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for the mavericks fans...Score another point for Mark Cuban in SEC battle
Posted Jun 2nd 2009 6:30PM by Zac Bissonnette
Filed under: Scandals
The SEC's insider trading case against Mark Cuban is proving to be quite different from the usual open and shut matters we've come to expect from the commission. As Jonathan Berr reported yesterday on DailyFinance, some major legal experts have defended Mark Cuban's insistence that he didn't qualify as an insider when engaged in the trades in question.
Worse news for the SEC: Cuban has taken the unusual step of suing the SEC for denying him proper access to documents that detail the SEC's allegations and evidence against him.
The lawsuit, filed in U.S. District Court in Washington, accuses the commission of improperly rejecting requests to access some evidence, being too slow to respond to some requests, and not trying hard enough to find all the documentation Cuban's attorneys requested.
And now for more bad news for the SEC: The Wall Street Journal reports (subscription required) that "The inspector general of the Securities and Exchange Commission is investigating allegations that enforcement staff engaged in misconduct in connection with the insider trading case filed last fall against Mark Cuban."
The investigation was of course spurred by complains from Cuban's legal team, so it can't be called a real setback for the SEC unless there's some sort of unfavorable outcome. But for the $750,000 Cuban is accused of saving by dumping the MAMA.com shares, this case is turning out to be quite the headache for the SEC -- and Cuban loves a good fight, so this one seems destined to drag on until either Cuban is convicted or acquitted or the SEC drops the charges.
nice close on BZCN v cat....purrrrrr
fed felines on the move...Fed Said to Raise Requirements for Banks to Repay TARP Funds
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By Christine Harper and Craig Torres
June 3 (Bloomberg) -- Federal Reserve officials surprised bankers in the past week by demanding they raise specific amounts of new capital before repaying taxpayer funds, applying a more stringent assessment than the stress tests in May.
JPMorgan Chase & Co. and American Express Co. were told they need to boost common equity, less than four weeks after being informed they had enough to withstand a deeper economic slump. Morgan Stanley was directed to raise more funds after already selling stock to cover its stress-test shortfall. One firm was told June 1, people with direct knowledge said.
The central bank’s further scrutiny signals concern at the political and economic dangers of having a bank boomerang back to government aid once it leaves the program.
“The Fed doesn’t want to be criticized for allowing people to repay this and then having the banks say we just don’t have the capital to make loans now,” said Lawrence Kaplan, a former attorney at the Office of Thrift Supervision who now works at law firm Paul, Hastings, Janofsky & Walker LLP in Washington. “It’s an exercise to make sure that no one is going to get criticized for allowing these redemptions.”
The Fed’s demands also partly reflect the biggest three- month rally in U.S. financial shares in at least two decades, which has made it easier for banks to raise the funds. The central bank said in a June 1 statement that the biggest 19 lenders “must successfully demonstrate access to public equity markets” before repaying TARP money.
Goldman’s Case
Goldman Sachs Group Inc. hasn’t been required to seek any more funds since the firm raised $5.75 billion by selling shares in April, according to a person familiar with the matter. The firm sold $1.91 billion of stock in Industrial & Commercial Bank of China Ltd. this week, of which about half is owned by funds managed by Goldman Sachs. That sale was unrelated to any capital raising requirements, the person said.
JPMorgan Chase & Co. Chief Financial Officer Michael Cavanagh told analysts on a conference call June 1 that the New York-based bank was informed by regulators it needed to raise $5 billion in common equity. JPMorgan announced it would sell that amount.
“We believe we’ve met all the terms to get out of TARP,” JPMorgan Chairman Jamie Dimon said on the conference call. “If we don’t get out of TARP, we’d be very surprised. We don’t think we should be surprised.”
First Approvals
Fed approvals for an “initial set” of TARP repayments by banks among the 19 largest institutions are scheduled to be announced next week.
“Both the banks and the government would like to have the institutions operate on their own,” said former Fed Governor Randall Kroszner, who is now an economics professor at the University of Chicago’s Booth School of Business. “It is very important that the stability of those institutions not be questioned during the recovery.”
Morgan Stanley, JPMorgan and American Express raised at least $7.7 billion this week as they learned of the new hurdles to leave the TARP.
Morgan Stanley was judged in last month’s stress tests to need an additional capital buffer of $1.8 billion. The New York- based bank then raised $4.6 billion in common equity, only to be told this week it needed $2.2 billion more to repay TARP.
“It doesn’t make a lot of sense if they’ve raised well in excess of the initial capital requirement to then be told you need a little bit more,” said David Killian, a portfolio manager at Sterling Asset Management LLC in King of Prussia, Pennsylvania, who manages $500 million including stock in Morgan Stanley, JPMorgan and Goldman Sachs. “It’s government.”
Dimon’s Riposte
The 19 largest U.S. banks have more than $200 billion of preferred equity shares owned by the Treasury. The TARP program became a stigma for banks after the government set compensation limits and began criticizing the expenses of companies receiving aid. JPMorgan’s Dimon poked fun at the program June 1, reading a mock letter to Treasury Secretary Timothy Geithner.
“Dear Timmy, we are happy to be able to pay back the $25 billion you lent us,” Dimon said at the 31st Annual NYU International Hospitality Industry Investment Conference. “We hope you enjoyed the experience as much as we did.”
Banks’ funding costs have declined and their reliance on the Fed’s liquidity programs has diminished as confidence in the financial system improves. The London interbank offered rate, or Libor, for three-month dollar loans stood at 0.65 percent yesterday, down from 1 percent May 1, according to the British Bankers’ Association.
Loss Estimate
The Fed’s May 7 analysis showed that banks could lose $599.2 billion over two years in a “more adverse” scenario. That projection was based on an unemployment rate averaging 10.3 percent in 2010, with a 0.5 percent economic expansion -- less than the 1.9 percent median estimate in a Bloomberg News survey.
One risk is that the loss estimates the Fed used on specific products, such as credit-card loans and commercial real-estate loans, is even higher for some firms.
If banks repay TARP funds next week, “politically, the administration can claim a victory,” said Dino Kos, managing director at Portales Partners LLC and a former New York Fed executive vice president. “They can claim TARP is working, we’re getting our money back and making a profit. But there are more shoes to drop in commercial and industrial loans, leveraged loans, and real estate.”
wickerman cat...what's the word today??
yesssss ga cats....purrrrr
thankssss for the link i cat....
too funny cats..."How do you motivate an American CEO? Answer: Cut his bonus." — ExGov
interessssting stock doc cat....
KERX up almost a dime cats...
yep...a few more shiny coins and drinks on me! purrrrrr
hahahaha! your alright biggie cat....
yeah doc...still got some sweet leftovers from last year...purrrr
don't forget to keep this cat in the loop! lol.
KERX coming up on a buck thirty...purrrrrr
updates cats...Before the bell: Wall Street puts on the brakes; still positive ahead of data
Posted Jun 2nd 2009 7:37AM by Melly Alazraki
Filed under: Before the bell, International markets, General Motors (GM), Market matters, Economic data, Oil, Housing
U.S. stock futures were still higher this morning, although only by a small margin as investors seemed ready to take a breather following Monday's sharp rally. News about General Motors continued to dominate the headlines, but the Street's attention may once again return to the economy on continued hopes for a recovery.
On Monday, a key manufacturing gauge pointed to a smaller-than-expected contraction, adding to positive sentiment following the relief of GM's bankruptcy filing. Today, more housing data is on tap at 10:00 a.m. Eastern with April's pending home sales report. Throughout the day, carmakers will also release auto and truck sales figures for May.
morning stock doc cat...any thoughts on KERX?
what's gold today 007 cat?
GM Bankruptcy Judge Approves Asset Sale on First Day (Update2)
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By Linda Sandler, Chris Scinta, Bob Van Voris and Jeff Green
June 2 (Bloomberg) -- General Motors Corp. won court approval on its first day in bankruptcy to sell assets as soon as next month after collapsing under $172.8 billion in debt and failing to adapt to consumer demands for smaller cars.
The automaker, the largest manufacturer to seek protection from creditors, also won permission yesterday from Judge Robert Gerber in Manhattan to draw $15 billion from a $33.3 billion bankruptcy loan.
Detroit-based GM plans to form a new company in 60 to 90 days, built around its Cadillac, Chevrolet, Buick and GMC brands in the U.S. The lead bidder for the assets is the U.S. Treasury, which will provide the 100-year-old company with billions in loans that would be converted into a 60 percent equity stake. GM today said it has an agreement with a buyer for its Hummer sport-utility vehicle unit.
“There’s only one prospective purchaser,” GM attorney Harvey Miller told Gerber, referring to the U.S. government’s offer for the new GM. “There’s no entity that has the wherewithal to bid in these cases.”
The automaker missed yesterday’s deadline to show that it could reorganize outside of court and reported debt of more than twice the listed value of its assets.
The filing was a “defining moment in the reinvention of GM,” said Fritz Henderson, president and chief executive officer of the carmaker. “The economic crisis has caused enormous disruption in the auto industry.”
Defining Moment
One idle GM facility in the U.S. will be retooled to make small, fuel-efficient cars as part of an agreement with union workers, GM said May 29. Under the deal to sell Hummer announced today, the identity of the buyer and financial terms aren’t yet being disclosed.
GM’s Saab unit is reorganizing in Sweden. The German government picked Magna International Inc., a Canadian car-parts maker, as the preferred bidder to buy the company’s Opel unit.
The GM Chapter 11 petition makes the carmaker’s reorganization the third-largest bankruptcy in U.S. history, ranked by total assets listed in the initial filing, after Lehman Brothers Holdings Inc. and WorldCom Inc.
“This is a step they should have taken more than a year ago, which could have put them in much better shape,” said Stephen Pope, chief global strategist at Cantor Fitzgerald in London.
GM listed in its petition as top creditors Wilmington Trust Co., representing bondholders owed $22.8 billion; United Auto Workers, owed $20.6 billion; and Deutsche Bank AG, representing bondholders owed $4.44 billion. The Unofficial GM Dealers Committee, which said it represents more than 6,000 U.S. GM dealers, filed a notice that it will take part in the case.
Chrysler’s Filing
Before declaring bankruptcy, GM received $20.57 billion in U.S. Treasury loans, according to court filings. Administration officials said yesterday the government would advance $30 billion more, with another $9.5 billion from the Canadian government.
“GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,” President Barack Obama said yesterday. The government was becoming a “reluctant” owner of the automaker, Obama said, adding that his goal was to “take a hands-off approach and get out quickly.”
GM said yesterday that the new company would have total debt of $17 billion, excluding liabilities such as a workers’ health-care trust. The filing said the loan total from the U.S. and Canadian government could grow to as much as $65 billion.
Equity Share
Chrysler LLC, the automaker that filed for bankruptcy April 30, listed $39 billion in assets in its petition. The Auburn Hills, Michigan-based carmaker plans to transfer most of its assets to a new entity run by Italy’s Fiat SpA. Another bankruptcy judge in New York approved that deal May 31.
Aside from the U.S. government’s equity share, GM’s statement called for a worker health-care fund to get a 17.5 percent stake and the Canadian government to take 11.7 percent. Bondholders would be eligible for 10 percent and warrants to buy another 15 percent.
There would be no initial public trading of the shares, some of which will be given to the Canadian government in exchange for loans, an administration official said last week. The company might remain private for as long as 18 months, said the official, who asked not to be identified.
Because of its size, GM faces more obstacles than Chrysler in resolving creditor claims that remain in bankruptcy after the new company is created. Reeling from almost $88 billion in losses since 2004, GM may not return to profitability if U.S. vehicle sales are below 10 million a year, an amount the government said a new GM will need to break even.
Speedy Sale
GM filed a request to sell most of its assets to a Treasury-sponsored entity that will hold the government’s stake in the company. GM’s board of directors said in court papers that an asset sale to the Treasury is “expedient.”
Of the government funding, “approximately” $30.1 billion in new money will be advanced by the Treasury, according to the filing.
GM’s Saturn LLC and Saturn Distribution Corp. also sought court protection yesterday. The Chapter 11 petitions are the “only opportunity for preserving” the Saturn brand, according to the filings.
“Just a couple of months ago, it was predicted by some that a bankruptcy filing by GM would inevitably lead to its demise,” said Lynn Hiestand, a lawyer specializing in restructuring with Skadden, Arps, Slate, Meagher & Flom LLP. “That remains to be seen.” Hiestand’s firm represents Delphi Corp., GM’s former parts unit, in a separate U.S. bankruptcy.
J.P. Morgan
The automaker was founded in 1908 by William “Billy” Durant, who bought more than 20 car companies before being ousted in a 1920 bailout by Pierre Du Pont and J.P. Morgan.
By the 1960s, GM controlled more than half the U.S. vehicle market. In 2008, it sold only 8.35 million cars worldwide, losing its place as the world’s biggest automaker to Toyota Motor Corp. as customers opted for the Japanese carmaker’s fuel- efficient Corolla and Camry brands instead of GM’s light trucks and Hummers.
GM will introduce several vehicles in 2009 and 2010, the company said, including the Chevrolet Camaro, the Buick LaCrosse, the Cadillac SRX and CTS Sport Wagon, the Chevy Equinox and the Chevy Cruze, GM’s “new global compact car.”
Also scheduled for production is the Chevy Volt, “an extended-range electric vehicle that can travel up to 40 miles on battery power alone with the extended-range capability of more than 300 total miles,” the company said.
Delphi Deal
Yesterday’s filing will trigger credit-default swaps protecting about $3.1 billion of GM debt, in the biggest settlement of the derivatives since September’s collapse of Lehman Brothers. Pricing reflected the risks last week as dealers charged about $8.7 million upfront and $500,000 annually to protect $10 million of debt.
Banks such as JPMorgan Chase & Co. secured GM’s revolving loan of about $4.5 billion with inventory, receivables and factories, also providing a $1.5 billion term loan.
The automaker agreed to buy back ownership of Delphi plants in Wyoming, Michigan; Lockport and Rochester, New York; and Kokomo, Indiana, according to a Delphi statement yesterday.
The requests approved by Gerber include permission for GM to honor vehicle warranties and dealer-incentive programs, the company said in a statement. GM said it also won approval to meet obligations to employees and retirees as well as fulfill financing agreements and pay “essential suppliers.”
Deadline
The judge said objections to the sale must be filed by June 19 and set a deadline of June 22 for competing bids.
Gerber also presides over the bankruptcies of Lyondell Chemical Co. and BearingPoint Inc. He handled the Adelphia Communications Corp. and Global Crossing Ltd. cases as well.
“The gravity of the circumstances cannot be overstated,” GM said in court papers. “The business and assets to be transferred are extremely sensitive and will be subject to major value erosion unless they are quickly sold and transferred to New GM.”
The case is In re General Motors Corp., 09-50026, U.S. Bankruptcy Court, Southern District, New York (Manhattan).
cats eyes on KERX today...
gm ga cats....purrrr
sssssweeet ride gold cat...
run doc run! lol.
0.58 looking good there gold cat...
Bankruptcy ends GM's 84-year ride in Blue Chip index
Citigroup also out; Cisco, Travelers join Dow industrials average
BZCN starting to purrrrr...
another smoking one wise old cat...
that's some serious black cat shit...
as long as it ain't GM! lol
Before the bell: Stocks poised to soar at the open as GM set to file for bankruptcy
Posted Jun 1st 2009 7:37AM by Melly Alazraki
Filed under: Before the bell, International markets, General Motors (GM), Market matters, Economic data, Oil
U.S. stock market futures soared Monday morning, indicating Wall Street might rally today, or at least at the open, as the stage is set for General Motors Corp. (NYSE: GM) to declare the long awaited bankruptcy shortly. With some relief as the bankruptcy is not expected to carry any surprises, and as hopes mount the worst of the financial crisis and recession is over U.S. stocks were poised to soar at the start of trading Monday.
The main story today is of course the auto sector, namely GM. The century-old automaker is expected to file and declare bankruptcy at 8:00 a.m. this morning after mounting $889 billion in losses. The government will likely end up with at least a 60% stake and an unprecedented role in reshaping the auto industry. It will be the largest industrial bankruptcy in U.S. history and the fourth-largest overall. Meanwhile, a federal bankruptcy judge has approved the sale of most of Chrysler's assets to Fiat, clearing the way for it to exit court protection shortly.
wise cat...what's up for today?
any guesses on where GM heads today kitties?
BZCN with a little RTGV on the feline menu for today cats....
Hmmmmmm....Stocks, Commodities, Pound Advance; Dollar, Treasuries Decline
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By Daniel Hauck
June 1 (Bloomberg) -- Stocks climbed, sending the MSCI World Index to the highest level since November, and oil and metals advanced as manufacturing in China signaled the worst of the global recession may be ending. Treasuries declined and the dollar fell against every major currency.
The MSCI World Index of 23 developed countries added 1.3 percent to 982.87 at 11:16 a.m. in London. Copper and oil also climbed to the highest levels in seven months. Gold traded within 1.2 percent of $1,000 an ounce in London. The pound rose above $1.64 for the first time since October.
Manufacturing in China expanded for a third month in May, the official Purchasing Manager’s Index showed. Economists estimated that U.S. manufacturing shrank at the slowest pace in eight months and Dow Chemical Co., the largest U.S. chemical maker, said its plants operated at 70 percent of capacity in April, up from 45 percent in December. Still, the global economy is contracting for the first time since World War II and General Motors Corp. plans to declare bankruptcy.
“The key market-driving dynamic remains improving global investor confidence in anticipation of a recovery in the global economy coupled with improving financial-market conditions,” Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in a report. “The market has taken heart today from continued signs of growth in the Chinese manufacturing sector.”
GM Bankruptcy
Russia’s Micex index climbed 5.4 percent, the steepest gain among equity benchmarks in the world’s 25 biggest markets, after UBS AG said shares may jump another 30 percent this year. Europe’s Dow Jones Stoxx 600 Index advanced for the fifth time in six days, rising 2.1 percent as commodity producers increased, while futures on the Standard & Poor’s 500 Index added 1.7 percent.
Stocks rallied from Shanghai to Moscow and London even as Detroit-based GM, the world’s largest automaker for 77 years, prepared to become the largest manufacturer to file for bankruptcy. GM has said it aims to reduce its U.S. hourly workforce to about 40,000 next year from 61,000 at the end of last year. A report this week will show unemployment in the U.S. surpassed 9 percent in May for the first time in more than 25 years, according to a Bloomberg survey of 59 economists.
U.S. bonds dropped, driving the yield on the benchmark 10- year note six basis points higher to 3.52 percent, as Treasury Secretary Timothy Geithner arrived in Beijing to reassure China its holdings of U.S. debt are safe even as government borrowing soars. The gap between yields on two-year and 10-year notes widened five basis points to 259 basis points.
China to Norway
The bond market shows international demand for American financial assets is as high as ever, even as the dollar slides and the U.S. deficit expands.
The Federal Reserve’s holdings of Treasuries on behalf of central banks and institutions from China to Norway rose by $68.8 billion, or 3.3 percent, in May, the third most on record, data compiled by Bloomberg show. The U.S. Treasury said bidding from foreigners was above average at its $101 billion of note auctions last week.
Universa Investments LP, which has links to “Black Swan” author and New York University professor Nassim Nicholas Taleb, is starting a hedge fund to bet that efforts by governments and central banks to end the global recession will lead to hyperinflation, the Wall Street Journal reported, citing Taleb. The fund will invest in commodities and options on oil and gold stocks, the Journal said.
Australian Dollar
The dollar declined the most against currencies of commodity producers, sliding 1.7 percent versus Norway’s krone and the New Zealand dollar. The Australian dollar climbed 1.6 percent, touching the strongest since September.
Prices of raw materials account for more than 50 percent of exports in New Zealand and Australia, while interest rates higher than borrowing costs of 0.1 percent in Japan and as low as zero in the U.S. also attracted investors. The risk in so- called carry trades is that sudden exchange-rate movements can erase profits.
The Dollar Index declined to the lowest level this year as the U.S. government said it will own a majority of GM after the carmaker’s bankruptcy, heightening concern that record debt sales to fund bailout packages and economic stimulus programs will weigh on the currency.
The pound advanced as much as 1.5 percent to $1.6431, the strongest level since Oct. 31, after a report showed U.K. house prices stopped falling last month. Average house prices in England and Wales were unchanged in May, a survey of real-estate agents by Hometrack Ltd. showed today.
Oil, Copper, Gold
Crude oil for July delivery rose as much as $1.98 to $68.29 a barrel on the New York Mercantile Exchange, after China, the world’s second-biggest energy consumer, expanded manufacturing and raised domestic gasoline and diesel prices.
Copper for delivery in three months climbed 3.5 percent to $5,000 a metric ton on the London Metal Exchange, the highest compared with intraday prices since Oct. 15. Gold for immediate delivery advanced as much as 0.9 percent to $987.80 an ounce, while silver added 1.4 percent to $15.955 an ounce, the highest since Aug. 8.
The MSCI Emerging Markets Index climbed 2.6 percent, the most in two weeks. The gauge surged 55 percent the past three months, the steepest gain since its inception in December 1987 and more than the 29 percent rally in MSCI’s developed-market stock measure.
Poland’s zloty appreciated 1.4 percent against the euro and 1.9 percent against the dollar, the top gains among currencies in 22 developing nations tracked by MSCI. Russia’s ruble added 1.1 percent against the dollar, bolstered by oil’s rise.
Credit-default swaps on the Markit iTraxx Crossover Index of 45 companies with mostly high-yield credit ratings dropped 14 basis points to 710, the lowest since Oct. 15, according to JPMorgan Chase & Co. prices. Contracts on European automakers including Munich-based Bayerische Motoren Werke AG and Stuttgart, Germany-based Daimler AG fell, CMA DataVision prices showed. Declines signal an improvement in perceptions of credit quality.
morning e cat...
morning ga cats...purrrr
BEXP looking tasty stock doc cat...purrrr
still going wise cat...lucky bastard!
what's on the dog list today mr.doog....
major indices starting green cats...purrrrr
shit...my greenbacks are gettin spanked!!!