David Kirkpatrick

May 13, 2010

The iPad is a netbook killer

Filed under: Business, Technology — Tags: , , , , , — David Kirkpatrick @ 6:08 pm

And just wait until Windows or Chrome versions hit the shelves.

From the link:

While it’s true that netbooks are the more affordable choice with better keyboards, USB ports, faster processors, superior e-mail and Flash usability, and a variety of models to choose from, the popularity of netbooks have been in a freefall just as the elegant iPad is catching fire.

Could this be happenstance? Maybe. The netbook trend may just be played out regardless of the iPad. But a new report from Morgan Stanley argues there is a direct correlation.

In addition to forecasting that the iPad will cannibalize iPod Touch sales, the Morgan Stanley report provides data showing that the netbook craze hit a crescendo in July of 2009, with a stunning 641 percent year-over-year growth. But after the holidays, netbook growth took a big fall, and it’s been dropping each month since. In April, netbooks only experienced 5 percent year-over-year growth.

December 23, 2009

Wall Street rigged the CDO market

Man, it’s easy to make money when you can create a bad investment out of whole cloth then bet against its success while selling it hand-over-fist to your unsuspecting clients. There ought to be some legal action in the form of civil suits from defrauded investors if nothing else.

Wall Street wonders why Main Street holds it in such contempt. Stories like this should make that dynamic easy to see.

From the link (bolded text my emphasis):

Mr. Egol, a Princeton graduate, had risen to prominence inside the bank by creating mortgage-related securities, named Abacus, that were at first intended to protect Goldman from investment losses if the housing market collapsed. As the market soured, Goldman created even more of these securities, enabling it to pocket huge profits.

Goldman’s own clients who bought them, however, were less fortunate.

Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments, according to former Goldman employees with direct knowledge of the deals who asked not to be identified because they have confidentiality agreements with the firm.

Goldman was not the only firm that peddled these complex securities — known as synthetic collateralized debt obligations, or C.D.O.’s — and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail, according to Wall Street traders, include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner.

Also from the link:

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

February 11, 2009

Banks want backsies

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 11:56 am

Oh, now they see the light since Bush’s blindly giving team is gone and Obama’s group demanding oversight with teeth is in place.

I hope these banks are able to repay the taxpayer’s money very quickly. I predicted some of the oversight rules put into place by the new economic team might cause some executives to see the capitalist light and decide the public dole of corporate socialism wasn’t so great after all.


From the link:

Even before the government announced its latest efforts to fix the troubled banking industry on Tuesday, executives at Goldman Sachs and Morgan Stanley said they wanted to repay the money quickly. Both banks received $10 billion under the first rescue plan last fall.

Paying back all those funds would be difficult in this tough economic environment. But banking executives worry that the government may intrude further into their businesses as long as they are beholden to Washington.

December 17, 2008

Morgan Stanley announces almost $2.4B quarterly loss

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 2:33 pm

Overall the bank posted a net gain for the year, but the final quarter was predictably brutal.

From the link:

Morgan Stanley reported a fourth-quarter loss of $2.36 billion — or $2.34 a share — on Wednesday, as the bank remained battered by old investments.

The quarter was Morgan’s first loss this year, though it did not outweigh the profit earned earlier this year. Morgan reported a full-year profit of $1.59 billion, or $1.54 a share.

Revenue in every corner of the bank fell, even when compared with last quarter, showing a deteriorating environment that cut across businesses. Analysts polled by Thomson Reuters had forecast a loss of 34 cents a share. The loss from continuing operations for the quarter, which does not include Discover, the credit card unit that was spun off, was $2.20 billion, or $2.24 a share

October 7, 2008

Floyd Norris is feeling a little bearish

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 6:19 pm

And he’s not alone. Everyone I’m talking to these days, and I mean everyone, has a very high level of economic anxiety.

From the NYT link:

And You Thought September Was Bad

September was the worst month in six years for the stock market. This month is young, but prices have fallen more in October than they did in September.

The rumor that Morgan Stanley’s financing was falling apart — which was denied and which appears to be false — was not the only factor in sending the market down today, but it helped.

Financial stocks led the decline, breaking through their July lows. The S.&P. Financial index ended the day at 215.39, the lowest close since April 28, 1997. That index was down 11 percent today, and is off 22 percent over the last four sessions.

It is gradually dawning on people that the entire financial system is in danger if this cycle continues and no one trusts anyone else. Bob Prince of Bridgewater Associates says there are indications that deposits are moving to small banks from large banks (under the insurance limit, of course) but that the small banks will not take the chance of lending to the large banks.

September 18, 2008

Possible merger for Washington Mutual and Morgan Stanley

I think that would be something like making an omelet with two rotten eggs.

From the link:

It wasn’t too many years ago that some federal regulators fretted about the dangers of letting commercial banks merge with the big investment houses on Wall Street. But in the current financial crisis, those mergers might be the only thing that saves some of Wall Street’s most storied firms, such as Morgan Stanley (MS) and a troubled lender like Washington Mutual (WM).

Update — the Wall Street Journal is reporting a possible deal between Morgan Stanley and Wachovia.

From the link:

A Wachovia deal would unite two large American financial companies and potentially placate investors who believe investment banks need to be joined with deposit-taking institutions. But Wachovia’s own mortgage exposure could be a sticking point in completing a deal, and some analysts have questioned whether Wachovia is the right partner for Morgan Stanley.

Morgan Stanley’s Mr. Mack appeared at the regularly scheduled quarterly town hall meeting at 8:30 a.m., speaking to a packed audience at the company’s Times Square headquarters. The CEO, joined by Chief Financial Officer Colm Kelleher and fellow co-presidents Walid Chammah and James Gorman said the company is exploring many options including the Chinese investment and a Wachovia tie-up.

Sounds like Morgan Stanley is really in deep. Parts of the article not excerpted covered potential deals with Citigroup and China Investment Group. Mack is in contact with the SEC and the White House to try and stop shorting of Morgan Stanley stock. I think we’re getting to a point where some these collapsing companies need to be allowed to crater.

Here’s another list of potential partners for the failing investment bank:

Morgan Stanley has other potential international and domestic partners, including HSBC Holdings PLC of the U.K., Banco Santander SA of Spain, Japan’s Nomura Holdings Inc. or Bank of New York Mellon Corp.