Would you believe….Even The Mexican Peso Is Set To Wallop The Dollar?

Something to chew over with your holiday meal. Things are looking grim for the Yankee Dollar. Pimco's Guillermo Osses believes that currency traders are set to bid up the Mexican peso as much as 20% against the dollar during the next year, right after Mexico just had its credit rating downgraded to BBB by Fitch Ratings.

While Mr. Osses appears to be one of the most bullish on the peso, he's not alone. Economists' consensus forecast predicts a 3.3% rise against the dollar, according to Bloomberg.

Bloomberg: ...investors were “awaiting the downgrade to take positions in Mexico,” Osses said in a telephone interview from Newport Beach, California. “The peso is one of the cheapest currencies in emerging markets. External accounts will improve and the government’s efforts on the fiscal side are reasonable.”

Given the Mexican peso's horrible performance year to date, a 20% rally wouldn't be too wild, simply recovering some of the ground it has lost against the U.S. dollar since the middle of 2008. Any large move in the peso would have serious repercussions for manufacturers set up along the U.S./Mexican border, including the many relocated Chinese ones.

http://www.businessinsider.com/pimco-mexican-peso-will-spike-20-against-the-dollar-2009-11

It's melting! Hedges may get Lehman’s frozen $11 bln

Lehman Brothers International (Europe), where more than $35 billion of hedge fund assets have been frozen since the bank's collapse last September, could return about $11 billion to fund managers by March if enough firms approve a new plan.

PricewaterhouseCoopers, administrators for bankrupt Lehman's London-based unit, announced on Monday a proposal that would let hedge funds recover their assets held in custody by Lehman Brothers International (Europe), or LBIE. The scheme requires approval by 90 percent of Lehman's clients..

Hundreds of hedge funds were left hanging last September when New York-based Lehman filed for bankruptcy. More than $35 billion of assets that they entrusted to Lehman's London unit have been frozen as part of the receivership process.

http://www.reuters.com/article/etfNews/idUSN2327439420091123

Breaking Up is Hard to Do: Is the era of the big bank over?

Instead of helping cushion the fall of Wall Street powerhouses through government aid or variations on traditional bankruptcy, there is growing momentum in Congress to cut those firms down to size before they start teetering to limit the damage if they do collapse.

Angered by bailouts that have kept corporate titans such as American International Group Inc. afloat, members of a key House committee last week voted to give the government vast new power to downsize private companies, something that happens now only in the most egregious antitrust cases.

"The era of the big bank is over," said Simon Johnson, an MIT professor and former chief economist at the International Monetary Fund.

http://www.latimes.com/business/la-fi-breakup24-2009nov24,0,2069502.story

“Oh No - We've Got To Give Our Bonuses Back!”

Spare a thought for the 48 people who joined Lehman Brothers last summer (39 of them fresh graduates), who were paid $49,400 in signing-on bonuses and who are now being asked to return them.

The Daily Telegraph reports that the sign-ons, which appear to have been structured as 'loans' for tax reasons, were provided to the young Lehman employees just weeks before the firm went bankrupt, and the trustee now wants the money back. Some of the employees concerned are thought to have found it difficult to find alternative employment since Lehman's demise. The trustee has said that although it has no choice but to seek the return of the funds, it will look sympathetically at cases of 'individual hardship'.

The newspaper also reports that the number of claims made against Lehman Brothers may possibly end up topping $1 trillion. So far the firm has received over 64,000 claims.

http://news.hereisthecity.com/news/business_news/9591.cntns

The Curious Case of Buffett’s $8 Billion Loan

“What's up with Warren Buffet taking out an $8 billion, 1 year loan to finance the acquisition of Burlington Northern Santa Fe?

According to media reports, the loan was arranged by JP Morgan Chase and Wells Fargo. Burlington will pay an interest rate of 100 to 200 basis points above LIBOR. With Libor down at 0.27 percent, that's pretty cheap money.

So why didn't Buffett try to lock it in for longer?

"The best I can figure is that Buffett is expecting to cash out of other positions to pay down the debt and that he is using the short-term loan as a bridge while he liquidates his other positions," Rob Wenzel at Economic Policy Journal writes.”

http://www.businessinsider.com/why-is-warren-buffett-taking-an-8-billion-one-year-loan-2009-11

Fixing Goldman’s Spin Problem

Lloyd C. Blankfein, CEO of Goldman Sachs, the bank to bash on a resurgent Wall Street, is receiving a lot of advice lately, and it’s not just about money, . Sitting before an audience of 300 at the Metropolitan Club of New York on Tuesday, he spoke with barely disguised disdain in his voice about the work of the image consultants, reputation experts and public relations advisors who are beating a path to his door, and to the doors of other Wall Street banks vilified for their profits and million-dollar bonuses at a time of continuing economic pain.

A few years ago, Wall Street would have cared less — it was enough that the Masters of the Universe were wildly successful; their success spoke for itself. But politics and the bottom line have energized the relationship between these New York institutions of money and spin, as banks see the need to calm the rage directed toward them and confront a public relations problem that has seemed in recent weeks to be spiraling out of control. Just last week, Goldman announced that it would spend $500 million to help thousands of small businesses recover from the recession. At the same time, Mr. Blankfein acknowledged that Goldman had made mistakes. “We participated in things that were clearly wrong and have reason to regret,” he said. ”We apologize.” But is that enough? And, if it isn’t, what will be?

http://dealbook.blogs.nytimes.com/2009/11/22/wall-streets-spin-game/

Calling All You Hedge Fund Angels: Greenwich, Connecticut Needs You, ASAP

Think the worst is over? Think again. Greenwich, CT is probably going to be forced to cut back on its Christmas lights this year, having only raised $30,000 for a display that costs a minimum of $45,000 to put on, if we’re talking bare bones, $60,000 if we want it done up right. Over 2,000 letters have been sent out begging for more money, so far to no avail, while organizer Mary Ann Morrison is already saying she may have to get rid of lights entirely on long stretches of Greenwich Avenue (this is not simply a matter of dimming). And yet, first Selectman Peter Tesei seems unconcerned about the whole thing.

“I’m sure that some angel will come down to provide the money to put them up,” Tesei said. “I’m optimistic that will happen.

http://dealbreaker.com/