Hedge fund managers are fuming at new political rhetoric against them and their huge paydays.» Read More
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. "
CNBC Reports More Insider Trading Charges to Come (CNBC) "Wall Street is bracing for another round of indictments as early as next week in a massive insider trading probe, people familiar with the matter told CNBC. The move by Federal prosecutors may include a number of arrests, according to these people. The indictments right at the height of the holiday season may prove a tactical advantage for prosecutors, sources in the legal community say." Hardball.
Yesterday Third Point founder Dan Loeb sent a mocking letter to a group of hedge fund managers who have supported Barack Obama, comparing them to battered wives.
“I am sure, if we are really nice and stay quiet, everything will be alright and the President will become more centrist and that all his tough talk is just words; I mean he really loves us and when he beats us, he doesn’t mean it; he just gets a little angry,” Loeb wrote.
Loeb is famous for his poisonous pen. He once wrote to Irik Sevin, the chief of Star Gas Partners, calling him “one of the most dangerous and incompetent executives in America.”
“Do what you do best: retreat to your waterfront mansion in the Hamptons where you can play tennis and hobnob with your fellow socialites,” Loeb said .
Nigel Hart managed the Tamarack Fund for UBS's Private Wealth Management—until recently.
Earlier this afternoon, Courtney Comstock of Business Insider published a letter related to the departure on BI's website. The letter is said to be from Nigel Hart—and is addressed to the head of UBS's Wealth Management hedge fund unit, Ned Sienko.
It appears the Treasury Secretary going under the knife today.
The AP is reporting that Geithner was admitted to George Washington University hospital early Friday morning because of pain caused by a kidney stone.
A Treasury spokesman said he would undergo surgery Friday afternoon. » Read More at CNBC.com
What do investors fear most about Spain?
The cancer at the core of the Spanish economy may be the structure of its banking system, according to a recent report issued by UBS.
The report comes to our attention via Tracy Alloway at the FT blog Alphaville .
Alphaville reports the context: Spanish sovereign debt-to-GDP ratios don't look appreciably worse than the rest of the pack in the eurozone. And the overall trend line for Spain doesn't seem much worse either.
So where does the problem lie?
Are the Irish already getting accustomed to a more austere life?
One of the most popular songs in Ireland at this very moment is about how owning a horse is superior to owning a fancy automobile. It may be that the message is resonating with the Irish people. Or, you know, maybe it's just a really, really funny gag. The song is called "A Horse Outside" and it is by the Rubberbandits, a comedy hip-hop outfit from Limerick. The video, below, was released on December 8th.
Warning: There's a lot of foul language. So if that kind of thing offends you, consider turning down the volume. Also, if you are at work, listen with headphones.
Vermont Senator Sanders is a socialist: Self confessed.
He's filibustering tax cuts right now—seen here on a Live Video Feed —from C-SPAN.
I think I disagree with every economic policy position Senator Sanders holds. But I have to give him this: The guy has heart.
I don't have any deep thoughts to share here.
Except the obvious: Raising taxes during a fragile recovery sounds like an appallingly bade idea.
Res ipsa loquitur.
Notwithstanding all that—Big Picture—Democracy is lovely to behold: Capra would be proud.
(Hat Tip: Business Insider. —for both the link and the Mr. Smith metaphor.)
The news that Goldman Sachs credit traders attempted to scare rivals off of short positions in the mortgage market will no doubt bring more gnashing of the teeth. FT Alphaville and Felix Salmon have good write-ups about the plot.
But what I find most striking is that the guy advocating the trade—Michael Swenson—was not officially a prop trader. He didn’t work for one of Goldman Sachs’ hedge funds. He was, at least officially, running a client-facing part of Goldman’s business.
“I was a Managing Director in SPG Trading and co-managed the group. I was primarily responsible for the Asset-Backed Securities (ABS) trading desk, which was responsible for making markets in ABS securities and derivatives for our customer franchise. The ABS desk traded consumer ABS, sub-prime cash, singlename ABS credit default swaps (which I will refer to as "single names") and the ABX indices, which are a family of synthetic indices that reference a standard basket of 20 subprime deals,” Swenson said in his testimony on Capitol Hill in April, 2010.
So the question is, if the Volcker Rule had been in effect at the time, would it have had any impact on Swenson? I suspect the answer is, unfortunately, no.
Former Goldman Sachs computer programmer Sergey Aleynikov was convicted by a jury today on charges copied that he stole code used by Goldman in high-frequency trading and planned to use the code to build a competing HFT trading system.
U.S. fund managers have launched a new attack on global regulators as they fight a rearguard action against proposed rules. The FT reports.
Jack Bogle, Vanguard's founder, identifies the tenets of mutual fund investing: low fees and high ratings.
On the eve of the GOP primaries, here’s the big question: What must we do to restore America’s long-term economic-growth performance?