Weil on Finance: Michael Steinberg’s Next Trade?
Happy Thursday, View fans. Let the annotated links begin.
If the feds can’t nail Steven Cohen now, they never will
Michael Steinberg, who was Steven Cohen’s right-hand man at SAC Capital, was found guilty by a jury on insider-trading charges. Now he faces the biggest trading decision of his life: Take whatever prison time the judge hands him, or try to seek a lesser sentence by turning state’s evidence against Cohen. Big caveat: This assumes Steinberg has anything of value to tell the feds, and that they would still be interested in cutting a deal after all the time and expense that Steinberg put them through by taking his case to trial. For all we know, Steinberg might not have anything on Cohen, although if anybody does you would think it would be Steinberg. Meanwhile, former SAC fund manager Mathew Martoma, who has refused to cooperate with prosecutors, is set to go to trial next month.
Zero-commission stock trading? Really?
This piece at TechCrunch about the startup Robinhood, which has a mobile investment app that promises zero-commission stock trading, seems a bit promotional. But if you happen to own shares of an online brokerage such as E*Trade Financial Corp., or otherwise care about the future of online brokerages, this is worth reading. Consider it a risk factor if nothing else.
Here are some of the biggest losers from gold’s decline
Gold is set to post its first yearly loss in 13 years. Here’s a story from South Africa’s Mail & Guardian about how the metal’s drop has caused thousands of job losses and closed mines such as Blyvoorzicht, southwest of Johannesburg: “The men stand near a small wood fire as the sun shines off a hill of extracted earth, in sight of a housing block that was supposed to be vacated. One holds a jaw bone over the flame, nibbles the meat off, and tosses the rest into a rusty barrel. What's left of the carcass with its entrails spilling out is starting to dry at their feet. The scene, resembling something from an apocalypse film out of Hollywood, is an extreme example of the impact gold's 25 percent drop this year may have on towns around the world that are dependent on the precious metal.”
Bernanke got us into quantitative easing, and now Yellen will have to get us out
Peter Schiff, chief executive officer of Euro Pacific Capital, writes: “More important than the taper `surprise’ was the unusually dovish language in which the Fed decided to wrap its seemingly bitter pill.” The upshot: “If yields move much higher I feel that the Fed will have to intervene to bring them back down. In other words, the Fed will find it much harder to exit QE than it was to enter. As he left the stage from his final press conference, Ben Bernanke should have left a giant bottle of aspirin on the podium for his successor Janet Yellen. She's going to need it.”
This correction was even better than the original article
From the New York Times: “The TV Watch column on Tuesday, about the Showtime show `Homeland,’ misidentified the setting where the characters Carrie and Brody first had sex. It was in a car, not a lakeside cottage.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)