Meditor, a London-based hedge fund that managed $3.1 billion as of July, is liquidating its main funds, according to a letter obtained by CNBC.com» Read More
"Recovery Jolt: Few New Jobs as Jobless Rate Rises to 9.8%" (New York Times) "In a jolting surprise to the economic recovery and market expectations, the United States economy added just 39,000 jobs in November, and the unemployment rate rose to 9.8 percent, according to the Department of Labor. In a jolting surprise to the economic recovery and market expectations, the United States economy added just 39,000 jobs in November, and the unemployment rate rose to 9.8 percent, according to the Department of Labor. In a jolting surprise to the economic recovery and market expectations, the United States economy added just 39,000 jobs in November, and the unemployment rate rose to 9.8 percent, according to the Department of Labor."
"Weak Jobs Data Dash Hopes of Accelerating Recovery" \(Wall Street Journal\) The unemployment rate has now been above 9% since May 2009, or 19 months. That matches the longest stretch at such an elevated level since the Second World War. In the previous deep recession of the early 1980s, the jobless rate crept to 9% in March 1982 and remained above that mark until September 1983.
"US jobs market woe dampens optimism" \(The Telegraph\) "Given the country's retail and manufacturing sectors have shown signs of strengthening in recent weeks, others cautioned that it's too early to draw firm conclusions from just one report. Retailers had reported strong sales during last weekend's Thanksgiving sales, the start of a critical period of consumer spending. While a separate report today from the Institute of Supply Management showed that the US services industry grew at the fastest pace in six months in November. Nigel Gault, the chief US economist at IHS Global Insight said that he suspects the report from the Labour Department is an "an outlier—on the downside—but it does underline that the recovery remains a gradual one."
After you crunch the Primary Dealer Credit Facility (PDCF) numbers, you can see through the noise. What is revealed is this: The Fed's overnight lending to primary dealers concentrated staggering sums of government cash in the hands of a tiny circle of financial institutions. The story of PDCF lending is the story of those few financial institutions that went on to become just six banks.
Over the lifecycle of the PDCF program, The Federal Reserve lent a total of about $8.95 trillion to primary dealers of government securities. (This group is already a very small club: Currently, the New York Fed lists a total of 18 institutions authorized to perform this function.)
But the concentration of the vast majority of PDFC funds was far narrower than that. Institutions that ultimately went on to become just six banks—Bank of America, Citigroup, Morgan Stanley, Barclays, Goldman Sachs, and JPMorgan—received at total of about $8.78 trillion through the PDFC program.
John Kinnucan, the guy who turned down an FBI request to wiretap clients as part of an insider trading probe, needs a lawyer.
He was subpoenaed today by the government. But the Portland, Ore.-based analyst says that the costs of hiring an attorney are too much for him. So he’s going to represent himself.
“The costs of hiring a lawyer would leave my family homeless. I’d rather go to jail than have that happen,” he told me today.
Friday Link Fest: What If Low Interest Rates Don't Matter? How the Government is Creating Another Housing Bubble. (The American) Thanks to expanded government lending, 60 percent of home purchase loans now have down payments of less than 5 percent, compared to 40 percent at the height of the bubble. Time to restart the mortgage implode-o-meters.
Fannie and Freddie Suspend Foreclosures (Consumerist) Freddie Mac and Fannie Mae are issuing a brief moratorium—December 20 through January 3—on evicting people from foreclosed properties during the holiday season.
NYC’s Got A New FinTech Incubator (Venture Capital Dispatch) The New York City Investment Fund is teaming up with consulting firm Accenture to launch FinTech Innovation Lab, a seed program that will provide work space, $25,000 in funding and advice from banking technology executives and venture capitalists to financial start-ups.
Do Low Interest Rates Matter? (pdf via Journal of Economic Perspectives via Tyler Cowen ) Everyone attributes the credit boom (at least in part) to the Federal Reserve having kept the federal funds rate "too low for too long," but in reality the increase in lending was greatest in 2006 and the first half of 2007, after the federal funds rate had already returned to a level consistent with normal benchmarks.
How Banks Pawned Junk to the Fed (DealBook) The day after Lehman’s collapse JPMorgan, Goldman Sachs, Citigroup and Morgan Stanley collectively pledged more than $100 million in collateral that was rated Triple-c or below.
Nothing Is More Noticeable In America Than The Level Of Inequality (Business Insider) Are you a low-skilled worker? Move to Australia, where you’ll have a much easier time earning a living wage.
Keeping up with the Jones: Billionaire lights up the night (Greenwich Time via DealBreaker ) Paul Tudor Jones is putting the final touches on his annual Christmas spectacular.
Elaine Kaufman, the owner of the legendary Upper East Side saloon, died shortly after noon today.
All the protesting going on in Europe seems to have finally stirred the Germans to action.
Apparently, some young Berliners, who call themselves the "Hedonist International," are fed up with rising rents and are retaliating by crashing apartment viewings dressed in nothing but their birthday suit.
The protesting is going on in East Berlin, which is an area that has apparently seen a significant increase in its yuppie population. The Local describes it as being "transformed from a hang-out of squatters and punks to a haven for hipsters and buggy-pushing young couples."
I can't say I am surprised that the President's Deficit Panel failed to get enough votes to move its plan forward to Congress.
How could they when one of the biggest price tag items—ObamaCare—couldn't be touched?
Larry Lindsey, President and Chief Executive Officer of The Lindsey Group, explains in today's interview why Obamacare could not be touched. Lindsey was one of the key players behind Bush's $1.35 trillion tax cut plan, calling it an "insurance policy" against an economic downturn.
Blackstone Group's chief executive Stephen Schwarzman is fleeing the United States for Europe.
John Kinnucan just got a subpoena from the FBI, according to Courtney Comstock at the Business Insider.
The eye-bulging total amount that PDCF lent to banks is $8.95 trillion.
The Primary Dealer Credit Facility (PDCF) was an overnight lending program set up by the Fed to help banks manage short term liquidity issues during the financial crisis.
The numbers cited here for that program represent the total amount banks received in aggregate—not the amounts outstanding at any point in time. (For example: If a bank tapped the PDCF for a million dollars five days in a row, it would be represented here as $5 million in total borrowing.)
This rollover and reissue effect is one of the reasons why the numbers look so gargantuan.
The other reason is this: The Fed handed out a ton of money.
John Carney is a senior editor for CNBC.com, covering Wall Street and finance and running the NetNet blog.
Jeff Cox is finance editor for CNBC.com.
Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.
Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."
The unofficial odds are rising that the Fed will announce taper plans at its December meeting.
Three Wall Street trade groups sued the Commodities Futures Trading Commission to stop tough overseas trading guidelines they fear.
Paid in the form of assistance programs, the funds are in effect a subsidy to the banking industry, The Washington Post reported.