Observer » Morning Roundup

Morning Roundup: Tis the Season to Give Billions of Dollars

Mike Taylor — Thu, 09 Dec 2010 13:23:57 -0400

Mark Zuckerberg, Steve Case, Carl Icahn and others have vowed to give most of their money away to charity, in a pact known as the "Giving Pledge." [WSJ]
Morgan Stanley CEO James Gorman is curtailing pay packages for high level employees -- because he's listening to his shareholders. [NYT]
Citigroup and Bank of America have joined the enormous list of institutions and individuals to fall in the crosshairs of Irving Picard, the Robin Hood of Bernie Madoff money. [Bloomberg]
An uncle and a nephew are in trouble with the SEC after using the "Blue Horseshoe" line from the 1987 movie Wall Street to conduct insider trading. An obvious move, considering Wall Street is about insider trading. [Reuters]
Democrat Congressman Anthony Weiner is just simply so mad at President Obama for compromising on the Bush tax cuts. [AP]

mtaylor [at] observer.com | @mbrookstaylor

Morning Roundup: Return of the Golden Parachute

Mike Taylor — Tue, 30 Nov 2010 12:56:04 -0400

According to one powerful shareholder group, Wall Street firms still tie executive pay too closely with the pursuit of short-term profit and fail to penalize executives for thoroughly gumming up their companies. In fact, this situation has only gotten worse since 2007, which wasn't exactly a banner year for corporate responsibility. [WSJ]
The Justice Minister of Ireland is accusing the European Central Bank of trying to force his country to take a bailout. He also believes the ECB is now putting the screws to Portugal. [Bloomberg]
In October, increasingly combatitive and off-kilter former car czar Steven Rattner dramatically refused to pay $20 million to Attorney General Andrew Cuomo. The Attorney General's office has since responded by seeking $26 million against Rattner in a big pension-kickback investigation. [NYT]
The trial of Sergey Aleynikov, who stands accused of stealing a high-speed trading program from Goldman Sachs, begins today. [Reuters]
General Motors still owes Americans $2.1 billion in preferred shares, plus the common-stock stake it's been offloading to private investors. [TheStreet]

mtaylor [at] observer.com | @mbrookstaylor

Morning Roundup: Bank Dividends Are Coming Back!

Mike Taylor — Fri, 12 Nov 2010 14:41:20 -0400

As expected, today's decision by the G20 group of economic powers did not do much to fix the problem of global trade imbalances. [NYT]
OneWest, a Frankenstein bank made of the sewn-together appendages of massive credit-crisis failure IndyMac, has bought a $1.4 billion real-estate loan portfolio from Citigroup. [WSJ]
The Shanghai Composite Index dropped 5.2 percent -- which is a lot -- on fears of rising interest rates. [MarketWatch]
At least one person thinks the May 6 Flash Crash marks occasion to reconsider the role finance plays in the U.S. economic ecosystem. [Bloomberg]
The Federal Reserve is getting ready to tell banks how much they're allowed to raise dividends paid to stockholders. Because in America, a government institution tells the financial sector how to conduct its affairs. [Reuters]

mtaylor [at] observer.com | @mbrookstaylor

Morning Roundup: Bank Breakup Rules Coming Soon

Mike Taylor — Fri, 08 Oct 2010 12:47:21 -0400

Breaking up is hard to do, especially when the separation involves components of systemically important financial institutions. The FDIC is expected to offer a helping hand today by outlining new rules that would change the haircut taken by creditors to giant firms in the event of a failure. [WSJ]
'80s retro fever is back in the form of a resurging junk-bond market. [NYT]
Killjoy St. Louis Fed president James Bullard says that the U.S. economy is probably not headed for another recession, and so he refuses to guarantee that the Fed will provide more monetary stimulus. [Bloomberg]
The big September employment report is in! The Bureau of Labor Statistics says the economy lost 95,000 jobs last month, and the unemployment rate remains at an impressively sickly 9.6 percent. [Department of Labor]
Some people won some Nobel Prizes, but the economics accolades won't be awarded until Monday. Sit tight, nerds. [AP]

mtaylor@observer.com

Twitter: @mbrookstaylor

Morning Roundup: PIMCO’s Ideas Are Idiotic

Mike Taylor — Tue, 28 Sep 2010 12:04:46 -0400

President Obama said on Monday that the U.S. is not in a jobless economic recovery. Which is true, because to have a jobless economic recovery you first need to have an economic recovery. [Reuters]
A Government Accountability Office report shows that women accounted for 40 percent of management positions in 2007, up from 39 percent in 2000 -- but below 50 percent, which is what one would presumably hope for. [NYT]
Billionaire Ken Fisher thinks the 2010s will be just as good economically as the 1990s, calling PIMCO's concept of the "new normal" "idiotic." [Bloomberg]
Endo Pharmaceuticals, which makes both branded and generic drugs, has agreed to buy Qualitest Pharmaceuticals, which makes generic drugs. [Press Release]
The British economy grew by 1.2 percent from the first quarter to the second quarter. It grew by 1.7 percent from the second quarter of 2009 to the second quarter of 2010. [AFP]

Morning Roundup: Merger Mania Monday!

Mike Taylor — Mon, 27 Sep 2010 12:11:38 -0400

Southwest Airlines has inked a deal to buy AirTran. Southwest CEO Gary Kelly said that both companies employ "dedicated people with kindred Warrior Spirits," which in our opinion is just kind of a weird thing to say when announcing a merger. [Press Release]
Other deals: European automakers Saab and BMW should be announcing a technology-cooperation agreement. Unilever (Vaseline, Dove Soap) agreed to buy Alberto Culver (TRESemme, VO5). Wal-Mart offered to take over South African retailer Massmart, a company we have to admire for its honest branding. Oh yeah, and Hyundai ("Like Sunday") wants to buy a struggling construction company.
Citigroup may pay former UBS energy banker Stephen Trauber $30 million over three years as he joins up with Citi, a deal that would make him one of the highest-paid employees at his new home. President Obama's "pay czar," Kenneth Feinberg, is no longer overseeing Citigroup's pay practices although the U.S. government continues to own roughly 18 percent of the bank. [WSJ]
Back in 2006, ratings agencies ignored evidence suggesting many of the mortgages being packaged into tradable securities were high-risk stink bombs. [NYT]
Nestle, whose food offerings includ Butterfinger candy bars, DiGiorno pizza, Hot Pockets microwaveable heart bombs and Pixy Stix (sugar in a tube), plans to develop products that will treat diabetes, obesity, heart disease and Alzheimer's. [Bloomberg]

Thursday Morning Roundup: You Can't Double Dip If You Got No More Chips

Mike Taylor — Thu, 02 Sep 2010 12:02:26 -0400

• Talk of a double-dip recession is overblown, says one economist, for the simple reason that our beaten-up economy is close to rock bottom. [Bloomberg]

• The European Central Bank will probably continue to prop up basket-case banks in Ireland, Spain and Greece until early 2011. [Reuters]

• At the top of the bill for day two of the Financial Crisis Inquiry Commission's "Too Big to Fail" inquiry panel is none other than Federal Reserve Chairman Ben Bernanke. This is all on the FCIC's website, but the Associated Press story has a rarely seen file photo of Bernanke wearing a classy powder-blue polo shirt and is therefore worth a look. [AP]

• Attempting to explain why her initial peak-unemployment forecast of 8 percent was "so far off," departing Council of Economic Advisors chair Christina Romer said that economists remain mystified and surprised that businesses hemorrhaged so many jobs in the wake of the financial panic. It was an awkward exit interview. [NYT]

• After nearly a year of making KB Home incredibly nervous, the Securities and Exchange Commission has decided not to take action against the homebuilder. Now KB can go back to filling America's insatiable demand for hous -- oh, wait, never mind. [WSJ]

Thursday Morning Roundup: Just the Facts, Bam

Mike Taylor — Thu, 26 Aug 2010 13:11:37 -0400

• When checked for factual accuracy, the Obama administration's assessment of a $100 billion government investment in technology appears overly optimistic. [AP]

•Senator Dick Lugar and others are mad at President Obama because he hasn't even named an ambassador to the Association of Southeast Asian Nations trade group, let alone sent one to yesterday's meeting. [Bloomberg]

• India, which is one of several countries whose intelligence community isn't smart enough to decrypt messages sent on BlackBerries, is holding an emergency meeting about the Research In Motion device. A BlackBerry ban is in the works if RIM doesn't start cooperating. [Reuters]

• BP, the company best known for destroying the Gulf of Mexico, is backing off plans to drill in the Arctic Sea, much to the relief of local polar bears and seals. [AFP]

• Diageo, whom can all thank for Smirnoff, Guinness, Jose Cuervo and other coping mechanisms, saw full-year profits rise 1.5 percent, but North American sales were down on pervasive unwillingness to tuck in your skirt and take another shot. [MarketWatch]

Wednesday Morning Roundup: Central Bankers' Retreat Will Be No Picnic

Mike Taylor — Wed, 25 Aug 2010 14:23:21 -0400

• The fact that the global economy has sputtered this summer will hopefully weigh on the minds of the world's central bankers as they hold their annual summit this week in beautiful Jackson Hole, Wyoming. [MarketWatch]

• Ireland, the country, is not at all happy that Standard & Poor's cut its credit rating, partly because nobody likes to be called a deadbeat and partly because Ireland's borrowing costs are rising as it tries to bail out its debt-addled banks. [Reuters]

• A new SEC rule expected to take effect today would make it easier for shareholders to hold CEOs accountable. CEOs are worried that the rule change is actually part of a broad conspiracy by the labor movement and other special interest groups to permanently shackle American businesses. [Financial Times]

• Automakers are starting to recall faulty and unsafe cars of their own volition, rather than wait for the government to shame them into doing so. [New York Times]

• "Circuit breakers" went off at the London Stock Exchange Monday, averting a potential "flash crash" caused by a so-called "fat-finger trade" on shares in five British companies. Sadly, the circuit-breakers were unable to prevent an unusual spike in the deployment of trading-floor jargon and scare quotes. [WSJ]

Tuesday Morning Roundup

Mike Taylor — Tue, 24 Aug 2010 13:18:51 -0400

• At their last meeting, the monetary-policy wonks Federal Reserve got into a huge fight about whether to print more play money (U.S. dollars) or to just hope the economy isn't plunging further into despair. [WSJ]

• Delinquent loans, which are a great way to lose a lot of money, are up at Citigroup's CitiFinancial. That's bad for CEO Vikram Pandit, who's trying to restructure and sell the division for well over a year now. [Bloomberg]

• A spate of merger activity in August won't help our horrible jobs market, and is probably more of a coincidence than a sign the U.S. economy is getting healthier. [New York Times]

• Germany has confirmed that in the second quarter, its economy grew at its fastest pace since the parting of the Iron Curtain. What's the opposite of schadenfreude? Oh yeah, envy. [MarketWatch]

• Should the government have a say in how many boatloads of cash CEOs take home every year? Readers of The Economist are roughly split on the issue. [Economist]