$$$ The Galleon Case Is Nowhere Near Over (NYT)

$$$ Little Guys Are Everywhere in Rajaratnam’s World (Bloomberg)

$$$ BofA’s Moynihan Says U.S. Lender ‘Still Struggles Mightily’ on Mortgages (Bloomberg)

$$$ Rating agencies win dismissal of lawsuits (Reuters)

$$$ Gasoline slump drags oil prices to second big drop (Reuters)

$$$ Corn, Wheat, Soybean Futures Decline as USDA Supply Outlook Tops Forecast (Bloomberg)

$$$ U.S. Budget Deficit Narrowed to $40.5 Billion in April as Revenue Climbed (Bloomberg)

$$$ Sell riskiest investments now, Grantham urges (MarketWatch)

$$$ Senate Democrats seek to highlight tax breaks for oil companies ahead of Hill visit by CEOs (AP via WaPo)

$$$ RAB set to delist as assets evaporate (FT)

$$$ Earthquake hits southern Spain, ten dead (Telegraph)

$$$ Google’s Chrome Laptops to Go on Sale in June (NYT)

$$$ How to Turn 100 Trillion Dollars Into Five and Feel Good About It (WSJ)

$$$ Hipsters to blame for billions of dollars in Census losses? (Metro)

$$$ New York delegation goes after foreign parking violators (Politico)

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

It looks like investors think there’s real money in e-reading — at least, judging from the $50 million round just raised by e-reading startup Kobo.

The company offers its own e-reading devices (the Kobo eReader and the Kobo Wireless eReader), as well as apps for a wide range of other platforms, including the iPad, iPhone, Blackberry, and Android. It has also partnered with Samsung, Research in Motion, and HTC to supply the e-reading application for their tablet devices.

And even though it may be less well-known than competitors like Apple (with its iBooks app) and Amazon, Kobo seems to be growing fast, with 3.2 million users, including 1 million added in the last 90 days.

The round was led by undisclosed institutional investor, with funding also coming from past backers Indigo Books & Music, Cheung Kong Holdings, and others. Toronto-based Kobo said it wants to use money to expand internationally (last week it announced plans to open localized versions of its e-book store for Germany and Spain) and to launch new products.

This is the largest round I’ve seen for an e-book company, but the area has already attracted some leading investors. For example, digital textbook maker Inkling’s investors include Sequoia Capital, while Callaway Digital Arts, which creates e-books that are enriched for iPads, has raised money from Kleiner Perkins Caufield & Byers.

Tags: e-books, e-reading

Companies: Cheung Kong Holdings, Indigo Books & Music, Kobo

Article courtesy of VentureBeat » deals

Obama Girds for Struggle With Republicans Over Debt Limit (Bloomberg)
The U.S. government is projected to slam into the $14.3 trillion legal cap on government borrowing sometime this spring. As the price of their vote to allow the government to go further into debt, congressional Republicans are demanding far deeper cuts than the $38 billion they got last week in the deal to fund the government for the last six months of the 2011 fiscal year. Failing to raise the debt ceiling would have much more dire consequences than a shutdown, with Treasury Secretary Timothy Geithner predicting last week that it would “call into question the willingness of the government of the United States to meet its obligations,” and “shake the basic foundations of the entire global financial system.”

PIMCO goes short US government debt, raises cash holdings (Reuters)
The portion of PIMCO’s $236 billion Total Return Fund held in U.S. government debt, including U.S. Treasuries, was -3 percent of total assets in the fund as of March, down from zero in February.

JPMorgan Accused Of Breaking Its Duty To Clients (NYT)
In the summer of 2007, as the first tremors of the coming financial crisis were being felt on Wall Street, top executives of JPMorgan Chase were raising red flags about a troubled investment vehicle called Sigma, which was based in London. But the bank chose not to move out $500 million in client assets that it had put into Sigma two months earlier. Sigma collapsed a year later. Now, new documents unsealed late last month as part of a lawsuit by bank clients against JPMorgan show for the first time just how high the warnings about Sigma went — all the way to the office of the bank’s chief executive, Jamie Dimon. While the clients lost nearly all their money, JPMorgan collected nearly $1.9 billion from Sigma’s demise, according to the suit.

China Inflation Is `Somewhat Out of Control’ on Weak Currency, Soros Says (Bloomberg)
“It would be very advantageous to allow the currency to appreciate as a way of controlling inflation,” Soros said. “The authorities missed that opportunity. You now have inflation somewhat out of control, and causing some serious danger of wage-price inflation.”

NYSE Rejects Nasdaq Offer (WSJ)
In a statement Sunday, NYSE Euronext called the bid by Nasdaq and partner IntercontinentalExchange Inc. “strategically unattractive” and entailing “unacceptable execution risk.” The NYSE reaffirmed its commitment to a $9.7 billion merger with Deutsche Börse announced in February, itself fraught with political and antitrust issues in both Europe and the U.S.

Nomura’s Stock-Backed Loans Jump 50% as Japan Quake Spurs Demand for Cash (Bloomberg)
Daily loan transactions jumped to about 150 from 100 and credit volume also climbed 50 percent as customers sought funds following the disaster, Naoshi Sakai, an executive director of Tokyo-based Nomura’s banking and trust agency services unit, said in an interview.

U.K.’s ‘Moderate’ Bank Report Calls for More Capital, Sales (Bloomberg)
“The universal banks such as RBS and Barclays fare best from the report,” said Joseph Dickerson, a banking analyst at Espirito Santo Investment Bank. “The key negative in the report is the prospect of further branch divestitures at Lloyds which is currently unquantifiable.”

From Behind Bars, Madoff Spins His Story (FT)
He says he gets lots of mail from well-wishers, but no hate mail. “I spend most of my time in my room, reading,” he adds. “And – this is my secret – Danielle Steel.” We all laugh. “Yes, Danielle Steel.”

Economists See Growth Accelerating Later This Year (WSJ)
On average, the 56 economists polled downgraded their estimate of first-quarter growth in gross domestic product to 2.7% at a seasonally adjusted annual rate. That is down from an average first-quarter forecast of 3.6% just two months ago. The economy grew at a 3.1% rate in the fourth quarter.

Economist: Spain Will Not Escape Europe’s Debt Woes (CNBC)
“The fact is that nobody knows whether the country (Spain) will need external help in the months that lie ahead. But what everybody knows is that the European Central Bank’s decision to raise interest rates will intensify its difficulties,” said Roger Nightingale, a global economist at Pointon York in London in a note to clients.

Glencore Eyes Big Mergers After IPO (FT)
CEO Glasenberg told the Financial Times that the launch of the offering – the largest ever in London – was “imminent” after it received robust support from big institutional investors. Glencore plans to sell a 20 per cent stake worth about $10 billion-$12 billion, valuing the whole company at around $60 billion, bankers said.

Insider Trading in China Thrives With Selectively Disclosed Economic Data (Bloomberg)
“In China, it’s better to be prepared than to be surprised,” said Shi, 42, an investment manager with Nanjing 21st Century Investment Group, a property developer in eastern China. “There is a window for speculation.”

Article courtesy of Dealbreaker

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

The second wave of e-commerce is coming, buoyed by a flood of fresh cash. European flash-sales site operator Privalia, which offers short-term, steeply discounted fashion deals in Spain, Italy, Brazil, and Mexico, is expanding to Germany with a $280 million acquisition of rival Dress-For-Less.

The deal is funded in part by $123 million in fresh cash from General Atlantic, Highland Capital Partners, Index Ventures, and Insight Venture Partners, as well as debt and newly issued shares.

Those are big numbers, and they come on top of a $95 million round just last October from General Atlantic and Index.

Privalia is a private-sales site that offers members deep discounts on apparel and other items for a short period of time. Others in the flash-sales category include Rue La La, now owned by GSI Commerce; Gilt Groupe, which offers deals in apparel and travel; and One Kings Lane, a home-décor site. The limited time horizon for offers, combined with a curated array of merchandise and new social tools, serves to drive demand from consumers looking to buy something new.

That customer base — those who view shopping as entertainment and largely made up of women — is potentially much larger than the hardcore online shoppers who became loyal online shoppers a decade ago.

The first wave of e-commerce, transactional and efficient, did catalogs one better by offering a nearly limitless array of merchandise and selling it cheaply and quickly. It satisfied demand, rather than creating it.

Private-sales sites, daily deals purveyors like Groupon, and other new forms of e-commerce promise to do something much bigger and more difficult: create demand. Successful traditional retailers excel at this, turning their stores into showcases of consumer delight and convincing people to reach for their pocketbooks for something they had no intention of buying when they walked into the store.

Privalia seems to have an edge in fast-growing overseas markets. Gilt currently operates in the U.S. and Japan. GSI, which is publicly traded, spent $350 million acquiring Rue La La and could expand quickly. A lot of capital is flowing into the sector. But unlike earlier waves of e-commerce, which required building and stocking warehouses to guarantee the availability of those vast virtual shelves of merchandise, the new e-commerce tends to move products quickly, making it an appealing investment to venture capitalists who might shy away from plowing their capital into inventory.

Instead, the money in this second wave of e-commerce is going into customer acquisition, technology, and some financial maneuvers — like Privalia’s rollup of Dress-for-Less.

Tags: e commerce, e-commerce 2.0, flash sales, private sales, social shopping

Companies: Dress-for-Less, General Atlantic Partners, Index Ventures, Insight Venture Partners, Privalia

Article courtesy of VentureBeat » deals

Shares of solar energy technology providers are trading mixed today following a Reuters‘s report this morning that Italian regulators decided not to impose any suspension of subsidies, or feed-in-tariff, FiT, for the technology once a threshold of installations is reached.

The stocks are clearly struggling for direction, trading quite mixed in a market that’s up strongly today.  Sunpower (SPWRA), for example, is down 12 cents at $17.12,  while First Solar (FSLR) is up 15 cents at $145.79.

To judge from the various analyst reports today, the Street is having a hard time even agreeing on what was resolved so far in Italy, with some people saying a “cap” was imposed on subsidies, others saying it was not, and still others saying there wasn’t any cap, ever, to begin with.

Solar analyst Jeff Bencik with Kaufman Brothers tells me by phone this afternoon that his impression is nothing has been resolved for sure.

“If it’s anything like Spain, in 2008, and Germany, any number of times, you are just going to get this back and forth and nothing is decided for a very long time,” says Bencik.

“People are construing it as a cap, but I don’t think it ever was,” says Bencik, referring to the threshold of 8 gigawatts of solar installations in Italy that have served as a benchmark around which the debate has revolved.

“At the time they put it, it wasn’t a cap, it was a “goal.” There could at some point be a “soft cap” of sorts implemented, if say, they reached 7 gigawatts of installations and then cut the tariff somewhat, and then, when they reached 8 gigawatts, cut it some more. in reality, though, cap is the wrong word for that. It’s really a market-based incentive program.”

Bencik, who is Neutral on shares of FSLR and SPWRA, thinks that with a “back-end loaded” earnings picture for those companies, the fundamentals of their business may come to matter more than the regulatory environment sometime later this year. In the meantime, he has a Buy recommendation on LDK Solar (LDK), the Chinese producer, which has a more even flow of earnings over the year, and which he sees as deeply undervalued, trading at just six times forward earnings.

Nevertheless, there remains a wide disparity of views on the matter:

Mark Bachman, Auriga Securities: “No cap in Italy. A news report on the website Il Messaggero said the Economic Minister and Environment Minister agreed this morning to not institute a cap at 8GW. We expect some form of normalcy to return to solar shares in the coming days. In general, this means we should expect a bid to solar as prices come back toward where we started last Friday. We do not believe this is the end of macro-led drama for solar shares as further European incentive schemes are more likely to be reduced in order to better reflect a balance between incentive and investment. However, with Germany settled and Italy well on its way, the uncertainty surrounding incentives is slowly whiling away. Other noise may crop up, but now that a discussion of a cap in Germany and Italy is out of the way, all players can concentrate on the business of installing solar, and any further news of incentive reductions will likely be small potatoes.”

Gordon Johnson, Axiom Capital: Today, the Italian govt passed legislation that will: provide an annual limit of total PV power to be incentivized as part of a new FiT scheme to be effective June 1st, 2011, or a ’11 cap which will apply to out years [...] end the current FiT scheme May 31st, 2011, with the definition of new tariffs based on both the reduction in PV systems costs & a comparison to similar FiT levels from EU member states [...] implementation, immediately, of a 1MW cap for ground‐based PV plants on agricultural land [...] only 10% of a farmer’s land can be used for the installation of a ground‐based PV plant (the plants cannot be placed within 2 kilometers of each other) [...] modules for plants must have a 10‐year warranty; and new buildings must have renewable energy generation capacity of 10kW per 8,600 square feet of surface in ‘11. we strongly recommend [...] initiating short positions in this space ahead of the market better understanding the implications of this action by the Italian govt.”

Vishal Shah, Barclays Capital: “Overall, we consider the outcome to be worse than expectations as it increases uncertainty with respect to the second half of 2011 fundamentals and likely increases risk to financing of several ongoing projects. We expect this policy to result in a significant slowdown in the Italian market in Q2 until pricing expectations are reset for a potential 30% to 50% FiT cut in the second half of 2011.”

Terence Geoghan, Brigantine Advisors: “We believe that much of the sellside are focusing on the wrong end of stick; the fact that FiT would be reduced in Germany/ Italy in 2011 is well known already. The bigger deal is that Italy did not impose a cap on the FiT at 8GW, potentially paving the way for Italy becoming the largest solar market this year. Finally, lost in all the to & fro is the fact that Europe is making significant progress towards its goal of getting 20% of its power from renewable sources by 2020.” Geoghan sees Sunpower and First Solar as being well-positioned in the utility-scale market, and recommends buying the shares on the recent pullback. As for Suntech Power Holdings (STP) will get some “tailwinds” from Italy and “could even provide some upside,” but he thinks Chinese producers will “scramble” this year for business in Italy, and he maintains a Hold rating on STP.

Dan Ries, Collins Stewart: Today’s developments “remove the big risk of a halt to the Italian solar demand, but is by no means a free lunch. Our point is that without the FIT being known for June can affect projects as early as March or April. That is within the normal lead time for module sales agreements. We suspect a lot of calls are being made from module buyers to module producers (in China) saying, ‘hey, I am not sure I need all those modules I ordered for 2Q11 and I am sure I will need them at a lower price.’ The Italian policy change set to occur in June will have implications for module sales in the very near-term.”

Article courtesy of Tech Trader Daily

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

Morgan Stanley Profit Surges (Fortune)
The bank made $1.1 billion, or 43 cents a share, from continuing operations. That’s up from $653 million, or 18 cents a share, on a comparable basis a year ago and ahead of the 35-cent analyst consensus estimate.Revenue rose 14% from a year ago to $7.8 billion, beating the $7.4 billion analyst target. Revenue rose 12% in institutional securities and 7% in global wealth management. Within institutional securities, principal transactions trading revenue fell 27% from a year ago.

FrontPoint’s Steve Eisman Weighs Leaving The Firm (WSJ)
Mr. Eisman, 48 years old, said Wednesday in response to questions about his plans, “At this point in my career, I want to have more control over my destiny.” He said he hasn’t decided on a structure for a potential new firm, and he plans to continue managing investments for FrontPoint, as well as for other investors, in any event.

David Tepper Is Cautious For 2011 (NYP)
Tepper said while “the biggest opportunities” will remain in equities, 2011 will be “harder and not without risk.” “When things go up too high, they will go down,” Tepper said, referring to the recent market surge, which saw the S&P 500 close the year up 13 percent, in line with his prediction.

Initial Jobless Claims in U.S. Fell to 404,000 Last Week (Bloomberg)
Applications for jobless benefits decreased 37,000 in the week ended Jan. 15, the biggest decline since February 2010, to 404,000, Labor Department figures showed today. Economists forecast 420,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments rose.

More Than 100 Suspected Mobsters Arrested (WSJ)
The arrests were made around the New York area on charges including racketeering, conspiracy, extortion and murder, a person familiar with the situation said. The takedown involved accused members and associates of all five New York organized-crime families: the Gambinos, Genoveses, Bonnanos, Luccheses and Colombos, this person said. Also arrested were members of the DeCavalcantes in Newark, N.J., and accused New England mobsters in Providence, R.I.

Spain To Ramp Up Bank Bailouts (WSJ)
In a first step, Spain is preparing to issue €3 billion ($4 billion) in debt in coming days, the people familiar with the matter said. Government officials are putting plans in place to eventually raise as much as €30 billion, according to these people, though some say the final tally will be less.

Blackstone on Pensions: ‘We Oppose Scapegoating Public Employees’ (Deal Journal)
“Blackstone’s view on public employee pensions is clear and unambiguous: We believe a pension is a promise. Working men and women should not have to worry about their retirement security after years of service to their communities. We oppose scapegoating public employees by blaming them for the structural budget deficits that cities and states face. We at Blackstone are committed to helping public employees retire with confidence in the strength and reliability of their pensions.”

Carlos Slim: Invest In Mexico Or Else (CNBC)
In fact, he says those choosing not to invest in Mexico are making a big mistake: They will lose. “If they are already here, they will lose market share. If they are not here they will lose a very big market. We are 110-112 million people, and growing the economy,” Slim says.

Article courtesy of Dealbreaker

Wilbur Ross: Ireland Will Overcome Problems In Two Years (CNBC)
Ireland passed a very tough budget, cutting the minimum wage, and it now has in place a bailout by the European Union and the International Monetary Fund, showing the government’s determination to solve the problem the country faces, Ross said. “Ireland has a very specific problem, we think they’ll overcome it in a couple of years,” he added.

Fed Signals Stronger Economy Won’t Slow $600 Billion Stimulus (Bloomberg)
The Federal Open Market Committee said yesterday after its final meeting of 2010 that growth is “insufficient to bring down unemployment” and inflation has “continued to trend lower.” U.S. central bankers affirmed a plan to buy $600 billion of bonds through June and renewed their pledge for an “extended period” of low interest rates.

Spain Rating Put On Review By Moody’s (Bloomberg)
Spain’s credit rating may be cut from Aa1, Moody’s Investors Service said, as the government prepares its final bond sale of the year tomorrow amid concern it may follow Greece and Ireland in seeking a bailout. Spain has to raise 170 billion euros ($226 billion) next year, while refinancing needs for its regions total 30 billion euros and for banks around 90 billion euros, Moody’s estimates. “Spain’s substantial funding requirements, not only for the sovereign but also for the regional governments and the banks, make the country susceptible to further episodes of funding stress,” Kathrin Muehlbronner, an analyst at Moody’s, said in a report today.

Senate Sets Wednesday Vote On Tax Cuts (Reuters)
While the Senate neared a rare bipartisan vote on the bill to renew all Bush-era income tax breaks and add provisions to stimulate the economy, House Democrats mulled ways to pull back on some of the measure’s tax breaks for the wealthy.

Tax Deal Shaping 2012 GOP Campaign (WSJ)
Former Alaska Gov. Sarah Palin and former Massachusetts Gov. Mitt Romney have both come out sharply against the measure, which President Barack Obama hammered out last week with Senate Republican leaders. Both cite the deal’s price tag, with Mr. Romney saying it will heap billions more onto the nation’s debt load. Supporting the package are former Arkansas Gov. Mike Huckabee, Minnesota Gov. Tim Pawlenty and former House Speaker Newt Gingrich, all of whom praise the deal as good for the economy and the only way to spare Americans the jolt of a sudden tax increase that otherwise would take effect on Jan. 1.

No Funeral, Just Cremation For Mark Madoff (NYP)
“He is going to be cremated at the family’s wishes,” the source said, hours after Mark’s body was released by the Medical Examiner’s Office to a Manhattan funeral home. “No services, no viewing. The family doesn’t want a viewing.”

Goldman Seeks New Top Asia Manager (FT)
GS is seeking an executive to run its day-to-day operations in Asia even as the bank struggles to find a new role in its New York headquarters for the region’s chairman, Michael Evans.

Icahn To Buy Dynegy For $665 Million (WSJ)
Dynegy Inc. said its board has agreed to be acquired by Icahn Enterprises LP for about $665 million and billions in assumed debt. Shares of the power producer climbed 2.2% to $5.57 premarket, above the $5.50-a-share offer price. The per-share bid from Icahn is 10% higher than an earlier bid by Blackstone Group LP that failed to win shareholder support amid intense opposition from investor Carl Icahn and hedge-fund operator Seneca Capital, another major holder.

Companies Assail Whistleblower Bounties (WSJ)
In a letter to the SEC, top legal officials at companies such as Delta Air Lines Inc., FedEx Corp., Gap Inc. and Pfizer Inc. told the agency that proposed rules for an enhanced whistleblower system required under the Dodd-Frank Act will undermine internal compliance programs already in place at companies. The proposed rules “disincent employees from looking for ways to improve or correct corporate behaviors, and incent them to find ways to profit from corporate wrongdoing,” according to the letter, which is set to be released Wednesday. “Fraudulent misconduct, the bane of good compliance systems, then becomes the gold mine.”

Jeffrey Gundlach: The US Can’t Handle Rising Interest Rates (PC via BI)
“I don’t think the economy can take much of a rate rise above 3.5 percent….The economy, society and government are fueled by debt.”

Article courtesy of Dealbreaker