As stock bets go it is no way the biggest and not particularly dramatic.
But the decision by Paulson & Co. to pick-up some 1 million shares of Goldman Sachs Group in the second-quarter may be some of the most fitting piece of Wall Street poetry to come out of this latest round of 13-F filings.
Of course Paulson’s fund will forever be linked with Goldman because it was the hedge fund at the heart of the Securities and Exchange Commission’s civil fraud case against the Wall Street bank. The SEC, in April, charged Goldman with failing to disclose that Paulson’s hedge fund had a hand in picking securities for a complex mortgage-related deal that the hedge fund was betting against.
Stifel Nicolaus analyst Greg Mason says American Capital now faces less risk of bankruptcy than it did just a day ago. And although he wouldn’t say it, the highly rated analyst himself may be the reason for the business development company’s apparent reversal of fortunes.
Mason, who has a four-stars on analyst rating service Starmine, said in a note Friday: “We believe the meaningful negative reaction in the share price today (likely the result of a mention of a possible bankruptcy) will incent ACAS management to ‘give in’ to public bondholder demands.”
NEW YORK (Reuters) – The U.S. Justice Department has dropped a probe of American International Group Inc executives involving the credit default swaps that sent the insurer to the brink of bankruptcy and forced a huge taxpayer bailout, lawyers for the executives said on Saturday.
The investigation had centered on AIG Financial Products, which nearly brought down the giant insurer after writing tens of billions of dollars on insurance-like contracts on complex securities backed by mortgages that turned out to be toxic.
NEW YORK, May 22 (Reuters) – The U.S. Justice Department
has dropped a probe of American International Group Inc <AIG.N>
executives involving the credit default swaps that sent the
insurer to the brink of bankruptcy and forced a huge taxpayer
bailout, lawyers for the executives said on Saturday.
The investigation had centered on AIG Financial Products,
which nearly brought down the giant insurer after writing tens
of billions of dollars on insurance-like contracts on complex
securities backed by mortgages that turned out to be toxic.
LONDON/NEW YORK (Reuters) – Goldman Sachs Group Inc faced rising regulatory and legal pressure on Monday as allegations that the bank duped clients fueled momentum for regulatory reform on both sides of the Atlantic.
Shares in the Wall Street powerhouse fell again and the cost of insuring its debt rose as investors struggled to assess how big a hit Goldman and the rest of the financial industry would take from the fraud charges.
A bit grayer and world wearier, maybe, but there’s no mistaking the family resemblance between NYSE Chief Operating Office Larry Leibowitz and his kid brother Jon Stewart. Unlike the Daily Show host, Leibowitz mostly keeps a low profile, although he did find himself in the spotlight even before his appearance at the Reuters Global Exchanges and Trading Summit on Monday. The Wall Street Journal interviewed him in a story about the NYSE’s effort to turn some high frequency traders — who have been chipping away at the exchange’s business — into exchange floor traders.
Leibowitz may be sick of the Jon Stewart questions, but when pesky Reuters editors and journalists inevitably raised them, he answered them with relatively good humor.
NEW YORK/CHARLOTTE, North Carolina (Reuters) – American Express Co and Capital One Financial Corp both reported better than forecast fourth quarter earnings, but expressed concern about the growth outlook for credit cards.
American Express, the largest U.S. credit card company by purchases, posted much higher fourth quarter earnings, beating forecasts, helped by rising consumer spending and lower credit losses, but revenue was flat.
Lloyd Blankfein has very much been a man in the news lately, sometimes to good effect and sometimes not so much. In the past few weeks the Goldman Sachs CEO has made headlines by declaring that his firm was “doing God’s work” and, just this week, by suggesting that Goldman probably would have survived without the government largess that was channeled its way at the height of last year’s financial sector meltdown. Those comments, made in interviews with the Times of London and Vanity Fair, were part of a broad media offensive which has sought to burnish the image of the bank Rolling Stone’s Matt Taibbi famously described as a blood sucking vampire squid.It seems surprising, then, that the nearly ubiquitous Blankfein will be absent when Goldman convenes its annual U.S. financial services conference next week, featuring such industry heavyweights as JPMorgan’s Jamie Dimon and Blackstone’s Steve Schwarzman, there will be no appearance by Blankfein or any other Goldman senior executive. That’s in sharp contrast to what happens at many top banks when they sponsor conferences; Bank of America’s outgoing CEO Ken Lewis, for example, was keynote speaker at his bank’s financial services conference early last month.Does this mean Blankfein has said his piece for now and is going to adopt a lower profile going forward? Not necessarily, Goldman says. Blankfein, or whoever the Goldman CEO is at a given time, is never a featured guest at the conference, said Ed Canaday, a spokesman for the bank. “Historically we have not had our CEO or another member of senior management speak at the conference,” he said. “I know it’s different from some other companies but that’s how it’s been done historically.”Meanwhile Bank of America, which on the initial conference agenda had the initials “TBD” next to its name in the space where other banks listed their CEOs, has dropped out entirely as speculation swirls about who will take the top job at the troubled lender. Given Blankfein is as secure in his job as any CEO of a major bank, perhaps the next Bank of America chief will take a page out of his book and be conspicuously absent from the stage next year.
More consolidation may be coming to the world of private equity lenders. Debt-laden Allied Capital solved its long-standing problems last week when it sold itself to Ares Capital. Rival American Capital, once an S&P 500 component but now struggling for survival, could be the next takeover target.
But some investors wonder if Allied got a raw deal. Ares paid $3.47 a share in stock for a company that had a book value of $7.49 in June. One law firm has already launched a “shareholder investigation“. Similarly, American Capital’s shares trade below $3, compared with a book value of $8.76 at the end of June.