Maybe it was the martini that helped Carl Icahn publicly support longtime nemesis Bill Ackman, but he still calls Marty Lipton "dead wrong."» Read More
Fed Reviews QE2 at Last Scheduled Meeting of 2010 (Yahoo Finance via AP) Many investors believe policies will remain unchanged—but will focus on modifications in language to signal future actions. "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend. On the other hand, rates on mortgages have risen, defying one of the Fed's stated goals of the bond-buying program. The average rate on a 30-year fixed mortgage has climbed to 4.61 percent. It's up sharply from 4.17 a month ago, the lowest rate in in some 40 years of recordkeeping. And "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend."
Spanish Bonds Down (Again); Borrowing Costs Rising (Bloomberg) "Spanish government bonds fell for a seventh day as the country paid higher costs to sell more than 2.5 billion euros ($3.3 billion) of securities and prepared to issue more debt later this week."And: "The yield on the 10-year Spanish bond rose eight basis points to 5.57 percent at 12:27 p.m. in London. The 4.85 percent security due October 2020 fell 0.58, or 5.8 euros per 1,000-euro ($1,346) face amount, to 94.61. German 10-year yields were one basis point lower at 2.96 percent, while two-year yields fell two basis points to 1.04 percent."
Distressed Assets Funds Trade Madoff Settlement Claims \(DealBook New York Times\) "The lawsuits filed by the trustee seeking money for Bernard L. Madoff’s fraud victims may be a blow for the defendants — but they are catnip for an obscure breed of Wall Street traders speculating on the outcome of the enormous Madoff bankruptcy case. In recent months, hedge funds and other investment firms have been quietly contacting Madoff victims whose loss claims have been approved by the trustee, Irving H. Picard. These funds — specialists in beaten-down assets known as distressed securities — are offering to buy those claims immediately for cash, but at a sharp discount from their face value. With the latest round of big-ticket lawsuits, however, that quiet market has started to sizzle."
It's time to wonder if the decades long war by the government that has allegedly been waged in favor of making financial products and services more competitive might have been a mistake.
Time after time the government has intervened in practices that it has deemed anti-competitive. This happened in the 1970s, when the government effectively got the New York Stock Exchange to abolish fixed trading commissions. It happened in the 1990s, when the government cracked down on NASDAQ market makers. In 2002, corporate bond trading went onto "screens" on the TRACE system after years of pressure from securities regulators.
Tough Blow for the President—Federal Judge Rules 'Central Plank' in Health Law Unconstitutional (Wall Street Journal) "A federal court ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration's signature legislative accomplishment. In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law's requirement that most Americans carry insurance or pay a penalty 'exceeds the constitutional boundaries of congressional power. 'The individual mandate 'would invite unbridled exercise of federal police powers,' wrote Judge Hudson, of the Eastern District of Virginia. "At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it's about an individual's right to choose to participate."
Tax Cut Package Poised to Sail Through Senate \(Reuters\) "President Barack Obama's bipartisan tax plan was on its way to passing its first test in Congress on Monday but a major Wall Street firm warned that damage to America's strained finances would outweigh any short-term economic boost. The $858 billion package, which would keep lowered income-tax rates from expiring at the end of the year, picked up 62 votes in the 100-seat Senate. Voting continued but the tax measure had effectively passed a procedural hurdle and will now go to a full vote in the chamber on Tuesday or Wednesday."Next stop: The House.
A concurrence by a brilliant judge on the 9th Circuit Court of Appeals may be a warning to federal authorities that they are over-stepping their bounds in pursuit of insider trading.
On the face of it, the concurrence has nothing to do with insider trading. Instead it involves the reversal of a jury verdict in a case where a CFO was criminally convicted of securities fraud by recognizing revenues in violation of GAAP. But it's hard not to notice that Judge Alex Kozinski's concurring opinion resonates with implications for the insider trading dragnet underway inside the federal Attorney General's office in Manhattan.
Even while the federal government is apparently cracking down on expert networks and other types of independent research firms that offer customers an inside track on various economic sectors, sell-side research firms are pushing ahead with these same types of promises. The twist, however, is that they aren't promising the inside track on companies traded on US equities markets.
Instead, they are touting their access to important decision-makers and data holders in China.
Several firms offer junkets for customers to places like Macau, where customers are told they will be introduced to people with access to markets and information unavailable to the typical US based investor.
Typically, the firms involved aren't the big, bulge bracket Wall Street firms. But the practice of making these kind of introductions and offering access to non-public information about China is increasingly wide-spread in the second and third tier firms, according to a person familiar with the matter.
With investors and traders constantly seeking an informational "edge" over competitors, this is apparently becoming a part of the ordinary business of some sell-side firms.
Merck and Wells Fargo are over-owned while Ford is under-owned by mutual funds, according to third-quarter analysis from Citigroup’s Tobias Levkovich.
Each quarter, Citi compiles its list of mutual fund stock holdings. While Microsoft continues to be most owned, there are some surprises in the list.
He's got his list. And, he's checking it twice. He's not Santa. He's not on a buying spree. Wall Street Strategies Retail Analyst Brian Sozzi has been surfing the malls in and around the New York City metropolitan area. Sozzi, who is rated five stars by Starmine for accuracy, has been doing this every weekend this season.
"There are important things that can't be found on earnings calls. I touch a lot of clothes, the more I touch, the better observations I can make," said Sozzi. "For example, Coach handbags. I must have touched hundreds if not a thousand handbags since I have been working here. By touch alone, I can tell the quality of Coach handbags is down compared to prior years."
Besides Coach, Sozzi follows major chain stores such as Macy's, Target, Kohl's, Aeropostale, Urban Outfitters, Gap, American Eagle and Ann Taylor.
I shadowed Sozzi as he hit three of the busiest malls in Bergen County, NJ on Saturday—two weeks before Christmas. The itinerary: the Garden State Plaza in Paramus, NJ, the Bergen Mall in Paramus, NJ and The Shops At Riverside in Hackensack, NJ.
Just because you owe more on your mortgage than your home is worth doesn't necessarily mean that you are no longer able to afford your mortgage. For many Americans who bought their homes during the housing boom, little has changed for them financially other than what the appraiser has determined on paper.
What has changed are attitudes, and attitudes can be dangerous.
Eight months after a Securities and Exchange Commission lawsuit raised tough questions about its business standards, Goldman Sachs is completing a report on its structure and practices intended to quell fears that its ethics have lapsed.
When Paul Krugman refers to the administration's proposed tax policy as the "Obama-McConnell Tax-Cut", that phrase alone signals more than just a policy disagreement. It's becoming a kind of short hand on the left for dissatisfaction with Barack Obama.
Krugman believes the current proposal will give the economy a "short-term boost": Unfortunately, he also believes that a short-term boost is woefully inadequate to fix problems on the scale we are now experiencing.
Bill Ackman also tells CNBC that Allergan's poison-pill defense doesn't make his takeover bid more difficult.
The bull market is seeing the equivalent of its first gray hairs and the proof is in Tuesday's blast of merger activity.
Greenlight Capital supports the subject of the book 'Flash Boys' and thinks investors should consider routing orders there.