Insider Info and Daily News

Radio Ga Ga

Fri, 05 Sep 2008 12:02:52 GMT

Vibrant financial markets exist for trading everything from bushels of corn to barrels of oil. Now a new company is hoping to do the same for the nation's airwaves, with an online trading exchange for radio spectrum.

The company, Spectrum Bridge Inc., will match buyers and sellers of spectrum licenses used for wireless communications. Its Web site, specex.com, will go live on Friday with an initial inventory of about $250 million of spectrum.

The Federal Communications Commission during periodic auctions doles out licenses to use particular radio frequencies. While most of the prime spectrum used by cellphones, two-way radios used by first responders and other communications gear has already been allocated by the agency, much of it isn't actually in use at any given moment. Spectrum Bridge hopes to create an organized secondary market to help recycle those "fallow" frequencies.

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Pimco Nabs Harvard Man

Fri, 05 Sep 2008 12:03:46 GMT

Just nine months after returning from running Harvard University's endowment, Mohamed El-Erian was named on Thursday as chief executive of Pacific Investment Management Co.

The handover comes at a key time for Pimco, a unit of German insurer Allianz SE. The bond-management firm has posted good gains since the credit crunch began last year, in part by betting big on mortgage debt tied to Fannie Mae and Freddie Mac -- whose implicit government backing and relative safety compared with other securities has helped keep their bond returns in the black.

Now as both entities show continued financial weakness and many parts of the bond market remain pressured, a main challenge for Mr. El-Erian, 50 years old, will be sustaining Pimco's winning returns.

Pimco is the only firm among the 25 largest fund groups to post a positive percentage increase in stock and bond assets through earlier this year, according to Financial Research Corp.

Bill Thompson, 63, a 15-year Pimco veteran, will retire from his co-CEO post at the end of this year. He says one reason is because he wanted to leave at the top.

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No Kidding

Fri, 05 Sep 2008 12:04:45 GMT

Russia’s central bank intervened heavily to support the rouble on Thursday as analysts said $21bn of foreign capital might have been pulled out of the country as Moscow paid the price for its conflict with Georgia.

The rouble fell as low as R30.41, its weakest level since the Russian central bank adopted its euro/dollar basket in February 2007. The central bank governor admitted there had been capital outflows since the war but said the amount was much lower.

The currency intervention was the first since the height of the war with Georgia at the beginning of August. Before the conflict the central bank’s interventions in the market were aimed at stemming the rise of the rouble, which it manages to a basket weighted 55 per cent in dollars and 45 per cent in euros.

The attractions of resource-rich Russia, a net foreign creditor with sustainable trade and fiscal surpluses and the third-largest foreign exchange reserves, had made the rouble a one-way upward bet. However, the rouble has suffered as foreign investors have pulled money out of Russia.

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Yen Drama Over US Payrolls?

Fri, 05 Sep 2008 12:05:34 GMT

The yen climbed to the highest in more than a year against the euro on concern the credit-market slump will lead the world into a recession, prompting investors to sell higher-yielding assets funded in Japan.

The dollar fell versus the yen before a U.S. government report that will probably show employment dropped for an eighth month. The yen also jumped to a two-year high against the Australian and New Zealand dollars as stocks and commodities slumped. The pound dropped for a ninth day versus the dollar.

``This is a global recession story,'' said Toru Umemoto, chief currency analyst in Tokyo at Barclays Capital, Britain's third-biggest lender. ``The yen is benefiting as risk appetite is on the decline.''

Against the euro, Japan's currency climbed to 150.60 yen, the strongest since Aug. 17, 2007, before trading at 151.40 yen as of 9:23 a.m. in London, from 153.40 yen. The yen reached 105.69 per dollar, the highest since July 17, before trading at 106.25, from 107.08. The euro fell to $1.4248, from $1.4325. It earlier touched $1.4214, the weakest since Oct. 24. The euro may decline to $1.40 in six months, Umemoto said.

U.S. payrolls fell by 75,000 after declining by 51,000 in July, according to the median estimate of 76 economists in a Bloomberg News survey before the Labor Department report due at 8:30 a.m. in Washington today. The unemployment rate likely stayed at a four-year high of 5.7 percent.

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Xstrata: Gotcha

Fri, 05 Sep 2008 12:06:21 GMT

Mining group Xstrata on Friday bought a 17.83 per cent stake in Indophil Resources for A$82m, potentially blocking a management buy-out of the Australian copper miner.

Indophil’s main asset is a 34 per cent stake in the Tampakan project in the Philippines, thought to be one of the world’s largest unexploited sources of copper. Xstrata already owns 62.5 per cent of Tampakan, but is trying to gain full control of the project in order to speed up its development.

Earlier this year Xstrata launched an all-cash A$503m takeover bid for Indophil, but this was resisted by management who responded by putting together a rival offer. Richard Laufmann, Indophil chief executive, in June formed a consortium called Stanhill Resources, including Crosby Capital, the Hong Kong-based investment bank, and Alsons Group of the Philippines, and last month their revised bid gained the backing of Indophil’s three independent board members.

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But Do They Protest Too Much?

Fri, 05 Sep 2008 12:07:10 GMT

Speculation sweeping the market that large hedge fund Atticus Capital is liquidating its positions and closing down is not accurate, according to executives of the firm.

"We've heard these rumors as well and they're not true," says Tim Barakett, founder of Atticus, which has about $14 billion under management. "We're certainly not liquidating. In fact we have a large net cash position and are looking for opportunities to invest capital."

Part of the reason stocks tumbled Thursday was selling by hedge funds who are trying to get out of positions they fear fellow hedge funds, such as Atticus, will sell if they are under pressure to close shop or trim losses. Some are trying to make money shorting stocks held by struggling hedge funds, traders say. Some stocks that Atticus has held in recent months were clobbered Thursday, including Burlington Northern Santa Fe Corp., down 3.7%, Union Pacific, down 6%, and MasterCard Inc., down 5.9%.

"Hedge funds that picked on Lehman Brothers and Bear Stearns now are picking on each other," said the head of prime brokerage at a major investment bank.

A number of hedge funds are nervous that their investors might ask to pull out in the weeks and months ahead, amid a disappointing year for many funds. That's sparking anxiety in the market.

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Friday Levity: Your Christian Campus Hazing Update

Fri, 05 Sep 2008 12:08:40 GMT

A hazing incident at Point Loma Nazarene University has triggered the firing of a residence hall director and a formal apology to the victims.

Freshmen in Young Hall were awakened in the middle of the night by upperclassmen, then told to march down the bluffs and swim in the ocean naked. Officials still are trying to determine whether students were slapped and whether one was urinated on during the trek to the water.

The hazing occurred at 2 a.m. Aug. 25, the first day of classes at the private Christian college, and prompted complaints from outraged students and parents.

Some students said the march is an unofficial annual tradition that got out of hand at a university not known for hazing.

“While we have a legal responsibility to eliminate hazing anywhere we can, we have a higher responsibility to make sure our institution builds people, not diminishes people,” said Joe Watkins, vice president for external relations.

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