Tuesday, April 30, 2013

Only In America: High Bid Of $605K For Coffee With Tim Cook Rejected Because Bidder Used Stolen Credit Card!

From Fortune: You know you're spending too much time tracking a charity auction -- in this case for the Robert F. Kennedy Center for Justice & Human Rights -- when a $5,000 drop in price feels like big news.

But there I was Monday morning asking the spokesperson for Charitybuzz, which is running the RFK Center's 2013 fundraiser, why the top bid for a chance to have coffee with Apple (AAPL) CEO Tim Cook had fallen from $605,000 Friday night to $600,000 Monday morning. The answer, it turns out, is that the $605,000 bid was made on a stolen credit card.

That must have been a rude surprise for the card holder….

What Bubble? Home prices rise by most in seven years

Reuters reports that single-family home prices rose more than expected in February, posting their best annual rise since May 2006 in a fresh sign the housing recovery remains on track, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.2 percent on a seasonally adjusted basis compared to January, topping forecasts for 0.9 percent.  Prices in the 20 cities gained 9.3 percent year-over-year, also beating expectations for 9 percent and the biggest increase since May 2006.  On a non-adjusted basis, prices rose 0.3 percent.

Hedge fund to cough up over $21.5 million to settle SEC charges

The following is from the SEC...

The Securities and Exchange Commission today announced that Greenwich, Conn.-based hedge fund advisory firm Level Global Investors LP has agreed to pay more than $21.5 million to settle charges that its co-founder, who also served as a portfolio manager, and its analyst engaged in repeated insider trading in the securities of Dell Inc. and Nvidia Corp.

In January 2012, the SEC filed insider trading charges against Level Global, the firm's co-founder Anthony Chiasson, a former analyst Spyridon "Sam" Adondakis, and six other defendants, including five investment professionals and the hedge fund advisory firm Diamondback Capital Management.  The SEC's complaint, filed in federal court in Manhattan, alleged that Adondakis was a member of a group of closely associated hedge fund analysts who illegally obtained highly sensitive information regarding the financial performance of Dell and Nvidia before this information was made public.

According to the SEC, during 2008 and 2009, Adondakis passed the information on to Chiasson, who used it to execute trades on behalf of hedge funds managed by Level Global and reap millions of dollars in illegal profits…..

Infamous Trader With A $320,000 Bar Tab Has Been Charged In A $7 Million Unauthorized Investment Scheme

From BI: Alex Hope, the young trader who dropped over $320,000 on champagne and Grey Goose at a Liverpool nightclub last year, has been charged in relation with a $7.7 million unauthorized investment scheme.

ZeroHedge has the full bio.  We've included a brief excerpt below (emphasis ours): 
As his confidence and knowledge grew, Alex knew this was the world for him and at 20 years old he headed for the city and soon found employment at The Forex Academy in early 2010 as a FX & Commodity Trader. In July this year, he stepped into the spotlight when his career was profiled in The Daily Telegraph, subsequently Alex went onto to work at leading Trading and Commodities company, Zone Invest Group. For a career that started out trading on the local market stalls for pocket money, to a modest £21k salary in the hospitality industry, Alex has since followed his dream in the trading world and his basic salary has entered the six figure bracket!

The New New Thing: Banker Roommates Follow Zuckerberg Not Blankfein With IvyConnect

From Bloomberg: A former GE Capital associate with a fuchsia handgun on his $185 lilac tie gave out his business card near a Danish man twirling a Turkish woman. An American International Group Inc. (AIG) employee left out his firm’s name when he said he works in risk.  They had come to a lower Manhattan classic-car gallery April 18 for what Philipp Triebel, co-chief executive officer of IvyConnect, calls a new “private members club for the most inspiring people.”

A former Goldman Sachs Group Inc. associate in the Special Situations Group, which invests the firm’s own money, Triebel started IvyConnect last year with ex-Morgan Stanley (MS) investment banker Beri Meric, 28. They threw their first party in November.

Members are “intellectually curious risk-takers,” said Triebel, 31. “We want the hedge-fund guy the same as we want a painter or a yoga instructor. We also want a lawyer, because we believe there’s value to bringing them together….”

Meet Lloyd Blankfein, Outsider.

According to the NY Post the prominent investment bank CEO told attendees at a gay-advocacy leadership conference, “Out on The Street,” at Goldman’s headquarters yesterday that he understood what it was like to be on the outskirts.

“And I think that on a personal level I always felt a little bit outside, myself, in a lot of ways. . . . There’s a lot of people in a lot of circumstances that make somebody feel that way,” Blankfein told an auditorium of Wall Streeters.  “Even in the context of Goldman Sachs, I was a sales trader in an investment bank, I was a salesman in the context of trading. I was in a funny asset class — commodities — in a firm that’s more known for a securities kind of business,” he noted.

Paulson Leads Hedge-Fund Lobby Push to Privatize Fannie

Hedge funds including Paulson & Co. Inc. are pushing Congress to abandon plans to liquidate Fannie Mae (FNMA) and Freddie Mac as investors buy up preferred stock that has long been considered worthless, according to people with knowledge of the discussions.

The improving finances of the two government-owned mortgage companies have kindled hopes among shareholders that they could be revived as private firms.   Paulson & Co. is among funds that met with members of the Senate Banking Committee and with staff members in the House of Representatives two of the people briefed on the matter told Bloomberg…..

Monday, April 29, 2013

Poor Poor Billionaires Flee Havens as Trillions Pursued Offshore

“….According to Tax Justice Network, a U.K.-based organization that campaigns for transparency in the financial system, wealthy individuals were hiding as much as $32 trillion offshore at the end of 2010. Fewer than 100,000 people own $9.8 trillion of offshore assets, according to research compiled by former McKinsey & Co. economist James Henry.

More than 30 percent of the world’s 200 richest people, who have a $2.8 trillion collective net worth, according to the Bloomberg Billionaires Index, control part of their personal fortune through an offshore holding company or other domestic entity where the assets are held indirectly. These structures often hide assets from tax authorities or provide legal protection from government seizure and lawsuits…..

The S&P 500 Is Just Points From An All-Time High

From BI: Stocks are up early in the U.S. trading session. The S&P 500 is up 1,590, which is just 3 points from its all-time closing high of 1,593.37.

Both the all-time closing and all-time intraday (1,597.35) highs were achieved on April 11, 2013.
The rally comes despite weak personal income and Dallas Fed manufacturing reports this morning.
However, the new pending home sales and consumer income numbers were a bit better than expected….

Read more: http://www.businessinsider.com/stock-market-all-time-high-2013-4#ixzz2Rrh7agUj

Un-German Jain Bringing Deutsche Bank to World as Customer’s Man

Bloomberg reports that twelve days into his job as co- chief executive officer of Deutsche Bank AG (DBK), Anshu Jain stood beside Germany’s finance minister and in front of video images of lush forests and rolling rivers as hundreds of businessmen sang the national anthem.

Anshu Jain, co-chief executive officer of Deutsche Bank, spent 18 years climbing to the top of Germany's largest lender. Now he's facing an even greater challenge, fending off allegations of wrongdoing by investment bankers and trying to boost capital.  Jain, an Indian-born British citizen who built a career as a London-based investment banker and speaks little German, remained silent as guests gathered for his debut speech last June at Berlin’s InterContinental hotel raised their voices in praise of the fatherland.
It was a moment that captured the 50-year-old banker’s dilemma: While he works to keep Germany’s biggest lender anchored in Europe’s largest economy, many Germans see him as an outsider selling products they don’t understand….

Is Jain being set up to take the fall when the economy tumbles?  Find out more at http://www.bloomberg.com/news/2013-04-28/no-german-jain-bringing-deutsche-bank-to-world-as-customer-s-man.html

JPMorgan Beats Goldman as Biggest Payer

JPMorgan Chase was the top payer among investment banks last year, awarding its senior employees a fifth more than Goldman Sachs Group Inc., according to a Bloomberg report that also highlights a growing divide between firms based in the U.S. and Europe.

Managing directors in JPMorgan’s mergers advisory and underwriting teams earned an average of 1.1 million pounds ($1.7 million) in total compensation for 2012, according to Emolument, a London-based salary data provider. Morgan Stanley  was the second-highest payer, with an average award of 903,000 pounds, followed by Goldman Sachs (GS) at 873,000 pounds.

High-Frequency Traders Face Speed Limits

High-freq traders are facing "speed limits" for the first time on a major trading platform, under a proposal that is being touted as a template for a regulatory clampdown on computer-driven activity, CNBC reports. . EBS, one of the two dominant trading platforms in the foreign exchange market, is suggesting scrapping the principle of "first in, first out" trading, which it says gives an unfair advantage to the fastest computers and has led to an arms race of spending on technology…..

Wait...there's more at http://www.cnbc.com/id/100682552

Weird's Deep Thoughts (Monday Morning Insight Edition) :Wall Street's full of 'crooks'

Corruption, insider trading and criminal behavior are rampant on a vast scale on Wall Street today as financiers and Washington play the same greedy games that brought us to the brink five years ago, according to one of the world’s most influential economists.

Wall Street is full of “crooks,” and it never properly cleaned up its act after the financial crisis of 2007 and 2008, Columbia University professor Jeffrey Sachs told a distinguished gathering of bankers and professionals in bombshell remarks at the Philadelphia Federal Reserve building earlier this month.

What’s behind this, says the high-profile academic twice named one of Time magazine’s 100 Most Influential People in the World, is “a docile president, a docile White House and a docile regulatory system that absolutely can’t find its voice.”

Sachs pulled no punches. “What has been revealed, in my view, is prima facie criminal behavior,” he said.

…And Another Exec Leaves After Multi-Billon Dollar Scandal

From HuffPo: JPMorgan Chase & Co. said Sunday that one of its co-chief operating officers is leaving the company, marking the latest high-profile departure since the bank's massive trading loss last year. Frank Bisignano will become CEO of payment processor First Data Corp. on Monday. Matt Zames, who was co-chief operating officer with Bisignano, will become the sole COO of JPMorgan Chase effective immediately.

Saturday, April 27, 2013

Matt Taibbi’s Mega-Shocker: The Biggest Price-Fixing Scandal Ever

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players are a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything....

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments.
That was bad enough, but now Libor may have a twin brother.

Wait…wait…there’s more at http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

Feds seek prison for Conn. ex-hedge fund manager/insider trader

From the AP: A former hedge fund manager should serve at least five years in prison for his insider trading conviction and repay $39 million to his former employer for the troubles he put the company through and the money it lost as a result, the government told a judge Friday.

Prosecutors made the recommendations in papers filed in U.S. District Court in Manhattan in advance of Thursday's sentencing of Todd Newman, who was convicted in December of conspiracy and insider trading charges for trades that generated $3.6 million in profits when he worked at Stamford, Conn.-based Diamondback Capital Management. The government recommended that Newman be sentenced within the recommended guidelines range of five years, three months to 6 1/2 years.

SAC’s Stevie goes prime time

According to the Post hedge fund honcho Steve Cohen made the jump from Wall Street to Main Street this week when a character loosely based on him appeared on a CBS crime drama.

In a story ripped from the headlines, Thursday night’s “Person of Interest” centered on a hedge fund’s insider-trading scandal gone awry.  The show’s hedge fund was called VAC Capital. Cohen’s firm is  the $15 billion dollar SAC Capital.

There were more similarities. The show centered on a doctor who told a young trader at VAC that a drug trial he was overseeing was “about to fail.  The trader earned VAC $500 million on the insider tip, which he called “black edge.”  SAC’s traders have also reportedly called such tips “black edge….”

Friday, April 26, 2013

John Paulson Likes A Couple Of Money-Making Investments, Too

(They are useful for blunting the impact of drops in his most favorite thing in the whole world.)

John Paulson, the hedge-fund manager trying to recover from more than two years of losses in some of his funds, told investors he likes convertible bonds, according to a person familiar with the matter.
Paulson, speaking on a conference call with clients today, also said mortgage-backed securities have been performing well within the New York-based firm’s Credit Opportunities Fund, according to a person who listened and asked not to be identified because the information isn’t public. The strategy is Paulson’s biggest, with $5.9 billion in assets, according to a letter to investors that was obtained by Bloomberg News….

Convertible bonds rose 7.9 percent in the first quarter and 9.9 percent last year, compared with returns for investment- grade corporate bonds of 1.5 percent this year and 10 percent in 2012, according to Bank of America Merrill Lynch data. The Standard & Poor’s 500 Index increased 11 percent, with reinvested dividends, in the first three months of 2013 and 16 percent last year.

The New New Thing: Hedge Funds And Money Laundering

Forbes reports that there are indications from Washington that hedge funds, long exempt from anti-money laundering reporting rules, may soon be brought into the fold under new rules proposed by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

1. While public hard data is scant on the amount of money laundering through hedge funds, we believe that hedge funds would easily fit into money laundering schemes. They offer varying degrees of: secrecy, offshore accounts and the ability to place large sums of money. While it is often thought that a “lock up” of the investment for long period would be a deterrent to money laundering, this may no longer be the case with more complex schemes.

Perhaps most importantly, hedge funds have traditionally delegated the anti-money laundering function to admistrators, who will do a very good job performing as much checking and monitoring as required under applicable law and their own internal procedures.  However, the administrators may be at a disadvantage in spotting the launderer because their personal contact with the investor is cursory at best– and the personal contact element in the hedge function scenario may be the most important…..

Options Trading Resumes as Normal on CBOE

From WSJ: Trading on the Chicago Board Options Exchange resumed normally Friday in the wake of a software glitch that delayed business for more than three hours Thursday and left U.S. markets without crucial hedging tools.

The largest U.S. stock-options exchange by volume experienced an early problem, as one series of options contracts was briefly halted by what CBOE called a "system issue," but traders said this was a common occurrence and didn't cause wider disruption.

"So far, we aren't noticing anything out of line," said Joe Bell, senior equity analyst with Schaeffer's Investment Research Inc., which advises investors on option-trading strategies…

SAC Capital to "Give Clients More Time" on Withdrawals

That Stevie Cohen is all heart!  Bloomberg reports that Cohen’s SAC Capital Advisors LP is giving more time to investors to decide if they want to pull their money from the firm’s hedge funds, according to a person with knowledge of the plan.  The firm, based in Stamford, Connecticut, is giving clients the opportunity to withdraw 50 percent of their fund stakes in each of the third and fourth quarters, said the person, who asked not to be named because the information is private.

 “We are offering our investors additional time to make their decisions as we are hopeful that the next few months will bring greater clarity surrounding the resolution of pending regulatory matters,” Tom Conheeney, president of SAC Capital said in a statement, which didn’t provide details on the fund redemption terms….

Hedge Fund Millionaire Sues Former Goldman Exec For Allegedly Helping His Ex Inflate Her Child Support

 Only in America! 

Hedge funder Warren Lichtenstein says that Andrew Cader, a former Goldman exec, conspired with British socialite Annabelle Bond to inflate her child support payments from him, New York Times Peter Lattman reports.

Lichtenstein, who runs New York-based hedge fund Steel Partners, has a five-year-old daughter with Bond, his former fiancée.  He alleges that Cader, the current boyfriend who also owns part of the Tampa Bay Rays baseball team, conspired with Bond, the daughter of a former HSBC CEO….

Read more: http://www.businessinsider.com/lichtenstein-cader-child-support-case-2013-4#ixzz2RaU9jSWg

Thursday, April 25, 2013

People: Fabrice Tourre - From 'Fabulous Fab' to Grad Student

According to the WSJ Fabrice Tourre is trying to get on with his life.  Since he first emerged three years ago as the Goldman Sachs Group Inc. GS +0.58% employee at the center of one of the most bruising regulatory battles in the firm's history, Mr. Tourre has settled into the cloistered world of academia. He is pursuing a doctorate in economics at the University of Chicago and working as a teaching assistant.

The SEC sued Goldman and Mr. Tourre, then a vice president, in April 2010, alleging they misled investors on a collateralized-debt obligation called Abacus 2007-AC1 that produced big losses for investors and big gains for hedge-fund firm Paulson & Co.  Mr. Tourre's emails formed a central part of the regulator's case and created a sensation on Wall Street. The messages disclosed both a sense of humor—in one email, he refers to himself as "the fabulous Fab"—and a keen awareness of the looming crisis….

CBOE reopened after half-day outage

From the NY Post: Trading on the biggest exchange for financial options resumed Thursday following an outage caused by software problems.

The Chicago Board of Options Exchange failed to open at its regular time of 9:30 a.m. Eastern, then reopened at 12:50 p.m. with trading of options on the Standard & Poor's 500 index, according to CBOE spokesperson Gail Osten.  Trading of other options resumed ten minutes later, according to the CBOE's Twitter feed.

Bernanke: Alternatives to Libor Being Considered

Federal Reserve Chairman Ben Bernanke told Bloomberg today that “a new issue this year pertains to reference interest rates, which recent investigations have demonstrated were manipulated, particularly in the case of Libor.”

“The international regulatory community is taking actions to address the governance and the integrity of Libor and to consider transitions toward alternative benchmarks,” Bernanke said today during a meeting of the Financial Stability Oversight Council. He said the U.S. needs to cooperate in those efforts…

JC Penney Soars on News George Soros Is Shareholder

According to BI Shares of beleaguered retailer JC Penney rose more than 7 percent in aftermarket trading on Thursday after billionaire financier George Soros disclosed a 7.9 percent stake in the company.

Soros disclosed he owns about 17.4 million shares of the Plano, Texas, department store operator in a filing with the Securities and Exchange Commission….

Hedge Funders: It's 'A Badge Of Honor' To Be Targeted By 'Thuggish' Teachers Unions

From BI: The American Federation of Teachers, a labor union that represents teachers, is going after a bunch of hedge funders who support education reform.  Last week, the AFT released a "watch list" of hedge funds they think are "attacking" their defined benefit plans through their support of various educational reform groups.

. A total of 33 asset managers were named. There were big names on the so-called "watch list", including David Tepper (Appaloosa Management), Cliff Asness (AQR), Paul Singer (Elliott Management), Henry Kravis (KKR), Daniel Loeb (Third Point), Julian Robertson (Tiger Management) and Paul Tudor Jones (Tudor Investments), just to name a few….

Read all about it at http://www.businessinsider.com/aft-attacking-hedge-funds-2013-4#ixzz2RUPJv9J3

Twitter to Bolster Security After AP Account Hacked

Twitter Inc. plans to bolster security on its site after the account of the Associated Press news service was hacked and an erroneous post triggered a stock- market decline, a person familiar with the matter told Bloomberg.

Two-step authentication will be introduced to make it harder for outsiders to gain access to an account, said the person, who declined to be identified because the information isn’t public. In addition to a password, the security measure usually requires a code sent as a text message to a user’s mobile phone, or generated on a device or software. Twitter’s defense against hacks involving the theft of passwords came under scrutiny this week after a hacker sent a false post about explosions at the White House, triggering a drop in the Standard & Poor’s 500 Index that wiped out $136 billion in market value….

Wow! Is This Firm Unbeatable ? 100 straight quarters of profits!

Bloomberg writes that Raymond James Financial Inc., the brokerage that posted profits for 100 straight quarters, is showing investors that simplicity is key to generating gains.

With headquarters 1,200 miles from Wall Street, the St. Petersburg, Florida-based company produced the best risk- adjusted return of nine U.S. brokerages, banks and advisory firms since 2009, the Bloomberg Riskless Return Banking shows. JPMorgan Chase, the biggest U.S. bank, ranked third as Bank of America, Goldman Sachs and Morgan Stanley were among the worst performers.

Investors compare Raymond James, which has a business model that’s easy to grasp and shields the balance sheet from risk, to an asset manager as it mainly relies on fees. Unlike larger rivals, the brokerage gets most of its sales managing investor money, earning 64 percent of annual revenue in the last fiscal year from its private-client group. That gave Raymond James the stability to weather a financial crisis that caused larger banks to write off billions of dollars in loans….

Greenlight’s Einhorn applauds Apple's capital return moves

According to thestreet, after waging and then withdrawing a battle with Apple to pay out a perpetual preferred stock dividend, David Einhorn of hedge fund Greenlight Capital is applauding the iPhone maker's decision to finance a 15% increase to the company's quarterly payout.

"We applaud Apple's decision to borrow money and return excess capital to shareholders, an idea that was off the table only months ago," a Greenlight Capital spokesperson said on behalf of the fund.

"This positive development represents a more shareholder friendly capital allocation policy and demonstrates the conviction of Apple's management and board in the Company's future."

Wednesday, April 24, 2013

12 Signs the Economy is Weaker Than You Think

We’ve seen plenty of conflicting data in recent weeks as we begin to see some weakness in the economy (right on time again!).  In his latest note David Rosenberg highlights 12 indications that the economy is weaker than you think:

Household employment (-206k in March, the steepest decline in well over a year).

Real retail sales (-0.3% in March, down for the second time in three months).

Manufacturing production (-0.1% and also down in two of the past three months).

Core capex orders (-3.2% in February, and again, down in two of the past three months).

Single-family housing starts (-4.8% in March and negative for two of the past three months as well.

Apple Dives as Cook Reports Profit Dip and No June IPhone

From Bloomberg: The shares of Cupertino, California-based Apple declined as much as 3.4 percent. While Cook outlined plans to debut new products starting late this year, analysts including Gene Munster at Piper Jaffray Cos. had expected the iPhone 5S in June and now anticipate that the new handset may not ship until September at the earliest.

Cook yesterday boosted Apple’s quarterly dividend and alloted more cash to buybacks, adding $55 billion to its plan to return cash to shareholders -- bringing the total to $100 billion through 2015. Cook made the announcements as Apple reported narrowing margins, an 18 percent decline in earnings and acknowledged that growth will continue to slow….

Fasten Your Seatbelts! Orders for U.S. Durable Goods Decline by Most Since August

From Bloomberg: Orders for U.S. durable goods fell in March by the most in seven months as demand slumped for commercial aircraft and business investment cooled.

Bookings for goods meant to last at least three years decreased 5.7 percent after a revised 4.3 percent gain the prior month that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast of 78 economists surveyed by Bloomberg called for a 3 percent decline. Excluding transportation equipment such as planes, which is volatile month to month, orders unexpectedly fell for a second month….

Man vs. Machine: Stocks shake off bogus tweet on White House to end higher

One bogus tweet about blasts at the White House was all it took Tuesday in a market already on edge after the attack in Boston. After that, panic and the machines took over, sending stocks into a brief but shocking tailspin.

By the close of trading, stocks ended 152 points higher. It was the 15th consecutive Tuesday that the Dow Jones industrial average ended higher,…

The Trader Call That May Cost Billions

Deutsche Bank said it wasn’t to blame for 2008 losses on currency trades by Alexander Vik’s Sebastian Holdings Inc. that the Norwegian entrepreneur described in a phone to Bloomberg as his “worst nightmare.”

E-mails and phone calls cited by the bank in trial documents show how market turmoil in October 2008 led to escalating losses at Sebastian, soured its relationship with Deutsche Bank and tested the lender’s prime brokerage systems to the breaking point.

Vik’s investment fund is suing the bank for as much as $8 billion over margin calls made at the height of the financial crisis, the bank said yesterday in documents released at the start of a London trial. Deutsche Bank says it acted properly and Sebastian owes it $250 million….

Tuesday, April 23, 2013

Chesapeake, Bank of New York, square off in bond trial

Reuters reports that Chesapeake Energy Corp began an expedited trial on Tuesday against Bank of New York Mellon Corp over the energy company's effort to redeem $1.3 billion of notes at par.  The proceeding in Manhattan federal court comes less than two months after Chesapeake sued the bank, the trustee for the bonds, seeking to prevent it from interfering with the redemption.

Chesapeake, which faces a projected $3 billion cash shortfall this year, argues that it had until this past March 15 to notify noteholders that it intended to redeem the notes, which have an interest rate of 6.775 percent and mature in 2019, at par…..

Apple Returning $55 Billion to Investors as Forecast Trails

From Bloomberg: Apple forecast sales that missed analysts’ predictions and said it will return an additional $55 billion in cash to shareholders to compensate for a stock that’s been hammered by signs of slowing growth.

The company boosted its quarterly dividend and alloted more cash to buybacks, announcing plans to borrow funds for what it called the largest share-repurchase program in history. Apple will have returned $100 billion, including past buybacks and dividends, through 2015, the Cupertino, California-based company said today in a statement…..

How to Make $800 Million in 6 Months, Carl Icahn Edition

From WSJ: Back in January Netflix NFLX +6.73% disclosed that in late 2012, activist investor Carl Icahn had acquired about 10% of the company, at an average price of $58 per share. That means his stake of just over 5.5 million shares would have set him back about $321 million.

Mr. Icahn’s final intentions may still be a work in progress, but the “more valuable” part has certainly happened: After reporting positive first quarter results today, Netflix stock is up almost 25% in after-hours trading, at about $217 per share on Monday evening. That values the company at about $11.2 billion, and Mr. Icahn’s stake somewhere north of $1.1 billion.  On paper, that’s a tidy little $800 million profit in six months….

Why Singapore Has Become A Wall Street Paradise

Bankers have already said they want to work in Singapore.  According to a Telegraph survey published last year, 27% of respondents (investment bankers) said they wanted to move to Singapore more than any place else, beating out London and NYC.

That may be because Singapore was named best in the world for business.  Here's why:

It takes, on average, three days to open a business.

Trade is open and competitive: there are no tariffs on imports and foreign and domestic business are regulated equally.

Unemployment is only 2.1%

Corzine Sued Over MF Global Flop

Who says there’s no such thing as justice?  Jon Corzine, the former head of bankrupt broker MF Global Holdings Ltd., was sued by the holding company’s trustee, Louis J. Freeh, for failing in his duty to oversee the company and causing the eighth-biggest bankruptcy in U.S. history.

In the suit, filed in U.S. bankruptcy court in Manhattan, Freeh alleged that Corzine, the company’s chief executive officer and a former governor and senator from New Jersey, along with senior executives Bradley Abelow and Henri Steenkamp, failed to act in good faith and implemented strategies that caused the company to fail….

Apple’s Identity Crisis: Is It a Hardware Company or a Software Firm?

As Apple prepares to report what analysts project may be the company's first year-over-year quarterly earnings decline in a decade on Tuesday, it is also grappling with jittery investors and a recent share-price plunge that has wiped about $280 billion off its market capitalization since its stock reached a high of $702.10 last September.

Much of the investor nervousness is rooted in how Wall Street is treating and valuing the Cupertino, Calif., company as a traditional hardware maker. One camp of analysts and some investors said there is strong evidence that Apple should be viewed in a different light: as a software-hardware hybrid.

The distinction matters. If it continues to be seen as a hardware business, Apple's streak—driven by products like the iPhone and iPad—could run out….

Monday, April 22, 2013

Uh-Oh China’s PMI Miss Means Trouble With a Capital T

China's first economic indicator for the second quarter far underperformed expectations on Tuesday, putting the nation's recovery in question as economists recalibrate growth projections lower for the world's second largest economy.

China's flash HSBC PMI fell to a two-month low of 50.5 in April from 51.6 in March – compared with expectations for a fall to 51.5. A reading above 50 indicates expanding activity and one below 50 signals contraction.

"It's a big miss. Confidence in the outlook for China has really diminished, particularly after first quarter growth data," said Tim Condon, head of research for Asia at ING. "People are now reforming their views on economy. The new view is that growth will be stagnant," he told CNBC.

7 Reasons Apple Is Worse Off Than You Think

1. The stock is expensive.   Clusterstock’s Henry Blodget argues that Apple stock is cheap since he claims it trades at a P/E of 9 — less than the market average of 15. Moreover, he argues that if Apple just keeps generating cash at the rate of $40 billion a year, an investor could buy the company today for $390 billion, pocket its $150 billion of cash and just wait six years to get Apple’s business ”free and clear, for nothing.”

But both of these arguments only make sense if the assumptions about Apple’s future financial performance are correct. For example, if you believe that a stock is cheap when its P/E is less than its earnings growth, then Apple is very expensive. That’s because its earnings shrank at a 17% rate in the first quarter of 2013 and are expected to fall nearly 1% for all of 2013. Nor is it clear how these trends will yield $40 billion a year in cash flow.

2. Apple has nothing new in the pipeline.  Clusterstock’s Blodget writes that “excitement should begin to build about the iPhone 5S, the new iPad Mini.” He admits that these products are nothing new. Moreover, based on the bored reaction from my students last fall to the iPhone 5′s announcement, many may shrug should Apple release these “new” versions of old products.  Many will conclude that there is no compelling reason to replace their current iPhones. Or, perhaps they will buy the latest offerings from Samsung and other Android makers….

3. Without Jobs, Apple’s management has lost the ability to innovate.  The absence of innovative products from Apple since Jobs died is compelling proof that his team is not able to take over where he left off. In fact, the fiasco with Apple Maps shows that the team can do harm — rather than merely fail to innovate….

Wait…there’s more.  Find out all about them at http://www.huffingtonpost.com/2013/04/19/apple-worse-off_n_3117237.html

The Strongest Evidence Yet That The Austerity Movement Has Suffered A Huge Blow

The fallout from Reinhart and Rogoff's Excel error appears to have officially jumped from the digital to the real (h/t Jim Pethokoukis).   Stanford economist John Taylor reports that the G20 appears to be abandoning specific fiscal and monetary goals:

A participant in last Friday’s G20 meetings told me that the error was a factor in the decision to omit specific deficit or debt-to-GDP targets in the G20 communique.  The error refers to Reinhart and Rogoff's leaving out data that would have shown high debt-to-GDP levels actually don't produce that great an impact on growth.

Wait, wait….there’s more at : http://www.businessinsider.com/reinhart-and-rogoff-ignored-by-g20-2013-4#ixzz2RD1kjtyA

Heavy hitters swing for the ‘hedges’

According to the NY Post hedge-fund mogul Stevie Cohen will be pitching at Yankee Stadium tomorrow.   No, the 56-year-old billionaire is not suiting up for the Bronx Bombers — but he will be hoping the magic of the House that Ruth Built will yield some investment cash.

Cohen, whose SAC Capital faces a loss of $1.7 billion from investors who want out of his $15 billion hedge fund, is one of about 70 hedge fund managers who’ll be at the Stadium tomorrow making a pitch to prospective new investors at a day-long event sponsored by Goldman Sachs.

SAC, which just settled Securities and Exchange Commission charges over insider trading, has recently re-opened its fund to new investments….

Data Shift to Lift US Economy by 3%

The U.S. economy will officially become 3 percent bigger in July as part of a shake-up that will for the first time see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world's largest economy in a revision aimed at capturing the changing nature of U.S. output….

Why A Top Firm’s Job-Hunt Ban Was Doomed To Fail

From Hereisthecity: No matter how hard you try, it appears workers will do their best to avert imminent unemployment.  Morgan Stanley last week rescinded a short-lived policy that barred junior bankers from searching for jobs until their two-year contracts were more than half done, Bloomberg News reported. Predictably, it didn’t work.

'Telling employees that they can’t look for jobs while working for you is like telling them not to use the Internet', says Wanda Cumberlander, assistant dean of applied management degrees at Georgetown University’s School of Continuing Studies. 'These things are unrealistic'….

Sunday, April 21, 2013

Is Apple Looking For A Replacement For CEO Cook?

Is Apple  (AAPL) secretly searching for a new chief executive to replace Tim Cook? Some Wall Street sources close to some Apple executives say such a move is afoot, although there’s yet no available evidence that the board of the once-mighty top tech-innovator is officially in such a game-changing mode.

But if it isn’t yet pursuing such a goal, it should, according to some big stakeholders, who have trimmed their Apple holdings. They assert privately that It’s time for Apple to oust Cook under whose tenure Apple’s stock has lost about half of its market value since October 2011, when he took over as CEO…..

Are Apple’s awesome days over?  Will sacking Cook really help?  Check out http://www.forbes.com/sites/genemarcial/2013/04/21/is-apple-looking-for-a-replacement-for-ceo-cook/

A Make-or-Break Week Ahead for the Stock Market (Is this pullback really different?)

It's make-or-break time for the first-quarter earnings season, and it comes just as the stock market is showing signs of strain, according to CNBC.  About 170 S&P 500 and 10 Dow companies report earnings in the week ahead, and they include everything from tech icon Apple to industrial names like Caterpillar and energy companies like giant Exxon. As of Friday, a fifth of the S&P 500 had reported, and two-thirds had better-than-expected earnings. But an unusually high amount—57 percent—missed their top-line revenue estimates, according to Thomson Reuters…..That's a cause for concern, since stocks traded in one of the most volatile seesaw patterns of the year in the past week, as worries about global growth increased amid a dramatic sell-off in commodities….

 The Dow finished its worst week this year 2.1 percent lower at 14,547, and the S&P 500 was down 2.1 percent at 1,555. The Nasdaq was down 2.7 percent for the week, even with Friday's big gain of 1.3 percent on the back of a tech rally….

Is Another Bubble Is On The Verge Of Imploding?

Steven Harper (In the Belly of the Beast)  sat down with Bloomberg Law to talk about student debt.

When I applied to law school in 1975, the nation was recovering from a severe and prolonged recession. Even so, I always assumed that I’d be able to make a comfortable living with a legal degree, although I didn’t think that practicing law would make me rich.

Three and a half years later, I became a new associate at one of the nation’s largest law firms, Kirkland & Ellis. It had about 150 attorneys in two offices, Chicago and Washington, D.C. My annual salary was $25,000, which is $80,000 in 2012 dollars. There were rumors that some partners in large firms earned as much as ten or fifteen times that amount; by any measure, that was and is a lot of money.

Today, the business of law focuses law school deans and practitioners in big law firms on something else: maximizing immediate profits for their institutions. That has muddied the profession’s mission and, even worse, set it on a course to become yet another object lesson in the perils of short-term thinking. Like the dot-com, real estate, and financial bubbles that preceded it, the lawyer bubble won’t end well, either. But now is the time to consider its causes, stop its growth, and take steps that might soften the impact when it bursts.  The Lawyer Bubble is about much more than lawyers…..

John Paulson is no longer the man with the Midas touch

From The Observer:  Gold and its beguiling promise of assured riches have lured clever men into making bad decisions for millennia. The latest to have fallen under its alchemical spell is apparently John Paulson, hedge fund billionaire and the man who made his name – and a $5bn (£2.5bn) profit – betting against that other supposedly safe bet, the housing market.

In just two days last week, the 57-year-old hedge fund manager lost almost $1bn as the gold price slumped at a speed unseen in decades. With a personal fortune valued by Forbes magazine at $11.2bn, Paulson can weather the loss, but this is not his first stumble since his historic bet on the property crash made him the world's most famous hedge fund manager. And despite recent events, he is still flying the gold standard….

Probed Hedge mega-mogul buys $39M W. Village property

Hedge-fund billionaire Steve Cohen is on a real-estate buying spree as his SAC Capital insider-trading woes continue.  Cohen, whose firm got a conditional court agreement to pay the Securities and Exchange Commission $602 million this week, snapped up 145 Perry St. in the West Village for $38.8 million, according to public records of the sale.

The apartment building was being developed by David Halpern Architects, but that deal fell through. Records show it was sold to Cohen’s Greenwich Heights Corp. in Stamford, Conn.

There is chatter he bought another city apartment, this one at the Abingdon, also in the West Village, while he renovates 145 Perry…


Saturday, April 20, 2013

5 Reasons Why Emerging Markets Are Selling Off

From soberlook.com: The reasons behind emerging markets correction:

1. The spectacular decline in shares of Apple has put downward pressure on some of its Asian suppliers and related technology firms.

2. Weaker than expected growth in China is contributing to the sell-off (see Bloomberg story from earlier this week).

3. The recent violent commodity sell-off especially in metals and energy is pressuring commodity producers such as Russia. Russia's export sector is a one-trick pony, except for some arms sales and a sprinkle of IT services. That's why with oil sharply lower, the Russian stock market is down 13% year-to-date. Other commodity exporters, from Brazil to South Africa, got hit as well….

Find out the rest at  http://soberlook.com/2013/04/reasons-behind-emerging-markets.html#ixzz2R1Tg9abt

Inside trader to Judge: Go easy

It wasn’t for the money — at least not a lot of it.  According to the NY Post former Diamondback Capital portfolio manager Todd Newman asked a judge for “leniency” yesterday when he is sentenced next month as part of a $72 million insider-trading conspiracy in computer-maker Dell and a software firm.

Newman, who faces up to 78 months in prison, claims he should receive a much lighter sentence because he pocketed only $442,761 on his trade — just 12 percent of the $4 million the government claims.

Friday, April 19, 2013

Boston Bombing Suspect Killed in Shootout; Boston in Lock-down

From the WSJ: U.S. authorities on Friday locked down the Boston area in the hunt for one of two brothers of Chechen background suspected in Monday's Boston Marathon bombings.

Authorities identified one suspect as 26-year-old Tamerlan Tsarnaev, who was killed in a confrontation with police in Watertown, Mass., according to a U.S. law-enforcement official.

A manhunt was on for the second suspect, identified as Dzhokhar Tsarnaev, 19 years old. Both Chechnyan Muslim brothers were believed to be involved in the fatal shooting of a Massachusetts Institute of Technology campus police officer during a chaotic series of events Thursday night….

Howard tops hedge fund rich list as wealth hits 1.5 billion pounds

Star trader Alan Howard has cemented his place as the wealthiest hedge fund manager in this year's Sunday Times Rich List with a jump in his net worth, after further profits from his main hedge fund.

The Switzerland-based Howard, co-founder of Brevan Howard and one of the industry's most media-shy managers, grew his total wealth by 100 million pounds to 1.5 billion pounds, according to the Sunday Times Hedge Fund Rich List.

Paulson's Advantage fund stung by plunge in gold

Hedge fund billionaire John Paulson's best-known fund is down 2.4 percent in April, largely due to the sharp selloff in gold, a source familiar with the numbers said on Thursday, Reuters reports.

The Paulson & Co Advantage fund is making money for the year, but just barely, with a 1.3 percent gain, the source said.

The fund's substantial holdings in several gold mining stocks, including a bet on AngloGold Ashanti Ltd, which is down 40 percent this year, have dramatically cut into the Advantage fund's returns.

Oops! Reuters Accidentally Releases George Soros Obituary And It's REALLY Nasty

Reuters has accidentally posted an obituary of hedge fund billionaire George Soros.
The remarkable thing is how harsh it is, basically calling the fund manager a hypocrite, and talking about all of the crises he supposedly caused by making currency bets.

In the opening line, Soros, 82, is referred to as "predatory."  He's also called "an enigma, wrapped in intellect, contradiction and money" in the piece.  Other critiques include the fact that he failed to buy the Washington Nationals at one point.

Moments after the story was set live, Reuters Tweeted that it published the obit in error. The article has been taken down.

Read all about it at : http://www.businessinsider.com/reuters-george-soros-obituary-2013-4#ixzz2QtCKIzS5

Shocker:Former Israeli Intelligence Operatives Now Working For Hedge Funds

According to a Forbes report a company staffed with former operatives of Israel’s top intelligence agencies and founded with the help of the former head of the Mossad is being used by hedge funds looking for an edge in the financial markets.

Kela Israeli Intelligence has increasingly become a popular service on Wall Street. The firm employs about 40 former intelligence operatives and analysts, most of them ex-members of the Israeli army’s secretive 8200 unit, which is often described as Israel’s equivalent to the National Security Agency and believed to be behind the Stuxnet computer worm that attacked Iran’s nuclear facilities. Kela also employs former agents of Israel’s Mossad spy agency and the company was founded with the help of Shabtai Shavit, the director general of the Mossad from 1989 to 1996, who sits on Kela’s advisory board….

Thursday, April 18, 2013

Weird's Deal of the Week: Applicants sought for one-way trip to Martian Big Brother house

Must be willing to die off-planet and on-air

According to TheRegister (UK): A Netherlands-based non-profit group called Mars One is seeking video applications from pioneers willing to take a one-way trip to Mars and become stars in a new interplanetary reality show.

"This will be the biggest thing that humanity has ever done. In 15 years people will still be watching," Mars One's co-founder Bas Lansdorp told the BBC. "Exploring our world, and now beyond is what humans do, it's in our genome. The settlers' dream of going to Mars will come true."

Mars One wants to send four hardy souls to the Red Planet in 2023 using hardware from Elon Musk's SpaceX company. It plans to land a Curiosity-style rover by 2018 to scout out locations for the settlement and then fire out food, equipment, power generation and life-support systems using SpaceX's Falcon Heavy lifter and Dragon capsule….

The Hamptons: Hedge Titans vs.Mother Nature

From the NY Times: Soon after Hurricane Sandy hit last fall, Joshua Harris, a billionaire hedge fund founder and an owner of the Philadelphia 76ers, began to fear that his $25 million home on the water here might fall victim to the next major storm. So he installed a costly defense against incoming waves: a shield of large metal plates on the beach, camouflaged by sand.  His neighbor, Mark Rachesky, another billionaire hedge fund founder, put up similar fortifications between his home and the surf. Chris Shumway, who closed his $8 billion hedge fund two years ago, trucked in boulders the size of Volkswagens.

Across a section of this wealthy town, some residents, accustomed to having their way in the business world, are now trying to hold back the ocean.  But the flurry of construction on beachfront residences since the hurricane is touching off bitter disputes over the environment, real estate and class.  Some local officials said they were worried that the owners were engaging in an arms race with nature, installing higher and higher barricades that could rapidly hasten erosion — essentially sacrificing public beaches to save private homes…..

Weird's Deep Thoughts (Thursday Insight Edition): The Gold Plunge May Have Been The First ETF-Led Death Spiral

“….If it was just ETFs and some retail money, then it wouldn’t be so bad. The real problem comes from hedge funds. While mom and pop and the die hards might sit on their gold holdings, hedge funds don’t have that luxury. Funds have monthly and quarterly performance targets. Watching a market meltdown doesn’t bring out buyers, it forces selling.

This is especially true in assets that have seen “mission creep”. It is one thing for a commodity focused hedge fund to lose on gold. It isn’t even so bad if a global macro fund does, but the problem is when funds that really don’t have much business being in gold have added positions. As a “hedge” or as an “alternative”. Whatever the excuse was, many funds had accumulated some gold….

Stoolie turns up heat on Steve Cohen

According to the NY Post more bad news has landed at the doorstep of billionaire hedge-fund honcho Steven Cohen. Cohen, who just had his ex-wife’s racketeering lawsuit against him revived, learned yesterday that a former employee of his $14 billion SAC Capital Advisors has become quite the government stoolie.

Jon Horvath, an analyst with SAC’s Sigma Capital unit until his arrest last year on insider-trading charges, pleaded guilty last September. The government was given until March 31 to say whether he should be sentenced.  But he has apparently been so helpful to prosecutors and the FBI probing fraud at SAC that the feds requested the sentencing be put off for six months..

Wall Street Slips Out of Highest-Paid Intern List

Yahoo Finance opines that if you believe the highest-paid interns are on Wall Street, you're wrong. They're mostly in social media and technology, according to a recent Glassdoor.com survey. The site, which touts itself as a jobs and career community, found that the top four companies pay interns more than $6,000 a month.

VMware (VMW), a leading technology firm, ranks No. 1 in internship salaries, at $6,704. Rounding out the top five: eBay (EBAY) ($6,500), ExxonMobil (XOM) ($6,268), Facebook (FB) ($6,084) and Google (GOOG) (5,891).  In fact, Wall Street firms didn't even crack the top 10…..

Twitter launches music service

From the AP: Twitter has launched a service for people to find music they like and tweet songs from iTunes, Spotify and Rdio.

Twitter said in a blog post that an app will be available for download from Apple's online store Thursday. A Web version is also expected Thursday. Twitter said the service will eventually be available on Android devices as well.

The service uses information from Twitter chatter to find popular tracks as well as new artists. Users who follow musicians can see what artists those musicians follow and listen to songs by them….