According to Bloomberg Warren Buffett, who announced plans to repurchase Berkshire Hathaway Inc. (BRK/A) shares for the first time in four decades, said he won’t pay full value for the stock.
“If I can buy dollar bills for 90 cents, I’ll buy them,” Buffett, 81, said today at Fortune magazine’s Most Powerful Women conference in Laguna Niguel, California. “I want to warn the people that are selling to me that I believe I am buying their dollar bills for 90 cents.”
Buffett targeted a new use for Berkshire’s cash after the firm’s shares plummeted to a 20-month low in September. Buffett, Berkshire’s chief executive officer since 1970, previously used profits to buy companies and securities issued by other firms. Omaha, Nebraska-based Berkshire may have the capacity to buy back $15 billion of stock, Jay Gelb, an analyst with Barclays Plc, said in a Sept. 26 research report.
“For the indefinite future, if we can buy our stock at something of a discount from its real value we’re going to do it,” Buffett said. “If I can find something else even cheaper I may be doing that too.”
In case you've forgotten, Berkshire Class A shares slid under $100,000 on Sept. 22 for the first time since January 2010. The company’s catastrophe reinsurance business posted a loss in the first half on claims from Japan’s costliest earthquake. Buffett’s equity-derivative bets have been pressured by declines in stock markets worldwide….
Find out more at http://www.bloomberg.com/news/2011-10-04/buffett-likens-buyback-to-getting-dollar-bills-for-90-cents.html
Tuesday, October 4, 2011
Markets Overblown? Perhaps…..But This Is The Story That Made The Markets Come Surging Back
EU leaders are actively looking for ways recapitalize European banks in a coordinated plan, according to an FT report. Finance ministers concluded that banks are suffering from funding concerns and that markets will need to be convinced they can withstand the crisis.
"Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty," Olli Rehn told the FT. "This should be regarded as an integral part of the EU’s comprehensive strategy to restore confidence and overcome the crisis.”
While Rehn and others have admitted to funding problems in European banks before, this time he suggests that Europe — rather than just member states individually — must take "a concerted, co-ordinated approach" to stem bank fears.
German Finance Minister Wolfgang Schaeuble added that Berlin could reactivate capitalization mechanisms put into place in 2008…. Nuff said.
Read more at http://www.businessinsider.com/this-is-the-story-thats-probably-making-markets-come-back-right-now-2011-10
"Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty," Olli Rehn told the FT. "This should be regarded as an integral part of the EU’s comprehensive strategy to restore confidence and overcome the crisis.”
While Rehn and others have admitted to funding problems in European banks before, this time he suggests that Europe — rather than just member states individually — must take "a concerted, co-ordinated approach" to stem bank fears.
German Finance Minister Wolfgang Schaeuble added that Berlin could reactivate capitalization mechanisms put into place in 2008…. Nuff said.
Read more at http://www.businessinsider.com/this-is-the-story-thats-probably-making-markets-come-back-right-now-2011-10
Layoffs Watch ’11: Deutsche Bank
The Germans are ‘considering’ kissing off 500. Non-Germans naturally
According to Dealbreaker the intensifying European sovereign debt crisis led to sustained uncertainties among market participants in the third quarter and thus to significantly reduced volumes and revenues in particular in the Corporate Banking & Securities (CB&S) Corporate Division. At the same time, the third quarter of 2011 has been negatively impacted by operating costs relating to an indirect tax position. As such, the third quarter 2011 result will come in significantly lower than expected for the CB&S business division.
In response to the significant and unabated slowdown in client activity, Deutsche Bank will consider additional cost controls beyond those already implemented as part of the recalibration of the Corporate & Investment Bank (CIB). This will lead to a reduction in headcount by around 500 positions in CB&S during Q4 2011 and Q1 2012, primarily outside Germany. Nice move guys….
Read more at http://dealbreaker.com/2011/10/layoffs-watch-11-deutsche-bank-2/#more-54625
According to Dealbreaker the intensifying European sovereign debt crisis led to sustained uncertainties among market participants in the third quarter and thus to significantly reduced volumes and revenues in particular in the Corporate Banking & Securities (CB&S) Corporate Division. At the same time, the third quarter of 2011 has been negatively impacted by operating costs relating to an indirect tax position. As such, the third quarter 2011 result will come in significantly lower than expected for the CB&S business division.
In response to the significant and unabated slowdown in client activity, Deutsche Bank will consider additional cost controls beyond those already implemented as part of the recalibration of the Corporate & Investment Bank (CIB). This will lead to a reduction in headcount by around 500 positions in CB&S during Q4 2011 and Q1 2012, primarily outside Germany. Nice move guys….
Read more at http://dealbreaker.com/2011/10/layoffs-watch-11-deutsche-bank-2/#more-54625
Ken Griffin's Citadel Made Coin in September!
Ken Griffin’s Kensington and Wellington hedge funds were able to make a little money in September when most of the global markets extended their slide to five straight months. The Citadel founder’s main hedge funds were up 0.25 percent in September, putting them up by about 15.10 percent for the year, according to sources, making them among the best performers this year.
The strong performance was led by its global equities strategy, which was up about 2.35 percent, say knowledgeable sources. More importantly, certain investors have finally gone over the high water mark. Sources say all investors should be able to reach that magic level once the funds climb another 6 or 7 percentage points.
Griffin’s September performance is especially impressive given the S&P 500 dropped 7.18 percent for the month while the global markets in general fell 10.11 percent, the worst performance since the 20.61 percent disaster in October 2008, according to Standard & Poor’s....
Find out more at http://www.institutionalinvestor.com/Article.aspx?ArticleID=2911913&LS=EMS575223
The Sh#! Hits the Fan: France, Belgium Pledge Aid for Struggling Dexia
From the good people at Reuters: France and Belgium will guarantee the financing of stricken bank Dexia, finance ministers pledged on Tuesday as officials prepared a rescue designed to stop its troubles from worsening the euro zone crisis.
"We are going to take action concerning our banks, and the decision taken so far is to act with a guarantee," Belgian Finance Minister Didier Reynders said after a joint government statement that followed a 38 percent drop in the banks share price in early trading.
Key Belgian cabinet ministers will meet to discuss Dexia on Tuesday evening, a government spokesman told Reuters.
In France, talks on creating a new entity combining Dexia's local government lending arm with French state bank Caisse des Depots and Banque Postale are ongoing but likely to be finalized, a senator from French President Nicolas Sarkozy's centre-right party told Reuters. The French state does not expect to inject capital into this new entity, which would safeguard the financing of France's local governments and regional authorities, Senator Philippe Marini said in an interview.
Read more at http://www.cnbc.com/id/44766823
"We are going to take action concerning our banks, and the decision taken so far is to act with a guarantee," Belgian Finance Minister Didier Reynders said after a joint government statement that followed a 38 percent drop in the banks share price in early trading.
Key Belgian cabinet ministers will meet to discuss Dexia on Tuesday evening, a government spokesman told Reuters.
In France, talks on creating a new entity combining Dexia's local government lending arm with French state bank Caisse des Depots and Banque Postale are ongoing but likely to be finalized, a senator from French President Nicolas Sarkozy's centre-right party told Reuters. The French state does not expect to inject capital into this new entity, which would safeguard the financing of France's local governments and regional authorities, Senator Philippe Marini said in an interview.
Read more at http://www.cnbc.com/id/44766823
Another day, another fight between Obama and business leaders...
The latest point of conflict according to BusinessInsider: The Bank of America decision to charge $5/month to active debit card holders.
Ben White at Morning Money has the whole scoop of how it went down, but basically it went like this: Obama was being interviewed by ABC and was asked about the fee, to which he responded.
“This is exactly why we need this Consumer Finance Protection Bureau that we set up that is ready to go ... This is exactly why we need somebody who's sole job it is to prevent this kind of stuff from happening. ... You can stop it because if you say to the banks, ‘You don't have some inherent right just to – you know, get a certain amount of profit. If your customers – are being mistreated. That you have to treat them fairly and transparently.”
That caused the American Bankers Association to flip out, and complain that these fees are the inevitable result of regulations, etc., not their usual profit-crazed, fee-gouging stuff…
Read more: http://www.businessinsider.com/obama-makes-new-enemies-commenting-on-the-bofa-5-fee-2011-10#ixzz1Zow5BAxs
Ben White at Morning Money has the whole scoop of how it went down, but basically it went like this: Obama was being interviewed by ABC and was asked about the fee, to which he responded.
“This is exactly why we need this Consumer Finance Protection Bureau that we set up that is ready to go ... This is exactly why we need somebody who's sole job it is to prevent this kind of stuff from happening. ... You can stop it because if you say to the banks, ‘You don't have some inherent right just to – you know, get a certain amount of profit. If your customers – are being mistreated. That you have to treat them fairly and transparently.”
That caused the American Bankers Association to flip out, and complain that these fees are the inevitable result of regulations, etc., not their usual profit-crazed, fee-gouging stuff…
Read more: http://www.businessinsider.com/obama-makes-new-enemies-commenting-on-the-bofa-5-fee-2011-10#ixzz1Zow5BAxs
Deutsche Bank to Miss Targets
Deutsche Bank AG on Tuesday said it no longer expects to reach the targeted €10 billion ($13.18 billion) pretax profit from operating businesses this year, as uncertainty caused by the European sovereign-debt crisis ate into volumes and revenue in the third quarter, notably at the investment bank, according to the Wall St Journal.
But not to worry dear reader - ”Nevertheless, the bank will be profitable in the third quarter and expects a robust earnings level for the full year 2011,” CEO Josef Ackermann told an investor conference in London, according to a company announcement.
Read more at http://online.wsj.com/article/SB10001424052970204524604576610412050256944.html?mod=WSJ_hp_LEFTWhatsNewsCollection
But not to worry dear reader - ”Nevertheless, the bank will be profitable in the third quarter and expects a robust earnings level for the full year 2011,” CEO Josef Ackermann told an investor conference in London, according to a company announcement.
Read more at http://online.wsj.com/article/SB10001424052970204524604576610412050256944.html?mod=WSJ_hp_LEFTWhatsNewsCollection
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