Goldman Sachs Turns Down Southern Europe Banks as Crisis Lingers - (www.bloomberg.com) Goldman Sachs Group Inc. (GS), the No. 1 stock underwriter in Europe, turned down roles in offerings by banks in Spain and Italy this year, the only top U.S. securities firm not to take part in the fundraisings by southern European lenders as the region’s debt crisis stretches to a fourth year. The firm declined a role in Banco Popular Espanol SA (POP)’s 2.5 billion-euro ($3.2 billion) rights offering this month because it wanted greater protection to avoid potential losses on the sale, two people familiar with the talks said. JPMorgan Chase & Co. (JPM) and Morgan Stanley are helping to guarantee the deal. Goldman also didn’t underwrite this year’s share sales by Italy’s UniCredit SpA and Portugal’s Banco Espirito Santo SA (BES), which drew Bank of America Corp. and Citigroup Inc. Goldman Sachs, which got 55 percent of its revenue this year from sales and trading, is passing on underwriting fees that could be at risk should the stock drop, as happened with insurer Fondiaria-SAI SpA (FSA) this year.
Why IPOs Look to Be Entering a Slow Deep Freeze for Now - (www.cnbc.com) Making a killing on initial public offerings used to be easy. At the peak of the technology boom, little more than a decade ago, a plentiful supply of companies vied to sell stock on the exchanges, and investors were assured mouthwatering returns. These days, the deals are fewer and the returns more modest. Companies are set to raise more than $45 billion through IPOs this year — the most since 2007, according to data provider Dealogic. But if you scratch the surface, there are signs that the market is less healthy than it appears. Almost a third of the money raised in IPOs this year came from one deal, Facebook's $16 billion offering in May, and the number of companies taking themselves public may end at a three-year low.
Smart Money? Hedge Funds Now Worse Than Mutual Funds - (www.cnbc.com) Hedge fund managers don’t have much to be thankful for these holidays, as failure to beat low-fee index funds will likely infuriate investors shelling out hefty fees for their services. Just 13 percent of the so-called smartest money on the Street are outperforming the S&P 500, and a fifth of all hedge funds are actually in the red during 2012, according to Goldman Sachs data. To make matters worse, hedge fund managers have crowded into the same trades, with turnover at a record low, according to Goldman. Translation: Hedge fund investors are paying 2 percent fees up front and 20 percent of profits thereafter to managers delivering poor performance and apparently doing little about it.
Downturn erodes central bank independence - (www.ft.com) The global financial and economic crisis has weakened central bank independence, a report suggests, as bankers’ increased responsibilities have earned them higher profiles and politicised their work. Most of the world’s central banks have in recent decades been granted power to set monetary policy as they see fit, rather than bend to the demands of politicians to lower interest rates before elections. But the downturn has weakened their operational independence as it has left them filling in for governments unable, or unwilling, to prevent an economic slowdown, a report, due to be published on Tuesday, has said.
Supreme Court Says It's OK To Record Cops In Illinois – (www.businessinsider.com) The U.S. Supreme Court issued an order Monday that essentially allows people in Illinois to record police officers, the Chicago Tribune reports. The justices declined to review a lower court ruling that found the state's “anti-eavesdropping law” to be in violation of a person’s free speech rights when used against anyone who records police officers. By refusing to review the case, the high court leaves the ban on the law in place. The law set out a maximum prison term of 15 years.