Wednesday, October 31, 2012

Hot Bargain of the Week: Mercedes Dangles $5,000 VIP Discounts




Daimler AG (DAI)’s Mercedes-Benz, guarding its U.S. luxury-auto sales lead, is letting some buyers skip more monthly payments than Bayerische Motoren Werke AG (BMW) and offering as much as $5,000 discounts to “VIP customers.” Bloomberg tells us.

Mercedes introduced a program for 2012 models sold through this month that included cash offers and special lease deals, according to an Oct. 2 memo to dealers. The Stuttgart, Germany- based automaker in an Oct. 5 e-mail to dealers also announced a promotion for the month that lets some current Mercedes owners forgo as many as five payments.

Mercedes leads BMW by 5,221 sales in the U.S. through this year’s first nine months. Weak demand in Europe is spreading to Germany and deliveries in China slipped for the first time in eight months in September. Those markets’ struggles are putting more pressure on Daimler and BMW in the U.S….

Cash burning a hole in your ;pocket?  Turn to http://www.bloomberg.com/news/2012-10-31/mercedes-dangles-5-000-vip-discounts-to-hold-u-s-lead-over-bmw.html

The 1%: Wall Street Finds Sandy Silver Lining in Wine, Monopoly




From Bloomberg (Not one word has been changed): Wall Street turned to Bordeaux, sushi and faxes as Hurricane Sandy wreaked the most havoc in the history of the city’s transit system and closed stock markets on consecutive days for the first time for weather since 1888.

“I had to go to the wine cellar and find a good bottle of wine and drink it before it goes bad,” Murry Stegelmann, 50, a founder of investment-management firm Kilimanjaro Advisors LLC, wrote in an e-mail after he lost power at 6 p.m. on Oct. 29 in Darien, Connecticut.  The bottle he chose, a 2005 Chateau Margaux, was given 98 points by wine critic Robert Parker and is on sale at the Westchester Wine Warehouse for $999.99.

“Outstanding,” Stegelmann said. He started the day with green tea at Starbucks, talking with neighbors about the New York Yankees’ future and moving boats to the parking lot of Darien’s Middlesex Middle School…..

Citi's Downtown Building Is So Flooded It Could Be Closed For Weeks



Citigroup, the third-largest U.S. bank, said its office at 111 Wall St. will be unusable for weeks and that a building housing senior capital-markets executives lost power after Hurricane Sandy hit Lower Manhattan, according to Businessweek.

“The building experienced severe flooding and will be out of commission for several weeks,” CEO Michael Corbat wrote yesterday in a memo to employees. “We will continue to use backup sites and work-from-home strategies as necessary.”

Citi is assessing when buildings at 388 and 390 Greenwich St. can open, a process complicated by power failures and transit disruptions, Corbat wrote. The New York-based company uses those offices as the headquarters for its trading and investment-banking operations….

The Brutal Way Some UBS Employees Discovered They Were Laid Off




UBS has announced 10,000 layoffs, and they've started immediately..
The Shocking details from FT:  Some of the Swiss lender’s fixed income traders discovered that their passes were no longer working when they tried to get to work at its Finsbury Avenue offices on Tuesday morning, bank insiders said.
...

JPMorgan Sues London Whale’s Boss




JPMorgan Chase sued the executive responsible for supervising Bruno Iksil, the trader nicknamed the London Whale for market-moving wagers at the division responsible for a $6.2 billion trading loss.

Javier Martin-Artajo, Iksil’s boss in the chief investment office, is a defendant in a London lawsuit filed Oct. 22 by the bank and made public today. The court filings didn’t reveal any details of the complaint. Both men have left the bank.
JPMorgan disclosed trading losses in May after what CEO Jamie Dimon said were “egregious” failures to manage flawed positions on synthetic credit securities. The bank is still recovering from those bets, the losses on which had risen to $6.2 billion through the first nine months of 2012 and may increase, the bank told Bloomberg....

Sandy’s Recovery Could Take Weeks as Millions Struggle




From Wires with CNBC.com: Stock trading resumed Wednesday on Wall Street for the first time this week as the Northeast limped into a recovery that could last weeks after epic flooding caused massive power outages, knocked out large parts of New York City's transportation network and killed at least 50 people.

Millions of people in New York City and other hard-hit areas will spend days or weeks recovering from a storm already seen as far more destructive than Hurricane Irene, which slammed into the same region a year ago.  Super storm Sandy killed 18 people in New York City, and a total of 23 in New York state, while six died in New Jersey. Seven other states reported fatalities. Some 6.6 million homes and businesses remained without electricity on Wednesday as trees toppled by Sandy's fierce winds took down power lines....

How one superbull would trade the market reopen




Jonathan Burton of MarketWatch fame writes:  The New York Stock Exchange was not flooded during Hurricane Sandy, contrary to rumors. But the storm’s surge may be nothing compared with the trading wave that could wash over Wall Street on Wednesday morning, when U.S. markets reopen after being closed for two days.

Technical analyst Ralph Acampora is hoping for the worst. “Ideally, I’d like to see the market open down big,” he said in a telephone interview late Tuesday. “A bang, down 4% to 5%,” that rockets the CBOE Volatility Index    VIX -1.71%    up to around 25, “would scare the hell out of everybody.”

A “bang,” with prices tumbling not from disappointing earnings but due to Sandy’s damage, would spur a new leg up, added Acampora,  He isn’t saying this because Wednesday is Halloween. Acampora — the self-proclaimed “godfather of technical analysis” whose Wall Street career spans several decades — is looking for the first session of trading after the two-day closure to end a stretch of market weakness....

$53 Billion Man tops Buffet’s Fortune


From the good folks at Bloomberg: Inside Inditex SA (concrete-and- glass headquarters in the Spanish town of Arteixo, a lithe woman slips into a dress that a seamstress working amid buzzing sewing machines stitched together just minutes earlier.  In weeks, this and hundreds of others creations inspired by pop culture or couture catwalks will fill the company’s more than 1,600 Zara stores in 85 countries on six continents. Since opening the first shop in his seaside home of La Coruna in 1975, billionaire founder Amancio Ortega has built the world’s largest clothing retailer -- and a fortune exceeding Warren Buffett’s, Bloomberg Markets magazine reports in its December cover package.

Ortega’s wealth is soaring even as his country battles an economic meltdown. Spain’s unemployment is hovering around 25 percent as the country suffers its second recession since 2009 and a debt crisis roils Europe. Standard & Poor’s cut Spain’s debt rating to one level above junk on Oct. 10. With the global economy growing the slowest in three years, Ortega’s cost- conscious lines are ringing up sales….

Read all about it at http://www.bloomberg.com/news/2012-10-31/ortega-tops-buffett-with-zara-fortune-of-53-6-billion.html

Tuesday, October 30, 2012

Stock Market Reopening Could Get Crazy




If and when U.S. stock trading starts up again on Wednesday, the crowd waiting to trade will be like those Black Friday masses busting down the doors of Wal-Mart to get their hands on a $20 DVD player. Things could get ugly, according to a HuffPo report.

Everything could go smoothly, of course. But investors should be ready for the chance, however small, of volatile trading that could further rattle already shaky confidence in financial markets, with longer-term implications for the economy, and possibly the presidential election, if things get really messy.

"The last thing we can afford in this country is for capital markets to come online tomorrow and not have the ability to handle what happens, after 48 hours of being closed after a natural disaster," said Dennis Kelleher, president and CEO of Better Markets, a financial-reform advocacy group. "It will compound all the bad trends in these markets."

Rogue Trader: My Girlfriend Told Me To Confess




From BI: A City trader accused of losing UBS £1.4bn through reckless and illicit deals has told a court he was actively encouraged by superiors to "push the boundaries" so as to maximise profits.
Kweku Adoboli, 32, told Southwark crown court on Tuesday that traders at all investment banks viewed compliance policies as "aspirational" rather than fixed and knew they had to bend rules if they were to achieve the goals set out for them by managers.

The court was told that Yassine Bouhara, former co-head of equities at UBS, wrote to Adoboli in an email: "You don't know what your limits are until you push the boundary so far that you receive a slap on the back of the wrist."  Quizzed on this by the defence barrister, Paul Garlick QC, Adoboli said: "There were no secrets, there was no hiding, there was no holding back. We were told to go for it, we went for it. We were told to push the boundaries, so we pushed the boundaries…

Top firm to axe as many as 10,000 jobs




Swiss banking giant UBS AG is to cut as many as 10,000 employees, or some 15 percent of its staff, to drastically shrink its ailing investment bank, according to a NY Post report

The news of the layoffs came as Switzerland's biggest bank posted another big loss for the third quarter. It said Tuesday that the job cuts are part of a strategy to shore up profits.  As a result, UBS said it needs to reduce its headcount to "around 54,000" by 2015, down from its current 64,000 employees in 57 countries.

Some 7,500 jobs are to be cut mainly in London and the United States, where UBS has a prominent building and trading operations in Stamford, Conn., near New York City. The other 2,500 cuts are to be in Switzerland….

A NEW STAR WARS IS COMING IN 2015! Disney just bought Lucasfilm for $4 billion



From Businssinsider: Announcing the news, Disney also said it will release a new Star Wars movie in 2015.  The movie is currently titled Star Wars: Episode 7. That means it will take place after Return Of The Jedi.

From a press release: "Star Wars Episode 7 is targeted for release in 2015, with more feature films expected to continue the Star Wars saga and grow the franchise well into the future."

Traditionalists are going to scream in horror at this news, but there is a silver lining. The new films will not be produced by George Lucas – who lost his touch a long time ago.  Disney exec Kathleen Kennedy will be executive producer of all new Star Wars films. Lucas will serve as a mere "creative consultant."

Read more: http://www.businessinsider.com/a-new-star-wars-is-coming-in-2015-2012-10#ixzz2AocMROoQ

Bank of America wealth advisor sues for job




Banks have been required by new rules in effect since May 2011 to conduct background checks on all employees, in an effort to ensure people guilty of past crimes are not put in position repeat their offenses, according to a fiercefinance report..

….The Houston Chronicle reports that Paul Boudwin was "a successful wealth manager at the bank's Houston office. Last year, he was recognized with the bank's 'Chairman's Club' award, which came with a trip to Philadelphia for training at the University of Pennsylvania's prestigious Wharton School. He was on track for a big bonus."

But then a back ground check revealed that 14 years ago, he was arrested with other fellow college students as part of misunderstanding involving a check at Denny's. The charge was later dismissed, but the bank initially tried to fire him…..

Read more: Bank of America wealth advisor sues for job - FierceFinance http://www.fiercefinance.com/story/bank-america-wealth-advisor-sues-job/2012-10-29#ixzz2AoY2PAHX 

O.J. Simpson 2.0? Gupta’s Appeal Could Blacken His Name Instead of Clearing It



Stephen Bornstein writes:  Of all the Wall Street players U.S. attorney Preet Bahara has nabbed for insider trading in the last four years, Rajat Gupta has got to be the most improbable.

He’s not a hedge fund operator, investment banker, equity trader, research analyst or expert network consultant. Instead, Raj Gupta has for years been a distinguished member of America’s business and philanthropic elite, a native of India who rose from orphanhood to the top of McKinsey & Co. and then onto the boards of Goldman Sachs, Procter & Gamble, American Airlines, the Rockefeller Foundation and the Bill & Melinda Gates Foundation. He and his wife Anita attended President Obama’s first state dinner.

Gupta’s two-year sentence, handed down last week, was well below the 20-year maximum term the 63 year-old was facing. He was convicted of securities fraud for tipping Galleon hedge fund manager Raj Rajaratnam to Warren Buffet’s $5 billion investment in Goldman at the height of the financial crisis and Goldman’s first quarterly loss as a public company. Gupta was also fined $5 million, while Rajaratnam is now serving an 11-year sentence for trading on those two insider tips and lots of other material, non-public information obtained from illegal sources.

The insider trading case against Rajat Gupta was completely circumstantial, although the indirect evidence was “overwhelming” according to Judge Rakoff……

Read more at http://newyorkcityassetmanagementlawblog.com/2012/10/guptas-appeal-could-blacken-his-name-instead-of-clearing-it/

Lawyer for New York man suing Facebook wants out of the case




The New York man facing federal charges that he attempted to defraud Mark Zuckerberg and the company Zuckerberg founded Facebook Inc. may have lost yet another lawyer, according to a report in the LA Times.

Dean Boland, who is representing Paul Ceglia in a civil lawsuit that federal prosecutors allege is fraudulent, has filed a motion in U.S. District Court in Buffalo to withdraw as Ceglia's counsel. He is one in a long line of lawyers who have withdrawn from the case since it was first filed in 2010.

In the motion, Boland insisted his reasons for withdrawing "have nothing to do with any belief by the undersigned that plaintiff is engaged in now or has been engaged in during the past, fraud regarding this case."

In an email, Boland said: "The motion speaks for itself." A Facebook spokesman declined to comment….

Wait…wait…there’s more at http://www.latimes.com/business/technology/la-fi-tn-lawyer-for-new-york-man-facing-federal-charges-he-tried-to-defraud-facebook-wants-out-of-the-case-20121030,0,6141436.story

Emerging managers seeing renaissance among investors

From pionline: Some of the world's largest pension funds are increasingly turning to emerging managers to generate alpha, particularly in alternative asset classes where more nimble players might have an edge.

“There is renewed interest in emerging managers, stemming in general from investors looking for diversity among managers — not necessarily just on an outperformance level but also (in terms of) diversity in investment ideas, which may be coming from smaller firms,” said Andrew Junkin, managing director at investment consultant Wilshire Associates Inc. based in Denver.
Furthermore, major organizational changes at larger firms have led some investors to opt for smaller managers “with the view that they may be more nimble in certain areas of the market,” Mr. Junkin said. “Smaller managers can provide organizational stability, and more of them tend to fall into the (women and minority business enterprises) category…..”

Disaster Politics: In Middle of a Messy Election, a Nightmare Makes Landfall



It was a dark and stormy night....,when they get what little sleep they get these days, the people running the campaigns for president have more than enough fodder for nightmares. According to the NY Times worse, come daybreak, they realize their worst fears may yet come true. Under one scenario, the country could wind up with President Romney, right, and Vice President Biden.

Dancing in their heads are visions of recounts, contested ballots and lawsuits. The possibility that their candidate could win the popular vote yet lose the presidency. Even the outside chance of an Electoral College tie that throws the contest to Congress.  Now add to that parade of potential horrors one more: a freakish two-in-one storm that could, if the more dire forecasts prove correct, warp an election two years and $2 billion in the making.

Despite the meticulous planning, careful strategies, polling, advertising and get-out-the-vote efforts, the election could produce the sort of messy outcome that defies expectation and prognostication....

How Much Will Sandy Cost?



Hurricane Sandy appears to have easily caused more losses than last year's Hurricane Irene, but final totals will be hard to come by for some time because of the scale of the disaster, catastrophe forecasting companies told HuffPo on Tuesday.

RMS, one of the three primary firms used by the insurance industry to calculate disaster exposures, indicated that Sandy should outdo the roughly $4.5 billion in insured losses Irene caused after hitting the northeast in August 2011.

"Sandy event is much more severe ... and has impacted NYC to a much worse degree than Irene," RMS said in a storm report early Tuesday.  Its assessment follows that of peer Eqecat, which said late Monday that Sandy was likely to cause anywhere from $5 billion to $10 billion in insured losses and from $10 billion to $20 billion in economic losses…..

NYSE Expects Normal Open Tomorrow After Storm

The New York Stock Exchange (NYX) expects to open as usual tomorrow, saying its facilities were spared when Hurricane Sandy blasted Lower Manhattan with floods and 90- mile-per-hour winds, the good folks at Bloomberg told us.

The floor and building of the NYSE “are fine,” Robert Rendine, a spokesman, wrote in an e-mail. Executives of the biggest U.S. equity venue expect a normal open, according to Eric Ryan, another spokesman.

U.S. exchanges are in the second day of a shutdown called to safeguard workers as Sandy barreled up the East Coast and forced hundreds of thousands of evacuations in New York City. NYSE Euronext’s building on Wall Street is close to the section of Manhattan that was deluged when the storm propelled a 13-foot sea surge as it came ashore last night. The NYSE began testing for a back-up plan that would be necessary if storm damage prevented it from reopening the floor tomorrow….

The Biggest Question Facing Apple After Steve Jobs' Death Has Now Been Answered



Wow!  According to BI yesterday, Apple CEO Tim Cook fired software design boss Scott Forstall and gave Forstall's responsibilities to Jony Ive, who was previously in charge of just hardware design.

The last person to be in charge of both hardware and software design at Apple was, of course, Steve Jobs...

Daring Fireball's Jon Gruber says this move answered the biggest question facing Apple post-Jobs:
The big news today is about Jony Ive. I don’t think it can be overstated just how big a deal it is that he now oversees all product design; hardware and software...

For the last year, outside observers have been left to wonder just where the buck stopped for UI design at post-Jobs Apple. That question has now been answered: Jony Ive….

Read all about it at http://www.businessinsider.com/the-biggest-question-facing-apple-after-steve-jobss-death-has-now-been-answered-2012-10

NYSE Tests New Contingency Plan Today

From the WSJ: U.S. stock exchange operators are preparing to test a new contingency plan Tuesday morning to ensure domestic equity trading restarts this week.  Under the backup plan outlined late Monday, all trading in NYSE-listed securities would execute on the Arca exchange, according to the notice from NYSE Euronext..
The broader plan outlined Monday night by NYSE and rival exchange groups BATS Global Markets Inc. and Direct Edge Holdings LLC would see the Big Board operator's all-electronic NYSE Arca platform handle critical opening and closing auctions.

The New York Stock Exchange and the smaller NYSE MKT exchange would remain closed under the plan being discussed,  The plan deviates from a proposal floated Sunday by NYSE Euronext, which involved operating the New York Stock Exchange using Arca's systems. This drew concerns from brokerage officials worried that they weren't properly prepared for the unconventional approach.  Under the plan outlined late Monday, all trading in NYSE-listed securities would execute on the Arca exchange, according to the notice from NYSE Euronext……

Find out more at http://online.wsj.com/article/SB10001424052970203335504578087651091664508.html?mod=WSJ_hps_LEFTTopStories

Stock Exchanges Testing New Plan To Get The Markets Open Again This Week




From the WSJ: U.S. stock exchange operators are preparing to test a new contingency plan Tuesday morning to ensure domestic equity trading restarts this week.  Under the backup plan outlined late Monday, all trading in NYSE-listed securities would execute on the Arca exchange, according to the notice from NYSE Euronext. .


NYSE Euronext officials also dismissed reports that its headquarters in lower Manhattan had been affected by flooding, though they said they have a backup plan should the building and its storied trading floor suffer "irreparable damage."

"We stress that, as of now, there has been no damage to the NYSE Euronext NYC headquarters that would impair trading floor operations," exchange officials said in a notice to traders.

The contingency plan was described as "precautionary" given the unpredictability of the storm that has already caused flooding in parts of the city…..

More?  Check out http://online.wsj.com/article/SB10001424052970203335504578087651091664508.html?mod=djemalertMARKET

Facebook ‘virtual $uit’

Bloomberg reports that Facebook was sued by Kickflip, which does business as Gambit, over claims the social-networking company broke antitrust laws in the virtual-currency market.

Gambit was the leading virtual currency and payment- processing provider to software developers that published games on Facebook and other social networks. Facebook’s decision in 2009 to offer its own services to developers destroyed a “vibrant and competitive market,” lawyers for Kickflip said in court papers made public yesterday in federal court in Wilmington, Del…..

More?  Go to http://www.nypost.com/p/news/business/facebook_virtual_uit_CK64IJeS1vbPu5vBDGCVkL

An Apple Exec Shakeup Over Maps




From WSJ: Apple exec Scott Forstall was asked to leave the company after he refused to sign his name to a letter apologizing for shortcomings in Apple's new mapping service, according to people familiar with the matter.

The incident was the latest clash between Mr. Forstall, who oversaw Apple's mobile software unit, and other executives at the company. It led to one of the most significant management shake-ups in Apple's recent history and its most sweeping changes under CEO Tim Cook.

Apple announced the departure of Mr. Forstall on Monday along with the unrelated departure of its new retail chief, John Browett. People familiar with the matter said Mr. Browett was also asked to leave. Mr. Browett, who only recently was appointed head of the company's retail operations, failed to fit in at Apple and made some mistakes. They included the faulty implementation of a new staffing formula that cut some employee hours too severely…..

Read all about it at http://online.wsj.com/article/SB10001424052970204840504578087192497916304.html?mod=WSJ_business_whatsNews

Monday, October 29, 2012

On Wall Street, It's Business as Unusual

Storm Upends Stock and Bond Markets and Thins Activity in Currencies and Commodities; 'Like a Four-Day Weekend'

According to a WSJ report traders and analysts pushed to the sidelines by the approach of Hurricane Sandy spent Monday trying to limit damage to their portfolios, prepare for whenever markets reopen and keep an eye on assets such as oil and international stocks that are still changing hands.

Some who live and work in the storm's path labored from home, while others reserved hotel rooms near their offices in case the commute became too dangerous. All had to adjust to the extraordinary weather that shut down markets for U.S. stocks and other assets and left trading thin in others.

Even with the U.S. stock market closed, investors found ways to trade. "You can work around it to a certain extent," said Nanette Buziak, head of equity trading at ING Investment Management. On Monday morning, "where I would have been trading in stocks, we ended up trading what we needed to in futures. We're also still trading where we need to in international markets."

Read all about it at http://online.wsj.com/article/SB10001424052970204840504578086732176501780.html?mod=WSJ_hps_LEFTTopStories

U.S. Super Storm’s Record Flooding Lands Blackout Blow




Record tides from a wintry super storm combined with hours of pounding wind and rain to deal an unprecedented blow at the U.S Northeast’s power grid, flooding electrical substations and shutting down New York City’s financial district, Bloomberg reports.

At nightfall, Consolidated Edison, New York City’s utility, killed power in parts of downtown Manhattan and Brooklyn as seawater encroached on crucial electrical equipment and warned more power cuts may be coming. Crews in Connecticut threw up a dike around a substation serving downtown Stamford and stood ready to shut down four others should floodwaters rise by the forecast 11 feet....

As of 8 p.m. in New York yesterday, the storm had knocked out power to some 3.6 million homes and businesses, according to the U.S. Energy Department. That figure may increase overnight.  Power blackouts that may eventually affect as many as 10 million people in the region for as long as 10 days left homes in the dark, closed the stock market, and disrupted operations at refineries, pipelines and power plants….

And Now For Something Completely Different: Gupta - Help Me, Rwanda



NY Magazine’s Jessica Presseler writes :Lawyers for Rajat Gupta, the former McKinsey managing director and Goldman Sachs board member convicted of insider trading, made an unusual request as he awaited his sentencing. Rather than jail time, they suggested, their client should be given a stint of community service in Rwanda, working “to ensure that the needs to end HIV, malaria, extreme poverty, and food security are implemented.” The request was accompanied by a letter from Rwanda’s minister of justice promising close supervision of the felon and urging the court’s support for a “rare, unique” alternative that “might provide future precedent to other situations of similar nature.” In fact, that precedent already exists.

Gupta is not the first disgraced Goldmanite to seek rehabilitation in the African nation, best known for the 1994 genocide that claimed more than 1 million lives. Earlier this year, it emerged that Goldman vice-president Fabrice Tourre, who was accused by the SEC of defrauding investors in one of the most high-profile cases of the financial crisis, had been spending time living in Kigali, Rwanda, and volunteering for a nongovernmental organization there. As he prepares to go on trial next year, the image of the young banker squatting on the ground, being taught to knit by locals, could serve a redemptive purpose…..


Obama: ‘Secretary of Business’ in a 2nd Term

Believe it or not according to WSJ blogger Carol E. Lee  President Barack Obama signaled if he wins a second term he would appoint a Secretary of Business to oversee newly-consolidated government agencies, including the Small Business Administration, and predicted “a war” will break out within the Republican Party after the Nov. 6 election.

“We should have one Secretary of Business, instead of nine different departments that are dealing with things like giving loans to SBA or helping companies with exports,” Mr. Obama said in an interview that aired Monday on MSNBC. “There should be a one-stop shop.”

Mr. Obama blamed Congress for such consolidation not happening during his first term because lawmakers have been “very protective about not giving up their jurisdiction over various pieces of government.” But the president has done little to push the idea himself…..

Read all about it at http://blogs.wsj.com/washwire/2012/10/29/obama-suggests-secretary-of-business-in-a-second-term/

The Fancy Just Raised $26.4 Million, With American Express On Board



According to BI The Fancy, a Pinterest-like website based in New York where users collect interesting-looking objects, has just raised $26.4 million, according to a disclosure form filed with the Securities & Exchange Commission.

There aren't many details on the fundraising, which was made under The Fancy's corporate name, Thing Daemon, but there is one interesting addition.

American Express vice chairman Ed Gilligan is listed as a member of Thing Daemon's board of directors, which also includes Facebook cofounder Chris Hughes and Twitter cofounder Jack Dorsey….


Citi, Goldman Shut Some NYC Offices for Storm

Citigroup  and Goldman Sachs. are among Wall Street firms planning to shift operations to other cities and have staff work from home as Hurricane Sandy’s arrival in New York forces evacuations.

Employees at Citi, the third-biggest U.S. bank by assets, won’t be able to enter Lower Manhattan offices on Greenwich Street and Wall Street, which include the main trading floor, according to a memo sent to workers and confirmed by Shannon Bell, a spokeswoman. Goldman Sachs, whose corporate headquarters at 200 West St. is also located in an evacuation zone, told the staff in an internal memo that most of them will work from home.

“Given the potential severity of Hurricane Sandy, we have activated our business continuity plans,” Goldman Sachs Chief Administrative Officer Jeffrey Schroeder wrote in a memo to employees yesterday, the contents of which were confirmed by Michael DuVally, a spokesman.....

Stock futures end shortened session lower on storm,




Reuters reports that U.S. stock index futures fell in a shortened session on Monday and cash equity trading was canceled as powerful Hurricane Sandy bore down on the U.S. East Coast while renewed uncertainty in Europe hurt sentiment.

All U.S. stock markets were closed on Monday and may remain closed on Tuesday, the operator of the New York Stock Exchange said, depending on the damage from the huge and dangerous storm on financial center New York City overnight and on Tuesday. Index futures stopped trading electronically at 9:15 a.m. and will stay shut until further notice.

Sandy, a mammoth storm, took aim at the most densely populated U.S. Northeast Coast on Monday, forcing hundreds of thousands to seek higher ground, halting public transport and closing schools, businesses and government departments.....

New York Girds for Storm



From Bloomberg: Workers stacked sandbags in Lower Manhattan while banks and brokerages tested contingency plans, encouraged employees to work from home and prepared to operate with skeleton crews. The trade group representing the bond industry recommended an early close for trading. Governor Andrew Cuomo’s order that subway, bus and commuter rail services be closed starting at 7 p.m. Oct. 28 left many of the city’s almost 170,000 securities industry employees wondering how they would make it to work.

Sandy is predicted to make landfall early Oct. 30 in southern New Jersey, then turn inland, according to the National Hurricane Center’s three-day forecast. Winds may cause a tidal surge as high as a record 11 feet (3 meters), according to New York City Mayor Michael Bloomberg.
In Lower Manhattan, cranes laid concrete barricades at Goldman Sachs Group Inc. (GS)’s headquarters at 200 West Street. Sandbags were piled along garages and doors at Four World Financial Center, the offices of Bank of America Corp., and lined the sidewalk facing the river outside the Depository Trust & Clearing Corp. and Nymex…..

Read more at http://www.bloomberg.com/news/2012-10-28/nymex-to-close-floor-for-sandy-as-nyse-nasdaq-see-normal-open.html

Sunday, October 28, 2012

Frigate-aboudit: Argentina loses big bond ruling to hedge fund billionaire


According to the NY Post billionaire Paul Singer’s costly, take-no-prisoners approach to Argentina is finally paying off.  A federal appeals court in New York handed Singer’s Elliott Management its biggest win yet in the hedge fund’s almost 10-year battle with the South American country over its 2001 default.

Elliott’s recent seizure of Argentina’s prized naval ship in Ghana — an embarrassing blow to the nation that aimed to get it to pay up — is a minor flap compared to the potential payday from this latest legal victory.

On Friday, a unanimous three-judge panel ruled that Argentina must pay Elliott affiliate NML Capital in full every time it pays other bondholders who agreed to take a haircut. Argentine bonds sank on the decision, and the price of guaranteeing its debt against default skyrocketed on the ruling.   The country quickly vowed to take the case to the US Supreme Court...

Hackers take aim at Zynga




CNET reports that the hacktivist group Anonymous apparently is perturbed by the financial situation at Zynga.

A posting on the AnonNews site this morning posits that layoffs at Zynga will help to bring about the "end of the US game market as we know it" as jobs get shipped overseas, a plan that the AnonNews report says was discovered in confidential files leaked from the games maker.
 During the last few days anonymous has been targeting Zynga for the outrageous treatment of their employees and their actions against many developers.

We have come to believe that this actions of Zynga will result in massive layoff of a thousand people and legal actions against everyone that speaks to the public about this plan. It will also come to end of the US game market as we know it as all this jobs will be replaced in other more convenient financial countries.  With a billion dollars cash sitting in a bank we do believe that such actions are an insult to the population and the behaviour of corporations like Zynga must change….

Frankenstorm Heads for the East Coast; Stock Market Closes




The Daily Beast writes: Despite initial reports that only the New York Stock Exchange building would be closing on Monday, sources say the U.S. stock market will in fact close trading on Monday and possibly Tuesday as well. In a statement released Monday night, the NYSE said the decision is due to "the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority" and "concerns about market integrity." Much of lower Manhattan, where the Exchange is located, is supposed to be evacuated in preparation for Hurricane Sandy….

Now Amazon Can Easily Win The $100 Billion Local Commerce Market (And The $150 Billion Smartphone Market)



Forbes writes: One of the most surprising findings in Amazon’s recent quarterly earnings was its massive writedown of its investment in LivingSocial, the number two company in the daily deals market, $169 out of an initial $175 million investment.  At first, that sounds like a disaster. When you look into the details, it looks like LivingSocial had to write down a lot of goodwill in its acquisitions (ie restate the value of acquisitions on its balance sheet), and that itself is due to the comparables LivingSocial uses to value those assets…..

Anyway, that’s not the point. The point is that LivingSocial is now cheap to buy for Amazon. Even if LivingSocial’s business is foundering (LivingSocial says it’s still growing), it still has very valuable assets ; namely a huge opt-in email list, a big salesforce and relationships with zillions of merchants.

And it’s key to remember the arcane reason why Amazon didn’t buy LivingSocial outright in the first place: because until recently, Amazon didn’t collect sales tax in US states where it didn’t have a physical presence. Acquiring LivingSocial would have given it a presence in virtually every state. But now Amazon has decided to collect sales tax in every state where it operates (it has undertaken a giant warehouse buildout as a result). So that barrier is gone. It can own LivingSocial outright.  Heck, Amazon should also buy Groupon while it’s at it. Groupon is clearly undervalued:…..


Saturday, October 27, 2012

Why the S&P Is Trashing Hedge Funds




Putting money into a Standard & Poor's 500-stock index fund would have gained you more than 12% so far this year, while investing in the average hedge fund would have generated just 4.8% in returns, net of fees, through September, according to hedge-fund performance tracker HFR. Even most strategies correlated with equity markets trail the S&P by a wide mark, reports Barrons. Put simply, alpha, or the value a manager adds to returns beyond his benchmark, just isn't there. And that's what the typical hedge fund promises investors, in return for its hefty fees.

Hedge funds typically lag behind broader indexes slightly during years with double-digit S&P gains—they do have to hedge, after all—but it's rarely by this much.

Managers across all strategies are concerned about another 2008-like market crash, but in the meantime, they've been hurt…..

Layoff Watch: Top Firm Shrinks, Plans 10,000 Job Cuts



Switzerland’s largest bank, will cut as many as 10,000 jobs companywide as the trading business shrinks, a person with knowledge of the plan told Bloomberg.

Many of the reductions will come in the trading businesses overseen by investment-bank co-head Carsten Kengeter and probably will occur over several quarters, said the person, who requested anonymity because the plans haven’t been publicly announced. An announcement may come when UBS reports third- quarter earnings on Oct. 30, the person said.

CEO Sergio Ermotti, 52, is overhauling the bank as Swiss regulators pressure UBS and Credit Suisse Group AG to boost capital and scale back trading and investment- banking operations. Like rival securities firms, UBS has been struggling to boost profitability as client activity and trading remain sluggish.

Rise of the Tiger Nation




According to the WSJ Asian-Americans are now the country's best-educated, highest-earning and fastest-growing racial group. They share with American Jews both the distinction and the occasional burden of immigrant success.

Last March, an interviewer archly asked President Barack Obama whether he was aware that he had been "surpassed" by basketball phenomenon Jeremy Lin "as the most famous Harvard graduate." The question was misformulated. If there was any surpassing going on, it was that Mr. Lin had become, briefly, more famous than Mr. Obama as the country's most exemplary figure from a hitherto marginalized minority.

Mr. Lin's triumph on the basketball court is a living metaphor for the social group he comes from. No one would dispute the opening paragraph of the Pew Research Center's massive study of Asian-Americans, released over the summer: "Asian-Americans are the highest-income, best-educated and fastest-growing racial group in the United States. They are more satisfied than the general public with their lives, finances and the direction of the country, and they place more value than other Americans do on marriage, parenthood, hard work and career success." Or as Mr. Lin put it in a video of congratulation he made last spring for the overwhelmingly Asian-American graduates of New York City's famed Stuyvesant High School: "Never let anyone tell you what you can't do……."

Wait…wait…there’s more at http://online.wsj.com/article/SB10001424052970204076204578076613986930932.html?mod=WSJ_hpp_LEFTTopStories

Pay pal: Raj’s friend settles SEC charges




From the NY Post: A former CFO at Xilinx Inc. yesterday became the latest executive to settle civil charges of being part of now-imprisoned hedge fund tycoon Raj Rajaratnam’s insider-trading network.

The tech executive, Kris Chellam of Saratoga, Calif., was charged by the Securities and Exchange Commission of giving Rajaratnam confidential information on Xilinx in December 2006.  The tip helped the Galleon Group founder, who was Chellam’s close friend, make nearly $1 million in illicit profits, the SEC said in its lawsuit. 

Chellam has not been criminally charged. He agreed to pay $1.75 million to settle the case, the SEC said. The agreement is subject to approval by US District Judge Barbara Jones in New York.

Hi Ho, Hi Ho, It's Off the Cliff We Go



Slate’s Michael Moran writes: If nothing else of note emerged from the third and final presidential debate of this election cycle, let’s at least thank Mitt Romney for saying a word that has been notably absent from this contest: “sequestration.”

It’s an ugly word—a typical euphemism of the Washington ruling class. It should not be confused with castration, though economically its effects on the American economy might be similar. Nor does it mean, really, what the word implies. To sequester is to take temporary possession of—to seize—with the intention of returning it. The Latin root, sequestrate, means “to surrender for safekeeping.”

That’s not at all what’s going on here. Sequestration, defined in terms of the current debate, is the result of the Budget Control Act of 2011—itself another silly euphemism. A more apt definition would be something like this: “To light a fuse of an economic explosion that provides a two-year smokescreen for political cowardice until after the next election, when we will come up with some new way to pretend this is all the fault of the other political party…..”

Read all about it at http://www.slate.com/blogs/the_reckoning/2012/10/24/are_we_headed_off_the_fiscal_cliff.html

DIMON: CEOs Are All Telling Me The Same Thing



According to CNBC’s Deepanshu Bagchee the U.S. economy is on the mend and has been getting better, but JPMorgan Chase CEO Jamie Dimon said chief executives he has spoken to have told him they are already making decisions to protect their companies from a looming "fiscal cliff."
The mix of automatic spending cuts and the expiration of Bush-era tax cuts at the end of the year could cut U.S. growth in 2013 and send the economy back into a recession, according to economists.

Chief executives of 80 big U.S. companies, including Dimon, have been lobbying for a deal to avert such an outcome. "I've spoken to CEOs who say, you know, absolutely, we are making decisions to protect ourselves from the ‘fiscal cliff’ and those are like investment decisions and hiring decisions," Dimon told CNBC-TV18 in India, during a visit to the country…..

A Global Bond Bubble Is Emerging That The Pros Never Could Have Imagined

Europe is on the ropes as investors shun peripheral euro-area government debt. In the United States, interest rates are fixed at zero, and government bonds are arguably already quite far along in an epic 30-years-and-running bull market.

Given the state of global debt markets and the apparent lack of value across the investment landscape, it's easy to see why interest has turned to emerging economies…...

Deep Thoughts (Saturday Edition): Are superstar traders history?



The Guardian writes: Hedge fund maestro Greg Coffey is retiring at 41 after a glittering career. And, after a distinctly lacklustre performance recently, many of his contemporaries are following suit

The Wizard of Oz, Greg Coffey, has clicked his heels together and said there's no place like home. He is bowing out of the London hedge fund world, retiring to his native Australia at the ripe old age of 41.  One of the city's best-known traders, the slick-haired investor who famously left his employer, GLG Partners, in 2008 after turning down a £156m "golden handcuffs" offer to stay, is the latest superstar hedge fund manager to leave the industry this year.
….He has gone from generating around £200m of GLG's performance fees in 2007, capping an impressive annual return of 22% since 2004 (and ultimately leading to the massive golden handshake offer) to underperforming at Moore Capital, with two smaller emerging-market funds losing 16% and 2.3% respectively.

So could Coffey's departure mark the end of the big-name trader?….

Friday, October 26, 2012

The Luxury Repo Men or Dude, Where’s My Yacht?


  


From Businessweek: The white yacht bobbed at the end of a pier on the St. Johns River in Central Florida. On the opposite riverbank, several men tried to convey boredom from a distance: stretching, taking off sunglasses, yawning, squinting, replacing sunglasses. The small team’s leader, Ken Cage, peeked at the boat through binoculars, then turned with a snap. “That’s the one,” he said.

The four men—Cage, his No. 2 man, a boat captain, and a driver—hustled into two trucks, wheeled over a river bridge, and entered the marina. They walked quickly along the waterfront until they saw their target—a gleaming Luhrs yacht—and huddled again behind a patch of tall grass. “That has to be our boat,” Cage said. “Has to be.” The team fell silent. An alligator lay motionless in the grass three feet away.

Cage and his guys make a living taking from the rich. He’s one of a handful of the world’s most sophisticated repo men. And while the language may be different from the doorbusters who grab TVs, the game is the same: On behalf of banks Cage nabs high-dollar toys from self-styled magnates who find themselves overleveraged. Many of the deadbeat owners made a killing in finance and real estate during the economic bubble—expanding it, even—and were caught out of position when it burst. So now men like Cage steal $20 million jets like they were jalopies. And fast boats. Even, on one occasion, a racehorse…..

Worst Storm in 100 Years Seen for Northeast U.S.




Hurricane Sandy will probably grow into a “Frankenstorm” that may become the worst to hit the U.S. Northeast in 100 years if current forecasts are correct, Bloomberg says.

Sandy may combine with a second storm coming out of the Midwest to create a system that would rival the New England hurricane of 1938 in intensity, said Paul Kocin, a National Weather Service meteorologist in College Park, Maryland. The hurricane currently passing the Bahamas has killed 21 people across the Caribbean, the Associated Press reported, citing local officials.

“What we’re seeing in some of our models is a storm at an intensity that we have not seen in this part of the country in the past century,” Kocin said in a telephone interview yesterday. “We’re not trying to hype it, this is what we’re seeing in some of our models. It may come in weaker.”
The hybrid storm may strike anywhere from the Delaware- Maryland-Virginia peninsula to southern New England. The current National Hurricane Center track calls for the system to go up Delaware Bay and almost directly over Wilmington, Delaware, just southwest of Philadelphia, on Oct. 30-31…..

Citi fined $2 million over Facebook IPO




According to a report in the NY Post the top securities regulator in Massachusetts has fined Citigroup $2 million for failing to supervise analysts who improperly disclosed confidential information about Facebook's initial public offering.

Secretary of State William Galvin announced Friday that Citi acknowledged a statement of facts in the case and agreed to permanently stop violating state securities laws.

Galvin's office said a junior analyst assigned to work on the IPO emailed two employees at a tech blog that contained confidential information, including a senior analyst's view of investment risks and positives, and revenue estimates for Facebook. The analyst was eventually fired….

Feds arrest man who claimed half of Facebook for trying to bilk Zuck




Mark Zuckerberg has prevailed in his battle with a man who claimed to own half of Facebook.  Federal agents today arrested Paul Ceglia, a wood-pellet salesman from upstate New York, for doctoring documents in an attempt to extort money from the social-networking founder.

Ceglia made waves when he sued Zuckerberg in federal court in Buffalo two years ago, saying the CEO signed a contract in 2003 promising Ceglia a 50-percent stake in Facebook.  It turns out that claim was “entirely false,” according to a complaint filed today by Manhattan US Attorney Preet Bharara…..

9 More Banks Subpoenaed Over Libor

Nine more banks have received subpoenas in connection with a probe into alleged widespread interest-rate manipulation by banks, a person familiar with the investigation said.

The probe, a joint effort by the offices of New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen, could lead to civil enforcement action related to breaches of antitrust and fraud laws.

The subpoenas, which were issued in August and September but haven't been previously reported….

Citi Chair Planned Chief’s Exit Over Months




According to the NY Times Vikram Pandit’s last day at Citigroup swung from celebratory to devastating in a matter of minutes. Having fielded congratulatory e-mails about the earnings report in the morning that suggested the bank was finally on more solid ground, Mr. Pandit strode into the office of the chairman at day’s end on Oct. 15 for what he considered just another of their frequent meetings on his calendar.
Instead, Mr. Pandit, the chief exec of Citigroup, was told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his.
The abrupt encounter, described by three people briefed on the conversation, included a terse comment by the chairman, Michael E. O’Neill: “The board has lost confidence in you.” A stunned Mr. Pandit chose to resign immediately. Even though Mr. Pandit and the board have publicly characterized his exit as his decision…..

Can't wait to find out more?  Check out http://www.nytimes.com/2012/10/26/business/citi-chairman-is-said-to-have-planned-pandits-exit-for-months.html?_r=1&pagewanted=1&ref=business

Rajaratnam Wants Reversal




Galleon Group LLC co-founder Raj Rajaratnam is asking a federal appeals court to set aside his conviction for directing the biggest hedge fund insider trading scheme in U.S. history one day after a key source of his tips was sentenced to two years in prison, according to Businessweek.

The case against Rajaratnam, convicted last year of conspiracy and securities fraud, turned on the first significant use of government wiretaps in an insider-trading case. Those wiretaps are now at the center of his appeal. His lawyers argue the U.S., required to exhaust other avenues of inquiry before resorting to electronic surveillance, hid the existence of a related Securities and Exchange Commission investigation from a federal judge when seeking permission for a wiretap....

Apple loses juice: Profits miss

Although iPad sales have sagged lately, don’t worry about an iPad recession.  Sales of Apple’s blockbuster tablet device totaled 14 million units in the three months ended Sept. 30, missing Wall Street expectations and falling short of the previous quarter’s tally of 17 million.

The iPad sales disappointment — which may have been the result of some Apple fanatics’ putting off a purchase in anticipation of the iPad Mini — coupled with higher-than-expected costs brought on by Apple’s all-out sprint to bring new products to stores in time for the holiday season, led the tech titan to forecast lower-than-expected profits in the current quarter.

For the current quarter, Apple warned it expects earnings of about $11.75 a share — sharply below the Street’s forecast of $15.41 a share…..

Read more at http://www.nypost.com/p/news/business/apple_loses_juice_VqvLAxHasdje84nsTYnyOL

Thursday, October 25, 2012

A Profound Shift In Mark Zuckerberg's Attitude Toward Facebook




According to BI, during yesterday's conference call, Zuckerberg announced a big change at Facebook over the past few months.

Teams that once built their products for users only, and left monetization for someone else to worry about later, are now required to build mobile monetization in from the ground up.
"We’re building a lot more integrated ad products now," said Zuckerberg. “Historically, most of the ad inventory was in this right-hand column. It was a separate experience. We had this ad team and their job was to kind of drive that service, and they could provide that service to every other product team.  Now, we’ve told every product team that they’re responsible for the advertising experience within each of their products."

Zuckerberg said the first team given these new marching orders is the News Feed team.  The results are already stunning.  Two quarters ago, Facebook generated zero revenues from its mobile News Feed. Now, CFO David Ebersman says it's generating $3 million per day, pushing the annual run rate over $1 billion.

Back in 2004, Zuckerberg said he wasn't worried about making money because he was "content to make something cool."  Finally, he's figured out he doesn't have to make that choice……

Read all about it at http://www.businessinsider.com/profound-shift-in-zuckerbergs-attitude-2012-10

Meet The Man Who Knows All Romney's Investment Secrets (And Who Could Lose The Job in 2 Weeks)



The man who knows all of Mitt Romney's investment secrets might be out of that job in less than two weeks. Meet R. Bradford Malt, also known as the Republican nominee's investment manager for his blind trust.

For the last nine years, Malt has been the eyes behind Romney’s blind trust, which is estimated to be worth as much as $250 million. But should Romney win the election come Nov. 6, the candidate has said he will terminate his current blind trust and create a new, federal blind trust. The new trust will potentially be much stricter than his current one, with neither Romney nor the American public able to get a peek at what's inside. And it likely won't allow Malt to qualify as an independent overseer….

But for now, Romney's millions are in the hands of this Boston-based lawyer, who is also the chairman for corporate law firm Ropes & Gray……

P.S. Photo is totally bogus.  Among other things Mormons are serious homophobes!  ! 


Is the iBloom Off the iRose at Apple?




From NY Magazine: Corporate earnings are confusing things. Sometimes you'll see headlines like "Apple Profits Rise 24% on iPhone 5 Sales," and you might be like, Wow, Apple is amazing! And then you'll click another story and see "Apple Misses Wall Street 4Q expectations" and be very confused, because that doesn't sound good at all. It's all very Rorschach-y.

Today, Apple managed to both wow and disappoint investors. The company reported third-quarter revenue that slightly beat expectations, and profits that topped last year's numbers, but its earnings per share came in below expectations, and the company cut its earnings guidance for next quarter…..

Mein Kampf owning UBS’s Investment Banking Head May Have To Slash His Own Expenses “Like A Jewish Shopkeeper”



Dealbreaker’s own Bess Levin reports: As those of you keeping up with the many trials and travails of UBS know, the last couple years have been fairly brutal for investment banking chief Carsten Kengeter. Pre-tax IBD profit was down 55 percent YoY through June, employees are constantly on his ass about getting paid, the comments he made in attempt to “rally the troops” re: “slashing expenses like a Jewish shopkeeper” were totally taken the wrong way, some guy perpetrated a $2 billion fraud (which was partially to blame for CK getting passed over for the promotion he was gunning for), and to top it all off, the higher-ups accepted his offer to forgo a bonus for 2011, which he would never have put out there if he thought they’d actually go for it.

And now, as a thanks for all his hard work, management is publicly mulling the idea of lightening his load and paycheck, which could not come at a worse time considering he just put a down payment on a signed first-edition copy of Mein Kampf.