Shares of contract electronics manufacturer Sanmina-SCI (SANM) are down $2.10, or almost 16%, at $11.30 in early trading, after the company this morning warned its fiscal Q2 that ends this month with fall short of analysts’ estimates because of federal budget delays and continued weakness in the optical equipment market.

The company’s president and COO, Hari Pillai, stepped down.

The company expects revenue this quarter in a range of $1.56 billion to $1.6 billion, below the average $1.65 billion estimate. EPS is seen in a range of 28 cents to 32 cents, versus the consensus 41 cents.

Discussing the outlook, the company remarked that, “a delay in defense market projects and shipments due to Federal budget uncertainty, recently resolved labor strike in India delaying certain product shipments, and short-term softness in the optical market near the end of the quarter.”

Pillai is resigning immediately, the company said, and sales and operations will report to Sanmina CEO Jure Sola, the company said.

During a conference call with analysts this morning, Sola said that the company intended not to replace Pillai, but to keep the new reporting structure. Pillai remarked that, “We have the right markets we are involved in, we are well positioned in these markets, I believe we have fantastic global footprint that we can grow, we have a lot of opportunities to expand our margin as we discussed in the past.”

Also on the call, CFO Robert Eulau said that U.S. budget debates going on have “slowed dramatically” the pace of defense spending on the products Sanmina produces. “We basically stopped getting new orders for the budget title have been taking place in Washington,” said Eulau.

“These are important, proprietary products that we have been shipping for years.”

As for the optical market, “Like some of the other market segments, we are seeing some OEMs making inventory adjustments,” said Eulau.

Addressing the crisis in Japan, Eulau said the company so had “not had any significant impact” from the disruptions going on there.

Article courtesy of Tech Trader Daily

Kan Seeks Calm as Japan Tries to Contain Meltdown, Panic Buying (Bloomberg)
Japanese stocks fell after reports of today’s explosion and fire, sending the Topix 9.5 percent lower at the close in Tokyo, the largest one-day slide since October 2008. The gauge has dropped 18 percent since the quake. The central bank injected 8 trillion yen ($98 billion) into the financial system today, on top of a record 15 trillion yen yesterday. “We are in uncharted waters now,” said Kirby Daley, a Hong Kong-based senior strategist with Newedge Group’s prime brokerage business.

Hedge Funds Had Bets Against Japan (WSJ)
In recent years, a chorus of voices has warned that Japan is facing an inevitable crisis to be brought on by a stagnant economy, a shrinking population and the worst debt profile of any major industrialized country. Hedge-fund managers from Kyle Bass of Hayman Advisors LP in Dallas to smaller firms like Commonwealth Opportunity Capital have made money since the earthquake on long-held bets on Japan’s government and corporate bonds.

Marc Faber: If Markets Keep Falling, Fed Will Keep Printing (CNBC)
“We may drop 10 to 15 percent. Then QE 2 will come, (then) QE 4, QE 5, QE 6, QE 7—whatever you want. The money printer will continue to print, that I’m sure,” said the author of the Gloom, Boom and Doom Report. Later in the interview, he added, “Actually I made a mistake. I meant to say QE 18.”

Pandit Picks Emerging Markets as Citigroup Future in New Risk (Bloomberg)
Citigroup now earns more than half its profit from developing countries, Chief Executive Officer Pandit said at a March 9 conference in New York. The bank increased assets in Latin America and Asia by 16 percent to more than $470 billion last year, adding customers in countries such as Brazil, Mexico and India…“If it grows like a weed, maybe it is a weed,” said Mike Mayo, who recommends investors sell Citigroup shares. “They’ve had risk- management mishaps. We’re not convinced the culture has changed enough to prevent similar mishaps from occurring.”

Gaddafi Says European Friends Betrayed Him (Reuters)
“I was really shocked by the attitude of my European friends,” he told the newspaper. “They have damaged and endangered a series of major accords on security that were in their interests and the economic cooperation that we had.”

Fed’s Next Steps Divide Economists as Asset Purchases Slow (Bloomberg)
Of 50 economists surveyed by Bloomberg News last week, 49 said the Fed will buy the full amount of bonds in a bid to boost the economy. Thirty-one said the central bank won’t adjust the pace or duration of the purchases, as it did in the first round of so-called quantitative easing in 2009-10. Respondents were further divided over how long the Fed will keep its bond portfolio stable after the purchases end, with a plurality of 16 betting on a period of four to six months.

Banking’s Scourge On Charm Offensive (WSJ)
A wall map of the U.S. in the Consumer Protection Bureau’s offices tracks Ms. Warren’s methodical campaign with colored push-pins. Each blue pin records an “in-person meeting w/[Elizabeth Warren], while a red pin means a “one-on-one EW call” and a white pin a “group meeting w/EW.” The map has 47 pins so far.

EU Agrees On Economic Overhaul (WSJ)
Mr. Trichet said the changes aren’t ambitious enough. “We continue to think that the improvement in governance that is presently envisioned is, in our opinion, insufficient to draw the lessons from the crisis we had to cope with,” he said.

Roubini: Yen Will Further Weaken In The Long Run (CNBC)
“Japan is going to need significant depreciation of the yen to increase its net exports because domestic demand is going to be anemic for a while. Therefore on a fundamental basis, the yen is going to be much weaker rather than stronger because you need improvement of external balance given the shock to the domestic economy,” he said.

Japanese Nuclear Plan Radiation Recedes As Engineers Restore Water Level (Bloomberg)
Water supply at reactors No. 1 and No. 3 stabilized and radiation readings at the front gate of the plant dropped to a level that isn’t “harmful to the human body,” Chief Cabinet Secretary Yukio Edano said this afternoon in Tokyo. Separately, Tokyo Electric said it hadn’t decided whether to bring workers after the utility evacuated 750 of its 800 employees following this morning’s blast.

Article courtesy of Dealbreaker

Mary Sadrakula, pictured in both the glamour shot and mugshot at left, is a New Jersey councilwoman and a managing director at Cowen and Company. If colleagues have noticed that it seems like her head’s been in another place lately, it probably has, given that, in the last two weeks, she’s been charged with 1) assaulting her sister and 2) trying to cover up the incident. Why would a grown woman resort to physical violence- which included a punch so hard it broke a nose- toward anyone, let alone her own blood? According to the abused, it’s because Mary had an issue with the fact that her sis “is thin.”

What does that mean? Was Mary jealous of her sister’s slimmer waistline? Or, does she prefer her ladies with meat on their bones and was angry sis isn’t a little thicker? Unclear, but it’s what the victim told the police when they arrived at Mary’s house and found The Thin One sitting the driveway with a broken nose and broken tailbone, meaning whatever Sadrakula was pissed about, she was really pissed. The intensity of the (alleged) assault, however, is not the most impressive part of this story, which involves what Sadrakula, who is also a Bear Stearns alum, did to get herself additionally charged with “purposely obstructing the administration of law.”

After the (literal) ass kicking incident, the police received a call from Sadrakula’s house. The call presumably came from the sister, but when the 911 dispatcher answered, no one was there because, we’re going out on a limb here, Mary knocked the phone out of her sister’s hand. The dispatcher then called back, and the following exchange ensued:

911: Hi, this is the Clifton Police.
Mary: Yes, everything’s okay, there was a problem with my phone.
Voice in the background: Bull shit! She hit me!
Mary: Okay thanks, bye.

Apparently the “bull shit” line piqued the cop’s interest, so he called back again. Here’s how that second call went.

911: This is the Clifton police. What’s going on there?
Mary: Nothing, nothing. This is Councilwoman Mary Sadrakula. I had trouble with my phone.
911: Alright, everything is okay?
Mary: Everything is fine.
911: Alright, no problem.
Mary: When you called back I said that. I had trouble with my phone. So that was what the trouble was. Thanks so much for checking. I appreciate it…bye.

For the full effect, you must listen to the call, and hear the utterly composed tone to Mary’s voice. We’ll wait.

Okay, good?

Now, just take a moment with this. Other than not exactly thinking through the lie (do a lot of phones have problems where they accidentally dial 911?), this woman is good. It’s like, there’s this crisis going on, there’s a crazed sister in the background, Mary’s got blood on her knuckles and her hair is mussed up from the beating and she’s still out of breathe from her Raging Bull moment yet she immediately clicks right into corporate shmoozespeak. “Oh, hey, Officer Jim, how’s it going? Is Bob still with you guys? Haha, yeah, anyway, listen Jim, this was all just a big silly misunderstanding. Nothing to see here, move along. Yup, all good! Thanks so much! You guys do good work down there!”

Unfortunately, cops “can’t take the word of someone on the other end of the phone” and had to send someone to investigate the situation, where they found the sister who told them Mary had “gotten angry” at her because she’s thin. So Mare’s going to have to deal with clearing all this up but if the charges happen to affect her employment with Cowen, which appears to have pulled her bio from their website, though her name can still be found in other places– we’re thinking she shouldn’t have too hard a time bouncing back with a new shop.

Councilwoman Accused Of Assaulting Sister [ABC]
Council Meeting Draws Crowd [NJ]

Article courtesy of Dealbreaker

Hint: he calls Libya home and recently vowed to “fight to the death” anyone questioning his leadership skills.

Moammar Gadhafi’s regime controls $32 billion in liquid assets around the world, including hundreds of millions of dollars invested in U.S. banks, according to a confidential cable written by the U.S. ambassador to Libya last year. The leaked diplomatic message was distributed through WikiLeaks.

The same cable reported that Libya had been approached by two men accused of running huge Ponzi schemes, Bernard Madoff and Allen Stanford, but had resisted offers from them to invest Libyan funds with them…The cable is entitled “Technology of Tourism: Head of Libyan Investment Authority Discusses Opportunities for US Business in Libya,” and was written Jan. 28, 2010, by Ambassador Gene A. Cretz, after a meeting with Mohamed Layas, the head of the LIA, Libya’s sovereign wealth fund. Sovereign wealth funds are the vehicles used by Middle East and other governments to invest oil wealth. The LIA, according to U.S. intelligence, is controlled by Gadhafi’s regime.

“Stanford had approached the LIA in the middle of his crisis, offering a 7-8% share in his investment scheme, but Layas had refused,” Cretz wrote. “Layas also mentioned having been previously approached by Bernard Madoff about an investment opportunity, ‘but we did not accept’.”

Gadhafi controls $32 billion, turned down Madoff, diplomat wrote [MSNBC]

Article courtesy of Dealbreaker

The answer may reveal the rationale behind a report arguing for supervision by the Federal Reserve.

Hedge funds and insurers might threaten U.S. economic stability in a time of crisis, according to a report aimed at helping regulators decide which non-bank financial companies warrant Federal Reserve supervision.

An exodus of hedge-fund investors could “cause activity in some markets to freeze,” said the Feb. 3 report by staff of the Financial Stability Oversight Council. The report, obtained by Bloomberg News, also said the failure of a large insurance company could “result in dramatic and destabilizing actions being taken by investors.”

So would it have to be like a thousand funds? Just a couple big ones all at once? Are we going by number of assets or body size?

Hedge Funds May Pose Systemic Risk in Crisis, U.S. [Bloomberg]

Article courtesy of Dealbreaker

“Even if a guy is really lazy and has done s*** all year, he’ll still get a £600,000 bonus.”

Those words supposedly comes from a “sharp-suited trader” guzzling Cristal with his colleagues in a London bar yesterday, who went on:

“Everyone in here is BarCap. The reason there’s so much champagne is because it’s our bonus day…The PAs even got bonuses today, some of them got £60,000. Most traders got two, three, four, five and even six million.

One of the more believable lines from the article which may have been written by Stephen Glass: “Some people are annoyed because they don’t think they got enough this year.”

Bankers Celebrate Bonuses Like Crisis Never Happened [Mirror via BI]

Article courtesy of Dealbreaker

As you know, there are two types of financial services organizations- those that emerged from the financial crisis as winners (John Paulson comes to mind) and those that did not (a category that would include firms like Lehman Brothers, if you want to get really judgey). Where did Credit Suisse fall? JPMorgan has some thoughts.

The bank’s share of more than $146 billion in revenue from trading and advising clients that the biggest investment banks made in the first nine months of 2010 was 8 percent, compared with 13 percent in 2007, data compiled by Bloomberg show.

“It does not look like Credit Suisse is coming as a winner out of the crisis,” Kian Abouhossein, a banking analyst at JPMorgan Chase & Co. in London, said in a note. “We think it missed an opportunity to take market share, specifically in fixed-income.”

Credit Suisse Trims Profit Goal as Net Misses Estimate [Bloomberg]

Article courtesy of Dealbreaker

Gold May Get Boost From Increased Collateral Use, MF Global Says (Bloomberg)
JPMorgan yesterday said it will accept bullion “to satisfy securities lending and repo obligations” as more clients seek to use gold as an inflation hedge and to post as collateral…“The announcement should be slightly positive for gold prices, as it further grows the belief that gold is a currency and has more uses than simply acting as a safe haven or portfolio diversifier,” Tom Pawlicki, an analyst at MF Global in Chicago, said today in a report.

Meredith Whitney’s Muni Bond Prediction Draws Scrutiny (NYT)
“I’ve seen a copy of the report, and frankly, I’ve seen better papers from graduate students in finance,” said Richard P.Larkin, director of credit analysis at Herbert J.Sims & Company, a municipal bond broker and underwriter. “It’s ludicrous, reckless and irresponsible, and it’s being done without any regard for the consequences.”

Goldman Sachs Turns Bullish on European Banks Bond Market Shuns (Bloomberg)
The bank is telling investors to buy European bank stocks for the first time in more than 16 months. Bond buyers are taking the opposite view on concern that policy makers will fail to staunch the debt crisis.

Rep Ryan: Fed Should Raise Rates (CNBC)
“I’m worried they’re not going to pre-empt inflation,” Ryan said. “I’m worried they’re going to see it too late and we’re going to have a problem.”

Obama Urges Businesses To Increase Spending For Good Of The Country (Bloomberg)
“As we work with you to make America a better place to do business, I’m hoping that all of you are thinking what you can do for America,” Obama said. “Ask yourselves what you can do to hire more American workers, what you can do to support the American economy and invest in this nation.”

Behind The Bond Crisis Brouhaha (NYP)
Charlie Gasparino has a theory: “My sources in Washington say the left sees the writing on the wall: A more conservative electorate means less money from Washington to finance the various welfare schemes and public-sector unions. What better way to keep the federal gravy train running than to use predictions of another financial collapse to dismiss the budget-cutting progress made by such governors as New Jersey’s Chris Christie?”

Florida Bans Cocaine-Like Bath Salt (NPR)
“For lack of a better term, they’re flipped out. It’s almost like a psychotic break. They’re extremely anxious and combative, they think there’s stuff trying to get them, they’re paranoid, they’re having hallucinations. So, the encounters are not pleasant,” Ryan says. “And we were finding that some of these guys couldn’t be sedated with the normal drugs that we would use with other stimulants.”

Banks Reach Out To Small Firms (WSJ)
“We found that small-business people have to eat, too,” says Rick Hartnack, U.S. Bancorp’s vice chairman for consumer banking. During the past two years, U.S. Bancorp also has added more than 100 private bankers who can sell loans and other products to doctors, lawyers and other small-business owners.

Cash Buyers Boost Battered Housing Market (WSJ)
Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.

UBS Optimistic On Attracting More Client Funds In 2011 (Bloomberg)
“We are optimistic that overall positive net new money inflows will continue in the first quarter,” Chief Executive Officer Oswald Gruebel and Chairman Kaspar Villiger said in a letter to shareholders today. “For the full year, we believe that net new money will strengthen noticeably.”

Article courtesy of Dealbreaker

As you may remember, prior to his flogging on Capitol Hill, we were privy to Goldman Sachs employee Fabrice Touree’s emails to lady-friend he was looking to bed. He did so by begging off the “fabulous” titles (“I’m not fabulous, you’re fabulous”) and laying it on embarrassingly thick with Marine Serras (with lines like “[My friend Mitch] would call me the fabulous Fab even though there is nothing fabulous about me, just kindness, altruism and deep love for some gorgeous and super smart French girl in London”). In its recently released “who to blame for the crisis” report, the FCIC thought it prudent to release a few more excerpts.

In a line that’s been in the public domain for some time, Tourre went on to say he didn’t fully understand the “monstrosities” he created and sold to investors. Then the previously unreleased portion resumed:

“Anyway, not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself,” Mr. Tourre wrote.

Then this: “So there is a humble, noble and ethical reason for my job amazing how good I am in convincing myself!!!”

This is what your employers mean when they say don’t put anything embarrassing in an email.

The further misadventures of Goldman’s ‘fabulous Fab’ [Crain's]

Article courtesy of Dealbreaker

Over the weekend, the NYT magazine ran a Q&A with Abby Joseph Cohen, president of the Global Markets group and senior investment strategist at Goldman Sachs. In the last two years, Goldman brass has been subject to more than its fair-share of grilling by the press. Some of the interviews have been reasonable- for instance, it’s not entirely out of bounds to ask for a high-ranking bank executive’s thoughts on the 2008 crisis- others the stuff of misinformed hack journalists who see it as their duty to wage a vendetta for the bloodthirsty public who want to blame everything on the financial community without taking any blame themselves. None have been as uncomfortable, hostile or delightfully awkward as Deborah Solomon’s “Questions” with AJC. From Solomon’s typically adversarial and I don’t want to call them kind of bitchy but okay, kind of bitchy questions to Cohen seemingly, amazingly, being entirely caught off-guard by the fact that someone from the NYT would ask her, a GS employee, about the crisis, and her almost entire inability to adapt to a more adversarial line of questioning than she was expecting, this thing was so delightfully car-wreck you can’t look away from-esque that few things could top it, except maybe seeing Lloyd Blankfein and his wife having a drawn out argument in front of Williams Sonoma about whether or not he’s allowed to go to his nephew’s bachelor party.

Everything starts off fine, with business about a lack of women in the senior ranks on Wall Street. JoCo answers the question as anyone probably would, by not really answering it at all because having a vagina does not necessarily make you an authority on why it’s harder for women to obtain/maintain senior roles, or mean you know how to solve the problem, or mean you even care because some people don’t. Remembering what she was there for- detonating a bomb that explodes not once but multiple times- and probably realizing she had a limited amount of time, Solomon gets right into the good stuff.

Do you have a Facebook page?
No, I don’t. I don’t think we should talk about this. No one here is supposed to be talking about Facebook.

Do you mean the fact that Goldman Sachs basically committed securities fraud, Solomon wonders?

You’re referring to the fact that Goldman Sachs just withdrew its offer to American clients to sell shares of Facebook, which could violate all kinds of rules.
I can’t comment.

Fair enough, Solomon figures, and moves onto a new topic on which she has not yet formed an opinion– is it unethical and likely even criminal that your boss makes millions and if yes how do you justify his paycheck when he provides little to nothing to society?

Do you think it’s ethically justifiable that certain bankers earn $50 million or $60 million a year at a time when unemployment is nearly 10 percent and income inequality is widening in this country?
The income inequality that you refer to is apparent in many different places. You see it in athletics; you see it in entertainment; you see it in your industry as well. You take a look at the compensation of C.E.O.’s of major corporations, recognizing that those corporations have become much larger —they do business in many different parts around the world — and it’s very difficult to know how to properly benchmark the compensation.

You could say that entertainers at least provide entertainment, as opposed to a C.E.O. What is a C.E.O. contributing to society?
What about the C.E.O. of the New York Times Company?

What about her? She’s contributing a newspaper to society, which presumably keeps the American public better informed. It has been widely observed that the financial-services industry is not creating a product in the tangible sense.
It’s unfortunate that — I think that there is not a good understanding as to the role of financial intermediaries. For example, without banks it’s hard to see how businesses would get the money they need to grow and to hire new workers. Let’s not lose track of the fact that most people need to borrow in order to buy a home, and if you don’t have banks, that’s not going to happen.

A natural segue from here, practically anyone would agree, would be to ask the subject how it felt to get demoted. What it’s like to take orders from someone younger and more nimble. If it feels as though he/she is being slowly phased out.

In 2008, David Kostin replaced you as Goldman’s chief forecaster. Did you see that as a demotion?
Certainly not. It was a generational thing. I hired David several years earlier, and the idea was that David would move into the position.

Finally, let’s talk about the 2008 crisis. You may not have caused the entire thing with your own two hands, working late at night on it when everyone else had gone home but you didn’t personally do anything to stop it, is that right? And if yes, does that weigh on your conscience? And finally, how do you sleep at night?

Do you feel any responsibility for the economic meltdown of 2008, which you failed to foresee?
That’s an odd question to be asking me.

Because?
I did not think that was part of what we were going to be talking about.

We’re talking about your life; there was a big meltdown in 2008. I’m wondering, how do you deal with that emotionally?
I would say that the causes of the meltdown were multiple, and it is a mistake to point a finger at any one entity. And that these problems took place not just in the United States. This was a very unfortunate confluence, bad decisions made by many different entities.

The only thing that could have made this better is if it were a video interview and the questions were posed by Jiminy Glick.

Questions For Abby Joseph Cohen [NYT]

Article courtesy of Dealbreaker