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Archive for October, 2013

Charitable Donations by Goldman Sachs

Tuesday, October 29th, 2013 Leave a comment

Everyone knows Goldman Sachs is good at making money, and lots of it. Having said that, you may be surprised by the fact that Goldman has given away more than $1.6 billion since 2008 (especially since Goldman — unlike most corporations with large charitable efforts — has no presence on Main Street). Interestingly, Dina Powell, president of the Goldman Sachs Foundation, the clearinghouse of the company’s giving, makes roughly $2 million annually for giving money away.

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Source: NYT

Current Tech Valuations Stir Memories of 1999

Monday, October 28th, 2013 Leave a comment

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Source: WSJ

Quote of the Day

Saturday, October 26th, 2013 Leave a comment

“Money is a public good; as such, it lends itself to private exploitation.”

— Charles P. Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises

Federal Reserve Toughens Requirements For Biggest Banks

Saturday, October 26th, 2013 Leave a comment

This past Thursday, the Federal Reserve proposed a measure that requires big financial institutions to have enough cash and easy-to-sell securities to withstand a 30-day run on the bank.

According to Huff Post Business, the introduction of the “liquidity coverage ratio,” or LCR, marks the first time U.S. regulators have required banks to have a specific amount of liquid assets in order to withstand a run on the bank or a credit crunch. U.S. financial regulation for years has focused on capital, or the ratio of equity-to-debt that a bank uses to fund its loans and securities.

While global regulators have already agreed to stricter liquidity rules as part of the Basel III banking accords, the Fed’s version is tougher, underscoring the central bank’s concern that the nation’s largest banks still pose great risk to the U.S. financial system.

Here are other highlights regarding the Fed’s proposal:

  • Much of Wall Street and some Obama administration officials have feared that the proposed rule, with its incentive for banks to hold substantial amounts of U.S. Treasuries, risks creating a situation in which the demand for safe securities outstrips supply, leading to a shortage of so-called safe assets.
  • The Fed’s proposal is now open for public comment. The Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, the two other federal bank regulators, also will propose the rule in the coming weeks.
  • The U.S. proposal is likely to be met with stiff resistance from financial companies, which have been lobbying regulators to relax the proposal ahead of its formal introduction.

 

Source: Huff Post Business

 

Cumulative Flows of Equity Funds and Bond Funds Since June ’13

Saturday, October 26th, 2013 Leave a comment

BI_CumulativeFlows_screen shot 2013-10-25 at 9.25.38 am

 

Source: Business Insider

Twitter IPO Pegs Valuation at Modest $11 billion and Sets IPO Price at $17-$20

Thursday, October 24th, 2013 Leave a comment

With the way some tech and social media stocks are performing today, it’s starting to feel a little like the dot-com bubble era again. In an attempt to avoid Facebook’s notorious IPO stumble, Twitter revealed more modest ambitions, saying its initial offering would raise up to $1.6 billion and value the company at up to about $11 billion.

From Reuters:

The valuation was more conservative than the $15 billion some analysts had expected for the social media phenomenon, potentially attracting investors who might consider the money-losing company’s listing price a better deal, with room to rise.

Twitter had signaled for weeks it would price its IPO modestly to avoid the sort of stock plummet that spoiled Facebook’s coming-out party. It said on Thursday it intends to sell 70 million shares between $17 and $20 apiece, raking in up to $1.4 billion for the company.

If underwriters choose to sell an additional allotment of 10.5 million shares, the offer could raise as much as $1.6 billion.

 

So when should we expect Twitter to make its public debut? It appears Twitter’s IPO date will likely be November 7. Specifically, The New York Times notes:

Twitter has also moved up the pricing of its offering by more than a week, to Nov. 6. That means that the social network would then begin trading on the New York Stock Exchange, under the ticker symbol TWTR, the next day.

 

Sources:

Twitter IPO pegs valuation at modest $11 billion (Reuters)

Twitter Sets I.P.O Price at $17 to $20 a Share (The New York Times)

Carl Icahn Increases Stake In Apple, Pushes for Stock Buyback

Thursday, October 24th, 2013 Leave a comment

Earlier today, well-known activist investor Carl Icahn went on CNBC and made a push for Apple to engage in a $150 billion stock buyback. While Icahn’s comments certainly make the headlines, it should be noted that Icahn’s $2.5 billion stake in Apple means he only owns roughly 0.5% of the tech giant. Put in a broader context, Icahn remains far down the list of Apple’s top shareholders.

Below is a chart of Apple’s top shareholders. Notably, Blackrock tops the list with just over a 5% stake in the company.

 

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Source: Floating Path