Showing posts with label Against. Show all posts
Showing posts with label Against. Show all posts

Monday, February 13, 2012

How JP Morgan Just Made $1.9 Billion By Everyone Betting Against Them (JPM)

sausage-casingEarlier this morning, JP Morgan reported Q3 earnings of $1.02 per share, which compares to analysts' expectation for $0.92 per share.

However, no one can seem to agree on whether or not JP Morgan actually beat the analysts' estimates.

In fact, CEO Jamie Dimon was the first to say that there were "several significant items" that were unusual during the quarter.

The one item everyone is raising red flags about is the $1.9 billion pretax DVA gain.  DVA is short for debt valuation adjustment.

Bloomberg explains the DVA:

[R]esults may include gains taken under a U.S. accounting rule known as Statement 159, adopted by the Financial Accounting Standards Board in 2007, which allows banks to book profits when the value of their bonds falls from par. The rule expanded the daily marking of banks’ trading assets to their liabilities, under the theory that a profit would be realized if the debt were bought back at a discount.

In other words, when investors and traders bet against a banks' bonds, causing credit default swap spreads to soar, the bank is allowed to book a mark-to-market gain.

Last year, Bloomberg spoke to Oppenheimer analyst Chris Kotowski who called the DVA an "abomination."  He explains, "Just because Morgan’s credit spreads widened out this quarter doesn’t mean that their ultimate interest and principal payments changed one iota."

But Dimon doesn't act like the DVA is anything worth applauding.  "The DVA gain reflects an adjustment for the widening of the Firm’s credit spreads which could reverse in future periods and does not relate to the underlying operations of the company."

Expect more banks to report DVA gains.


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Thursday, September 22, 2011

This Is Why Russia Is Blocking International Action Against Syria

Syrian President Bashar al-Assad's brutal crackdown on the popular uprising against his rule, which has left some 2,600 people dead since March, has earned him opprobrium across the globe. But international efforts to pressure his regime further are unlikely to be enough to bring it down, so long as Mr. Assad retains the support of one powerful global player: Russia.

A traditional ally with trade ties worth close to $20 billion, Russia has a strong financial stake in the Assad regime's survival. But Moscow's support goes beyond pocketbook issues. As a vast country that has seen its share of uprising and revolution, the one-time superpower tends to support autocracy as the lesser evil and is skeptical of Western intervention – particularly in the wake of NATO's Libya campaign.

As one of five veto-wielding members on the United Nations Security Council, Russia can block any attempt to exert major international pressure on Assad, whether through economic sanctions or military intervention.

“Russia is now a business-oriented country, and the Russian government obviously wants to protect the investments made by its businessmen in Syria,” Yevgeny Satanovsky, president of the independent Institute of Middle Eastern Studies in Moscow. “But … the main reason in being so stubborn [blocking UN action against Syria] is because Moscow perceives that the Western bloc is wrecking stability in the Middle East in pursuit of wrong-headed idealistic goals. A lot of Russians are horrified at what’s going on in the Middle East and they’re happy with their government’s position.”

Russia has been a prominent defender of the Assad regime, dispatching delegations and envoys to the Syrian capital and warning against international intervention similar to the NATO-led campaign against Col. Muammar Qaddafi.

Russian President Dmitry Medvedev said recently that some of those taking part in the Syrian street protests had links to “terrorists,” while another senior Russian foreign ministry official said that “terrorist organizations” could gain power in Syria if Assad’s regime is toppled.

Such comments, which echo those of the Assad regime, have been warmly greeted in Damascus. On Sunday, Assad welcomed the “balanced and constructive Russian position toward the security and stability of Syria.”

True, Moscow is not the only country expressing wariness at sudden change in Syria: the five-nation BRICS bloc (Brazil, Russia, India, China, and South Africa) recently declared they were against intervention in Syria and urged dialogue between the Assad regime and the Syrian opposition. But Russia’s public and repeated defense of the regime has frustrated the Syrian opposition, which is seeking the support of the international community in its bid to oust Assad. Last week, Syrian protesters vented their irritation by staging a “day of anger against Russia.”

Russia’s support for the Assad regime is rooted in self-interest, and calculates that Assad could yet prevail against the Syrian opposition movement.

"In fact we see that there is no united opposition in Syria, nor is there NATO support [for the rebellion] as was the case in Libya,” says Georgi Mirsky, an expert with the official Institute of World Economy and International Relations in Moscow. “Arab countries will never agree to even limited military operations against Syria [as they did in Libya]. The Syrian army is not split. Therefore, we see serious reasons to believe the Assad regime can survive. Even if it’s discredited, it could still hold on for a number of years. So there’s no sense of urgency in Moscow to change policies.”

Russia has long-standing commercial, military, and political ties to Syria. According to a recent article in The Moscow Times, Russian investments in Syria in 2009 were valued at $19.4 billion, mainly in arms deals, infrastructure development, energy, and tourism. Russian exports to Syria in 2010 totaled $1.1 billion, the newspaper said.

Other than lucrative business deals, Moscow is seeking to wield greater influence on the global stage after losing some of its prestige with the collapse of the Soviet Union in 1991. It traditionally opposes foreign interventions – which potentially can set precedents for Russia in the future – and serves as a counter-balance to the perceived axis of the United States, the European Union and NATO.

Furthermore, Russia – with a multitude of ethnic and religious sects, as well as nationalist minorities – has an innate suspicion of popular uprisings and their uncertain outcomes, from ousting a regime to plunging a country into chaos. While the West optimistically embraces the Arab Spring as a welcome shift toward democracy in the region, Russia takes the more hard-nosed view that the outcome will be instability and bloodshed.

“Western idealism has contributed to chaos in the Middle East, and for once Russian foreign policy is right not to want any part of it,” says Mr. Satanovsky from the Institute of Middle Eastern Studies in Moscow. “The minimum we can expect in Syria is civil war, with rivers of blood. Yes, it is a cruel dictatorship, but Russia sees only worse things taking its place.”

Russian-Syrian ties are perhaps strongest in the field of arms sales. The Soviet Union was Syria’s main supplier of weapons during the cold war, leaving Damascus saddled with a $13.4 billion arms debt.

Although trade dwindled following the collapse of the Soviet Union, it picked up again beginning in 2005 when Moscow wrote off almost 75 percent of the debt. Russia and Syria have signed arms deals worth some $4 billion since 2006. They include the sale of MiG 29 fighter jets, Yak-130 jet trainers, Pantsir and Buk air defense systems, and P-800 Yakhont anti-ship missiles. Syria also hopes to receive Iskandar ballistic missiles and S-300 anti-aircraft missiles, the latter of which would pose significant threats to hostile aircraft operating in Syrian skies.

Much of the funding for the arms deals reportedly is underwritten by Iran, which signed several defense agreements with Syria from 2005. That enables some of the weapons allegedly to be quietly transferred to Iran thus circumventing a United Nations ban of arms exports to the Islamic Republic.

Russia also operates a naval supply and maintenance site near the Syrian port city of Tartous on the Mediterranean. The Soviet-era facility has been in Russian hands since 1971 but fell into disrepair in 1992. However, the port is undergoing a major refurbishment which will grant Russian naval vessels a permanent base in the Mediterranean after 2012. Presently, Russia’s only other warm-water naval facility is at Sevastopol in the nearly-landlocked Black Sea. All Russian shipping exiting the Black Sea must sail through the narrow Bosporus channel, which lies within Turkish waters.

However, the billions of dollars in investments and the strategic naval facility in Tartous could all be jeopardized if the Assad regime is overthrown or the country descends into violent chaos. As it is, Moscow, which has criticized the NATO-led intervention in Libya, is waiting to see if the new authorities in Tripoli will honor some $10 billion worth of business deals reached with the Qaddafi regime.


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Saturday, September 3, 2011

Over 130 Named As Individuals In The FHFA's Lawsuits Against U.S. And Euro Banks (BAC)

Lots of Wall Streeters are named in the FHFA's 17 lawsuits against banks for their roles in the mortgage crisis.

They are named for signing the shelf-registrations filed with the SEC. (Shelf registration is a process authorized by the U.S. Securities and Exchange Commission under Rule 415 that allows a single registration document to be filed by a company that permits the issuance of multiple securities.)

The FHFA alleges that the data in the shelf statements is false and that they omitted material facts, in addition to other things.

In total over 130 execs are named. 

Here are those named in the FHFA's lawsuit against BofA:

GEORGE C. CARP

ROBERT CARUSO

GEORGE E. ELLISON

ADAM D.GLASSNER

DANIEL B. GOODWIN

JULIANA JOHNSON

AASHISH KAMAT

MICHAEL J. KULA

JAMES H. LUTHER

WILLIAM L. MAXWELL

MARK I. RYAN

ANTOINE SCHETRITT

Those named in the lawsuit against Goldman:

PETER C.ABERG

HOWARD S. ALTARESC

ROBERT J. CHRISTIE

KEVIN GASVODA

MICHELLE GILL

DAVID J. ROSENBLUM

JONATHAN S. SOBEL

DANIEL L.SPARKS

MARK WEISS

Those named in the lawsuit against Citi:

SUSAN MILLS

RANDALL COSTA

SCOTT FREIDENRICH

RICHARDA. ISENBERG

MARK I. TSESARSKY

PETER PATRICOLA

JEFFREY PERLOWITZ

EVELYN ECHEVARRI

Those named in the lawsuit against Morgan Stanley:

GAIL P. MCDONNELL

HOWARD HUBLER

CRAIG S. PHILLIPS

ALEXANDER C. FRANK

DAVID R. WARREN

JOHN E. WESTERFIELD

STEVEN S. STERN

Those named in the lawsuit against Barclays:

MICHAEL WADE

JOHN CARROLL

PAUL MENEFEE

Those named in the lawsuit against Countrywide:

JOSHUA ADLER

THOMAS H. BOONE

JEFFREY P. GROGIN

RANJIT KRIPALANI

STANFORD KURLAND

THOMAS KEITH MCLAUGHLIN

JENNIFER S. SANDEFUR

ERIC SIERACKI

DAVID A. SPECTOR

Those named in the lawsuit against Credit Suisse:

ANDREW A. KIMURA

JEFFREY A. ALTABEF

EVELYN ECHEVARRIA

MICHAEL A. MARRIOTT

ZEV KINDLER

JOHN P. GRAHAM

THOMAS E. SIEGLER

THOMAS ZINGALLI

CARLOS ONIS

STEVEN L. KANTOR

JOSEPH M. DONOVAN

JULIANA JOHNSON

GREG RICHTER

Those named in the lawsuit against Deutsche Bank

DOUGLAS K. JOHNSON

EVELYN ECHEVARRIA

JULIANA C. JOHNSON

Those named in the lawsuit against JPMorgan

DAVID M. DUZYK

LOUIS SCHIOPPO, JR.

CHRISTINE E. COLE

EDWIN F. MCMICHAEL

WILLIAM A. KING

BRIAN BERNARD

MATTHEW E. PERKINS

JOSEPH T. JURKOWSKI, JR.

SAMUEL L. MOLINARO, JR.

THOMAS F. MARANO

KIM LUTTHANS

KATHERINE GARNIEWSKI

JEFFREY MAYER

JEFFREY L. VERSCHLEISER

MICHAEL B. NIERENBERG

RICHARD CAREAGA

DAVID BECK

DIANE NOVAK

THOMAS GREEN

ROLLAND JURGENS

THOMAS G. LEHMANN

STEPHEN FORTUNATO

DONALD WILHELM

MICHAEL J. KULA

CRAIG S. DAVIS

MARC K. MALONE

MICHAEL L. PARKER

MEGAN M. DAVIDSON

DAVID H. ZIELKE

THOMAS W. CASEY

JOHN F. ROBINSON

KEITH JOHNSON

SUZANNE KRAHLING

LARRY BREITBARTH

MARANGAL I. DOMINGO

TROY A. GOTSCHALL

ART DEN HEYER

STEPHEN LOBO

Those named in the lawsuit against Merrill Lynch:

MATTHEW WHALEN

BRIAN T. SULLIVAN

MICHAEL M. MCGOVERN

DONALD J. PUGLISI

PAUL PARK

DONALD C. HAN

Those named in the lawsuit against Nomura

DAVID FINDLAY

JOHN MCCARTHY

JOHN P. GRAHAM

NATHAN GORIN

N. DANTE LAROCCA

Those named in the lawsuit against RBS

JOSEPH N. WALSH III

CAROL P MATHIS

ROBERT J MCGINNIS

JOHN C ANDERSON

JAMES ESPOSITO

Those names in the lawsuit against SOCGEN

ARNAUD DENIS

ABNER FIGUEROA

TONY TUSI

ORLANDO FIGUEROA


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Thursday, August 25, 2011

Turkish Bombing Campaign Against PKK Signals Shift In Strategy

Turkey has cracked down hard on Kurdish rebels in northern Iraq, responding to their attacks by hitting guerrilla bases with air strikes. The bombing campaign, coming amid rising tensions with the country's significant Kurdish minority, signals a shift away from diplomacy to military might in dealing with the rebels.

Turkish leaders today claimed to have killed up to 100 Kurdish rebels following six days of intense bombing of their bases. The bombing campaign was launched following an ambush last week in which the rebels killed eight Turkish soldiers near the Iraqi border, after which Turkish Prime Minster Recep Tayyip Erdogan said his government had "run out of patience."

“The state is obliged to carry out these operations for the peace of the nation and it is the natural right of the state to do so,” said Mr. Erdogan yesterday.

Despite reports of civilian casualties and condemnation from the president of autonomous Iraqi Kurdistan, Erdogan vowed to continue the attacks on the Kurdistan Workers Party (PKK), a separatist guerrilla outfit that has been fighting the Turkish state for 26 years. Turkey, the US, and the European Union have all designated the group to be a terrorist organization.

Rising tension between government, Kurdish minority

The assault comes amid rising tensions between the Turkish government and the country's Kurdish minority since June elections. Candidates backed by the Kurds, who make up almost a fifth of Turkey's population, performed well in the poll, garnering 36 seats. But after some members of parliament were barred because of PKK-related convictions, the Kurdish bloc boycotted parliament – a boycott that is still in effect.

In recent years Turkey’s ruling Justice and Development Party (AKP) has repeatedly said it plans to redress the long-running grievances of the country’s 15 million Kurds, who are seeking greater cultural and political autonomy. Among other initiatives, the government has loosened restrictions on the use of the Kurdish language, launching a Kurdish state TV channel.

But partly as a result of a backlash among Turkish nationalists, the government’s rhetoric has become increasingly hostile in recent months.

“Even before this last PKK attack, the government was preparing to increase pressure, but the latest attack has forced them to step forward,” says Gokhan Bacik, director of the Middle East Research Centre at Zirve University in southern Turkey.

Backed by US intelligence?

The Turkish Army has often bombed PKK positions in the Qandil Mountains of Northern Iraq, a safe haven for the rebels, but seldom with such apparently devastating effect.

Professor Bacik says the bombing may also have been aided by US intelligence. According to the Turkish Army, some 2,000 fighters are hiding in the mountains. The government of Iraqi Kurdistan has repeatedly claimed it is not able to eject the rebel group.

"I call on Turkey to stop these operations,” said Iraqi Kurdistan’s President Massud Barzani on Monday. “Actions that injure people and destroy their property cannot be justified.”

But Bacik says that in spite of its protests, the bombing campaign was unlikely to seriously alter Turkey’s relationship with the autonomous Iraqi region.

“They can protest, but they have no leverage with which to control Turkey, and it is not a strong government,” he says.

In recent years, Turkey has developed massive economic influence over northern Iraq. More than half of the 2,000 foreign companies working in northern Iraq are Turkish, and 75 percent of all goods sold in the region are Turkish made.

This post originally appeared on The Christian Science Monitor.


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