News From GodOfTrading

[godoftrading]

Daimler Sells Abu Dhabi a 9.1% Stake for $2.7 Billion

March 22 (Bloomberg) -- Daimler AG, the world’s second- largest maker of luxury cars, will sell 1.95 billion euros ($2.7 billion) of shares to Abu Dhabi’s Aabar Investments PJSC, making it the company’s largest shareholder.

Aabar will buy 96.4 million new Daimler shares for 20.27 euros a piece, the Stuttgart, Germany-based automaker said today in an e-mailed statement. The price equates to a 5 percent discount to Friday’s close of 21.34 euros.

“We are delighted to welcome Aabar as a new major shareholder that is supportive of our corporate strategy,” Daimler Chief Executive Officer Dieter Zetsche said in the statement. “We look forward to working together to pursue joint strategic initiatives.”

Daimler, the maker of Mercedes-Benz cars and trucks, is cutting car production in Germany and closing truck plants in North America to counter the worst auto-industry crisis in decades. The company, also the world’s largest truck maker, lost 1.53 billion euros in the fourth quarter, burdened by declining sales and expenses related to former U.S. arm Chrysler LLC.

Aabar’s stake will total 9.1 percent after the capital increase, exceeding Kuwait’s stake of 6.9 percent, Daimler said.

Aabar’s largest shareholder is International Petroleum Investment Co., owned by the government of Abu Dhabi.

“Daimler is an iconic brand and a financially strong company,” said Aabar Chairman Khadem al-Qubaisi in the statement. “We are delighted to have the opportunity to make this investment and are excited by the commercial potential of our partnership.”

Daimler and Aabar intend to cooperate on the development of electric vehicles and new materials for auto production as well as establish a training center in Abu Dhabi.

Aabar agreed in December to pay 307 million Swiss francs ($272 million) and assume 100 million francs in debt to takeover the Swiss-based private banking unit of American International Group Inc.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0eAzATgnNcU&refer=home
____________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

Deutsche Bank Had Good Start to 2009

March 24 (Bloomberg) -- Deutsche Bank AG Chief Executive Officer Josef Ackermann said Germany’s biggest bank had a “good start” to the year and expects to return to profitability after scaling back risky businesses and shedding toxic assets.

“We are very disappointed at our loss in 2008, but absolutely determined to take all necessary measures to restore Deutsche Bank to the path of profitability,” Ackermann, 61, wrote in a letter to shareholders published in the annual report today. “At the time of writing, I am pleased to report that we have made a good start to 2009.”

Bank of America Corp., the biggest U.S. bank, JPMorgan Chase & Co. and Citigroup Inc. have said they were profitable in the first two months of the year, bolstering banking shares. Credit Suisse Group AG said today it had a “good start” to the year. Deutsche Bank generated increased revenue of 2.8 billion euros ($3.8 billion) in January, the bank said last month.

“Deutsche Bank is one of the big profiteers of the bond- market rebound,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets, who recommends buying the stock. “We’ll likely see a comeback this year after a horrible fourth quarter.”

Deutsche Bank gained 1.4 euros, or 4.6 percent, to 32.10 euros by 9:07 a.m. in Frankfurt trading. The stock rose 53 percent this month, valuing the bank at 18.1 billion euros. That compares with an 18 percent advance in the Bloomberg Europe Banks and Financial Services Index of 65 companies.

http://www.bloomberg.com/apps/news?pid=20601087&sid=akD1vZ_M.xWA&refer=home
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

Goldman works on iShares bid

Goldman Sachs is working on a bid for iShares, the securities lending and exchange-traded funds business being auctioned by Barclays. Bids, due by Friday, could put a value ofup to $6.5bn on iShares. Goldman and at least three other parties have expressed interest in iShares including buy-out group Bain Capital and a consortium led by Hellman & Friedman. Fund manager Vanguard is also thought to be interested.

http://ftalphaville.ft.com/blog/2009/03/24/53924/goldman-works-on-ishares-bid/
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

Top 25 Highest-Earning Hedge Fund Managers 2008

Times may be tough for most folks, but not for the top moneymakers on Alpha magazine’s eighth annual ranking of the world’s highest-earning hedge fund managers. They took home, on average, an anything but average $464 million apiece in 2008. Four hedge fund managers took home more than $1 billion each. Altogether the 25 highest-earning hedge fund managers made $11.6 billion, making 2008 the third-best year on record since Alpha began compiling its exclusive ranking.

Alpha uses two components to calculate earnings: the managers’ shares of their firm’s performance and management fees, as well as gains on their own capital invested in their funds.

Rank Name Firm Name 2008 Earnings
1 James Simons Renaissance Technologies Corp. $2.5 billion
2 John Paulson Paulson & Co. $2 billion
3 John Arnold Centaurus Energy $1.5 billion
4 George Soros Soros Fund Management $1.1 billion
5 Raymond Dalio Bridgewater Associates $780 million
6 Bruce Kovner Caxton Associates $640 million
7 David Shaw D.E. Shaw & Co. $275 million
8 Stanley Druckenmiller Duquesne Capital Management $260 million
9 (tie) David Harding Winton Capital Management $250 million
9 (tie) Alan Howard Brevan Howard Asset Management $250 million
9 (tie) John Taylor Jr. FX Concepts $250 million


Rest here:
http://iimagazine.com/Alpha/Article.aspx?ArticleID=2165638
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

If 1 trillion of bad bank debt is 'cleared,' another trillion waits 'off books'

Banks’ Hidden Junk Menaces $1 Trillion Purge

http://www.bloomberg.com/apps/news?pid=20601039&sid=akv_p6LBNIdw&refer=home

Commentary by David Reilly

March 25 (Bloomberg) -- The U.S. government wants to clear as much as $1 trillion in soured loans and securities from bank balance sheets with its latest bailout plan.

That might prove a short-term respite. No sooner might the Treasury Department mop up those assets than $1 trillion or more in new ones spring up to take their place.

That is due to the potential return of assets held in so- called off-balance-sheet vehicles that banks may soon have to put back onto their books. The end result may be that banks are in no better shape to increase lending even after the government bailout.

So investors betting for quick solutions to the financial crisis could be disappointed. The tangled web that banks wove over the years will take a long time to undo.

At the end of 2008, for example, off-balance-sheet assets at just the four biggest U.S. banks -- Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. -- were about $5.2 trillion, according to their 2008 annual filings.

Even if only a portion of those assets return to the banks - - as much as $1 trillion is one dark possibility -- it would take up lending capacity the government is trying to free.

The hidden assets that may return to banks consist of mortgages, credit-card debts and auto loans, among others. Over the years, banks bundled them together and sold them to investors as securities.

Whether these assets are “troubled” or “toxic,” their return to bank balance sheets could slow efforts to get credit flowing again. After all, banks shed the loans to make their balance sheets look smaller, allowing them to hold less capital to act as a buffer against losses. Until a couple of years ago, that boosted profits.

Inflated the Bubble

It also helped inflate the credit bubble, even as these accounting maneuvers made it harder for investors and regulators to see how much risk banks actually faced.

Accounting rulemakers now want banks to bring some of those assets back onto their books. They are trying to crack down on transactions that banks used to sidestep rules inspired by the off-balance-sheet antics that led to Enron Corp.’s collapse. Of course, there is a danger that the rulemakers will backtrack, especially given recent congressional efforts to twist rules that will let banks polish their books.

Investors have all but forgotten these out-of-sight assets. That’s a mistake.

True, banks won’t have to repatriate all of them. Mortgages guaranteed by Fannie Mae and Freddie Mac, for example, may have to be booked by those two companies, rather than banks.

Yet other assets will come back to banks. The tough part for investors is gauging how much. That is because the accounting- rules changes aren’t final, and their impact will depend on judgments by bank executives and auditors.

Hundreds of Billions

In its annual filing, JPMorgan said the rules change might lead it to bring back about $160 billion in assets. Citigroup estimated it may have to reclaim $179 billion.

That would equal about 9 percent of year-end 2008 assets at Citigroup, and about 7 percent at JPMorgan.

Neither Bank of America nor Wells Fargo provided such estimates. It’s possible, though, from JPMorgan and Citigroup’s disclosures and the thrust of the new accounting rules, to get some idea of what they might face.

Both Citigroup and JPMorgan said most of the assets they expect to return will be securitized credit-card debt -- $92 billion at Citigroup and about $70 billion at JPMorgan. Bank of America disclosed it had about $114 billion in off-balance-sheet credit-card debt. So a portion of that may shift back onto its books. (A similar estimate wasn’t possible for Wells, based on the information it disclosed.)

The return of credit-card debt may prove especially painful for banks, since delinquencies are soaring as unemployment increases. That might force banks to add to loss reserves, eating into profits.

Loan Consolidation

Banks may also have to consolidate securitized commercial loans. That could be an issue for Wells, which had securitized $355 billion of this kind of debt.

And while mortgage-backed securities guaranteed by Fannie and Freddie likely wouldn’t have to be booked by banks, there are plenty of other mortgages out there.

Bank of America, for example, disclosed that it had about $360 billion of securitized mortgage debt that wasn’t backed by Fannie or Freddie.

Of the non-guaranteed debt, about $58 billion was subprime loans and about $138 billion was so-called Alt-A mortgages, according to Bank of America.

All told, Bank of America and Wells Fargo have a combined $600 billion in assets that may be under consideration for possible consolidation. If just half these assets come back to the banks, that would equal almost 6 percent of Bank of America’s assets and about 14 percent at Wells.

Granted, those are rough numbers. They underscore, though, that there is still a lot investors don’t know about banks and their books. That’s reason to worry.
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

Japan FY09 Passenger Car Output To Revert

The Nikkei estimates that Japan passenger car production in fiscal 2009 will likely decrease to 1979 levels, mostly due to a plunge in exports.

The projection, which was compiled based on automakers’ data and interviews with company officials, calls for the eight Japanese passenger car firms to assemble 8.21 million vehicles in the year ending in March 2010, 14% fewer than last year and the second consecutive annual decline, following a 15% fall in fiscal 2008.

Toyota Motor Corp. and seven other Japanese passenger carmakers are being forced to lower production because exports, which absorbed 58% of their total domestic output in fiscal 2007, remain weak. While sales are picking up in some areas of Europe, thanks to government measures to encourage car owners to upgrade to new vehicles, demand in the mainstay US market continues to be soft. As a result, the companies’ total exports in fiscal 2009 will likely plunge by 25.7% to 4.04 million units.

http://www.greencarcongress.com/2009/05/japan-1979-20090525.html

http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090525D25JFF03.htm
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

Record 12% of Mortgages Are Delinquent

12 pct. are behind on mortgage or in foreclosure

Delinquencies and foreclosures set record in 1st quarter, driven by prime loan defaults

NEW YORK (AP) -- An industry report shows that a record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit.

The Mortgage Bankers Association said Thursday the foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were in the foreclosure process.

At the same time, almost half of all adjustable-rate loans to borrowers with shaky credit were past due or in foreclosure.

California, Nevada, Arizona and Florida accounted for 46 percent of new foreclosures in the country.

 

[godoftrading]

Wells Fargo, BofA Pay to Settle Fraud Claims

Wells Fargo & Co. and Bank of America Corp. agreed Monday to settle claims that employees misled investors about the value and safety of certain securities during the financial crisis.

Wells's Boston-based mutual fund Evergreen Investment Management Co. agreed along with its brokerage unit to pay $40 million to end civil state and federal securities-fraud allegations that it overvalued the holdings of its Evergreen Ultra Short Opportunities Fund and then, when it was going to lower the value of the securities, informed only select investors -- many of them customers of an Evergeen affiliate -- allowing them to cash out of the fund and lessen their losses.

Separately, Bank of America agreed to "facilitate" the return of more than $3 billion to California clients who purchased auction rate securities, an investment that went sour last year amid a liquidity freeze. The bank reached the agreement with the California Department of Corporations.

"We are pleased that the outcome of these negotiations will result in the return of money to many investors who suffered by the freezing of their assets when the auctions failed," said California Department of Corporations Deputy Commissioner Alan Weinger. A bank spokeswoman couldn't be reached for comment.

The Wells case highlights the valuing of securities as a key issue during the financial crisis as banks, hedge funds and now mutual funds have failed to take losses on their holdings even though there was evidence in the market these securities were trading at lower prices.

In one case Evergreen, which had $164 billion in assets at the end of the first quarter, was holding a security at nearly full value when another fund at the firm purchased a similar security for 10 cents on the dollar.

http://online.wsj.com/article/SB124447741263994585.html
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[godoftrading]

ECB Expects No Recovery Before 2010

LUXEMBOURG -- The European Central Bank expects further financial-sector weakness could help keep the euro-zone economy from expanding before the middle of next year, a top policy maker said in an interview.

ECB officials believe the euro-zone recession could weaken the 16-nation bloc's strained banking system. "That is the reason why we are also cautious about the gradual recovery path in our scenario," said Yves Mersch, who sits on the ECB's 22-member Governing Council.

Mr. Mersch, head of Luxembourg's central bank, is a lawyer and political scientist whose influence on ECB policy exceeds the tiny nation's importance in the euro zone's economy.

In the interview, he said financial-sector weakness, which could push more European banks to fail, is "already penciled in" to policy makers' calculations. He suggested policy makers see their role shifting from actively shoring up the bloc's financial system and economy to monitoring the effect of measures they have taken.

"We must move away from an announcement policy to an implementation policy," Mr. Mersch said.

"But if the ceiling is falling on our head," he added, noting developments could turn out worse than the central bank expects, "we have to change."

In May, the ECB cut its key rate to a record low of 1% and announced a program to buy €60 billion ($83 billion) in low-risk bonds. Central banks in the U.K. and U.S. have taken their key rates close to zero and launched broader asset-purchase programs to boost economic activity.

The prospect that a worse-than-expected downturn could throttle European banks is spurring concern outside the bloc. The International Monetary Fund warned Monday that financial-sector weakness could thwart the euro zone's economic recovery. U.S. Treasury Secretary Timothy Geithner will press the Obama administration's case for European authorities to run tougher bank stress tests at a meeting of finance ministers from the Group of Eight leading nations at a meeting in Italy this week.

http://online.wsj.com/article/SB124458116932999475.html
_________________
http://zantrio.com
http://millennium-traders.com
http://swing-trading.com

 

[aHmadDaniEL]

how to analysis how the market react to this news???