• Rule Change Could Boost Wall Street’s Profits
    Posted by on June 12th, 2007 at 6:30 am

    Wall Street firms could see a big boost to their bottom lines this year thanks to a rule change. An SEC regulation passed in 2004 will allowed firms to set aside less money in reserve so Wall Street can better compete with financial firms in other countries.

    Investors are underestimating the benefits of “alternative net capital requirements,” a regulation passed by the Securities and Exchange Commission in 2004 to keep Wall Street firms competitive with their counterparts in the European Union, said Brad Hintz, an analyst at New York-based Sanford C. Bernstein & Co. Profits will get a boost in the second half of 2007, depending on how fast the five firms shift their capital, he said. U.S. commercial banks are receiving a similar break from the Basel II agreement, set to take effect as early as next year.
    “They’re all increasing capital at risk because the new capital requirements allow it,” said Hintz, a former chief financial officer at Lehman. “As the transition to the new capital rules is completed, they’ll have more room to do so, and that will help their profit.”

  • Just in Case You’re Feeling Sorry for Paris
    Posted by on June 11th, 2007 at 3:12 pm

    According to the chart, she’s doing just fine.
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    Hilton‘s (HLT) stock fell in half after 9/11. I remember how people said that it will hurt travel companies. In retrospective, it had almost no impact and the sell-off was really a great time to buy.

  • Chinese Stocks 65% Overvalued
    Posted by on June 11th, 2007 at 1:10 pm

    Bloomberg notes that the Chinese stock market’s benchmarket CSI 300 “would have to drop 65 percent to match the average multiple for Chinese shares traded in Singapore.”

    On the mainland, investors pay 147 times earnings to own Fortune Ng Fung Food (Hebei) Co. Hong Kong-listed China Yurun Food Group Ltd. trades at 26.7 times profit. And in Singapore, People’s Food Holdings Ltd. is valued at 11.7 times earnings.
    “There is not that big a difference in their businesses, so there shouldn’t be such a difference in their prospects and valuations,” says Greg Lesko, who helps manage $900 million at New York-based hedge fund Deltec Asset Management.

  • This Just In
    Posted by on June 11th, 2007 at 10:23 am

    YouTube’s Chen: Better Content Needed

  • NYT Hearts Lloyd
    Posted by on June 11th, 2007 at 9:48 am

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    Jenny Anderson in the Sunday NYT writes a 2,500-word love letter to Lloyd Blankfein:

    Lloyd Blankfein’s makeover from frumpy gold salesman to chief executive has a bit of a reality-TV feel to it. Less than a decade ago, he could be seen in shorts at a golf outing, tube socks stretched to his knees, 50 pounds heavier, and toting his BlackBerry in the same plastic bag as his bagel with cream cheese. Today, he dons navy pinstripes and a power tie and, having just returned from a business trip to Turkey, enjoys conversing about the Ottoman Empire.
    Even with careful grooming, Mr. Blankfein remains a far cry from central casting’s idea of a chief executive.
    At 5 foot 8, he is balding, has eyes more mischievous than intense and blankets himself in a shield of one-liners. Why did he shed the weight and shave the beard? “I wasn’t going to make myself taller.” How does he feel about the markets? “I haven’t felt this good since July 1998” (a month before Wall Street went into a tailspin after the Russian ruble collapsed). And to a photographer shooting his portrait? “If I’d known you were coming, I’d have had my hair done.”

    Sheesh, get a room!

  • JoS. A. Bank’s Earnings
    Posted by on June 11th, 2007 at 9:34 am

    I may have gotten a lot of things wrong this year, but I’m happy to say that JoS. A. Bank (JOSB) was a great addition to our Buy List. The company just reported terrific earnings of 45 cents a share.
    The stock is already up 45.6% this year and will probably add some more today.

  • Sorry Ladies
    Posted by on June 11th, 2007 at 9:17 am

    DealBook‘s Andrew Ross Sorkin is off the market. My congratulations to the happy couple.
    (Hat Tip: DealBreaker)

  • Dick Parsons on Wal-Mart
    Posted by on June 8th, 2007 at 1:45 pm

    AdAge via Drudge:

    “It will be a cold day in hell that I would actually get up from my apartment to go to the video store,” Mr. Parsons added. “I’ve never actually been in a Wal-Mart.”

  • Defending Bed Bath & Beyond
    Posted by on June 8th, 2007 at 10:58 am

    I’m not the only one who still likes Bed Bath & Beyond (BBBY). Here are some other views:

    SunTrust Robinson Humphrey analyst David Magee stood by his “Buy” rating and said the company will be one of the first to gain when the housing market shows signs of a bottom.
    Magee also said the lowered expectations, while disappointing, are not that bad and its balance sheet remains strong. Magee also expects the company will use its $1 billion share repurchase program to enhance shareholder value.
    “We had actually expected the market reaction to the news might be worse, and while we do believe there could be some additional near-term volatility, (we) don’t anticipate significant further declines in the multiple,” Magee wrote in a client note.
    Meanwhile, CIBC World Markets Corp. Vivian Ma said a decline in the share price presents a buying opportunity. She remained bullish on the company’s long-term value.
    “We think the sales environment could remain very competitive in the second quarter, but Bed Bath & Beyond may see some rebound sequentially,” Ma wrote in a client note. “Bed Bath & Beyond has been a consistent outperformer in other periods of consumer pullback.”

  • The Yield Curve Widens
    Posted by on June 8th, 2007 at 10:54 am

    Yesterday’s real action was in the bond market. The 10-year Treasury had its worst day in over three years. Here’s a chart of the 10-year T-bond along with the three-month Treasury bill to show you how much things have changed in the past month.
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