Friday, August 31, 2012

And Now For Something Completely Different: 21 Ways Rich People Think Differently




1 Average people think MONEY is the root of all evil. Rich people believe POVERTY is the root of all evil...

2 Average people think selfishness is a vice. Rich people think selfishness is a virtue. "The rich go out there and try to make themselves happy. They don't try to pretend to save the world," Steve Siebold, author of “How Rich People Think” told Business Insider.  The problem is that middle class people see that as a negative––and it's keeping them poor, he writes.

3 Average people have a lottery mentality. Rich people have an action mentality. "While the masses are waiting to pick the right numbers and praying for prosperity, the great ones are solving problems," Siebold writes.

4  Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

5  Average people see money through the eyes of emotion. Rich people think about money logically.  "An ordinarily smart, well-educated and otherwise successful person can be instantly transformed into a fear-based, scarcity driven thinker whose greatest financial aspiration is to retire comfortably," he writes.

6  Average people earn money doing things they don't love. Rich people follow their passion."To the average person, it looks like the rich are working all the time," Siebold says. "But one of the smartest strategies of the world class is doing what they love and finding a way to get paid for it…."

Read all about it at http://www.businessinsider.com/how-rich-people-think-differently-from-the-poor-2012-8#average-people-think-money-is-the-root-of-all-evil-rich-people-believe-poverty-is-the-root-of-all-evil-1

Good Golly! SEC Study Proves That Stock-Picking Should Probably Be Left to the Professionals




From New York Magazine: Just in time for your Labor Day vacation, the Securities and Exchange Commission has produced a spellbinding story of what happens when normal people try to invest like Wall Street big shots.

The masterpiece in question is "Study Regarding Financial Literacy Among Investors", which was commissioned by the watchdog agency in response to a Dodd-Frank mandate. And while a 182-page treatise on financial literacy may not seem like beach-read material, it's very likely the most darkly funny thing you'll read all year.

The basic story is that after the financial crisis, lawmakers decided that one of the reasons the economy collapsed is that average investors didn't understand the various stocks and bonds and mutual fund shares they had bought.   The resulting study, released today, is amazing and depressing. Not only does it contain the world's longest section titles ("The Most Useful and Understandable Relevant Information that Retail Investors Need to Make Informed Financial Decisions before Engaging a Financial Intermediary or Purchasing an Investment Product or Service") but it sheds light on how little people know about the financial products they own.

The SEC's conclusion is fairly straightforward: "U.S. retail investors lack basic financial literacy ... have a weak grasp of elementary financial concepts and lack critical knowledge of ways to avoid investment fraud."

More?  Check out http://nymag.com/daily/intel/2012/08/sec-study-nobody-knows-anything.html


Feeling the Facebook Blues: GSV Capital, Placing Bets on Start-Ups, Falters




Few investors have ridden the recent Internet boomlet like the GSV Capital Corporation.  After GSV announced in June 2011 that it was buying a stake in the privately held Facebook, the closed-end mutual fund surged 42 percent that day. Capitalizing on the euphoria, GSV sold another $247 million of its shares, using the money to expand its portfolio of hot start-ups like Groupon and Zynga according to a NY Times' Dealbook report.

Now, GSV is feeling the Facebook blues.  When the public offering of the social network flopped, GSV fell hard, and it still has not recovered. Shares of GSV, which were sold for an average of $15.35, are trading at $8.54.

Michael T. Moe of GSV, the largest of several closed-end mutual funds that offer ordinary investors a chance to own stakes in privately held companies.  GSV, short for Global Silicon Valley, is the largest of several closed-end mutual funds that offer ordinary investors a chance to own stakes in privately held companies, at least indirectly….

Wait...wait...there's more at http://dealbook.nytimes.com/2012/08/29/gsv-capital-placing-bets-on-start-ups-falters/?src=dlbksb

JPMorgan faces sea of trouble resolving 'Whale' probe




The fallout from a nearly $6 billion (3.8 billion pounds) trading loss at JPMorgan Chase & Co looks like it will haunt the big U.S. bank and its high-profile chief executive, Jamie Dimon, for months to come, Reuters told us.

U.S. authorities are interviewing witnesses in both the United States and Europe to determine if three former London-based traders and others who worked with them at JPMorgan tried to hide some of the mounting losses during the first quarter of this year, said people familiar with the situation.

The situation presents several challenges to U.S. authorities: the potentially irregular trading occurred in London; and it was carried out by non-U.S. citizens, such as French national Bruno Iksil, who became known in the market as the "London Whale" for the size of his positions.  That translates into different rules for different jurisdictions and could raise extradition issues if any individuals are charged….

http://uk.reuters.com/article/2012/08/31/uk-jpmorgan-loss-transatlantic-idUKBRE87U06620120831?feedType=nl&feedName=uktopnewsmid

Harvard Cheating Probe Under Way For About 125




About 125 Harvard University undergraduates are being investigated for cheating on a final exam earlier this year, the most widespread academic misconduct scandal known at the school, college officials told Bloomberg's Best.

All of the students, who were in a class of more than 250, will face hearings before Harvard’s Administrative Board, Jay Harris, dean of undergraduate education at the Cambridge, Massachusetts-based school, said today in an interview.

Harvard professors probed the incident with months of reading through the take-home exams beginning in May, Harris said. Students found to have violated university rules may be required to withdraw from school for a year, Harvard said. “These allegations, if proven, represent totally unacceptable behavior that betrays the trust upon which intellectual inquiry at Harvard depends,” Harvard President Drew Faust said in a statement on the college’s website…..

Read all about it  at http://www.bloomberg.com/news/2012-08-30/harvard-plagiarism-probe-under-way-for-about-125-students.html

World Food Prices Jump 10% as Drought Sears Crops


World food prices jumped 10 percent in July as drought parched crop lands in the United States and Eastern Europe, the World Bank said in a statement urging governments to shore up programs that protect their most vulnerable populations, according to cnbc.

From June to July, corn and wheat prices rose by 25 percent each, soybean prices by 17 percent, and only rice prices went down, by 4 percent, the World Bank said.  Overall, the World Bank's Food Price Index, which tracks the price of internationally traded food commodities, was 6 percent higher than in July of last year, and 1 percent over the previous peak of February 2011.

"We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,'' World Bank Group President Jim Yong Kim said. "Countries must strengthen their targeted programs to ease the pressure on the most vulnerable population, and implement the right policies….''


Poof! $1 Billion Slashed From 2012 Facebook Revenues




 Facebook‘s revenues, particularly from advertising, won’t grow as fast as expected this year, according to a revised forecast from market researcher eMarketer.  The forecaster today said the No. 1 social network will just break $5 billion in revenues this year, with $4.2 billion coming from advertising and the rest from payments and other revenues. That’s down $1 billion from the research firm’s estimate from last February, several months before Facebook’s initial public offering in early May. Even so, Facebook’s ad revenues are still forecast to jump 34% this year from a year ago, and rise 29% next year.

The key reason for the change actually does not reflect a key concern of investors: mobile advertising. [Corrected; I initially misread the release to say mobile was a key factor.] Although Facebook has been slow to roll out advertising on mobile devices, eMarketer had not factored that into previous forecasts either. Instead, the estimate cut reflects growing concerns about the effectiveness and measurability of Facebook ads….

Wait...wait...there's more at http://www.forbes.com/sites/roberthof/2012/08/30/poof-1-billion-slashed-from-2012-facebook-revenue-forecast/

Thursday, August 30, 2012

Carlyle Insiders Pledge $700 Million to New Fund



Carlyle Group,  better known on Wall Street as the world’s second-biggest private-equity firm, said execs pledged more than $700 million of their own money to its latest buyout fund, boosting efforts to reach a $10 billion goal.

The insider commitments during the second quarter, disclosed in a filing with the U.S. Securities and Exchange Commission, accounted for 35 percent of the $2 billion brought in during its first fundraising round at the end of May. The management’s contribution would represent at least 7 percent of the target that the firm has set for Carlyle Partners VI LP.

Carlyle, led by co-founders William Conway, Daniel D’Aniello and David Rubenstein, is offering breaks such as lower fees for big clients to entice investors in the most crowded market for gathering money since 2009…..

Read all about it at http://www.businessweek.com/news/2012-08-30/carlyle-insiders-boost-new-fund-by-pledging-700-million

Alleged Ponzi Gold Fund Founder Held


According to the WSJ a Polish judge on Thursday ordered the detention of a man alleged to be behind a Ponzi scheme that is roiling politics and raising questions about financial regulation here, as Parliament debated who was at fault after the unraveling of a gold-derivatives business the man started.

Marcin Plichta, founder and chief executive of Amber Gold Sp. z o.o, was arrested by police on Wednesday and charged with fraud and other financial crimes. Amber Gold collapsed earlier this month, leaving thousands of Polish investors looking for repayment of millions of dollars….

More?  Check out http://online.wsj.com/article/SB10000872396390443618604577621540340350870.html

Google, Apple CEOs in secret talks



Reuters reports that Google  Chief Executive Larry Page and Apple CEO Tim Cook have been conducting behind-the-scenes talks about a range of intellectual property matters, including the mobile patent disputes between the companies, people familiar with the matter said.  The two executives had a phone conversation last week, the sources said. Discussions involving lower-level officials of the two companies are also ongoing.

Page and Cook are expected to talk again in the coming weeks, though no firm date has been set, the sources said on Thursday. One of the sources told Reuters that a meeting had been scheduled for this Friday, but had been delayed for reasons that were unclear.

The two companies are keeping lines of communication open at a high level against the backdrop of Apple's legal victory in a patent infringement case against Samsung, which uses Google's Android software….


The GOP's Behavior At The Convention Makes It Clear That Mitt Romney Will Be Great For The Economy



The puzzle pieces continue to fall into place to support the idea that a Mitt Romney presidency would be great for the economy, writes BusinessInsider’s Joe Weisenthal.

Back in the Spring, we pointed out that if you believe the economy needs more fiscal stimulus (which is to say: "deficits") in order to thrive, that Romney would be the better choice than Obama.
If Obama wins, he's likely to come up against an even more hostile Congress than he has right now.
On the other hand, if Romney wins, the GOP will quickly forget about its lower-spending, anti-deficit stance. That's because parties in the majority don't care about deficits. It's strictly an out-of-power issue. Once Romney is in power, his main focus will be on winning re-election in 2016, and that's not going to happen with fiscal contraction and an economic slowdown....


Another Facebook co-founder dumps his shares



From WashPo: Facebook co-founder Dustin Moskovitz is shedding another 450,000 company shares for a take of about $8.7 million.  Moskovitz has been selling 150,000 shares a day and disclosing the sales every three days. Including the most recent sale, he still holds more than 130 million shares....

Retailers report best sales growth since March




Americans kept spending this summer despite their escalating fears about the slow economic recovery and surging gas prices according to a NY Post report.

A group of 18 retailers ranging from discounter Target to club-operator Costco reported monthly sales on Thursday that rose 6 percent — the industry's best performance since March — according to trade group International Council of Shopping Centers. The results come as the government released numbers showing that Americans spent in July at the fastest clip in five months.
The reports seem to show that what Americans say and do are two different things: The strong spending results come just two days after a private research firm said consumer confidence in August fell to its lowest level since November 2011.

"It shows some resilience among shoppers. Let's face it. There are a whole series of economic headwinds that they are fighting against," said Ken Perkins, president of Retail Metrics, a research firm. "The results show that the consumer isn't dead."

Paulson’s Gold Fund Faced 22% Losses in July


One nugget that may have been lost in the clamor of hedge-fund John Paulson’s conference call with Bank of America employees and clients yesterday: The fund that represents his core thesis right now has struggled mightily so far this year, according to a cnbc report.

Paulson’s gold fund, which holds an array of gold miners, fell a whopping 22 percent between the beginning of the year and July 31, according to people familiar with its returns — outsinking the oft-discussed flagship funds, which were down 13 percent and 18 percent respectively during the same period, by a considerable margin..

Amazon says sold out Kindle Fire has 22 percent of U.S. market




Amazon.com Inc said on Thursday that its Kindle Fire tablet accounts for 22 percent of U.S. tablet sales and that the device is sold out.  The tablet hit stores last November at a cost well below that of Apple Inc's market-leading iPad., Reuters UK reports.

Since the Kindle Fire launch last year, Google Inc has introduced a seven-inch tablet called Nexus 7, which has been selling well. Barnes & Noble Inc's Nook Tablet, introduced last autumn, has also been popular.  Amazon said its Kindle Fire is sold out, but its statement did not say when the device would be back in stock, nor how many Amazon has sold.

Amazon is holding a press event next week in Santa Monica, California, fueling speculation it will launch new tablet devices.

Wednesday, August 29, 2012

Sears Kicked Out of S&P 500


Sears Holdings will lose its spot in the S&P 500 after the close of trading on September 4. It will be replaced by chemical maker LyondellBasell [LYB  47.29     -0.19  (-0.4%)            ].

As one of America’s oldest retailers, Sears, Roebuck & Co. was one of the original members of the S&P 500 when the index was created in 1957 (69 of the index’s original components are still in the S&P 500 today, according to S&P’s Howard Silverblatt)….

More Pain to Come for Facebook




Fromt the WSJ: Facebook Inc.'s initial public offering and its subsequent stock-price tumble have been the subject of so much scorn, outrage, controversy, criticism and ridicule that to add anymore is just piling on. But give it a couple of months. By then, you might think there hasn't been enough criticism. That is because Facebook is still overpriced and it is about to be walloped by a flood of shares hitting the market.

As the stock stabilizes from its latest wave of insider selling, an even bigger block, 247 million shares—more than 10% of the company's shares outstanding—will be available to be sold in October and early November.  But the fun won't end there. On Nov. 14, another 1.24 billion shares will be added to the float and hit the market as their lockups expire, according to SNL Kagan.  Another way to look at it:….

Banks: Three Potential Winners


According to Barrons’ Sterne Agee, conversations with bank managements and directors suggest that some thawing has occurred in the stalemate between buyers and sellers, as sellers' boards of directors have become more accepting that difficult conditions are likely to persist.

In an unrelated matter, some of the strongest-performing stocks in the bank-stock rally over the past year have included the shares of issuers that have been able to recapture valuation allowances on deferred-tax assets (e.g., Pinnacle Financial Partners, Citizens Republic Bancorp, West Coast Bancorp and Taylor Capital Group, among others). Going forward, potential winners could include ...

Why Warren Buffett And Berkshire Won't Be Leaving Omaha Anytime Soon




Omaha won't throw a bash for Warren Buffett's 82nd birthday on Thursday, and that's just fine with the billionaire investor, according to the Associated Press.

The decidedly low-key lifestyle in Omaha, where Buffett was born and where he's lived continuously since 1956, is a key reason he chose to remain there rather than trade up to a city with a splashier skyline or new digs closer to Wall Street.

"If I had to live some other place I'd be fine doing it, but I can't think of a better place to live than Omaha," Buffett said in an interview.

Read more: http://www.businessinsider.com/warren-buffett-berkshire-omaha-2012-8#ixzz250MAQU14

Banker Bonuses At Risk As EU Lawmakers Fight




According to Bloomberg European Union lawmakers said they will fight proposals from EU Financial Services Commissioner Michel Barnier that would water down legislation capping banker bonuses.

European Parliament members have until the end of the week to respond to Barnier’s compromises, which would weaken a ban they approved in May on bonuses larger than bankers’ fixed pay, Sharon Bowles, chairwoman of the assembly’s economic and monetary affairs committee, said in an interview.

Bankers are facing a backlash from EU lawmakers determined to cut variable pay as part of a quest to reshape lenders as utilities rather than money-making machines….


Citi, Investors Reach $590 Million Accord




Citigroup Inc. agreed to pay $590 million in cash to settle a lawsuit by investors alleging the bank hid risks tied to toxic assets, the plaintiffs said.  U.S. District Judge Sidney Stein in Manhattan, who is presiding over the suit, today granted preliminary approval to the unopposed accord, and ordered a hearing for Jan. 15.

Citi, the third-biggest U.S. bank by assets, was accused by investors of repackaging unmarketable collateralized debt obligations and reselling them to itself to hide its exposure to the securities….

Citigroup began using the “CDO-related quasi-Ponzi scheme” in 2006 to give the appearance that it had a healthy asset base, investors alleged in court documents. The plaintiffs alleged Citigroup, including some of its former senior officers and directors, “materially misrepresented” its exposure to CDOs and were both aware of the size of Citigroup’s holdings and their impairment before they were disclosed to the public....

Read more: http://www.sfgate.com/business/bloomberg/article/Citigroup-Investors-Reach-590-Million-Accord-in-3824457.php

Oops! Barclays Under Criminal Investigation Over Qatar Payments

Barclays Plc faces a criminal probe into fees it paid in 2008 to Qatar’s sovereign wealth fund as the bank sought to raise money to avoid a government bailout, Bloomberg reports.  The Serious Fraud Office, which prosecutes bribery and white-collar crime, told the London-based bank it has “commenced an investigation into payments under certain commercial agreements between Barclays and Qatar Holding LLC,” the lender said in a statement today.


The investigation is another legal pitfall for Britain’s second-biggest lender by assets after it paid U.S. and U.K. authorities a record 290 million pounds ($459 million) in June for manipulating the London interbank offered rate, or Libor, and related interest benchmarks. The case led to the resignations of three top Barclays executives, including Chief Executive Officer Robert Diamond.

“It’s an uncomfortable regulatory environment right now,” Sara George, a financial regulation lawyer at Stephenson Harwood LLP in London, said in a telephone interview today. “The public appetite for these kind of actions has never been stronger….”

More?  Check out http://sfgate.adc.bloomberg.wallst.com/SFChronicle/Story?docId=1376-M99OMG1A1I4H01-412P7SPV09MG5AS91RJFHOF4SD

Shocker: Wall Street pay rose in 2011!




Crains New York;s Greg Daid writes: Yesterday’s blog post focused on the issue of whether pay on Wall Street is headed down. I included a chart from the state comptroller’s crucial annual report on the industry which showed pay rose in 2010 and said we would have to wait for this year’s update to find out about 2011.

Well, we don’t have to wait, thanks to Marisa Di Natale of Moody’s Analytics, who crunched recently released data using the same methodology as the comptroller’s staff.

The results are just amazing. Despite a 72% decline in profits, the average compensation on Wall Street rose slightly in 2011. Good thing the Occupy Wall Street movement has disbanded!.

What drought? US Farmers Eye Record Profits




Talk about totally illogical, U.S. farmers are heading for their most profitable year on record despite the worst drought in half a century as high grain prices and payouts from a federal crop insurance program compensate for a smaller harvest, the Financial Times writes.

Holy Hannah we don’t advocate letting these good folks suffer and starve but net farm income will reach $122.2 billion in 2012, the highest-ever nominal profit and the second highest in inflation-adjusted terms after 1973, the U.S. Department of Agriculture (USDA) said in its first forecast since drought spread across the corn belt.

The expected 4 percent increase in average farm profit from 2011 comes as agricultural states, including Iowa and Ohio, have emerged as battlegrounds in the November presidential election and lawmakers have failed to renew legislation outlining agricultural subsidies ahead of its expiry on September 30….

Read all about it at http://www.cnbc.com/id/48822850

Deep Thoughts (Wednesday Navel Contemplation Edition): More Firms Bow to Generation Y's Demands




According to the WSJ’s Leslie Kwoh To Retain Young Workers, Companies Offer Special Incentives; Some Older Employees Cry Foul.

They're often criticized as spoiled, impatient, and most of all, entitled.  But as millennials enter the workforce, more companies are jumping through hoops to accommodate their demands for faster promotions, greater responsibilities and more flexible work schedules—much to the annoyance of older co-workers who feel they have spent years paying their dues to rise through the ranks.

Employers, however, say concessions are necessary to retain the best of millennials, also known as Generation Y, which is broadly defined as those born in the 1980s and 1990s. They bring fresh skills to the workplace: they're tech-savvy, racially diverse, socially interconnected and collaborative. Moreover, companies need to keep their employee pipelines full as baby boomers enter retirement…..

Ackman: $900M Penney markdown



Activist investor Bill Ackman has been beating the drums for a sale of mall owner General Growth Properties in recent days, but it’s his stake in JCPenney that’s really causing him grief, according to the NY Post report. The popular hedge-fund manager confessed to investors that his 18 percent stake in Penney had lowered returns by about $900 million this year, The Post has learned.

In the latest quarterly investor letter of his $10.5 billion Pershing Square firm, he said Penney “has cost us more than nine percentage points of gross return this year.” The hedge fund lost 6.4 percent in the quarter, after the retailer’s shares slid from their high of $43 in February.

Through June 30, Ackman was up only 2.3 percent, according to the letter. That means the acclaimed investor was trailing the Standard & Poor’s 500, up 9.5 percent in the first half.  Pershing has maintained its 18 percent stake in Penney, which he began to amass in October 2010 at a reported cost of about $900 million. The stake was worth just about that amount — $911 million — at June 30, according to a filing. Penney is down 28 percent for the year..

Read more: http://www.nypost.com/p/news/business/ackman_penney_markdown_yAEum8bPiLVIkwpEAImN1H#ixzz24wwOR6Ki

Fidelity Investments Keep It in the Family



Fidelity Investments told cnbc Tuesday that Abigail Johnson was promoted to run all of the company's main businesses, the strongest signal yet that she could be the next leader of the mutual fund powerhouse founded by her grandfather.

Abigail Johnson, 50, will continue to report to her 82-year-old father, Edward C. Johnson III, Boston-based Fidelity's chairman and chief executive since taking over from his father in 1977.  The promotion likely means Abigail Johnson will eventually replace her father as Fidelity's chairman, ending years of speculation about who would run the firm next, said John Bonnanzio, who edits a newsletter for Fidelity investors. Bonnanzio said he was only surprised she had not been given more responsibilities already…

U.S. Grew Faster Than First Estimated in Second Quarter

Man the lifeboats?  Not. The U.S. economy expanded more than previously estimated in the second quarter, reflecting an improvement in the trade deficit and a pickup in household spending on utilities, Businessweek reports.


Gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, revised Commerce Department figures showed today in Washington. The figure followed a 2 percent first-quarter pace and matched the median estimate in a Bloomberg survey. The revised data also showed companies invested in new equipment at the weakest pace in almost three years.

A second straight quarter of slowing growth shows the world’s largest economy is having difficulty making headway as consumers stay frugal and looming tax changes prompt companies to limit investment..

Read all about it at http://www.businessweek.com/news/2012-08-29/u-dot-s-dot-grew-faster-than-first-estimated-in-second-quarter#r=bloomberg

RockStar Wannabee Turned-Hedge Fund Manager Settles Fraud Suit


According to finalternatives a California hedge fund manager has settled allegations that he misled investors in his funds. Gary Marks, without admitting or denying wrongdoing, agreed to pay more than $421,000 in disgorgement and fines to end the Securities and Exchange Commission's case against him. The regulator has accused the Sky Bell Asset Management chief of negligently misrepresenting the correlation and diversification among the firm's hedge funds, among other improper actions between 2005 and 2008.

According to the SEC, Marks recommended investors put most of their money into Sky Bell hedge funds while failing to disclose that one was significantly investing in a subadvisor's fund and making misleading statements about liquidity problems in another fund.

In addition to running Sky Bell, which had offices in Florida and Hawaii, Marks is also a rock musician and the co-author of a 2007 investment guide, Rocking Wall Street….

Grim News: America's Truckers Have Some Bad News About The US Economy


Almost every good we own has been in a truck at one point or another.  As such trucking volumes are a key bellwether of the U.S. economy, Businessinsider says.

Unfortunately, truck volumes are looking "weaker than normal" so far in August.  This is according to Christian Wetherbee, Citi's trucking analyst….


Read more: http://www.businessinsider.com/truckers-us-economy-slowing-2012-8#ixzz24vOGK2m8

Chaos: Occupy Plans Wall Street Tie-Up




Occupy Wall Street, the global movement against inequality that ignited in Manhattan last year, will mark its first anniversary by trying to block traffic in the financial district and encircle the New York Stock Exchange.

Planning for the Sept. 17 protest, dubbed S17, follows months of internal debate and flagging interest, according to interviews with organizers. The morning action may include attempts to make citizens’ arrests of bankers, and some activists intend to bring handcuffs, they said.

 “We are here to bring you to justice,” said Sean McKeown, a 32-year-old chemist and New York University graduate who’s helping organize the demonstration. “We’re offering you the chance to repent for your sins...”

Read more at http://www.bloomberg.com/news/2012-08-29/occupy-sets-wall-street-tie-up-as-protesters-face-burnout.html

ROBOTCHED: Inventor Admits Pressing Problem With Droids Running Wall Street




The man who built what was possibly the first stock-trading robot now worries they have too much sway over the market. In other news, Victor Frankenstein is starting to rethink that whole reanimating-the-dead thing, according to HuffPo.

Starting in the 1970s, Thomas Peterffy, the billionaire founder of the Connecticut brokerage firm Interactive Brokers, was a pioneer in getting computers to perform the trading of stocks and options and whatsits, so that humans could spend the rest of eternity sipping drinks and collecting checks…..

Find out more at http://www.huffingtonpost.com/2012/08/28/thomas-peterffy-high-frequency-trading_n_1835802.html

U.S. Files New Charges in Hedge Fund Insider-Trading Case



Federal prosecutors filed new charges Tuesday against employees at three hedge funds accused of making improper trades on inside information, according to Dow Jones Newswire.

The new charges relate to short sales of NVIDIA Corp. (NVDA) stock in April and May 2009. Those charged Tuesday were Todd Newman, a former portfolio manager with hedge-fund firm Diamondback Capital Management; Anthony Chiasson, a former hedge-fund manager at Level Global Investors LP; and Jon Horvath, a technology analyst with SAC Capital Advisors LP'sSigma Capital Management division.

The new charges broaden the case against Messrs. Newman, Chiasson and Horvath, who were originally charged in January with engaging in a "criminal club" that prosecutors said netted more than $61.8 million through improper trades of NVIDIA and Dell Corp. (DELL) stock.

All three men had pleaded not guilty to the original charges in February….

Read all about it at http://www.nasdaq.com/article/us-files-new-charges-in-hedge-fund-insider-trading-case-20120828-00869

Standard Chartered isn’t done writing checks yet.


The UK bank is bracing itself for as much as a $600 million fine to be levied by US regulators in the next few weeks, The NY Post has learned. The fine stems from a joint investigation alleging that the bank laundered $250 billion for the dictatorial Iranian regime.

Regulators, who are putting the finishing touches on the settlement, are targeting a fine ranging from $300 million to $600 million, according to sources familiar with the situation. A joint regulatory settlement, which is likely to be announced sometime in September, would come weeks after newbie New York Department of Financial Services regulator Benjamin Lawsky struck a $340 million settlement with the bank’s boss, CEO Peter Sands.

This time around, StanChart will have to shell out dough to US officials, including Manhattan District Attorney Cyrus Vance, the Justice Department and a division of the US Treasury……


Tuesday, August 28, 2012

Only in America: Meet The Dominatrix Who Ties Up And Spanks Wall Streeters




Businessinsider writes: “…..We first read about Ms. Nina Payne when she was quoted in the Wall Street Journal a couple of weeks ago, so we decided to reach out to her to learn more about the Kink business.

She told Business Insider that her clients are predominately male and include celebrities, politicians, Fortune 500 leaders and Wall Streeters.  She sees teachers, garbage men and musicians, too. The finance guys tend to come see her on their lunch breaks, she said.

"I appreciate it because it's a very stressful job, I imagine, dealing with money and power meetings and closing deals," she said, adding, "And they come to me with that sort of stress and they just come to let it all go...I had guys call me after a session saying 'That was great.  I feel like I can go back to work.  I feel clear headed.  I feel like I could be a good husband and father."
When Wall Streeters come to see her they don't have to worry about calling the shots and closing a deal, she said. However, before she even schedules a session, she likes to make sure there's good chemistry. "We speak on the phone a few times because as a dominatrix I don't just cater to anybody.  I have specific interests and if a gentleman is interested in having a session and it doesn't fit well I won't see him," she said...

Hurricane Isaac Whips Dangerous Storm Surge In Louisiana




From Bloomberg: Hurricane Isaac unleashed a “dangerous storm surge” of 10.3 feet (3.1 meters) on a path toward New Orleans after making landfall in the Plaquemines Parish in southeastern Louisiana.
The storm, packing heavy rains and high winds, was 60 miles (97 kilometers) southeast of Houma, Louisiana, the National Hurricane Center said in an advisory at midnight local time. The center of Isaac “wobbled” to the west and was back over water near the mouth of the Mississippi River, the center said in a 9 p.m. report.

The hurricane is moving west-northwest at 7 miles per hour with maximum sustained winds of 80 miles per hour, making it a Category 1 hurricane, the center said. It forecast Isaac will travel inland over southeast Louisiana at a “slightly slower speed” in coming days. Tropical-storm-force winds of 39 mph or more have started slapping southern Louisiana, which was hit by Hurricane Katrina on Aug. 29, 2005. Levees protecting New Orleans failed in that storm, killing 1,800 people, displacing tens of thousands….

Samsung Vows to Fight Ban


Samsung Electronics Co. told the WSJ Tuesday it would fight Apple Inc.'s attempt to ban the sale of some of its smartphones in the U.S. with "all necessary measures."

After winning a jury verdict for patent infringement against Samsung in a U.S. court last week, Apple on Monday asked the presiding judge for a permanent injunction against the eight phones that accounted for most Samsung's U.S. smartphone revenue in the first six months of the year.

Apple told Judge Lucy Koh that it reserves the right to pursue permanent injunctions banning the sale of all 28 devices that the jury on Friday ...

Don't stop reading just when it's getting interesting....go to http://online.wsj.com/article/SB10000872396390444914904577616421507214932.html?mod=WSJ_business_whatsNews

Isaac Nears Gulf Coast as Residents Look to Levees




With Tropical Storm Isaac forecast to reach hurricane strength today, New Orleans residents said they are concerned about flooding even with improvements to levees after a collapse during Katrina in 2005, according to Businessweek..

“I hope the good Lord will see fit to bypass this situation and let the levees and all this new protection stand up,” said Antoine Davis, who was stocking up gas for a generator yesterday in New Orleans’s Lower Ninth Ward.

Officials are expressing confidence the levee system will hold. Isaac, which is closing oil and natural-gas production sites and threatening Louisiana, Mississippi, Alabama and Florida, is set to strike the Louisiana coast as early as tonight. Tomorrow is the seven-year anniversary of Hurricane Katrina, which killed more than 1,800 people and displaced 250,000.

Isaac’s center was about 80 miles (129 kilometers) south- southeast of the mouth of the Mississippi River with top winds of 70 miles per hour, the National Hurricane Center said in an advisory at 11 a.m. New York time. That’s 4 mph less than hurricane strength…

Read more at http://www.businessweek.com/news/2012-08-28/isaac-nears-gulf-coast-as-residents-count-on-levee-protection#r=bloomberg

Facebook Is Setting Off Tons Of Corporate Governance Red Flags



According to BusinessInsider on August 20, 2012, an SEC Form 4 form was released for Facebook founding investor and board member Peter Thiel, showing 20 million shares sold for a profit of nearly $400 million. Since May 22, 2012, total company stock sales for the Facebook director have eclipsed $1 billion.

Raising eyebrows, the venture capitalist dumped 80 percent of his remaining shares, essentially cashing out shortly after the required trading lock-down for investors was lifted. At GMI Ratings, we’ve rated the company a solid “D” since its IPO. This divesture news has Facebook on watch as a company likely to join the five percent of companies we rate “F”. To those who have been paying attention since the beginning, the company’s poor governance has been an unmistakable warning sign for investors to take heed, and a clear opportunity to avoid the resulting massive destruction in share price.

If a founder and board member is concerned enough to dump the vast majority of his shares, count us as equally concerned….

Grim News: Financier's Daughter Dead After Being Found With Huge Gash On Chin


A 29-year-old woman believed to be hiding from a failed marriage died after being found with a massive gash on her chin on the second-floor landing of a Lower East Side apartment building.  Police initially believed Carlisle Brigham, daughter of New York City's former budget director James Brigham, was murdered but are now considering the possibility her death was an accident, The New York Daily News reported Monday.

“I knew something had gone seriously wrong when I flipped her over,” Mizanur Rahman, a neighbor who found Brigham, told the Daily News. “There was blood in her nose, there was blood coming out of the mouth and a huge gash on her chin.”

She was taken to Beth Israel Medical Center but ultimately died.  Investigators think it's possible she "struck her chin in a fall down a flight of marble stairs,"...

Top firm ready to downsize bigtime




Nomura Holdings is finalising plans to cut hundreds of jobs, mainly in equities and investment banking, in an overhaul aimed at restoring its overseas operations to profitability, people with knowledge of the planning within Japan's largest brokerage said.

The cost-cutting will be part of a new strategic blueprint for Nomura being mapped out by Koji Nagai, who took over as CEO this month and has promised to rebuild the investment bank from the "ground up" after an insider trading scandal that forced the resignation of its top two executives.

While the size and scope of the streamlining are still being debated, one analyst estimated Nomura could target $750 million in annual cost savings, on top of a nearly completed $1.2 billion cost-cutting drive. The biggest cuts are likely to be made in Europe, mainly London, although they are thought to likely to impact the United States and Asia too….

Want to know more?  Go to http://in.reuters.com/article/2012/08/26/nomura-restructuring-idINL4E8JL1NC20120826

Swiss crackdown exposes numerous tax cheats




An 83-year-old Massachusetts man who held Swiss bank accounts at Credit Suisse Group AG (CSGN) and Wegelin & Co. pleaded guilty to hiding $5.7 million from U.S. tax authorities. Jacques Wajsfelner admitted in federal court in Manhattan yesterday that he failed to file Foreign Bank and Financial Accounts Reports. He will pay civil penalties of $2.84 million and restitution of $419,940. Under advisory guidelines, he faces 30 months to 37 months in prison at sentencing on Dec. 20.

Since 2009, U.S. prosecutors have charged about 50 U.S. taxpayers and more than 20 offshore bankers, lawyers and advisers with tax crimes. Wajsfelner was born in Germany and fled the Nazis as a teenager, according to Jeffrey Denner, his attorney. He became a U.S. citizen and worked in real estate and advertising in New York and Boston, Denner told Bloomberg.

“He pleaded guilty to some very bad judgment that he exercised,” Denner said in a telephone interview. “We are hopeful at his sentencing that the very serious mitigating factors of his life will be considered by the court.”

Wajsfelner’s former Swiss adviser, Beda Singenberger, was indicted last year on a charge of conspiring to help more than 60 U.S. taxpayers hide $184 million from the Internal Revenue Service in offshore accounts…

Gold Set For Best Year Since 2010


Gold is poised to climb the most in two years as prospects for additional economic stimulus by governments from the U.S. to China stoke demand for the precious metal as a bet against inflation, a Bloomberg survey showed.

Bullion for immediate delivery may reach $1,800 an ounce by the year-end, extending gains this year to 15 percent, according to the median forecast in the Bloomberg survey of 15 traders and analysts at a conference in Hyderabad in South India on Aug. 25. That would be the most since a 30 percent surge in 2010, data show.

Gold is set for a 12th year of gains as the European sovereign-debt crisis boosts haven demand amid speculation of further policy easing by central banks, including the U.S. Federal Reserve, which may be considering a third round of so- called quantitative easing, or QE3. Investment holdings have expanded to a record on demand for a hedge against inflation….

http://www.bloomberg.com/news/2012-08-27/gold-set-for-best-year-since-2010-as-stimulus-bets-stoke-demand.html?cmpid=yhoo

Apple Analysts Call Verdict An Important Victory in 'Thermonuclear War' With Google



 A jury in federal court gave Apple an important victory in its ‘thermonuclear war’ against Google and its Android mobile operating system when it upheld seven key design and utility patents around Apple’s top-selling iPhone smartphone and iPad tablet, Apple analysts told Forbes..

More than a year after challenging Samsung Electronic Co. with “copying” the designs of the iPhone and iPad, Apple won over a nine-member jury last week, which awarded it $1.05 billion in damages and found that Apple’s seven design and utility patents were valid and that Samsung had infringed six of them.

“Apple’s victory is part of Apple’s ‘thermonuclear war’ on Android, said Brian White of Topeka Capital. “We expect this verdict to have some impact on the growth of the Android ecosystem.”  He’s not the only one. Analysts overall called this a setback – though a temporary one – one Google and Android as devices makers work to tweak their devices to avoid infringing on Apple’s patents. They argue that mobile OS makers including Microsoft may benefit as a result….

More?  Check out http://www.forbes.com/sites/connieguglielmo/2012/08/27/apple-analysts-call-verdict-an-important-victory-in-thermonuclear-war-with-google-android/

Isaac Menaces New Orleans/Gulf Coast Just 7 Years After Katrina


Tropical Storm Isaac closed in on the U.S. Gulf coast on Monday, triggering evacuation orders in some areas and disrupting offshore oil production as it threatened to make landfall between Florida and Louisiana as a Category 2 hurricane, cnbc reports. Satellite image provided by National Oceanic and Atmospheric Administration (NOAA), Isaac (L) reached tropical storm status and is approaching the Lesser Antilles islands as it moves westward on August 22, 2012 in the Atlantic Ocean.

The wide, slow-moving storm swiped south Florida on Sunday and strengthened over the warm Gulf waters. It was expected to reach land late on Tuesday or early Wednesday, the anniversary of devastating Hurricane Katrina seven years ago.

The U.S. National Hurricane Center warned the storm could buffet towns and cities in at least three U.S. states near the shoreline and flood the northern Gulf coast with a storm surge of up to 12 feet (3.6 meters) in some areas….

Read all about it at http://www.cnbc.com/id/48808328

11 Of The Most Secretive Companies In The World




From HuffPo: Some companies go to great lengths to stay under the radar. Whether that's to protect a secret recipe, strange business practice or simply due to eccentric personalities depends on the company. What's clear is that the below companies love to maintain an air of mystery.  Here are 11 of the most secretive companies in the world:..

1.      Tootsie Roll - We all may be familiar with Tootsie Roll's "How many licks" slogan, as well as the taste of its famous candy, but the company's business practices are largely kept under wraps. Tootsie Roll hasn't offered clues to its succession plan even though its CEO is in his 90s, according to the Wall Street Journal. In addition, the last analyst to follow the company stopped last year because it was too difficult to get information –

2.      Coca-Cola - Coca-Cola is notorious for taking great pains to guard the recipe to its elixer. Only two of the company's top executives knows the formula, which Coke claims has stayed secret since 1886, according to the Guardian. And those two executives can't travel together for fear they'll go down together, the recipe with them.

3.      Bridgewater - Bridgewater, the insanely successful hedge fund, was also insanely secretive, at least until financial gossip site Dealbreaker got a copy of its principles, which the company had taken pains to keep hush-hush, according to the New Yorker. "Bridgewater is a cult. It's isolated, it has a charismatic leader and it has its own dogma," a former co-worker of Ray Dalio, the company's CEO, told a hedge fund magazine.

4.      Apple - Apple is so secretive that there is essentially an entire industry built around creating, spreading and debunking rumors about the company. But Apple gave a small window into its secret world; many of the documents released during the Apple, Samsung patent dispute photos and prototypes illustrating how its devices are made, according The New York Times…...


Citi to settle MBS suit for $24.9 million

According to Reuters Citigroup has agreed to pay nearly $25 million to settle a lawsuit by investors who said they were misled about the quality of mortgage-backed securities they bought just before the U.S. housing market crashed, according to court papers filed Monday in federal court.


The 2008 lawsuit accused Citi of lying about lenders' deteriorating mortgage underwriting and appraisal standards during the subprime mortgage boom, and understating the risk of default. As the underlying mortgages began to default, the value of the investments plummeted, the lawsuit alleged.
The Ann Arbor Employees' Retirement System and Greater Kansas City Laborers Pension Fund had led the lawsuit on behalf of investors who purchased certificates in one of two mortgage-backed securities trusts from Citigroup Mortgage Loan Trust Inc in 2007.

The $25 million settlement represents about $13.25 per $1,000 in initial face value of the two trusts named in the lawsuit, which would be equal to about $1.88 billion, according to court documents…..

Wait…wait…there’s more at
http://finance.yahoo.com/news/citigroup-settle-mbs-suit-24-9-million-210045672--sector.html

Apple Seeks Ban On Sales Of Eight Samsung Phones In U.S.



Steve Jobs must be spinning in his grave with glee.  Apple Inc.  is seeking a U.S. sales ban on eight models of Samsung Electronics Co. (005930) smartphones and the extension of a preliminary ban on a tablet computer after winning a patent trial against the South Korean company, Bloomberg reports.

Apple, which won more than $1 billion Aug. 24 after a jury found Samsung infringed six of seven patents at stake in the trial, named the phones it wants barred in a filing yesterday with U.S. District Judge Lucy Koh in San Jose, California. The list includes several devices in the bestselling Galaxy lineup.

The effect on Samsung’s sales will be negligible because its newest smartphones aren’t on Apple’s list of devices, which will account for less than 1.4 percent of the Korean company’s profits next year, said Mark Newman, an analyst at Sanford C. Bernstein who used to work at Samsung. The impact would be 6.3 percent if Apple manages to broaden a ban to newer devices and block 80 percent of all Samsung phones, he said….

Americans Think the Rich Are Smarter, But Greedier




The Presidential campaign has given us two opposing stereotypes of the wealthy –  neither of which reflects the actual views of most American voters writes cnbc.

Republicans say that the rich are hard-working job creators who are admired – and even saluted – by their fellow Americans. They say Americans don’t want to tax success and engage in wealth spreading.  Democrats say the rich didn’t make it on their own, and can be heartless and uncharitable. They say Americans want the rich to pay their fair share and want to shrink the growing wealth gap….

Monday, August 27, 2012

Dollar Loses Hedge Fund Bulls




Hedge funds and large speculators are abandoning bets on a stronger dollar at the fastest pace ever amid growing confidence in the global economy Bolomberg/Businessweek tells us.

Futures contracts favoring gains in the U.S. currency surged to the most on record in June as growth faltered and investors retreated from risky assets. Now, hedge funds are reversing those bets as central banks from China to the U.S. vow to stimulate their economies, prompting money managers to seek higher returns from Sweden to Australia.

Traders have less need for the relative safety of assets denominated in dollars as the cost of insuring sovereign bonds for Group of 10 and other nations tumbles to the lowest level in a year and stocks reach the highest since 2008. Sweden’s krona, backed by interest rates about six times those in the U.S., rose more than any other major currency in the past month. The dollar and the yen, havens in periods of turmoil, declined the most….

The 10 Worst Central Bankers In The World




Global Finance magazine is out with its annual report cards for the world's most central bankers. The grades, which range from A to F, are based on banker's success in controlling inflation, fostering economic growth, and managing interest rates. These 10 bankers have not been up to the task and score lowest according to Global Finance.

Mercedes Marc√≥ del Pont, Argentina; 2012 Grade: D;  Core inflation: 9.8% (official number, independent estimates are higher); Unemployment: 7.5%;  Benchmark interest rate: 14.125%

Pedro Delgado, Ecuador; 2012 Grade: D; Core inflation: 5.09%; Unemployment: 5.19%; Benchmark interest rate: 0.2%;

Masaaki Shirakawa, Japan; 2012 Grade: C-; Core inflation: 0.2%; Unemployment rate: 4.4%; Benchmark interest rate: 0.1%;…

Duvvuri Subbarao, India; 2012 Grade: C;- Core inflation: 7.0%; Unemployment rate: 3.8%;  Benchmark interest rate: 8%...

Andras Simor, Hungary: 2012 Grade: C; Core inflation: 3.49%; Unemployment: 11%; Benchmark interest rate: 7%...

Another ‘Madoff’ name nixed




What’s in a name? If the moniker is Madoff, apparently the answer is nothing good, according to the NY Post.

The second of Ponzi-schemer Bernie Madoff’s daughters-in-law is asking a court for permission to shed her now notorious married name. Deborah West Madoff, who started divorce proceedings against Bernie’s son Andrew back in 2008, has sought permission in Manhattan Supreme Court to revert to her maiden name. The couple have two children.

She’s not the first in the family to do so: in 2010, her sister-in-law made a similar court application….

Read more: http://www.nypost.com/p/news/local/manhattan/another_madoff_name_nix_ZfIXFDZHNbrWZhJtikJdHJ#ixzz24kpioAyy

$27.7 Billion Worth Of American Property Is In Isaac's Path




Tropical Storm Isaac is not a hurricane (yet) and it hasn't landed on the U.S. (yet). But analysts are already estimating the costs of the potential damage.

From CoreLogic:
“Based on current forecasts, Tropical Storm Isaac is predicted to strengthen into a Category 1 hurricane and become the first hurricane to impact the United States this year,” said Dr. Howard Botts, vice president and director of database development for CoreLogic Spatial Solutions. “Though the forecasted path is constantly changing, at this point, Isaac seems to be poised to strike the Gulf Coast early Wednesday. Major metro areas that could potentially feel the impact of hurricane-driven storm surge include New Orleans, La.; Baton Rouge, La.; Biloxi, Miss.; Mobile, Ala.; Pensacola, Fla. and Tallahassee, Fla., depending on where the storm makes landfall.”
The data shows nearly 210,000 total residential properties valued at more than $27.7 billion in seven major metro areas along the Gulf Coast could be at risk for storm-surge related flooding, assuming the storm hits as a Category 1 hurricane....


Read more: http://www.businessinsider.com/tropical-storm-hurricane-isaac-path-property-damage-2012-8#ixzz24kogbZwS

Republicans eye a return to gold standard


Is gold money? According to CNN Money some Republicans think it should be.
The Republican Party is considering setting up a commission to examine the pros and cons of going back to the gold standard, according to draft documents of the party platform.

The official party platform won't be decided until Monday, but a Republican National Committee spokeswoman confirmed the draft language to CNNMoney.
The commission harkens back to the early 1980s, when President Ronald Reagan set up a Gold Commission with the same intention….

Bankers Told to Watch What They Say at Bar




In the boom years, conspicuous consumption in the bars was investment bankers' natural release from long hours in the office. Now the office sits on their shoulders while they sup, Reuters told us.

After a series of banking scandals, banks' compliance teams are ramping up their checks on every aspect of office life, such that even social outings are under scrutiny, with training sessions on what you can and can't say over a beer with colleagues.

"Everyone is more paranoid, that's for sure," said one department head at a European investment bank, where the trading floor is festooned with posters reminding staff to report any suspicious behavior….

http://www.cnbc.com/id/48798491

Whoa! Top firm introduces new bonus rules-



Yes folks, Deutsche Bank has become the first global bank to introduce rules allowing it to strip staff of bonuses they earned at previous employers, the Financial Times reported on Monday.

The rules will enable Germany's biggest bank to take back unvested shares that newly hired senior staff received in exchange for stock earned at another bank, the FT said.

The rule is described by pay consultants, cited by the newspaper, as unusual -- if not unique -- in the banking world, but could turn into a blueprint for rivals…..


http://in.reuters.com/article/2012/08/26/deutschebank-idINL5E8JQ9EA20120826