Major Banks Prepare for Possible Credit DowngradesSome of Wall Street's
biggest banks are bracing for fallout from a possible cut in their credit
Moody's Investors Service, one of the two big ratings agencies,
has said it will decide in mid-May whether to lower its ratings for 17 global
financial companies. Morgan Stanley, which was hit hard in the financial crisis,
appears to be the most vulnerable. Moody's is threatening to cut the bank's
ratings by three notches, to a level that would be well below the rating of a
rival like JPMorgan Chase.
Bank of America and Citigroup may also fall
to the same level as Morgan Stanley, but those two are helped by having
Hedge Funds Fared Well in 2011Hedge funds have endured
a rough year. Tumultuous markets. Tighter regulations. An insider trading
crackdown. But despite the lackluster environment, the top managers still took
home $14.4 billion in 2011.
Even when returns suffer, the largest hedge
funds can collect big paychecks, thanks to the fees they charge pensions,
endowments and wealthy individuals to manage money.
Paul Tudor Jones II
charges a 4 percent management fee and takes 23 percent of any profit. So he
made $175 million in 2011, although his main fund tracked the returns of the
Standard & Poor's 500-stock index. Steven A. Cohen, whose firm, SAC Capital
Advisors, keeps 50 percent of the profit, earned $585 million.
Dalio, the enigmatic founder of Bridgewater Associates, seized the top spot,
after his largest fund gained 16.05 percent last year. His payday: $3.9
Deal for Greg SmithAfter his public
resignation from Goldman Sachs brought him overnight fame, Greg Smith has landed
a book deal with Grand Central Publishing, a division of the Hachette Book
Group, that includes a $1.5 million advance, The New York Post
News Group Likely to Change After MergerThe Bay Citizen, the
journalism nonprofit that was created by the financier and philanthropist Warren
Hellman, will likely see major changes in its coverage after merging with the
Center for Investigative Reporting, The New York Times reports.
Energy ProposalSteven Rattner argues in
a column in The Financial Times for "the most powerful and effective way of
achieving the twin goals of greater efficiency and less consumption of oil:
Weighs Sales as Part of ReviewThe chief executive of
Research in Motion, which posted a fourth-quarter loss of $125 million,
acknowledged that turning around the BlackBerry maker would be challenging, The
New York Times reports.
Said to Near Deal for StarBevThe Japanese brewer
Asahi is close to buying StarBev from CVC Capital Partners in a deal that could
be worth about $3 billion, Reuters reports, citing unnamed people familiar with
Said to Be Looking to Sell Lands' EndSears Holdings,
controlled by Edward S. Lampert, has been seeking offers for its Lands' End
division, The Wall Street Journal reports, citing unnamed people familiar with
and ONGC in Exploration PartnershipThe Oil & Natural
Gas Corporation of India said it could end up offering equity stakes in some of
its Indian assets to ConocoPhillips, after the two companies enter an
exploration agreement, The Wall Street Journal reports.
Consortium Invests in Australian MineA group of Korean and
Japanese companies is paying about $3.67 billion for a 30 percent stake in the
Roy Hill iron ore mine being developed by the billionaire Gina Rinehart, The
Wall Street Journal reports.
Newspapers Near SaleThe Philadelphia Media
Network, which publishes The Inquirer, The Daily News and Philly.com, is set to
be sold to a group of local business and political leaders, the Media Decoder
blog reports, citing several people familiar with the negotiations.
Sink to Lowest Level in Three YearsInvestment banks saw
deal making fees of $15.9 billion in the first quarter, 24 percent less than the
period a year earlier, according to Thomson Reuters, The Financial Times
Goes Bullish on Mortgage BondsGoldman Sachs is raising
money for a new fund, called the U.S. Housing Recovery Fund, to buy senior
mortgage securities, Bloomberg News reports. Formerly bearish investors, like
Kyle Bass, have recently begun to bet on a housing recovery.
Investors Hungry for JunkWith investors looking
for yield, 130 junk-rated companies have sold $75 billion in junk bonds this
quarter, 12 percent more than a year earlier, according to Thomson Reuters, The
Wall Street Journal reports.
Brokerages Lose Wealthy ClientsThe biggest four -
Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors and UBS Wealth
Management Americas - saw their market share of high net worth clients fall to
45 percent last year after peaking at 56 percent in 2007, according to the
research firm Cerulli Associates, Reuters reports.
Traders Look to Get Even FasterA new cable connecting
markets in New York and London that is set to open in 2013 would shave
milliseconds off computerized trades, conferring an advantage on the firms that
pay to use it, Bloomberg Businessweek reports.
Banks See Profit RiseThe Industrial &
Commercial Bank of China reported fourth-quarter profit of about $7 billion, 17
percent more than the period a year earlier, Bloomberg News reports. The Bank of
China reported an 11 percent increase in profit.
of America Ranks Second on 'Green' ListBloomberg Markets
Magazine has ranked banks according to their support of clean energy and their
management of their own power consumption. Banco Santander kept the top
to Cross-List DerivativesExchanges in Brazil,
Russia, India, China and South Africa are beginning to allow trading in
derivatives of each other's equity indexes, The Wall Street Journal
Moves to Raise Private Equity TaxesUnder a proposal from
the country's Finance Ministry, carried interest would be taxed at the income
tax rate rather than the capital gains rate, Reuters reports.
Departs From China Sovereign Wealth Fund Collin Lau, who became
the head of real estate investment at the China Investment Corporation in 2009,
has left, The Wall Street Journal reports, citing unnamed people familiar with
the Hedge Fund Industry's SilenceInvestors may soon get a
keyhole view into the cloistered world of hedge funds and private equity firms,
thanks to a little-known provision in the new JOBS Act that would relax rules on
how firms can market themselves to the public.
Funds Miss a RallyWhile the Brent crude
oil benchmark has risen 15 percent this year, hedge funds have shunned risk,
averaging returns of around 5 percent, according to Hedge Fund Research, The
Financial Times reports.
Fund to Return Assets to InvestorsDavid Coolidge of Velite
Capital plans to return a quarter of his hedge fund's assets, an amount
estimated to be about $400 million, in a rare move that comes as natural gas
prices fall, Reuters reports, citing unnamed people.
Financial to Wait for Favorable ConditionsThe Hartford Financial
Services Group, under pressure from John A. Paulson, said it was considering
various transactions to exit businesses and reduce risk, Bloomberg News reports.
"The phones are ringing off the hook," said Liam McGee, the chief
Backlog Piles UpCompanies around the
world raised at least $15.8 billion in I.P.O.'s in the first quarter, the least
since 2009, Bloomberg News reports. The value of pending deals, meanwhile,
reached the highest in more than a decade, according to Renaissance
Said to Consider Suspending Recruitment EffortThe software glitch at
BATS Global Markets is making the company think twice about its efforts to
encourage companies to list on its electronic exchange, The Wall Street Journal
reports, citing unnamed people familiar with the matter.
Plans for RussiaThe company is
discussing a deal with the Russian postal service to issue prepaid cards that
would be linked to PayPal accounts, the Russian newspaper Kommersant reported,
according to GigaOm.
Firms to Merge in UtahVSpring Capital and
Signal Peak Ventures are combining under the Signal Peak name, to manage $450
million with plans to invest in companies around Utah, the Deseret News
Debate Touches on Privacy of DebateRepresentatives of
technology companies told a House subcommittee they wanted the talks about data
collection and online privacy to be "open and transparent," but that didn't
necessarily mean they wanted the talks to be public, The New York Times
Kong Corruption Crackdown Snares Billionaire BrothersRaymond and Thomas Kwok,
who run Hong Kong's biggest real estate company, were arrested in connection
with an investigation into violations of anti-bribery laws, The New York Times
Fund Said to Have Asked to Change Benchmark RateThere's a new wrinkle in
the investigation into whether banks manipulated a key interest rate. The hedge
fund Brevan Howard Asset Management asked the Royal Bank of Scotland to change
the rate five years ago, and the bank "received this request without objection,"
according to papers filed in a lawsuit, Bloomberg News reports.
Loses in Bank AuctionThe Treasury Department
said it lost about $50 million on its offering this week of preferred stock of
six small banks that it bailed out through the Troubled Asset Relief Program,
The Wall Street Journal reports.
Confirms New RegulatorsThomas Curry is
replacing John Walsh as the head of the Office of the Comptroller of the
Currency, and Thomas Hoenig is becoming the vice chairman of the Federal Deposit
Insurance Corporation, The Financial Times reports.
Bank Nominee Faces 2 RivalsJim Yong Kim, President
Obama's choice to lead the World Bank, is expected to get the job, but emerging
and developing economies are supporting two other candidates, The New York Times
Rejects S.E.C.'s Subpoena RequestThe Securities and
Exchange Commission, which was seeking documents from Wells Fargo, was told to
meet with representatives of the bank to discuss the matter, Bloomberg News
Lawmakers Challenge Financial TaxMembers of the House of
Lords said a proposed European Union tax, which would affect derivative, stock
and bond trades, could cause financial institutions to relocate, Reuters
Watchdog's Role Sparks DebateNew legislation would
give the Financial Policy Committee, part of the Bank of England, the ability to
set maximum leverage ratios and extra capital requirements, Reuters reports. But
some politicians and bankers said the body should also be willing to stimulate