Aruba Networks Rallies As FY Q4 Tops Forecasts


This post is by Eric Savitz from BARRONS.com: Tech Trader Daily - Barron's Online


Click here to view on the original site: Original Post




Aruba Networks (ARUN) shares are moving higher after hours on better-than-expected results for its fiscal fourth quarter ended July 31.

For the quarter, the wireless LAN provider posted revenue of $53.3 million, up 10.5% year over year and 16.4% sequentially, and above the Street at $49.5 million. Non-GAAP profits of 3 cents a share were a penny ahead of expectations.

In a statement, CEO Dominic Orr said that the company is “gaining market share and deriving significant traction from both new and existing customers despite challenging market conditions.”

In late trading, ARUN is up 86 cents, or 10.6%, to $9.

OmniVision Soars; FY Q1 Beats; Guidance Crushes Ests


This post is by Eric Savitz from BARRONS.com: Tech Trader Daily - Barron's Online


Click here to view on the original site: Original Post




OmniVision (OVTI) shares are sharply higher in late trading, after the image sensor company posted strong results for its fiscal first quarter ended July 31 – and provided guidance for the fiscal second quarter that is dramatically higher than the previous Street forecasts.

For the quarter, OVTI posted revenue of $105.6 million, down from $174.3 million a year ago, but up from $89.1 million in Q4, and above the Street at $99.1 million. Non-GAAP EPS loss of 8 cents a share was smaller than the Street projection of 11 cents.

More impressive was the guidance. OmniVision sees Q2 revenue of $155 millon to $170 million, a huge sequential increase, and way above the old consensus of $111.8 million. The company sees non-GAAP EPS for the quarter of 10-20 cents a share, while the Street had been looking for a loss of 4 cents a share.

In a statement, CEO Shaw Hong said that “the current market demand for our products demonstrates that our operating strategy is well aligned with the demands of the image sensor market.”

In after hours trading, OVTI is up $1.70, or 12.8%, to $15.

Earlier: OmniVision Reportedly To Provide iPod Camera Sensors

Carbon Cap-and-Trade: A Government M&A Stimulus Plan?


This post is by Kyle Stock from WSJ.com: Deal Journal


Click here to view on the original site: Original Post




Kyle Stock, who writes about careers for Dow Jones’ financial-careers site, FINS.com, reports:

Health-care overhaul may be on life support, and while the chances of carbon cap-and-trade legislation may not be appreciably stronger, the bill still is sparking some M&A chatter.

A functioning carbon market in the U.S. would cook up deals in almost any sector with a big emissions footprint, including utilities, oil refiners and metal-makers, according to Michael Hill, global co-head of natural resources at Deutsche Bank.

wyomingplant_D_20090827160046.jpgBloomberg News

A coal-fired power plant near Casper, Wyo.

Markets hate uncertainty and the expense of polluting has been anyone’s guess. “The cost of carbon will no longer be a question mark,” Hill said. “It will be a fact and in a short period of time the market can model that. …Obviously, it’s hard to do deals when people are unclear about value.”

In particular, U.S. industrial companies will begin to look more attractive to companies in Europe, which has had a carbon market since 2005. While the U.S. power market has long looked good to foreigners, because Americans buy a relatively large amount of electricity per-capita and the regulatory structure here lends itself to rate increases, European companies have shied away from acquisitions because of the carbon question mark. They would likely be bolder if carbon had a price and a fixed supply.

Relatively “clean” utilities such as Xcel Energy, of Minneapolis, would command a premium, as would those that are buying or building wind turbines and solar panels, like New Jersey’s NRG Energy.

Meantime, Hill said a cap-and-trade system would also heat up underwriting activity, as power companies would need to raise cash to bankroll new infrastructure for cutting emissions and to buy companies that create renewable energy.

Michael Wong, an analyst who covers financiers and stock exchanges for mutual-fund tracker Morningstar Inc., said investment banks already have started maneuvering for the would-be windfall. Those, like Deutsche Bank, that deal in European carbon markets, will have a head-start.

At the end of June, a cadre of former bulge-bracket bankers led by Jeff McDermott, once the joint global head of investment banking at UBS, launched Greentech Capital Advisors, a New York boutique aimed at cultivating “green” deals.

Goldman Sachs Group and private-equity shops such as First Reserve have been buying into the renewable-energy industry. Both companies own stakes in Blue Source, a Utah company that captures and stores carbon. Goldman Sachs also has agreed to buy the majority of the carbon offsets from E+Co., which builds renewable energy plants world-wide.

For now, burning carbon is still free. The House of Representatives passed a 1,300 page cap-and-trade measure in early July that the Senate will start chewing on when it comes back from August recess.

Whether the bill still stimulate Wall Street’s specialty, trading, is another question. “Speculators” is a dirty word in D.C. these days, and there is a move to block finance firms from what would be a massive new commodity market.

Sen. Maria Cantwell, a democrat from Washington, has filed a stripped down 22-page cap-and-trade bill that would largely box out finance firms. Sen. Byron Dorgan, a democrat from North Dakota, has opposed carbon-trading altogether, arguing that it would be “a field day for speculation.”

“It won’t be very long before we have derivatives,” Dorgan said late last month. “We’ll have swaps; we’ll have synthetic swaps. You name it; we’ll have all of them.”

For the full story click here.


A Few Favorites


This post is by Michael Panzner from Financial Armageddon


Click here to view on the original site: Original Post




Six Apart, the creators of Typepad (the hosting service that I use for all my blogs), publishes a website called Blogs.com, aimed at helping visitors discover the best in the genre.

One of the site’s popular features is a section called Top Ten Lists, where selected bloggers get to highlight sites others might find interesting and informative. Some recent business and finance-related contributors include Stephen Vita, publisher of Alchemy of Finance, the editor-in-chief of FiveCentNickel, and Russell Bailyn, publisher of Russell Bailyn’s Financial Planning Blog.

In today’s edition, entitled “Coming to Grips with the Great Unraveling – 10 Great Financial Blogs,” I listed a few of the blogs that help keep me informed about what is really going on, as follows:

Calculated Risk

Cara Community

FT Alphaville

Jr Deputy Accountant

Mish’s Global Economic Trend Analysis

Naked Capitalism

Of Two Minds

The Automatic Earth

The Big Picture

Zero Hedge

There are plenty of others, of course — my RSS reader, for example, has more than 350 blog feeds alone — so one shouldn’t assume I could get by with just the sites listed here. Nonetheless, they represent an excellent starting point (aside from Financial Armageddon and When Giants Fall, that is) for keeping tabs on a dangerously uncertain and fast-changing world.


Novell FY Q3 Revs, Profits Match Ests; Stock Slips


This post is by Eric Savitz from BARRONS.com: Tech Trader Daily - Barron's Online


Click here to view on the original site: Original Post




Novell (NOVL) reported in-line results for its fiscal third quarter ended July 31.

The company posted revenue of $216.1 million, down from $245 million a year ago, and a smidge below the Street at $216.6 million. Non-GAAP EPS of 7 cents a share matched the Street consensus.

Novell noted that it finished the quarter with $921 million in cash and equivalents, down from $1 billion after retiring its outstanding convertible debentures. The cash represents more than half of the company’s $1.6 billion market cap.

Novell did not give specific guidance in the release, but instead said it expects to maintain double-digit non-GAAP operating margins for the full year, “barring unforeseen circumstances.”

In late trading, NOVL is down 21 cents, or 4.5%, to $4.50.

“Revisiting Popper”


This post is by Mark Thoma from Economist's View


Click here to view on the original site: Original Post




Is it true that "History and society are not law-governed systems for which
we might eventually hope to find exact and comprehensive theories"?:


Revisiting Popper, by Daniel Little
: Karl Popper's most commonly cited
contribution to philosophy and the philosophy of science is his theory of
falsifiability
(The
Logic of Scientific Discovery
,

Conjectures and Refutations: The Growth of Scientific Knowledge
).
(Stephen Thornton has a very nice
essay on Popper's
philosophy in the Stanford Encyclopedia of
Philosophy
.) In its essence, this theory is an alternative to
"confirmation theory." Contrary to positivist philosophy of science, Popper
doesn't think that scientific theories can be confirmed by more and more
positive empirical evidence. Instead, he argues that the logic of scientific
research is a critical method in which scientists do their best to "falsify"
their hypotheses and theories. And we are rationally justified in accepting
theories that have been severely tested through an effort to show they are false
— rather than accepting theories for which we have accumulated a body of
corroborative evidence. Basically, he argues that scientists are in the business
of asking this question: what is the most unlikely consequence of this
hypothesis? How can I find evidence in nature that would demonstrate that the
hypothesis is false? Popper criticizes theorists like Marx and Freud who attempt
to accumulate evidence that corroborates their theories (historical materialism,
ego transference) and praises theorists like Einstein who honestly confront the
unlikely consequences their theories appear to have (perihelion of Mars).

At bottom, I think many philosophers of science have drawn their own conclusions
about both falsifiability and confirmation theory: there is no recipe for
measuring the empirical credibility of a given scientific theory, and there is
no codifiable "inductive logic" that might replace the forms of empirical
reasoning that we find throughout the history of science. Instead, we need to
look in greater detail at the epistemic practices of real research communities
in order to see the nuanced forms of empirical reasoning that are brought
forward for the evaluation of scientific theories. Popper's student, Imre
Lakatos, makes one effort at this (Methodology of Scientific Research Programmes;

Criticism and the Growth of Knowledge
);
so does William Newton-Smith (The
Rationality of Science
),
and much of the philosophy of science that has proceeded under the rubrics of
philosophy of physics, biology, or economics is equally attentive to the
specific epistemic practices of real working scientific traditions. So "falsifiability"
doesn't seem to have a lot to add to a theory of scientific rationality at this
point in the philosophy of science. In particular, Popper's grand critique of
Marx's social science on the grounds that it is "unfalsifiable" just seems to
miss the point; surely Marx, Durkheim, Weber, Simmel, or Tocqueville have
important social science insights that can't be refuted by deriding them as "unfalsifiable".
And Popper's impatience with Marxism makes one doubt his objectivity as a
sympathetic reader of Marx's work.

Of greater interest is another celebrated idea that Popper put forward, his
critique of “historicism” (Popper 1957). And unlike the theory of falsifiability,
I think that there are important insights in this discussion that are even more
useful today than they were in 1957, when it comes to conceptualizing the nature
of the social sciences. So people who are a little dismissive of Popper may find
that there are novelties here that they will find interesting.

Popper characterizes historicism as “an approach to the social sciences which
assumes that historical prediction is their principal aim, and which assumes
that this aim is attainable by discovering the ‘rhythms’ or the ‘patterns’, the
‘laws’ or the ‘trends’ that underlie the evolution of history” (3). Historicists
differ from naturalists, however, in that they believe that the laws that govern
history are themselves historically changeable. So a given historical epoch has
its own laws and generalizations – unlike the laws of nature that are uniform
across time and space. So historicism involves combining two ideas: prediction
of historical change based on a formulation of general laws or patterns; and a
recognition that historical laws and patterns are themselves variable over time,
in reaction to human agency.

Popper’s central conclusion is that large predictions of historical or social
outcomes are inherently unjustifiable — a position taken up several times here
(post,
post).
He finds that “holistic” or “utopian” historical predictions depend upon
assumptions that simply cannot be justified; instead, he prefers “piecemeal”
predictions and interventions (21). What Popper calls “historicism” amounts to
the aspiration that there should be a comprehensive science of society that
permits prediction of whole future states of the social system, and also
supports re-engineering of the social system if we choose. In other words,
historicism in his description sounds quite a bit like social physics: the
aspiration of finding a theory that describes and predicts the total state of
society.

The kind of history with which historicists wish to identify sociology looks not
only backwards to the past but also forwards to the future. It is the study of
the operative forces and, above all, of the laws of social development. (45)

Popper rejects the feasibility or appropriateness of this vision of social
knowledge, and he is right to do so. The social world is not amenable to this
kind of general theoretical representation.

The social thinker who serves as Popper’s example of this kind of holistic
social theory is Karl Marx. According to Popper, Marx’s
Capital (Marx 1977 [1867]) is intended
to be a general theory of capitalist society, providing a basis for predicting
its future and its specific internal changes over time. And Marx’s theory of
historical materialism (“History is a history of class conflict,” “History is
the unfolding of the contradictions between the forces and relations of
production”; (Communist Manifesto,
Preface to a Contribution to Political Economy))
is Popper’s central example of a holistic theory of history. And it is Marx’s
theory of revolution that provides a central example for Popper under the
category of utopian social engineering. In

The Scientific Marx

I argue that Popper’s representation of Marx’s social science contribution is
flawed; rather, Marx's ideas about capitalism take the form of an eclectic
combination of sociology, economic theory, historical description, and
institutional analysis. It is also true, however, that Marx writes in
Capital that he is looking to identify
the laws of motion of the capitalist mode of production.

Whatever the accuracy of Popper's interpretation of Marx, his more general point
is certainly correct. Sociology and economics cannot provide us with general
theories that permit the prediction of large historical change. Popper’s
critique of historicism, then, can be rephrased as a compelling critique of the
model of the natural sciences as a meta-theory for the social and historical
sciences. History and society are not law-governed systems for which we might
eventually hope to find exact and comprehensive theories. Instead, they are the
heterogeneous, plastic, and contingent compound of actions, structures, causal
mechanisms, and conjunctures that elude systematization and prediction. And this
conclusion brings us back to the centrality of agent-centered explanations of
historical outcomes.

I chose the

planetary photo
above because it raises a number of complexities about
theoretical systems, comprehensive models, and prediction that need sorting out.
Popper observes that metaphors from astronomy have had a great deal of sway with
historicists: "Modern historicists have been greatly impressed by the success of
Newtonian theory, and especially by its power of forecasting the position of the
planets a long time ahead" (36). The photo is of a distant planetary system in
the making. The amount of debris in orbit makes it clear that it would be
impossible to model and predict the behavior of this system over time; this is
an n-body gravitational problem that even Newton despaired to solve. What
physics does succeed in doing is identifying the processes and forces that are
relevant to the evolution of this system over time — without being able to
predict its course in even gross form. This is a good example of a complex,
chaotic system where prediction is impossible.

Fed appeals Court’s decision to release details of $2 trillion dollar bailouts


This post is by Connie Madon from BloggingStocks


Click here to view on the original site: Original Post




Filed under: , ,

What exactly is the Fed appealing? On August 24, Loretta Preska, Chief U.S. District judge, ruled that the Fed must disclose the identities of borrowers in 11 lending programs amounting to $2 trillion dollars.

In its motion, the Fed argued that “The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review.”

The Fed’s statement went on to say that “the Fed’s ability to effectively manage the current, and any future, financial crisis would be impaired.” It said “significant harm” could befall the U.S. economy as well.

Continue reading Fed appeals Court’s decision to release details of $2 trillion dollar bailouts

Fed appeals Court’s decision to release details of $2 trillion dollar bailouts originally appeared on BloggingStocks on Thu, 27 Aug 2009 15:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments



Add to digg
Add to del.icio.us
Add to Google
Add to StumbleUpon
Add to Facebook
Add to Reddit
Add to Technorati



Marvell FY Q2 Revs, EPS Top Street Forecasts


This post is by Eric Savitz from BARRONS.com: Tech Trader Daily - Barron's Online


Click here to view on the original site: Original Post




Marvell Technology (MRVL) this afternoon reported better-than-expected results for its fiscal second quarter ended August 1.

The chip maker posted Q2 revenues were $640.6 million, down 24% year over year, but up 23% sequentially, and above the Street consensus at $619.8 million. Non-GAAP EPS of 18 cents a share beat the consensus of 14 cents.

GAAP gross margin improved to 55%, from 50.6% in Q1 and 51.8% a year ago.

CEO Sehat Sutardja said in a statement that the strong sequential growth reflects “both an improving economy and the acceptance by customers of our new and existing products.”

After hours, MRVL is up 7 cents, or 0.5%, to $14.70.

Vulcan Capital Sells Stake in PAA Natural Gas Storage


This post is by editor from PE Hub News: All News


Click here to view on the original site: Original Post




Vulcan Capital has sold its 50% stake in PAA Natural Gas Storage LLC to Plans All American Pipeline (NYSE: PAA). The deal is valued at $220 million, including $90 million in cash, $40 million in deferred contingent cash consideration 1.9 million PAA common units valued at $90 million. PAA Natural Gas Storage is a joint venture Vulcan launched with PAAP back in 2005.

PRESS RELEASE

Plains All American Pipeline, L.P. (NYSE:PAA) and Vulcan Capital today announced that they have executed definitive agreements under which a subsidiary of PAA will acquire Vulcan Capital’s 50% indirect interest in PAA Natural Gas Storage, LLC (PNGS). The aggregate purchase price of $220 million consists of $90 million cash, 1.9 million PAA common units valued at $90 million, and deferred contingent cash consideration of up to $40 million. The contingent consideration is subject to achievement of certain events and performance milestones expected to occur over the next several years. The transaction is expected to close on September 3, 2009.

As a result of the transaction, PAA will own 100% of the natural gas storage business and related operating entities, which will be accounted for on a consolidated basis. The Partnership has historically accounted for its 50% indirect interest in PNGS under the equity method. At closing, PAA will repay the joint venture’s outstanding project finance debt using joint venture cash and borrowings under its revolving credit facility. As of June 30, 2009, the joint venture had approximately $450 million of debt and approximately $52 million of cash.

“We are extremely pleased to announce this transaction and are excited about the near-term and long-term potential of the natural gas storage business,” said Greg L. Armstrong, CEO of PAA. “This transaction provides economic returns solidly in excess of our weighted average cost of capital and will result in immediate accretion to the Partnership.”

“Increasing our interest to 100% will enhance our strategic flexibility with respect to future organic growth and acquisitions, and also increase the visibility of the value that has already been created,” said Armstrong. “Notably, the cash-flow stream of our natural gas storage business is essentially 100% fee-based, with currently available storage capacity substantially committed under contracts ranging up to ten years in duration. Moreover, the cash-flow profile is expected to increase steadily over the next several years as we continue to expand the storage capacity through our development activities at our Pine Prairie facility.”

Geoff McKay, a Managing Director at Vulcan Capital, said, “We have enjoyed working with the entire PAA team over the last four years to build value together at PNGS. Through our significant equity position in PAA, we will continue to be a meaningful participant in the growth of this and PAA’s other businesses, and we look forward to continuing to support PAA’s future success.”

The transaction was approved by the board of directors of the general partner of PAA and by its conflicts committee. The conflicts committee, which is comprised entirely of independent directors, received a fairness opinion from Simmons & Company International with respect to the consideration paid by PAA in this transaction.

PAA management intends to recommend to its board of directors an increase in the Partnership’s quarterly distribution level to $0.92 per unit, or $3.68 per unit on an annualized basis, effective with the November 2009 distribution, subject to adverse developments in the economic and financial markets, or other events that would make such recommendation inappropriate. To enhance PAA’s distribution coverage ratio over the next 24 months as cash flows ramp-up from expansion activities, PAA’s general partner has agreed to reduce its incentive distributions by an aggregate of $8 million over the next two years – $1.25 million per quarter for the first four quarters and $0.75 million per quarter for the next four quarters. The IDR reduction will become effective with the planned November 2009 distribution increase.

Conference Call

The Partnership will host a conference call at 10:00 AM (Central); 11:00 AM (Eastern) on Friday, August 28, 2009, to discuss the acquisition. Specific items to be addressed in this call include:

1.

a brief description of the transaction;

2.

the Partnership’s financing plans for funding the transaction;

3.

the strategic rationale for the transaction;

4.

an overview of the PNGS assets and business;

5.

certain accounting matters important to an understanding of the transaction impacts on PAA; and

6.

the anticipated financial performance of PNGS.

Webcast Instructions

To access the Internet webcast, please go to the Partnership’s website at www.paalp.com, choose “Investor Relations,” then choose “Conference Calls.” Following the live webcast, the call will be archived for a period of sixty (60) days on the Partnership’s website.

If you are unable to participate in the webcast, please dial 800-288-8974, or, for international callers, 612-332-0335 at approximately 9:55 AM (Central). No password or reservation number is required. You may access the slide presentation accompanying the conference call a few minutes prior to the call under the Conference Call Summaries portion of the Conference Calls tab of the Investor Relations section of PAA’s website at www.paalp.com.

Telephonic Replay Instructions

To listen to a telephonic replay of the conference call, please dial 800-475-6701, or, for international callers, 320-365-3844, and replay access code 113862. The replay will be available beginning Friday, August 28, 2009, at approximately 12:00 PM (Central) and continue until 11:59 PM (Central) on Monday, September 28, 2009.

Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its ownership in PAA Natural Gas Storage, the partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership is headquartered in Houston, Texas.

ShareThis


Dell FY Q2 Revs, EPS Top Ests; Numbers Posted Early


This post is by Eric Savitz from BARRONS.com: Tech Trader Daily - Barron's Online


Click here to view on the original site: Original Post




Dell (DELL) posted slightly better than expected results for its fiscal second quarter ended July 31.

The computer company’s revenue for the quarter was $12.764 billion, up from $12.342 billion in Q1, down 22% from $16.434 billion a year ago, and above the Street at $12.59 billion. EPS of 24 cents a share beat the consensus by a penny a share.

Gross margin rose to 18.7%, from 17.6% in Q1, and  17.2% a year ago. SG&A dropped to 12.3% of revenue, from 13.1% in Q1, while operating expenses fell to 13.5% of revenue, from 14.2%. Operating margin was 5.2%, up from 3.4% in Q1, and 5.0% a year ago.

I would note that the company posted financial data on the quarter on the Dell web site before the close of trading, which is highly unusual, and likely an error on the part of someone in Dell IR.

Update: The numbers were released on Business Wire at 3:57 p.m. Eastern time, again highly unusual.

CEO Michael Dell said in a statement that if current trends continue, second half revenue should be stronger than in the first half.

The company did not give specific Q3 guidance, but instead said it expects seasonal demand improvement from consumer and U.S. federal government customers, but notes that the quarter is also a period of slower demand from commercial accounts in the U.S. and Europe. Dell said it continues to see “pressure in the form of component costs and areas of aggressive pricing in the near term, and continues to take actions to offset these items.” The company said it continues to focus on cost improvements and strategic investments to improve operations for the long term.

Dell shares jumped in the last few minutes of trading; heading into the close the stock was up 87 cents, or 5.9%, to $15.54.

For Young People, A Jobless Summer


This post is by WSJ.com: Real Time Economics from WSJ.com: Real Time Economics


Click here to view on the original site: Original Post




The youth unemployment rate hit 18.5% in July 2009, the highest level for that month since 1948, the Labor Department said Thursday.

The youth unemployment rate, which covers people 16 to 24 years old, was down from 19.9% in June, but was the highest for the month of July since the Labor Department started tracking it.

From April to July, the number of employed young people rose by 1.6 million to 19.3 million, according to Labor Department data that’s not seasonally adjusted because it’s meant to track the traditional increase in summer employment among young people. Last summer the number of young people grew by 1.9 million.

The proportion of young people working, though, was 51.4%, another historic low for the month of July, which tends to be the peak for youth summer jobs. At its peak in 1989, that proportion was about 18 percentage points higher.

Young workers tend to be some of the most vulnerable employees, so they’ve been hit particularly hard during this deep downturn. Summer is traditionally the season when they hit the market en masse, searching for their first jobs, internships, or seasonal employment.

The worst recession in 70 years has made that pursuit extraordinarily tough, pushing even experienced workers to compete for low-wage jobs and parents to shell out thousands to buy their children coveted internship slots.

Some, it appears, are fleeing the labor market entirely – at least for now. The labor force participation rate for the age group, meaning the proportion of young people working or looking for work, was 63% in July, 2.1 percentage points lower than last year. It’s the lowest July rate in more than 50 years.


Is the dollar about to plunge?


This post is by Joseph Lazzaro from BloggingStocks


Click here to view on the original site: Original Post




Filed under: ,

Where’s the dollar headed from here? Well, if you’re in the camp that argues both monetary and fiscal stimulus guarantee rising inflation, the dollar will trend lower in the immediate quarters ahead, and probably for longer.

If you’re in the camp that argues that given asset destruction, and massive job lay-offs, pricing power is non-existent, the dollar will hold its own against the world’s other major currencies.

Continue reading Is the dollar about to plunge?

Is the dollar about to plunge? originally appeared on BloggingStocks on Thu, 27 Aug 2009 15:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments



Add to digg
Add to del.icio.us
Add to Google
Add to StumbleUpon
Add to Facebook
Add to Reddit
Add to Technorati



Goldman Sachs: The Movie


This post is by Michael Corkery from WSJ.com: Deal Journal


Click here to view on the original site: Original Post




The financial crisis is coming to the movies. The BBC is chronicling the collapse of Lehman Brothers in a television drama this fall, while film maker Michael Moore is taking on American International Group in a movie set for release next month

The mighty Goldman Sachs, meantime, is being lampooned by a former corporate lawyer turned aspiring stand-up comic, who has released a spoof about the Wall Street firm on YouTube and whose mom is doing the publicity for the film.

Matthew Rittberg, 30 years old, has written and directed an amateur video that pokes fun at Goldman’s profiteering amid the subprime bust. The clip satirizes a recent warning by chief executive Lloyd Blankfein that Goldman employees should refrain from lavish spending to avoid drawing any more public outrage.

Rittberg depicts the Goldman’s chiefs warning like the scene in the movie Godfellas, in which mafia boss Robert De Niro warns his crew not to spend money after they pull off the Lufthunsa cargo heist at JFK airport in the late 70s.

“What did I tell you,’’ says the Blankfein character. “With all that’s going on and you go out and buy a Mercedes 350.”

“It’s a Bamitzvah gift,’’ explains Ira, a pudgy managing director at Goldman, who is accompanied by his slim girlfriend.

“They are calling us vampire squids. The SEC and Geithner are on our backs and you go out and buy a $90,000 car?” asks the Blankfein character, trying his best to impersonate a mafia don.

Next, Tony, another Goldman managing director, shows up with his girlfriend, who is wearing a mink coat and a fake diamond ring the size of a tennis ball.

The Blankfein character unleashes another lashing: “What are you stupid. I say nothing big. One guy comes in with a Mercedes and the other with a $20,000 mink.”

“I’ll return it. I can get store credit at Neiman Marcus,” says Tony.

It’s a clever comparison to Goodfellas. But at times, the video’s dialogue drags and there’s only one real punch-line.

Rittberg says he took some heat from one newspaper editor he pitched the film to, who thought it was anti-semitic.(“I keep kosher,’’ says Rittberg, who is Jewish. “There is no way this is anti-semitic).

Rittberg says he hopes the film will boost notoriety for his stand up act. Since leaving his job as a lawyer in the private equity practice at Kirkland & Ellis six months ago, he’s been living off his savings and earning some income by writing pieces for the blog Bitter Lawyer

Rittberg also hopes the clip will raise awareness that “while regular people are suffering, on Wall Street it’s like Christmas, especially at Goldman,’’ he wrote in an email to Deal Journal.

Here’s the Goldman Goodfellas spoof:


Bond Market Close August 27 2009


This post is by John Jansen from Across the Curve


Click here to view on the original site: Original Post




Prices of Treasury coupon securities gyrated around today and made quite a bit of noise and are finishing with small changes.

The yield on the 2 year note is unchanged at 1.05 percent. The yield on the 3 year note increased a basis point to 1.56 percent. The yield on the 5 year note increased 2 basis points to 2.48 percent. The yield on the 7 year note edged 2 basis points higher to 3.09 percent. The yield on the 10 year note increased 3 basis points to 3.46 percent. The yield on the 30 year bond climbed to 4.22 percent.

The main feature of the day was the auction of $ 28 billion 7 year notes which proceeded in uneventful fashion. The market traded poorly following the auction result as the street is lugging paper and it is likely that the short base has been sated.

As the market has sagged the curve has reversed course and has steepened slightly.

The 2year/10 year spread widened 3 basis points to 241 basis points.

The 2year/30 year spread also widened by 3 basis points to 317 basis points.

For the record the 2year/5year/30 year butterfly is unchanged at 31 basis points.

Tips breakeven spreads are well behaved today also. Ten year breakevens narrowed a basis point to 174 and 30 year breakevens are unchanged at 207 basis points.

In the short run it will be interesting to see if the market holds in front of 3.50 percent on the 10 year note. We traded behind that level this morning and buyers emerged. On the other hand sellers emerge in the low 3.40s.

Month end is approaching with its much advertised extension trade. It will provide support but is so well advertised that I fear that there are enough street guys front running the trade that the crowded nature of the trade will preclude a  break into the 3.30s.

If the market is to break out of this narrow channel it is likely to happen next week when there is a spate of fundamental data to absorb.

Monday will bring the Chicago PMI and Tuesday the ISM itself.  On Friday before the Labor Day weekend participants will be greeted by the monthly labor report. There are several other second tier numbers available next week also and the combination of those economic offering should help to move the market from the current narrow range.