In a few years the rate of money flow and inflation will start to catch up to each other, eventually sparking a recession, a new analysis from Dick Bove said.» Read More
Moody's Cuts Ireland Five Steps (New York Times) "Even as Europe’s leaders were praising the Irish government’s deficit-cutting efforts, the country received a dramatically different verdict Friday from a credit rating agency: a steep downgrade and a warning of more to come. Having pledged late Thursday to do 'whatever is required' to contain the debt crisis and defend their embattled currency, European Union leaders reconvened for the final day of a summit meeting. In the draft of a closing statement, the leaders welcomed the 'impressive progress' in Dublin toward meeting the stiff conditions set for its recent bailout, including adoption of steep budget cuts. Moody’s Investors Service had a different assessment, however. It cut Ireland’s credit rating by five notches to Baa1, with a negative outlook, from Aa2 and it warned further downgrades could follow. The rating remains investment grade but if it were to move down by three more notches, Irish debt would be classified as junk."
"Markets torn by EU debt deal, Irish downgrade" \(Yahoo Finance via AP\) "European stocks traded flat Friday after EU leaders agreed to create a system to solve future debt crises, but a sharp ratings downgrade of Irish government bonds underscored the scale of Europe's short-term problems. Outside Europe, sentiment was buoyed somewhat by upbeat U.S. economic figures and indications Chinese policymakers are reluctant to raise interest rates. Asian shares rose and U.S. pre-open futures pointed slightly up. Britain's FTSE 100 and Germany's DAX were both flat, at 5,879.38 and 7,022.21. France's CAC-40 was 0.3 percent higher at 3,898.40. Asian markets closed mostly higher and Wall Street was expected to edge up on the open—Dow futures were 3 points higher at 11,434 and Standard & Poor's futures were up 0.1 point at 1,238.60."
CNBC's John Carney on Today's Arrests(CNBC) "Federal authorities arrested four suspects on insider trading charges involving a wide range of technology companies, escalating the recent crackdown on Wall Street hedge funds and expert networks. The arrests occurred Thursday in Boston, Massachusetts, Round Rock, Texas, Santa Clara and San Diego, California. The charges include four different counts of wire fraud and securities fraud. More arrests are expected in January."
4 Arrested in Insider Trading Investigation \(NY Times DealBook\) The arrests advance the government’s focus on so-called expert-network firms, which have emerged over the past decade as the research departments of large investment banks have retrenched. Another reason for their growth is Regulation Fair Disclosure, a decade-old Securities and Exchange Commission rule that requires publicly traded companies to disclose material information to all investors at the same time. That rule, known as Reg FD on Wall Street, left information-hungry hedge funds looking for new ways to gain an investment edge.
No doubt more than a few eyebrows will be cocked when the eyes below them come across Advanced Micro Devices statement that it was the victim of insider trading.
“It appears that AMD is the victim of an insider trading scheme,” AMD said in statement.
Why is it that we don't see more media coverage in the U.S. about the debt crisis in the Eurozone?
Such questions often have complex cultural, geopolitical explanations.
But maybe not this time. The answer may be as simple as this: Because it's not our money.
Let's begin with a specific example.
While hedge fund employees breathed a sign of relief today when they learned that none of their numbers had gone down in the big insider trading sweep today, a close read of one of the criminal complaints filed in federal court today reveals that New York hedge funds have a mole in their midst.
The mole is referred to as CW-5 in the criminal complaint filed in a federal court in New York City today. According to the complaint, CW-5 is an employee of a New York based “hedge fund” referred to as “Hedge Fund -2.” \(“Hedge Fund -1” is most likely Spherix Capital, which was started by Richard C.B. Lee, a former SAC Capital employee who is identified as CW-1 in the complaint.\)
One of the technology executives arrested Thursday in an insider trading sweep allegedly leaked advanced information about Apple’s iPad and revamped iPhone.
Walter Shimoon, an employee of contract electronics manufacturer Flextronics International —a key Apple supplier—is accused of supplying confidential information about Apple’s new products to a tech sector analyst identified only as “CW-2.”
The criminal complaint in the case reveals that Apple and Flextronics referred to the iPad by the code-name “K48” in 2009. In October of 2009, Shimoon and CW-2 held a phone conversation that was recorded in which Shimoon allegedly revealed, among other things, that Apple was working on a new project under the code name K48.
After dominating investing through 2010, the dreaded market correlation trade is starting to wear off, says Charles Schwab’s Liz Ann Sonders.
Trading the market this year has been a little like Wall Street’s version of “The Karate Kid.” Instead of Daniel-san being tutored in the ways of “wax-on, wax-off,” traders have been following the “risk-on, risk-off” practice in their own version of money martial arts.
When it’s risk on, that means all asset classes—stocks, commodities, Treasury prices—are all moving higher \(except for the US dollar\). Risk off means the stock market’s dropping, commodities are falling and Treasurys are losing ground.
Congress may have amnesia. Little more than five weeks have passed since the election, and the Senate is preparing the biggest pork feast this side of the Mississippi.
We're talking some serious BBQ folks: the 1,924 page omnibus bill has 6,000 earmarks in it. I've been told by sources that "Uncle Harry" is pushing them to pass this pig-packed bill before the end of the year, some anticipating to stay this weekend in order to do it. Interesting how some members who fought tooth and nail for their jobs in November are about to spit in the face of their constituents who voted for a more fiscally responsible Congress. I wonder if any of the newly anointed "fiscal conservatives" will vote yes on this bill.
One of the Senators leading the charge to change Uncle Sam's free spending ways is Senator Bob Corker \(R-TN\), a member of the Banking Committee. On Wednesday, the Senator along with Senator Claire McCaskill \(D-MO\) introduced an Amendment to cap federal spending as a percentage of GDP. I decided to talk to Corker about the budget appropriation bill.
A sigh of relief went out as authorities announced new insider trading charges against five people Thursday.
“I’m just glad it’s not anyone who is anyone,” a hedge fund manager explained.
Those charged—four consultants and an employee of Primary Global Research—are not closely connected with either the hedge fund world or Wall Street’s investment banks.
“It’s good news every time they arrest someone who isn’t running money, someone who isn’t primarily engaged in trading securities,” another manager explained.
Because of the ongoing probe, however, most of the fund managers or employees we contacted didn't want to be quoted on the record. They may be relieved that today’s bust didn’t involve them or their friends—but they didn't want to attract the attention of the authorities either.
Walter Shimoon is one of the suspectsarrested on Thursdayin connection with the government's latest insider trading crackdown.
According to Shimoon's profile on an online networking website, he is employed by a tech company called Vista Point Technologies, located in the San Francisco suburb of Milpitas, CA
Shimoon lists his current position as "VP Business Development for Asia & Americas".
Much of this information—job title, sector, and location—may be relevant to the complaint.
Stock valuations are "not excessive," but they're "not cheap" either, Wells Capital's James Paulsen tells CNBC.
One of the world's most respected investors has raised the alarm over a looming asset price bubble. The FT reports.
As job growth strengthens and commodity prices rise, inflation could rear its head.