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STORIES:
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.
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