According to CNNMoney -- Morgan Stanley is not on the verge of collapse. But you wouldn't know that from the way nervous investors are acting. Shares of Morgan Stanley (MS, Fortune 500) plunged more than 10% on Friday. That capped off a chaotic week in which the stock fell 5% Wednesday and bounced back more than 6.5% the following day.
Investors are worried about what exposure Morgan Stanley may have to sovereign debt of Greece and other so-called peripheral nations in Europe. Specifically, there are fears that Morgan Stanley could suffer big collateral damage due to its exposure to French banks that have big ties to Greece and the rest of the PIIGS.
Morgan Stanley's stock has yo-yoed for the past few weeks due to the concerns about Europe. Shares attempted a comeback on Monday, gaining as much as 4% in the morning before pulling back as the day wore on. Shares were down 6% in mid-afternoon trading.
That's par for the course with Morgan Stanley lately. The down days have been more frequent (and far more dramatic) than the up days. The company has lost more than half its market value in 2011. Bank of America is the only major U.S. bank to have fared worse. But it seems that investors are panicking and overreacting. If you look at the numbers, it does not look as if Morgan Stanley is close to becoming the next Lehman Brothers….
Read more at http://money.cnn.com/2011/10/03/markets/thebuzz/
Monday, October 3, 2011
Occupy Wall Street Protesters Deemed Less Flaky Than Expected
Despite the arrest of 700 people on the Brooklyn Bridge on Saturday, Occupy Wall Street continued to grow this weekend. NY Magazine reports that As the movement enters its third week, observers seem to have agreed that the protesters are more serious — and appealing — than suggested by earlier reports.
The Daily News claims that "hundreds" of arrested protesters returned to the demonstration immediately after jail. One, Robert Grodt, told the paper, "I'm back because I want to tell everyone: just because we're being arrested, we're not being silenced." Another indicated that the confrontation was exactly what he'd signed up for. "You go to Italy, you eat gelato," said Daniel Levine. "You go to a protest, you expect to be arrested." The New York Post, which has decided protesters are "in for the long haul," reported that a group of New York and New Jersey public school teachers drew attention for grading papers in Zuccotti Park on Sunday:
The protesters' ranks are expected to get even more respectable on Wednesday, as labor unions join them for a large-scale march. And like-minded people are starting to occupy places outside New York: Similar gatherings took place in Chicago and Los Angeles, and there are plans for demonstrations in San Francisco, Pittsburgh, Prague, Melbourne, and Montreal. Between that, the mass arrests, and weekend visits from Cornel West and Michael Moore, Bloomberg (News, not Michael) speculated that the initially ragtag operation was "ready for prime time." As sociologist Daniel Meyer put it:
The question activists face is "How do you do something that generates news, which doesn’t implicate you for being at fault?’ And I guess New York City police were really helpful in this regard…."
Read more at http://nymag.com/daily/intel/2011/10/occupy_wall_street_protesters.html
The Daily News claims that "hundreds" of arrested protesters returned to the demonstration immediately after jail. One, Robert Grodt, told the paper, "I'm back because I want to tell everyone: just because we're being arrested, we're not being silenced." Another indicated that the confrontation was exactly what he'd signed up for. "You go to Italy, you eat gelato," said Daniel Levine. "You go to a protest, you expect to be arrested." The New York Post, which has decided protesters are "in for the long haul," reported that a group of New York and New Jersey public school teachers drew attention for grading papers in Zuccotti Park on Sunday:
The protesters' ranks are expected to get even more respectable on Wednesday, as labor unions join them for a large-scale march. And like-minded people are starting to occupy places outside New York: Similar gatherings took place in Chicago and Los Angeles, and there are plans for demonstrations in San Francisco, Pittsburgh, Prague, Melbourne, and Montreal. Between that, the mass arrests, and weekend visits from Cornel West and Michael Moore, Bloomberg (News, not Michael) speculated that the initially ragtag operation was "ready for prime time." As sociologist Daniel Meyer put it:
The question activists face is "How do you do something that generates news, which doesn’t implicate you for being at fault?’ And I guess New York City police were really helpful in this regard…."
Read more at http://nymag.com/daily/intel/2011/10/occupy_wall_street_protesters.html
Think the Economy's Bad? 'You Ain’t Seen Nothin'
Market pessimism is reaching a fever pitch, fueled by increasing belief that global policymakers either are powerless or inept when it comes to controlling the various headwinds confronting the economy. CNBC writes that with a bloody third quarter coming to an end and hopes that the final three months of the year will live up to their reputation as the market's best, now might be the time when confidence would be on an upswing.
But some of the market's top thinkers are releasing a chorus of dour predictions that, while allowing for the chance of a mild rally as 2011 closes, otherwise believe there is little reason for hope.
Bob Janjuah, the notably bearish fixed income analyst for Nomura Securities, believes that a market low is coming in October that could be followed by a late-year rise. But 2012 holds little but a bear-market roar that could take the Standard & Poor's 500 [.SPX 1112.52 -18.90 (-1.67%) ] all the way down to the 700 range—a numbing 38 percent drop from current levels.
"The basic problems remain weak trend growth in the (developed market) world, which we think will continue for another three to five years, the policy errors (in our view) of the current set of policymakers, and the existing set of inadequate 'old world' policy institutions," Janjuah wrote in an analysis for clients.
As for investors in such a climate, Janjuah says they "should remain cautious, and focus on strong balance sheets and strong/robust business models…."
If you've got the stomach for it, find out more at http://www.cnbc.com/id/44757716
Citi Fined $770,000 For Failing To Report Employee Ponzi Scheme
Hong Kong's securities regulator has fined Citigroup (C.N) HK$6 million ($770,000) for failing to report a Ponzi scheme involving one of its former employees.
Citigroup will also compensate customers affected by the fraud and hire an external expert to review some of its operational practices and policies, the Securities and Futures Commission (SFC) said in a statement on Monday.
"Citi Asia not only failed to detect a Ponzi scheme operating under its nose, despite having the opportunity to do so, but then failed to report the scheme to the SFC in a timely way," the SFC's Executive Director of Enforcement Mark Steward said. The SFC said a Citi employee ran a fraudulent scheme between 2004 and 2009 involving 13 Citi Asia clients, who had invested through the employee on the basis that their money would be used to purchase U.S. Treasuries and other products…..
Read all about it at http://www.huffingtonpost.com/2011/10/03/citigroup-ponzi-scheme_n_991879.html
Citigroup will also compensate customers affected by the fraud and hire an external expert to review some of its operational practices and policies, the Securities and Futures Commission (SFC) said in a statement on Monday.
"Citi Asia not only failed to detect a Ponzi scheme operating under its nose, despite having the opportunity to do so, but then failed to report the scheme to the SFC in a timely way," the SFC's Executive Director of Enforcement Mark Steward said. The SFC said a Citi employee ran a fraudulent scheme between 2004 and 2009 involving 13 Citi Asia clients, who had invested through the employee on the basis that their money would be used to purchase U.S. Treasuries and other products…..
Read all about it at http://www.huffingtonpost.com/2011/10/03/citigroup-ponzi-scheme_n_991879.html
Koch Brothers Flout Law With Secret Iran Sales
In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. According to a Bloomberg report In less than a week, she discovered that the company had paid bribes to win contracts.
“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.
By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France….
Find out more at http://www.bloomberg.com/news/2011-10-02/koch-brothers-flout-law-getting-richer-with-secret-iran-sales.html
“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.
By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France….
Find out more at http://www.bloomberg.com/news/2011-10-02/koch-brothers-flout-law-getting-richer-with-secret-iran-sales.html
BofA Dives Below $6 as Weakness in Europe, Economy Adds Pressure
Yes folks, Bank of America Corp. (BAC), the largest U.S. lender by assets, fell below $6 in New York trading as concern increased that the world is on the brink of another recession.
The bank dropped 15 cents, or 2.5 percent, to $5.97 as of 12:17 p.m. in New York Stock Exchange composite trading. Financial shares are under pressure as European regulators struggle to quell concern about the health of their lenders. Moody’s Investors Service cut long-term ratings on Bank of America debt last month, saying U.S. support has become less likely for troubled lenders.
Bank of America’s status as the largest U.S. lender makes the Charlotte, North Carolina-based company sensitive to slowdowns in the nation’s economy and drops in employment. CEO Brian T. Moynihan cited those matters at a Sept. 12 presentation, when he said “the environment will continue to be difficult.”
Talk about deep insight....
Read more at http://online.wsj.com/article/SB10001424052970204226204576598842318233996.html?mod=WSJ_business_whatsNews
The Truth About Spending All Night And Day Protesting Wall Street
Clusterstock's Julia La Roche writes: What I wrote about the Occupy Wall Street demonstrators last week infuriated a lot of people — and for an obvious reasons too.
So I decided to spend more time in their Zuccotti Park encampment, this time not on the periphery, but as an insider, to see what it's really like. (I did not stay the entire night at Occupy Wall Street since it was raining and I live near the park.)
Af first glance, the Occupy Wall Streeters appear to be a disheveled rag-tag army of hippie civil disobedients that don't really have a clear message.
But don't let their appearance fool you.
There are tons of highly educated people that understandably feel angry at big banks and the government.
While the group's message continues to remain vague, what's clear now is they are starting to organize and they are definitely garnering attention….
Read more: http://www.businessinsider.com/heres-what-its-like-to-camp-out-at-occupy-wall-street-2011-09-30#ixzz1ZjgMjRcg
So I decided to spend more time in their Zuccotti Park encampment, this time not on the periphery, but as an insider, to see what it's really like. (I did not stay the entire night at Occupy Wall Street since it was raining and I live near the park.)
Af first glance, the Occupy Wall Streeters appear to be a disheveled rag-tag army of hippie civil disobedients that don't really have a clear message.
But don't let their appearance fool you.
There are tons of highly educated people that understandably feel angry at big banks and the government.
While the group's message continues to remain vague, what's clear now is they are starting to organize and they are definitely garnering attention….
Read more: http://www.businessinsider.com/heres-what-its-like-to-camp-out-at-occupy-wall-street-2011-09-30#ixzz1ZjgMjRcg
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