Tag Archives: Markets coverage

Dan Gallagher

Marketwatch’s Gallagher joining WSJ’s “Heard on the Street”

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Liam Denning, an editor for the “Heard on the Street” column of The Wall Street Journal, sent out the following staff announcement Monday:

We are pleased to announce that Dan Gallagher is joining the Heard on the Street column, writing financial commentary on the technology sector.

Dan joins us from MarketWatch, where he has been tech editor since July 2007. As well as overseeing tech coverage there, Dan led the creation of a data news team and has covered everything from Apple to the video-games industry. His years of experience take in the birth of the smartphone industry as well as the decline and fall of those companies that pioneered it.

A native Californian, Dan began his career in San Diego at the Daily Transcript, where he covered tech and biotech.  Prior to joining MarketWatch, he wrote for the East Bay Business Times, where he reported on Bay Area tech firms, including Oracle’s colossal battle to buy PeopleSoft. He is a graduate of Brigham Young University.

Dan will remain based in San Francisco, and will begin writing for the Heard in early November. You can follow him on twitter at @MWDanGallagher

Please join  us in welcoming Dan to his new role.

Investment News

Two journalists leave Investment News, a Crain publication

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Business journalists Evan Cooper and Dan Jamieson have both left Investment News, which is a Crain publication, reports Brooke Southall of RIABiz.com.

Southall writes, “Cooper, the head of custom content, and Jamieson, the West Coast-based senior reporter for the New York-based publication, left this month — and their replacements are on the way, according to Suzanne Siracuse, publisher of InvestmentNews.

“‘We are replacing both Evan and Dan … we are not reducing head count at all. On the contrary, Evan got an opportunity and decided it was a better fit for him,’ Siracuse writes in an e-mail.

“‘As [for Dan], we wanted that beat in New York and he didn’t want to move. Both left on fine terms. We have a new reporter … starting on Monday. We are actively searching for Evan’s replacement as we have a thriving and growing custom business that needs a full-time director.’”

Read more here. Jamieson is now editor-at-large for Financial Advisor, a monthly magazine, Cooper is now overseeing editorial operations for Asset TV, a United Kingdom-based company that helps produce paid video content.

Carole Vaporean

Commodities reporter Vaporean leaving Reuters

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Carole Vaporean, a Reuters reporter covering the commodities markets, is leaving the news organization after 26 years.

In an email to Talking Biz News, Vaporean writes:

After 26 years slogging it out as a financial reporter for Reuters, I decided to move on to expand on my 10-year commitment to women’s global empowerment. Over the years, I covered Federal Reserve policy, U.S. and international economics, developed an expertise in technical analysis forecasting of financial and commodity markets, that included a column on foreign exchange markets. I helped start two corporate bond market desks and covered Treasury securities, money market securities and Foreign Sovereign debt, as well as various stock and commodity markets, like gold, oil, industrial metals, and agricultural products.

While I have conducted innumerable executive interviews, some of the most notable included a chat with Playboy CEO Christie Heffner, a brief Q&A with former Federal Reserve vice chair Alice Rivlin while smashed against each other in a packed elevator and a moment of truth when a female competitor chased New York Federal Reserve President Bill McDonough into the men’s room at the Waldorf Astoria, which is where I drew the line on how far I’d go to get the story. The irony, he gave me the interview when he emerged from the men’s room and a sea of disappointed journalists that had swallowed up my competitor. After returning from a two-year sabbatical to earn my MBA from William and Mary, I moved to Reuters nascent TV operation to help develop and produce some of the shows that would become its bread-and-butter programming. Eventually, I returned to writing, reporting and editing.

I’ve lived through Reuters’ many transformations, but was finally made an offer I could not refuse that allows me to create the next phase of my very active life. I see the rapid social and environmental change happening in the world and feel that I can make a greater impact writing about those issues and trends going forward. For the last 10 years, I have worked tirelessly with organizations committed to global empowerment of women and want to further those efforts, as well. Fate will dictate my steps from here, as I continue to practice gratitude, grace and generosity.

goldman-sachs

Goldman revenue drop signals weakness in banking

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Goldman Sachs posted a 20 percent decline in third quarter revenues, signaling that the economic recovery may still have a ways to go and that banking still has some hurdles to overcome. But, of course, the more entertaining part of the stories were about banker pay.

First, here’s the Wall Street Journal with the basic earnings story:

Goldman Sachs Group Inc. posted a 20% decline in quarterly revenue, raising doubts that the securities industry will pull out of its trading slump—and putting a damper on expectations for Wall Street bonuses.

Goldman shares fell 2.4% Thursday, after the New York-based firm delivered disappointing third-quarter results. Per-share earnings exceeded analysts’ estimates, but revenue came in $1 billion short of expectations.

Goldman’s steepest drop came from one of its most-reliable profit engines—its fixed-income, currencies and commodities trading arm. Revenue for the business tumbled 44% from a year ago, to $1.25 billion, a worse performance than rivals.

“Just not a great quarter,” Harvey Schwartz, Goldman’s finance chief, said Thursday during a conference call with analysts.

The results were a surprise to Wall Street, where Goldman’s bond-trading dominance has become something of a staple. Now, the onetime king of fixed-income is suffering disproportionately, as larger banks thought to be more plodding and bureaucratic surpass it.

The firm’s fixed-income revenue fell 49% from the second quarter— at least double the drop of rivals including J.P. Morgan Chase & Co. and Citigroup Inc.  The overall revenue in Goldman’s fixed income, currency and commodity trading division was more than $1 billion short of the comparable number at Citigroup and about $470 million shy of the result at Bank of America Corp.

The New York Times took a different approach, saying bankers were disappointed that 2013 bonuses likely wouldn’t return to previous highs:

Among Goldman Sachs employees, the chatter started months ago that 2013 was going to be a good bonus year. The Wall Street bank began the year strong, and despite concerns about the economy, its profit doubled over year-ago levels in the second quarter.

These hopes were all but dashed Thursday when the firm announced that revenue in its fixed-income, currency and commodities division, a powerful unit inside the bank that in better years has produced more than 35 percent of Goldman’s entire revenue, dropped 44 percent from year-ago levels. It was the worst quarterly result in fixed income since the fourth quarter of 2008, when the financial crisis was raging.

Analysts apparently had many questions for the firm, the Times said:

Analysts pushed, without much success, for more details on the reasons behind the drop in revenue for the unit. They also pressed executives about their expectations for the firm’s return on equity, which effectively measures the profit a bank is able to generate on its capital. That return is hovering around 8 percent on an annualized basis, significantly lower than it has been in previous years, and well below the company’s previously stated goal of 20 percent over time.

“It is a quarter,” Mr. Schwartz reiterated several times on the call.

By slashing what it sets aside for compensation, Goldman was able to post a decent third-quarter profit, despite the revenue weakness. Quarterly earnings came in at $1.52 billion on Thursday, largely flat compared with the period a year earlier.

Reuters also led with the cut in compensation:

Goldman Sachs Group Inc (GS.N) slashed employee compensation costs by 35 percent in the third quarter as bond-trading revenue plunged, an unusual step that signals the investment bank’s concern about performance for the rest of the year.

Goldman responded to the weaker revenue by setting aside less money to pay employees during the quarter – $2.38 billion, compared with $3.68 billion in the same quarter last year. The 35 percent decline is high compared with competitors. JPMorgan Chase & Co (JPM.N) cut its third quarter compensation expense by 15 percent.

Goldman’s compensation costs amounted to 35 percent of its revenue in the quarter. The bank’s target is usually closer to 43 percent.

The bank sometimes cuts the money it sets aside for pay in a quarter, but it usually does so in the fourth quarter, when there is no hope of earning extra revenue for the year. Doing so in the third quarter signals that it does not expect a big rebound in the fourth quarter, a point Schwartz conceded on the conference call.

One bright spot– Goldman set aside a fair amount for pay in the first half of the year, when net income was up about 35 percent over the year-earlier period. Even with the third quarter drop, total compensation costs for the first three quarters are only down 5 percent from the same period last year.

While the bank may always change the amount of money it sets aside later in the year, the third-quarter reduction will likely translate to lower bonuses for employees.

Pay consultant Alan Johnson estimates that across Wall Street, fixed-income, currency, and commodities trading bonuses could fall 10 to 15 percent this year, with many employees getting $0 bonus checks.

Bloomberg added comments that Goldman wasn’t shifting its policy, just the amount it plans to pay this year:

The bank hasn’t changed its principles on compensation, Chief Financial Officer Harvey M. Schwartz said on a conference call with analysts. It reduced the year-to-date compensation ratio based on current revenue and “better visibility” into year-end pay, he said.

Roger Freeman, an analyst at Barclays Plc, predicts the ratio for the full year will be 39 percent. While a lower figure than that “would likely be welcome news for investors,” he wrote in a note to clients today that “we suspect that the third-quarter represents more of a true-up than anything else.”

The interesting point in many of these stories is that the compensation cut signals the firm isn’t expecting the fourth quarter to be any better. That’s a sign that Goldman is losing clients and trading business to rivals, or that the state of the global economy continues to rattle markets – either way, not good news.

Jason Raznick

Benzinga’s goal? A more engaging source of financial news

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Jason Raznick is the founder of the financial news site Benzinga and is a passionate entrepreneur. He founded two successful Internet companies prior to his current and largest company, Benzinga. Raznick has worked for Merrill Lynch, TheStreet.com, and Tricap Holdings.

In the first five months, Benzinga grew to more than 50,000 active members.

Benzinga is a financial media company based out of metro Detroit and currently has more than 3 million readers in more than 125 countries every month. Benzinga provides daily, original content to people interested in financial news. Benzinga also produces real-time tools and applications to give traders and readers an edge once only available to the very elite.

Instead of giving financial advice, Benzinga believes that it gives news to make  informed decisions to take control of a person’s financial future. Its strategy is that financial news consumers are dissatisfied with the  dinosaurs of financial media and crave a different, more engaging source of  information.

Raznick spoke by email with Talking Biz News about Benzinga’s operations. What follows is an edited transcript.

How did you get the idea for Benzinga?

I founded Benzinga a couple years after the 2007-08 financial crisis. I saw friends and neighbors lose money and become disillusioned with the markets. Some suffered an even worse toll because they trusted bad advice online. More than ever, I felt that there a huge information divide between retail investors and institutional investors.

The best way for good folks to get back on their feet was to identify good investment opportunities – especially when valuations were so low. But most people were not empowered with the same information and insights that Wall Street professionals had, so they fell even further behind. Ultimately, Benzinga was created to empower retail investors with high-quality, actionable ideas and information.

How is it different than other financial news sites out there?

Benzinga’s news team always offers unique insights on market-moving stories. From exclusive CEO comments and small-cap perspectives to unearthed information and breaking news — Benzinga reports stories that aren’t found elsewhere. Plus, our analysts provide trading ideas — helping the reader to act on a news event.

Who do you see as your competition, and what are you doing different or better than them?

Our readers have limited time, and there is so much media and information being barraged at them from all directions. Between print media, online content, social media, and TV — it’s a battle for mind share.

The only way to win that battle is to consistently produce content that is so powerful and valuable that our readers are drawn to Benzinga over all of the other media in their lives.

Your site focuses a lot on small or mid-cap stocks. Are those not covered as much by the rest of the financial media?

After 9/11, a lot of small-cap companies popped up that claimed to be in the defense or homeland security space. There was so much mayhem and hoopla. Nobody knew what was real and what wasn’t. I was very active on Yahoo message boards at the time, and I helped the community there to distinguish the real opportunities from the scammers.

I had 3,000 people following my posts and CEOs were contacting me to clarify their businesses. A good majority of the content and news covering these companies could actually be sourced back to PR initiatives and entities with a vested interest. I realized how little quality coverage there was of smaller companies — and that there was a ton of demand for accurate reporting in the space.

I’m proud that Benzinga is a leader in the field.

Who is your core audience?

We cater to long-term investors and traders with a fast growing audience of people who want to learn about the markets. Benzinga Pro, our real-time news and data platform, serves professional traders. The audience ranges from prop desks and hedge funds to day traders and active investors.

Benzinga Pro’s audio news alerts and chat functionality provides value to a wide arrange of audiences. And Marketfy is our educational course platform that serves new to sophisticated investors.

How have your UVs and page views been recently?

We aren’t making our traffic numbers public at this time. I will say that we are very pleased with our growth.

How have you been growing your readership?

First and foremost, we continue to grow our readership by providing valuable information to our audience. This industry thrives on content being shared and as we continue to provide value to our readers, they continue to share it with others. Our distribution partnerships with other websites/brokerages and regular TV appearances are a direct result of how our content’s value continues to lead our growth. We’re also very active in the world of social media and have become a growing resource to those using search engines for research.

How do you generate revenue? Is it strictly via advertising?

We generate revenue via licensing content and data to brokerage platforms, portals, and other web properties; subscriptions to the Benzinga Pro real-time news and data service;  and selling advertising.

In addition, Marketfy.com, a newer education property of ours, allows investors to signup for educational courses, top trading newsletters, trading chat-rooms. and other market tools. The marketplace features products and services that are free, one-time buy, or subscription-based.

How many journalists do you have on staff, and how is what they cover determined?

We currently have approximately 15 market analysts on staff – plus dozens of contributors and writers who pitch in. They cover stories that fall into their area of expertise. For example, Matt McCall is one of the world’s foremost experts on ETF investing. Nic Chahine and Adam Beaty write thought-provoking pieces on options trading. And, our real-time team specializes in reporting and breaking news.

How are you expanding that coverage now? What would you like to cover that you’re not?

We have excellent coverage of the US stock market and the global economy. We are looking to expand coverage in global equities and the commodity market.

Where did the name Benzinga come from?

When I was a little kid, I had a speech disorder and went to a speech therapist. Afterwards, my grandfather and I would practice silly, made-up words. Benzinga was one of them – and it stuck in my head ever since. I wanted to use a name that had no particular meaning at first – so that we could create a meaning around it.

How do you decide where to aggregate content from, and where to distribute your content?

We work with companies who live by the same high quality standards that we do, like TD Ameritrade, Microsoft, Nasdaq, etc.

Millie the Cat

When Millie the Cat picked stocks for a biz editor

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Chuck Jaffe, who writes about investing for Marketwatch.com, reminisces about the time he let his cat, named Millie, pick stocks when he was the business editor of the Allentown Morning Call in Pennsylvania.

Jaffe writes, “Today, of course, most editors and publishers — but especially those covering the world of finance and investing — recognize that there are the diehard readers who must get their business fix every day, then the read-it-sometimes crowd, and then the vast majority of people who get their financial news only if it comes wrapped in videos of cats doing funny, amusing or cute things.

“It wasn’t a unique idea; there already were dartboard portfolios and other ideas trying to come to similar conclusions.

“But a quarter-century ago — before anyone had sent out ridiculous pictures and videos of their feline to every person who could loosely be categorized as a ‘friend’ — I thought it would be a fun way to get a different look at a market that was rising even as many investors still found it terrifying.

“There was nothing terrifying about the cat — named Millie Schembechler for the wife of the legendary University of Michigan football coach — but she had an annoying habit of finishing her breakfast and wandering over to where I had the newspaper spread out on the coffee table, and an uncanny knack for arriving just as I turned to the stock pages.

“Once there, Millie invariably stretched, rolled around — poring over the market’s daily fluctuations, I suppose — before settling down.

“And so, in September of 1988, I decided to see if she was sending me a message, and I charted the tip of her feet and nose to see what she was picking.”

Read more here.

John Melloy

CNBC executive producer Melloy to become CEO of StockTwits

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CNBC executive producer John Melloy — a star who’s been at CNBC for more than 7 years — is leaving the financial network to be the CEO of Stocktwits, according a source familiar with the matter, reports Joe Weisenthal of Business Insider.

Weisenthal writes, “Melloy has been in charge of CNBC’s Halftime Report as well as the very successful show Fast Money.

“Stocktwits — which was founded by Howard Lindzon — was an early player in social finance. It consists of an avid community of traders constantly tweeting ideas and news, as well as a network of highly respected finance blogs. Lindzon, we’re told, will be moving from the CEO role to Chairman.

“When reached for comment, Melloy told BI: ‘I look forward to the opportunity at Stocktwits. It’s already an incredible company. I’m joining it at a great time.’”

Read more here.
twitter-logo-bird

Using Twitter to move markets

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David Carr of the New York Times writes about how investors such as Carl Icahn have taken to Twitter to influence stock prices, knowing that the business news media will record their moves.

Carr writes, “First let’s stipulate that unless you are a day trader, much of the business news right now is boring. There is very little deal flow, the mergers of old are gone and, give or take the occasional Twitter initial public offering or a government shutdown, there isn’t much to talk about — unless a Libor scandal or quantitative easing get your blood flowing.

“That means the ink and attention go to the straw stirrers, the agitators, the outliers who make business news and numbers jump off the page and the screen. There’s a reason that the frantic Jim Cramer endures on CNBC.

“It’s also why Mr. Icahn, a 77-year-old with a net worth of $20 billion, when sending out a post or three about Apple, can make big news. He can still shake things up and move the market, enabled by the incredible reach of social media like Twitter or the ample exposure from a TV channel like CNBC.

“Here’s the chronology. Back in August, Mr. Icahn announced in two separate posts that he was buying Apple stock and that he planned to push for large payouts to investors.

“As Fortune magazine pointed out, within an hour of his posts on Twitter, Apple’s market capitalization increased by $17 billion.”

Read more here.

Alex Frangos

WSJ’s “Heard on the Street” names Asia editor

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David Reilly and Liam Denning, co-deputy editors of The Wall Street Journal “Heard on the Street” feature, sent out the following staff promotion on Wednesday:

We are happy to announce that Alex Frangos becomes Heard on the Street’s new Asia editor, based in Hong Kong. In his new role, Alex will direct the development of the Heard in the region while supervising the Heard’s team of Asia-based reporters. He will also write for the column.

For the past four years, Alex has been a reporter in Hong Kong covering Asian economics and markets, giving him a wide-ranging view of the region. He was an important contributor to this year’s China’s Rising Risks series on dangers lurking in the financial system of the world’s second-largest economy and was among the first to identify the shifting tides for investors in emerging markets. His reporting on the return of high debt levels in Asia has taken readers from towering Malaysian skyscrapers to Korean fried chicken shacks.

A long-time Journal reporter, Alex joined the paper in New York in 2000. Before his move to Asia, he had covered real estate, digging into the finances of the redevelopment of the World Trade Center and Donald Trump’s property flops. He also covered the 2008 U.S. presidential primaries. He holds a B.A. in history from the University of California, Berkeley.

Please join us in congratulating Alex on his new role.

financial bubble

How the financial media will spur the next financial crisis

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Lynn Stuart Parramore writes for Salon.com that the business media is doing nothing to prevent the next financial crisis.

Parramore argues, “Yet in the financial media bubble, being critical of Wall Street means that you are a wild-eyed radical from the far left, a view which is particularly surprising given the rush of even conservative Republicans like Sen. David Vitter to brandish their bank-taming credentials.

“The official inquiries into JPMorgan’s activities may indicate a shift toward a more aggressive stance by the U.S. government in trying to prevent American banks from ripping off the public and their investors, and that’s a good thing. Of that $11 billion JPMorgan may have to pay for its mortgage shenanigans, $4 billion could go to consumer relief for struggling homeowners. That’s something, though clearly a fine that only adds up to two quarters of JPMorgan’s profits isn’t nearly enough.

“But financial media personalities like Maria Bartiromo are standing in the way of this process by continuing to act as the marketing arm of Wall Street and apologists for people like Dimon. In her brain, Eliot Spitzer is a demon for going after AIG, public employees are responsible for state budget problems, and banks are being unfairly assaulted. And unicorns are producing her show.

“If the Bartiromos have their way, we may never adequately prosecute fraud, hold executives accountable, or get giant banks like JPMorgan under control so they don’t go on to wreck the entire economy and cause even more damage than they did the last go-round. Wall Street cheerleading from the business press could help bring on yet another financial crisis when one of these banks implodes.”

Read more here.