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SNY + ???
IMHO, I do not see SNY buying Biogen right now. Why would EXEL's CEO (Scangos) leave EXEL to take the Biogen CEO position on Wednesday only to sell the company in a couple weeks? Granted EXEL is likely a sinking ship and I'm sure he'll get a nice one-time pay day from a sale.
If your Biogen why bring in a guy like Scangos to sell the company in short notice? If SNY was at Biogen's door already why hire a CEO at all? Have the BOD and investment bankers deal with the sale.
10nis
<< New home sales IMO aren't a good gage of real demand and trends. The areas with the jobs and money don't have new homes - think NYC, Boston and other urban areas and job centers. The areas with lots of new construction uimply lots of available land - which there insnt any in/around any major metropolitan area. >>
What's a good gage of real demand and trends? Other than NyC and Boston, most urban areas have available land for building homes, office buildings, etc. (think Atlanta, Chicago, Dallas, Denver, Houston, Charlotte, Minneapolis, to name just a few).
New construction is a key to turning this economy around as it employs a lot of workers directly and indirectly. Until housing and commercial inventory levels are at more normal levels there's going to be huge slack in the economy causing high unemployment and low growth.
10nis
<< Correction is over >>
Maybe for today. However, I'll bet you some CREE shares that we see the S&P in the 900's before 1,080.
10nis
<< Which ones? >>
http://www.bloomberg.com/news/2010-06-29/citigroup-trading-halted-by-circuit-breaker-as-shares-fall-as-much-as-17-.html
Washington Post, however, I thought there was one other large cap company as well.
10nis
<< $3.3174 today. It triggered the new system or it could have gone down much further. Wow. >>
Based on what I've been told my a large HF manger the "new system" is being randomly tested on a number of big board companies. Essentially, the major exchanges (NYSE) are being told to stop trading in a specific listing thus pushing trading to the smaller electronic markets causing higher volatility and large movements. In the end nobody is hurt while the circuit breakers are tested in real life scenarios. I don't know if this truely happening or not, however, this is what I've been told.
So, far a couple of other large listings have had their circuit breakers tested in the past two weeks.
10nis
Could the late day rise have been due to the rebalancing (Russell) which took place today? Just throwing it out there...
10nis
LLY
Any reason why LLY hasn't been acquired by Big Pharma? Would any particular Big Pharma be more likely to acquire it versus another? Would a merger between BMY and LLY make sense? Any opinions would be greatly appreciated. TIA...
10nis
Looks like P&G rumors are back....
Newell Rises On Speculation P&G May Bid
http://blogs.barrons.com/stockstowatchtoday/2010/01/19/newell-rises-on-speculation-pg-may-bid/
January 19, 2010
By Eric Savitz
Newell Rubbermaid (NWL) shares are trading higher this morning on rumors that Procter & Gamble (PG) might be interested in acquiring the company. According to TheFlyOnTheWall.com, “it’s believed that the boards of both companies met earlier,” and that Newell is seeking at least $21-$22 a share.
Schaeffer’s Investment Research notes that call trading in NWL options has skyrocketed today.
Newell Rises On Speculation P&G May Bid
http://blogs.barrons.com/stockstowatchtoday/2010/01/19/newell-rises-on-speculation-pg-may-bid/
By Eric Savitz
Newell Rubbermaid (NWL) shares are trading higher this morning on rumors that Procter & Gamble (PG) might be interested in acquiring the company. According to TheFlyOnTheWall.com, “it’s believed that the boards of both companies met earlier,” and that Newell is seeking at least $21-$22 a share.
Schaeffer’s Investment Research notes that call trading in NWL options has skyrocketed today.
P&G Takeover?
http://www.bloomberg.com/apps/news?pid=20601103&sid=aaremWOxJh.Q
June 1 (Bloomberg) -- Trading of bullish Newell Rubbermaid Inc. options surged to the highest in almost three months on speculation the maker of food-storage and home products may be taken over by Procter & Gamble Co.
Almost 14,000 calls to buy the stock changed hands, 10 times the four-week average and 11 times the number of puts, which give the right to sell. The most-active contracts were June $17.50 calls, which rose 60 percent to 40 cents and accounted for more than half of all options volume for Atlanta- based Newell. Those contracts expire June 18.
“There’s an unsubstantiated rumor that Newell may be taken over by Procter & Gamble,” said Patrick Mortimer, director of options trading at Pipeline Trading Systems LLC in New Hope, Pennsylvania. “That could drive the trading in options.”
Procter & Gamble, the Cincinnati-based company that gets half of its revenue from household-care products, agreed last month to acquire closely held Natura Pet Products Inc. Newell Chief Executive Officer Mark Ketchum said in an interview today that the company may expand its cooperation with Avon Products Inc. to developing countries such as China where it doesn’t offer Rubbermaid products and Avon has salespeople. The plan was announced last week at an analyst conference in Atlanta.
Newell’s Share Gains
Newell’s stock had gained 11 percent this year before today. The shares rose as much as 5 percent today before closing unchanged at $16.66. Procter & Gamble, the world’s largest consumer products company, rose 0.1 percent to $61.16. Avon, based in New York, fell 2.4 percent to $25.86.
Rotha Penn, a spokeswoman for Procter & Gamble, said the company doesn’t comment on rumors about acquisitions or divestitures.
“Managing the product portfolio is an ongoing process,” Penn said in an e-mail. “Procter & Gamble management and the board regularly review the portfolio to ensure the businesses are capable of meeting our shareholder value creation expectations.”
David Doolittle, a Newell spokesman, declined to comment.
<< As far as ACA not suing, yes, that is strange if gS is guilty of the charge. But what is equally baffling is if this is a black and white issue, why would SEC file charges if they didn't already have proof? >>
The SEC filed charges to (1) cover up its complete moronic actions related to the Stanford Ponzi Scheme... The told the world on the same day they filed charges against GS that whoops we knew about the Ponzi Scheme 10 years earlier (just like Madoff) but they decided not to do anything about it.
(2) the SEC filed charges as a result of pressure from the Obama Administration as they sought to issue a financial reform bill the next week.
The SEC is easily one of the worst run and least effective government agencies.
10nis
<< 1) It does matter who puts the package togethor. Let's use a NASCAR analysis. Racer X and Racer Y are both competing in a race. Racer X goes to GS and says, "Hey, I want to buy a car from you but I need a third party mechanic to tell me the one you sold me is good." GS goes to Racer Y and Says "I need a car for Racer X". Then GS hires Racer Y's mechanic to tell Racer X "Yeh, this is a great car!". Of course, GS leaves out the facts that Racer Y supplied the car and that the mechanic works for Racer Y.>>
You really need to understand the transaction. Both ACA as well as Paulson selected the assets underlying the CDO. They each picked assets they wanted in and out of the package and both agreed on the final assets to be included in the transaction.
<<< 2) The buyer of the CDS should do their own due diligence? Ok, Caveat Emptor is a fair statement. And even if you are buying from a trusted source, you have to 'keep them honest' by chacking on them. But regardless... wasn't GS hired as an expert and trusted source? >>>
GS was the middle man in the transaction. That's all. Nobody hired GS for expert asset valuation services or whatever. GS just worked to put the CDO instrument and the parties together. ACA knew Paulson was short the CDO and vice versa.
You fail to understand that ACA is a large institutional investor that has well educated and experienced employees who decided to go long the CDO based on their believes, research, etc.. ACA screwed up whether in not doing proper due diligence (which is the main job of an asset manager) or thinking earning a slightly higher yield from the transaction was worth the large potential risk of loss. ACA screwed up not GS.
If ACA felt GS was fraudlent in the transaction they would have sued GS a long-time ago. ACA screwed up because they bet the wrong way just like Bear Stearns, WaMu, AIG, etc.. All these firms hire well educated and experienced employees who were on the losing end of their decisions.
10nis
<< Cramer said Citigroup should hit $12 a share by 2012. >>
It will when it does a reverse stock split. It won't happen on a pre-split adjusted basis. But, if you want to keep drinking the Kramer Kool-Aid be my guest and buy, buy, buy...
Just remember if C trades at $12 on a pre-reverse split basis it would have a market capitalization of approximately $420 Billion assuming the current 35 billion diluted share count, or 45% higher than Exxon's (XOM) current market capitalization. BTW, Exxon currently has the highest market capitalization of any U.S. based company and the 2nd highest market capitalization in the world.
I willing to bet you, Kramer or anyone else out there 10,000 shares of C that C will not trade at $12 on a pre-reverse split adjusted basis in 2012.
10nis
<< Yes, it could easily happen - CITI announces share buy back program or CITI aquired by another bank or.... who knows, speculation??? US$12 easy by 2012. >>
Anything I suppose could happen however the likelihood that C sees $12 (pre reverse split) by 2012 is about as good as winning the Powerball and MegaMillions jackpots on the same day.
<< CITI acquired by another bank >>
C will only be acquired by another bank if it ends up like WaMu. Bought for scraps.
<<< $12 by 2012. mark this post. >>>
The only way C is going to see $12 by 2012 is thru a reverse split. With approximately 35 billion shares outstanding you're expecting C to add $280 billion in value between now and 2012. That won't be happening...
Also, at $12, C would have a market capitalization of $420 billion or about 30% greater than the largest market capitalized company today.
10nis
IDIX..
<<< IDIX getting a nice haircut of another 8%....any thoughts?
IDIX/IDENIX PHARMACEUTICALS, INC.
Last [Tick] $3.33[+]
Change $-0.31
% Change -8.52%
Bid $3.32
Bid Size 17
Ask $3.33
Ask Size 2
Open $3.57
Volume 103,160
Day High $3.74
Day Low $3.32
Previous Close $3.64 >>>
IDIX is a relatively illiquid equity that results in higher percentage moves when people want in or out. Thus, on days like today when market's are down pretty good anyone who wants out will have to accept the buyers lower bid. Days like today tend to be good buying opportunities.
10nis
Astellas Pharma Inc. to Acquire OSI Pharmaceuticals, Inc.
Companies enter into definitive merger agreement to combine to create a world-class oncology platform
OSI Stockholders to receive $57.50 per share in cash
http://finance.yahoo.com/news/Astellas-Pharma-Inc-to-prnews-1811151503.html?x=0&.v=1
Press Release Source: Astellas Pharma US, Inc.; OSI Pharmaceuticals, Inc. On Sunday May 16, 2010, 8:20 pm EDT
TOKYO and MELVILLE, N.Y. May 16 /PRNewswire-FirstCall/ -- Astellas Pharma Inc. (TSE:4503.to - News), a global pharmaceutical company, and OSI Pharmaceuticals, Inc. (Nasdaq:OSIP - News), a biotechnology company primarily focused on the discovery, development and commercialization of molecular targeted therapies addressing medical needs in oncology, diabetes and obesity, today announced that they have entered into a definitive merger agreement under which Astellas will acquire OSI.
Under the terms of the merger agreement, Astellas will increase its offer price to $57.50 per share, which represents a premium of 55% to the closing price for OSI's shares of $37.02 on February 26, 2010, the last trading day before the announcement by Astellas of its tender offer. The boards of directors of both companies have unanimously approved the combination. The all-cash transaction is valued at $4.0 billion on a fully diluted basis.
The combined company creates a world-class oncology platform supporting Astellas' stated growth strategy of becoming a Global Category Leader in Oncology, a high-priority therapeutic area for Astellas. OSI commercializes Tarceva? (erlotinib), a leading cancer medication. OSI's total annual revenues for 2009, as reported in its Form 10-K for the year ended December 31, 2009, were $428 million and operating income was $153 million.
Masafumi Nogimori, President and Chief Executive Officer of Astellas, said, "The merger with OSI provides Astellas with a top-tier oncology platform in the U.S. and an expanded product portfolio and pipelines. In addition to Tarceva?, we are pleased to add its oncology infrastructure, discovery platform, expanded pipelines and talent base to our existing businesses. We look forward to working together with our OSI colleagues to grow the combined business and realize our shared goal of improving the health of the people around the world every day."
Colin Goddard, Ph.D., Chief Executive Officer of OSI Pharmaceuticals, said, "We believe today's announcement recognizes the significant value we have built for our stockholders while providing the merged companies the opportunity to forge a stronger collective path forward in a shared mission to provide innovative new medicines to patients around the world."
Financial Details and Closing Conditions
This is an all-cash transaction with no financing conditions to close.
The transaction is subject to other customary closing conditions, including the tender of a majority of OSI's shares of common stock on a fully diluted basis. The HSR waiting period applicable to the acquisition of OSI by Astellas expired on March 19, 2010.
Astellas' all-cash tender offer for $57.50 per share for all of the currently outstanding shares of common stock (including the associated stock purchase rights) of OSI Pharmaceuticals, Inc. will expire no later than 10 business days after the amendment to the Schedule TO is filed (which is expected to be filed on or before May 21st), unless extended. As of 4:00 p.m. New York City time on Friday, May 14, 2010, 299,214 shares of OSI had been tendered in and not withdrawn from the tender offer.
Citigroup is acting as exclusive financial advisor to Astellas and Morrison & Foerster LLP is acting as legal counsel. Centerview Partners LLC is acting as lead financial advisor to OSI. Lazard also was retained as a financial advisor to OSI. Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates is acting as legal counsel.
Additional Information
Details related to this announcement can be found on http://www.oncologyleader.com/
OT - Trades in PG will stand - Others will not..
http://www.bloomberg.com/apps/news?pid=20601057&sid=aETiygQQ8Y3g
Electronic Trading to Blame for Plunge, NYSE Says (Update2)
Chris Nagi and Matt Miller
May 6 (Bloomberg) -- Computerized trades sent to electronic networks turned an orderly stock market decline into a rout, according to Larry Leibowitz, the chief operating officer of NYSE Euronext. Nasdaq OMX Group Inc. canceled trades in 286 securities that rose or fell 60 percent or more.
While the first half of the Dow Jones Industrial Average?s 998.5-point intraday plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television.
?If you look at the charts you can see fairly clearly where the trades came in,? he said from New York. ?It?s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split-instant because there really was no liquidity in electronic markets.?
The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission are reviewing ?unusual trading? that contributed to the plunge.
NYSE Volume
More than 29.4 billion shares changed hands in all U.S. markets today, including traditional exchanges such as the NYSE, rivals Bats Global Markets Inc. in Kansas City and Jersey City, New Jersey-based Direct Edge LLC, and other electronic platforms. The level compares with 2.58 billion traded on the NYSE, making it the biggest gap between the two in more than three years, data compiled by Bloomberg show.
Increasing automation and competition have reduced the Big Board and Nasdaq?s volume in securities they list from as much as 80 percent in the last decade. Now, two-thirds of trading in their companies takes place off their networks because orders are dispersed across dozens of competing venues.
Nasdaq OMX in said it will cancel stock trades that were more than 60 percent above or below price levels at 2:40 p.m. New York time, just before U.S. equities plummeted. The New York-based firm investigated trades between 2:40 p.m. and 3 p.m.
?Snapped Back?
?The fact that it snapped back so quickly made it clear that it was an aberration,? Leibowitz said. ?When a large order or series of orders comes into electronic markets, they don?t really have any way to recognize either that they?re a mistake or to slow them to down to attract the proper liquidity on the other side.?
The NYSE doesn?t know where the trades that triggered the selloff originated, according to Leibowitz. Citigroup Inc. said it found ?no evidence? that it was involved in erroneous trades, a finding supported by futures market CME Group Inc., after U.S. equity markets plunged today.
The market rout triggered scrutiny from lawmakers. U.S. Representative Paul Kanjorski, a Pennsylvania Democrat, set a May 11 hearing. U.S. Senator Ted Kaufman, a Delaware Democrat, questioned whether markets that increasingly rely on computer algorithms to execute thousands of transactions in seconds triggered false trades.
?This is unacceptable,? Kanjorski, who leads a House Financial Services subcommittee that oversees the SEC, said in a statement. ?We cannot allow a technological error to spook the markets and cause panic.?
Accenture, Exelon
Accenture Plc, Exelon Corp. and Philip Morris International Inc. were among 27 U.S. stocks with at least $50 million in market value that dropped more than 90 percent as U.S. equities tumbled, before recovering by the close, according to Bloomberg data excluding exchange-traded funds.
The Nasdaq?s decision means that trades in Cincinnati-based Procter & Gamble Co., which fell as much as 37 percent for the biggest intraday drop in the Dow industrials, would stand. The world?s largest consumer products company said stock trades that pushed its shares down were probably an error.
?Our greater concern is not the fact that a trade error occurred at all but the magnitude of its impact,? Birinyi Associates Inc., the research and money-management firm founded by Laszlo Birinyi, said in a note today. ?We propose that when trading errors have occurred in the past, their impact has not been as significant and impactful because of the existence of human intervention.?
<< "Selloff May Have Been Triggered by a Trader Error" >>
CNBC is now saying its sources are telling them the trading error occurred at Citigroup. Must be fun to be able to move $100+ Billion dollar companies by 25% by hitting a B instead of an M.
Accenture (ACN) hit a low at 1 penny now trading at $41 and change. Some great lottery like buying opportunities for some lucky winners on a ton of companies. This mishap shows how dangerous stop orders can be.
10nis
<< YES. halted it will be...they most likely will announce a resumed trade with a news of that with about 1 hour or half hour notice...imo >>
There is no reason for POZN to be halted in pre-market trading. Earnings conference calls happen everyday pre-market, post-market and intraday without any trading halts. The material news has already been announced and POZN should trade pre-market, IMHO.
10nis
MON bottoming out? Starting to feel that way with MON up decently today compared to a very red tape although volume is a rather weak. FWIW, I've started to accumulate some shares and will buy more if it ends up going lower.
10nis
<< Tin Man looks like Criminal Charges too,,, get the idea? Did you see the stripe outfits behind Blank Fine on Senate BBQ day? Could come true,,, I doubt it but at least the Govs are doing something. Next Holder should arrest 2/3 of the House and Senate and we will be getting somewhere... imho hge >>
IMHO, this is all publicity BS in order to milk the deep pockets of GS. Based on the current public facts, GS did nothing illegal. They played the system according to the rules as they were and that was that. GS is not at fault for sophisticated institutional investors rolling the dice in hopes of earning higher yields. Those morons should be the one's sued and arrested, but then again they only have pennies left so no sense in going after them.
The majority of the senators that asked questions during Goldman's congressional meeting should be arrested for being clueless about the mortgage back security market and how markets and investment banks work. The regulators and rating agencies should be arrested way before the investment banks, IMO.
10nis
<< someone is betting a million dollars with that purchase of pozn wow >>
They could have covered part of a short position. The purchase did not push up the share price much so there was a willing seller of equal size as well. That trade is nothing to get excited over.
10nis
C will do a reverse split to reduce its float to a more reasonable level (3-7 billion shares) as well as allow more institutions to own its shares (to mitigate the $5 share price minimum).
IMO, C will do a 5 to 10-1 reverse split moving the share price to the $25-50 range.
10nis
Quiz:
<< The private company focuses on branded generics and over-the-counter (OTC) products and had annual sales of about 49 million Brazilian reals in 2009, Valeant said >>
It should be Brazilian Reais vs. reals.
10nis
<< This is from today's news:
In a statement, the Treasury Department said it voted all of its shares, which represent about 28 percent of Citi's outstanding stock, in favor of the reverse split.
ALL OF IT"S SHARES...28%???
So has it sold any? >>
The record date for determining which stockholders are entitled to vote was February 25, 2010 (see page 3 of the linked PDF file below). Thus, on February 25, 2010, the Treasury held approximately 28% percent of C shares however they could have sold shares since then.
http://www.citigroup.com/citi/fin/data/ar10cp.pdf
It is my understanding the Treasury will not be making SEC filings (13D, etc.) regarding their sale of C shares.
10nis
<< Interesting comment made on Fast Money tonight:
Joe Taranova stated that he'd be very surprised if Morgan Stanley hadn't already sold some of C's shares... >>
Why is that so interesting? The government already said they were going to have Morgan Stanley sell them over the rest of the year. If MS choose to sell the 7.7 billion shares evenly over the last 9 months (April thru December)... They would need to sell approximately 40 million shares per trading day.
10nis
<< It is odd. Maybe to stop the freefall? or just confidence in future share price or a bit of both? >>
I don't see it stopping the free-fall although it should stop it for the next couple of days but cost shareholders a couple dollars per share purchased in the buyback. FCN did a similar move last year (however I believe they said over the remaining fiscal quarter) and once they announced the accelerated buy-back was completed the share price fell 8-10% (over a couple of weeks).
It is odd that they would say this week since MON has seen a decent increase in volume the past 5-6 trading days so they should have had no problems picking up large blocks last week and the rest of this week.
Also, what is the rush in getting it completed this week versus over the next couple of weeks??? Trying to impact its EPS calculation?
10nis
<< it is possible i think this week over $6 >>
You must be friends with cyclone. Anything is possible... However, I'll bet you a $1k, $10k, whatever you want that C does not get over $6 this week.
10nis
<< more spin nisman. Not to impune your intelligence or character but you're all wet here... You actually believe GS? Come ON!You're not a shareholder, not stupid, so what is your motivation to defend the indefensable? Just curious,, especially since a simpleton like myself can even argue this case with ease,,,hehe >>
What am I spinning? I'm defending Goldman because they are correct in this matter - they did not commit fraud. You're correct that you are a simpleton.
Why would Goldman risk putting out a false PR and risk more damage to its reputation? Why didn't GS settle the claim 9 months ago? Because its knows it didn't commit fraud. Goldman hires the best and brightest from the best schools all over the world. They may be @ssholes and make insane compensation however they don't commit fraud and think they can get away with it.
More importantly how can anyone claim Goldman committed Fraud when it lost nearly $100 million on the disputed CDO transaction.
Its pretty obvious that the SEC is trying to cover up yet another blown ponzi scheme by bring up this matter on Friday.
10nis
<< Was C selling securitized mortgages that were hand selected by a hedge fund that was short them?
Something tells me no hedge fund would go to C about arranging something like that - Goldman would be the first and only likely place to go. I'm sure C isn't completely innocent however I do not believe C Management believed they were smart enough to even try a "Goldman" like move."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49082569 >>
I wrote the above message before finding out more of the facts regarding the transaction. After learning more about the transaction it came clear Goldman did NOT commit fraud regarding this transaction.
10nis
<< you are misinformed or are you desperate? "The SEC, in its complaint, says Goldman failed to disclose to investors that Paulson & Co., a hedge fund, had cherry-picked assets to go into the CDO in question and that it was betting against those underlying assets, unbeknownst to ACA." www.advfn.com/news_Insurer-ACA-At-Heart-Of-Goldman-Case-Had-Financial-Troubles_42421188.html
AcA was the weak patsy set up to carry the payload, not an informed player. Even NBC Nightly News reported it was a set up, there is little doubt.
http://www.msnbc.msn.com/id/21134540/vp/36233217#36606904
And the ultimate suckers in the deal, not ACA, but a German and Dutch National Bank were puposely misinformed that Paulson & Co. had a long interest in this "Good Investment" when GS knew he was ALL IN Short! on the hand picked "Likely to Lose" bucket of chum... Do you acknowledge, at least that? Or will you find some complicated rational to suit?
These foreign banks were highly pissed at GS for what bad deals they got, yada yada the Big Boy Clause, but now it is not just bad timing, it is unadultrated, on purpose, stick it to THEM<>FRAUD and the law suits are going to be stacked up TO DA MOON!>>>
You must work for the SEC because you sound misinformed and financially illiterate. I have never held a position in GS and I'm only writing to educate the financial illiterate on this board.
First off, why do you believe everything you hear from CNBC, the SEC and NBC as its gospel? Second, did you even read Goldman's press release after hours? If not, you should. It makes the situation pretty clear and there is no reason Goldman would risk its entire business future on a press release that was not accurate. On the other hand the SEC can say and do anything it essentially wants because it has no risk of going out of business - how many more ponzi schemes are they going to do nothing about? Anyways...
Based on the after hours press release there was NO Cherry Picking as both ACA and Paulson & Co selected the assets underlying the CDO. They both knew exactly which assets were underlying the CDO and they both had the same opportunity to do their due diligence on those assets.
How are German and Dutch National Banks not informed players? They have billions of investment dollars yet some how they are not informed or do not have the ability to do due diligence on every investment they make? You're insane to believe they are not informed or they did not have the opportunity to do due diligence on the CDO. They have highly educated and intelligent staff people that make investment decisions - just like hedge funds, foundations, endowments, mutual funds, etc. throughout the world.
In the end, ACA/National Banks tried to generate higher yields/returns through CDO's vs. take the return on riskless assets. They based their decision on due diligence of the underlying mortgages and their belief that real estate would not correct. They sure as hell did not invest because they thought some random hedge fund they never heard of "was in" the CDO. That's the most moronic claim of this dispute. And if they actual did invest based on that premise AcA/National Banks violated their fiduciary duty to their investors for not doing due diligence on the investment/CDO. These banks aren't moron retail investors that make investments based on what they hear at the watercooler. They have highly educated investment teams whose sole job is to research and make proper investment decisions.
Last you say these banks were highly pissed at GS for what bad deals they got... Goldman wasn't investing the banks money - Goldman is just the middle man. The Banks investment team failed to do its job and make correct investment decisions. Goldman isn't at fault for being a market maker to moronic investment decisions just like Etrade, Schwab or whomever isn't at fault when retail investors make bad investment decisions.
This is my last post on this subject.
10nis
<< 10 I appreciate you having this discussion. With so much Grey Area, it is useful to ferret out some kind of black and white assertion even if Truth has been lost in a sea of self serving rationalization. You said "The broad definition of fraud is an intentional deception made for personal gain or to damage another person/company". Say we had a big poker game and a number observers around the game decided to make wagers too. You and I run the game and set the rules for the observers bets and we want to have a lively game. So, to make it interesting, what if we gave one of the side betters a chance to populate one of the players hand with a full house, and cleared the deck of good cards so all the other suckers had zilch. Our fav better could then go ALL IN on the full house player, sure to win. No harm right? Only for the purpose of making a market. Sure thing.... Paulson & Co made a Billion on CDS of a Billion CDO offering.... ALL IN,, he knew it was a dead CDO walking.. and GS did that for their most favorite client at the expense of some foreign suckers dumb enough to believe GS when told Paulson was in on this offering,, but they failed to say HE WAS ALL IN SHORT and had POPULATED THE LOSING HAND THEY WERE DEALT! Now what part of that is NOT FRAUD?????? >>
Your scenario makes no sense. BOTH ACA and Paulson & Co. decided on the CDO asset portfolio. They both knew exactly which mortgages were included in the CDO and they each selected assets they wanted or did not want in the portfolio. After they both were comfortable with asset selection and after doing their due diligence on the asset portfolio they both agreed to invest in the CDO (one betting long and one betting short) with Goldman being the middle guy (i.e., the poker dealer taking the ante). To make the transaction whole Goldman also went long a portion of the CDO. In dervivative transactions (swaps, CDO's, etc.) the transaction parties rarely if ever know who their counterparty is. That is why you need a middle man putting the transctions together - just like a equity market maker.
ACA went all in assuming it had the better hand (i.e., that its due diligence on the asset pool was correct) while Paulson & Co. did the same thing. This happens every day in every stock transaction / private equity transaction, etc. - some sells and some buys (one believes its time to get out and one thinks its time to get in). Think about the AOL / TW transaction. Did AOL somehow know that the tech boom would start imploding at the end of January 2000? Hell no, but they were smart enough to sell out before it implode. The same thing happened in this case. Paulson & Co. did not know for certain the housing market or the selected CDO asset portfolio was going to implode however they believed there was a good chance it may while ACA thought the opposite. There was no 100% certainty that Paulson & Co was right and ACA was wrong.
In the end, ACA like TW made a very bad investment decision. Both ACA and TW have highly intelligent, well educated executives that spent time doing due diligence on the proposed transaction however they completely screwed up on their investment decision.
Or maybe an easier way to think of it is using this link...
<< intentional deception,,,,, to harm another.... get it? >>
How did Goldman gain financially from the disputed transaction? How come AXA and other large institutional investors of Goldman who lost money on CDO bets are not suing Goldman for fraud?
10nis
<< it is FRAUD when you misrepresent the TRUTH saying Paulson & Co. was in the CDO deal as if he also had bought the same paper>>><<<
You don't think that is double dealing scum fraud? >>
The broad definition of fraud is an intentional deception made for personal gain or to damage another person/company, etc.
How did Goldman gain from this transaction when it actually lost money on it? Did ACA ask GS whether Paulson & Co. was going long the CDO and Goldman actually told them they were when actually they were short?
Also, wouldn't you think ACA and its investors would be suing Goldman if GS commit fraud against them? How come they are not? Because no fraud took place and ACA just screwed up and bet the wrong way.
10nis
<< Saying Paulson and Co.. were in on the CDOs,, pumping but not revealing he was short,,, is FRAUD.. pure and simple
blog.newsweek.com/blogs/wealthofnations/archive/2010/04/16/goldman-sachs-has-the-sec-finally-grown-a-pair-under-mary-schapiro.aspx >>
What is fraud?? GS was a market maker just like when you buy or sell a share of stock. Are you being told before you buy a share of say GE whether your shares are shorted and who is short them? Hell no!!
Both AXA and Paulson & Co knew exactly what assets were backing the CDO. AXA bet long, Paulson & Co. bet short... Someone wins, someone losses. Its simply like betting on a straight up game (Baseball, BBall, etc.) in Vegas. There's a winner, there's a loser and the house gets a cut. The only difference is Goldman was one of the long investors as well.
The SEC simple is trying to take some heat off yet another blown Ponzi Scheme as well as drum up some support for the financial overhaul bill. If the little investor wants to be pissed off at someone its not Goldman but the SEC for failing to do its job for decades.
10nis
If Goldman did what they said they did in their after hours press release ( http://finance.yahoo.com/news/Goldman-Sachs-Makes-Further-bw-754781372.html?x=0&.v=1 ) they did not commit fraud related to this incident. AXA and the rest of the investors plainly just had the wrong view on housing and the potential of a severe housing correction. They bet and were wrong. End of story.
I think its pretty obvious the SEC filed charges on Friday to 1.) cover up the Stanford Ponzi Scheme F up - way to go!! and 2.) To help get a major finance overhaul bill passed.
10nis
OT: << Is there actually anyone still left on the planet that doesn't believe global warming is causing major destruction? or at least anyone who has not slept with his sister or his sister's goat? >>
I don't think there is any dispute that the earth has gotten warmer just whether the majority of that increase is due to human actions or uncontrollable natural global changes. I'm a believer that human actions have had an immaterial impact to global warming. I'm all for conserving and doing the right thing, however, IMHO politicans and corporate america are overhyping the problem in order to generate growth and inflate their ego - Mr. Gore, inventor of the Internet.
10nis
<< CYCC mentioned with Merck and Pfizer: will be monster Monday:
seekingalpha.com/instablog/353981-michael-becker/63734-cyclin-dependent-cancer-confab-preview
At AACR, Cyclacel is introducing a second-generation CDK product candidate, which is currently in investigational new drug [IND]-directed development. The undisclosed molecule is a second generation oral CDK inhibitor with increased potency. Three abstracts related to both seliciclib and the second-generation compound are scheduled for presentation at AACR. >>
jaybird... Thanks for your insightful pump and dump post. Next time hit the YMB's. Thanks.
10nis
<<< took a beating today -- slipped under $5 -- disappointed but not worried -- >>>
Slipped under $5? Try its currently trading 10% under $5. Good luck with $6 on Monday. I don't see C adding $50+ billion in market cap from one earnings announcement but I guess crazier things have happened.
10nis