Tops & bottoms of 2007

Futures, Feb 2008 by Collins, Daniel P, McMahon, Chris

*After more than 280 consecutive profitable quarters, Morgan Stanley posted its first quarterly loss: $9.4 billion.

*As part of the CME/CBOT merger, the CME will move its two trading floors to the historicL CBOT building. The one contract that lifted the' fortunes of the exchange, and which is indelibly linked to the CME, will not have a home. Pork bellies will trade exclusively on Globex. God speed piggies.

Off the charts

Don't bogart my bonus, dude: According to the Wall Street Journal, while Bear Stearns' management tried to salvage two hedge funds crippled by subprime exposure, CEO James Cayne was out of the office 10 of 21 workdays playing golf and playing in a bridge tournament in Tennessee. Cayne reportedly mellows out after the bridge sessions by smoking marijuana.

Nice work if...Just when it looked like we would have to pass the hat around for the growing list of recently unemployed investment bank CEOs, we hear Goldman Sachs Group Inc.'s CEO Lloyd Blanfein received a $67.9 million bonus for 2007. This can be a model for others: see what can happen when you manage not to lose several billion dollars.

Weather futures: Newswires reported a research paper entitled "Gone with the wind: Chicago's weather and futures trading," presented at the Asia Pacific Futures Research Symposium in Shanghai, showed how wind velocity affects the performance of traders. It found that on days with higher than normal wind velocity, traders tended to sell more often. It also found that traders made more profits on sunny days than cloudy days. Perhaps the "BIG WIND" award should go to whoever managed to gain funding for this study.

Impractical jokes: sec Chairman Christopher Cox sent out a mock press, release as ah April Fool's Day joke announcing plans to require public companies, to reveal the pay and perks of the top 100 people at their firms. The joke, an attempt to bring levity to the often mun? dark workings at the sec, was out of character for die regulator that came ujader increased criticism as more and more people viewed the vyorkings of the sec itself as a joke,

Just in case the Fed runs out of money:

* Chiha Investment Corp. invested $5 billion for a 9% interest, find the investment converts into Morgan Stanley stock in 201,0.

* The Abu Dhabi Investment Authority invested $7.5 billion in Citjgroup.

* Temasek, a Singapore based invesrment fund was in talks to invest $11 billion in UBS.

Beware erkf-of-year prognostications: Jordan Kimmel's newsletter for January 2007 predicted the Dow would hit 15,000 in 2007 but also said: "Wj? are seeing the first signs of an improving housing market in the U.S."

Oops! In early 2007, Merrill Lynch became the largest underwriter of subprime mortgage-backed securities when it purchased First Franklin Financial for $1.3 billion. After assurances that subprime exposure is "limited, contained, and appropriately marked," Merrill announced a quarterly loss of $2.24 billion after $7.9 billion in subprime related write-downs.

How relevant? In September Calyon Financial discovered large credit index positions on the books of its New York prop desk subsidiary. The position built up at the end of August was above the authorized limit and cost Calyon euro250 million. Calyon reports that "relevant disciplinary measures have been taken."