Deutsche Bank Profit Rises on Record Consumer Bank Earnings (Bloomberg, DB Release)
Deutsche Bank reported a 17 percent increase in first-quarter profit, exceeding analyst estimates on record earnings at the consumer- banking and asset-management units. Net income climbed to 2.1 billion euros ($3.1 billion), the second-highest quarterly result ever and more than the 1.8 billion-euro average estimate of 11 analysts surveyed by Bloomberg.

Goldman Sachs, JPMorgan Face EU Antitrust Probe of CDS Market (Bloomberg)
Goldman Sachs, JPMorgan Chase and other 14 other investment banks face a European Union antitrust probe into credit-default swaps for companies and sovereign debt, regulators said. The European Commission said it opened two antitrust probes. It will check whether 16 bank dealers colluded by giving market information to Markit, a financial information provider. It will also examine whether nine of the banks struck deals with ICE Clear Europe that block other clearinghouses from entering the market and give rivals “no real choice where to clear their transactions.”

Facebook’s value plateaus as $90B deal flops (NYP)
Ahead of the company’s long-rumored IPO, a group of Facebook employees and investors tried to unload $1 billion in stock at a $90 billion valuation but couldn’t find enough investor appetite. Instead, they had to lower their asking price to an implied $70 billion valuation — the high end of where Facebook has traded on private exchanges that traffic in the shares.

US Officials Unfazed By Dollar Slide (WSJ)
In recent days, the nation’s top two economic policy makers—Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner—have publicly expressed their desire for a strong dollar. But there is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency’s downward course.

Nasdaq, ICE Are Said to Consider Tender Offer for NYSE Euronext (Bloomberg)
While announcing a tender offer for NYSE Euronext shares would demonstrate Nasdaq OMX and ICE’s urgency, it carries little weight, said Sang Lee, a managing partner at Aite Group LLC, a Boston-based financial-research firm. That’s because the Big Board’s governing documents, mandated by the Securities and Exchange Commission, prevent investors from accumulating a 20 percent stake in the company without the approval of the board.

The Waiting Game: Notes From A Tense Courtroom (Law Blog)
One man who has attended every day of the trial, but whose identity has remained a mystery to reporters because he has repeatedly declined to give his name, said in a brief interview Thursday that he ran a brokerage, Cummins Financial, that counted Rajaratnam’s hedge fund, Galleon Group, among its clients. The brokerage closed in 2008. David Cummins, 49 years old, said he has known Mr. Rajaratnam about 10 years, and that the two men and their wives and kids are “close friends.” He said of Galleon and its employees: “They were immaculate.”…Another supporter, Peter Malaszuk, said he worked with Rajaratnam for 15 years and was a “logistics manager” at Galleon. “He’s a great man,” Malaszuk said. Asked what toll the trial is taking personally, he said, “He’s a tough man – very successful, but this is getting to him.”

Calling Animals ‘Pets’ Is Insulting, Academics Say (Telegraph)
Domestic dogs, cats, hamsters or budgerigars should be rebranded as “companion animals” while owners should be known as “human carers”, they insist. Even terms such as wildlife are dismissed as insulting to the animals concerned – who should instead be known as “free-living”, the academics including an Oxford professor suggest. The call comes from the editors of then Journal of Animal Ethics, a new academic publication devoted to the issue.

Can Macquarie Again Become a Millionaires Factory? (CNBC)
Friday’s results revealed yet another decline in profit at the company called the “Millionaires Factory” thanks to the huge bonuses paid to top executives and employees. From record profits of A$1.8 billion posted in 2008, Macquarie’s annual profits have now fallen nearly 50 percent to A$956 million in the year to March 2011. Now the question facing both the company and its shareholders is, can Macquarie ever recover to the glory days?

Banks Rush To Improve Foreclosure Practices (WSJ)
Under orders from U.S. regulators, 14 financial institutions have until mid-June to lay out plans to clean up their mortgage-servicing operations—and another 60 days to make the changes.

Buffett To Face Question On Praising Sokol Before Audit Reports (Bloomberg)
Berkshire is facing “governance challenges” that may hurt the company’s credit quality, Moody’s Investors Service said April 1, citing Sokol’s stock trades and resignation. The Securities and Exchange Commission is probing whether Sokol bought Lubrizol shares on inside information…“The whole notion of Berkshire Hathaway operating on a higher plane was based upon the idea they didn’t just do what was legal, they did what was ethical,” said Cornelius Hurley, a professor at Boston University School of Law and former assistant general counsel at the Federal Reserve Board of Governors. “When one of your senior officers gets caught with his hand in the jar and you say, ‘Oh it’s legal,’ you’ve kind of blown away that principle of higher standards.”

William’s Royal Giggle Fest (TDB)
As Kate entered Westminster Abbey, the cameras respectfully panned away from Prince William, who seemed to suffer an attack of the giggles as his future wife made her way up the aisle. When the couple were finally face to face, William mouthed, “You look beautiful,” and a billion hearts melted around the globe.

Article courtesy of Dealbreaker

Obama Demands Budget Deal To Avert Government Shutdown (Bloomberg)
fter meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid, Obama said issues remained unresolved and he hoped for a breakthrough that would prevent a shutdown, set to begin at midnight tonight. “I’m not yet prepared to express wild optimism but I think we are further along,” he told reporters. “My hope is, is that I’ll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted.”

SEC May Relax Limits On Shares In Private Firms (WSJ)
According to the letter and people familiar with the matter, the likely changes would include raising from 499 the number of shareholders private companies can have without being required to open their books, and also making it easier for such companies to publicize share offerings.

Portugal To Face Strict EU Aid Terms Amid Political Storm (Bloomberg)
In an unprecedented intervention in national politics, euro-area finance ministers said Portugal can win relief by mid- May as long as it makes cuts that go beyond measures that failed to pass parliament in March and led to the government’s downfall.

EU Stress Tests To Examine 90 Banks, 5% Capital Pass Rate (Bloomberg)
“Make no mistake, 5 percent of Core Tier 1 is harder in comparison with last year,” James Babicz, head of risk at SAS, a business analytics company, said in telephone interview in London today. “But I think you have to look at how risky a bank is rather than look at a static capital threshold.”

Marc Faber: Gold Is Still Cheap Despite Record Surge (CNBC)
Faber rejected the notion that gold is in a bubble even as it begins to approach $1,500 an ounce. “If it were a bubble a lot of people would have gold. The whole world would be trading gold 24 hours a day,” he said. “But I don’t think it’s really a bubble. I think gold is maybe cheaper today than it was in 1999, when it was $252.

Why London Can Live Without Its Big Banks (Reuters)
“One or two of them might change their corporate headquarters for tax purposes but if they do go we probably won’t even notice. There won’t be a great outflow of workers and Canary Wharf won’t turn into a ghost town.”

Corporate Jets Often First Thing To Go After Leveraged Buyouts (Bloomberg)
Companies bought by private-equity firms are 32 percent less likely to have a jet in the three years after the deal closes than in the year before, according to a paper written by the Federal Reserve Board’s Jesse Edgerton. The study, published Jan. 21, found that jet fleets at LBO-backed companies are at least 40 percent smaller than at similar publicly traded firms.

Jefferies Expands (Breakingviews)
Jefferies’ lineup now includes municipal bonds and an enlarged investment bank. Staffing has increased by more than a third since the financial crisis struck. Now it’s adding commodities and futures, by buying Prudential Bache for $430 million. Jefferies is still far from joining the big boys. Net profit last year was just $280 million, far less than what Goldman harvested. There’s still scope to grow, however. New hires arguably have not yet settled in enough to crank out their full earnings potential. Shareholders appear to have baked in a better relative performance at Jefferies: the stock trades at about 1.7 times book value, double Morgan Stanley’s multiple and a third better than Goldman’s.

An Aggressive Fed? More Of Street Betting On It (Reuters)
The survey found that about a third of the economists, fund managers and strategists who responded to the survey see the Fed hiking interest rates this year, double the percentage from the March survey. About 27 percent believe the Fed will begin selling assets in the second half of 2011, to reduce the size of its portfolio, up from around 16 percent in the prior survey.

How To Pay No Taxes (BusinessWeek)
Some tips.

Asian Central Banks Intervene As Currencies Rise (WSJ)
Asian currencies rose against the dollar Friday, prompting a number of regional central banks to intervene, as the U.S. currency fell over that nation’s budget woes and a rise in the euro spurred the region’s currencies higher. The move follows Thursday’s rate increase by the European Central Bank, its first tightening since 2008. While the move was widely expected, it suggests world economic growth will continue to improve.

Speed Trading May Be Heading Out To Sea, Literally (CNBC)
In many cases, the best places to maximize chances of buying low in one place and selling high in another (for example between New York and London) were located in the world’s oceans. So could this be the end of traditional fixed stock exchanges in the world’s biggest cities and the rise of floating exchanges in the mid-Atlantic ocean? Wissner-Gross believes that floating trade centers could be a reality of the future.

Article courtesy of Dealbreaker

If you’re a person who’s living in the past, you were probably very excited to hear that the Federal Reserve would today be releasing secret loan documents detailing who was in some trouble several years ago and who was in some big trouble, in case you were unable to hazard a guess. The Fed originally wasn’t going to share any information, having denied Bloomberg’s request for the details almost three years ago, but was forced to do so under court order. They really didn’t want to but after the Supreme Court said last month they must, everyone came around and said you know what? Sure thing. Happy to do it. You want documents? You’re gonna get ‘em. EVERY SINGLE ONE.

Liking the move Goldman pulled when it sent the Financial Crisis Inquiry Commission thousands upon thousands of documents last year to wade through, some of it germane to the situation, some of it CFO David Vinair sending links to himself from Bon Appetit‘s website for butter pecan ice cream recipes so he wouldn’t forget, the Fed sent Bloomberg and various other news organizations two CD-ROMS containing 894 PDF files and over 25,000 pages of information. Happy hunting.

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Rajaratnam’s Wiretapped Call With Brother Bolsters Insider Case (Bloomberg)
And in testimony earlier this week, Goel said that Rajaratnam told him in 2003 that Rajaratnam had given BMW cars to two women in Intel’s sales department who leaked information to him. Lynam asked Goel if he thought Rajaratnam was joking. “I don’t think that was a joke, sir,” he responded. Wasn’t Rajaratnam kidding when he told Goel in a wiretapped conversation that he would kiss Goel on the cheek the next time he saw him? Lynam later asked. “I hope he was,” said Goel, to laughter in the courtroom. “If not, I had him figured out all wrong.”

Economy Grows 3.1%, Aided By Surge in Corporate Profits (Reuters)
Gross domestic product growth was revised up to an annualized rate of 3.1 percent, the Commerce Department said in its final estimate, close to its initial estimate of 3.2 percent published two months ago and up from its tally of 2.8 percent made in February.

Barclays Said to Be Investigated by Regulators in Libor Probe (Bloomberg)
U.S. and U.K. regulators are examining if communications between Barclays’s traders and its treasury broke regulations that stop information being shared across the bank.

S&P Warns Big Banks About ‘Excessive’ Dividends (NYT)
The credit rating agency said in a report that it “remains wary of banks aggressively increasing capital returns to shareholders at this juncture of the economic recovery.” S.&.P. indicated it might downgrade credit ratings at banks that made “excessive” payouts to investors.

Goldman Slides to 10th Spot in US M&A Rankings (Reuters)
Goldman advised on $71 billion worth of U.S. deals in the first quarter, far less than JPMorgan’s chart-topping $170 billion, and even lower than much smaller banks such as Rothschild, Evercore Partners and Lazard.

China-Focused Hedge Fund Assets Rise Despite Laggard Performance (DJ)
China funds added $3.5 billion in assets in 2010 to a total $18.68 billion, even as their 6.11% gains were short of the global industry average of 10.55%.

Warren Says Consumer Bureau Foes Should Look at Bank ‘Behemoths’ (Bloomberg)
“If we’re going to go out there and spill ink on accountability, we should also ask about how to hold powerful financial institutions accountable,” Warren said yesterday in an interview with Bloomberg News. “The idea that we should be worried that some agency that will speak up for consumers might get a little too loud is looking in the wrong direction.”

Bernanke To Hold Press Conferences 4 Times A Year (WSJ)
“The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve’s monetary policy communication,” the Fed said.

Spain’s Bank Rescue Hits Headwinds (WSJ)
Eight of Spain’s cajas must present their capital-raising plans to regulators by April 10. That has caused a flurry of activity in recent weeks as savings banks sounded out hedge funds and private-equity funds and others pursued initial public offerings. But the exercise has stirred questions from investors about the level of reserves that the banks hold against real-estate risk in their portfolios. The banks also have faced questions over whether their executives have distanced themselves sufficiently from local politics; in some cases, they have even been quizzed about managements’ own understanding of what is on their books. In general, “people don’t understand what they are buying,” said a Spanish banker who has tried to get investors interested in the cajas.

Reactor Core May Be Breached at Damaged Fukushima Plant (Bloomberg)
“It’s very possible that there has been some kind of leak at the No. 3 reactor,” Hidehiko Nishiyama, a spokesman at the Japan Nuclear and Industrial Safety Agency, said in Tokyo today. While radioactive water at the unit most likely escaped from the reactor core, it also could have originated from spent fuel pools stored atop the reactor, he said.

Fed Mulls Auction For AIG Bonds (WSJ)
The Federal Reserve is considering an auction for a large portfolio of subprime-mortgage bonds and is consulting with BlackRock Inc. about the process, according to people familiar with the matter.

Article courtesy of Dealbreaker

Hedge Funds Scramble As Rivals Exit (WSJ)
Both Level Global Investors LP and Shumway Capital Partners, which have more than $12 billion in combined assets in trading strategies involving bets on and against stocks, are both giving back cash, albeit it for different reasons. Several investors in the funds as well as consultants close to the matter say some investors are looking to put their cash into funds that follow the same “long-short” investment style. “We will probably look for a firm that is a similar strategy to Level Global,” said Craig Slaughter, the executive director of the West Virginia Investment Management Board, which manages pensions and other investments for the state. It has nearly $12 billion under management and invested about $50 million with Level Global. Mr. Slaughter said his staff is working on a recommendation.

Mets Forward List Of Potential Buyers To MLB (MLB)
The list, which originally included about 30 potential buyers, includes David Heller, co-head of Goldman Sachs’ securities unit, who leads one potential group of buyers with other former and current Goldman partners. Heller has already met at least twice with Steve Greenberg, the managing director of Allen & Co., who has been hired by the Mets to find a buyer, the Post reported.

Bernanke Says Stronger Recovery Would Reduce State Woes (Bloomberg)
“If the economy continues to strengthen at about the pace projected by the Federal Reserve and many private forecasters, states and localities may start to get a little breathing space,” Bernanke said yesterday.

Guggenheim to Hire 150 Proprietary Traders Fleeing Banks (Bloomberg)
Loren M. Katzovitz and Patrick Hughes, 49-year-old managing partners who have worked together since 1993, are launching Guggenheim Global Trading LLC in Purchase, New York, with an initial investment of $500 million as soon as June 1, they said yesterday in an interview. The firm plans to hire 100 to 150 traders and manage as much as $2 billion, they said.

BlackRock, Santander Said to Pursue Citi Consumer Lender (Bloomberg)
BlackRock private- equity firms KKR & Co. and Warburg Pincus LLC are considering a joint bid for the unit and are in talks to include Santander, Spain’s biggest bank, said the people, who spoke on condition of anonymity because the discussions are private. Their team is one of at least four competing for the business, which has about $13 billion of assets, the people said.

For Muni-Bond Market, Calm After The Storm (WSJ)
Since late January, the market appears to be stabilizing. Yields on a benchmark 30-year general obligation bond have fallen 7%—only part of the way toward erasing the 22% rise between Veterans Day and Jan. 14. A few individual investors have been willing to test the waters. Rick Tronvig, 63 years old, who lives outside of Denver, hasn’t owned municipal bonds for many years but recently upped his holdings to 6% of his portfolio. “It got cheap enough that it discounts the risks of default,” he says.

Euro Zone Countries ‘Have Cancer’ (CNBC)
Periphery euro zone countries are seriously ill and will have to default on their debt at some point, Satyajit Das, a risk consultant and author of “Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives” told CNBC Thursday. So far, the European Central Bank has treated the problem as a liquidity problem, but it will have to admit that the debt will not go away, Das said. “This is like somebody with a disease, it’s a major disease … they’ve got cancer, you’ve got to be honest about it,” he said.

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]

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The good news: the economy is improving slightly! The even better news: you’re getting even more stimulus up in this piece!

The Federal Reserve gave a lukewarm economic assessment on Wednesday despite recent signs the recovery was strengthening, saying high unemployment still justified its $600 billion bond-buying program. In a statement following its policy-setting meeting, the central bank also said measures of underlying inflation were “somewhat low” although it acknowledged rising commodity prices that have fueled global inflation worries. It left its benchmark interest rate unchanged near zero, as was widely expected, and reiterated that rates would likely stay ultra-low for an extended period. None of the Fed officials dissented.

“The economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Fed said.

[CNBC]

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BofA Posts Quarterly Loss (MarketWatch)
The bank reported a fourth-quarter loss of $1.2 billion, or 16 cents a share, including a previously announced goodwill impairment charge of $2 billion related to its home loans and insurance business. Excluding the charge, the company saw profit of $756 million, or 4 cents a share. Analysts polled by FactSet Research had forecast quarterly net income of 18 cents a share, on average. In the year-ago quarter, Bank of America posted a loss of $194 million, or 60 cents a share.

Goldman Pay Still Tops JPMorgan’s as Bonus Season Begins (Bloomberg)
JPMorgan’s investment bank set aside enough money to pay an average of $369,651 to each employee for 2010, or 2.4 percent less than in 2009, according to the company’s year-end financial statements. Goldman Sachs’s pool equates to an average of $430,700, a reduction of 14 percent.

Buffett Stock Picker Simpson Opens Florida Firm After Retiring From Geico (Bloomberg)
Louis Simpson, the investor who picked stocks on behalf of billionaire Warren Buffett’s Berkshire Hathaway Inc. for more than a decade before stepping down, is going into business for himself. The 74-year-old Illinois native is starting an investment- advisory firm with his wife Kimberly Querrey in Naples, Florida, according to documents filed Dec. 20 with the U.S. Securities and Exchange Commission. The company, SQ Advisors LLC, is preparing to manage money later this year for Simpson’s family and friends, as well as outside charities, he said in an interview.

RBS In Talks To Quit State Protection Plan (FT)
Executives at Royal Bank of Scotland and officials at the Treasury are examining ways in which the part-nationalised bank could secure an early exit from the costly Asset Protection Scheme – an insurance structure designed to provide a government backstop for an original portfolio of £280bn ($445bn) of bad or risky assets.

California Declares Fiscal Emergency (CNBC)
Jerry Brown, California’s governor, declared a state of fiscal emergency on Thursday for the government of the most populous US state to press lawmakers to tackle its $25.4 billion budget gap.

Morgan Stanley Shows Life (WSJ)
Morgan Stanley Chief Financial Officer Ruth Porat said in an interview with The Wall Street Journal that the firm still needs to “close the gap” in interest-rate and currency trading. The company is just halfway into a two-year recovery plan for the trading unit, she added. It has hired more traders whose expertise is dealing with clients that like to buy large amounts of relatively simple products.

Immelt To Head New White House Jobs Board (WSJ)
The board will replace an existing panel called the President’s Economic Recovery Advisory Board, led by former Federal Reserve chairman Paul Volcker. The name of the new panel stresses competitiveness and job creation, which are expected to be themes of Mr. Obama’s State of the Union Address next week. It will be called the President’s Council on Jobs and Competitiveness.

Lovebite partially paralyses woman (National)
A Christchurch doctor had to treat a woman after she was partially paralysed by a lovebite from her amorous partner. Dr Teddy Wu, who is currently working in the neurology department at Christchurch Hospital, said he believed it was the first time someone had been hospitalised by a “hickey”. An article on the case has appeared in the New Zealand Medical Journal. Wu said he saw the woman over a year ago while he was working in Middlemore Hospital in Auckland. The 44-year-old Maori woman went to the emergency department after experiencing loss of movement in her left arm. It happened while she was sitting watching television. The only injury was a lovebite on the right of her neck near an artery. “Because it was a lovebite there would be a lot of suction. Because of the physical trauma it had made a bit of bruising inside the vessel,” said Wu.

Article courtesy of Dealbreaker

There’s an old saying that goes “Poors- what are they good for? [sing this part] Absolutely nothin’!” Slightly clichéd though not necessarily untrue. Take the economy. Are the poor and middle class, many without jobs and/or disposable income, doing their part to stimulate the damn thing? No, not really. As always, the rich people have to do everything around here.

Rich shoppers are driving an increase in consumer spending, bolstering a recovery that masks reluctance among less affluent Americans to join in. Sales are up at Tiffany & Co. and Coach Inc., buoyed by demand for $6,000 diamond pendants and $1,200 leather handbags as a stock-market surge pads the wallets of the wealthy. At the other end of the economic spectrum, Wal-Mart Stores Inc., the world’s largest discount retailer, reports “everyday Americans” are living paycheck to paycheck as they await an improvement in job prospects.

“The heavy lifting is being done by the upper-income households,” said Michael Feroli, a former Federal Reserve economist who is now chief U.S. economist at JPMorgan Chase & Co. in New York. “They’re the ones benefiting the most from the stock market rally, and they’re spending.”

The Rich Go Spend But With Little Help From The Middle Class [Bloomberg via Daily Intel]

Article courtesy of Dealbreaker

He’s does it all the time around the office but never in public, in front of other people.

To: NYU Stern Community

Subject: Interview with Dr. Allan Greenspan, Former Chairman of the Federal Reserve, by John A. Paulson, President of Paulson & Co. Inc

To mark the establishment of the Alan Greenspan Chair in Economics, Former Federal Reserve Chairman Alan Greenspan (BS ’48, MA ’50, PhD ’77, Honorary Doctorate of Commercial Science ’05) will be interviewed by John A. Paulson (BS ’78), the president of Paulson & Co. Inc. Drawing on Dr. Greenspan’s lifetime experience, the interview will provide a perspective on the future of finance and financial markets as well as the implications of recent regulatory action. Come hear an illuminating discussion between two NYU Stern alumni, who will share insights into the US and global markets. Q&A will follow their dialogue.

Related: Alan Greenspan Joins John Paulson’s Hedge Fund [AC]

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