The currency war is getting out of control. Here's a snapshot of the week so far in central banking.» Read More
This morning Dick Bove sent out a note to clients explaining that he doubts WikiLeaks founder Julian Assange has “new information” about Bank of America.
I think Bove is likely to be proven wrong.
Bove knows a lot about Bank of America . He’s a smart and feisty guy who I admire.
But I don’t get his logic on WikiLeaks. Bove runs through the various types of information WikiLeaks could expose and dismisses them.
— Emails showing BofA employees didn’t have faith in toxic securities it sold? Bove says that’s possible but thinks the risk sections of the prospectuses will protect the bank.
— Dirt on departed management? That is not really relevant.
— Merrill- or Countrywide-related dirt? This has already been addressed through investigations and fines.
— Information about customers? That would backfire and expose Assange to legal liability for breaching bank customer confidentiality rules.
In other words, Bove thinks there can't be serious dirt on Bank of America in the Wikileaks data because ... he cannot imagine what it could be.
But Bove's failure to imagine a scandal is no indication that one doesn't exist.
He usually gives Santa a run for his money. Not this year. Old Man Winter has been tame in much of the country. Is his restraint skewing the retail data?
"The biggest thing this season was the comparisons to last year. Last year, we had the 'Super Saturday' storm that impacted the whole I-95 corridor which is a huge chunk of humanity to the U.S.," said Paul Walsh, Atmospheric and Environmental Research Senior Vice President. "We had snowmaggedon. We dodged a bullet this year."
An animated version of the man behind WikiLeaks' in a satire of his alleged sex charges.
Sadly, a Chinese construction company has just purchased the 15,000+ square-foot "megahouse" that had been on the market in the Financial District.
It's a shame, really.
The speculation , in September of 2009, was that the house would become a mega-crib for some lucky Wall Street exec or hedge fund titan.
But it didn’t work out that way: And now the moralizing forces of class warfare have been deprived of a convenient metaphor for excess this holiday season.
They'll have to take what they can get. For example : the Dream List.
Ok, I have to admit it: I had my hopes too.
You may remember that private-equity giant Blackstone Group throw a 25th anniversary bash at the Metropolitan Museum of Art. We described it as "disappointingly dull and surprisingly crashable."
Both descriptions were derived from the work of freelance journalist Kevin Roose, who reported on the party for New York magazine.
Now Blackstone is reportedly trying to catch the insider who tipped Roose off about the party.
The Greenlight Capital president not only was critical of Lehman's balance sheet chicanery at a time when almost everyone else believed the firm really was bringing down its leverage, he's also one hell of a poker player .
Einhorn recently sat down with DealBreaker's Bess Levin for a game of cards and some conversation.
The long interview covers a lot of ground, including politics, the Fed's quantitative easing policy, and Einhorn's history. But our favorite part is where Bess asks Einhorn about Apple, and then somehow directs the conversation into talk about booze.
Julian Assange might be saying he’s got the goods on Bank of America , but Dick Bove’s not buying it.
The Wikileaks founder has been spreading word that he has documented misbehavior by BofA executives that he will disclose after the New Year.
While the nature of the bank’s misdeeds remains undisclosed, speculation of what exactly Assange has got tucked up his sleeve has caused some gyrations in the BofA stock price.
But anyone getting themselves upset over the possibility of another significant data dump from Wikileaks is worked up over nothing, says Bove, of Rochdale Securities.
“It may just be the case here that the sound is greater than the fury,” the analyst wrote in a note to clients. “It is highly questionable that Mr. Assange has new information about Bank of America.”
The New York attorney general’s lawsuit accusing Ernst & Young of helping Lehman Brothers disguise its financial condition for more than seven years paints a road map for a criminal case against Lehman Brothers executives.
The lawsuit claims that Lehman’s financial statements misstated its leverage. Indeed, the four causes of action against the accounting firm are all based on the idea that E&Y was “aware that the public was being misled.”
Three of those causes of action are made under the Martin Act, the powerful anti-fraud statute passed in 1921 that gives the New York Attorney General an edge over national regulators such as the SEC when it comes to securities fraud cases. After decades of dormancy, the statute was revived aggressively by Eliot Spitzer.
Perhaps most importantly, the Martin Act gives the Attorney General broad discretion in whether to file civil or criminal fraud charges. It’s good news for Ernst & Young that the attorney general is only filing a civil suit. But this could be bad news for former Lehman Brothers executives. If Ernst & Young is guilty of fraud for merely helping Lehman executives mislead the public, the Lehman Brothers executives are likely to find themselves faced with criminal charges.
When Banks Attack — And Wrongfully Targeted Homeowners Sue (New York Times) "When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words 'Together Forever,' that contained the ashes of her late husband, Robert. The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand. In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed."
Will China Buy Portuguese Debt? (Reuters) "The euro gained against the dollar and bounced from all-time lows against the Swiss franc on Wednesday, boosted by a news report that China was ready to buy significant amounts of Portuguese sovereign debt. The Jornal de Negocios daily reported China is looking to buy between 4 billion euros ($5.26 billion) and 5 billion euros of Portuguese sovereign debt to help the country ward off pressure in debt markets, though it gave no details of its sources. China's central bank declined to comment on the report which said the deal reached between the two governments will lead to China buying Portuguese debt in auctions or in the secondary markets during the first quarter of 2011."
Treasuries Down, on Sentiments of Economic Growth \(Bloomberg\) "Treasuries fell, extending their biggest monthly loss in a year, on speculation data showing the recovery is gaining momentum will fuel concern that debt supply will overwhelm demand as inflation accelerates. Five-year notes led losses before data that economists said will show sales of existing homes and gross domestic product increased. The Treasury is tomorrow scheduled to announce the sizes of two-, five- and seven-year auctions for next week. Ten- year yields have increased 41 basis points since Dec. 6, when President Barack Obama agreed to a two-year extension for tax cuts, widening the deficit and fueling bets that growth and inflation will quicken. "
Meredith Whitney's Nightmare Scenario: Muni Defaults, Layoffs & Social Unrest (CNBC) "A wave of defaults by state and local governments in the coming months will spark a selloff in the municipal bond market, hurting US economic growth and stocks and causing social unrest as governments are forced lay off workers and cut back on services, Meredith Whitney, well known financial analyst famous for predicting the financial crisis, told CNBC Tuesday. Responding to the uproar over her "60 Minutes" interview broadcast on CBS Sunday night, Whitney defended her prediction that at least 50 to 100 cities and towns could default on their debt as states and the federal government cut back on financial support. "
Attorney General Cuomo Files Suit against Lehman Auditor Ernst & Young (NY Times DealBook) "The New York attorney general on Tuesday sued Ernst & Young, accusing the accounting firm of helping its client Lehman Brothers “engage in a massive accounting fraud” by misleading investors about the investment bank’s financial health. The lawsuit, coming more than two years after Lehman collapsed and the global economy buckled, is the first major legal action stemming from the collapse of the investment bank."
"Madoff Aide Bongiorno Reports to Jail" \(Wall Street Journal\) "A longtime 'back office' employee of convicted Ponzi schemer Bernard Madoff reported to jail in Florida on Tuesday after a federal judge in New York revoked her bail." It further explains: "Ms. Bongiorno, who has been on home incarceration and subject to electronic monitoring in Florida, had difficulty meeting the conditions of a $5 million bail set last month. " And "Ms. Bongiorno is one of five former Madoff employees facing criminal charges in the case."
Hedge funds in both the U.S. and abroad are grabbing at investment opportunities in a distressed energy sector.
Analysts had expected the price to fall within a range of $17 to $19 a share, up from the original forecast of $14 to $16 a share.
Investors should not fear the market, BlackRock President Rob Kapito said. Here's what he'd do.