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CNBC - The Wall Street fallout is having aftershocks throughout the economy, but believe it or not, the entertainment industry is having no problem securing bank-financed credit.
Sure, it’s not boom time, but the fact that media companies are able to attract financing is impressive, and a testament to the fact that movie going is generally counter-cyclical.
On Friday the government was frantically putting together a bailout plan for the financial markets, while production houses attracted more investment. Last week Steven Spielberg secured $700 million in credit through JP Morgan to back his new production company in partnership with India’s Reliance Big Entertainment, from which he’s getting $500 million in equity.
Reuters - Securities regulators are locking horns with some of the U.S.’s most powerful mutual funds and Wall Street players over plans to scrap requirements that money market funds hold investment-grade securities.
For years, the Securities and Exchange Commission allowed fund firms to buy only highly rated municipal bonds for money market funds but now the SEC is considering changing that rule in an effort to curb investors’ reliance on credit ratings.
Ironically, players like The Vanguard Group, one of the biggest in the $12.3 trillion (7 trillion pounds) mutual fund industry, want less freedom instead of more, arguing the SEC-mandated ratings offer would-be investors a sense of comfort.
Reuters Singapore- Assets managed by fund managers in Singapore grew 32 percent to S$1.173 trillion (431 billion pounds) last year, driven by a doubling in assets held by hedge funds, the central bank said on Thursday.
"This is the seventh consecutive year of double-digit year-on-year growth in total assets under management registered by Singapore-based asset managers," the Monetary Authority of Singapore said in a statement.
Singapore has invited asset managers, private banks and hedge funds to boost its fast-growing financial industry as it tries to reduce the economy’s reliance on manufacturing.
New York (HedgeCo.Net) - Appaloosa Management is getting hit from all angles in their attempt to walk away from the deal they struck with Delphi. The hedge fund is not only being sued by the auto parts maker, but now creditors of Delphi Corp. are seeking to intervene on the case.
The lawsuit stems from an original agreement, led by Appaloosa, to provide Delphi with $2.55 billion in aid to help them exit Chapter 11. Though $6.1 billion was needed to make that happen, it looked as if Delphi was going to pull it together, thanks largely to a $2 billion influx of cash from former parent company, General Motors.
Appaloosa walked away from the deal at the deadline, claiming that Delphi had violated several agreements and had an over reliance on GM. Now, creditors are siding with Delphi, saying that Appaloosa walked away simply because they lost interest in the deal.
“Because of the failure to provide the agreed-upon investment financing, distributions that should have been made to creditors pursuant to the plan have not been made,” the Creditors Committee said in the court papers.
The committee said it "should have the right" to join in the lawsuit because they would have "directly benefitted" from Appaloosa’s investment.
Delphi is seeking a ruling that would force Appaloosa to deliver on their original promise.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Financial Times - Jimmy Cayne apologised for the first time to Bear Stearns shareholders and employees on Thursday as the investment bank he helped build into a scrappy powerhouse formally disappeared into Wall Street history as the biggest victim of the credit crisis.
Mr Cayne’s comments, made before a packed auditorium at Bear headquarters, came as shareholders approved the sale of the bank to JPMorgan Chase for $10 a share, or $2.2bn. Bear traded above $150 a share as recently as a year ago.
“I just want to personally apologise for what has happened,” Mr Cayne, 74, said at a meeting that lasted less than 10 minutes. “We just ran into our own hurricane.”
He was referring to a crisis of confidence that slammed Bear in March, leading clients to flee and lenders to pull the overnight funding on which the bank had become so dependent.
The crisis pushed Bear to the brink of bankruptcy before the Federal Reserve and other regulators stepped in to help broker the sale to JPMorgan for an initial price of $2 per share. JPMorgan later lifted the offer to $10 after an outcry from Bear shareholders.
Bear employees and shareholders on Thursday were not sympathetic to the run-on-the-bank argument, contending that the company could have moved sooner to raise capital and reduce its reliance on borrowed money.
“This did not need to happen and a lot of people lost all they had,” said one Bear trader, smoking a cigarette on the street after the meeting ended.
The trader, who declined to give his name, said he was happy to still have his job even as JPMorgan cuts the vast bulk of Bear‘s former workforce of 14,000. “Maybe they will come in here and really clean this place up,” he said.