Man in the Street: Why Not Prosecute CEOs?
August 20, 2008
Mark Sunshine submits:
This morning I was a guest on FOX Business Network. FOX provided a car and driver to take me to the studio. The driver immediately started quizzing me on what I was going to talk about on television. When I told him I would discuss banking and public markets and that I am a former lawyer, he demanded to know “Why isn’t the government prosecuting corporate executives whose companies have made bad disclosure to shareholders?”
The driver was very clear that he believed corporate CEOs and CFOs violated the law by misleading shareholders, and he didn’t understand the government’s reluctance to prosecute anyone involved in bad and misleading disclosure. He particularly thought that bank executives had abused the public trust and deserved to be prosecuted. The driver said that after Enron he figured things would be better and the middle class would be treated fairly by Wall Street. He repeated several times that “brokers for a commission will do anything” and that CEOs were “screwing the little guy”.
Man in the Street: Why Not Prosecute CEOs?
U.S. Dollar’s Rise Has a Dark Side - Merrill
August 20, 2008
FP Trading Desk submits:
Investors in the U.S. have responded positively to a firmer U.S. dollar, says Merrill Lynch North American economist David Rosenberg, but there is a darker side to the story.
Mr. Rosenberg said in a research note that the rising dollar has likely had an impact on commodity markets and the recent drop in oil prices, a situation that investors have welcomed. “There is no doubt that the decline in oil prices is good news from a margin-supporting standpoint, as well as helping put at least a tentative floor under consumer confidence levels,” he said. Mr. Rosenberg added that a decline in commodity prices and a stable–to-firm U.S. currency are bright developments – especially since they have contributed to lower inflation expectations.
U.S. Dollar’s Rise Has a Dark Side - Merrill
How Private Equity Funds Manage Such Big Returns
August 20, 2008
Toro submits:
Are you jealous of Blackstone? Have a hankering to be like KKR?
No problem, dear readers. We at Running of the Bulls are here to enlighten you on how to make 40% a year, just like the private equity funds, without having to pay the extortionary fees just to have the privilege of participating in a pool of capital in which you are not allowed to withdraw any money until your first born is in college.
How Private Equity Funds Manage Such Big Returns
High Yield Credit Spreads at Post Bear Stearns High
August 20, 2008
Hickey and Walters (Bespoke) submit:
High yield credit spreads as measured by the Merrill Lynch High Yield Index are currently at their widest levels since the bailout of Bear Stearns in March. At a level of 823 basis points, high yield corporate bonds are currently yielding 8.23 percentage points more than comparable treasuries.
Credit spreads are often looked to as a leading inverse indicator of stock market direction, so rising levels are generally considered bearish for the market. However, conventional wisdom and reality can often differ.
High Yield Credit Spreads at Post Bear Stearns High
Protect Your Portfolio: Here Comes the Squeeze
August 20, 2008
Get ready.
Earlier this month, I commented that the latest stock market rally was a load of nonsense. For one thing, it was kicked off by a massive short squeeze—the SEC’s alleged “new” policy about banning naked short-selling in financial stocks—not actual bulls. If you’re looking for a sustainable bull market, you need actual buyers, not guys who are buying stocks to cover their shorts.
Protect Your Portfolio: Here Comes the Squeeze
If Money Isn’t Flowing to Agencies, Where Is It Going?
August 20, 2008
John Jansen submits:
I wrote a piece yesterday about the diminished bid for agency paper in the Central Bank Community. Brad Setser posed the pertinent question and wanted to know where the money that was not being spent in agencies was being invested. I spoke with several Treasury market veterans (a small sample of four, I will confess) but each is perched in a seat which permits them to offer an informed opinion.
One trader who specializes in the Treasury bill market notes that bill supply has become very large and the prospect is that it will increase going forward. He notes that Treasury bills, in spite of the supply glut, trade superbly and he has observed some of this money flow into the bill sector.
If Money Isn’t Flowing to Agencies, Where Is It Going?
Bond Expert: Early Wednesday Wrap
August 20, 2008
John Jansen submits:
(I am writing this early because I have some business to attend to this afternoon. It is about 230PM as I begin to pen this and that is about an hour earlier than normal.)
Prices of Treasury coupon securities pushed higher today as financial concerns generated by the travails of Freddie Mac (FRE) and FNMA (FNM) dominate trading. There are other concerns about the wellbeing of the global economy and the wellbeing of the global financial system.
Bond Expert: Early Wednesday Wrap
The Most Important Price in an Economy
August 20, 2008
John M. Mason submits:
In my post of August 18, 2008, I argued that neither of the presidential candidates had really staked out a well defined position as far as their economic vision was concerned. The pronouncements of the candidates, I wrote, were either too general or were bogged down in ‘wonkish’ minutia. As a consequence, an uncertainty has resulted that has left people and markets without direction and has fueled a greater volatility in prices.
Given this criticism, the question must be asked, “What is the basis for a sound economic vision?”
The Most Important Price in an Economy
20 Aug 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
August 20, 2008
| Intraday Unusual Volume - Top 5 Up |
| Symbol | Volume % Change |
Price % Change |
News | |
| MENT | 291% |  11.48% |
news | |
| OTEX | 256% | 34.50% |
news | |
| UHAL | 214% | 37.99% |
news | |
| TTWO | 197% | 24.34% |
news | |
| HGIC | 196% | 37.09% |
news | |
|
||||
20 Aug 2008 16:00:00 - Top 5 Stocks up on Unusual Volume
SEC Considering ‘Market-Wide’ Short Sale Rule
August 20, 2008
David Enke submits:
As reported in a Reuters article and elsewhere, the SEC is expected to propose a new short selling rule in the next few weeks that will be broader than the original temporary order that protected 19 financial stocks (17 major Wall Street firms, along with Freddie Mac (FRE) and Fannie Mae (FNM)). SEC Chairman Cox is quoted as saying the proposed rule "will focus on market-wide solutions," implying not only larger breadth, but possible other restrictions or changes affecting the markets that reach beyond just widening the number of stocks and sectors affected.
One possible change is to require investors to publicly disclose large short positions, similar to the current requirements for disclosing large long positions. Whether a more encompassing rule will prop-up the markets longer-term and give some non-financial stocks a boost is difficult to predict. Even with crude oil continuing to sell off, the Financial Select Sector SPDR (XLF) has given back some of its gains and is near short-term, yet technically-weak support. With the S&P 500 having trouble getting above 1,300, and the DJIA having difficulty around the 11,750 level, another SEC-induced short covering rally that is now more inclusive may be just what the market needs short-term to break resistance, even if not the original goal of the SEC.
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