Wall $treet Folly

To Infinity and Beyond!: Google scales another all time high

Google hit another new all time high closing the regular trading session at $707 and after hours at $707.57.

SEC interested in Goldman's latest results; did they cheat their way to big profits?

A couple of weeks ago we noted that a Fortune Magazine article wondered if Goldman Sachs' recent positive quarterly results were artificially inflated.  This morning's New York Post suggests that SEC may be taking a look at how Goldman came to report such positive results when their peers were getting crushed....

The Securities & Exchange Commission is looking into whether Goldman Sachs cheated its way to enormous profits - even as the rest of the financial industry was suffering through a massive downturn.

One person who discussed the matter with the SEC says the investigator seemed curious as to whether the investment banking side of Goldman's business could have tipped off the trading side of that brokerage firm to the extent of the problems that would soon be encountered by Bear and others.

And there also seemed to be a philosophical discussion as to whether that would constitute insider trading even if there was such a leak. The SEC doesn't comment on any investigation it might be undertaking. My sense is that the SEC's interest is preliminary.

SEC Eyes Goldman Sach's Good Fortune - New York Post

WSF Headline Roundup - 10/31/07 - Deutsche Bank jumps; LSE/Tokyo Stock Exchange JV; Nasdaq front runner for Philly Stock Exchange?; Consumer confidence 2 yr low; Countrywide's Mozilo & board sued; Delphi's shrinking plan; Hollywood strike?....

                 

Deutsche Bank jumps on better than expected earnings LSE and Tokyo Stock Exchange in joint venture mimic London's Aim in Tokyo. Nasdaq said to be the front runner as buyer of Philadelphia Stock Exchange Consumer confidence drops to two year low Countrywide's Mozilo and the board are sued by pension fund Delphi creditors getting getting a smaller payout Will Hollywood writers go on strike?

Burned Bear Stearns hedge fund investors are biting back

A group of investors who lost millions of dollars in one of the two hedge funds that imploded last summer are taking matters into their own hands:

The investors hope to replace Bear with an independent administrator that could look for evidence of mismanagement to be used in legal actions.

The investors have called meetings at Bear’s offices in New York and London at which they hope to unseat the bank.

They need to get a majority of investors to turn up or to send in proxies to vote in favour.

“It is hard to see why investors would not support this course of action,” said one person close to the initiative. But efforts have been hampered by Bear’s refusal to provide them with a list of investors.

Some of the investors, who lost hundreds of millions of dollars when the fund imploded, have hired law firm Reed Smith to handle the campaign. Reed Smith has proxies for more than 25 per cent of the investors, according to someone familiar with the campaign.

Bear hedge fund investors seek control - Financial Times

Unsubstantiated rumors: Chatter is spreading that Goldman may have to take a derivatives based writedown...

Och-Ziff agrees to sell 9.9% of itself to a Dubai fund

Och-Ziff has a new investor.  Dubai International Capital is buying 9.9% of the hedge fund for around $1.25 billion when it goes public.    

The deal, by which DIC will take 31.8m shares in Och-Ziff, came after the hedge fund run by Daniel Och, a former Goldman Sachs executive, slashed its proposed valuation by about 40 per cent as the credit squeeze diminished investor appetite for the listing.

At Och-Ziff’s implied valuation of $12.5bn, the hedge fund would be trading at about 13 times expected earnings. Och-Ziff said it expects to price its offering at between $30 and $33 a share.

According to a report on sovereign wealth funds published this month by Standard Chartered, the global bank, DIC invests between $3bn and $4bn a year in buy-outs, stakes in public companies and private equity funds.

Och-Ziff to sell 9.9% stake to Dubai fund - Financial Times

Done deal: Stan O'Neal "retires"

Retired.  Yah, right. Whatever.

The press release is below.  The rumors about leadership seem to have been off.  Larry Fink's name isn't mentioned.  There will be two co-presidents, including Ahmass Fakahany who was rumored earlier today to be out of the firm. Alberto Cribiore, currently on the Merrill board, will serve asinterim non-executive chairman

This paragraph from the release strikes us as particularly amusing given the what's transpired over the last few days:

“We would like to thank Stan for the contribution he has made leading a major transformation of Merrill Lynch into a global and diversified company with enormous potential ahead of it,” said Mr.   Cribiore. “His commitment to the company, its clients, shareholders and employees has never wavered and the company will reap tremendous benefits in the future from his work.”

The discussion on CNBC is centering around whether civil war will now break out within Mother Merrill....

Pink slip wielding grim reaper visits Bear and Bank of America

The grim reaper's job cut ax has fallen yet again at both Bear Stearns and Bank of America. Bear is cutting 300 jobs:

The cuts will be made in ``various business units at all levels of the organization,'' the New York-based firm said in an e-mailed statement today. It didn't specify the units affected.

Bear Stearns announced two previous rounds of job cuts this year affecting 600 people at mortgage units. The new reduction targets the core of the investment bank, such as bond trading.

We here that some of the option guys at Bear were cut as well.

Bank of America also started letting people go this morning, on its way to ultimately letting around 3000 go companywide.  45-50 were reportedly let go on the mortgage desk, but we hear that the cuts were also being starting in other areas.  Up to 700 wholesale mortgage positions are said to be getting the ax, with cuts also coming in corporate and investment banking.  In addition, the bank's base and precious metals desk in both London and New York are said to be winding down:

Stan O'Neal drama: Shakespeare, anyone?; CFO Edwards said to offer to quit; Will Merrill someday rue Stan's departure?....

• David Weider compares the Stan O'Neal drama to Shakespeare
• Merrill CEO Edwards is said to have offered to quit
• The Wall Street Journal discusses O'Neal's last big deal at Merrill -- negotiating the terms of his own exit, which could be worth upwards of $160 million including accumulated equity, retirement benefits and deferred compensation
• Why Merrill could someday "rue O'Neal's premature departure" - A comment by the FT's Abigail Hofman

WSF Headline Roundup - 10/30/07 - Is a Fed cut a done deal?; UBS disappoints with worse than expected earnings & guidance; More writedowns for Countrywide?; NYSE aims to reclaim block trading; JPMorgan goes to Japan; BEA hunts for $21/share buyer...

• Is a Fed rate cut a sure thing?
• UBS reports worse than expected results and give gloomy guidance
• Countrywide may be in for more writedowns
• NYSE forms partnership to reclaim lost block trading
• JP Morgan goes hunting for deals in Japan
• After Oracle pulls its $17 bid, BEA Systems is still looking for someone to   pay $21