$$$ CME completes $9.4bn Nymex deal [FT]
$$$ The Evolution of Portfolio’s Covers [Gawker]
$$$ Coldwell Banker broker Ray Schmitz, the guy who was standing outside Bear Stearns’ headquarters hawking apartments for any BS employees now looking to downgrade….
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Our item on Lehman has provoked sadness and not a little outrage by some of our readers who are both Lehman employees and investors. We’re accused of simply buying into the rumor fueled fire that is burning down Lehman brother’s share price today. In fact, at least one person familiar with the firm suspects a conspiracy behind the fall of Lehman’s shares today.
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We contacted the DealBreaker energy trading desk this afternoon for a report on the state of the market, but the celtic tigers who are supposed to watch that market for us were already out getting drunk for Saint Patrick’s Day.
We rifled through the desk anyway, and came up with a few notes on what we think was supposed to be a report on the state of the market today. “Still haunted by the sudden loss of liquidity when Enron collpased, the nation’s energy markets remained stable with normal volumes Monday but traders admitted they are waiting for bad news from the financial sector which rescued it post-Enron,” the note said. At least that’s what we think it said. It was hard to tell because the page was stained with beer.
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How easy would it be to chalk Jim Cramer’s horrifically bad guidance to a Mad Money emailer last Tuesday to keep his money in Bear Stearns up to Jim Cramer being just plain clueless? I don’t know, very? But let’s think about this for a sec. JC’s given what’s known in the business as “shitty investment advice” in the past, that’s an incontrovertible fact. But has he ever been this off? As far as we can tell, he’s not officially retarded—or Tim Sykes. So what was it then, that made him tell “Peter,” “No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear”? Once again, the answer lies with Eliot Spitzer’s love of whores. As you well know, JC was v…
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Angry Bear Stearns shareholders and class-action lawyers eager to represent them in the inevitable lawsuits of Bear’s sale to JP Morgan Chase are already sounding off against the deal. As soon as the deal was announced, a Bear Stearns investor asked JP Morgan executives “Why is this better for shareholders of Bear Stearns than a Chapter 11 filing?”
In the eyes of many on Wall Street, the answer is obvious. In the first place, they see Bear’s investors as risk-takers who deserve to bear the brunt of the collapse of the company. The enormous trading volume on Friday suggests that many of the investors of those currently holding shares of Bear Stearns bought the stock after news of trouble spread last week.
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The earnings yield for Nicholas Financial (NICK), based on trailing earnings, is about 17%. That’s about 20 times what a T-bill can get you….
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To my previous post. Nevertheless looking at current market I am becoming more and more bullish. Major indices are well of its latest high from October 2007. If this was entering point for bear market we are already 5 months in. FED has adjusted interest rates significantly and tomorrow we can see another sharp cut (0.75 or even 1%). We just enter quarter in which first cuts could be reflected in corporate earnings and activities.Market mood is very bad due to financials. But on the other side what worse could come.F…
Original Source
Lehman Brothers led the pack of financial stocks downward this morning, falling to six-year low as investors speculated that the firm might be vulnerable to a run-on-the bank similar to the one that brought down Bear Stearns. This worry continues despite Lehman having announced a new 3-year credit facility of $2 billion dollars and the Federal Reserve opening up the discount window to brokerages houses, a move many regard as specifically aimed at providing liquidity to avoid the fears that fueled the collapse of Bear.
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You know things are bad when Big Fucking Goon Of A Bank Citi is getting rid of businesses. You might even call it the “end of an era,” if you were an account exec with the ‘group prone to cliches and excessive exclamation points.
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Bear Stearns came last summer as a first on surface with problems related to risky loans. In fact issues with Bear’s hedge funds have started credit market turmoil. And these days this company is just history, traded for fraction of its price one year ago.Today company has earnings call. Also other big brokerages are releasing results this week like Goldman Sachs, Lehman Brothers and Morgan Stanley. What is interesting that up to now Bear Stearns hasn’t declared such a huge writedowns as e.g. Merryll Lynch did….
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Shareholders in Bear Stearns have been all but wiped out despite the rescue bid from the Federal Reserve and JP Morgan Chase, prompting comparisons to the collapse of Enron. CNBC has been airing videos of old interviews with former Enron CEO Ken Lay, which fell apart almost seven years ago destroying a great deal of shareholder value. Far more shareholder value, in fact, than at Bear Stearns.
Those comparisons are apt, Tom Kirkendall points out, but not for the reasons many would suspect. There’s a tendency among some—especially plaintiff lawyers and some in the media—to suspect criminal wrong-doing when a company collapses. How could so much value be destroyed without serious wrong-doing? But these suspicions are often wrong-headed, and may even be counter-productive if they encourage shareholders and regulators to concentrate on investigations or misguided regulations.
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Abby Joseph Cohen won’t make any more predictions for the S&P 500.
Abby Joseph Cohen, the most bullish investment strategist on Wall Street this year, will stop making Standard & Poor’s 500 Index forecasts for Goldman Sachs Group Inc.
She was succeeded in the role by David Kostin, Goldman’s U.S. investment strategist, spokesman Ed Canaday said in a telephone interview. Kostin today predicted the S&P 500 may fall 10 percent to 1,160 before rebounding to 1,380 by year’s end. Cohen, as chief investment strategist, last predicted the benchmark for American equities would end 2008 at 1,675, representing a 32 percent rally from its current level.
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The yield on the three-month T-bill is at a 50-year low.
“People are confused. They are in a reactive mode,” said Lou Brien, market strategist at DRW Trading in Chicago.
The yield on three-month T-bills, considered by economists as a “risk-free” benchmark return on U.S. assets, was last quoted at 0.84 percent, down 36 basis points from late Friday. It reached a low of 0.63 percent earlier.
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Today is a good time to slip out bad news.
Goldman Sachs to reveal $3bn hit
Goldman Sachs, Wall Street’s most powerful investment bank, will this week announce asset writedowns worth about $3bn (£1.5bn), its biggest jolt to date from the crisis threatening to engulf the world’s financial markets.
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Ballsy. Now, who’s going to one-up Scotch Tape man? Best prank wins the four shares of BSC Carney and I have between us, or cash equivalent.
Shares of MF Global Ltd dropped sharply in trading today, reaching a new low. The stock is at $7.26, down $10.09. The stock opened lower and continued to slide for the opening 45 minutes. Trading volume is way up.
Officially, there’s no news with respect to MF Global. Unofficially, rumors are circulating that a major European investment bank is rumored to have shut off MF Global with respect to trades in which MF Global acts as principal. Nothing has been confirmed.
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Bankers at JP Morgan Chase sounded very confident that their shareholders would approve the deal to buy Bear Stearns. Speaking on a conference call with analysts and investors, JP Morgan chief financial officer Michael Cavanaugh repeatedly told questioners that he believed the deal would benefit JP Morgan and meet with shareholder approval. Clearly the low price—and lack of other bidders who could secure the kind of fire-proof financing from the Federal Reserve—encouraged JP Morgan to do the deal. But the price to JP Morgan far exceeds the purchase price thanks to the guarantee extended to Bear Stearns counterparties and clients. Last night, JP Morgan estimated deal costs could reach $6 billion.
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