Financial Mines

News and notes from the business reporters for the Connecticut Media Group.

Former SPM trader takes post that sparked $74M suit

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Passport Capital of San Francisco announced that it has hired former Structured Portfolio Management trader Jeffrey Kong, a Norwalk resident, as a portfolio manager.

Earlier this year, Kong was embroiled in a lawsuit with his former boss, Don Browstein, the founder of SPM in Stamford. After more than a decade of collaboration and building SPM into a $2 billion hedge fund, Brownstein and Kong had a falling out and Kong left the firm.

In 2010, Kong accepted a job with Passport, sparking a lawsuit from SPM, which claimeda noncompete clause was still in effect. Kong filed a counterclaim asking for $74 million in bonus for managing SPM funds, but the two sides settled their dispute out of court earlier this year and have not revealed the terms of that settlement.

Kong will manage Passport’s mortgage-backed securities portfolio and related fixed income strategies. He has been given control over asset selection, risk management and hedging. Passport has an office in Stamford.

Categories: General

Economy burning like a last cigarette

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“Hey, can I buy a cig?” the man in the striped hoodie, wearing a bandana or ski mask over his face, shouts from the corner of State and West Tuesday morning. He’s yelling at another young man in a grey hoodie on the opposite corner.

“My last one!” the grey hooded kid shouts back holding up the lit stick. He takes a small drag. Neither breaks stride as they go about their business walking in different directions.

Barely any cars were heading towards downtown during their exchange. And there was no pause or haggling over the price, though presumably, the grey hooded guy could have got a good deal. I’ve heard guys offering a buck for a cigarette and, though it’s not supposed to happen, there are places where you can buy a single cigarette over the counter.

Cigarettes cost from $6 to $8.25 a pack one Bridgeport grocer said. That’s more than a gallon of gas, which is going for $4 or more for regular at some stations, and maybe why, there weren’t so many cars at 9:30 a.m. on State Street.

It’s all part of an economy that’s burning like a last cigarette, for many people. It’s like each puff is the rising price of gas and food burning up the family budget leaving ashes.

Of course, the sensible thing is to quite smoking and save yourself a few bucks. After all every dollar counts.

Categories: General

Atlas Shrugging in Connecticut

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So far, Atlas Shrugged Part 1 will open in  two movie theaters in Connecticut on April 15, it’s official release date.

Fairfield Cinemas at Bullard Square, 41 Blackrock Turnpike and in Plainville at AMC Loews.

For a movie based on a revered book that graces many an MBA’s desk, it’s been getting decent reviews indicating  co-writer and co-producer John Aglialoro has stuck to Ayn Rand’s plot and honored the spirit of the novel.

Not an easy thing to do with this book in particular, which has a complex cast of characters operating in a world where Communism, socialism and capitalism are all vying for dominance.

To understand the book, however, you should remember Rand was born in Russia and her family lost its business to the communists after the revolution. After earning a degree in her native country, she came to the America of the Roaring 20s and stayed becoming a successful writer who defended elitism and competence as well as capitalism after watching the Great Depression and World War II unfold.

(It’s still hard to fathom why being elite in this country has become a bad thing.)

Her two most famous works of fiction were The Fountainhead and Atlas Shrugged.

Atlas Shrugged is the more complex of the two books, and, in typical Russian novelist tradition, tends to go on-and-on-and-on in parts. There is an exceptionally long passage on a train ride. I know it’s supposed to convey the importance of opening a new line and serve as a symbolic passage on the nature of creation and conflict, but man. That aside, the work itself is unequaled in its portrayal of the battle between talent and social organizations bent on hammering all people into equal rolls.

The main characters are a second generation railroad heiress, an engineer who builds a static engine that runs on air, and an industrialist who by himself creates a new allow of metal that is stronger than steel.

Despite the serious nature, there is some humor in this story. Particularly when you learn the genesis of the phrase “Who is John Galt?”  That’s a question that people ask when something goes wrong that shouldn’t.

The actual premis is clever and funny as well. It’s Rand’s vision of what would happen if the creative and competent people in society went on strike.

While the book’s heroes are businessmen and women, Rand also casts businessmen who don’t create things and use government to glomb on to the success and genius of others as villains as well as government officials who try to create a forced equality of people, instead of allowing equality of opportunity.

It will be interesting to see if director Paul Johansson, (who by the way is John Galt, according to IMBD) and the production can manage to make this point rather than just dumming the book down to the premis of “Businessman good. Government bad.”

For more information on the movie, visit http://www.AtlasShruggedPart1.com.

Categories: General

IRS not so subtle threat

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The IRS issued a press release this weekend advising people to stay away from its dirty dozen “tax scams.”

They include hiding income in off shore accounts. Then the IRS reminds taxpayers that it works closely with federal prosecutors. You’ve been warned.

The Feds want, heck they need money.

Here are some of the other things the taxman will be looking for:

Zero income

Misuse of trusts

Disguised corporate ownership

Frivolous arguments (those include that the income tax is illegal)

Abuse of charitable deductions

Anyway you have until April 18 to file this year. Good luck.

Categories: General

Labor offering web classes

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The Connecticut Department of Labor said it cut a deal with a private company to provide up to 1,000 people free access to classes that can carry college credit or allow someone to earn a technical certification. The program is being run by through CTWorks Centers and is open to unemployed residents already registered with the centers.

The Labor Department said staff would be contacting individuals who would benefit from this program, whihc requires an email address and access to a computer.

The access, granted by Metrix Learning System, is only good for 90 days.

For more information, visit your local CTWorks Center or email Metrix@etiworks.com.

Categories: General

Brown or green field for GE solar

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GE announced it will build a solar panel manufacturing plant in the U.S. raising some interesting questions and a dilemma for the company.

First, will the Fairfield company recycle an old industrial site, or defile a pristine piece of land?

It’s a hard choice for the Ecomagination company. The green field would probably be cheaper and the plant could go up faster. But the brownfield would be in keeping with its goal of responsible development.

Then, there’s the mystery location. The company hasn’t divulged where the plant will go. Is this GE angling for some tax benefits or other considerations from competing communities?

And has Bridgeport Mayor Bill Finch called Immelt, yet to remind him there’s room in the Park City?

Categories: General

First Niagara gets State approval to buy NewAlliance

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Buffalo Bank is cleared to takeover New Haven’s New Alliance.
The state Banking Department issued the final approval needed to go ahead with the merger on Wednesday. The banks also received an approval from the Office of Comptroller of the Currency earlier in the day.

Here’s the release from the department.
STATE BANKING COMMISSIONER APPROVES MERGER OF FIRST NIAGARA AND NEWALLIANCE BANK

State Banking Commissioner Howard F. Pitkin has approved the acquisition by First Niagara Financial Group Inc. of NewAlliance Bancshares Inc. and the subsequent merger of First Niagara Bank, N.A. and NewAlliance Bank. The Connecticut Department of Banking (“Department”) has reviewed the acquisition statement and application thoroughly and deemed it satisfies all statutory requirements for an acquisition and merger to proceed.

In a letter dated October 29, 2010, applications and an acquisition statement were filed by First Niagara Financial Group, Inc. to acquire NewAlliance Bancshares, Inc. First Niagara submitted a Community Reinvestment Act (CRA) plan on December 20, 2010. Revisions to this plan were requested by the Department on January 7, 2011 and were received January 18, 2011.

Commissioner Pitkin held a public hearing regarding the transaction on March 8, 2011 in Manchester. The hearing was continued on March 9, 2011 in New Haven. Commissioner Pitkin convened the hearing at the request of local leaders and members of the community to allow the public an opportunity to voice their opinions related to the acquisition and merger.

“The hearing provided an opportunity to solicit comments from the public,” said Commissioner Pitkin. “Having considered all comments received from the public, I have reviewed the application in its entirety and approved it with certain monitoring conditions to ensure the bank’s commitment to the State of Connecticut is fulfilled.”

Please find a copy of the Department’s final approval letter attached. The Federal Reserve Board of Governors and the Office of the Comptroller of the Currency have also issued approvals on the transaction.

Categories: General

RBS’ Citizens Bank upgraded

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Standard and Poor’s Ratings Services upgraded its outlook for Citizens Financial Group subsidiaries RBS Citizens N.A., and Citizens Bank of Pennsylvania, to stable from negative. S&P also affirmed the “A–” long-term counterparty credit ratings of these CFG subsidiaries.

“We are pleased with Standard & Poor’s acknowledgment of the progress we have made over the last year and our prospects for the future,” said CFG chairman and CEO Ellen Alemany. “We have done a great deal to augment our capital position and have seen regulatory capital ratios continue to improve for each of the last eight quarters.”

S&P cited expectations for improved asset quality and earnings and that the bank has built capital ratios in excess of its peers. CFG’s capital ratios exceed well-capitalized minimums. Its Tier 1 Common Ratio, which is a key measure of a bank’s strength and capital adequacy, is at 12.5 percent and above all peers.

Additional information about the upgrade of CFG’s outlook is available at www.standardandpoors.com

Categories: General