Davidson Kempner continues to make money by focusing on beat up loans—despite the general perception that bonds have little to offer investors.» Read More
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.
Time was you could count on Steve Schwarzman to throw a good party.
Or, at least, an excessive party.
In February of 2007, Schwarzman celebrated his birthday with a $4 million party. Just a few days before, Blackstone had completed a $39 billion purchase of EOP Properties. It was the largest leveraged buyout ever. Security was said to be close to impenetrable.
"Security at the event was tight: Beyond the handful of police officers on the scene, several barrel-chested men with black berets, olive jackets served as silent sentries at the door," DealBook's Mike Merced wrote.
Those days are past. Last Thursday, Kevin Roose of New York Magazine managed to crash the Blackstone holiday party without so much as a word to the folks at the door. No more burly men in black berets. Just girls with clipboards.
Countering some of the rosy rhetoric on Wall Street this holiday season, Guggenheim Partners CIO Scott Minerd came loaded for bear.
In an interview this morning on "Squawk Box" he questions the German Finance Minister's "street" cred, the stability of European banking and, says Spain could become the "Lehman of Europe".
"I think that there is a possibility that the subprime crisis was just the opening act to the main act and that the main act here in the ultimate financial crisis that we are living in is the European crisis", says Minerd.
CNBC's Steve Liesman labeled Minerd's doomsday scenario as the ECE or, European Cataclysmic Event.
But even in chaos or, especially in chaos, there are opportunities to make money.
Minerd's advice: Short the euro, short certain sovereign CDSs and get long gold.
Watch the full interview here.
Is it really so bad if an elite cabal of bankers meets once a month in midtown Manhattan to conspire about the rules governing derivatives trading?
Over the weekend, Louise Story of the New York Times breathlessly told the tale of a regular meeting of the risk committee of the derivatives clearing house set up by the InterContinental Exchange, usually known as ICE.
The main issue with this committee, it seems, is that outside financial firms complain that it is a cabal of insiders set up to keep out competition.
Moody's has just increased its estimate for loan losses by Spanish banks by a sizeable 63 percent.
The new loss estimate is now €176 billion—nearly one quarter of a trillion U.S. dollars. What may be worse is this: Moody's states that the banks have only recognized half of those projected losses. Moody's also criticizes the current levels of capital cushions, stating that those reserves must be increased in order for Spanish banks to sustain the coming losses.
The report cites adverse economic conditions and deteriorating asset quality. Moreover, Spanish banks may face difficulty recapitalizing.
As I sat watching a video of Vladimir Putin warble "Blueberry Hill" this weekend, I couldn't help but think, what would Ronald Reagan say?
Totally mesmerizing and a little shocking, the leader of the former "evil empire" was putting it all on the line to raise money for a children's charity. The star-studded audience gave it up for the Vlad, clapping and singing along—Goldie Hawn and Kurt Russell, Sharon Stone rockin' out hard, Kevin Costner blowing bubbles with his gum, and a stout Gerard Depardieu. Who knew Hollywood elite would travel to St. Pete for a fundraiser?
Like I tell my kids, whatever you do or say on camera or online is public domain—I dare you to turn away.
Tax Deal Looks Likely to Pass Senate Today; Potential for Changes in House Unclear. (Wall Street Journal) "Democrats are predicting that a much-debated tax agreement will clear a crucial hurdle comfortably in the Senate on Monday, with a margin that they hope will add momentum to the deal in the House. But even with President Barack Obama, former President Bill Clinton and a growing number of Senate Democrats backing the deal, House Democrats remained eager to test whether they could push Republicans to raise the proposed tax rate on estates. It wasn't clear how far House Democrats would push such a fight. If a bill isn't passed by the end of the year, tax rates are scheduled to go up, although the White House could block an immediate increase in withholding levels, pending passage of a tax bill by a new Congress next year."
10-Year Yield Rises (CNBC via Reuters) "U.S. Treasurys tumbled in Asia on Monday, driving up their 10-year yields to a new six-month high as Japanese investors kept dumping Treasurys on the specter of higher growth and higher deficits in the United States. The short end of the market is increasingly under pressure as the yield on two-year notes also rose to a near six-month high and federal fund rate futures prices started to price in the chance of a possible rate hike by the Federal Reserve in 2012. That is a sea change from just over a week ago, when comments by Fed chief Ben Bernanke prompted debate among traders over whether the central bank will adopt another round of easing after its current $600 billion debt purchase program expires next June."
Why Investors Are Demanding Greater Treasury Yield \(Bloomberg\) "Treasury notes fell before tomorrow’s Federal Reserve meeting, pushing 10-year yields to a six-month high, on speculation reports this week will add to signs the recovery is sustainable. The extra yield investors demand to hold 10-year notes over 2-year debt was the highest since April as economists raised growth estimates after President Barack Obama’s agreement to extend tax cuts. Ten-year notes, which declined last week by the most since August 2009, also fell as stocks gained. "
Hedge funds have seen the worst start to the year since the financial crisis, as returns in January and March were both in the red.
The Fed indicated to Citi that it would get more time to fix "stress test" planning problems before rejecting its capital plan.
Goldman Sachs reported quarterly earnings and revenue that topped analysts' expectations on Thursday.