“I think I have all of the qualifications to run the institution. I have 30 years of public service. I have a PHD from the University of Chicago. I have worked all my life in matters relevant for the Fund. I was the Executive Director of the Fund, the Deputy Managing Director of the Fund, in charge of the relationship with 80 countries. I was Minister of Finance of Mexico and now I am the Governor of the central bank. I have wide experience, I have participated in the G20, part of the steering committee of the Financial Stability Board, I’m a board member of the Bank for International Settlements. I know the institution from all different angles. I know the Fund as a member of the staff and its management, I was an Executive Director and I know the Fund, having been in authority with a lot stake at the Fund. I think I make a good candidate.” And despite all that…

Nothing about how he would react in a scenario wherein he was surrounded by hotel maids and “no one would find out,” i.e. this resume is going directly to the trash.

Article courtesy of Dealbreaker

It would be a “moral disaster” if the United States were to default on its debts and become unable to pay its obligations, Jamie Dimon said at an appearance in Colorado Thursday evening. The U.S. is the financial linchpin of the world, and the economic effects of the U.S. defaulting could be “potentially catastrophic,” he said at a dinner for the University of Colorado Denver Business School. “It will dwarf Lehman,” Dimon said. [HP]

Article courtesy of Dealbreaker

Goldman BRIC Fund Among Most Hurt in ‘Panic’ Commodities Selling (Bloomberg)
The $831 million Goldman Sachs BRIC Fund (GBRAX) and the $825 million Templeton BRIC Fund (TABRX), which focus on Brazil, China, India and Russia, both fell 5.7 percent in the week ended yesterday. The funds, from New York-based Goldman Sachs Group Inc. and San Mateo, California’s Franklin Resources Inc., lost the most among diversified equity funds with more than $500 million in assets and at least 20 percent in energy or basic materials stocks, according to data compiled by Bloomberg.

Glencore IPO Orders Continue To Roll In (WSJ)
Glencore on Wednesday set the price range for the offer at 480 pence to 580 pence, valuing it at around $61 billion, including the new money being raised. Around $10 billion in shares will be sold, plus a $1 billion overallotment. Most of the offer is in the form of new shares. Bankers said the order book was covered after the first day of subscriptions. One on Friday said a “material” amount of orders were added to the total on Thursday, even as oil and silver prices slid sharply.

Paulson’s Biggest Fund Said to Be Down in 2011 After April Gain (SFGate/Bloomberg)
Paulson’s Advantage Plus Fund, which uses strategies designed to profit from corporate events such as takeovers and bankruptcies, is down 1.7 percent in 2011 after gaining 0.1 percent last month, said the person, who asked not to be identified because the returns are private. The fund’s gold- denominated share class rose 6.3 percent in April and 4.9 percent this year.

Bank of America Had Positive Trading Revenue Every Day of First Quarter (Bloomberg)
Trading-related revenue was positive every day and exceeded $25 million on 98 percent of days during the year’s first three months, the Charlotte, North Carolina-based lender said today in a filing with the U.S. Securities and Exchange Commission. In 2010, it had gains on 90 percent of trading days, with perfect records in that year’s first and third quarters, according to previous filings.

AIG quarterly net income drops 85% (MarketWatch)
First-quarter net income attributable to AIG was $269 million, compared with $1.8 billion a year earlier, the company said. On a per-share basis, AIG reported a net loss of 35 cents, versus a profit of $2.66 a share in the first quarter of 2010…AIG expected to make 34 cents a share, according to a FactSet survey of three analysts. A Thomson Reuters survey of three analysts came up with a consensus estimate of a loss of 15 cents a share.

JPMorgan Chase Said to Be Subpoenaed by SEC Over Mortgage Debt Documents (Bloomberg)
JPMorgan received a subpoena from the U.S. Securities and Exchange Commission over failed mortgages, a person familiar with the investigation said, as the agency probes banks including Credit Suisse Group AG for allegedly failing to share refunds from sellers of faulty debt.

RBS core operating profit jumps 25 pct (Reuters)
RBS, which is majority-owned by the British government, made a first quarter loss of 528 million pounds ($841.5 million) after it racked up 1.3 billion pounds in bad debts at Ulster Bank… RBS said Irish loan losses would stay high this quarter before “gradually declining” in the second half of the year. The bank’s core business – namely its main retail and investment banking arms and excluding its insurance unit which is due to be sold off or floated on the stock market in 2012 – had an operating profit of about 2 billion pounds a quarter.

Schumer Tilts Toward Offer by Germans for Big Board (WSJ)
Chuck Schumer, a New York Democrat, remains publicly neutral on the competing proposals: a roughly $10 billion bid from Deutsche Börse AG, which agreed in February to buy NYSE Euronext, and a hostile, $11 billion offer from Nasdaq OMX Group Inc. and IntercontinentalExchange Inc.  But Mr. Schumer is favoring the German deal as the best way to protect New York, according to the people who have spoken with him. Mr. Schumer focuses on the question so much that he tracks the number of Bloomberg terminals sold in major financial capitals.

Coffee, Sex, Blowing Nose May Increase Risk of a Stroke, Dutch Study Finds (Bloomberg)
Researchers from University Medical Center in Utrecht, the Netherlands, analyzed 250 patients who survived such a stroke and identified eight risk factors tied to the event. They included drinking a cup of coffee, which carried the highest risk, having sex, physical exercise, nose blowing, straining to defecate, drinking cola and being startled or angry.

Carlyle faces questions over China investments (FT)
Carlyle, the US private equity group, is facing questions over its investments in two Chinese companies that have been accused of fraud and suspended from trading on stock exchanges in Hong Kong and New York. The scrutiny comes at an unwelcome time for Carlyle, as the manager of some $106bn in funds seeks to burnish its reputation ahead of a planned initial public offering. China Forestry, a Hong Kong-listed plantation operator in which Carlyle has an 11 per cent stake, and China Agritech, a Nasdaq-listed fertiliser maker in which Carlyle has a 22 per cent stake, have both had their shares suspended from trading in recent months.

CME launches London clearing house (FT)
CME Group is considering offering clearing services to exchanges in Europe as the largest US futures exchange establishes a beachhead in the region by launching a new clearing house in London on Friday.
The move into clearing in Europe highlights the Chicago-based operator’s ambitions to expand into Europe, where CME’s two biggest rivals, IntercontinentalExchange (ICE) and Deutsche Börse, have established clearing businesses.

US Lawmaker Wants To Require Whistleblowers To Report Internally (DJ via WSJ)
A U.S. House Republican lawmaker plans to introduce legislation that would require whistleblowers to report wrongdoing to their employer to be eligible for a Securities and Exchange Commission bounty program, Dow Jones reported.

Indonesia Imposes More Sanctions on Citigroup (WSJ)
Bank Indonesia on Friday announced a raft of additional sanctions against Citigroup Inc. as investigations continue into the alleged embezzlement of millions of dollars and the death of a debtor…[Bank Indonesia Deputy Governor Budi] Rochadi said, the central bank imposed a number of restrictions on Citi’s operations in Indonesia, including a one-year ban on the local unit signing new clients to its Citigold wealth-management unit and a two-year ban on it issuing new credit cards. The central bank also forbade Citi’s local unit from opening new branches in Indonesia for one year and imposed an offshore travel ban on some of the unit’s executives, effective from Friday, while investigations continue.

Allen Stanford Indicted Again as Prosecutors Drop 7 of 21 Criminal Charges (Bloomberg)
The original indictment contained 21 criminal counts. The new one contains 14, including conspiracy to commit money laundering, obstruction of a U.S. Securities and Exchange Commission investigation, wire fraud and mail fraud. Two wire-fraud counts were dropped as were five mail-fraud charges. Stanford, 61, still faces five of each count, conviction for any one of which could result in a maximum sentence of 20 years in prison.

A wide-open Derby field of odds (USA Today)
With so many unknowns among local 3-year-olds, it might pay to take a chance on Master of Hounds, a new face shipping in from afar — Ireland, via Dubai in the United Arab Emirates. Trained by perpetual Irish champion Aiden O’Brien and owned by the imposing Coolmore partnership, Master of Hounds has never raced on dirt, but the same can be said for several other leading Derby contenders. Bred to stay every yard of the 1¼-mile Derby distance, Master of Hounds was beaten by a nose in his last start, the UAE Derby run on a synthetic surface in March. Master of Hounds stalked the leaders, burst to the front in the stretch and was just caught after battling gamely all the way to the finish.

Article courtesy of Dealbreaker

Robert Hess, who interned at [Fortress] in 2008 and will attend Yale University in August, will try to see the future over the next seven days — on a chessboard. The 19-year-old grandmaster is alone atop his group in the first phase of the 2011 U.S. Championship in St. Louis, and has clinched a spot in the semifinals. In five months, he plans to use his chess skills to help study finance at Yale in New Haven, Connecticut, and join the likes of Harvard University economics professor Ken Rogoff as grandmasters to attend the university. “These are the kinds of things that I like doing, strategizing and finding patterns,” Hess said in a telephone interview from St. Louis. Hess, who deferred from Yale for a year to play chess full time, worked a summer internship at Fortress. There, Hess analyzed entertainment stocks and developed an interest in finance. [Bloomberg via BI]

Article courtesy of Dealbreaker

Morgan Stanley Profit Drops, Beats Estimates as Trading Revenue Jumps (Bloomberg)
Net income fell 45 percent to $968 million, or 50 cents a share, from $1.78 billion, or 99 cents, a year earlier, the bank said today in a statement. Earnings from continuing operations, excluding a 26-cent loss tied to a Japanese joint venture and a 30-cent tax gain, were 46 cents a share. That compared with the 40-cent average estimate of 14 analysts surveyed by Bloomberg.

Ex-Goldman Sachs Banker Starts Hedge Fund Analyzing Japanese Blog Traffic (Bloomberg)
Former Goldman Sachs Group banker Hideki Furusho and a University of Tokyo professor have teamed up to create a hedge fund that invests in Nikkei 225 futures based on a computer model that analyzes Japanese blogs.

At Facebook Townhall, Obama Goes On Offensive (WSJ)
“The Republican budget that was put forward I would say is fairly radical. I wouldn’t call it particularly courageous,” Mr. Obama said. Mr. Obama offered a dire description of the budget drafted by Republican Rep. Paul Ryan of Wisconsin. He said it would reduce taxes for corporations and the wealthy by cutting funds to clean energy programs and transportation. “I guess you could call that bold. I would call it shortsighted,” Mr. Obama said to applause from an audience of mostly young people. “I do think Mr. Ryan is serious,” Mr. Obama added. “He’s a patriot.”

BlackRock First Quarter Profit Gets Boost From Popular ETFs (Reuters)
The New York-based firm earned $819 million, or $2.96 per share, excluding some expenses, compared with $727 million, or $2.40 per share, a year earlier, BlackRock said on Thursday.

Weil: Geithner Downgrades His Own Credibility To Junk (BusinessWeek)
Fox Business reporter Peter Barnes began his televised interview with Treasury Secretary Tim Geithner two days ago with this question: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?” Geithner’s response: “No risk of that.” “No risk?” Barnes asked. “No risk,” Geithner said.

GE Profit, Revenue Beat Street View (Reuters)
The world’s biggest maker of jet engines and electric turbines said earnings attributable to common shareholders came to $3.36 billion, or 31 cents per share, up from $1.87 billion, or 17 cents per share, a year earlier. Revenue rose 6 percent to $38.45 billion.

Bernanke Plans To Make Voice Heard (WSJ)
Next Wednesday, Federal Reserve Chairman Ben Bernanke will do something no Fed chief has done before: Stand before a room full of journalists after officials conclude a policy meeting and answer questions about the central bank’s decisions…”You can argue that the chairman of the Fed is more important than the president of the United States, but very few Americans understand what the Fed does,” says Sen. Bernie Sanders, a Vermont independent who successfully pushed for the Fed to disclose more about its secretive bank lending. Addressing the press, Mr. Sanders says, will be “a step forward.”

Greece Seeks Probe Into Debt Restructuring Rumor (Reuters)
Greek bank stocks fell 4.58 percent on Wednesday and the broader Athens bourse index lost 2.62 percent, underperforming pan-European indices on what traders said where rumors, spread by email, that the country would soon restructure its debt…”The ministry urgently requested the prosecutor’s office to launch a criminal investigation regarding the move in the Athens Stock Exchange and the bond market,” the ministry said in a statement.

Taco Bell Demands Apology After Lawsuit Is Withdrawn (CT)
On Wednesday, the fast-food chain decided to trumpet that good news with full-page ads in 10 major U.S. newspapers, including the Chicago Tribune, Los Angeles Times, New York Times, USA Today and The Wall Street Journal, demanding an apology. The company pegged the ads at a total cost of between $3 million and $4 million. “Would it kill you to say you’re sorry?” the ad exclaimed. “Sure, they could have just asked us if our recipe uses real beef. Even easier, they could have gone to our Web site where the ingredients in every one of our products are listed for everyone to see,” the ad read. “But that’s not what they chose to do.

New Swiss Tax Rules Signal Big Changes for Private Banks (NYT)
Switzerland aims to sign new treaties by the summer with Germany and Britain under which their citizens would pay taxes on more of their undeclared assets in Swiss banks. France and Italy are expected to follow suit.

Business Group Vows Support for U.S. Lawmakers to Cut Deficits (Bloomberg)
“The business community strongly supports a comprehensive deficit-reduction plan and will support members of Congress who help get it enacted,” according to a statement from the Committee for Economic Development released today in Washington. “Serious deficit reduction cannot be painless, and no one should expect or demand that the spending and revenue provisions they care most about will not be touched.”

Regulators Serve Up Alphabet Soup (WSJ)
Banks that decide they don’t want to belong to this exclusive, heavily regulated club should beware the “Hotel California.” This provision of Dodd-Frank, named in homage to the Eagles lyric that “you can check out any time you like but you can never leave,” ensures a taxpayer-aided bank can’t “de-SIFI” simply by shrinking its assets. Jargon purists, who prefer acronyms to Eagles songs, can find particularly rich pickings in the dozens of new rules affecting swaps, futures and options. A round-table event held by regulators last fall invited the public—”seating on a first-come, first-served basis”—to discuss DCOs, DCMs, SDs, MSPs, SEFs and SB SEFs. Such acronyms “remain strictly for the Dodd-Frank cognoscenti,” says Margaret Tahyar, a partner at law firm Davis Polk. Some of these terms will remain obscure. But some will enter the corporate lexicon, perhaps graduating to be the SECs and FDICs of their day.

Article courtesy of Dealbreaker

On Friday, Gregg A. Jarrell, a finance professor at the University of Rochester’s graduate business school, took jurors through a variety of Mr. Rajaratnam’s trades, showing chart after chart of information he said he was publicly available before any alleged tips to Mr. Rajaratnam. “In your view, is that information consistent with a reasonably sophisticated investor buying shares of Clearwire in this period?” asked Terence Lynam, one of Mr. Rajaratnam’s lawyers, referring to one of the trades at issue. “Yes,” Mr. Jarrell said. [WSJ, verdict poll]

Article courtesy of Dealbreaker

Angel investors were increasingly active in 2010, with total angel investments increasing 14 percent to $20.1 billion from $17.6 billion in 2009. But angels were more risk averse than they were in the past, investing in fewer seed stage companies.

A total of 61,900 startups (up 8.2 percent) received funding from angels, who are rich folks who provide capital in exchange for ownership. The data show that angels continue to be a vital part of the entrepreneurial ecosystem.

The number of active investors reached 265,400 in 2010, up 2.3 percent from 2009, according to the 2010 Angel Market Analysis report by the Center for Venture Research at the University of New Hampshire.

“The significant increase in total dollars, coupled with the rise in the number of investments, resulted in a larger deal size,” said Jeffrey Sohl, director of the center.”These data indicate that angels have significantly increased their investment activity and are committing more dollars resulting from higher valuations. It appears that a cautious optimism to investing is taking hold. Noteworthy changes did occur in the critical seed and start-up stage investment landscape.”

Healthcare and medical devices received the largest share at 30 percent of angel fundings. Software was 16 percent, biotech 15 percent, industrial/energy 8 percent, retail 5 percent, and information tech services 5 percent.

Mergers and acquisitions were about 66 percent of angel exits, while bankruptcies were 27 percent of exits in 2010. About half of the exits were at a profit and annual returns were 24 percent to 36 percent.

Angels reduced their investments in seed and startup capital, with 31 percent participating in those stages, down 4 percent from 2009. Angeles showed more interest in post-seed investing with  67 percent of investments in the early and expansion stage. New investments were 41 percent of angel activity, down from a year ago of 6 percent. That decline raises concerns, Sohl said. But he expects that as more exits occur, more angel capital will be available to plow into new seed investments.

Angel-related companies created 370,000 new jobs in the U.S. in 2010, or six jobs per investment.

[image credit: business news daily]

Tags: Center for Venture Research at the University of New Hampshire

People: jeffrey sohl

Article courtesy of VentureBeat » deals

Feds: Insider Scheme Spanned 17 Years (WSJ)
The alleged scheme revealed on Wednesday stretched back to 1994, when Mr. Kluger allegedly told the co-conspirator while attending law school at New York University and after taking a summer associate job at Cravath that “I’ve got something,” meaning he had access to confidential information, prosecutors said. The co-conspirator then approached Mr. Bauer, whom he had worked with in the 1990s at venture capital firm Weiss, Peck & Greer. Mr. Bauer agreed to trade based on the information provided, prosecutors said. “They structured their relationship so that Bauer and Kluger did not have direct contact prior to the trades,” said Daniel M. Hawke, the regional director for the Securities and Exchange Commission’s Philadelphia office.

Portugal Bailout May Reach $129 Billion (WSJ)
“The talk is for around €75 billion, but this could be raised to around €90billion. A bailout package can be put together very quickly as there has already been preparatory work in anticipation of Portugal’s request,” said the minister, who asked not to be identified.

Moody’s May Take Axe To UK Bank Ratings (Reuters)
Up to 18 British banks could see their senior debt ratings cut several notches by Moody’s over coming months as the rating agency assesses how they would fare without implicit government support. The banks more immediately vulnerable to a downgrade are smaller institutions, including many building societies, rather than larger banks still heavily supported by the state, Moody’s said Thursday.

The Valley’s Banker Returns To The Top (NYT)
Andrew Ross Sorkin: “I’d really prefer you didn’t write about me,” Mr. Quattrone said recently, trying to dissuade me from this column. But it is hard to ignore Mr. Quattrone. In the last year, his boutique advisory firm, Qatalyst Partners, has been involved in nearly every major technology merger. As Hewlett-Packard and Dell battled over 3Par last summer, Mr. Quattrone was calling the shots. He orchestrated the sale of Palm to H.P. for $1.2 billion in April 2010. And Texas Instruments’ $6.5 billion deal to buy National Semiconductor this week? Yes, that was his deal, too.

ECB Raises Interest Rates (WSJ)
The European Central Bank on Thursday raised its benchmark interest rate to 1.25% from a historic low of 1%, as expected, making it the first of the developed world’s major central banks to initiate a cycle of raising rates.

A Hot Idea Falls Short At Goldman (WSJ)
Goldman spent millions of dollars to develop the private exchange, and senior Goldman bankers spent over a year on the project. They gave it an awkward name—the “GS Tradable Unregistered Equity OTC Market” or GSTrUE—but it seemed like an instant success. Los Angeles-based Oaktree Capital Management LLC raised about $1 billion in May 2007, selling a 15% stake in itself on the Goldman market. Two months later, Apollo Management LP, the big New York private-equity firm, also sold shares, raising $895 million. Many bankers expected the new market to steal some of the hottest offerings from the New York Stock Exchange and Nasdaq. Private-equity firms, hedge funds and others that guarded their privacy seemed likely to sell shares there. At the time, Oaktree partners Howard Marks and Bruce Karsh predicted in a memo to clients that “a number of premier companies in other industries” would join their firm on the Goldman platform. Rival banks and exchanges soon launched competing private markets. Then a curious thing happened—hardly any investors showed up.

Sailor, 85, crosses Atlantic on raft with friends (MSNBC)
A stroke of bad luck for Anthony Smith paid for the trip (he was hit by a van and broke his hip). “I got some compensation money,” he said. “So what do you blow the compensation money on? You blow it on a raft.”
Slower Recruitment In London (FT)
City hiring in 2011 is unlikely to reach the heights of last year when banks snapped up staff in a fight for market share, Robert Walters, the white collar recruitment firm, said on Wednesday. “Last year was an unrepeatable correction,” Robert Walters, chief executive of the eponymous firm, said. “Banks had made savage cuts during the financial crisis and they needed to replenish staff quickly. But that was a one-off. Now we’ll have to wait and see.”

RAB Says Clients to Pull 79 Percent of Flagship Fund’s Assets (Bloomberg)
The hedge fund will allow investors to withdraw money when a three-year freeze on client redemptions ends on Oct. 1, the London-based firm said in a statement today. The fund, run by co-founder Philip Richards, had $2 billion at December 2007. The fund slumped 73 percent in 2008, hurt by a bet on Northern Rock Plc, the first British bank nationalized during the credit crisis. RAB won investor approval to halt redemptions in September 2008. The fund declined 7.6 percent in 2010.

Marc Lasry & Team OKed To Control Trump Casino (AP)
Lasry’s Avenue Capital was given final approval Wednesday by New Jersey casino regulators to control the Atlantic City casino company that was founded by Donald Trump. Avenue, which specializes in distressed investments, won the company in a bankruptcy battle last year, and is the largest shareholder at nearly 22 percent.

Sokol Joins Brandon Winning Praise In Buffett Head-Scratcher (Bloomberg)
Sokol’s contributions to Berkshire were “extraordinary,” Buffett said when he announced his resignation March 30. Buffett said in 2009 that Brandon helped in “righting the ship” at General Re. Brandon left in 2008 after prosecutors named him an unindicted co-conspirator at a trial where four former General Re officers were convicted of helping American International Group deceive investors through a sham transaction.

Should There Be A Fat Tax? (CNBC)
Arizona says yes.

Article courtesy of Dealbreaker

• Another day, another SoCal weed bust: cops seize over 700 weed plants from an upscale home in which every room was being used to grow “high-end marijuana” [KTLA]
• It’s probably a good idea to sign up for L.A. County’s emergency alerts for official notifications on evacuations and news in a natural disaster [LAT]
• Two CA skydivers, one being a highly experienced instructor, collide mid-air, fall to their deaths [KABC]
• Lindsay Lohan insists she had not been drinking when she was photographed Wednesday night in NYC eating pavement… as she was walking out of a bar… [TMZ]
• Rutgers University pays Snooki $32,000 for two Q&A appearances, more than what Nobel Prize winner Toni Morrison will earn to speak at their commencement [PE]

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At his high school graduation last year, Tyler Coyner told the audience his goal in life was to become a hedge fund manager. Coyner was the class’s salutatorian and finished his time at Pahrump Valley High School with a 4.54 grade point average. That number may be slightly higher than it ought to have been, as Coyner was the founder of a business that charged students money to raise their GPA’s, by breaking into the school’s computer system.

Police say Tyler Coyner, 19, was the ringleader in a group of 13 students who have been charged with conspiracy, theft and computer intrusion in connection with the case. Last year, Coyner somehow obtained a password to the Pahrump Valley High School’s grade system and, over the course of two semesters, offered to change grades in return for cash payments, police say.

Born with some serious business sense, the grade deal wasn’t the only thing Coyner had going on. Police apparently found “equipment for making fake driver’s licenses” in Coyner’s dorm room at the University of Nevada-Reno (in addition to a flat screen TV, allegedly borrowed from Wal-Mart). Anyway, back to Coyner’s dreams- as his seems to be a victimless crime, much like insider trading, anyone want to hook him up with a summer internship?

Top Student Charged With Fixing Grades For Cash [PCW]

Article courtesy of Dealbreaker