Der Doomsday Bären-Thread
xpfuture
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U.S. regulators grow alarmed over 'hedge fund hotels'
By Jenny Anderson
Monday, January 1, 2007
International Herald Tribune
NEW YORK - Inside a Philip Johnson-designed office tower in the Boston financial district, UBS, the giant Swiss bank, is running a "hedge fund hotel."
Just as venture capitalists and others during the technology boom created incubators to help entrepreneurs start businesses without the headaches of finding real estate and office support, so a few big investment banks are offering young ambitious hedge fund traders a temporary home, complete with receptionists, espresso machines and consultants to help manage their information systems.
As the technology incubators sought to oversee the birth of the next Netscape, so these hedge fund hotels hope that the small hedge funds may some day become big clients of the bank.
UBS is the leader in this business, with 400,000 square feet, or 37,000 square meters, of hedge fund hotels in a number of cities. Bear Stearns is also active, with space for rent in New York, Boston, San Francisco and Los Angeles.
Some regulators, however, are growing concerned about the relationship between the banks and their hedge-fund hotel guests, looking at whether the banks might be using the real estate-relationship as a way to entice hedge funds to do business with them.
William Galvin, secretary of the Commonwealth of Massachusetts, has subpoenaed UBS, and he is investigating other banks with hedge fund hotels in Boston to determine how the banks are charging for their services.
"It's a conflict of interest issue," Galvin said.
A spokeswoman for UBS declined to comment.
At the heart of the investigation is a thorny issue that has dogged regulators for decades. Money managers, including mutual funds and hedge funds, often pay Wall Street with "soft dollars" — inflated commissions that include the cost of trading (typically 1 cent to 2 cents a share) plus an additional few cents a share that can be directed to pay for research and other services.
Soft dollars are controversial because the higher commissions are paid for by clients while the services often benefit the manager most. Higher commissions result in greater expenses for the fund and potentially lower returns for investors.
In the late 1990s, the U.S. Securities and Exchange Commission cracked down on the use of soft dollars by mutual funds, concerned that investors were being duped into paying for services the manager enjoyed.
Massachusetts is now investigating whether hedge funds are improperly using soft dollars to pay for space in these hotels and failing to disclose to investors that they are covering a major expense.
"It's the same soft dollar question," Galvin said. "What kind of quid pro quo might be in the placement of an order? What's the relationship between the entities?"
At the heart of Galvin's investigation is the understanding that as hedge funds have exploded, so too have the fortunes of Wall Street. Hedge funds typically trade more than other Wall Street clients and they trade exotic, high-margin products, like complex derivatives. Because hedge funds have become such important customers, there are concerns that they may be getting better information than other investors as a result of the business they do with the banks.
The business of servicing hedge funds is called prime brokerage, and it includes financing trades, finding and lending stock to allow hedge funds to short stocks (betting that their price will fall) to structuring derivatives and executing swaps. It can also include hedge fund hotels — securing real estate, receptionists and information technology and even managing, say, the risk of trading currencies in Asia.
The global prime brokerage business generates between $8 billion and $10 billion a year, estimates Vodia Group, a consulting firm for the financial services industry. The business is highly profitable, with a return on equity — a measure of how efficiently the bank reinvests its capital — of a healthy 15 percent to 20 percent. In 2006, Goldman Sachs made $2 billion directly servicing hedge funds, 22 percent more than the previous year.
Prime brokerage is only the tip of the iceberg when it comes to the fees that hedge funds generate for Wall Street firms: billions of additional dollars come from trading for these funds.
Credit Suisse estimates investment banks made $25 billion in revenues from hedge funds in 2004, $19 billion of which came from sales and trading and the rest from prime brokerage.
Hedge funds now control half the volume traded on the New York and London stock exchanges, according to Credit Suisse.
Hedge funds generate about 30 to 35 percent of the equity commission volume of the major Wall Street firms, according to Brad Hintz, a securities analyst at Sanford C. Bernstein.
But that's only part of the equation.
"Because a hedge fund has broad investment guidelines — it is not constrained like a mutual fund to invest in certain stocks or certain sectors — it allows the hedge fund to really go after some of the more financially attractive products the Street offers," Hintz said.
In the United States, Goldman Sachs, Morgan Stanley and Bear Stearns lead the pack in prime brokerage, collectively controlling about 75 percent of the market, according to Sanford C. Bernstein.
But neither Goldman nor Morgan Stanley run significant hedge fund hotel operations. (Goldman inherited a small business from Spear, Leeds Kellogg, which it bought in 2001.)
Bear Stearns' hedge-fund hotel clients tend to be small, though some that started with the bank 10 years ago have built multibillion-dollar systems. Bear Stearns unusual is because it accepts only "hard-dollar" arrangements, rather then venturing into the murky area of soft dollars.
Bank of America exited the hedge fund hotel business 18 months ago because of a lack of demand.
Lehman Brothers and Credit Suisse have been building their prime-brokerage businesses. Lehman has space that it leases to a select group of clients, but it is not a major player in the hotel space. Credit Suisse prefers to cater to a small number of institutional-quality hedge funds that are expanding into high-margin products like structured derivatives and reinsurance.
Jefferies, a bank that caters to mid- market clients, recruited a significant part of Bank of America's prime brokerage team to build up its business, including hedge fund hotels. Glen Dailey, head of prime brokerage, said the business was too expensive to build.
The banks that provide hedge fund hotels are careful to indicate they do not endorse the fund they are presenting to investors. But that may always be clear to investors.
"When does the corporate veil get pierced here?" Hintz of Sanford C. Bernstein asked. "When is this fund not independent because it depends on its broker-dealer for everything? It could get messy."
Den Kommentar von Cathy Minehan, Präsidentin der Federal Reserve Bank von Boston, habe ich ja gestern hier eingestellt, heute der optimistische Fed – Chef persönlich, denn man merke auf, die Fed ist
"able to respond more quickly, more effectively and in a more informed way than would otherwise be possible,"Bernanke: Fed is prepared for crisis
Chief does not specify any looming disasters
By Bill Barnhart
Tribune staff reporter
Published January 6, 2007
Federal Reserve Board Chairman Ben Bernanke, speaking in Chicago on Friday, said the Fed is prepared to handle the next financial crisis.
"Yogi Berra reminded us that prediction is very hard, especially about the future," Bernanke told a convention of economists and finance experts. "In that spirit, the Federal Reserve continues to work actively to prepare for the possibility of financial stress."
Bernanke did not specify any looming disasters. Late last year, global financial markets were rattled briefly when the Thai government placed restrictions on foreign investment in the country.
Numerous financial analysts, in their new year forecasts, cited the possibility of a blow-up at one or more of the proliferating and largely unsupervised hedge funds, which are private investment pools.
Another potential ground zero is institutions that deal in exotic derivative instruments, such as credit default swaps, which trade outside of traditional securities and futures exchanges.
Bernanke said the Fed is well-suited to detect and respond to financial crises because of its multi-task role in the economy, as a regulator of banks and financial holding companies, as a provider of payment services and, in its best-known job, as the developer of the nation's monetary policy.
"When financial problems do develop, however, the Fed and other policymakers face the important threshold question of whether public action is warranted," he said.
"They must weigh the expected benefits of taking action against the possibility that such action will encourage excessive private risk-taking in the future."
He noted several Fed interventions of recent decades: The near-collapse of the Long-Term Capital Management hedge fund in 1998, the failure of the Drexel Burnham Lambert brokerage firm in 1990 and the stock market crash of 1987.
Because of its multiple engagements with the private sector, through its supervisory, payment systems and monetary policy functions, "the Fed is able to respond more quickly, more effectively and in a more informed way than would otherwise be possible," he said.
bbarnhart@tribune.com
Copyright © 2007,
Chicago TribuneLeading and lagging indicators of the labor market
Nouriel Roubini | Jan 05, 2007The December employment report today was good and better than expected by the markets; 167K jobs were added in December (and ADP provided a false alarm on December jobs). Add that to the plus list for those who expect a soft landing of the economy in 2007. The message from the December report was clearly good and one can clearly recognized that, subject to a number of important caveats.
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First, as I have suggested in a previous blog employment and unemployment rates are at best coincident indicators of the business cycle or more likely lagging indicators. So, to understand where employment will go in the months ahead we need to look at leading indicators and other factors. In December jobs were lost in construction, residential housing and manufacturing consistent with the recent recession in these sectors; while more jobs were added in the service sectors (with the exception of retail) where the economy is still expanding at a reasonable pace.
The job losses in residential construction in December were a little smaller than in previous months, most likely given the warmer than seasonal weather that kept some construction sites open longer. Also, in some areas jobs in construction (and their losses) are mostly among illegal immigrants whose jobs gains and losses are hard to track in official establishment statistics. One can comfortably expect that jobs losses will continue and accelerate in the housing sector in the months ahead as completions of current residential projects shink while the reduced housing starts take a greater toll on housing jobs. And since the employment index of the manufacturing ISM was still below 50 one can also expect further losses of jobs in manufacturing in the months ahead.
Next, what do other leading indicators of the job market tell us about job creation in the months ahead? The service ISM index is still well above 50 but the index fell in December suggesting a deceleration of growth in this sector ahead that may affect the rate of job creation in this sector; certainly weak retail sales in December – if persisting over time- may affect employment in this sector ahead. And indeed the retail sector experienced job losses already in December.
Other relevant leading indicators are various forward looking surveys of the labor market. These surveys all suggest a softening of the labor market ahead: 1. the Hudson survey this week showed workers more pessimistic about job prospects; 2. the online job ads survey by the Conference Board also showed labor market weakness as job ads are falling; 3. the Monster index of online job ads fell in December and is also signaling greater softness in the labor market ahead.
So, the employment report today was no doubt strong; but instead of looking at the lagging back mirror of the labor market, analysts may want to pay attention to the forward looking indicators that suggests softness ahead.
PS: I am in Chicago for the annual meetings of the American Economic Association; lots of interesting sessions and debates on the global economy here that I will be happy to report on next week.
Crisis ?? What Crisis ??
Im Nachgang zu dem Bernanke – Statement hier noch etwas Zahlenwerk.
Empire of Debt
Nun zum grössten Schuldner dieser Welt, den USA. Der Titel oben wurde dem gleichnahmigen Buch von Bill Bonner entnommen.
Aus dem neuesten Privateer von Bill Buckler:
This US Federal Reserve Z-1 report is without any doubt the most hair raising the Captain, Officers and crew of The Privateer has ever seen. The US financial system is blowing itself up! The US government had a budget deficit of $US 119.2 Billion in February alone. The US trade gap jumped to a monthly record of $US 68.5 Billion in January.
Also, der Crew der Privateer stellt es die Haare auf, bei fast 120 Mrd $ Budgetdefizit im Februar 2006 und einem Aussenhandels-Bilanz-Defizit von 68.5 Mrd $.
Noch eine Kostprobe:
As of the end of 2005, US foreign financial liabilities totaled $US 5.344 TRILLION, which leaves a net
foreign claim against the US of $US 5.810 TRILLION. As of the end of 2005, foreign investors now hold
a total of $US 11.154 TRILLION of US financial assets. Total US household borrowings expanded 11.7
percent during 2005. Total US business debt expanded 7.8 percent while State and local debt expanded
10.6 percent during 2005. Federal government borrowings grew 7.0 percent. For all of 2005, US total
credit market debt expanded by $US 3.340 TRILLION to $US 40.230 TRILLION. Counting the entire
size of the US economy at $US 11 TRILLION, and with the official acknowledgement that $US 3.340
TRILLION of it is borrowed into existence, leaves a REAL US economy of $US 7.660 TRILLION!
…..
The key GLOBAL point is that the entire US economy, scaled to that $US 11 TRILLION annual GDP, now carries a debt load of 365 percent of GDP. Scaled to its true size (minus the credit expansion) of closer to $US 7.660 TRILLION, carrying a total credit market debt of $US 40.230 TRILLION means a debt load of 525 percent of GDP. The US is now in a position where it has to borrow faster and faster because, if it were to stop, its economy would contract to that extent while its past debts became due and payable.
Buckler schreibt, dass die US-Aussenverschuldung nun ca. $11 Trillions (Billionen) ist – davon das meiste leicht verkaufbar, da Papierwerte. Beim derzeitigen BNP von ca. $11 Trillions ist die Gesamtverschuldung 365%. Nimmt man die Neuverschuldung des letzten Jahres weg, springt die Zahl auf unvorstellbare 525%. In den 30er Jahren waren es 270% - nach der Kontraktion.
Zur US-Situation gibt es genügend Literatur, sodass keine weiteren Kommentare notwendig sind. Jedoch gibt es Berechnungen, wonach mit den Pensions-Verpflichtungen (Social Security, Medicare) die US-Gesamtverpflichtung bei etwa $44 Trillions liegt. Unter Bush II war es eine Zunahme von etwa 50%.
(US-Trillions = Billionen)
Ein-Terabyte-Laufwerke
Rekordmarke geknackt
Die Größe der PC-Festplattenspeicher hat mit einem Terabyte (1.000 Gigabyte) eine neue Rekordmarke geknackt. Der japanische Hitachi-Konzern will im ersten Quartal nach eigenen Angaben als Erster ein Laufwerk mit diesem Volumen in den Handel bringen.
Für die USA sei ein Verkaufspreis von 399 Dollar angesetzt worden, teilte das Unternehmen am Freitag zur Unterhaltungselektronik-Messe CES in Las Vegas mit. Das etwa 700 Gramm schwere Laufwerk enthält fünf Magnetscheiben.
Auch andere Hersteller stehen mit Ein-Terabyte-Laufwerken in den Startlöchern. Seagate kündigte sein Gerät für die erste Hälfte 2007 an. Es soll mit vier Magnetscheiben arbeiten. Da die Verbraucher immer mehr Bilder, Musik und auch Videos auf ihren Computern speichern, brauchen sie auch immer mehr Platz auf ihren Harddiscs.
Bush Says He and Democrats Can Find Common Ground This Year
By Catherine Dodge
Jan. 6 (Bloomberg) -- President George W. Bush said he's ``confident'' he can find common ground with Democrats, who took control of Congress this week, during the next two years.
Bush, in his weekly radio address, said he wants to work with Democrats to balance the federal budget, reduce wasteful spending and reauthorize his No Child Left Behind education measure that requires schools to conduct annual tests of students in math and science.
``Democrats and Republicans will have many opportunities to serve the American people,'' Bush said. ``We must rise to meet those opportunities and build a stronger and more compassionate nation for generations to come.''
Bush, who gives his State of the Union address before a joint session of Congress on Jan. 23, said he will propose a five-year spending plan that balances the budget in 2012. Bush leaves office in January 2009.
White House Budget Director Rob Portman said Bush will propose a fiscal 2008 budget for the year beginning Oct. 1 of between $2.8 trillion and $2.9 trillion, up from this year's $2.77 trillion.
Portman's office projected in July that the budget deficit would be $339 billion in this fiscal year, up from $248 billion last year. The OMB estimated that the deficit would narrow to $188 billion in 2008. Bush entered office in 2001 with a budget surplus of $127 billion.
Portman acknowledged that the Iraq war is costing more than previously estimated. The Defense Department is seeking about $100 billion more for the war and operations in Afghanistan in the current fiscal year on top of the $70 billion already approved by Congress. Last year's emergency supplemental funding, which included war costs, totaled about $120 billion.
To contact the reporter on this story: Catherine Dodge in Washington at cdodge1@bloomberg.net
Last Updated: January 6, 2007 10:06 EST
Commodities to set market tone next week
Stocks will be hurt if the carnage in the energy and metal pits continues
By Ciara Linnane, MarketWatch
Last Update: 10:24 AM ET Jan 6, 2007
NEW YORK (MarketWatch) -- U.S. stocks are likely to fall next week if the carnage in the commodity markets continues, hurting mining, oil and material shares which account for almost half of the broad-based S&P 500 index.
The heavy losses suffered by energy and metals futures this week were badly timed, coming as aluminum giant Alcoa Inc. prepares to report its fourth-quarter earnings on Tuesday, marking the launch of the season. Analysts are expecting the world's biggest aluminum producer's report to provide insight into the length and severity of the U.S. manufacturing slowdown.
"A lot will depend next week on whether the oil sector can hold up, with oil staying above $55 a barrel," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "Energy and materials account for 45% of the S&P 500, so it's hard to get an up market if you don't have those sectors rising."
The slide in oil and metal prices weighed on the stock market this week and left some economists wondering if it's a signal that a severe slowdown is underway.
Some of the week's data supported the slowdown argument, notably a series of lackluster reports from the nation's retailers on the holiday shopping season.
The minutes of the Federal Reserve's December meeting showed policymakers remained most focused on inflation although they also acknowledged that the economy may have been a "touch softer" than they had thought.
"Barring an unexpectedly huge deterioration in the trade gap in November and December, the net export component of real GDP is going to add substantially to growth in Q4," said Joshua Shapiro, chief U.S. economist at MFR.
On Monday, Fed Vice Chairman Donald Kohn is scheduled to deliver a speech on the economic outlook. On Thursday, New York Fed President Timothy Geithner is to make a speech on the global economy and its implications for the US, and Fed Governor Susan Bies will delivery an address on risk management.
The bond market will close early Friday in advance of the Martin Luther King holiday the following Monday.
Alcoa's fourth-quarter
Alcoa (AA) is expected on Tuesday to report fourth-quarter earnings of 66 cents a share, up from 35 cents a share a year ago, according to the consensus of analysts polled by Thomson First Call.
Revenue is projected at $7.6 billion, a 14% increase on the same period in 2005.
Those gains come on the back of steep year-over-year price increases in aluminum, the light metal used in everything from soda cans to airplane bodies. By December, prices of the commodity had climbed to an average $1.32 a pound, up 23% from where they stood a year ago, lifting the quarterly average above many analysts' forecasts.
But Alcoa's earnings are often regarded as a broader measure of the state of U.S. manufacturing as its customers come from a broad range of industries and businesses. The company also has a strong exposure to China and other emerging economies that have fed the recent commodity boom.
Earnings for materials companies in the S&P 500 should gain 33% from the year-ago quarter, just one point short of the 34% growth forecast for the top-performing financials sector, says Thomson First Call.
Ciara Linnane is markets editor for MarketWatch in New York.
Yo Anti, das Gemetzel an den Rohstoffmärkten ist schon heftig.
Canada Stocks Have Worst 1st Week Since 2000 on Commodity Drop
Brazilian Stocks Fall on Commodity Rout: World's Biggest Mover
Jan. 5 (Bloomberg) -- Brazilian stocks had their biggest drop in six months, led by Petroleo Brasileiro SA, as global growth concerns drove commodity prices to their lowest levels since 2005.
Brazil's Bovespa Index fell 1,774.61, or 4 percent, to 42,245.16, its worst drop since June 12 and the biggest move today among markets included in global benchmarks. Shares fell 5 percent for the week, the biggest decline since May.
Commodities to set market tone next week
Jan. 6, 2007
U.S. stocks are likely to fall next week if the carnage in the commodity markets continues, hurting mining, oil and material shares which account for almost half of the broad-based S&P 500 index. BASE METALS: Copper saw spectacular losses, hitting a nine-month low on the back of rising stockpiles and weaker demand, while most other base metals also fell. Copper hit an all-time record of 8,800 dollars on May 11, 2006, owing largely to worries over lower global stocks and soaring demand-especially from China and India. The metal is used primarily in plumbing and the manufacture of electrical cables. However, copper slid to 5,625 dollars a tonne on Thursday, its lowest reading since April 5, 2006. That marked a 36-percent plunge in value since May.
Some traders are taking the view that prices will sink further if the copper market moves into a production surplus in the face of a global slowdown. "The argument the bears are suggesting is that we are heading for slower economic growth this year," said Stephen Briggs, an analyst with Societe Generale. Societe Generale analysts said the copper market, which has witnessed four years of production deficits, would likely switch into surplus in 2008.
OIL: Oil prices began 2007 with heavy losses, sinking under 55 dollars per barrel for the first time since 2005, amid a milder-than-expected winter in key energy consumer the United States. In Friday trade, New York's main contract, light sweet crude for delivery in February slid to 54.90 dollars per barrel-the lowest level since June 14, 2005. In London, Brent North Sea crude for February delivery sank to 54.50 dollars, marking the lowest point since November 30, 2005. At current prices, oil futures have fallen about 9.0 percent since the start of 2007 trading. "Expectations of a continuing mild US winter have sapped expected demand for heating fuel," Sucden analyst Michael Davies said on Friday. "There was also talk of funds bailing out of the market after suffering heavy losses recently." Crude prices have tumbled since the start of the New Year as unseasonably warm US weather curbs demand for heating oil in the northeast United States, the world's most energy-hungry region.
The slump has extended from the end of last year despite efforts by the Organization of Petroleum Exporting Countries (OPEC) to cut production to support prices. The Department of Energy (DoE) revealed Thursday that US stockpiles of distillates, which include heating fuel, jumped by two million barrels to 135.6 million barrels in the week ending December 29. That reading was much more than the rise of 850,000 barrels predicted by analysts.
Oil prices have slumped from their record highs above 78 dollars a barrel struck during last year's northern hemisphere summer, when tensions over Iran, Nigeria and wider geopolitical frictions gripped the market. By Friday in New York, a barrel of crude for delivery in February slumped to 55.50 dollars per barrel from 60.15 dollars the previous week. In London, a barrel of Brent North Sea crude for delivery in February dropped to 55.10 dollars per barrel, from 60.27 dollars.
smilie-headbang.gif
Im Dezember lag bei Insidern das Verhältnis von Käufern zu Käufern bei 55 zu 1. Im Durchschnitt der letzten 12 Monate lag es bei nur 10,7 zu 1. Wer hat den Insidern die Aktien abgekauft? Die Papiere gingen größtenteils an die Käufer der immer populärer werdenden börsennotierten Index- oder Sektor-Fonds (ETF), bei denen sich Käufer weniger Gedanken über Bewertungen machen als bei Einzelaktien. Der Autor des Barron's-Artikels unten meint, dass die ganze Rallye seit Juli den ETFs zu verdanken ist. Einer der beliebtesten, QQQQ (ETF für den Nasdaq-100), hat inzwischen ein KGV von 33. Das ist nicht mehr weit entfernt von den Blasenbewertungen des Jahres 2000. 
Barry Ritholtz Blog
Insider Selling
in Corporate Management | Investing | Markets | Psychology/SentimentThere are thousands of reasons to sell, but only one reason to buy: You think a stock is going to go higher.
The people who are thought of as having the greatest insight into that upside potential -- corporate insiders -- are always doing both, buying and selling. So it can be instructive to see the ratio of what their Buys/Sells are like. Oftentimes, that can provide a small measure of insight into sentiment and potentially what management thinks the next 6-12 months miught hold. They aren't infallible, but they do have access to better info than most investors do.
Consider the following observation, from Alan Newman (via Barron's):
"As Alan Newman notes in his always rewarding CrossCurrents commentary, in November, those worthies, as totted up by Thomson Financial, dumped an astounding $16 billion worth of their stock, or nearly 35 times as much as they bought. By comparison, in the 11 months beginning December '05 and ending October '06, the ratio of sellers to buyers among insiders averaged 10.7-to-1.
The early returns for December are even worse: in that month's first two weeks insiders collectively sold 55 shares for every one they bought. As Alan comments, they were so bound and determined to take money off the table that they couldn't even wait the few weeks until January to avoid the serious tax bite for what probably was a pretty lush year for them in '06. "What," he asks, "does that tell you?" We're terrific at answering rhetorical questions, and the answer to that one is "plenty."
So who's buying those billions of dollars worth of shares the insiders are selling? Alan speculates that the latest Wall Street wonder, exchange-traded funds -- or in the lexicon of the Street, ETFs (see Exchange-Traded Funds) -- has been sucking up a lot of that stock gushing out of insider portfolios.
By his reckoning, through mid-December, last year's net issuance of ETF shares weighed in at a massive $54 billion, extending a smashing seven-year growth that has averaged an awesome 41% annually and has lifted the total value of such shares to close to $400 billion. It's critical to remember, Alan points out, that for an exchange-traded fund to issue shares it must first buy the underlying assets, primarily stocks. That demand all by itself, he reckons, was enough to keep the market rally of the past few months alive and well.
Not the least interesting thing about ETFs and their powerful impact on market prices is that they don't trade on the basis of individual corporate prospects. Alan posits that more than half the price of many stocks is now dependent on "index or sector sponsorship, the obvious result of a market that has been increasingly sectored to death and indexed beyond any efficiency" imagined by academics. For ETFs, in other words, valuations don't matter.
Which is the dangerous message he gets from the fact that the top 10 constituents of the most popular ETF, the Nasdaq 100 Trust (QQQQ), which trades a formidable $4.7 billion a day, sport a P/E north of 33 and are selling at over six times sales.
Unless we're willing to say history and, for that matter, logic are bunk, it's plain as the nose on your face that valuations do matter. That's what investors should have learned from their sorry experience in 2000, reflects Alan, and what they very well may learn again the hard way when this market turns tail."
That's fascinating stuff. Its hardly a precise timing mechanism, but it does point up an interesting factor: Insiders have been taking advantage of the stock run up from July to year's end to sell into the strength.
I would be curious to see how this compares to other significant market periods. Is it determinative? Does it provide an early warning, or is it merely an interesting data point?
If any hung over revelers have an idea, please let us know . . .
Source:
Sore Winners
ALAN ABELSON
UP AND DOWN WALL STREET
MONDAY, JANUARY 1, 2007
Das Zurück – Datieren von Aktien – Optionen scheint mir in den USA zu einer "sportlichen Disziplin" zu erwachsen.
Backdating Is Revealed by 28 Companies to Avoid Taxes (Update2)
By Miles Weiss
Jan. 5 (Bloomberg) -- At least 28 companies now under investigation for stock-options backdating, including Staples Inc. and KLA-Tencor Corp., named executives who received improper grants as part of an effort to shield them from millions of dollars in tax penalties.
The grants, detailed in filings with the U.S. Securities and Exchange Commission over the past three weeks, show 15 chairmen and chief executive officers, as well as dozens of other senior managers, were awarded options to buy shares at below-market prices. Companies had until Dec. 31 to correct the prices to keep their top brass from paying a 20 percent surtax on potential profits from the options.
``The tax is draconian,'' said Richard Susko, a partner at the New York law firm Cleary, Gottlieb, Steen & Hamilton. ``For companies with a large spread for their options, it became an issue that had to be dealt with by Dec. 31.''
Some documents name for the first time executives who may have benefited from backdating, a practice that has embroiled almost 200 companies in one of the most sweeping probes of business practices in America.
New Revelations
Vincent Smith, the chairman and CEO of Quest Software Inc., is one. Aliso Viejo, California-based Quest disclosed earlier this week that it increased the exercise price for Smith's options on 785,000 shares. The changes reduced his potential profit on the options by about $10 million.
Quest, a maker of database-management programs, last year formed a special board committee to conduct an internal investigation into the company's option-pricing procedures. Spokesman Joe Horine said Quest won't comment until the committee completes its review and issues a report.
Four companies, Staples, Medarex Inc., CNET Networks Inc. and Asyst Technologies Inc., disclosed that they repriced options grants in SEC filings on Dec. 22, the Friday before Christmas. Filings by Marvell Technology Group Ltd., Corinthian Colleges Inc., Microtune Inc., Bed, Bath & Beyond Inc., KLA-Tencor and Cyberonics Inc. and UTStarcom Inc. arrived on Dec. 29, the last business day of the year.
Framingham, Massachusetts-based Staples is the world's largest retailer of office supplies. KLA-Tencor, based in San Jose, California, is the No. 2 U.S. maker of equipment for the semiconductor industry.
UnitedHealth Group Inc., which ousted CEO William McGuire in October over his role in options backdating, said in an SEC filing yesterday that it repriced some grants on Dec. 29 so executives won't be liable for the surtax. McGuire's options are among those affected by the change, meaning he may face a lower tax bill. Minnetonka, Minnesota-based UnitedHealth is the second- largest U.S. health insurer.
Lower Prices, Higher Profits
Employee stock options typically give recipients the right to purchase company stock at the price on the day they're granted. Because options increase in value as the underlying shares rise, backdating the grants to earlier dates when the stock price was lower makes them worth even more.
The recent filings don't offer an explanation for why the original grants were improperly priced, how the backdating took place or whether the executives named had any role in it.
Section 409A of the Internal Revenue Code imposes a levy of as much as 55 percent on personal profits from backdated stock options. That includes a penalty of 20 percent on top of a maximum personal income-tax rate of 35 percent.
Tax Deadline
The IRS in October said companies that previously issued backdated options would have until the end of 2006 to correct the grants and avoid the surtax. While that benefits recipients by eliminating a potential penalty, raising the exercise prices on the options also reduces their potential gains.
``The IRS is just being unmerciful to backdaters,'' said Mark Poerio, who co-chairs the executive compensation practice at the law firm Paul, Hastings, Janofsky & Walker LLP. ``Because the penalties are so extreme, companies are just being extra conservative,'' he added.
Under SEC rules, the senior officers of public companies must disclose any changes to their stock option grants. The filings by the 28 companies, received between December 15 and today, not only identify executives who may have received backdated options, but also disclose for the first time how much of a gain they stood to receive.
`Clerical Error'
The filings aren't necessarily an admission that laws were broken when options were issued at the wrong price; McAfee Inc., in a Form 4 filed December 27 on behalf of Director Leslie Denend, said that awards he received between 2002 and 2006 had ``incorrect'' grant dates that resulted from ``a clerical error in administering'' the option plan.
American Tower Corp., Affiliated Computer Services Inc., Sharper Image Corp. Broadcom Corp., and Trident Microsystems Inc. also disclosed that they had increased the exercise price of previous grants to their CEOs or other executives.
The SEC received similar filings since December 15 from insiders at Cheesecake Factory Inc., L-3 Communications Holdings Inc., J2 Global Communications Inc., SPSS Inc., Jabil Circuit Inc., VeriSign Inc., Power Integrations Inc., Equinix Inc. and Sycamore Networks Inc.
To contact the reporter on this story: Miles Weiss in Washington mweiss@bloomberg.net .
Last Updated: January 5, 2007 17:54 EST
Kolummnist Lackey sieht als oberste Priorität der Fed die Bekämpfung der Inflation, damit sich die Geschehnisse aus den "guten alten Siebziger"-Zeiten nicht wiederholen. Vielleicht sollten daher auch die Druckpressen mehr Bibeln und weniger Papiergeld drucken. J
Fed's inflation strategy has roots in the `good old' 1970s
BY ANDREW LECKEY
a Tribune Media Services columnist
Posted January 7, 2007
I love the good old days as much as anybody, but they're overrated.
Take the 1970s, for example. Except for good fortune enjoyed by John Travolta, the Bee Gees and Japan, that decade wreaked havoc on most wallets.
Travolta made a lucrative leap from the TV sitcom "Welcome Back, Kotter" to big-screen hits "Saturday Night Fever" and "Grease." Disco tunes flooded the airwaves. Japanese products flooded U.S. stores.
At the same time, oil embargoes, escalating consumer prices and high unemployment combined to make average Americans miserable financially. We encountered long lines at gas stations. Once we reached the pump, we found high prices or makeshift signs explaining the supply was exhausted.
Gold shot up dramatically because investors thought it was all they could count on long term. For many of us, the only ones taking the battle against inflation seriously were employers who seized an opportunity to do their part by foregoing pay raises for workers.
Gerald Ford's time spent as president from August 1974 until January 1977 were especially ugly years for the economy. Yet Ford's much-ridiculed red-and-white "WIN" buttons--for "Whip Inflation Now"--don't deserve all the ignominy that's been heaped on them.
Today's investors should be aware that holding down inflation has remained the No. 1 pursuit of our government's financial policymakers, largely because the 1970s were so disastrous to one and all.
When Federal Reserve Chairman Paul Volcker eventually jacked up interest rates, inciting an early 1980s recession, inflation finally began to cool. He announced those initial increases like a declaration of war.
The direct connection between interest rates and the price of just about everything came across loud and clear. Since then, despite a few uprisings here and there, inflation has been held at bay.
Volcker's Fed successor, Alan Greenspan, who was chairman of the Council of Economic Advisers when Ford was in office, for more than 18 years carefully worked to keep inflation at bay. Greenspan raised rates, lowered rates, raised them again. He spoke in minute-long, complex, monotone sentences so as not to rile markets unnecessarily.
Inflation was and is a preoccupation of Wall Street, world markets, central banks, currency markets, individual investors, home buyers and the news media. You can bet current Fed chief Ben Bernanke thinks more about inflation and its potential effect on the economy than anything else on his plate.
The Federal Reserve has, in effect, been wearing Gerald Ford "WIN" buttons on its chest to this very day. We're still trying to whip inflation now because we don't want a repeat of those good old days.
Andrew Leckey is a Tribune Media Services columnist.
Copyright © 2007, Chicago Tribune
In Israel existiert ein Geheimplan, die iranischen Atomanlagen anzugreifen. Die Londoner "Sunday Times" beruft sich in ihrem Bericht auf Militärkreise in Israel.
Zwei Flugstaffeln der israelischen Luftwaffe würden derzeit für die Zerstörung iranischer Atomanlagen in Natanz, Isfahan und Arak mit bunkerbrechenden Nuklearbomben ausgebildet, berichtete die Londoner „Sunday Times“. Ein Sprecher des israelischen Außenministeriums dementierte den Bericht als „ungenau“. Israel unterstütze zu “100 Prozent“ die Bemühungen der internationalen Gemeinschaft zur Einstellung des iranischen Atomprogramms. Die Regierung in Teheran drohte Israel mit Gegenattacken, sollte es den Iran angreifen.
Die israelische Luftwaffe plant laut „Sunday Times“ den Einsatz von lasergesteuerten konventionellen Raketen, die „Tunnel“ zu den eigentlichen Zielen öffnen sollten, bevor Mini-Nuklearwaffen mit einem Fünfzehntel der Sprengkraft der Hiroshima-Bombe abgefeuert werden sollten. Der Einsatz von Atombomben wird nach Angaben des Blattes deswegen erwogen, weil konventionelle Waffen möglicherweise nicht ausreichten, um die gut geschützten Ziele zu zerstören. Die Atomwaffen würden tief unter der Erdoberfläche explodieren, um das Risiko eines nuklearen Niederschlags zu minimieren.
„Sobald wir grünes Licht haben, wird die Mission gestartet. Ein Schlag - und das iranische Atomprogramm wird zerstört sein“, zitierte die „Sunday Times“ eine ungenannte Quelle. Israelische Piloten hätten in den vergangenen Wochen bereits mit Flügen nach Gibraltar für die mit 3.200 Kilometern ähnlich lange Strecke geübt. Es seien drei Optionen für Anflugrouten ausgewählt worden. Eine davon verlaufe über türkischen Luftraum.
Der von der britischen Sonntagszeitung beschriebene angebliche Angriffsplan Israels ähnelte einem vom US-Magazin „New Yorker“ im April beschriebenen angeblichen Vorhaben der USA. Das Weiße Haus hatte diesen Bericht damals entschieden zurückgewiesen.
Israel hat bisher einen Präventivangriff gegen den Iran nie ausgeschlossen. Laut „Sunday Times“ trafen sich israelische Verantwortliche wiederholt mit Partnern aus den USA, um einen Militäreinsatz zu erörtern. Die Zeitung spekulierte, dass die Offenlegung eines solchen Angriffsplans das Ziel haben könnte, Druck auf den Iran auszuüben, damit dieser sein Atomprogramm einstelle. Israel hat den Besitz von Atombomben offiziell nie zugegeben, verfügt nach Einschätzung von Fachleuten aber über rund einhundert Atomsprengköpfe. 1981 hatte Israel einen Angriff gegen einen irakischen Atomreaktor geführt. Experten bezweifeln jedoch, dass Israel die wesentlich umfangreicheren iranischen Atomanlagen mit seinen eigenen Militär-Kapazitäten wirksam ausschalten könnte.
Israel sei auf einer Linie mit den vom UNO-Sicherheitsrat beschlossenen Sanktionen gegenüber dem Iran, betonte der israelische Außenamtssprecher Mark Regev. Ein ranghoher israelischer Regierungsbeamter hatte den Bericht der „Sunday Times“ zuvor als „absurd“ zurückgewiesen. „Zu denken, dass wir einen Atomangriff gegen den Iran starten, und darüber hinaus, diesen im voraus verraten würden, ist doppelt lächerlich“, sagte er. Die britische Zeitung vermutet vor diesem Hintergrund, dass Israel durch das Lancieren des Angriffsplans Druck auf den Iran ausüben wolle, seine umstrittene Atompolitik zu stoppen.
Die iranische Regierung reagierte umgehend auf die angeblichen Angriffspläne: Jegliche Militäraktion gegen die Islamische Republik werde „nicht ohne Antwort bleiben“, erklärte Außenamtssprecher Mohammed Ali Hosseini in Teheran. Der „Aggressor“ werde seine Tat „sehr schnell bereuen“.
„Jeglicher Angriff auf den Iran würde eine schlagkräftige Reaktion nach sich ziehen“, sagte der Sprecher des iranischen Außenministeriums, Mohammed-Ali Hosseini, am Sonntag in Teheran. Er reagierte damit auf einen Bericht der britischen Zeitung „Sunday Times“, wonach Israel einen Geheimplan für einen Anschlag mit Atomwaffen auf eine Uran-Anreicherungsanlage im Iran ausgearbeitet habe. Israel dementierte den Zeitungsbericht umgehend.
Ein Sprecher des israelischen Außenministeriums betonte, der Bericht sei unwahr. Israel unterstütze „hundertprozentig die Bemühungen der internationalen Gemeinschaft, mit Hilfe des Sicherheitsrats einen Stopp des iranischen Atomprogramms zu erreichen“.
Blatt beruft sich auf Militärkreise
Die „Sunday Times“ hatte berichtet, die israelische Luftwaffe bereite sich mit Bunker brechenden Waffen auf einen Nuklearangriff vor, bei dem dann unterirdisch Atombomben gezündet werden könnten. Mögliches Ziel sei die Uran-Anreicherungsanlage von Natans, etwa 220 Kilometer südöstlich von Teheran.
Die britische Sonntagszeitung stützte sich bei ihrem Bericht auf israelische Militärkreise. Demnach könnte der Angriff mit lasergesteuerten konventionellen Raketen beginnen, die die Anlage aufbrechen. Anschließend würden unter der Erde so genannte Mini- Atombomben zur Explosion gebracht, wodurch die radioaktive Verseuchung begrenzt werden könnte. Die Sprengkraft der „Minibomben“ wurde mit einem Fünfzehntel der Atombomben angegeben, die die USA im August 1945 auf Hiroschima und Nagasaki abwarfen.
Atomschlag als letztes Mittel
Nach Informationen der „Sunday Times“ wurde dieses Szenario bereits von zwei Staffeln der israelischen Luftwaffe auf Langstreckenflügen geübt. Das Blatt zitiert namentlich nicht genannte Militärvertreter mit den Worten: „Sobald es Grünes Licht gibt, wird das iranische Nuklearprojekt mit einer Mission und einem Schlag zerstört.“ Der Angriff sei jedoch nur letztes Mittel, wenn eine Attacke mit konventionellen Waffen ausgeschlossen werde und sich die USA gegen ein Eingreifen im Iran entschlössen.
Staatsführer Irans und Israels urplötzlich illuminiert + + + Bilaterale Gespräche aufgenommen + + + Gegenseitiger Respekt unverzichtbar + + + Unterzeichnung eines Anti – Angriffskriegs – Abkommens in Vorbereitung + + + Weiteres in Kürze
Würde mir persönlich Meldungen dieser Art wünschen !
Stöffen_Press_X.jpg (verkleinert auf 53%)
BERLIN (dpa-AFX) - Das amerikanische Wirtschaftswachstum wird sich nach Ansicht des US-Wirtschaftsnobelpreisträgers Joseph Stiglitz in diesem Jahr stark verringern. 'Ich gehöre zu denen, die eine deutliche Abschwächung erwarten', sagte er dem 'Tagesspiegel' (Montagausgabe). 'Zwei Prozent Wachstum oder sogar weniger' werde es 2007 geben, sagte der Ökonom, der in den neunziger Jahren Berater des US-Präsidenten Clinton und Vizechef der Weltbank war. Das US-Wachstum habe sich lange auf den Konsum gestützt, der wiederum vom Anstieg der Immobilienpreise profitiert habe. 'Jetzt aber werden Immobilien billiger und die Zinsen steigen - das lässt nichts Gutes für den Konsum erwarten.'
Es gebe eine 'signifikante Chance für eine harte Landung. Das ist ein globales Risiko.' 2006 ist die US-Wirtschaft vermutlich um mehr als drei Prozent gewachsen. Stiglitz, der momentan an der Columbia School of Business in New York lehrt, warnte die deutsche Bundesregierung zudem davor, mit ihrer Finanzpolitik die Staatsverschuldung zu rasch abzubauen. 'Die Erhöhung der Mehrwertsteuer könnte großen Schaden anrichten und das Wachstum abwürgen', sagte er./he
Quelle: dpa-AFX
mfg J.B.
Tja, so ist das Leben, manche wissen es und viele nicht!!
Matthew Kirdahy, 01.05.07, 7:06 PM ET
Investors sent commodity prices down on Friday following signs of a softening economy and warm winter weather. One analyst believes the sell-off is simply a correction on the heels of a bullish 2006.
Unseasonably warm weather throughout much of the U.S. weighed on oil prices, which are rebounding from their largest two-day drop in two years. After sharp drops on Wednesday and Thursday, crude prices fell nearly 8% for the week.
The price of crude fell 16 cents to $56.15 on the New York Mercantile Exchange to close the week.
“It was simply an overreaction,” said Standard & Poor’s economist David Wyss about the market activity. “Historically, if you look at commodity prices that’s the way they tend to behave. When they move, they move too much and then they go back down again. Not as low as they were you realize. And part of that has to do with the investment cycle in commodities.”
He expects oil prices to hover around $60 a barrel again when the U.S. driving season begins in late spring and early summer.
Wyss also said fund managers are shuffling their investment portfolios, selling off the winners in 2006 early this year and plotting a course for 2007.
“After today, the markets are nervous,” he said. “There isn’t anything that’s going to get them unnervous on Monday. If anything the market will go down a little bit after the big reaction that occurred today. A bit more will sell off and my guess a little more correction will occur.”
On the first day of trading in the New Year, February gold futures reached a one-month high, but reversed to close at a more than one-week low. For the week, as of Thursday, the contract lost $12 an ounce.
Gold prices were up $1.17 cents to $608.60 an ounce in Friday trading.
Natural gas in underground storage fell by 47 billion cubic feet to 3.07 trillion last week, according to the Energy Information Administration. Traders and analysts had been expecting a withdrawal of 55 billion cubic feet, according to a Dow Jones Newswires survey.
Natural gas prices rose 2.2 cents to $6.184 per 1,000 cubic feet.
Crude futures have fared worse, with the February contract suffering midweek for a total loss of about 9%.
In addition, copper futures have dropped more than 20% in the past two months in the wake of waning demand in China and the U.S.
The price of copper was up a half cent to $2.54 per pound on Friday.
- The Associated Press contributed to this story.
mfg J.B.
Tja, so ist das Leben, manche wissen es und viele nicht!!
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Wie geht es nun 2007 weiter, lautet einer der meist gestellten Fragen. Die Konsensschätzung der großen Banken ist mittlerweile veröffentlicht und bewegt sich um die 7000er-Punkte-Marke, sogar tendenziell eher leicht darüber. Doch die Masse hat meistens Unrecht, wie auch das Vorjahr gezeigt hat. Da waren die Profis zu skeptisch.
Ein Indikator – sicherlich statistisch nicht sondern aussagekräftig – ist die Betrachtung der ersten Handelswoche. Fällt das Ergebnis positiv aus, dann wird schnell und kräftig investiert, da alle wieder auf „Start“ stehen und eine neue Runde „Monopoly“ spielen. Seit der Jahrtausendwende hat die Tendenz bis auf eine Ausnahme 2002 gestimmt: Erste Handelswoche im Plus, Jahresergebnis ebenfalls und umgekehrt. Nur vor fünf Jahren legte der DAX in der ersten Handelswoche um mehr als ein Prozent zu, um bis Dezember um 45 Prozent einzubrechen. Aber diese Zahlenspielerei mag als Test der Stimmung geeignet erscheinen – angesichts der niedrigen Umsätze ist es jedoch nicht mehr als das. Ein kleiner Sieg der Bullen wäre ein Wochenschluss oberhalb besagter 6596,92 Zähler.
Für die Anleger mit den Hörnern spricht auch die Tatsache, dass die Haussen ab 1930 im Schnitt rund 5,8 Jahre dauerten. Die vergangenen vier Aufwärtszyklen hatten mit durchschnittlich 6,3 Jahren einen noch längeren Atem. Außerdem ist von Euphorie wenig zu spüren. Sicherlich gibt es den einen oder anderen, der von DAX 10000 spricht – aber der wird nicht sonderlich ernst genommen. Auch der jüngste DAX-Sentiment weist keinen überschäumenden Optimismus auf, denn er fiel auf den niedrigsten Stand seit Mitte November.
Was mich ein wenig stört, ist das gemeinsame Prozedere: Die Mehrheit glaubt jetzt an eine kurze Rally, dann an einen Rücksetzer, ehe der Gipfel bei 7000 nachhaltig erklommen wird. Dieses Szenario signalisiert auch die Charttechnik. Sollte der Leitindex die Marke bei 6700 Stellen auf Schlusskursbasis erobern, geht es weiter aufwärts. Laut technischer Analyse sieht es aber so lange bullisch aus, bis der Aufwärtstrend von Sommer 2004 (aktuell bei 5900 Punkten) gebrochen wird.
Von meinem persönlichen Gefühl her bin ich nicht sonderlich zuversichtlich, ohne dies genauer begründen zu können. Aber der Trend zeigt aufwärts, da führt kein Weg daran vorbei. Also bleibt man investiert in der Hoffnung, nachher die „Schlossallee“ zu besitzen. Sinnvoll ist es aber, den Stoppkurs so zu platzieren, dass zumindest die „Hauptstraße“ unterm Strich herauskommt. Die „Badstraße“ war noch nie sonderlich begehrt.
jeder macht was er will - keiner macht was er soll - aber alle machen mit
mfg J.B.
Tja, so ist das Leben, manche wissen es und viele nicht!!
Einfach einmal anschauen!!
mfg J.B.
Tja, so ist das Leben, manche wissen es und viele nicht!!