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Posted
Sep 01 2009, 06:26 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
When the century-old investment bank Lehman Brothers collapsed a year ago, it spawned not just a global financial firestorm but a cottage industry of insider accounts of where it all went wrong. Three major books have been published and more are on the way -- each proposing to tell us the darkest secrets of the world's worst-run brokerage. (My take on it: New column.)
Any endeavor that pits Type A personalities against each other in a battle for control of the public discourse is bound to be competitive, and one like this in which reputations are at stake will naturally be especially fierce. That makes the effort by Lawrence G. McDonald, a former vice president at Lehman, particularly compelling, as he was first out of the gate.
In a late-night conversation from his vacation in Paris, the former fixed-income trader told me that the book, "A Colossal Failure of Common Sense," took him and co-author Patrick Robinson one hundred and seventy-three 17-hour days to research and write -- including Christmas and New Year's. Not that anyone's counting. Because he was first off the starting line with a publishing contract and a plan, he managed to grab co-workers for interviews "at a golden moment of frustration," he says, a time when they wanted the bad apples at Lehman exposed. The bottom line is about what you'd imagine: An overmatched boss failed to listen to smarter underlings and drove the company into the ground. The details are amazing, which makes the read compelling even if you feel you know the whole story already.
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Posted
Jul 03 2008, 10:23 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
In an unusual move, Lehman Brothers decided to try and engender some employee goodwill by handing out a mid-year bonus. Unfortunately, it was in stock. Worse still, it was in Lehman stock.
Now before you go and assume that this is a bad idea because Lehman stock has been so badly beaten up, let's be clear -- this is bad for a whole lot of reasons. And instead of getting hung up on minutiae like whether it's really an incentive when you're handing out shares of a plummeting stock, think about what this says about the bigger picture at Lehman.
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Posted
Sep 29 2008, 01:09 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Members of Congress shocked the world today by voting down legislation aimed at resolving the U.S. credit crisis, evidently determining that it was far from the comprehensive rescue plan that its promoters claimed and instead was just a handout to fatcats. Investors responded by throwing a fit, punching the Dow Jones Industrials Average down 778 points.
The House move was one part nihilism, one part bluff-calling and one part an expression of total constituent outrage, and only history will be able to judge if representatives' snub of their political leadership will rank among the greatest blunders of all time or a brave move of principle. Both views will have their day in court, for dispassionate analysis
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Posted
Sep 22 2008, 01:51 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Watching Treasury Secretary Henry Paulson make the rounds of Sunday morning television shows to make his case for applying a trillion dollars' worth of CPR to the U.S. banking system, I was struck by the prosaic quality of his argument. You sure didn’t have the sense that he thought this was any big deal. I mean, it was almost the same tone as you’d hear on a recorded message of the day’s surf forecasts. Wake me when we’ve spent all our money.
The humdrum quality of technocrats like the former Goldman Sachs chief makes me wistful for the days of Franklin Delano Roosevelt. Now there was a guy who was mad as hell about the state of the banking system, and wasn’t going to take it anymore. And could he ever deliver a speech.
FDR’s Inaugural Address in 1933 – in which he excoriated bankers for their greed, selfishness and incompetence -- was his most famous, and you may be amazed to discover how relevant it sounds today. "There must be an end to speculation with other people's money!" he said.
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Posted
Sep 15 2008, 02:54 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
The fate of the world financial system hangs from a thread today after the New York office of the Federal Reserve stood up to the big Wall Street financial houses on Sunday and essentially told them, "thanks but no thanks" on their request for a bridge loan to nowhere.
It's about time. For years, the country’s major broker-dealers and banks have competed with each other to become the No. 1 underwriter of loans, bonds, mergers, mortgages, swaps and equities. The industry’s compensation system is focused on rewarding managers who took big risks, and could bring home top rankings in dealmaker lists.
All the while, banks figured that if they really got into trouble, the federal government would back them up with taxpayer funds. And the government reluctantly complied twice this year, backing up the reckless behavior of high-flying bankers at Bear Stearns in March, and Fannie Mae and Freddie Mac last week with loan guarantees costing untold billions
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Posted
Apr 23 2009, 09:19 PM
by
Andrew Rosenbaum
Rating:
Money Blog: Top Stocks Blog - MSN Money
You would think that investors would reward stocks when companies show strong earnings -- and punish those that don't.
Nothing could be further from the truth. If you want proof that stock trading isn't a science, you can find it by looking at some of the loopy moves investors make after stocks announce their earnings.
Here are three such examples from this earnings season so far
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Posted
Aug 18 2008, 06:57 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
We've seen a lot of wild things in the stock market over the past few years. Homebuilders have completely crashed and burned, banks and other financial companies are treading water at best, retail stocks have been punished, and the dollar has been in freefall. And all this while commodities from gold to wheat to oil have been skyrocketing.
But it may get just a bit wilder now that whole scenario has been flipped on its head. Financials have had fitful rallies, the dollar is showing some definite life, and oil has been sliding. While this could lead to a number of different outcomes, on The Motley Fool's CAPS service CAPS blogger RVAspeculator thinks that this turn of events is delivering a sucker punch to some hedge funds and Wall Street trading desks.
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Posted
Mar 25 2008, 03:58 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
Al Copeland died on Sunday. You might not know the name. In Louisiana and certainly around New Orleans, he was about as well known as anybody both for the chicken you can get at Popeyes Famous Fried Chicken, the chain he started, and for his lavish, complicated and exuberant lifestyle.
He liked getting married. But all four of his marriages ended in divorce -- often acrimoniously. He liked Christmas. His house along Lake Pontchartrain in Kenner, La., was so lit up with lights at the holidays that airline pilots would use it to line up their approaches to the airport.
He liked fast cars and fast boats. He carried on a fun feud over the decor of one of his restaurants with no less than Anne Rice, the author of "Interview with the Vampire."
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Posted
Nov 18 2008, 03:38 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
In this corporate earnings environment, there should be ample opportunities for analysts to put "sell" ratings on stocks. Of course, there was the famous call a few days ago when one enterprising securities researcher had the guts to say GM shares would fall to zero. He probably still kept his "buy" rating on the stock.
New evidence has come up that "sell" ratings are scarce as hen's teeth, at least in the US.
Research from Thomson Reuters StarMine shows that 18% of European analysts have "sell" ratings or the equivalent on stocks that they cover. The number in the US is less than 7%. According to the FT, "Equity research departments around the world have become much more bearish since the start of the year, but US analysts remain markedly more bullish on stocks than peers elsewhere."
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Posted
Apr 25 2008, 01:46 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Every frat house manager knows that if you want to end a party, you take away the keg. And that’s pretty much all you need to know about why the stock market is so sluggish this year.
The banks have sharply cut back on the credit they’ve allocated to hedge funds, making less money available to purchase stocks and bonds of all stripes. Less borrowing = less buying power. It's pretty simple.
The latest evidence of this action has come from reporters at the Financial Times, who say they’ve discovered that the most leveraged funds are now borrowing no more than five times their asset base -- down from at least 10 times their base six months ago. That means a $100 million hedge fund that was buying up to $1 billion worth of stocks a year ago now can only buy less than $500 million worth. That's a big difference.
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