• Political Interference in Bank Bailout Decisions
    Posted by on January 22nd, 2009 at 11:10 am

    I’m shocked! Absolutely shocked something like this could happen:

    Troubled OneUnited Bank in Boston didn’t look much like a candidate for aid from the Treasury Department’s bank bailout fund last fall.
    The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives’ use.
    Nonetheless, in December OneUnited got a $12 million injection from the Treasury’s Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.
    Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.

    The WSJ has a nice graphic showing the distribution of TARP funds.

  • Parsons Named Chairman of Citigroup
    Posted by on January 21st, 2009 at 5:51 pm

    Remember George W. Bush? Me neither, but once he said that “Wall Street got drunk.”
    Few folks got more boozed than the kids down at Citigroup (C). The good news is that Dick Parsons has been named as their new chairman.
    The irony, of course, is that Parsons is a vinter. No seriously. Naturally, here’s the family crest.

  • The House of Commons Is a Tough Crowd
    Posted by on January 21st, 2009 at 5:23 pm


    (Via: Paul K)

  • This Day in Gold History
    Posted by on January 21st, 2009 at 5:20 pm

    From This Day in Market History:

    On January 21, 1974, gold hit a record $161.31 and silver hit a record $3.97 an ounce in London. It was still illegal for Americans to own the metal, until it was legalized on the last day of 1974.
    On Monday, January 21, 1980, gold hit $850 an ounce, a level it would not exceed for the next 28 years. Gold was over $800 for only one day back then, and it was over $700 for only three or four days. This daily spike to $850 was gold’s one-day bull market peak, a typical “spike” peak.

  • Apple’s Earnings
    Posted by on January 21st, 2009 at 5:17 pm

    Here’s a quick follow-up on my previous post. Apple’s Q4 net came in at $1.78 a share. Sheesh, their guidance is a joke. I’ve always known it’s a joke, but come on.
    Apple said to expect a range of $1.06 to $1.35. That’s not even in the ballpark. Sorry, guys. You got to have some credibility here.

    For the quarter ended Dec. 27, traditionally the best of the year because it includes the holiday season, the maker of computers and electronic devices reported net income of $1.61 billion, or $1.78 a share, up from $1.58 billion, or $1.76 a share, a year earlier. Excluding items, earnings were $2.56 a share.
    Revenue rose 5.8% to $10.17 billion, with 54% of sales in the U.S.
    In October, the iPod and iPhone maker predicted per-share earnings of $1.06 to $1.35 on revenue of $9 billion to $10 billion. Analysts’ latest estimates were for per-share earnings of $1.39 on revenue of $9.75 billion, according to a poll by Thomson Reuters. Gross margin was flat at 34.7%.
    Apple sold 2.5 million Macintosh computers in the latest quarter, up 9% from a year earlier and in line with estimates. The company sold 22.7 million iPod media players, up 3% and far exceeding Wall Street’s expectations.
    It also sold 4.4 million iPhones, 88% more than a year earlier but slightly less that Wall Street expected. The iPhone was launched in the U.S. in June 2007, the second-generation iPhone 3G went on sale last July, and sales started in about 30 more countries last fall. Last last month, Wal-Mart Stores Inc. said it will begin selling the iPhone 3G in a partnership that could boost Apple’s effort to gain share in the cellphone business.

    The company said to expect Q2 EPS of 90 cents to $1. Yeah, right.

  • TARP Application
    Posted by on January 21st, 2009 at 2:45 pm

    Just in case anybody needs this.

  • Jobs that Americans Won’t Do
    Posted by on January 21st, 2009 at 1:57 pm

    Mexican billionaire invests in the New York Times:

    A Latin American billionaire looks to expand his empire in the United States in a deal that could make him the largest shareholder of The New York Times Co.
    The $250 million investment by Mexican tycoon Carlos Slim could provide some synergies with his telecommunications holdings in Latin America, analysts say.
    Perhaps more importantly, Slim, reputed to be the world’s second-richest man, would gain the prestige of owning one of the world’s best-known and most influential newspapers.
    “By having a stake in the New York Times, he’s basically projecting himself as a powerbroker in this country, regardless of how his investment does,” said Armand Peschard-Sverdrup, a senior associate of the Center For Strategic and International Studies, a Washington think tank.

  • Anyone Remember What Interest Rates Were?
    Posted by on January 21st, 2009 at 1:49 pm

    David Merkel takes a look at the dollar’s role in the banking crisis. Since the dollar is the reserve currency of the world, and by definition there can only be one of those, it’s doing much better than other currencies out there. David cites the British pound which has much in common with the dollar, but since it’s not the global powerhouse, it’s getting left behind.
    The Canadians just lowered rates. The EU is bringing down rates, though they’re still above most everyone else (which may lead to some intra-continental strife). The Bank of England now has rates at 300-year lows.
    In looking at alternatives to the dollar, David asks: “External commodity-based currencies? None that I know of; few governments want to limit their power by tying their hands on monetary policy.”
    He’s right. I do wonder why gold continues to be so strong against the dollar. It made more sense before the global economy fell apart, but I’m not so sure now. Is gold ready to plunge, or do gold investors think inflation is about to come roaring back. I suspect the former, but I’m not willing to make that bet.

  • Arthur Nadel Touted as America’s Top Ranked Money Manager
    Posted by on January 21st, 2009 at 11:50 am

    Before Arthur Nadel disappeared, along with $350 million of his clients money, he was touted as “America’s Top Ranked Money Manager” in a 2003 issue of the Wall Street Digest

    The FBI’s Tampa office opened an investigation into Nadel on Tuesday, launching a search for the 76-year-old former New York jazz pianist whose disappearance has drawn parallels to last month’s arrest of former Nasdaq Stock Market chairman Bernard Madoff.
    Like Madoff’s funds, Nadel’s investments generated returns regardless of whether markets rose or fell. Hagar estimates he saw a total return of about 70 percent over seven years.
    Madoff allegedly confessed to his sons that his firm’s investment-advisory business was “basically a giant Ponzi scheme” in which money from new investors is used to pay distributions and redemptions to existing investors.
    A visit to the offices of Nadel’s company, Scoop Management Inc, in Sarasota on Tuesday found the doors locked and lights out. Through a window, the office looked orderly with papers stacked as if it were just closed for the weekend.
    “They’re out of business,” a man said as he walked by.
    At Nadel’s home in a quiet, upscale neighborhood in Sarasota, his daughter Alex came outside to address reporters but would only say, “We can’t say anything now.”
    Sarasota Police Capt. William Spitler said detectives were trying to determine the total amount of money that might be missing, based on calls from investors. “It’s alarming. It’s hundreds of millions of dollars for sure,” Spitler said.

  • The BIX Imploads
    Posted by on January 21st, 2009 at 11:40 am

    Good golly. The Bank Index is on life support:
    yhoo012109.png