“Excuse me, do these effectively hide my thunder?”
Dr. Tobias Fünke. A medical visionary as the world’s first certified Analrapist (analyst + therapist) and thespian. And yet, his fashion has never really caught on: until now. For the Never-Nude in all of us, may we present the Junderpants: Read the full story
“Excuse me, do these effectively hide my thunder?”
Dr. Tobias Fünke. A medical visionary as the world’s first certified Analrapist (analyst + therapist) and thespian. And yet, his fashion has never really caught on: until now. For the Never-Nude in all of us, may we present the Junderpants: Read the full story
Paulson Plays the Lehman Bust (WSJ)
Mr. Paulson’s fund has been snatching up Lehman debt at steep discounts since the day the investment bank collapsed, betting prices would rise while panicked investors fled. Now, as Lehman’s estate prepares to wind down, Mr. Paulson’s fund could reap profits between $350 million and $726 million on the Lehman trades…Over two and a half years, Mr. Paulson’s fund, Paulson & Co., purchased more than $7 billion worth of Lehman bonds in about 1,800 transactions. The average cost of those trades was just 13 cents on the dollar, according to the Journal’s analysis.
PIMCO raises bet against U.S. government debt (Reuters)
PIMCO’s Bill Gross, the manager of the world’s largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the company’s website on Monday.
Morgan Stanley Trading Gains Topped $100 Million on 10 Days (Bloomberg)
The firm’s trading division lost money on 3 days during the period, compared with 13 days in the fourth quarter, New York- based Morgan Stanley said in a filing with the U.S. Securities and Exchange Commission.
BofA to cut $850bn bad loan book in half (FT)
Bank of America plans to shrink its $850bn portfolio of troubled home loans by about half over the next three years as it seeks to quicken the pace with which it resolves problems related to the housing crisis and its disastrous purchase of Countrywide Financial. Terry Laughlin, who is spearheading BofA’s mortgage modification and foreclosure programmes, told the Financial Times he had been given leeway to act quickly to tackle the growing number of bad loans that threaten to overwhelm the bank’s overall performance and tarnish the reputation of Brian Moynihan, its chief executive.
Microsoft Said to Discuss Buying Internet-Call Provider Skype (Bloomberg)
A deal would value Skype at about $8.5 billion and may be announced as early as today, said one of the people, who asked not to be identified because the talks are private.
Alan Simpson Attacks AARP, Says Social Security Is ‘Not A Retirement Program’ (HuffPo)
At an event hosted by the Investment Company Institute, Simpson delighted the finance industry audience members by aiming a rude gesture at the leading lobby for senior citizens.
CME raises crude futures margins 4th time since Feb (Reuters)
Margins will climb by 25 percent as of the close of business on May 10, boosting the cost of holding positions for hedgers and speculators, a factor some traders said helped bring oil prices down by as much as 2 percent on Tuesday following a $5 a barrel spike a day earlier…The cumulative increase in margins on U.S. crude benchmark West Texas Intermediate CLc1 positions since February is 67 percent, from $3,750 to $6,250 per contract.
China Has Bigger-Than-Forecast Surplus on Record Exports (Bloomberg)
China reported a trade surplus that was more than three times larger than forecast in April as exports surged to a record, bolstering the U.S. case for faster yuan gains as officials from both nations meet for annual talks in Washington. The surplus widened to $11.4 billion and exceeded the forecasts of all 27 economists in a Bloomberg News survey. Exports climbed 30 percent to $156 billion while import growth slowed to 22 percent, the customs bureau said today.
Euro wobbles, haunted by commodities and debt worries (Reuters)
The common currency, which hit a six-week low against the Japanese yen and a one-month low against the British pound, was also hobbled by fears of a commodities rout after oil prices fell in the wake of the CME Group’s hike in trading margins for U.S. crude futures.
BNP Paribas chairman to retire (FT)
Michel Pébereau, France’s most influential banker, is retiring as chairman of BNP Paribas, the domestic bank he helped transform over two decades.
Reports of Mortgage Fraud Reach Record Level (WSJ)
Reports of mortgage fraud, which have been increasing since the housing boom, rose to their highest level on record in 2010, Treasury Department figures showed. The Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 “suspicious activity reports” related to suspected mortgage fraud, up from 67,507 in 2009, or a 5% increase. That’s the highest number recorded by the government since tracking began in 1996.
A Venture-Capital Newbie Shakes Up Silicon Valley (WSJ)
As a newly minted venture capitalist, Marc Andreessen, co-founder of Netscape, aimed for nothing less than big… Like other investors here, he’d been eying Web companies with explosive growth and global star power. But acquiring shares in tech titans like Facebook is tricky…So Mr. Andreessen set out to make his own rules—maneuvering his way into hot private deals at huge cost.
U.S. Braced for Fights With Pakistanis in Bin Laden Raid (NYT)
President Obama insisted that the assault force hunting down Osama bin Laden last week be large enough to fight its way out of Pakistan if confronted by hostile local police officers and troops, senior administration and military officials said Monday. In revealing additional details about planning for the mission, senior officials also said that two teams of specialists were on standby: One to bury Bin Laden if he was killed, and a second composed of lawyers, interrogators and translators in case he was captured alive.
Arnold Schwarzenegger, Maria Shriver announce separation (LA Times)
Shriver has been residing apart from the actor-turned-politician for the last few weeks. The former first couple confirmed the separation in a joint statement released Monday after questions from The Times…Over the years, the marriage between the international celebrity and the daughter of the Kennedy dynasty has come under close scrutiny, especially during the 2003 recall of Gov. Gray Davis, when The Times reported on Schwarzenegger’s lengthy history of groping women. At the time, Shriver defended her husband, helping lift him to victory in the free-for-all contest.
Article courtesy of Dealbreaker
via guestofaguest.com: If you haven’t yet heard the name Ellie Goulding, then let us get you up to speed. See how this British ingenue has what it takes to sing at the Royal Wedding and why the U.K. is so taken with charming Ellie. MORE>>
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Wait, who? Are we supposed to know who that is? If you do, then you probably saw Beastly or I Am Number Four and we’ve never met because I literally don’t know a soul who saw either. Anyway, Us Weekly thinks Alex Pettyfer is relevant enough for an interview and, in addition to sharing he has a tattoo that reads “Thank You” just above his crotch (“in case I forget to say it”), Romeo had some choice words for our turf and the people who live here. Read the full story
Don’t get Simon Murray wrong, he loves the pregnant ladies. They really rev his engine, but they don’t belong in the boardroom.
Take the issue of gender quotas in British boardrooms, which are being threatened in an attempt to increase the number of women at the top. Murray is not a supporter. “Women in the boardroom? Terrific,” he says. “Why not? Always welcome. But why make a special case out of it? Why tell everybody you’ve got to have X number of women in the boardroom? Women are quite as intelligent as men. They have a tendency not to be so involved quite often and they’re not so ambitious in business as men because they’ve better things to do. Quite often they like bringing up their children and all sorts of other things.
“All these things have unintended consequences. Pregnant ladies have nine months off. Do you think that means that when I rush out, what I’m absolutely desperate to have is young women who are about to get married in my company, and that I really need them on board because I know they’re going to get pregnant and they’re going to go off for nine months?”
Article courtesy of Dealbreaker
Fed Searches For Next Step After QE2 (WSJ)
Federal Reserve officials on Wednesday are expected to signal that in June they plan to end their controversial strategy of buying $600 billion in U.S. Treasury bonds to spur the economy. That would mark a milestone in the historic efforts by the central bank to stimulate economic growth. While analysts and investors debate whether the end to the bond-buying effort will have a significant impact on financial markets, the Fed is contemplating when and how to begin draining the credit it pumped into the economy during and after the global financial crisis. That tightening of credit still looks at least several months off, if not longer, and could take a while to unfold.
Bill Gross Battles Bond Dealers on Outlook as Treasuries Gain (Bloomberg)
“I could join the dealers and say the 10-year’s not going to go to 4 percent, so what am I left with?” Gross said in a telephone interview April 20. “I’m left with an under-yielding, less-than-inflation security. I have better choices. As a firm we’re not going to put up with it.”
US Housing Showing Some Signs Of Life (Reuters)
Four years after U.S. housing prices began to nose-dive, eventually triggering a global financial crisis, signs of life are appearing at the top and the bottom ends of the market. By contrast, a sustained recovery remains far off for the vast middle ground of the U.S. housing sector. Affluent Americans are feeling more secure as the impact of the recession fades and the stock market racks up big gains. “People who have decent income are saying, maybe I can trade up, buy a better property,” said Bill Hardin, director of the real estate program at Florida International University. “Some people are even saying, I’m willing to take a loss on the property I’m selling now to get something I couldn’t buy during the housing peak.”
NYSE Sees Higher Savings In Deutsche Boerse Deal (Reuters)
NYSE Euronext sees cost savings in its $9.8 billion deal with Deutsche Boerse at closer to 400 million euros ($583 million), up by about a third from its initial estimate, according to a Big Board spokesman on Sunday.
Big Oil’s Profits Set To Impress (WSJ)
If oil prices continue to climb, they could at least rival 2008. That year, U.S. producers reported astronomic profits as crude hit $147 a barrel for a time. Exxon that year earned $45.2 billion, more than any other U.S. publicly traded company in history.
Glencore Traders Urged Russia To Ban Grain Exports (FT)
As it bet on rising prices, senior traders at the Swiss-based company publicly urged Russia to impose a grain export ban. Moscow acted a few days later, triggering a grain rally. Glencore is the largest trader in Russian wheat, followed by US-based rivals Cargill and Bunge. The issue is sensitive because politicians such as Nicolas Sarkozy, French president have often blamed speculators for rising food prices. The G20 group of leading economies will hold a special meeting in June to discuss grain markets. Glencore revealed the proprietary trades to UBS, one of the banks underwriting its flotation, in a rare disclosure for a company that guards its market insights closely.
Plane Hauling Cocaine Crashes In Lake (SFNM)
A small planed loaded with bundles of cocaine and likely battling stormy weather crashed into Lake Heron in Rio Arriba County on Sunday morning, apparently killing all on board, according to the New Mexico State Police. Access to that section of the 4-mile-long lake, near Tierra Amarilla, was closed after bundles of what turned out to be cocaine began floating to the surface, Garcia said. “Several packages began surfacing,” he said.
Barrick to Buy Equinox for $7.68 Billion (Bloomberg)
Barrick bid C$8.15 per Equinox share, the Toronto-based mining company said today in a statement. A previous offer from China’s Minmetals was for C$7 a share. Perth-based Equinox has agreed to the Barrick offer and will drop its bid for Lundin Mining Corp., a Canadian copper and zinc producer.
Warren Buffett, Delegator In Chief (NYT)
ARS: Mr. Buffett’s investing antennas may be genius, but some of his critics have suggested that his trust-based management style may have left him too farsighted to quickly spot operational problems. As reported by Carol Loomis of Fortune magazine, when Mr. Buffett was first told in 1991 about indications of a possible scandal at Salomon Brothers that later nearly took down the company (Berkshire was its largest shareholder), he initially did not detect any reason to be particularly alarmed, “so he went back to dinner.” Only after speaking several days later about the matter with his partner, Mr. Munger, “did Buffett get a sense of real trouble.”
Swiss SVP against capital rules, wants banks split (Reuters)
The popular right-wing Swiss People’s Party (SVP) is against government plans proposed this week to tighten regulation of the country’s biggest banks, saying it wants them split up to cut risk to the Swiss economy. Christoph Blocher, former justice minister and SVP mastermind, said his party would oppose legislation the government handed to parliament on Wednesday to force the big banks to meet tough new capital standards.
Tepco Pumps Tainted Water From Reactor Trenches, Adds Backup Power Cables (Bloomberg)
“While not stable yet, things are generally moving in the right direction,” Penn Bowers, a Tokyo-based analyst for CLSA Asia-Pacific Markets, said by telephone today. “I’m not sure we’re going to see any major corner being turned at this point. There’s going to be a slow grind, probably for months.”
Boeing Factory Probed In Rupture Of Southwest Jet (WSJ)
It is too early to draw definitive conclusions, the officials said, and further testing and data analysis could bring other issues to the forefront. But the federal probe increasingly is focused on some type of assembly-line lapse—a rare occurrence in modern aircraft production— that would explain an incident that stunned the airline industry and worried travelers.
China Must Watch for Rising U.S. Treasury Yields: PBOC Researcher (Reuters)
Zhang Jianhua, a head of research at the People’s Bank of China, said worries that the heavily indebted U.S. government may not repay its debt could drive Treasury yields higher and cause U.S. debt prices to fluctuate.
A Fairytale View Of Britain (LATimes)
“The British public is simply not that excited about the royal wedding. According to the Economist, only a third of the population is definitely going to watch the nuptials on TV, while close to half are actively uninterested. My own secret source on the English streets (OK, it’s my mum, who lives in a small town called Tring) reports that ‘people seem much less bothered’ about Will and Kate than about Charles and Di in 1981.”
Jury Deliberations Set to Begin in Rajaratnam Case (FBN)
Jury deliberations are expected to begin Monday in the closely-watched insider trading trial of ex-Galleon hedge fund founder Raj Rajaratnam. Rajaratnam is charged with 14 counts of conspiracy and securities fraud. The government claims he made $63.8 million illicitly between 2003 and March 2009. He was arrested at his Manhattan apartment and charged in October 2009. He maintains he did nothing wrong…The jury’s patience with the nearly two-month trial has shown some signs of fatigue. On Thursday, two jurors groaned when the prosecution continued its rebuttal past 5 p.m. Another rolled her eyes and put on her coat.
Article courtesy of Dealbreaker
The following post is by Dealbreaker reader and commenter Infinite Guest.
This is the worst time in decades to try to reduce the deficit. Unemployment is immorally high, growth remains anemic, private deleveraging shows no signs of abatement, infrastructure is rapidly deteriorating and the prospect of a stagflationary double-dip recession is all too imminent. Yet the drum beat for deficit reduction is deafening, with everyone from Standard & Poor’s to the Committee for Economic Development to the AFL-CIO keeping time, and the rest of the world joining in, marching for a cure to our ailing fiscal health. But if Dr. Dominique Strauss-Kahn prescribes it, and Dr. Zhou Xiaohuan concurs, then it’s snake oil. Don’t drink it.
To be fair, the cacophony of voices calling for deficit reduction is just that, a cacophony. Each special interest has its own rationale for deficit reduction, political, economic and otherwise, and each one places a different level of emphasis on the goal, with a different timeline, different priorities and tactics for achieving it. The AFL-CIO tepidly supports deficit reduction lite, at the bottom of a list of concerns trumped ultimately by the continuance of its own tenuous relevance. The Chinese are focused on their own political stability, now threatened by commodity inflation and their own rudderless domestic economy. The IMF needs contributor nations to appear credible if it has any hope of enforcing its agreements with debtor nations. The Tea Party misunderstands the inchoate backlash that bought them power as a mandate for Objectivism. President Obama is fighting for his political life. Standard & Poor’s, as near as I can fathom, is simply conducting a marketing exercise. But any attention paid to deficit reduction is wasted. Deficit reduction is not a legitimate strategy, period. It is merely one of the pleasant side-effects of a more balanced national economy.
Of all the various approaches floated to address our deficit, the one that seems most likely to succeed is the high-sounding “shared sacrifice.” Shared sacrifice is bullshit. It’s nationalist bullshit meant to distract pensioners from the exiguity of their pensions. It’s statist bullshit to bully the fortunate among us into silence. Shared sacrifice is what we must do when our homes are under attack by a foreign enemy. Otherwise anyone selling you shared sacrifice is picking your pocket.
The nice thing about using leverage is that when things go your way they go your way bigger. Uncle Sam has used a nice amount of leverage and at least has the sense to recognize (for the most part) that he should continue to do so. But there’s more than one kind of leverage.
At home, literally trillions of dollars are languishing on corporate balance sheets right now for a dearth of good investment opportunities. That would be crazy were it not for the stunning lack of leadership that characterizes our public sector. It’s fundamental: Who wants to invest in a country that can’t get its political act together? Chew on this: Spain is ahead of the United States in alternative energy. How is that possible? Among other advantages we have a more flexible economy, better immigration policy, a better educated and more productive labor pool on our side. Good leaders would find some way to encourage better utilization of all those factors. Or at least to stop discouraging their utilization. They may not even have to write any new legislation; they could start by conducting a better, more intelligible dialogue. Good leaders would signal something to the marketplace other than their willingness to squeeze the yield out of Treasurys at any cost. I’m not breaking any new ground when I say that private dollars invested domestically create jobs, which stimulates consumption, which improves profits. Income tax, sales tax and corporate taxes follow proportionately.
The story abroad is no different. Rather than living up to the ideal of American exceptionalism, we lean ever further toward repeating Queen Victoria’s British empire, sucking commodities out of our colonies as they grow progressively more dissatisfied with the burden of our friendship. It doesn’t end well. And like any pseudo-imperial power, we are too slow to recognize how badly we’re hurting ourselves. The core failure common to our China trade, our wars and our energy policy is that we are shipping boatloads of money overseas to people who don’t even want it. We should be recirculating that capital at home. The “how” is the same here. Our trade deficits, like our budget deficits, are only a symptom of the failure of leadership to encourage domestic investment.
Take care of the economy and the deficit will take care of itself.
Article courtesy of Dealbreaker
Feds: Insider Scheme Spanned 17 Years (WSJ)
The alleged scheme revealed on Wednesday stretched back to 1994, when Mr. Kluger allegedly told the co-conspirator while attending law school at New York University and after taking a summer associate job at Cravath that “I’ve got something,” meaning he had access to confidential information, prosecutors said. The co-conspirator then approached Mr. Bauer, whom he had worked with in the 1990s at venture capital firm Weiss, Peck & Greer. Mr. Bauer agreed to trade based on the information provided, prosecutors said. “They structured their relationship so that Bauer and Kluger did not have direct contact prior to the trades,” said Daniel M. Hawke, the regional director for the Securities and Exchange Commission’s Philadelphia office.
Portugal Bailout May Reach $129 Billion (WSJ)
“The talk is for around €75 billion, but this could be raised to around €90billion. A bailout package can be put together very quickly as there has already been preparatory work in anticipation of Portugal’s request,” said the minister, who asked not to be identified.
Moody’s May Take Axe To UK Bank Ratings (Reuters)
Up to 18 British banks could see their senior debt ratings cut several notches by Moody’s over coming months as the rating agency assesses how they would fare without implicit government support. The banks more immediately vulnerable to a downgrade are smaller institutions, including many building societies, rather than larger banks still heavily supported by the state, Moody’s said Thursday.
The Valley’s Banker Returns To The Top (NYT)
Andrew Ross Sorkin: “I’d really prefer you didn’t write about me,” Mr. Quattrone said recently, trying to dissuade me from this column. But it is hard to ignore Mr. Quattrone. In the last year, his boutique advisory firm, Qatalyst Partners, has been involved in nearly every major technology merger. As Hewlett-Packard and Dell battled over 3Par last summer, Mr. Quattrone was calling the shots. He orchestrated the sale of Palm to H.P. for $1.2 billion in April 2010. And Texas Instruments’ $6.5 billion deal to buy National Semiconductor this week? Yes, that was his deal, too.
ECB Raises Interest Rates (WSJ)
The European Central Bank on Thursday raised its benchmark interest rate to 1.25% from a historic low of 1%, as expected, making it the first of the developed world’s major central banks to initiate a cycle of raising rates.
A Hot Idea Falls Short At Goldman (WSJ)
Goldman spent millions of dollars to develop the private exchange, and senior Goldman bankers spent over a year on the project. They gave it an awkward name—the “GS Tradable Unregistered Equity OTC Market” or GSTrUE—but it seemed like an instant success. Los Angeles-based Oaktree Capital Management LLC raised about $1 billion in May 2007, selling a 15% stake in itself on the Goldman market. Two months later, Apollo Management LP, the big New York private-equity firm, also sold shares, raising $895 million. Many bankers expected the new market to steal some of the hottest offerings from the New York Stock Exchange and Nasdaq. Private-equity firms, hedge funds and others that guarded their privacy seemed likely to sell shares there. At the time, Oaktree partners Howard Marks and Bruce Karsh predicted in a memo to clients that “a number of premier companies in other industries” would join their firm on the Goldman platform. Rival banks and exchanges soon launched competing private markets. Then a curious thing happened—hardly any investors showed up.
Sailor, 85, crosses Atlantic on raft with friends (MSNBC)
A stroke of bad luck for Anthony Smith paid for the trip (he was hit by a van and broke his hip). “I got some compensation money,” he said. “So what do you blow the compensation money on? You blow it on a raft.”
Slower Recruitment In London (FT)
City hiring in 2011 is unlikely to reach the heights of last year when banks snapped up staff in a fight for market share, Robert Walters, the white collar recruitment firm, said on Wednesday. “Last year was an unrepeatable correction,” Robert Walters, chief executive of the eponymous firm, said. “Banks had made savage cuts during the financial crisis and they needed to replenish staff quickly. But that was a one-off. Now we’ll have to wait and see.”
RAB Says Clients to Pull 79 Percent of Flagship Fund’s Assets (Bloomberg)
The hedge fund will allow investors to withdraw money when a three-year freeze on client redemptions ends on Oct. 1, the London-based firm said in a statement today. The fund, run by co-founder Philip Richards, had $2 billion at December 2007. The fund slumped 73 percent in 2008, hurt by a bet on Northern Rock Plc, the first British bank nationalized during the credit crisis. RAB won investor approval to halt redemptions in September 2008. The fund declined 7.6 percent in 2010.
Marc Lasry & Team OKed To Control Trump Casino (AP)
Lasry’s Avenue Capital was given final approval Wednesday by New Jersey casino regulators to control the Atlantic City casino company that was founded by Donald Trump. Avenue, which specializes in distressed investments, won the company in a bankruptcy battle last year, and is the largest shareholder at nearly 22 percent.
Sokol Joins Brandon Winning Praise In Buffett Head-Scratcher (Bloomberg)
Sokol’s contributions to Berkshire were “extraordinary,” Buffett said when he announced his resignation March 30. Buffett said in 2009 that Brandon helped in “righting the ship” at General Re. Brandon left in 2008 after prosecutors named him an unindicted co-conspirator at a trial where four former General Re officers were convicted of helping American International Group deceive investors through a sham transaction.
Should There Be A Fat Tax? (CNBC)
Arizona says yes.
Article courtesy of Dealbreaker
According to Yale senior Jeff Anderson, you gotta go with the latter. The opportunity to go pro is one thing but work in the same building as Jamie Dimon? Quite another and not something you want to wake up 30 years down the road asking, what if?
Anderson, who hails from British Columbia, led the Bulldogs to their first No. 1 national ranking last December, after joining them in 2007 when they hadn’t made past the ECAC Hockey quarterfinals in nine years. He graduates this spring and while he’s received “a number of professional hockey opportunities for next year,” he’s only received one once in a lifetime offer- to work for JPMorgan’s sales and trading department.
After “consulting with family, friends and colleagues” on the decision, he ultimately decided that “an opportunity with JPMorgan does not come along every day, and if I pursued hockey, I don’t know if it would be around in the future.”
Anderson doesn’t mention Jamie Dimon or his hair or his penchant for doing shots with the staff or the way he looks at you with those piercing blue eyes and makes you feel like you’re the most important person in the world and no one else matters- whether you’re one of his employees or Lloyd Blankfein- as having been a factor in his decision. But as they’re the most often cited reasons as why anyone takes a gig at JPM, NHL offers or not, he doesn’t have to. We get it.
Article courtesy of Dealbreaker