Big Firms Now Inside Crosshairs of Insider Trading Probe

S&P Cuts Irish Debt Two Steps, Outlook Negative (Bloomberg) The article quotes Standard & Poor's: "The Irish government looks set to borrow over and above our previous projections to fund further bank capital injections into Ireland’s troubled banking system," Hence, the cut from AA- to A for long-term, and the short-term grade cut from A-1+ to A1. According to the article, the negative outlook stems from"the risk that talks on a European Union-led rescue may fail to stanch capital flight."


Big Firms Now Inside Crosshairs of Insider Trading Probe (Wall Street Journal) As we reported yesterday, some of Wall Street's bigger players are now being investigated: "Hedge-fund giants SAC Capital Advisors and Citadel LLC, big mutual-fund company Janus Capital Group Inc. and Wellington Management Co., one of the nation's biggest institutional-investment firms, have received subpoenas from the Manhattan U.S. Attorney's office seeking trading, communications and other data as part of a broad criminal investigation, according to people familiar with the matter." One of the centers of the investigations seems to be the companies that provide "expert-network" services. The Journal article explains: "Such expert-network firms set up meetings and arrange calls between traders seeking an investing edge and current and former managers from hundreds of companies."

U.S. Aircraft Warships Headed to South Korea—Including AircraftCarrier(Financial Times)
On the heels of yesterday's bombardment of South Korea's Yeonpyeong island by the North Koreans, the United States is dispatching a naval battle group, which will join in joint exercises with the South. The South Koreans responded by returning fire yesterday. Now, there is criticism within South Korea of the government's response: "It is not yet clear whether the exercises will be enough to stem rising domestic criticism of South Korea's government. Parliamentarians and media have attacked the government of Lee Myung-bak for responding to the bombardment."

Tiffany Earnings Shine (Wall Street Journal) Tiffany releases new numbers, presumably gladdening analysts' hearts this holiday season: "fiscal third-quarter profit climbed 27 percent, and ore results handily topped analysts' expectations as sales and margins rose. As such, the luxury jewelry retailer increased its profit target for the year a third time, raising it by 12 cents to $2.72 to $2.77 a share. It also sees worldwide sales increasing 12%, one percentage point higher than its earlier expectation."

"Battered Ireland Clings to Its Low Taxes" (Bloomberg) Despite the deepening political and economic chaos , the Irish have defiantly clung to one vestigial feature of the boom era of the Celtic Tiger: Low taxes. But that may soon be changing—and not by choice. "Even before Irish Prime Minister Brian Cowen announced he was seeking the help of the European Union and the International Monetary Fund—and dissolving the government—the Irish were intent on passing an austerity budget by yearend. The EU and the IMF, which may extend to Ireland emergency loans of as much as €85 billion ($115 billion), couldn't ask for a more compliant patient—except in one area. The Irish credit much of their pre-crisis economic success to a policy of charging corporations only 12.5 percent in income tax, one of the lowest corporate rates in Europe. That rate, which compares with 28 percent or higher in Britain, France, Germany, and the U.S., has lured multinationals to set up manufacturing, research, and service centers in Ireland over the last 20 years. Now various officials in Europe are calling on the Irish to raise funds by hiking taxes. Olli Rehn, the EU's economic and monetary affairs commissioner, has stated that Ireland cannot be a low-tax economy anymore. French President Nicolas Sarkozy has said that while it's not his business, he could not see how the Irish could avoid hiking the corporate rate. Various members of German Chancellor Angela Merkel's ruling party have said Ireland should consider raising the corporate rate. "

Ireland to Seize Last Remaining Independent Bank (Yahoo Finance via New York Times) "The Irish press was abuzz with reports Wednesday morning that the country's government, fresh off its request for a bailout from the European Union, would take control of Bank of Ireland, the last large Irish lender to stay outside government control thus far."

Euro Still Dropping on Debt Contagion Fears (Reuters) "The euro fell to a two-month low against the dollar on Wednesday, extending losses on uncertainty over Ireland's plans to tackle its debts and fears the crisis could spread to other peripheral euro zone countries. Peripheral government bond yield spreads over Germany widened and a North Korean statement in the wake of Tuesday's artillery clash that the South's action was driving the peninsula to the brink of war prompted investors to seek safe-haven currencies. These factors lifted the dollar to a two-month high against a currency basket, while the troubles in the euro zone's periphery meant the euro quickly shrugged off a record high German Ifo business climate index for November."

Mortgage Apps at 6-Month High (CNBC via Reuters) "The Mortgage Bankers Association's seasonally adjusted purchase applications index jumped 14.4 percent to 205.0 in the week ended Nov. 19, the highest since the week ending May 7, the MBA said on Wednesday. The refinancing index slumped 1 percent to 3,793.6."

"Swagger" is Back on Wall Street? (New York Times DealBook) I feel like I read this article, or a slight variant thereof, every holiday season—except when the economy is truly dismal. Take it for what it's worth, I suppose. And be relieved it's not one of those really bad years."Two years after the onset of the financial crisis, the stock market is recovering and Wall Street’s moneyed elite are breathing easier again. And this means in some cases they are spending again — at times cautiously, but sometimes with a familiar swagger."