Crackberry Meltdown
Research in Motion sure picked a hell of a time to go down...right in the middle of earnings season. Will Wall Street shrug it off? Everyone thought Yahoo! ‘s earnings would be the disaster du jour…
RIM sent an email out last night to tell everyone about it...but you can’t read it. The problem resides in their data network, not with your carrier....so watch how you trade it today.
It all started last night around 7:15 EST
The latest headline from Reuters
8:17 AM EST -Research in Motion has no timeframe for restoring Blackberry service
Here are the events as they unfolded last night into this morning:
Update, 11:22 pm, EST: There are scattered reports that some users are able to receive mail.
Update, 11:44 pm, EST: Reports indicate that all users of
North American based Blackberry Enterprise servers are being affected.
This includes users accessing North American BES servers
internationally. RIM currently has no estimate on when they will be
back online.
Update 12:23 am, EST: Some users claim that email has resumed.
Update 12:48 am, EST: Users who have spoken with RIM tech
support are saying that this event started at 7:15 pm, EST. A few
T-Mobile users are experiencing an intermittent resumption of email.
Update 2:35 am, EST: WNBC has picked up the story. According to them, “Officials said the problem would carry into the morning. For the moment, RIM officials recommend all who depend on their
blackberry as a major way of communication should make some back-up
plans.”
Update 7:00 am, EST: System remains down for most users.
We will keep tabs on things over at Crackberry.com
My Cingular Blackberry service is still down at 8:50 AM EST...Enjoy the peace and quiet.
The Great Stonewall of China
The battle between the U.S. and China over intellectual property rights will likely never end. The Chinese built a Great Wall, and it should be no surprise they know how to stonewall.
The U.S. government has been lodging complaints with the World Trade Organization over a variety of trade issues but nothing ever seems to come of it. Maybe it is time to play hardball. Or at least rattle a few cages.
Morgan Stanley’s Stephen Roach is full of big ideas. Like all strategists/economists, he is paid to pontificate, which is what two-handed economists do best.
He also travels extensively, and despite the jet-lag, noticed how the Chinese practice selective enforcement of Intellectual Property Rights.
China has long complained how difficult it is to enforce IPR protection in a nation where factories and distribution facilities can spring up overnight. Try finding official Beijing 2008 souvenirs in China’s fabled open-air markets that contain knock-offs of a wide range of Western products. Let me assure you - you can’t. When China puts itself to the enforcement task ¨C even in the IPR area ¨C it can accomplish almost anything.
Well you can’t buy counterfeit Beijing Olympic tchotchkes in China, just pirated copies of Microsoft’s Windows.
But with the trade imbalance now at a record $232 billion the rhetoric is ratcheting up. And Roach is in the mix…
On the surface, the Bush Administration has very little to show for its efforts. The bilateral trade deficit with China soared to a record -$232 billion in 2006, and by the end of last year accounted for fully 34% of America’s overall multilateral imbalance. In the face of these numbers ¨C and in the context of politicians who have connected trade deficits with pressures on the American middle class ¨C patience with respect to talk and negotiations has worn thin in the White House, and the approach is now becoming more action-oriented.
Slapping the Chinese around might feel good, but is unlikely to accomplish much. Until we learn how to save, they will likely fund our capital inflows. But they are convenient scapegoats.
Check out more of Stephen Roach’s interview with People’s Daily Online
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Trader Mag: The List
What did it take to crack Trader Monthly's top five in compensation for 2006?
A cool billion.
Dollars that is.
John Arnold picked off Brian Hunter in the Trade of the Year and pulled down as much money last year as James Simons.
Not bad work for a 33-year old eh?
In a clash of the titans that is likely to be remembered for years to come,John Arnold took on Amaranth’s Brian Hunter last year in a battle over the direction of natural-gas prices. Hunter, the bull, got the horns when prices — along with his ability to trade out of the supremely dark corner into which he had painted himself — weakened in the summer. Arnold, formerly of Enron, squeezed his foe like a laundress wringing out a wet tube sock.
In the end,Arnold and his team of 10 traders — including right- hand man Michael Maggi and natural-gas guru Bill Perkins — walked away from the dustpile with a mountain of cash. Amaranth was wiped off the map.
Arnold claimed the bulk of the profits. He guided Centaurus to gaudy returns (on an estimated $2billion in assets) of 317 percent before fees. Apart from one “lousy”year (only 178 per- cent in 2005), the fund has always finished above 200 per- centsince inception in 2002.
Centaurus’s fee structure is 3-and-30. About half the fund is Arnold’s own money. He is the sole owner of the firm. And — good gosh almighty, what a year — he even got hitched to a beautiful Houston lawyer.
“Last year, it all came down to natural gas,” says one trader familiar with Arnold’s bonanza. “Some people had one idea about what it would do; others backed a different scenario. The bottom line is that a whole lot of money changed hands. When you start hearing from other traders that people are selling bonds just to meet margin, that’s when you know that some positions are too big and it’s all over.”
Arnold declined to comment on our income estimates, as did Centaurus’s Perkins, though Perkins shared his views on why a trading bounty is such a beautiful thing. “You ask a big CEO what he makes, and it’s a huge number, but it’s all tied up in stock and options. Traders get paid in cash. It’s liquid. It’s real. You can go, ‘Here, look,’ and slap someone across the face with it.”
Given Arnold’s record 2006 — the largest sum, we believe, anyone has ever earned in one year — a slap like that just might land someone in intensive care.
Estimated Income: $1.5 billion – $2 billion
Jog on over to Trader Daily to read all about John Arnold other big-hitters like James Simons...who must be good as he is able to secure a fee structure that puts 2 and 20 to shame.
How would 5 and 44 treat you?
Trader Daily
Shoot First
Looking for signs of froth in the go-go M&A arena? Or perhaps in hot commodities?
Sure, we can help. An apparent hoax sent the stock of South African mining company Gold Fields soaring yesterday.
You did not read about it here...we have a modicum of fact checking. At least for a lowly blog. But several main stream media outlets were caught in a frenzy that only paparazzi could truly appreciate, and rushed to spread the news.
We hope you did not lose any money. And good luck getting it back if you did.
More details emerged about a fishy report by Bloomberg News yesterday — picked up by news services including DealBook — that an American financier was planning a bid for Gold Fields, one of the world’s largest gold producers. New York Times
Bloomberg initially ran the story...but in this day and age news travels fast. Even if it is false.
Gold Fields’ shares soared by as much as 11 percent on Wednesday after a report by Bloomberg News that Edward Pastorini, identified as a U.S. financier, may lead a bid for Gold Fields, the world’s fourth-largest gold producer.
The shares gave up most of their gains by the end of trading on Wednesday and were down 1.2 percent to 140.31 rand by 1116 GMT on Thursday. The company also trades on the New York Stock Exchange.
Bloomberg later said the details of the report and the identity of Pastorini could not be verified. The phone number provided by the man was used in 2003 by a Florida partnership that made phony takeover bids for companies, it added. Reuters
This market is wacky. Maybe everyone needs to take a deep breath.
Jimmy Rogers World
Do you think hedge funds can control commodity prices? They can try, but in the long run attempts to manipulate commodities prices always fail. Take oil, for example. Six trillion ($6,000,000,000,000) of oil trades every day. Not even governments can control those kinds of capital flows, not for long. That goes for currencies, too. Short term, yes they can be manipulated. But eventually market forces take over, and the supply-demand market forces for oil long term will drive prices up. Governments can try to support the dollar, for example, but in the long run these efforts will eventually fail - Jimmy Rogers During in the internet bubble of 1999-2000 iTulip.com provided us with countless hours of amusement. In 2007 they feast on the housing bubble...and have been able to snare an interview with our favorite Investment Biker. Is this the last chance to hear from Jimmy Rogers before he moves to China? If A VC can sell his West Village Townhouse for $33 million, Rogers Riverside Drive mansion might not last much longer on the market. Join iTulip.com as they interview the savviest investor to ever roll out of Alabama...and before he moves to China Welcome to iTulip, again, Jim. Good to have you back. Good to be here.
You are bearish on the US housing market, and are reportedly selling your house and moving to China.
Yes, but two are not cause and effect. I'm bearish on housing in the bubble areas like Arizona, Florida, Nevada–you guys certainly know where they are. But that's not why I'm selling my house. I'm selling my house because I'm moving to Asia. That move has been in the works for some time. Housing prices continue to rise in NY, surprisingly enough. There was an article on the front page of the NY Times today showing that housing has remained strong in New York.
Housing price strength is strongly correlated to employment and incomes. Are flush Wall Street salaries and bonuses fueling the continued rise in NY?
Housing prices are related to employment and incomes worldwide but that's not the whole story. Employment is still strong in Arizona and Nevada, yet housing prices are falling. The problem is that whenever you have a bubble, it has to pop and everyone gets hurt. Prices have to fall more than they would if there was no bubble because they went up more than they should have.
How long does this US housing downturn last? The consensus of economists is that the correction is largely over.
It has a good long way to go because never before in American history have so many people be able to buy houses with no money down. Even during the 1920s when the banks first tried interest only mortgages borrowers at least had to put some money down. This time a lot of borrowers have put no money down on interest only mortgages. The results will be much worse.
Do you see a slowdown or an outright recession in the US economy?
I see a recession, and for a variety of reasons. Automobiles are in recession. Housing is in recession. There's been an inverted yield curve for a while. You have a slowdown in business spending. The subprime mortgage and junk bond markets are a disaster happening or waiting to happen in the financial area. There are plenty of things going on. Plus we've had recessions every four to eight years since the beginning of time, so there's nothing unusual about the fact that we're about to have another one.
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