The Week Unpeeled
The headlines were dominated again this week by MF Global (where $600 million in funds are still “missing” but may have been transferred from customer accounts to brokerage accounts before the bankruptcy); Europe debt woes (where UK Prime Minister David Cameron and German Chancellor Angela Merkel presented a unified front in Berlin stressing the positives from the Eurozone summit); and Occupy Wall Street protests around the globe (where 250 were arrested in New York after a failed attempt to “close” the New York Stock Exchange. Elsewhere:
- Deutsche Bank AG CEO Josef Ackermann resigned in a surprised move amid concerns of shareholder support;
- Virgin Money, part of the Richard Branson fold, acquired Northern Rock, a loss for British taxpayers and the first sale of banking assets for the UK government following the financial-crisis bailout;
- Warren Buffett, through Berkshire Hathaway, bought a 5.5 percent stake in IBM, which was widely reported as his first big stake in a tech company ever and makes Berkshire one of the biggest shares of Big Blue;
- NBC announced that Chelsea Clinton will become a full-time special correspondent for its news division, effective immediately, as part of its “Making a Difference” series on its Nightly News;
- In the UK, youth unemployment hit one million for the first time, and Mervyn King, Governor of the Bank of England, revised the nation's growth forecast down. Figures now show that 21.9 per cent of 16-24 year olds are now out of work, a rise of 67,000 in the last three months;
- Amid the arrests in New York, the Occupy London protestors have undertaken a “public repossession” of an office building owned by UBS, saying that it was only right that this kind of action is taken against banks that leave premises empty;
- Penn State’s Board of Trustees hired Ketchum for its crisis communications issues; and
- The Dow ended the week down 2.9 percent at 11,796 in one of the worst trading weeks in a couple months.
They’re Back, Perhaps
Are esoteric bonds making a comeback? First Bowie Bonds were launched in 1997, which were securities backed by 10 years of royalties on albums recorded by David Bowie before 1990. Now “Uma-Backed Securities,” (a nod to The Wall Street Journal headline) are expected to hit the market, or bonds backed by Miramax Film licensing and distribution revenues, which includes “Pulp Fiction.” Barclays Capital serves as investment banker for the private placement. Creative financing or a sign that traditional sources of collateral (mortgages, car loans, credit cards) are getting thin?