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  Friday, 15 Apr 2011 | 9:53 AM ET

The SEC Ranking Ratings Agencies: A Bad, Bad Idea

Posted By: John Carney
The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC.
Getty Images
The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, DC.

Here’s my nomination for the worst recommendation by the Senate panel on the financial crisis: the proposal for the Securities and Exchange Commission to rate credit ratings agencies based on their “accuracy.”

Everyone agrees that inaccurate ratings of mortgage-related financial products—from straight mortgage-backed securities to complex derivatives—contributed to the financial crisis. And nearly everyone would like credit ratings agencies to perform better in the future.

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  Friday, 15 Apr 2011 | 9:13 AM ET

Bank of America Swings and Misses

Posted By: Julia La Roche
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Bank of America Swings and Misses [CNN Money via Fortune]

OK that's just sketchy. Galleon chief put millions into fund of ex-employee who is testifying in favor of Rajaratnam. [NYTimes]

Check out the list of JPMorgan bankers who doubted Madoff in 2007 [NYTimes]

'Banks Near Deal with SEC' [WSJ]

Ireland on the verge of junk status after Moody's downgrade [Reuters]

»Read more
  Thursday, 14 Apr 2011 | 4:19 PM ET

ZipCars, Bodyslams, and 3 More Things About Goldman

Posted By: John Carney
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ZipCar's IPO Underwriters Just Screwed The Company To The Tune Of $50 Million (Business Insider). When a stock soars 70% on the day it IPOs, it means the underwriters screwed the founders and pre-IPO investors.

Also: we’re in a tech bubble.

Michael Burry gives a speech at Vanderbuilt (Distressed Debt Investing). Among other things, he’s buying farm land and thinks Goldman's short squeeze was despicable.

Why the SEC is mulling opening up to private market deals (Truth on the Market). Easy answer: because a vociferous Congressman is jerking their leash.

Dick Durbin bodyslams Jamie Dimon (Felix Samon) The best part is when Durbin tells Dimon to “keep some perspective.”

Deal Journal asks is Zipcar still affordable (DealJournal). I didn’t hear the answer because the bubbling noise was too loud.

Goldman goes neutral on financials (MarketBeat). Everyone secretly thinks this means the traders are “massively short.”

»Read more
  Thursday, 14 Apr 2011 | 3:58 PM ET

What the Senate Panel Got Wrong About Goldman

Posted By: John Carney
Chairman Carl Levin questions former and current Goldman Sachs employees during a Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on Capitol Hill.
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Chairman Carl Levin questions former and current Goldman Sachs employees during a Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on Capitol Hill.

Goldman Sachs was accused by the Senate investigative panel report of not accurately disclosing its short interest in complex derivatives it marketed to outside investors.

But this allegation depends on an aggressive and poorly supported reading of the law that governs conflicts of interest.

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  Thursday, 14 Apr 2011 | 3:48 PM ET

Going Green With Recycled Polyester

Posted By: Stephanie Landsman
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Getty Images

How dire is the situation surrounding higher commodities prices? Maybe enough to see more retailers take plastics likely destined for the junkyard and turn them into polyester.

Marketed as a green fashion line, H&M launches its "Conscious Collection" today. It features 96 pieces for women, men and children made with environmentally and sustained materials—such as recycled polyester.

The collection has already gone Hollywood ahead of its official launch. Racked.com shows actress Natalie Portman wearing a $49.95 H&M recycled polyester dress at a Vanity Fair party in February. There's a similar one on H&M's new advertisement for $19.95.

The Swedish fast fashion retailer is getting its recycled polyester from pet bottles or textile waste.

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  Thursday, 14 Apr 2011 | 3:32 PM ET

Black Swan Inflation Fund Rises on Commodities Trading

Posted By: Kate Kelly
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Eyal Bartov | Oxford Scientific | Getty Images

Thanks to commodities hoarding, the Black Swan inflation fund was up nearly 9 percent for the first quarter, according to a letter from its chief investor, Mark Spitznagel, that has been obtained by CNBC.

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  Thursday, 14 Apr 2011 | 1:12 PM ET

How Goldman Trades on Client Info

Posted By: John Carney
The Goldman Sachs booth on the floor of the New York Stock Exchange
Getty Images
The Goldman Sachs booth on the floor of the New York Stock Exchange

Goldman is often accused of being “ruthlessly self-serving” in its dealing with clients. Goldman, of course, maintains that it is still dedicated to serving its clients.

Unfortunately for Goldman, the report from the Senate investigations committee includes crystal clear evidence of its traders being, well, ruthlessly self-serving.

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  Thursday, 14 Apr 2011 | 11:47 AM ET

Did Lloyd Blankfein Misunderstand Goldman's Mortgage Bets?

Posted By: John Carney
Goldman Sachs CEO Lloyd Blankfein
CNBC.com
Goldman Sachs CEO Lloyd Blankfein

Goldman Sachs CEO Lloyd Blankfein and other top executives at the firm may not have understood the positions they were taking in the mortgage market, according to a report released today by the Senate Investigations subcommittee.

The report —which runs to 635 pages—details how Goldman built up a massive short position in mortgage-related assets following the collapse of two subprime Bear Stearns hedge funds. This was referred to as “the big short” within Goldman.

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  Thursday, 14 Apr 2011 | 11:31 AM ET

How Goldman Concealed Risk From Shareholders

Posted By: John Carney
Goldman Sachs
Getty Images
Goldman Sachs

When Goldman Sachs was making breathtaking gains as the subprime mortgage market collapsed in 2007, one of the most mysterious aspects of the trade was how Goldman could do this without appearing to dramatically raise the risks it was taking.

The Senate investigation committee’s report issued Thursday shows how this was accomplished: two weeks before the quarter ended, Goldman’s top executives would order the mortgage trading desk to reduce its risk. Because the mortgage desk was responsible for the majority of the firm’s risk—54 percent in August of 2007—this reduced firmwide risk. Goldman would then report lower risk in its quarterly reports.

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  Thursday, 14 Apr 2011 | 9:48 AM ET

Senator Levin Says He'll Refer Goldman Testimony From Last Year's Congressional Hearing to The DOJ For Possible Perjury Charges

Posted By: Katya Wachtel, Business Insider
Goldman Sachs CEO Lloyd Blankfein
Jim Watson | AFP | Getty Images
Goldman Sachs CEO Lloyd Blankfein

We can't say we're surprised that a Senate report released yesterday, that details what caused the financial crisis, focuses on Goldman Sachs. A lot.

The findings of a two-year analysis "trains much of its ire on Goldman Sachs, which Sen. Levin said deceived some clients by betting against home loans in 2006 and 2007, while simultaneously selling mortgage securities," the WSJ reported.

But Levin thinks Goldman deceived more than its investors.

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