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Reuters UK – Hedge fund millionaire Bertrand des Pallieres’s SPQR Capital has launched a bid to trump BlueGem Water’s proposed stake building in stockbroker Panmure Gordon & Co.
SPQR said that, via vehicle P.G. Holdings, it proposed to take part in a placing of at least 43 percent of Panmure’s capital at a price of at least 28 pence per share, a minimum total spend of 17.4 million pounds.
Last month, private equity firm BlueGem Capital Partners said it would take a stake of 40 percent in Panmure at 24 pence per share.
New York (HedgeCo.Net) – Saying that GM is in the “worst shape,” Senate Banking Committee Chairman Christopher Dodd told the struggling automaker that they’ve got to consider new leadership if they want to receive federal aid. The comments prompted many to believe he was referring in fact to GM CEO Richard Wagoner, whom Dodd said “has to move on,” on CBS’s “Face the Nation.”
President-elect Barack Obama didn’t exactly reaffirm Dodd’s position, but said at a Chicago press conference that if management “doesn’t understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go.”
Congress will reconvene this week to discuss the proposed $15 billion rescue plan that would hopefully salvage both General Motors and Chrysler. Although they are closer to finalizing a plan of action for the troubled companies, they are still met with reluctance from certain individuals.
Alabama Senator Richard Shelby, who has been outspoken about his disdain for any auto rescue plan, is supporting a filibuster that would put a halt to the legislation and instead prompt a lengthy debate about the issue.
Dodd, however, realizes it is a time-sensitive issue and focused during the interview on the fact that the auto industry could completely sink in the next few weeks if nothing is done. “Even if people don’t like this idea, none of us want to wake up January 1st and discover we don’t have an industry to save.” According to the Connecticut Senator, 1 out of every 10 jobs in the U.S. is either directly or indirectly related to the American auto industry.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York (HedgeCo.Net) – Senate leaders will vote today on the $700 billion bailout package, after some key changes were implemented including tax breaks and higher limits for insured bank deposits.
The new limit proposals are something that both candidates and President Bush agree upon, leading some to believe that the bailout package, in its current incarnation, will finally be passed through Congress.
Though the details of the plan are not readily available, lawmakers are hoping that the changes will appeal to those republicans who were knocked the first proposal, while keeping the democrats who are otherwise against generous tax incentives for businesses.
“It has been determined, in our judgment, this is the best thing to move forward,” said Democratic Senator Harry Reid of Nevada.
While the bill has certain new elements to it, including extensions of unemployment along with tax credits for low income home-owners, the basic principle of the government purchasing $700 billion worth of bad debt and eventually re-selling them remains the same. The bill also has some room for new additions, though Christopher Dodd, Chairman of the Senate Banking Committee warns, “Opening this up all over again to other things may doom it.”
Markets tanked following the rejection of the initial proposal on Monday, with the Dow Jones industrial average plummeting 778 points. Though the markets regained some vigor on Tuesday, many lawmakers felt a strong urgency to get a plan passed.
The FDIC currently insures up to $100,000 per account. The new proposal might see an increase in that amount to $250,000.
House Speaker Nancy Pelosi is confident about the new plan, telling President Bush that “Working together, we are confident we will pass a responsible bill in the very near future.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – The $700 billion rescue plan proposed by the Treasury and backed by President Bush seems to be greeted with disdain by republicans and democrats alike. After excruciatingly long hearings and even an emergency meeting with the two presidential candidates, an agreement was still not reached as to how the rescue will play out.
“There will ultimately be $700 billion available, but how soon and with what other steps, are still being debated,” House Financial Services Committee Chairman Barney Frank told reporters.
Some issues that lawmakers are trying to come to terms on include executive compensation, foreclosures, accountability, regulation, and how taxpayers can be provided equity stakes in the companies whose rescues they would be helping to fund.
Some republicans are pushing for financial institutions to purchase insurance on mortgage-backed securities, while the Treasury is opting for a plan where the government would instead purchase the bad debt.
"I don’t believe this Paulson plan will solve the problems, it might exacerbate them,” said Richard Shelby, a Republican member of the Senate Banking Committee.
Experts agree that unless the majority of the party hops on board with the president, it’s unlikely this will be passed through congress.
“Ms. [Nancy] Pelosi will not bring a partisan bill to the floor,” Frank said. “If the House Republicans continue to reject the president’s approach then there is no bill.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
New York (HedgeCo.Net) – Federal Reserve Chairman Ben Bernanke joined Treasury Secretary Henry Paulson yesterday in an attempt to sway lawmakers to pass a $700 billion rescue plan that would purchase illiquid mortgage-backed assets in an attempt to restore the U.S. financial system. Reaffirming that his interest lies solely in the recovery of the U.S. economy and not in Wall Street, Bernanke proceeded to outline a plan that would attack the root cause of our current credit crisis while bring stability back to the markets.
“I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover,” Bernanke pleaded to the Senate Banking Committee. “My interest is solely for the strength and recovery of the U.S. economy.”
Bernanke explained that the Treasury should buy the illiquid assets at their hold-to-maturity date, instead of at their discounted rates.
“I believe that under the Treasury program, auctions and other mechanisms could be designed that will give the market good information on what the hold-to-maturity price is for a large class of mortgage-related assets,” he explained. The reverse auction system would entail firms bidding to the Treasury to sell their assets. By removing these assets from our system, Bernanke believes that we can get to the root of the current financial crisis.
Reaffirming that taxpayers will get “good value,” Bernanke is hoping that the bipartisan rescue plan will be approved swiftly and not be slowed down with “other provisions that are unrelated or don’t have broad support." However, the Treasury’s plan has met resistance from both parties, who feel that taxpayers are going to bear the burden while there are no repercussions for Wall Street execs.
Republican Senator Richard Shelby of Alaska scoffed at the plan, saying that it “codifies the Treasury’s ad-hoc approach.” Democratic Representative Barney Frank of Massachusetts agreed, saying that “CEO’s put their ability to get unrestricted excessive compensation, including rewards for failure, over and above trying to cooperate in helping the economy.”
Christopher Dodd, who heads the Senate Banking Committee, opened the hearing by saying that “we must address the root cause by putting an end to the rising number of foreclosures sweeping across our nation,” while also expressing concerns about the taxpayers well-being.
As Paulson and Bernanke were making their case, Dick Cheney and other top White House advisors were sent to lobby House Republicans amidst growing discontent.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bloomberg – The U.S. Securities and Exchange Commission, seeking to jumpstart a hunt for suspected manipulation of financial stocks, will require hedge fund managers, brokerages and institutional investors to describe under oath their bets on the firms.
Investors with “significant” trades in the companies’ securities or credit default swaps must disclose their positions and provide “certain other information” in written statements, the regulator said yesterday. SEC spokesman John Nester declined to say who would receive the requests.
The SEC issued a series of emergency measures, rules and warnings to hedge funds this past week as lawmakers including Senate Banking Committee Chairman Christopher Dodd and executives such as Morgan Stanley Chief Executive Officer John Mack said traders may be spreading misinformation and using abusive tactics to attack companies. On Sept. 17, the agency said it may also force funds to hand over their communications.
Bloomberg – The U.S. Securities and Exchange Commission may require hedge funds to disclose their short-sale positions and plans to subpoena the funds’ communication records in an effort to stem turmoil in stock markets.
Hedge funds and investors managing more than $100 million in securities would be “required to promptly begin public reporting of their daily short positions,” Chairman Christopher Cox said in a statement yesterday. The proposed disclosure is in addition to three SEC rules that took effect today aimed at reducing manipulative trades betting on a drop in share prices.
Lawmakers including U.S. Senate Banking Committee Chairman Christopher Dodd and executives such as Morgan Stanley Chief Executive Officer John Mack say short sellers may be spreading false information and using abusive tactics to attack companies. Hedge funds say poor business strategies are to blame and an industry spokesman said the SEC announcement was “abrupt.”
“The consequences of a hasty or ill-considered rule in this environment could be extremely harmful to the capital markets,” said Jim Chanos, chairman of the Coalition of Private Investment Companies, which represents 20 funds with assets in excess of $120 billion. “Such a requirement is akin to the government suddenly requiring Coca-Cola to disclose their secret formula for free to all their competitors.”
