The family of controversial "father of daytrading" and so called
"SOES bandit", Harvey Houtkin, is suing the San Diego hospital where
he died. After his death following "uneventful emergency
surgery", a doctor who worked at the hospital sent an anonymous email to
the San Diego Medical Examiner alleging “erroneous, misleading and perhaps
fraudulent” information on Houtkin’s death certificate. According to the
San Diego Union Tribune:
Tags: Legal
The Financial Times helpfully points out that in eighteen months Merrill Lynch has managed to wipe out a quarter of its inflation adjusted profits earned over 36 years as a listed company…
Since the onset of the credit crunch
last year, Merrill has suffered after-tax losses of more than $14bn as its
balance sheet has been savaged by almost $52bn in writedowns and credit-related
losses.Merrill’s total inflation-adjusted profits between its 1971 listing and 2006
were about $56bn, according to figures from Thomson Reuters Fundamentals and an
FT analysis of reported earnings.The $14bn in losses for 2007 and the first two quarters of 2008 equal half of
Merrill’s profits since the beginning of the decade.
Merrill losses wipe away longtime profits – Financial Times
Tags: Credit Crunch, Merrill Lynch
Just call him the pusher: Thanks to billionaire hedge fund manager George
Soros, the good people of Massachusetts can look forward to voting on whether or
not possession of a small amount of marijuana will be decriminalzed in the
state. Soros put up $400k of the $429k that was collected by the group who
championed the measure — $315k alone was needed to gather the necessary 100k
signatures required to get the measure on the ballot. If the Soros backed
measure passes in November, possession of less than an ounce of the evil weed
would be a civil offense which would be punishable with a fine of $100.
And it's not the first time that Soros has gone to bat for pot….
Tags: Drugs, George Soros, Legal
Lehman Brothers is said to be close to axing nealy 1,500 more employees which will happen before earnings are announced on 9/15. According to the NY Times it’s not clear which divisions will be affected. Lehman had no comment.
Struggling Lehman Plans to Lay Off 1,500 – NY Times
Tags: Apple, Bloomberg, Lehman Brothers, Odd Lots
Fees generated by the big Wall Street banks and boutiques have dried up in a
big way and the Wall Street Journal’s Heard on the Street column suggests that there
may be more pain on the way. And that could lead to consolidation.
Senior bankers warn that after a tough first half, the outlook has deteriorated further. Does the grim forecast mean that the long-rumored consolidation in investment banking will finally occur?
The damage caused by mortgage-backed securities remains the focus for investors. The investment banks might have taken most of the balance-sheet hits from their subprime problems, but other areas, in particular commercial real estate and higher-grade residential mortgages, have begun to show cracks. Continued credit-market weakness is likely to force further write-downs in the third quarter.
Bankers Face a Grim Fall
- Wall Street Journal
Tags: Fees, investment banking, M&A
The guy who brought Smurfs to America was busted in an extortion attempt of
his son-in-law, a bigwig at Blackstone Group. Stuart Ross, of Aventura
Fla. was charged, along with his lawyer, of attempting to shake down Blackstone
senior managing director David Blitzer for serious cash — to the tune of $11
million. Ross and his lawyer could spend seven years in prison if they’re found guilty. This
Ross guy sounds like a real pill / ingrate / piece of work even after he had
convinced Blitzer to seed a a couple of earlier business ventures.
According to the New York Post:
Tags: Blackstone, Lawsuit, Legal
Let the lawsuits begin: With all the reports of dropped calls from users of the Apple iPhone, it was inevitable that someone would sue. And they have. Jessica Alena Smith, from Birmingham Alabama filed suit in U.S. District Court in Alabama. According to the San Francisco Chronicle:
Tags: Apple, Cell Phones, Lawsuit
The hits just keep on coming: One by one, big revenue streams that the major
investment banking firms have enjoyed are drying up. The latest: the junk
bond business. Underwriting fees have dropped dramatically.
According to the NY Post:
Underwriting volume this year for high-yield securities, known widely on Wall Street as junk debt, has sunk at firms such as Merrill Lynch, Citigroup, Lehman Brothers and JPMorgan Chase, adding more salt to the wounds already inflicted by massive losses on souring mortgage securities.
According to Thomson Reuters, junk-debt issuance in the US is down 64 percent this year, with investment banks having issued $35 billion so far this year.
That compares with a whopping $98 billion in issuance this time last year. In Europe, junk-debt issuance is off 84 percent so far this year.
JP Morgan stands at the head of the league tables, having underwritten around
$80 billion so far thisyear, down a whopping 68% from last year.
A
Junk Debt Funk – NY Post
Tags: Citigroup, high yield bonds, JPM Chase, Lehman Brothers, Merrill Lynch
Lots of Lehman headlines this morning. There was that FT article that described Lehman’s now aborted secret talks to sell a stake to Korea
Development Bank or CITIC. According to one of the potential investors,
Lehman CEO Dick Fuld still acted as though he was in the drivers seat, saying “he thinks he is playing with a full
deck". CITIC has since come out and denied knowledge of any talks. In
addition, Citigroup lowered earnings estimates on Lehman (and Goldman and
Morgan Stanley) in a report dated 8/20, joining the chorus of already lowered
numbers. And then there’s a WSJ article that says that last month
the Fed chased down a rumor that Credit Suisse had pulled a credit line from
Lehman….
Tags: Citigroup, Credit Crunch, Credit Suisse, Dick Fuld, Fed, Lehman Brothers
Andor Capital, the $2 billion hedge fund rund by Dan Benton, is closing its doors in October and returning funds to investors.
Benton, who earned a reputation for
picking technology stock winners, wrote to his clients that "after 24 years
in the investment business, I have decided to retire from managing outside
capital" to devote more time to family and other interests.The fund will continue investing
until September 30, "at which time the fund assets will be fully
liquidated," Benton told clients in a letter obtained by Reuters.Andor has counted Calpers, the biggest
U.S. pension fund among its investors, but recently the fund suffered losses as
the credit crisis widened and stock prices tumbled.
Andor Capital shutting down in October – Reuters
Tags: Andor, Hedge funds, Revolving Door
Outspoken activist investor Dan Loeb who runs hedge fund Third Point LLC has
been quiet for quite awhile. But no more. He’s currently under
investigation by the SEC over his communications with other hedge funds.
Not one to take things lying down, Loeb has of course come out swinging.
In his quarterly letter to
investors which is a great read, in addition to talking about the funds’ returns and thoughts about the current investment environment, he defends his chatting with other funds about trading ideas,
claiming that his "give-and-take" with other hedge fund managers
doesn’t violate securities laws. According to Blomberg:
Tags: 13F Charts, Credit Crunch, Dan Loeb, Hedge funds
That’s the amount that Joshua Rosner, a research analyst from consulting firm Graham-Fisher, thinks might do the trick according to this morning’s NY Post:
Joshua Rosner, a well-respected
analyst at consulting and research firm Graham-Fisher, said that even under the
most conservative circumstances, the embattled government-sponsored enterprises
(GSEs) would need to go out, hat in hand, and raise at least $40 billion in
order to shore up their balance sheets.But the realistic number could be more like $100 billion.
Rosner’s comments come as there is a growing belief on Wall Street and Capitol
Hill that the GSEs, which hold just under half of the nation’s $12 trillion in
mortgages, will require a government-led bailout.
$100,000,000,000.00 – NY Post
Why buy the cow when you can have the milk for free?: Barclays would love to increase it’s investment banking business in the
U.S. But with the credit crunch causing disarray at so many U.S.
investment banking firms, swallowing an entire firm might not be necessary when
they have opportunities to snag both staff and business anyway. While they didn’t
rule it out completely, they’d only buy a whole bank at a distressed price.
Barclays wouldn’t be averse, however, to buying a U.S. wealth management
business. (Like maybe Neuberger & Berman?). Barclays Capital
head Bob Diamond spoke to the Financial TImes:
Tags: Barclays, Credit Crunch, Lehman Brothers
The SEC’s financial document retrieval system, EDGAR (aka Electronic Data Gathering, Analysis and Retrieval system) is getting a long overdue upgrade, replacing its clunky interface with a more powerful successor dubbed IDEA ("Interactive Data Electronic Applications": According to the Washington Post :
JP Morgan estimates that when the books close on the third quarter, Lehman
could write down $4 billion of their debt related investment and other
assets. They also suggested that selling Neuberger and Berman, as has been
widely speculated, probably isn’t in the cards owing to rating agency
concerns. And naturally, JP Morgan is the latest to cut their loss estimates –
they went from an expected $0.35 profit to a $3.30 loss for Q3, and now expect a
$6.77 loss for the year (vs their $2.35 prior estimated loss). According
to Bloomberg:
Tags: Credit Crunch, JPM Chase, Lehman Brothers
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