Sayeth Chaz:

“Fuld portrayed Lehman as a firm that was fighting successfully to survive. With those words of encouragement, some investors lent Lehman money, others bought its stock or decided not to sell, thinking the situation was going to get better. Given what later happened, that sounds like an open-and-shut case of securities fraud, with greedy Wall Streeters caught lying to public investors, right? Well, no.

I’m told the SEC is under intense pressure to bring a case against someone at Lehman, whether it’s Fuld or another top exec — and having a tough time coming up with conclusive evidence they knew they were lying about what they were saying about Lehman’s chances. And if they can’t prove that, they don’t have a fraud case…As for the accounting gimmick Lehman used just before its ’08 implosion, it was approved by the firm’s auditor, Ernst & Young — which OK’d it because other firms had used similar techniques to mitigate losses, without a peep from regulators. In other words, Fuld really did think Lehman would survive — because in the past, with the help of the feds, it had. But…if Fuld “had” to know better, then what about all those politicians and bureaucrats who encouraged the creation of mortgage-backed securities, which were at the heart of the collapse? What about the Fannie Mae and Freddie Mac execs who let banks hand out loans to almost everyone? What about the Federal Reserve and Treasury officials, under Republicans and Democrats, who stepped in and mitigated Wall Street losses time after time, creating an environment where CEOs like Fuld believed there was no consequence to risk-taking? If it’s a crime to help trigger a disaster by getting things wrong, a lot of people belong in jail.”

Executives And The 2008 Collapse [NYP]

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

“Where’s the fucking proof,” he told colleague Donald Longueuil he was going to ask Federal officials, should they try to nail him for anything, although we now know when the big moment came he decided to just confess everything and cooperate so they wouldn’t hurt him.

Article courtesy of Dealbreaker

Aircell the company that provides the Gogo in-flight Internet service, has raised $35 million in new funding.

In-flight Internet seems to be more and more common (or at least it’s becoming more and more central to my work life), with Aircell leading the charge. The Itasca, Ill.-headquarted company said Gogo is now available on nine of the top 11 airlines. That includes all flights by AirTran Airways, Delta Air Lines, and Virgin America, as well as some flights from Air Canada, Alaska Airlines, American Airlines, United Airlines, and US Airways. And it has plans to go live on Frontier Airlines soon.

The company has also teamed up with tech companies to offer high-profile promotions, most notably deals with Google that led to free WiFi over the last two holiday seasons. Aircell said Gogo made more than 2 million WiFi connections during the 2010 promotion. (I thought Gogo service seemed to slow dramatically during the promotion, and I’ve heard similar complaints from friends, but an Aircell spokesperson denied that performance suffered.) This month Aircell is partnering with Ford to provide free in-flight access to Facebook.

Beyond commercial airlines, the company said offers in-flight Internet on nearly 6,000 business aircraft.

Aircell said it has raised more than $500 million in funding since it was awarded an exclusive spectrum license by the Federal Communications Commission in 2006, including $176 million raised last year. The new round came from existing investors including Ripplewood Holdings, Blumenstein/Thorne Information Partners, “other investment entities associated with investor/entrepreneur Oakleigh Thorne,” and Aircell management.

Competitors include OnAir and Row 44.

Tags: Gogo, in-flight Internet, in-flight wifi

Companies: Aircell

Article courtesy of VentureBeat » deals

After being announced nearly two years ago, the Federal Communications Commission and the Justice Department today finally approved the union of cable TV provider Comcast with NBC Universal. The deal is expected to be finalized by the end of the month.

As the New York Times points out, the deal marks the first time a cable company has had control over a major broadcast network. Not surprisingly, it has sparked concern since it was first announced in March 2009, as such a large media powerhouse could end up strong-arming its providers and partners. Comcast could for example give web speed preference to NBC shows, or prevent other carriers from streaming NBC content altogether.

But just as we reported it would last month, the FCC has made sure to include conditions for Comcast-NBCU to follow. In a statement released today, the FCC writes: “Comcast-NBCU will be required to take affirmative steps to foster competition in the video marketplace.  In addition, Comcast-NBCU will increase local news coverage to viewers; expand children’s programming; enhance the diversity of programming available to Spanish-speaking viewers; offer broadband services to low-income Americans at reduced monthly prices; and provide high-speed broadband to schools, libraries and under served communities, among other public benefits.”

The deal was approved by a 4 to 1 vote. Senior Democratic commissioner Michael J. Copps, who cast the dissenting vote, said in a statement that the deal “confers too much power in one company’s hands.” FCC chair Julius Genachowski responded with his own statement that reiterated why he believes the agency’s conditions on the deal will ultimately drive innovation in online video.

Indeed, Comcast will become an even bigger player in online video through the deal. Comcast will gain a minority stake in the popular video site Hulu, and it will also be able to control the availability of NBC content on Netflix’s streaming video library.

Tags: broadcast, cable, mergers, TV

Companies: Comcast, Comcast-NBCU, NBC Universal

People: Julius Genachowski, Michael J. Copps

Article courtesy of VentureBeat » deals

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]

Article courtesy of Dealbreaker

If you have ever wished you hadn’t taken the advice of a film critic, or cringed after purchasing a well-reviewed product that turned out to be junk, chances are you have since become a smarter shopper. Bad experiences teach us to be wary of the advice of others, especially those who are being paid to give us advice.

It seems that investors have begun to learn those same lessons. Bloomberg reports that, among companies within the S&P 500, those that were recommended increased 73% (on average) since March 2009. Meanwhile, the companies with the fewest “buy” recommendations were more than twice as successful, gaining 165%.

According to Bloomberg, retailers and restaurant chains are among the banks’ favorite investments. But investors who view the recommendations as a contrary indicator are buying into utilities, which disburse the highest dividends after telephone stocks. Wary investors are also turning to banks, which Bloomberg believes are likely to grow three times as fast as the S&P 500 this year.

“When you have a stock that has 15 analysts covering it and it has 15 buys, I can’t imagine it has much outperformance left,” said Don Wordell, a fund manager at Atlanta-based RidgeWorth Capital Management Inc. His $1.64 billion RidgeWorth Mid-Cap Value Equity Fund topped 98% of its peers in the past five years. “You’ve got a stock that has 15 sells on it, you’re set up there to have some strong outperformance.”

For the last six weeks, the S&P 500 has been moving upward. Bloomberg data show that the index has gained 88% (up to 1,271.50) since March 9, 2009.

In 2010, the index rallied 13%. Netflix, Inc. (NASDAQ: NFLX) earned the top spot for highest gains, rising 219% last year. Cummins Inc. (NYSE: CMI) scored an impressive 140%.

Previously, analysts predicted that health-care and technology companies would win the year, but they ended up having two of the three smallest rallies among 10 industries in the S&P 500, gaining less than 10%. At the same time, banks and real estate firms – which analysts did not rate very highly – performed the best, rising 19% and 28%, respectively.

Further gains were brought on by the Federal Reserve’s stimulus spending, which has poured a reported $600 billion into bonds. Bloomberg says that the companies that earned the most are the ones that are most closely tied to the economy. Cliffs Natural Resources Inc. (NYSE: CLF) is one such beneficiary, gaining 69%.

Still, David A. George, a bank analyst at Robert W. Baird & Co., does not believe that analysts could have foreseen the impending changes to financial regulations.

“A year ago today, financial regulatory reform was not even on people’s radar,” he said. “Going into 2010, a lot of investors were positioned in big banks. With the increased political and regulatory scrutiny, you saw money come out of those names and into the regionals.”

Investors: 1, Analysts: 0 [Benzinga]

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Article courtesy of Dealbreaker

Electronista today points us (thanks!) to an interesting document from Comcast (CMCSA) to the Federal Communications Commission outlining what the nation’s top cable operator would provide in return for having its proposed acquisition of NBC-Universal blessed.
The letter, dated December 23rd, from Comcast’s head of regulatory affairs, promises, among other things, [...]

Article courtesy of BARRONS.com: Tech Trader Daily

We are getting a bargain on this TARP business.

“The cost of TARP is likely to be no greater than the amount spent on the program’s housing initiatives,” Geithner said in prepared testimony to the Congressional Oversight Panel. He said the direct financial cost of TARP was once estimated as high as $350 billion by the Congressional Budget Office but was now “likely to cost a fraction of that amount” as investments are sold off and interest and dividends collected. The latest estimate from the non-partisan CBO estimated that TARP’s net cost will be as low as $25 billion. The Treasury’s most recent all-in cost estimate for TARP, including expected gains from AIG investments, is about $30 billion.

Geithner said the 1 percent of GDP cost for all rescues — including capital support to Fannie Mae and Freddie Mac. and actions taken by the Federal Reserve — is “remarkably low” compared to other past banking crises.

Article courtesy of Dealbreaker

via guestofaguest.com: Real news is happening today, like TIME naming their 2010 person of the year (Zuckerberg), and the federal court announcing that your email is protected by the 4th amendment. However, I think you may enjoy taking a look at the Kardashian Christmas Card and Vogue'[...]

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