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To: Jim Willie CB who wrote (73624)12/15/2006 12:25:47 AM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
Investment Banks Post Record 2006 Profit
______________________________________________________________

By JOE BEL BRUNO
AP Business Writer
Published December 14, 2006, 10:20 PM CST

NEW YORK -- Lehman Brothers and Bear Stearns sent a not-so-subtle message to Wall Street on Thursday when announcing 2006 results -- the word "record" appears a combined 37 times in their earnings reports.

Surging stock and bond markets, coupled with an unprecedented level of takeover activity, has turned the big investment houses into corporate cash machines. It is also delivering stratospheric bonuses to top employees, with Goldman Sachs Group Inc. doling out a staggering $16 billion this year.

For all of fiscal 2006, Lehman Brothers Holdings Inc. reported record net income of $4 billion, up 23 percent from the previous year. Bear Stearns Cos.'s profit for the year soared 40 percent to $2.1 billion. Goldman Sachs said Tuesday its full-year profit soared 70 percent to $9.4 billion, and Morgan Stanley Inc. is set to deliver strong results when it reports next Tuesday.

For chief financial officers, closing the books on 2006 has been an eye popping experience. They remain enthusiastic about 2007, though don't expect to see a repeat as the economy begins to moderate.

"We look out and believe we're having terrific performance, and you see it building throughout the year all across the board ... you can't help but feel good about where you're going," said Lehman CFO Chris O'Meara. "It's hard to predict where we'll be next year, but I will tell you we have some high quality people, and that sets us up for good things next year."

His counterpart at Bear Stearns, Sam Molinaro, said he could tell this was going to be a bumper year for Wall Street. "All you had to do was look at what's going on in the stock market, and the level of interest in taking companies public and making acquisitions," he said. "You have to say that the outlook for corporate America is strong right now, its in a growth mode and looking to build."

The fourth quarter was emblematic of this.

Bear Stearns reported profit attributable to common shareholders rose 38 percent to $557.6 million, or $4 per share, during the three months ended Nov. 30, while Lehman said profit rose 22 percent to $987 million, or $1.72 per share.

Both easily sailed past Wall Street projections, according to analysts polled by Thomson Financial. However, not by as wide a margin as Goldman's 93 percent jump in quarter profit on Tuesday -- the highest quarterly profit ever recorded for a Wall Street firm.

Both Lehman and Bear Stearns are renowned globally for their strength, and sometimes dependence, on the fixed-income market. The bond market has seen strength this year, as Treasury yields dipped to multiyear lows and companies increasingly raised debt to finance acquisitions.

"The quality of the earnings was quite good with merger and acquisitions being the clear standout in terms of performance upside," said Credit Suisse analyst Susan Roth Katzke "It was another solid quarter with full year profitability above average."

Fixed-income trading revenue for both companies rose 25 percent from the year-ago period, and at a faster pace than seen during the third quarter. Instruments such as derivatives were linked to everything from stocks to weather, or credit-default swaps that let investors hedge against bond defaults.

Investment banking was another area that both investment houses have been trying to expand in the U.S. and internationally. Bear Stearns' investment banking business rose 58 percent to $364 million. Lehman said its investment banking business rose only 5 percent to $585 million, and that fees from advising on corporate deals fell 7.2 percent to $256 million.

Six straight months of gains by the Standard & Poor's 500 index, with the Dow Jones industrial average reaching a new all-time high, was a boon for Wall Street.

Bear Stearns reported that revenue from its institutional equities business rose 7 percent to $397 million, while its money management and wealth management revenue jumped 33 percent to $245 million.

Lehman said revenue from equity sales and trading rose 22 percent to $900 million in the fourth quarter, compared with $2.14 billion in revenue from bond trading. Its money management and wealth management revenue grew 26 percent to a record $640 million.

Both Wall Street firms also outlined their bonus scheme for the period, which was far below the $622,000 per employee being paid out by Goldman Sachs.

Lehman said it would pay its employees an average of $335,441 this year -- paying 25,936 workers a total of $7.7 billion in salary, bonuses and other benefits. At Bear Stearns, staff would receive an average of $321,740 in compensation.

Copyright © 2006, The Associated Press



To: Jim Willie CB who wrote (73624)12/15/2006 12:49:24 AM
From: stockman_scott  Respond to of 89467
 
This do-nothing Congress did all the wrong things

By Daniel Schorr

csmonitor.com

Is flag burning more vital than ethics reform?

WASHINGTON - At 4:35 a.m. last Saturday, Sen. Bill Frist performed his last act as majority leader. To the handful of members still there, he announced the adjournment of the 109th Congress "sine die" - that is, forever - leaving behind the most unproductive session in recent history. Congress has been in session only 103 days this year, compared with 110 for President Truman's "do-nothing Congress."

It did not perform its most basic constitutional duty - to vote the appropriations necessary to run the government. Of 11 departmental appropriations, it had managed to pass only two - defense and homeland security. The rest of the government was left to limp along on a stopgap resolution that was constantly in danger of expiring - the next deadline is Feb. 15.

In its last throes, the 109th did manage to pass legislation establishing permanent trade relations with Vietnam and a nuclear trade pact with India. And, yes, it renewed a cluster of expiring tax breaks. The Democrats, flexing their pending muscle, secured a bill blocking an automatic pay raise for Congress until next year, until after a vote to increase the minimum wage.

What this Congress did not do is more striking than what this Congress did. It took no action on real immigration reform. It did not enact a budget. It produced no basic reform in Social Security or Medicare.

It did, however, have spirited debates on matters such as flag burning, gay marriage, and Terry Shiavo's feeding tube, an issue that seemed to absorb Senator Frist.

What Congress also left undone was any serious effort at ethics reform. What we got instead was retiring speaker Dennis Hastert's swan song, saying, "We promised to protect this nation from further attack and, by grace of God and with the leadership of President Bush, we have been successful."

This could also be called the Mark Foley Congress - a leadership that for years did nothing about a Congressman who made e-mail advances to adolescent pages. Mr. Foley resigned. The House ethics committee said members of Congress were negligent about protecting the pages. But it said no rules had been violated.

It may be that Congress has become, like the title of a recent book by scholars Thomas Mann and Norman Ornstein, "The Broken Branch."

• Daniel Schorr is a senior news analyst at National Public Radio.



To: Jim Willie CB who wrote (73624)12/16/2006 12:48:20 AM
From: stockman_scott  Read Replies (2) | Respond to of 89467
 
Farewell, Dense Prince
_______________________________________________

By MAUREEN DOWD
Op-Ed Columnist
The New York Times
December 16, 2006

James Baker ran after W. with a butterfly net for a while, but it is now clear that the inmates are still running the asylum.

The Defiant Ones came striding from the Pentagon yesterday, the troika of wayward warriors marching abreast in their dark suits and power ties. W., Rummy and Dick Cheney were so full of quick-draw confidence that they might have been sauntering down the main drag of Deadwood.

Far from being run out of town, the defense czar who rivals Robert McNamara for deadly incompetence has been on a victory lap in Baghdad, Mosul and Washington. Yesterday’s tribute had full military honors, a color guard, a 19-gun salute, an Old Guard performance with marching musicians — including piccolo players — in Revolutionary War costumes, John Philip Sousa music and the chuckleheaded neocons and ex-Rummy deputies who helped screw up the occupation, Paul Wolfowitz and Douglas Feith, cheering in the audience.

It was surreal: the septuagenarian who arrogantly dismissed initial advice to send more troops to secure Iraq, being praised as “the finest secretary of defense this nation has ever had” by his pal, the vice president, even as a desperate White House drafted ways to reinvade Iraq by sending more troops in a grasping-at-straws effort to reverse the chaos caused by Rummy’s mistakes.

Just imagine the send-off a defense secretary would have gotten who hadn’t sabotaged the Army, Iraq, global security, our chance to get Osama, our moral credibility, the deficit and American military confidence.

Even Joyce Rumsfeld got a Distinguished Public Service Award ribbon placed around her neck. The grandiose ceremony featured everything but the gold-plated matching set of pistols Tommy Franks, another failed warrior, and his wife, Cathy, recently received from a weapons manufacturer. (His had four stars and diamonds; hers, rubies and their marriage date.)

W. never seems as alarmed about the devastation in Iraq as he should be. He told People magazine “I must tell you, I’m sleeping a lot better than people would assume,” and he told Brit Hume that his presidency was “a joyful experience.”

He slacked off on his slacker effort to form a new Iraq plan. (Can’t these guys ever order pizzas and pull some all-nighters?) Mr. Bush was busy this week hosting Christmas parties for a press corps he disdains; convening a malaria conference at the National Geographic with Dr. Burke of “Grey’s Anatomy” Isaiah Washington; and presiding over a hero’s departure for the defense secretary he actually dumped, not because of incompetence but for political expediency.

The Rummy hoopla was a way for W. to signal his decision to shred the Baker-Hamilton study, after reportedly denouncing it as a flaming cowpie. Condi Rice signaled the same, telling The Washington Post that she did not want to negotiate with Syria and Iran, as the Iraq Study Group had proposed, because “the compensation” might be too high.

The Democrats thought that when they won the election, they won the debate on the war and they had W. cornered. But the president is leaning toward surging over the Democrats, voters, Baker and the Bush 41 crowd, and some of his own commanders.

W. seems gratified by the idea that rather than having his ears boxed by his father’s best friend, he’s going to go down swinging, or double down, in the metaphor du jour, on his macho bet in Iraq. He’s reading about Harry Truman and casting himself as a feisty Truman, but he’s heading toward late L.B.J. The White House budget office is studying how much it will cost to finance The Surge, an infusion of 20,000 to 50,000 troops into Baghdad to make one last try at “victory.” The policy would devolve from “We stand down as they stand up” to “We stand up more and maybe someday they will, too.”

Some serving commanders are not in favor of The Surge because they fret that it will infantilize Iraqis even more about assuming responsibility for their own security. They also fear that the insurgents, who have nowhere to go, will outwait our troops.

But W. would rather take a risk in Iraq than risk being a wimp. So he continued to wrap himself in muscular delusions, asserting that on Rummy’s watch, “the United States military helped the Iraqi people establish a constitutional democracy in the heart of the Middle East, a watershed event in the story of freedom.”

Dick Cheney offered this praise to his friend: “On the professional side, I would not be where I am today but for the confidence that Don first placed in me those many years ago.”

Alas, we wouldn’t be where we are today, either.