Weekend Headlines
Bloomberg:
- Goldman Sachs Group Inc.(GS) Chief Executive Officer Lloyd Blankfein, Citigroup Inc. CEO Vikram Pandit and television talk-show host Oprah Winfrey were among White House visitors during President Barack Obama’s first six months in office, records released by the administration show. The banking CEOs were joined by Microsoft Corp. executives Bill Gates and Steve Ballmer and Hollywood stars such as George Clooney among the 481 entries covering visitors from Jan. 20 to July 31. The most frequent visitor listed was Andrew Stern, president of the Service Employees International Union, who entered the White House grounds 22 times. The names disclosed yesterday are in response to requests about specific people and don’t include all of the thousands of people who have visited the White House during the period. Any member of the public can make such a request through the White House Web site. Other banking executives at that meeting and included on the logs were John Mack from Morgan Stanley, Kenneth Lewis from Bank of America Corp., Jamie Dimon from JPMorgan Chase & Co. and John Stumpf from Wells Fargo & Co. Maurice “Hank” Greenberg, the former chief executive of American International Group Inc., the insurer that was rescued by a $182.3 billion federal bailout, visited the White House three times. From the world’s largest oil company, Exxon Mobil Corp., CEO Rex Tillerson visited the White House on three occasions to meet with Obama, chief of staff Rahm Emanuel and the administration’s top energy adviser Carol Browner. David O’Reilly, the CEO of Chevron Corp., had four appointments at the White House to meet with Obama, Emanuel, Browner and economic adviser Lawrence Summers, according to the logs. Jeffrey Immelt, the chief executive of General Electric Co., was also listed on the logs, as was Procter & Gamble Co. President and CEO Robert McDonald. Billionaire investor George Soros is shown to have made four visits, as was former Vice President Al Gore. Along with Winfrey and Clooney, other celebrities who visited include actors Denzel Washington and Brad Pitt and tennis star Serena Williams.
- CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy to cut $10 billion in debt after the credit crunch dried up its funding and a
- Crude oil fell the most in a month after
- Warren Buffett’s Berkshire Hathaway Inc., the biggest shareholder in Coca-Cola Co. and Wells Fargo & Co., reduced its stake in credit-rating company Moody’s Corp(MCO) by 2.9 percent, the third cut in just over three months. Moody’s, whose founder John Moody created credit ratings in 1909, is suffering from reduced demand for debt analysis after the economic decline curbed fixed-income issuance. The firm and rival Standard & Poor’s have been criticized by regulators and lawmakers for not foreseeing the wave in homeowner defaults that brought down the value of securities once awarded gold-standard AAA credit grades.
- The chief executive officers of 28 of the largest U.S. banks have been summoned to meet with supervisors at Federal Reserve banks to discuss new rules on compensation, said a person familiar with the matter. The Fed this month said it will review the largest banks to ensure compensation doesn’t create incentives for the kinds of risky investments that brought the global financial system to the edge of collapse, prompting bailouts of firms including Bank of America Corp. and Citigroup Inc. By summoning bank chiefs, the Fed is sending a message that it wants the pay reviews taken seriously, said Kevin Petrasic, an attorney at
- Barney Frank, chairman of the U.S. House Financial Services Committee, reversed course on paying to unwind failed financial firms, splitting with the White House and setting up a possible fight with the biggest companies. Legislation Frank crafted with the Treasury Department and unveiled this week will be amended to impose a fee on financial institutions with more than $10 billion of assets before any firms fail, he said yesterday on Bloomberg Television’s “Political Capital with Al Hunt.” The Obama administration wants to collect fees after a company fails. “If you wait until after the fact, you would then have to go to the taxpayer first and get the assessment to repay it and some people are afraid that would never happen,” said Frank, a Democratic representative from
- Wheat’s steepest weekly drop since December may be just the start of a fourth-quarter slump as the biggest harvests on record turn this year into the worst for prices since 1990. Wheat will decline 13 percent to $4.30 a bushel in
Wall Street Journal:
- Republicans are preparing an alternative health-care bill to Democratic legislation, House Republican Leader John Boehner said, marking a shift in strategy as the full House is set to begin debate on the issue this week. Mr. Boehner said Sunday the Republican bill would extend health-insurance coverage to "millions" of Americans but wouldn't try to match the scope of the House Democratic bill unveiled last week. The Democratic legislation, if passed, is estimated to expand coverage to more than 30 million Americans now without insurance. Its estimated gross cost is $1.055 trillion over 10 years. "What we do is we try to make the current system work better," Mr. Boehner, of Ohio, said on CNN's "State of the Nation." He said the GOP bill would be less costly to taxpayers and involve less government intrusion into the health-care sector, instead taking "a step-by-step approach" to expanding coverage. It would, among other things, propose new limits on medical malpractice lawsuits and make it easier for individuals and small businesses to pool resources to purchase insurance. Mr. Boehner said the Republican bill would also include a proposal to provide grants to states that use "innovative" solutions to expand insurance. He pointed to states that have created special "high-risk pools" to provide insurance coverage to individuals with pre-existing conditions. He said the bill wouldn't raise taxes, nor mandate that individuals and businesses purchase insurance, as the Democratic legislation does.
- While President Barack Obama still faces stiff headwinds on a range of major legislation on his agenda, he has been signing into law a slew of smaller initiatives that had gathered dust on the Democratic wish list for years. Many of the bills had been blocked by Republicans who considered the measures unnecessary expansions of government or too costly. But facing Democratic majorities in Congress, conservatives are picking their battles and in many cases letting the legislation roll through.
- Ford Motor Co.'s(F) rank-and-file union members rejected a concessions agreement, leaving the auto maker at risk to higher costs compared with competitors Chrysler Group LLC and General Motors Co. Although some locals are still voting through Sunday, the United Auto Workers national leadership has accepted the defeat, said three union sources who asked not to be identified since they don't officially speak for the UAW. The leadership is now reviewing other options, these people said.
- Stimulus and the Jobless Recovery. Jobs ‘created or saved’ is meaningless. What matters is net job gain or loss, and that means the unemployment rate.
- Tonight the Inspector General of the Securities & Exchange Commission gives us Bernie Madoff in his own words — A jailhouse interview that Madoff granted to the SEC’s watchdog during his stay at
- Goldman Sachs Group Inc.(GS) is in talks to buy millions of dollars of tax credits from government-controlled mortgage giant Fannie Mae, but the potential deal is running into opposition from the U.S. Treasury, which could block the deal. A sale would bring some needed financial respite to Fannie Mae. But the administration is leery about approving a deal that would help Goldman reduce its tax bill, given the animus held by many lawmakers toward big Wall Street firms in general and Goldman in particular.
- The Worst Bill Ever. Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all. Speaker Nancy Pelosi has reportedly told fellow Democrats that she's prepared to lose seats in 2010 if that's what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a "critical milestone," may well be the worst piece of post-New Deal legislation ever introduced. In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics. Yet at this point, Democrats have dumped any pretense of genuine bipartisan "reform" and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be "universal coverage." The result will be destructive on every level—for the health-care system, for the country's fiscal condition, and ultimately for American freedom and prosperity.
- Stung by the financial crisis, companies are holding more cash -- and a greater percentage of assets in cash -- than at any time in the past 40 years. In the second quarter, the 500 largest nonfinancial
CNBC.com:
- Move over
- What to Expect From This Week’s Fed Meeting.
Forbes:
- John Martin is Chief Executive of Gilead Sciences(GILD), a drug company that has helped to transform HIV from a death sentence into a chronic disease in the developed world. Some 80% of Gilead's $6 billion in revenue comes from drugs to treat HIV, the virus that causes AIDS. Forbes met up with Martin to discuss managing success, maintaining productivity and what lies ahead.
NY Times:
- Big Investors Grow Wary of Hedge Funds and Private Equity.
- Even as Citigroup’s stock has soared from a low of $1.02 to its current $4.09 — and the company has eked out a $101 million profit in the third quarter along the way — it’s still unclear whether it can climb out of the hole that its former leaders dug before and during the mortgage mania. If Citigroup remains stuck, taxpayers will be on the hook for outsize losses. Citigroup remains a sprawling, complex enterprise, with 200 million customer accounts and operations in more than 100 countries. And when people talk about institutions that have grown so large and entwined in the economy that regulators have deemed them too big to be allowed to fail, Citigroup is the premier example.
The Business Insider:
- Why
NY Post:
- Federal agents this week are zeroing in on a $20 million Florida beachfront mansion owned by a hedge-fund titan who, law enforcement authorities believe, financed a lavish lifestyle -- complete with two corporate jets, a helicopter and the posh seaside home -- with cash he diverted from JPMorgan Chase, Barclays, PNB Paribas and other large global banks. The fraud, which went on for years, began to unravel this spring after banks, on heightened alert for suspicious investors in the wake of the arrest of Bernie Madoff, re-examined the hedge-fund trader's moves and started to withdraw some money, sources said. The hedge-fund titan, Helmut Kiener, was arrested in his native
CNNMoney.com:
- Mac share grew after Windows 7 debut. Microsoft(MSFT) has not halted Apple's(AAPL) momentum, according to Net Applications' October report.
Business Week:
- Golf courses across the nation are in crisis as memberships and money dwindle.
zerohedge:
- Much speculation was done over the past year about the nature of the hedges Goldman Sachs has done in the housing securities. While there was no certain proof of Goldman Sachs misleading its investors many believed, among them ZeroHedge, that the nature of Goldman Sachs hedges was basically illegal and fraudulent, given the two tier treatment of the housing securities by Goldman Sachs. In the recent report published by McClatchy some new and interesting details concerning those hedges are being brought into the spotlight. We hope that the regulatory bodies will perform their task and launch an investigation about the nature of those hedges. Also, if Goldman Sachs was hedged via the CDS contracts underwritten by AIGFP, the possible default of the insurance giant would, almost certainly, issue a lethal blow to Goldman Sachs itself. While those hedges are in no way illegal by themselves, the way and the time when Goldman was hedging its housing exposure is, to say the least, suspicious. A detailed view is presented in McClatchy article published today, and we hope that the article will bring the much needed attention and finally result in an investigation into those hedging practices done by Goldman Sachs. You can read the whole article here:
- North American Credit Default Swap Index Heatmap(Month to Date).
LA Times:
- Reporting from
- In the 1980s and '90s, Goldman Sachs Group ran a staid residential mortgage operation that simply bought and sold loans. But in 2001, the elite investment bank leaped aggressively into the burgeoning subprime securities market that was becoming a fountain of money for its rivals. That year, Goldman Sachs sold $8.7 billion in subprime bonds, a third of its business. In 2006 and 2007, it peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages. Today, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are dealing with huge losses. A five-month investigation by McClatchy Washington Bureau correspondent Greg Gordon shows how Goldman Sachs sold these securities to unsuspecting buyers, used offshore tax havens to market them to financial institutions worldwide and benefited from key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive officer whose staff at Treasury included several other Goldman alumni. MCT will move the results of this investigation as a four-part series with photos and graphics. The first part and a sidebar are embargoed for Sunday, Nov. 1, and parts two through four are embargoed for Monday, Nov. 2, through Wednesday, Nov. 4. If you have questions about this series, please call MCT Newsfeatures Editor Carol Johnson at 202-383-6148 or e-mail cjohnson@mctinfoservices.com.
Politico:
- Putting his own political capital on the line, President Obama headlined a pair of get-out-the-vote rallies for New Jersey Gov. Jon Corzine Sunday, two days before the election. Corzine, deadlocked in the polls with Republican Chris Christie, is hoping Obama’s star-power will rouse this state’s Democratic base while the White House is wagering that their 11th-hour boost could put the unpopular incumbent over the top and lessen attention on the party’s anticipated loss in the Virginia gubernatorial contest. At afternoon rallies here and earlier in Camden, New Jersey, Obama delivered similar speeches, urging large, raucous crowds to not only re-elect the unpopular Corzine but to work for him with the same fervor they did in last year’s presidential race. “We will not lose this election if all of you are as committed as you were last year,” Obama told about 11,000 sign-waving Democrats in a
Rasmussen Reports:
- When tracking President Obama’s job approval on a daily basis, people sometimes get so caught up in the day-to-day fluctuations that they miss the bigger picture. To look at the longer-term trends, Rasmussen Reports compiles the numbers on a full-month basis, and the results can be seen in the graphics below. The president’s ratings dipped slightly in October after stabilizing in September. In October, for the third straight month, 39% Strongly Disapproved of the president’s performance. The number who Strongly Approved fell two percentage points to 29%, the president’s lowest full-month total to date. That leads to a Presidential Approval Index rating of -10, also a new low for Obama. Also in October, the president’s total approval slipped a point to 48%. His total disapproval remained stable at 51%. (more below) During October, 55% of Democrats Strongly Approved of the president’s performance while 64% of Republicans Strongly Disapproved. Among those not affiliated with either major party, 21% offered Strong Approval while 44% Strongly Disapproved.
The
- New Jersey's gubernatorial race, winding down to Tuesday's election after a consistently brutal campaign, is a dead heat between Democratic Gov. Corzine and Republican Christopher J. Christie, in a state where no Republican has won a statewide race in a dozen years. "This should have been a race where no Republican in his right mind would have taken [Corzine] on," said Joseph Marbach, a political scientist at Seton Hall University. Corzine has the advantages of incumbency and vast personal wealth; he might pump in $30 million before the campaign is over. He also enjoys an almost 2-1 Democratic registration edge over Republicans. But Christie has given Corzine a vigorous challenge, fighting him in urban, Democratic strongholds and at kitchen tables in middle-class suburbia. The gubernatorial race has drawn national attention because it is one of only two this year, and some see it as a referendum on President Obama and his Democratic Party. And looming over it all has been a sour economy. "It's close because people are angry. They're frustrated. They are upset, and in the American democratic system, we allow those expressions of public frustration to be vented through elections,"
San Francisco Chronicle:
- Atlantic City teeters on edge.
- President Obama has asked the Pentagon's top generals to provide him with more options for troop levels in Afghanistan, two U.S. officials said late Friday, with one adding that some of the alternatives would allow Obama to send fewer new troops than the roughly 40,000 requested by his top commander. The military chiefs have been largely supportive of a resource request by Gen. Stanley A. McChrystal, the top U.S. and NATO commander in Afghanistan, that would by one Pentagon estimate require the deployment of 44,000 additional troops. But opinion among members of Obama's national security team is divided, and he now appears to be seeking a compromise solution that would satisfy both his military and civilian advisers.
- Northern Trust (NTRS) has been named the Best Overall Hedge Fund Administrator by HFMWeek in the magazine's inaugural U.S. Service Provider Awards. The awards recognize companies that have outperformed their peers during 2008-2009 and demonstrated financial progress, growth and genuine innovation.
USAToday:
- Retail gasoline prices chugged higher Friday to a new peak for the year, forcing consumers to dig deeper into already-thin wallets to pay for fuel. At the same time, natural gas prices also were moving up again and have now climbed 16% in the past two months — just in time for furnace season to kick in. The worst part: Supplies of oil and gas are plentiful. In fact, storage points for gas are so jammed, producers are running out of places to put it and crude supplies are well above average levels. Gasoline prices are now up 17 straight days after climbing 0.4 cents overnight to $2.695 a gallon, according to auto club AAA, Wright Express and Oil Price Information Services. That is the highest price since Oct. 26, 2008. Prices are up 5.9 cents from a week ago and 14.8 cents from a year ago. The average retail price for gas was $1.686 a gallon in December. Today's price will tack about $50 a month on to the monthly gas cost for the typical customer compared with then. It comes at a time when unemployment is at a 26-year high. "It's a wet blanket on the consumer. It's something visible you see," said economist Ken Mayland of ClearView Economics. Oil prices that skyrocketed to $147 a barrel a barrel in July 2008 helped push the economy into recession to begin with, he said. "Can high oil prices shut down the economy? Well, clearly the answer is yes," he said.
Reuters:
- Democratic leaders in the U.S. House of Representatives unveiled a bill on Thursday to reform the
Senate Democratic leaders are also working on their version of a healthcare overhaul. Here are the likely steps to come as the bill moves through Congress:
- Fertilizer maker CF Industries Holdings Inc (CF), which has been pursuing smaller rival Terra Industries (TRA) for months, once again changed its bid, offering $40.61 per share in cash and stock. CF Industries said on Sunday it is offering to acquire Terra for $32 in cash and 0.1034 of a share of its common stock for each Terra share, including a $7.50 special dividend declared by Terra. The $40.61 per share number is based on CF's Friday closing price and represents a 28 percent premium to Terra's Friday closing price, the company said in a statement. CF Industries, which is itself fending off a hostile takeover bid from Agrium Inc (AGU), in August sweetened its offer for Terra by 22 percent from its March 23 offer of $30.50 per share.
Financial Times:
- Palestinian officials accused Hillary Clinton, US secretary of state, of backtracking on pledges by the Obama administration after she endorsed the Israeli prime minister’s stance that a renewal of talks should not hinge on a settlement freeze. During a visit to
- The value of shares traded through independently owned “dark pools” of liquidity in Europe has jumped almost fivefold since the start of the year in a sign that investors are shrugging off increasing regulatory scrutiny of these off-exchange trading venues. Dark pools are growing because it has become increasingly difficult for those wishing to carry out large orders – typically asset managers – to transact on traditional exchanges and other platforms, as the growth of algorithmic trading has sliced orders into ever-smaller sizes on public order books of exchanges. This has forced larger orders to find alternative ways to be fulfilled. Miranda Mizen, author of the Tabb report, said investors were increasingly willing to pay higher fees typically levied by dark pools in order to be more sure of getting their large orders fulfilled.
TimesOnline:
- The Galleon Group insider trading scandal continues to grip New York two weeks after fraud and conspiracy charges were brought against Raj Rajaratnam, co-founder and one of America’s richest men, and five others. Prosecutors allege that the defendants generated more than $25 million in illicit gains by exchanging privileged information about quarterly earnings and takeover activities at a number of companies, including Hilton Hotels and Google. Since the arrests, the media has been fed further allegations on a daily basis about
- Swine flu is “spreading rapidly” across
Army Radio:
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Weekend Recommendations
Barron's:
- Made positive comments on (PGR) and (RY).
- Made negative comments on (GOOG).
Citigroup:
- Reiterated Buy on (CLF), raised estimates, boosted target to $43.
- Upgraded (MOT) to Buy, target $10.50.
- Upgraded (LEAP) to Buy, target $20.
Night Trading
Asian indices are -1.75% to -.50% on avg.
Asia Ex-Japan Inv Grade CDS Index 119.50 +12.50 basis points.
S&P 500 futures +.42%.
NASDAQ 100 futures +.17%.
Morning Preview
BNO Breaking Global News of Note
Yahoo Most Popular Biz Stories
MarketWatch Pre-market Commentary
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar
Who’s Speaking?
Upgrades/Downgrades
Politico Headlines
Rasmussen Reports Polling
Earnings of Note
Company/Estimate
- (ASF)/.22
- (OSG)/-1.09
- (HUM)/1.79
- (F)/-.20
- (APC)/-.31
- (CHK)/.65
- (PPS)/.25
- (VMC)/.37
- (L)/.76
- (SYY)/.45
- (CNA)/.63
- (JEC)/.68
- (CLX)/.97
Upcoming Splits
- None of note
Economic Releases
10:00 am EST
-.ISM Manufacturing for October is estimated to rise to 53.0 versus 52.6 in September.
- ISM Prices Paid for October is estimated to rise to 64.0 versus 63.5 in September.
- Pending Home Sales for September are estimated unch. versus a 6.4% gain in August.
- Construction Spending for September is estimated to fall -.2% versus a +.8% gain in August.
Other Potential Market Movers
- The Fed’s Tarullo speaking, Wedbush Morgan Clean Tech Conference, (NITE) analyst meeting, (ARAY) analyst meeting and the (AVID) investor day could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial stocks in the region. I expect
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