Reuters: The Senate is near its first vote on healthcare.
Reuters: Dell (NASDAQ:DELL) is betting on corporate spending for its recovery.
Reuters: Time Warner’s (NYSE:TWX) AOL showed that the worst is not over for media job cuts.
Reuters: China cyber-spying against the US will probably grow. Read More
The most charitable thing that can be said about Vikram Pandit, the CEO of Citigroup (NYSE:C) since December 11. 2007, is that he was in the wrong place at the wrong time. The bank’s stock is down 90% since his first day as chief executive. The shares of other large international banks were battered by the credit crisis, but JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) have gained most of their value back during the two-year period. Bank of America (NYSE:BAC), the most hapless of all the large financial firms, has even performed better than Citi in the market. Read More
Updated throughout the day.
Updated 12.43 PM EST: Apple may hire its own video game developers to create iPhone and iPod products (Apple Insider)
Updated 11.57 AM EST: Devon Energy (NYSE:DVN) may sell its international operations to interests in China (NYT)
Central banks will be net purchasers of gold for the first time in decades (CNBC)
Goldman Sachs (NYSE:GS) wants to expand it wealth management operation (Investment News and Business Insider)
Nvidia (NASDAQ:NVDA) has started to complain about Intel’s (NYSE:INTC) just as the world’s largest chip company settled antitrust issues with AMD (NYSE:AMD)
Intel plans to release powerful new notebook chips in January. (Digitimes)
Microsoft (NASDAQ:MSFT) will launch a Zune music and movies brand outside the US to try to challenge Apple (NASDAQ:AAPL) in the mobile content business. (FT)
JPMorgan (NYSE:JPM) is trying to buy the 50% of management firm Cazenove Group that it does not already own for $1.7 billion. (Bloomberg)
Citigroup (NYSE:C) has rejected Terra Firma Capital’s offer to restructure EMI Group. (WSJ).
Douglas A. McIntyre
John Paulson is rather notorious, and wealthy, for how much he picked up by shorting financial stocks on the way down. But the financial world found out in August that Paulson & Co. had bought up many key financial and banking stocks. Paulson & Co. Inc. is out with a 13-F filing after the close showing he is still in many key financial stocks.
The famed hedge fund manager took a massive stake in Citigroup and sold his entire interest in Goldman Sachs
We had also noted back in October how Conseco, Inc. (NYSE: CNO) had scored a Paulson investment.
Goldman Sachs Group Inc. (NYSE: GS) was NOT in the new filing compared to the August filing where he listed 2,000,000 shares of common stock in the August filing. State Street Corp. (NYSE: STT) was NOT in the filing versus a stake of 700,000 shares of common stock in August.
JON C. OGG
Short sellers have bought into the notion that the financial industry is in full recovery.
Shares sold short in Wells Fargo (NYSE:WFC) fell 8% to 78.8 million shares. Shares short in CIT (NYSE:CIT) were off 4% to 78.1 million. The short interest in Bank of America (NYSE:BAC) dropped 12% to 67 million. The short interest in JPMorgan (NYSE:JPM) dropped 4% to 37.7 million. Read More
Updated throughout the day.
Updated 10.30 AM EST: Oracle (NASDAQ:ORCL) believes that EU authorities may try to block its buy-out of Sun (NASDAQ:JAVA) (FT)
Updated 10:26 AM EST: Apollo Management is buying debt swap instruments to increase is control of Harrah’s. (NYPost)
The CEOs of Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM) met pay czar Feinberg before he announced pay cut plans (Bloomberg)
Time Warner’s (NYSE:TWX) Time, Inc publishing division will lay off 500 people (various).
Senator Chris Dodd will propose merging all four bank regulatory agencies (various).
Cisco’s (NASDAQ:CSCO) earnings outlook is likely to be poor (TheStreet)
Warren Buffett may join Goldman Sachs (NYSE:GS) in bidding for Fannie Mae (NYSE:FNM) tax credits.
Douglas A. McIntyre
Reuters: Investors in the banking sector were disturbed by the CIT (NYSE:CIT) bankruptcy.
Reuters: Summers will lead a high level meeting on the economy.
Reuters: US companies are holding more cash.
Reuters: The Fed is likely to keep interest rates flat due to economic uncertainty. Read More
Updated throughout the day.
Updated 3.23 PM EST: Analyst Michael Mayo says Citigroup (NYSE:C) will take a $10 billion write down the quarter. Citi denies it (CNBC)
Updated 10.24 AM EST: Cisco (NSADAQ:CSCO) may drop its bid for Tandberg (Barron’s)
Venezuela may have gold reserves with a total value over $13 billion. (CNBC)
JP Morgan (NYSE:JPM) may have had concerns about Galleon as early as 2001 (Financial Times)
Likely near-term tech acquisition targets include Sapient (NASDAQ:SAPE), Computer Sciences (NYSE:CSC), WNS (NYSE:WNS), Amdocs (NYSE:DOX), Cognizant Technology (NASDAQ:CTSH) and ExlService (NASDAQ:EXLS) (Reuters)
Time Warner (NYSE:TWX) may spin-off AOL in December (TheStreet.com)
CIT (NYSE:CIT) is likely to file for bankruptcy in the next few days. (Reuters)
Cargill is the largest private company in the US followed closely by Koch Industries (Forbes)
Douglas A. McIntyre
The SEC missed a number of signals in the Bernie Madoff case. Some concerns were raised by his clients and Barron’s years before he was caught. It seems that a similar pattern holds true with Raj Rajaratnam and his firm Galleon. Several press reports say that information was being passed between Intel (NASDAQ:INTC) and Galleon as early as 1998. An FT story claims that a JP Morgan (NYSE:JPM) employee raised a red flag about Galleon in 2001.
The SEC has said a number of times that the reason that large incidents of fraud are missed by its investigators is that the agency is understaffed and incapable of covering all the ground which is part of its mandate, and that is almost certainly true. Read More
Reuters: The US economy is stable but risks remain according to Geithner.
Reuters: JPMorgan (NYSE:JPM) raised concerns about Galleon in 2001.
Reuters: As many as five million Americans have been infected with H1N1.
Reuters: Sony (NYSE:SNE) posted a fourth straight quarterly loss. Read More
Updated throughout the day.
Update 12.05 PM EST: UBS (NYSE:UBS) may spin off PaineWebber (Breakingviews)
GMAC has asked the Treasury Department for several billion more dollars in loans. (NYTimes)
Barry Diller’s IACI (NASDAQ:IACI) might be willing to sell its search business. (NYPost)
News Corp (NYSE:NWS) and CBS (NYSE:CBS) are trying to get cable companies including Time Warner Cable (NYSE:TWC) to pay for carrying their broadcast channels. (WSJ)
Statistics on ”global cooling” may be bogus. (Ars Technica)
AMD’s (NYSE:AMD) former CEO Hector Ruiz may have leaked tips to one of the people accused of insider trading in the Galleon case. (various)
The German hedge fund firm K1 is part of an international criminal investigation after allegedly stiffing banks including Barclays (NYSE:BCS), JPMorgan Chase (NYSE:JPM). and BNP Paribas with $400 million of losses. (Bloomberg)
Covance (NYSE:CVD) shares are undervalued by 50% (BusinessWeek)
Sony (NYSE:SNE) is expected to loss money for the fourth straight quarter. (Forbes)
Douglas A. McIntyre
Short interest in a number of major financial firms rose for the period ending October 15.
Shares short in Citigroup (NYSE:C) rose 51% to 178.1 million. The short interest in CIT (NYSE:CIT) was up 21% to 85.6 million. Share sold short in Freddie Mac (NYSE:FRE) were up 14% to 71.5 million. Shares short in Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM) were fairly flat. Read More
Pay czar Kenneth Feinberg has already effectively clipped the compensation wings of Bank of America (NYSE:BAC) CEO Ken Lewis by taking away all of his 2009 compensation. Feinberg now plans to cut the pay packages of 175 executives at seven companies receiving federal aid by as much as 50%. Some base salaries will drop to a tenth of what they are now.
Not all the managers will lose the great majority of their compensation. Some of the money will be shifted into long- term bonus pools with the theory being that the alteration will cause executives to manage for multi-year results and take on less risk for their companies. Read More
Former Fed chief Paul Volker has argued that America’s largest banks should be broken up to prevent a situation in which another credit crisis would force the government to spend hundreds of billion of dollars to rescue them. Almost no one in the Administration or Congress is listening to him.
The New York Times reports that “The only viable solution, in the Volcker view, is to break up the giants. JPMorgan Chase would have to give up the trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies.” The counter of Mr. Volker’s argument, which is carrying weight with the powers that be, is that the government can regulate banks enough to keep them from taking imprudent risks.
Volker’s view of the world got substantial support today from the head of The Bank of England. BOE Governor Mervyn King said in a speech, “The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history.” His solution is to break financial firms into pieces. One set of institutions could take risks and would be unlikely to receive any government support in the event of a credit crisis. The other institutions would take and hold deposits from people and businesses.
While Volker’s and King’s recommendations will fall on deaf ears, they will be remembered very clearly if there is another credit crisis and the world’s major governments have to get back into the financial firm bailout business.
Douglas A. McIntyre
Reuters: China is having trouble managing supply and demand.
Reuters: Geithner said the core programs of the TARP are ending.
Reuters: Yahoo! (NASDAQ:YHOO) tripled it profits.
Reuters: Sun Microsystems (NASDAQ:JAVA) will cut 3,000 jobs due to delays in the Oracle (NASDAQ:ORCL) buyout of the company. Read More
It has taken the DJIA a little over 32 weeks to move from 6,547 to just over 10,000, a move up of 53%. The index will be back over 14,000 by the end of May next year if it continues its rise at this rate for the next 32 weeks. Read More
Goldman Sachs Group Inc. (NYSE: GS), Citigroup, Inc. (NYSE: C), and The Charles Schwab Corporation (NASDAQ: SCHW) have all reported earnings. All came in above or in-line with estimates and there is not really anything wrong with the numbers when you compare them to expectations, yet there is some disappointment on the trading floors. We noted yesterday how JPMorgan Chase & Co. (NYSE: JPM) set the bar extremely high for the rest of the financial leaders. As a result, the common theme here is profit taking in all of the majors. There is even enough profit taking that the highly volatile triple-leverage Direxion Daily Financial Bull 3X Shares (NYSE: FAS) ETF is selling off as well.
Read More
Reuters: Goldman Sachs (NYSE:GS) is having trouble justifying its huge bonuses.
Reuters: Bruce Wasserstein, M&A giant and head of Lazard (NYSE:LAZ), died.
Reuters: Congress will probe compensation at AIG (NYSE:AIG).
Reuters: US foreclosures fell for a second month but stayed high. Read More
Conseco Inc (NYSE: CNO) rallied 30% to a yearly high of $6.50 on news that Paulson & Co. had taken a large stake in the company as well as on news that the company had entered into an agreement to sell roughly $293 million in convertible notes.
J P Morgan Chase & Co. (NYSE: JPM) rose to a yearly high of $47.47 reporting strong earnings results.
Anheuser-Busch InBev SA (NYSE: BUD) rose over 4% to a yearly high of $49.91 on news that the company had successfully sold $5.5 billion in debt.
Siemans AG (NYSE: SI) rose over 5% to a yearly high of $103.08 after the company announced outsourcing contracts with University of Pennsylvania Health System, Ernst Klett AG, and Ziggo in the Netherlands.
Garrett W. McIntyre
The Dow Jones Industrial Average is literally within 20 points of the psychological DJIA 10,000 mark. We have not seen Dow-10K since October, 2008, but that month we saw 11,000 and saw under 8,000 all in the same month. JPMorgan Chase & Co. (NYSE: JPM), up over 3%, and Intel Corporation (NASDAQ: INTC), up over 2%, both DJIA components, are the two culprits that have us up to within 20 points now that the market is up over 100 points in early afternoon trading. At 1:00 we had only 7 of the DJIA components in negative territory, and these are all down only by a few cents each.
But the biggest DJIA component is International Business Machines Corp. (NYSE: IBM), and it reports earnings tomorrow after the close. As the DJIA is a price-weighted index, IBM is now the largest DJIA component with its $127+ price tag. Its weighting in the index is over 9% as a result. After Intel, it seems that you would expect a solid report. Its services order backlog reported at the end of last quarter was a whopping $132 billion. And many feel the bar is set low here for most large companies now this quarter.
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