 157,000 in the July survey. At that rate, job creation will barely keep up with new entrants to the labor force. Despite the continued challenging conditions, 30 out of 48 economists who answered the question said the economy didn’t need any more fiscal or monetary stimulus. Six economists said more fiscal stimulus was necessary, while five want more monetary stimulus from the Federal Reserve and seven said that the economy could use both. The survey was conducted before the central bank’s announcement Tuesday that it would reinvest proceeds from its mortgage-backed securities and agency debt portfolio into Treasurys, essentially boosting monetary stimulus. “The economy needs government to get out of the way,” said Stephen Stanley of Pierpont Securities.
Steven Slater Ready To Come Home To JetBlue (NYP)
“It’s a wonderful airline, he loves working for them and wishes to continue to work for them,” Slater’s attorney, Howard Turman, said outside his client’s apartment in Belle Harbor, Queens. “He did his job effectively, efficiently and appropriately.”
DOJ asks HP for records in bribery probe (MarketWatch)
German prosecutors, as first reported by The Wall Street Journal in April, are looking into the possibility that H-P executives paid about €8 million ($10.9 million) in bribes to win a €35 million contract under which the U.S. company sold computer gear, through a German subsidiary, to the office of the prosecutor general of the Russian Federation. The German probe has been joined by U.S. and Russian authorities, according to people familiar with the matter.
Irish Banks Rattling Nerves Again (WSJ)
Ireland’s problems have moved to center stage. On Thursday, the government sold €1 billion in six- and eight-month treasury bills, paying 2.458% on the six-month note, a big jump from the 1.367% yield it paid at the last auction three weeks ago. The yield on the 10-year bond rose to 5.367%, 2.94 percentage points higher than the relative German bund and up almost half a percentage point from one week ago. Philip Lane, a professor of international and macro-economics at Trinity College in Dublin, said Anglo Irish’s call for more capital is troublesome and there are worries that the deeper the government digs into its loan book, the more problems it could find.
Hedge Fund Inflows Jumped In July (WSJ)
Hedge-fund assets rose 1.37% in July to $2.249 trillion, after falling for two consecutive months. New money from investors boosted assets by $9.3 billion, the second highest monthly net inflow this year. Performance gains added another $21.09 billion to assets, HedgeFund.net said.
BP To Pay Record Fine Over Texas City (FT)
BP agreed to pay a record $50.6m fine for continued safety violations at its Texas City refinery five years after an explosion there killed 15 and injured 170. The fine came as federal officials on Thursday said that the UK oil group might not need to finish drilling the relief well touted as the permanent solution to the Gulf of Mexico oil spill.
Article courtesy of Dealbreaker
Bank of America’s profit slips, but tops estimates (MarketWatch)
The bank posted second-quarter net income of $3.12 billion, or 27 cents a share, down from $3.22 billion, or 33 cents a share, from the same period last year. That compares with analysts’ consensus estimate of 22 cents a share, based on estimates compiled by FactSet Research.
Citigroup Net Income Falls 38%, Beating Analysts’ Estimates (Bloomberg)
Second-quarter net income was $2.73 billion, down from $4.39 billion in the same period a year earlier, New York-based Citigroup said today in a statement. The per-share profit was 9 cents, exceeding the 5-cent average estimate of 18 analysts in a Bloomberg survey. “Citigroup, despite the turbulence in the markets, appears to have turned the corner and its plan is on track,” said James Ellman, a former Merrill Lynch & Co. bank-stock portfolio manager who is now president of San Francisco-based hedge fund Seacliff Capital.
Fabulous Fab to File Response to SEC (WSJ)
Fabrice Tourre, the only Goldman employee named as a defendant in the civil-fraud charges leveled against Goldman Sachs, is not close to settling his own case with the government, a person familiar with the matter said. The 31-year-old banker will file Monday a response to the SEC’s charges of misleading investors from his role in creating complex mortgage-linked investments, the person said. That response is expected to show that Tourre is willing to take the case to court in an effort to clear his name, the person said.
RBS May Seek More After $100 Million Goldman Payout (Reuters)
RBS said on Friday it would “carefully consider all of its options” after Goldman agreed on Thursday to pay it $100 million as part of a $550 million settlement of civil fraud charges over how it marketed the subprime mortgage product. German bank IKB, the other big loser on the transaction, will be paid $150 million under the settlement, recovering all of its loss.
Juncker:No catastrophes from stress tests seen (Reuters)
“I am not expecting any big catastrophes,” the chairman of euro zone finance ministers told Austrian newspaper Kurier. “But there cannot be any glossing over, the tests are based on reality,” he said in an interview.
Microsoft Co-Founder to Give Away Half of His Fortune to Philanthropy (NYT)
Paul Allen, who founded the Microsoft Corporation with Bill Gates, announced on Thursday that he planned to give more than half of his estimated $13.5 billion fortune to philanthropy.
Economists Express More Optimism Than General Public (WSJ)
The majority (64%) of the 55 economists polled—not all of whom answer every question—said that the economy would get better over the next 12 months and 9% said it would get worse; the rest said it would stay about the same. In contrast, the latest WSJ/NBC News poll found 33% of the general public expected the economy to improve and 23% think it will get worse.
Article courtesy of Dealbreaker
$$$ Greece Puts Its Islands Up For Sale To Save Economy [Guardian]
$$$ Money Manager Ken Heebner: A Hot Touch Gone Cold [BW]
$$$ Score one for Skilling [MarketWatch]
$$$ “[The World Cup] doesn’t come even close in importance to Tiger Woods’ [tell-all] press conference,” said Craig Peckham, equity strategist on the trading floor at Jefferies in New York. “People are mindful but not zeroed in on it.”
Article courtesy of Dealbreaker
Visit msnbc.com for breaking news, world news, and news about the economy
Presented without comment. Other than Jamie Dimon’s gonna be mad. And Jack Tuckner will haunt your dreams.
Article courtesy of Dealbreaker
Things were going great and WB was thisclose to fulfilling his lifelong dream of performing an Angry Pirate in the Lincoln bedroom and then boom! Out of nowhere, The Oracle stops hearing from the guy. Jonathan Alter reports:
Warren Buffett, who had been in contact with Obama every week as the economy collapsed in the fall of 2008, found himself mysteriously out of touch with the new president. In late 2009, the billionaire told a friend that he’d not had a single one-on-one meeting with Obama since he became president. They did speak once on the phone. No one knew the reason Obama held him at arm’s length, though it likely had to do with Buffett’s $5 billion investment in Goldman Sachs and his large ownership stake in Moody’s, one of the ratings agencies Obama blamed most for the economic crisis.
As Obama wasn’t man enough to give it to Buffett straight from the get-go, we’re probably never going to get an answer out of him. Still, in an effort to provide some sort of closure to Buffs, so he can finally move on, and maybe one day trust another president again, let’s give it our best guess. Did Obama drop off the face of the earth because of:
a) the Goldman taint
b) the fear he was going to have to make good on the Lincoln bedroom promise, and the realization that the costs associate with wiping that place down once WB was done with it were too great to bear, especially in this economy
c) There was someone else (name: James Dimon)
d) you tell us
Article courtesy of Dealbreaker
Amid protestors holding signs that read “Stop Hiding the Money” and “Transparency Now” the Rev. Jesse Jackson has stepped to the mic at the Goldman shareholder meeting in lower Manhattan.
The Reverend asks GS to put more consumers and labor leaders on the board. From the WSJ, which is live-blogging the event.
More from Jackson: States are sinking, schools closing, record breaking home foreclosures, public transportation cut, public health cut, poverty expanding, unemployment rising. A more diverse board might appeal to you today.
Blankfein says he agrees with Rev. Jackson. “There is no success for Goldman Sachs unless the economy as a whole grows” and a wider divergence is not created, Mr Blankfein said.
“I couldn’t agree with you more and we are committed in that direction,” he says.
Annoying shareholder gadfly Evelyn Davis blasts Lloyd and calls him out for nepotism since the younger Blankfein works for the firm.
“A once great company is going to shame,” she says. ” If Hank [Paulson] had been here this would never had happened. She said she encouraged Mr. Paulson to become Treasury Secretary so she feels guilty.
“Are you going to step down by the end of the business day on Monday,” Davis ask Blankfein point blank.
Blankfein: :I have no current plan to step down on Monday. There’s a vote today on directors, and I am a director. in a couple hours we’ll have a result of that vote in.”
Article courtesy of Dealbreaker
Sirius XM (SIRI) this afternoon said it will redeem all of its outstanding 10% senior PIK secured noted due 2011 at a price of 100% plus accrued interest.
“Our strong cash position, strong first quarter subscriber growth and the improving outlook for the economy have put us in position [...]
Article courtesy of BARRONS.com: Tech Trader Daily