Nicole Lapin, of CNBC's Worldwide Exchange, explains what she's long and what she's short this week.
Economics to English: NPR Translates Federal Reserve Communiqué (NPR) National Public Radio, via Slate Magazine and Planet Money, cleverly renders the latest Federal Reserve statement in language your mom will understand. (The news ain't pretty.)
Citigroup CEO Vikram Pandit and rapper Jay-Z were both honored recently at the same event by the New York Police and Fire Widows and Children's Benefit Fund, according to an article in the New York Times Dealbook blog .
A New York Times Dealbook post from earlier today cites a recent study by Wall Street compensation expert Alan Johnson demonstrating that pay for financial services employees will jump 5 percent this year — with some employees getting increases around 15%.
Earlier today I looked at a Bloomberg story about the decline in Wall Street compensation pools .
So who's right?
Meaningful data on this issue seems remarkably difficult to tease out.
Why? Mostly because it's difficult to make apples to apples comparisons based on the way banks are reporting their data. Let's engage in a little thought experiment to demonstrate how this type of analytic comparison is seriously problematic.
Odds are you haven’t heard of the monetary policy subcommittee. Officially known as the House Subcommittee for Domestic Monetary Policy and Technology, it’s a subdivision of the House Financial Services Committee that has mostly occupied itself with pressing questions of issuing commemorative coins and whether or not to eliminate the penny.
That’s about to change. Ron Paul, the Republican Congressman from Texas, is the ranking member of the monetary policy subcommittee, and when the next Congress takes over he’ll likely be the chairman of the subcommittee.
And Congressman Paul has some big plans.
Change is in the air in Washington and we are hearing more and more from the GOP leadership their plan to get America back on the path to prosperity. One of the top House Republicans who will take the lead in shaping Wall Street reform is Representative Spencer Bachus (R-Alabama).
Bachus is expected to be named Chairman of the Financial Services Committee when the Steering Committee meets in December. An outspoken critic on the Administration's spending and policies, Bachus took the time with me to lay out his plan on reforming the financial services industry.
The flaws in the pipeline through which Citigroup moved mortgages into mortgage-backed securities may create far more opportunities for investors to demand their money back than the bank is expecting.
In our article Tuesday , John Carney and I wrote about loan acquisition channels at Citigroup. Based on description of the flaws of those channels, we believe that Citi is far more exposed to mortgage put-backs than is commonly thought.
A mortgage put-back occurs when an investor in a mortgage-backed security successfully demands that a bank repurchase the underlying mortgages that do not adequately satisfy the representations and warranties the bank made about the mortgages when it originally sold the security. A bank can be forced to repurchase the mortgage at par under certain circumstances.
Citi says our view has "absolutely zero basis in fact." So let's take a deeper look at just one of their loan channels to examine Citi's potential exposure.
In April of 2010, former Citigroup executive Richard Bowen testified before the Financial Crisis Inquiry Commission \(FCIC\) . Bowen's testimony under oath before the FCIC reads like a roadmap to Citi's correspondent loan acquisition channels, and has been invaluable in our understanding of Citi's loan acquisition process.
Gold investor John Paulson should send Ben Bernanke a nice present this holiday season. The yellow metal is off to the races due to the $600 billion in QE2 announced yesterday. Not unexpected, the result is still a weaker dollar and buying in all the so-called precious metals: gold, silver, platinum and palladium.
And John Paulson, the hedge fund manager who made billions in the mortgage meltdown, is long not just gold but gold stocks. According to this article by someone named John Carney , Mr. Paulson has an 11.3% stake, or 39,911,282 shares in AngloGold Ashanti at $32 per share. At today’s stock price, that one position has made over $930 million.
The mood at the Park Avenue Ferrari dealership may be more dolorous than usual this bonus season. Traders may be about to take a big hit .
Historically, Wall Street traders have received the highest bonuses on The Street; this year, with trading profits down 12% so far, there may be some belt tightening by the boys and girls on the trading desks.
At Goldman Sachs , where most revenue is generated by trading, there has been a 26% reduction in average compensation for the first nine months of 2010. Still, in relation to the other big banks, Goldman is set to pay out the largest dollar figure amount in total compensation, according to the article cited above: a total of $387,655 in total compensation per employee.
\(If $387,655 doesn't sound like enough cash to lead the lifestyle of a Goldman Sachs trader, fear not: the money isn't distributed equally.