In Washington, Wall Street Turns to Damage Control

Wall Street bet big against President Obama, and lost. Now the industry “has to come to terms with an administration it has vilified,” Susanne Craig and Nicholas Confessore write in DealBook. It's a critical time to be on amicable terms with the White House, with regulations being finalized and with possible tax increases on the horizon. “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst at Nomura.

If recent studies are a guide, Wall Street's political spending may be an ominous sign for its business, Eduardo Porter writes in The New York Times.

Even as the industry tries to strike a more conciliatory tone, lobbyists are making an effort to temper rules, Ben Protess and Jessica Silver-Greenberg report in DealBook. In particular, trade groups are “expected to line up behind a new bill in Congress that would undercut the authority” of agen cies like the Commodity Futures Trading Commission and the Federal Deposit Insurance Corporation.

There was a sense of disappointment on Wednesday, when some of Mitt Romney's biggest donors gathered at the private air terminal at Logan Airport in Boston to board Gulfstream jets, The New York Times reports. One economic adviser and fund-raiser for Mr. Romney, Emil W. Henry Jr., encountered the hedge fund titan Julian Robertson and offered a “group hug.”

The hedge fund manager Daniel Loeb, who joined other titans of finance at a dinner in Boston on Tuesday, sounded sanguine. “Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly,” said Mr. Loeb, who switched his allegiance to Mitt Romney from Mr. Obama. Still, the industry “made a bad mistake” in pushing so hard for the Republican candidate, one senior Wall Street lawyer told DealBook. “They are going to pay a price,” he said.

 

ON THE AGENDA  |  A report on the United States international trade deficit for September is released at 8:30 a.m. The Bank of England kept its benchmark rate at 0.5 percent. A decision by the European Central Bank on rates is due on Thursday morning. Duke Energy, Vulcan Materials, Kohl's and Siemens report earnings before the opening bell. Groupon and the Walt Disney Company announce results on Thursday evening. Barry Knapp, head of United States equity strategy at Barclays, is on CNBC at 7 a.m. Robert A. Iger, chief executive of Disney, is on Bloomberg TV at 4:15 p.m.

 

NOTED  |  The market was down on Wednesday, but shares of Best Buy were up more than 3 percent. Investors may have been betting on a possible buyout bid from the founder, Richard Schulze.

 

CARLYLE SWINGS TO PROFIT  |  The Carlyle Group reported economic net income of $219 million in the third quarter, compared with a loss of $191 million in the period a year earlier. The private equity firm, which has announced a string of big deals in recent months, reported that its assets under management grew 0.8 percent during the quarter, to $157.4 billion. Carlyle said it was returning some money to investors.

 

INVESTORS PONDER GLENCORE-XSTRATA  |  With a vote set for Nov. 20, Xstrata shareholders are getting conflicting signals on whether to approve the takeover offer by Glencore International. The latest advice came from Pensions and Investment Research Consultants, a British group that recommended rejecting the deal. The adviser cited concerns about a lack of “more extensive due diligence” and said the “level of independent representation on the board is insufficient,” according to Bloomberg News. Institutional Shareholder Services, on the other hand, had come out in support of the takeover. For a refresher on the vote, see Steven M. Davidoff's Deal Professor column.

 

 

 

Mergers & Acquisitions '

Permira Sells Last of Its Stake in Macau Casino Operator  |  Permira, a European private equity firm, said on Thursday that it had sold its remaining stake in the casino operator Galaxy Entertainment, almost tripling its initial investment. DealBook '

 

For Deal Makers, Few Big Changes  |  The state of the merger market is expected to rema in the same, with possibly a bit of an uptick as the economy improves, writes Steven M. Davidoff in the Deal Professor column. A second-term Obama administration may affect things around the edges, but that is about it. DealBook '

 

Aviva Approaches a Sale of U.S. Business  | 
REUTERS

 

Occidental Petroleum Said to Be Among Bidders for Yates  |  Bids are due this week, and a deal could be worth as much as $3 billion, The Wall Street Journal reports. WALL STREET JOURNAL

 

Lloyds Bank Sells Loan Portfolio to K.K.R. and Allegro  |  The Lloyds Banking Group sold a portfolio with a face v alue of $364 million to K.K.R. and Allegro Funds at an undisclosed discount, The Wall Street Journal reports. WALL STREET JOURNAL

 

U.P.S. Set to Defend Takeover of TNT Express  |  A hearing with European regulators is set for Monday. REUTERS

 

INVESTMENT BANKING '

French Bank's Profit Plunged in Third Quarter  |  The French bank Société Générale said third-quarter net profit fell 86 percent, to $108 million, as it booked large one-time charges. DealBook '

 

Fannie Mae Swings to Third-Quarter Profit  |  The mortgage finance giant Fannie M ae reported a profit of $1.8 billion in the third quarter, compared with a loss of $5.1 billion in the period a year earlier, as the housing market mended, The Wall Street Journal reports. WALL STREET JOURNAL

 

Morgan Stanley Looks to Reassure Investment Bankers  |  Top executives of the firm “reassured senior bankers Monday that the investment-banking business was a priority,” after a management shake-up, The Wall Street Journal reports. WALL STREET JOURNAL

 

Wall Street Stocks Slump in Wake of Obama's Win  |  Shares of the nation's biggest banks and financial firms fell on Wednesday, as the prospects of a second term for President Obama mean tougher regulations for Wall Street are here to stay. DealBook '

 

UBS Brings Some Traders Back  |  The Swiss bank “has brought back several employees who were put on leave when it unveiled a drastic pullback from fixed income last week, and more could follow, sources familiar with the situation said,” according to Reuters. REUTERS

 

PRIVATE EQUITY '

A Warning on Carried Interest Tax Break  |  Leon Black, the chief executive of Apollo Global Management, said the tax break on private equity's carried interest “was on the table whoever won” the election, Reuters reports. REUTERS

 

Sweden Expands Investigation Into Private Equity Taxes  |  In Sweden, some deal makers are “bracing for back tax claims as investigators trawl through tax returns and earnings declarations going back to 2005,” Reuters reports. REUTERS

 

Carlyle Raises $1.1 Billion for Middle-Market Opportunities  | 
REUTERS

 

Chinese Private Equity Firms Search for Money Overseas  |  But “winning over Western investors hasn't been easy,” The Wall Street Journal reports. WALL STREET JOURNAL

 

HEDGE FUNDS '

Insider Trading Trial Begins After Delay  |  The case against Anthony Chiasson, a co-founder of Level Global Investors, and Todd Newman, formerly of Diamondback Capital Management, went to trial this week after being delayed because of the hurricane. BLOOMBERG NEWS

 

I.P.O./OFFERINGS '

Russian Mobile Operator Reports Rise in Earnings  |  MegaFon, which plans to hold an I.P.O. this year, said on Thursday that its third-quarter net profit rose 20 percent, Reuters reports. REUTERS

 

VENTURE CAPITAL '

San Francisco Tech Companies Poised for Tax Windfall  |  A ballot proposition that passed in San Francisco this week could save the technology industry millions in payroll taxes, the Bits bl og reports. NEW YORK TIMES BITS

 

LEGAL/REGULATORY '

Dexia Gets a Fresh Government Bailout  |  The French and Belgian governments said on Thursday that they would inject an additional 5.5 billion euros into Dexia, a bank that has been on troubled since the 2008 financial crisis. DealBook '

 

At a Glance: Changing Faces in Washington  |  As President Obama heads into his second term in office, his administration is likely to feature some new faces atop the regulatory agencies that oversee Wall Street. DealBook '

 

What Wall Street Needs to Know About Warren  |   As a senator, Elizabeth Warren, the architect of the Consumer Financial Protection Bureau, will have the opportunity to weigh in on issues that are making Wall Street nervous. DealBook '

 

Inquiries to Watch in a Second Term  |  There are not likely to be any new, sweeping investigations involving white-collar crime in President Obama's second term, but prominent cases involving the Foreign Corrupt Practices Act and the fallout from the 2008 financial crisis loom, Peter J. Henning writes in the White Collar Watch column. DealBook '

 

Greece Passes Austerity Bill  |  The Associated Press reports: “Greece's Parliament passed a crucial austerity bill early Thursday in vote so close that it left the coali tion government reeling from dissent.” ASSOCIATED PRESS

 

Rochdale Securities Said to Approach a Rescue Deal  | 
WALL STREET JOURNAL