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
Although the Federal Reserve made loans totaling $8.95 trillion to primary dealers in exchange for a wide range of collateral under its Primary Dealer Credit Facility, the size of the facility was likely never more than a fraction of that amount.
Beginning in March of 2008, the Fed undertook 1,376 transactions under the facility, with loans ranging from a $10 million to nearly $48 billion. The largest single loan went to Barclays Capital on September 18, 2008—the day after Barclays agreed to buy Lehman Brothers.
The biggest borrowers were Citigroup , Merrill Lynch and Morgan Stanley , each receiving loans that total more than $1 trillion.
Although the total numbers appear very large, the Fed never had anywhere near $8.95 trillion of loans outstanding under the program. The loans made under the PDCF were overnight loans, which were rapidly repaid or rolled over into new loans. This inflates the total number because the Fed counts each roll-over as a new loan.
UBS has launched a pilot program that will allow its employees to use iPhones and iPads to receive work email, according to a person inside of the Swiss bank.
It’s yet another blow to Blackberry maker Research In Motion’s quasi-monopoly over the Wall Street smart phone market.
A host of other Wall Street firms have already taken the plunge into Apple’s smart phones. Credit Suisse has a pilot program allowing employees to use iPhones, according to people familiar with the matter. Bank of America has begun phasing in iPhones, according to one person at the bank. JP Morgan Chase is reportedly experimenting with the iPhone. Skadden Arps, the powerhouse Wall Street law firm, buys iPhones for attorneys who choose them, and pays for the data plan.
The ongoing infiltration of the iPhone into Wall Street could create a serious problem for RIM.
Gold and silver continue to confound the naysayers, moving higher along with the U.S. dollar as investors flock to so-called safe haven investments.
Taking the pulse of the market, the overriding theme is fear of the crisis in Europe—here is some of the commentary:
Citing concerns about sovereign risk in Europe and the stand-off in Korea, Rohit Savant, Sr. Commodity Analyst at CPM Group says investors are buying "gold, silver, platinum in that order". And while there might be some profit taking into a rally, he says investors see sell-offs as buying opportunities.
Ashraf Laidi, CMC Markets Chief Market Strategist says, "...surging Eurozone bond spreads and a broadening selloff in the single currency \(euro\)" are helping to feed investor demand for gold. "This is a repeat of the Feb-June period when the yellow metal broke to new highs due to uncertainty with Greece and Spain."
ADP Report Show Improvement: 93,000 New Private Sector Jobs (CNBC) According to new employment numbers released by ADP at 8:15 this morning: "The economy created 93,000 private sector jobs in November, pointing to the first signs of a turnaround in the labor market, according to the latest report from ADP and Macroeconomic Advisors.
Job creation came primarily from the service sector, which rose by 79,000, gaining for the 10th month in a row. Goods producers added 14,000, while manufacturing lost 16,000."
Euro Zone Bonds Stronger on ECB Purchase Hopes (Financial Times) "On Tuesday, Portuguese bonds rallied strongly as traders said the eurozone central bank was an active buyer. Sovereign bonds of peripheral eurozone nations continued climbing on Wednesday in response with yields on 10-year Spanish debt falling 13 basis points to 5.30 per cent and 10-year Portuguese yields down 11bp at 6.57 percent." There was also a lessening of fear in credit default swaps: "Five year CDS spreads fell 49bp to 495bp on Portugal and were 20bp lower on Spain trading at 345bp."
"Mortgage Tax Break in Crosshairs" \(Wall Street Journal\) "The co-chairmen of the White House's bipartisan deficit-reduction commission said Tuesday they would propose a significant paring of popular middle-class tax breaks, including the mortgage-interest deduction…" You have to wonder two things: 1\) How popular will deficit reduction become on Main Street — if the proposed austerity package includes significantly reducing the ability of Americans to deduct the interest component of their mortgage payments? and 2\) What impact would such a reduction have on home sales? To the latter point: "Joe Stanton, chief lobbyist for the National Association of Home Builders, said his organization would use 'the full weight of our grass roots' to prevent any reduction of the mortgage-deduction tax break. 'You are already talking about an industry that is completely battered, and this will kill us,' he said."
A little over a week ago, I wrote a story about how a personal bankruptcy case in New Jersey might affect the mortgage repurchase fiasco currently underway in many of the big banks.
The upshot of the story is this: A Bank of America executive testified under oath in a bankruptcy hearing that Countrywide Financial did not properly transfer a mortgage note. Proper transfer of that note was required to maintain compliance with the legal terms of a document called the pooling and servicing agreement, which governs how individual loans are turned into mortgage-backed securities.
Moreover, the Bank of America executive, in the words of court documents "testified further that it was customary for Countrywide to maintain possession of the original note and related loan documents."
The gigantic mortgage database owned by the nations largest banks may have run afoul of Massachusetts strict property recordation filing laws, according to the elected Recorder of Deeds for the South Essex district of the state.
In an exclusive interview with CNBC, John O’Brien explained why he sent a letter to Massachusetts Attorney General Martha Coakley requesting an investigation into Mortgage Electronic Registrations Systems, Inc.
“It’s a basic issue of fairness. MERS says that if you are a member of their club, you can avoid fees on assignments of mortgages forever. Those are fees that everyone else pays,” O’Brien said. “I’ve never before heard of a private company that has attempted to unilaterally take over such a public function as property recordation. Imagine if someone tried to do this with drivers licenses.”
If you needed any more confirmation that investors are uncertainly certain about the current state of affairs, a new survey shows that while many are comfortable with the direction of the market, few are happy with the shape of their portfolios.
More than one-third of respondents (38 percent) to a Charles Schwab survey of “active traders” believe the market is heading in a positive direction for the next six months. That is about in line—in fact, somewhat on the pessimistic side—with recent sentiment surveys from the American Association of Individual Investors (47 percent bullish) and Investors Intelligence (56 percent bullish).
The Schwab survey found only 16 percent bearish, well below the other two surveys.
Bank of America may be the next target of a cache of Wikileaks documents.
Earlier this week, Wikileaks founder Julian Assange said that he planned to release tens of thousands of documents on one of the largest banks in the U.S. The documents would reveal unethical behavior at the bank that would likely prompt official investigations and reforms, Assange said.
Assange refused to reveal which bank was the source of the documents.
But in an interview last year , Assange said Wikileaks had acquired a huge cache of documents on Bank of America.
The Grinch may not have stolen the Black Friday momentum, but the coal in the retailer's stocking next year could the high price of cotton. "The fabric of our lives" is going to be more expensive come Spring and the prices you are seeing now will soon be a memory.
While the floods in Pakistan are being blamed as one of the reasons for the run up in the fluffy fiber, its good ole demand from China that's one of the driving forces.
"We are seeing strong demand from China," says Jason Roose, Vice President and commodities analyst a U.S. Commodities, "With the weak dollar they are buying commodities. For the first time in six years, China bought corn. They are getting good value (with cotton and corn). We are temporarily in a bubble."
With less acres of cotton being cultivated and being used instead for soybeans, the cotton crops aren't getting any larger.
So which retailers will be hurt most from this cotton crunch? Dana Telsey, CEO and Chief Research Officer of Telsey Advisory Group, says the impact of rising sourcing costs, including raw materials such as cotton, freight and labor will begin to have an impact most likely in the beginning of the second half of 2011 than the first of the year.
"Companies that have mentioned the upcoming pressures, include Jones, Volcom , and Carters. The magnitude of the increase is still in question and appears to vary; we are hearing everything from 3 percent to 5 percent to as much as 10 percent in terms of what the increases could be; although, there is no exact quantification," Telsey says.
One of best people to talk to when it comes to the overall health of the retail environment are the mall owners and operators. I decided to sit down and speak with Bill Taubman, Chief Operating Officer of Taubman Centers, on the headwinds retailers are facing when it comes to cotton as well as how this holiday shopping season is shaping up.
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.